dagblog - Comments for "Emergency Visits Seen Increasing With Health Law"

It may sound simplistic, but

Peter Schwartz — Mon, 20 Jan 2014 19:03:05 +0000

It may sound simplistic, but insurance companies make money when they take in more money than they pay out.

In general, they achieve this balance in two ways (excluding investing their money): 1) raising premiums when deductibles go down and vice versa; 2) excluding people whose conditions they know, in advance, are almost certain to be costly.

Number two has been taken away from them, which, IMO, is huge. If they know, going in, that they are going to pay out $1 million for a customer who will only pay in $100K, then they know they're going to be in trouble.

Higher premiums bring in more money. Higher deductibles simply increase the "space" in which they have no financial liability. In the first case, they make more; in the second case, they save more by paying out less.

In health insurance, your insurer is betting you won't get sick; you're betting you will. In life insurance, you're insurer is betting you won't die; you're betting you will. In an annuity, your insurer is betting you will die; you're betting you won't. With life and annuities, the actuarial figures are pretty exact; in health, they are much less certain and thus much more risk is involved in agreeing to cover your medical bills.

"Yeah, we're coming from

Peter Schwartz — Mon, 20 Jan 2014 18:51:07 +0000

In reply to You don't have to respond at

"Yeah, we're coming from different directions. I see it like this: I'm criticizing the design. And you're defending it as something as better than nothing, no matter how bad it is. And I am wondering why you are still fighting a propaganda fight for it when it's the law of the land, and you don't seem to want to see anything in the ACA as a flaw that should be fixed, but that it should just be accepted as is because the Republicans are against it. And you're like going out of your way digging deep for good in it anywhere you can find it."

This is a cartoon. I don't have to dig deep to find the good in it at all. All I have to do is look at: no pre-existing exclusions. That's a huge good and right on the surface. And, it accounts for much of what people find bad in the plan.

All I have to do is look at the huge number of choices I'd have now versus what I had before--choices that did NOT include "my" doctors.

All I have to do is look at the inclusion of mental health, which I paid for out of pocket for 25 years.

All I have to do is look at my last policy, which cost me $600 a month with a $3,000-$5,000 deductible for in-network and another, higher one for out of network versus an ACA policy that costs $600 and has a $0 deductible. Maybe in your world going from a 3K deductible to a $0 deductible is nothing, but not in mine.

All I have to do is read where my friend on SSI is going to save $800 a month on premiums for better coverage over what her insurance company was giving her before. Maybe you think that's nothing or "better than nothing," but saving $9600 is no small deal for her.

As far as the fight being over, you must have your head in the sand. That's all I can say. Even leaving aside the SCOTUS fight, you have states refusing Medicaid on party line bases. You have states outlawing navigators on party line bases. You have the GOP blocking any of the fixes you might like on party line bases and then accusing Obama of overstepping his constitutional bounds when he tries to make the fixes on his own. In short, you have an entire party still dedicated to making sure the program fails in order to kill it off. Where have you been?

"And the use of a HSA would be a great help for those who are above subsidy level, but not that high income, where they get a tax deduction for out-of-pocket. I recall you didn't understand that well how these work..."

Then I must not have been clear, or perhaps you misread. I am one of those people and had an HSA for years and know very well how they work. I also know how they were sold, which has turned out to be false.

They were sold as a way to reduce medical spending. If folks were spending their own money, they'd be more careful, shop around, and prices would come down. Apparently not. It was also envisioned that a young person, starting early, could save up a big pot of dough--saving both for medical expenses and retirement simultaneously--and pay out of pocket for big expenses which wouldn't hit until he was older. Not likely.

HSAs are a fine way to deduct your medical expenses. This assumes you have the money to pay for medical expenses in the first place. But as you noted elsewhere, even non-catastrophic events can easily spiral up into the five figure realm.

I myself forewent a procedure by an opthamological plastic surgeon because it was 3K and I hadn't met my deductible. I didn't have the dough at the moment. Had it been cancer, I'd have been in the soup. At that moment, I'd have rejoiced had I had a "better than nothing" policy with no deductible. And, I'd have gone to different, but no doubt perfectly fine, doctor for the procedure.

HSAs were based on the assumption, incorrect I think, that under-10K expenditures were what was driving up health care costs. I'd put the blame on high end procedures and chronic disease management. Also, I don't think people run to the doctor every chance they get just because they can charge it to insurance. I'm not a typical male in my aversion to doctors, but I don't go at the drop of a hat. I go when I need to. I didn't skip that eye procedure because I was having to spend my own money; I skipped it because I didn't have the money. And when I had the money, finally, and went, it was not a day in the park.

Shifting gears...

As long as you have private insurance, and maybe even with public insurance, deductibles will move inversely to premiums. The lower the premium, the higher the deductible, and vice versa. It's designed this way to mitigate the insurer's risk. Issues around how much a person makes or how much he's likely to use or overuse his plan don't fit neatly into this. Poor people often have very high bills. Rich people, who could afford high medical expenses, often have relatively low medical expenses.

Poor people need low premiums, for obvious reasons. Lower premiums come with higher deductibles. But if the max is 6,350 out of pocket, it is still a better deal for someone without much money than what was the case pre-ACA. As you say, the cost doesn't come crashing down all at once and, in fact, many hospitals will write off these expenses. In any event, it is FAR better than the 300K bill for heart work incurred by the Eritrean refugee couple (he made $10 an hour) my wife pleaded for. Capping a person's liability at 6,350 is a pretty good thing. It would be better if it were lower or $0. But it's far better than having it go up to $300,000.

Could we have low premiums and low-to-no deductibles? IMO, not without massive government backstopping or government capping the amount doctors and hospitals can charge. Ezra has pointed out that EVERY country which has successfully cut medical expenses has used government to cap prices (and also used personal incentives to help keep costs down, cf Japan and Singapore).

The right seems to think that empowering health care consumers to shop will do it--IMO, not unless they acquire tremendous leverage by banding together into very large groups with market pricing power. Doctors and hospitals hold a commodity of ultimate value to buyers--their lives and health.

Of course, if "we all" decided en masse to live ultra-healthy lives and bring down cancer and diabetes and heart disease to historic lows, we MIGHT move the needle. If, at the same time, we all decided that living beyond, say, 85 or 95, should be treated as life's lagniappe to us, we could probably eliminate a good chunk of the very expensive spending. I bet this would be Dasani's advice.

Just to finish on a different point: What's all this bitching about having to give up one's doctors? I never had a doctor who was in-network. And with the way Americans move, they are constantly giving up their doctors and finding new ones. Why does anyone think that a doctor who is in-network is worse than a doctor who is out of network? I could've saved a good bit of money years ago had I clued into this reality before. I recently switched to a doctor in-network who is just fine. Plus, she's ALWAYS on time and time manages throughout the day very efficiently. If I want a doctor willing to lollygag with me, then I'm going to have to pay more for it. But again, a doctor's office is not a place I rush to visit for overtreatments every chance I get.

Yes, but a couple of

Peter Schwartz — Thu, 09 Jan 2014 14:32:12 +0000

In reply to It may boil down to this

Yes, but a couple of things...

• In Dasani-ville, as you pointed out, folks are pretty good at learning to work the system. Had not the Republicans worked to sabotage the whole navigator effort, then we could have had people out there helping folks through the system, just as happened with Part D. And the navigators could have been a great source of feedback for improving the system as we went along.

It is true, these people have many economic and time pressures. But one of those is the health pressure, especially if they are now sick. So there is some real motivation to make this work for them. They may skim on a purely preventive procedure, but if the doctor has told them they may have cancer, then the motivation goes up. Especially if there are folks out there to them through.

• If the system is overly complex, it can be simplified. The unstated question underlying most of this debate is: Is the ACA fatally flawed, or is it fixable? Of course, the right wants to say that it's fatally flawed, and lately, it seems, that chunks of the left have joined their team.

If it's fixable, then it needs to be fixed and adjusted just like every other complex law in creation. It may be painful and take a while, but often that is what it takes.

• My point was about policy: If you build the tax benefits into the price of the premium and copay and deductible, then the person saves money from the get go and doesn't have to wait. IOW, the sticker price is substantially lower.

It's a little like those retail rebates: Some are instant (yay!) and you get them at the time you buy, and some require you to mail in your receipt or go online, assuming you haven't lost the receipt en route from store to home. Or just forget to do it.

Meanwhile, you've instantly paid out more money for the thing you bought. And the retailer knows just how many people will forget or won't bother or will lose, and they have captured a sale based on promised savings that will never materialize.

• If you deliver those savings at tax time, then you end up with higher upfront premiums, copays, deductibles that will also and even more powerfully dissuade those on the edge from buying. So, in fact, you end up with a worse situation, though a simpler one. If we're talking about people who haven't been insured up to now because of the high cost of insurance, then we've done nothing to improve that and simply made it "simpler" not to buy insurance at all.

It may boil down to this

artappraiser — Thu, 09 Jan 2014 06:18:23 +0000

In reply to This does seem complex. It

It may boil down to this trade-off: Do you want your savings instantly at the time you pay? Or do you want to get it tax time?

Respectfully, I suspect most people below 250% of poverty level don't have the luxury of thinking of such things! They are the same people targeted by payday-style lenders giving them advances against their earned income credit on their taxes and take a big chunk of it.

I doubt many will have the time or energy to spend hours and days talking to government agencies about getting a lower co-pay on that biopsy. They just won't go for the biopsy now, maybe later (maybe if they get that earned income credit check! or they could have one of the kids work a morning paper route or collect recyclables on garbage day?) They have to go back to work at their two part-time jobs and get the kids to day care, and get 5 hours of sleep so they can think straight.

P.S. I think everyone should

artappraiser — Thu, 09 Jan 2014 05:56:44 +0000

In reply to You don't have to respond at

P.S. I think everyone should keep this in mind: if the ACA individual market does not collapse, and it's unlikely it will, it is the model for the future. What it becomes is very probably coming to an employer-provided insurance plan near you in the foreseeable future.

(And yes, that also means that the "Obama lied about keeping your plan and your doctor" thing is not going to go away, I predict you are going to be hearing it for years )

You don't have to respond at

artappraiser — Thu, 09 Jan 2014 05:49:30 +0000

In reply to AA, too tired respond

You don't have to respond at all. And there is no time limit on responses as far as I'm concerned (I'm one who has argued here for keeping commenting up for years.)

Yeah, we're coming from different directions. I see it like this: I'm criticizing the design. And you're defending it as something as better than nothing, no matter how bad it is. And I am wondering why you are still fighting a propaganda fight for it when it's the law of the land, and you don't seem to want to see anything in the ACA as a flaw that should be fixed, but that it should just be accepted as is because the Republicans are against it. And you're like going out of your way digging deep for good in it anywhere you can find it.

I'm saying the plan choices (the metal designations) are designed badly, that's it perverse as far as fixing what it planned to fix, that it's upside down. That they should have made it so that the low income got low out of pockets. That the higher the income, the more they can afford higher deductibles, etc., and that these are more appropriate for those incomes.

[And the use of a HSA would be a great help for those who are above subsidy level, but not that high income, where they get a tax deduction for out-of-pocket. I recall you didn't understand that well how these work: you don't have to "save" anything; you can put money in and use it immediately to pay, you don't have to wait or "save" anything. You put it in, and you pay your doctor with the card to the account, no different than using a checking account to pay the doctor. It's actually merely a record keeping device for tracking amount paid against deductible and for tax deduction. Pays a teeny little bit of interest if you don't spend it, but I think hardly anyone does it for that reason, there are far better places for savings, most basically use it like a health care checking account.]

One of the main problems of our health care system is overuse, overmedication, over treatment by higher incomes and Medicare recipients because they can afford it or because it's covered. That's where the deductibles are appropriate, to make those people chose more wisely.

The problem of poor and low income is just the opposite. They wait until it is a major crisis costing a lot of money. With them, you want to encourage more care sooner. So it's upside down that those people are the ones that are getting the high deductible plans. It's not set up well to fix the health care cost problem, nor the problem of treatment of low income uninsured, nor the problem of overtreatment.

AA, too tired respond

Peter Schwartz — Thu, 09 Jan 2014 05:14:03 +0000

In reply to what's wrong with helping out

AA, too tired respond now.

Reading back over our exchange, I think we're just misunderstanding each other on a couple of points.

I'll try to respond later...

My only point in bringing up the Platinum example was that I was being offered a Platinum Plan for about $600 and $0 deductible. This compared VERY favorably with my plan of five years ago for which I was paying $500 and had something like a $5,000 deductible (though I can't remember exactly) and actually faced TWO different deductibles. This struck me as a big improvement.

Especially when you add the freebies...the no caps...the no pre-existing condition problem. I remember living in fear that my insurance might lapse (a variable income making it harder to be pay premiums regularly) and I would become uninsurable.

That's ALL GONE now, and this one fact is responsible for a lot of the cost issues we see in this program, IMO.

Premiums and deductibles are simply trade-offs. A person of limited means is probably better off with a Bronze plan because he doesn't have the money to pay that monthly bill. He can then bet he doesn't get sick.

If he's very sick AND he has limited means, then Platinum doesn't help him that much because he can't afford the premium (without subsidies). If subsidies can bring down the premium, then you're right, he's better off with the Platinum, IMO. If he's still too poor, then Medicaid has to step in.

what's wrong with helping out

artappraiser — Thu, 09 Jan 2014 05:08:33 +0000

In reply to ? That's what I said: 7

what's wrong with helping out folks who have seriously expensive pre-existing conditions? You toss that off like it's nothing.

I don't get where you get that! I basically think it's about the only really good thing about ACA! It's great! Long overdue!

I was only pointing out that it is probably a wise financial choice for people with expensive pre-existing conditions to go with low-deductible Platinum plans, but that for many others who do not have major pre-existing and are not qualilfied for subsidization, Platinum and Gold plans are probably kinda stupid choices. And that Bronze plans with high deductible combined with a Health Savings Account would be a far better option for those unsubsidized people, but unfortunately none of them on the exchange in NYC are set-up to be compatible with HSA's.

And again (apparently I have to be more blatant about my opinion, you don't seem to be getting it): I think high deductibles and out of pockets are really really bad for the low and middle income people and people of irregular incomes who are getting subsidized plans. But that is what they are ending up with, Bronze Plans! That those plans that are actually more appropriate for people with higher incomes! (Again, unless they have expensive pre-existing.)

I think it is going to cause the lower income people to delay important care until their problem is far more expensive, for which all of us will pay! It's got to be real easy and nearly cost-free for them to go to the next step of care after something is detected in the free preventive care stage. But so far it's looking like that's not going to happen, but they are going to have to come up with substantial amounts to be treated for anything major.

And this was also my point on mammograms

I don't get why you are going on about paying for a mammogram. Mammograms are included in free preventive care! I was talking about what happens after a mammogram comes back positive and they have to start paying out of pocket to deal with the possibility of cancer! It doesn't come crashing down all at once, they won't end up bankrupt on Medicaid.it's biopsy first, consultation with specialist, etc., up to $6,350, which they might not have! So they could put off being treated for the positive mammogram because of the expense. And I thought one of the major points of this reform was for that kind of thing to stop happening. I see it continuing unless they fix the out-of-pocket thing on Bronze plans. What I see from what I can find about any kind of subsidy for out-of-pocket, it is a big complicated mess that will involved tons of bureaucracy, especially if low incomes are erratic and not stable, meaning months of tangling and wrangling--meanwhile the cancer could be growing.

This does seem complex. It

Peter Schwartz — Thu, 09 Jan 2014 04:59:45 +0000

In reply to Found info. on the

This does seem complex.

It may boil down to this trade-off: Do you want your savings instantly at the time you pay? Or do you want to get it tax time?

Getting it at tax time means you have to pay more all year long and then get your credit at the end of the year.

For people with an irregular income, as I have, I imagine they could set your premium based on last year's tax return and then make an adjustment at the end of the year or for the following year. Sort of like income averaging or the regularizing of your utility bill despite fluctuating usage.

Social workers will more than likely be helping folks on Medicaid. Again, we have to stay clear on whom we're talking about and what their finances are.

Ultimately, most of these difficulties arise because of the hybrid, government-private insurer nature of the ACA.

Not sure why this applies

Peter Schwartz — Thu, 09 Jan 2014 04:51:30 +0000

In reply to Oh and I found out that for

Not sure why this applies particularly to silver plans...

If these folks find THIS shopping onerous, what did they do before? Could it be made easier? Yes, I am sure. But improving the program doesn't seem to be the tenor of this discussion.

For one thing, it's filled with paranoia about "evil intentions" on the part of someone, but whose evil intentions is not clear. To wit:

"I suspect this is actually the intention: the goal is to get people to make poor decisions, to pull the unwary into traps where they get very bad insurance and pay a lot."

We've already seen insurance companies trying to game the system, so maybe they mean that. I honestly don't know.

I started reading the rest, but the discussion was really about neo-liberalism (which goes way beyond health care), and the point seemed to be that no one had time to shop and figure all this out what with babies to raise and shopping to do, but the neo-liberals were forcing people to do that.

I'll have to go read it more carefully. It probably boils down to an argument for single payer which would obviate the need for people to shop. They could just go to their doctor and get the treatment their taxes have already paid for. I'm sympathetic, but that would undoubtedly cause an even greater doctor shortage than we have now. Just saying...

But just to cross-pollinate discussions a bit, I don't think Dasani would be sympathetic. She believes in people taking personal responsibility for their lives. These guys and gals feel that people are already struggling with full plates; let's not pile it higher. Again, how did these guys get their insurance before ACA?