A reader asks: "If the current bill passes are my health insurance costs likely to go up, down, or remain about the same?"
If the form that I believe most likely to pass actually passes (insurance reforms, individual mandate, weak or no public option or co-ops), I believe that they will continue to go up. There simply is nothing in the bill that would make things more affordable. In health care markets, for a convoluted nest of reasons, more competition causes prices to go up, not down.
Despite the concern and interest in health plan profits and executive salaries, most of what dictates the cost of health care insurance consists of:
- How effective are they at lining up providers willing to take a discount? That willingness depends on the ability of the health plan to say, "We've got many or most of the people in your market. If you want a lot of patients to amortize your fixed costs, you have to deal with us, and you have to cut us a good deal." Small, new insurers cannot say that.
- How effective are they at limiting what they cover?
- How effective are they at not covering sick people, either by not covering them in the first place, or by kicking them out?
- How good are they at avoiding paying the bills that people do run up?
Look these over. Health insurance reform closes the last three of these (at least somewhat). This will drive up the cost of providing insurance, since they are providing for more people, and sicker people, and being
forced to pay their bills, as well as being forced to provide some
minimal coverage (such as preventive and maintenance matters) for no
co-pay.
The first one means that if any new mechanism is just competing for
provider networks at market prices, they will pay more, not less.
And there is nothing in the bill about capping profits, or putting a minimum on medical loss ratios (the amount of the premium dollar that is paid out in health care resources), or capping executive salaries. So
though everyone is talking about "affordable" health care, all the reforms actually being contemplated mean higher costs, not lower.
Healthcare co-ops are a very bad choice! They will limit the number of doctors that you can go too just like HMO’s or managed care. Their doctors are only in plan doctors just like HMO’s so if you get sick or ill and you go to an out of plan doctor they will make you travel to a hospital that is part of their plan. So basically nothing will change you will end up with no choices at all. Senator Baucus is selling out the people of America for the four million that he got from the health insurance companies, he stood up there all by himself telling lies about how this was a good plan when clearly it is not!
I agree – mostly. The “co-ops,” even if they succeeded, would be like any other insurance plan, with limited choices of in-network and out-of-network docs and hospitals. But you say “you will end up with no choices at all.” This would only happen if the “co-op” became mandatory somehow – and that’s not the idea. The idea is that it competes with today’s insurance companies. Or that they become so wildly successful that they drive the other insurance companies out of business – and that is highly unlikely, since the “co-ops” would have no particular advantage.
On Sep 19, 2009, at 8:34 PM, wrote:
If all you that are complanning would give him a chance after all the great Mr. Bush had 8 years and did nothing it has not been a year and look at what he has done. Get with him and we just may get something it will take a lot longer to fix then 1/2 a year. most of the ones complanning donot even have Medicare
so just let him have a good slot.get on your knees and talk to God and let him lead you like when I voted God had his hand on mine a showed me the way to vote
God bless all of you Stan the Van man
I agree with the article and the following comments. There is just too much compromise being done to meet this campaign promise. This is following the same route as mandatory auto insurance. When something is mandatory, there are no choices. Like auto insurance, competing companies can charge similar rates because one has to have it. What really burns me up is that many of our hospitals and clinics are partly funded with public dollars, yet we have to pay premium prices so doctors and executives can have their expensive homes and an airplane.
If they could get the billing process to be less convoluted and clearer about what is and is not covered, that would be a huge start. I am also concerned that I would be forced to purchase health coverage(ala car insurance), when I don’t have insurance. I usually just budget for out-of-pocket exams and treatments.(my own health savings account). Will I get a ticket if I get pulled over for something else?
“more competition causes prices to go up, not down.”
LMFAO
Health care for profit is an ugly concept since it exposes the business to the possibility of corruption at the expense of people’s very lives.
You are absolutely right that there are no caps on anything, so how can this save us money? The only cap that I can see is the possibility that if things don’t go right in the future, that there will be a trigger to initiate the public option.
If costs do escalate where are the trigger points? Congress is able to ask the Iraqi government to perform according to a timetable. Why can’t they ask the insurance companies and the health care industry to do the same?
If a public health plan trigger is initiated it would then sound the death nil for the insurance companies. That would be more than just a cap it will take their head as well. Unless the insurance companies are somehow contracted or merged into the government (a government buyout) in order to manage the public plan, else-wise I see that business withering and us dying in the meantime.
I believe that the government alone would be incapable of managing a plan of this size considering every social plan that they have attempted has become bankrupt and they know next to nothing about actually running an efficient business. Ultimately a government run plan with the help of a well controlled insurance and health care industry may be the eventual outcome. But things are so broken at this point it will take quite a while to mend.
And that’s just the beginning… but ultimately, it’s all about more federal control over the individual. With increased health care costs comes the next logical argument by the feds: take over/control the food industries to regulate what we eat in order to make us “a healthier nation”. This will be the rationalization they need to help drive health care costs down which we all know will never happen. And we the people will willingly give up more of our individual rights to the elitists.
Heh heh, good thing for the public, you’re not giving financial advice.
Don’t worry about insurance companies costs going up, their costs (instead of their profit) should’ve been higher, after the reform, they’re just going to have to shift some of that profit over to their costs, just the way it should be.
We’ve seen the ways insurance companies already keep *their* costs down and inflate
their profits:
– dictating the $ amount to cover, not based on market rates, but based on what the insurance companies want, leaving the doctor & the patient as the victim, to either have the doctor eat the costs that go over or to deny care to transfer that cost to the patient (even though the patient paid for insurance)
– after years of pocketing a patients premiums, at the first sign of the patient needing serious care, insurance companies take out a team to investigate that patient’s health, digging up centuries old dirt to list them as having a pre-existing condition, so they don’t have to pay up a small portion of the premium they’ve been pocketing.
want more? lots more? I find it funny that your blog is being advertised on Google Adwords, as if this is a coverup for propaganda against health care reform….
This congress, the same one that tanked the economy then bailed out banks with our tax dollars that they could buy naming rights to stadiums (capitalone = new yankee stadium) now demand control over health care that they determine who is eligible for medical care funded by increased tax dollars from a smaller number of working folk (layoffs and reductions in force per above economic mismanagement). Campaign promises are merely fluff – it’s time to govern; vote out the congressmembers funded by the banks and insurance companies and fico and replace them with those who understand simple math.
After reading a few of the comments posted here, I would be remiss to not respond in kind.
Losing Our Rights:
Your claim, which struck me as mildly smacking as a warning of the imminent arrival of some sort of quasi-police state intent on forcing the 48 some-odd-million Americans who, for a host of reasons, have simply not been able to keep up with the cost of insurance deductibles, co-pays, et al that have risen over 489% in the last 10 years.
Any effort to reform what is comically referred to as “healthcare” is not an attempt to dictate what Americans should eat (although, given the fact that our society is plagued as having the highest rate of obesity, even that might not be a bad idea).
Here are a few facts to underscore my response to you:
http://helpglobe.com/answers.aspx?qid=570
http://www.medicalnewstoday.com/articles/51585.php
Kate Sender:
Whether or not the folks over at Fox News (sic) continue to rewrite what our country bore witness to the past eight years, President Obama inherited the misdoings which led to “the tanked economy” to which you refer.
Moreover, it was Mr. Bush who, just as he had done in informing the Americans he had decided that Iraq had to be invaded, delivered another of his “chicken little,” “the sky is falling” speeches.
http://abcnews.go.com/Politics/Vote2008/story?id=5879591&page=1&page=1
http://www.aim.org/aim-column/bushs-big-bank-bailout/
So while I agree that some blame must be placed, let it be attributed to the party responsible for it.
“more competition causes the price to go up not down” !??! I read the first paragraph and already this guy is full of sh*t !!!
Wow, you read the whole first paragraph before rendering that carefully-considered judgment?
Unfortunately, the explanation for this counter-intuitive observation is in the following paragraphs, not the first one.
This article is just a load of bull. These right-wing nut jobs never cease to amaze!
What amazes me is being called a right-wing nut job. Thats a first! I have many times been called a socialist merely for insisting that, yes, we really should find a way to cover everyone, as well as for my analysis explaining why free market competition cannot be the panacea that fixes health care.
I wonder if you actually read the full argument or just the headline – and I invite you to read other articles on the site. You might find that there is a bit more complexity to this issue than you suppose.