34 replies to this topic

[david ellis]

Good news again. In my last Obamacare post, Aetna had to give up $100,000,000 dollars because they spent too much on overhead. The goal is to spend 80% on medical care. Good thing Obamacare has enforcement teeth. Profit and overhead is limited to 20%. (Medicare's overhead is 3%- so a 20% limit is reasonable)

So here is the latest good news from Obamacare.

Insurers Profit From Health Law They Spent Millions to Fight

"Insurers led by WellPoint Inc. (WLP), the biggest by membership, recorded their highest combined quarterly net income of the past decade after the law was signed in 2010, said Peter Gosselin, the study author and senior health-care analyst for Bloomberg Government. The Standard & Poor’s 500 Managed Health-Care Index rose 36 percent in the period, four times more than the S&P 500."

[rwac]

The opposition to Obamacare is not based on insurer profit, it is based on consumer choice. In the short term, Obamacare may be beneficial to insurers, but it will almost certainly destroy them in the slightly longer term.

[david ellis]

The opposition to Obamacare is not based on insurer profit, it is based on consumer choice. In the short term, Obamacare may be beneficial to insurers, but it will almost certainly destroy them in the slightly longer term.

You should use more facts, it would save time and improve my understanding of how you got to a particular point. I don't know what you are talking about. To me it looks great, profit margins are up already, and soon everybody can be insured. There are going to be some problems, but time and adjustments to Obamacare will cure them. Obama has been flexible, exceptions have been made for stuff that didn't work well. And the wrinkles will be ironed out. It works great in Massachusetts, why not for the whole country?

Increased profit margins is a big deal. The insurers thought there would be losses, and spent almost a hundred million lobbying against Obamacare. Big surprise for the insurance companies and it should be a big surprise for you. I know some consumers who will be thrilled.

Those with pre-existing conditions can get coverage soon. The only people to feel sorry for are the lawyers and private detectives needed to enforce the pre-existing conditions, they are out of their jobs. Maybe that was the improvement to profit margins.

[rwac]

You should use more facts, it would save time and improve my understanding of how you got to a particular point. I don't know what you are talking about.

Look the most significant impact of Obamacare is due to the government run health-care exchanges, which will come into effect in 2014. Currently only some parts of Obamacare have come into effect, like for example the mandatory coverage of certain conditions, which increases the cost of certain policies, and thus the profit.

[niner]

The opposition to Obamacare is not based on insurer profit, it is based on consumer choice. In the short term, Obamacare may be beneficial to insurers, but it will almost certainly destroy them in the slightly longer term.

Hypothetically, let's say that the insurance companies are destroyed. Operationally that would mean that most of them had shut down their healthcare divisions and we concentrating on other insurance and financial activities. Those health insurance businesses had been profitable, which means money was being transferred from the 99%, either directly or through their employers, to the insurance companies where a lot of it went to exorbitant executive compensation. That money is now kept by consumers, who are able to spend it on other things they need. They now get their insurance through a more efficient organization, perhaps a public entity. Where's the problem with this scenario? Why is this not a good thing?

[rwac]

They now get their insurance through a more efficient organization, perhaps a public entity. Where's the problem with this scenario? Why is this not a good thing?

The problem is that this will make the whole healthcare industry stagnate. There are many ways in which having only a single insurance plan is a bad idea.

For example, I can definitely see the possibility of all doctors being forced to accept insurance from the new entities. Some doctors don't accept insurance at all, and they will be in some trouble. Currently, Insurance companies set the treatment guidelines, and you can go outside the insurance to get treatment (without coverage if necessary). With Obamacare, it is quite possible that all doctors will be forced to follow the same guidelines. This is the reason certain therapies are only possible in the US, and not in say the UK and Canada.

Another example is the USPS, it worked fine for a while, but now since mail quantity has reduced, it's running into trouble. There are number of ways to fix this, but it's hampered by government regulations in the matter.

It will probably slow down innovation in medical fields if every treatment is forced to go through Gov run insurance.

[david ellis]

You should use more facts, it would save time and improve my understanding of how you got to a particular point. I don't know what you are talking about.

Look the most significant impact of Obamacare is due to the government run health-care exchanges, which will come into effect in 2014. Currently only some parts of Obamacare have come into effect, like for example the mandatory coverage of certain conditions, which increases the cost of certain policies, and thus the profit.

I feel like we are talking religion where there are no facts. I asked for facts and got no facts. Tell me why. Why won't the exchanges work? Why will consumers not like their policies?(from your previous post). Please give me links/facts that support your statement so I can understand what you are thinking.

Why the nonsense "increases the cost of certain policies, and thus the profit." How does that work? Increasing costs equals increasing profit? That kind of logic is valid only in religion where making sense is not necessary.

[rwac]

I feel like we are talking religion where there are no facts. I asked for facts and got no facts. Tell me why. Why won't the exchanges work? Why will consumers not like their policies?(from your previous post). Please give me links/facts that support your statement so I can understand what you are thinking.

Why the nonsense "increases the cost of certain policies, and thus the profit." How does that work? Increasing costs equals increasing profit? That kind of logic is valid only in religion where making sense is not necessary.

For one thing, the rules are that everything under the sun will be covered. The high deductible insurance policies have also disappeared. So if you want to assume your own risk, it's not ok. So a young (and comparatively poor, unlikely to get sick) person is forced to pay extra to cover sick people. Oh, and there must be a reason why there are multiple insurance companies that provide different policies. Indeed, if you are pro-life, why should you be forced to buy insurance that would cover abortions?

Oh, btw, belief in government is a religion too, that government intervention is always beneficial.

Coverage of more conditions means the policy is more expensive, this is inevitable. http://articles.nyda...rivate-insurers . The insurance companies basically invest the money you give them, and the interest on it is theirs to keep. The more expensive the policy, the more the profit.

[david ellis]

For one thing, the rules are that everything under the sun will be covered. The high deductible insurance policies have also disappeared. So if you want to assume your own risk, it's not ok. So a young (and comparatively poor, unlikely to get sick) person is forced to pay extra to cover sick people. Oh, and there must be a reason why there are multiple insurance companies that provide different policies. Indeed, if you are pro-life, why should you be forced to buy insurance that would cover abortions?

Oh, btw, belief in government is a religion too, that government intervention is always beneficial.

Coverage of more conditions means the policy is more expensive, this is inevitable. http://articles.nyda...rivate-insurers . The insurance companies basically invest the money you give them, and the interest on it is theirs to keep. The more expensive the policy, the more the profit.

From your link-- It closes with

"Leslie Moran, a spokeswoman for the Health Plan Association of New York, says HMOs are forced to jack rates to shoulder $4 billion in state taxes and antiquated benefits laws while medical costs rise.
"It's the same thing we're seeing on the federal level where we're 'reforming' and controlling health insurance, but we're not doing anything to reform and control health care costs," she said."
Those high costs are not Obama care costs - keep looking.

[david ellis]

For one thing, the rules are that everything under the sun will be covered. The high deductible insurance policies have also disappeared. So if you want to assume your own risk, it's not ok. So a young (and comparatively poor, unlikely to get sick) person is forced to pay extra to cover sick people. Oh, and there must be a reason why there are multiple insurance companies that provide different policies. Indeed, if you are pro-life, why should you be forced to buy insurance that would cover abortions?

Oh, btw, belief in government is a religion too, that government intervention is always beneficial.

Coverage of more conditions means the policy is more expensive, this is inevitable. http://articles.nyda...rivate-insurers . The insurance companies basically invest the money you give them, and the interest on it is theirs to keep. The more expensive the policy, the more the profit.

From your link-- It closes with

"Leslie Moran, a spokeswoman for the Health Plan Association of New York, says HMOs are forced to jack rates to shoulder $4 billion in state taxes and antiquated benefits laws while medical costs rise.
"It's the same thing we're seeing on the federal level where we're 'reforming' and controlling health insurance, but we're not doing anything to reform and control health care costs," she said."
Those high costs are not Obama care costs - keep looking.

While you are looking for a source that supports your position, maybe you could reflect on what a mess health care is now,(as you found out for yourself with your link) and seriously consider the possibility that Obamacare might be the better choice. That health system that you are supporting is rotten, it costs twice as much as the rest of the world, and does not provide health care for 45 million citizens. The United States is the only first world country that doesn't cover all of its citizens. When you see a health care problem, read carefully, maybe your beliefs cause you to see things that are not there.

Government intervention is not always beneficial. However, I also believe government intervention is beneficial sometimes, but only when it is the best way to get an equitable solution.

Some republicans believe in no government intervention. I am calling them extremist radicals, they are no longer libertarians they are anarchists. These extremists are the ones who are religious. They believe things that are not true. And proved not true everyday. And unable to see the contradiction between reality and their beliefs. Unfortunately, the contradictions causes them to seek more purity. They think when things are finally pure that all will be good. This makes them dangerous, because people who want absolute purity are the kind of people that blow things up. I call beliefs like that religion.

[rwac]

"Leslie Moran, a spokeswoman for the Health Plan Association of New York, says HMOs are forced to jack rates to shoulder $4 billion in state taxes and antiquated benefits laws while medical costs rise.
"It's the same thing we're seeing on the federal level where we're 'reforming' and controlling health insurance, but we're not doing anything to reform and control health care costs," she said."
Those high costs are not Obama care costs - keep looking.

Read closer. Obamacare is a 'reform'.

[rwac]

While you are looking for a source that supports your position, maybe you could reflect on what a mess health care is now,(as you found out for yourself with your link) and seriously consider the possibility that Obamacare might be the better choice. That health system that you are supporting is rotten, it costs twice as much as the rest of the world, and does not provide health care for 45 million citizens. The United States is the only first world country that doesn't cover all of its citizens. When you see a health care problem, read carefully, maybe your beliefs cause you to see things that are not there.

Yes, healthcare is a horrible mess, it's a horrible combination of free market and socialist mechanisms. You can buy your own insurance, but companies get tax breaks for providing insurance. So most people never see the true cost of their healthcare. You can either go left or right from this position, to the left is of course Obamacare. To the right is something like remove the tax breaks for companies, and let people see the costs of healthcare first hand, rather than hiding the costs by having insurance pay for treatment. And that is probably the way to do it, simply show people how much treatments and patented drugs cost, and people will cut costs voluntarily.

[Rational Madman]

Good news again. In my last Obamacare post, Aetna had to give up $100,000,000 dollars because they spent too much on overhead. The goal is to spend 80% on medical care. Good thing Obamacare has enforcement teeth. Profit and overhead is limited to 20%. (Medicare's overhead is 3%- so a 20% limit is reasonable)

So here is the latest good news from Obamacare.

Insurers Profit From Health Law They Spent Millions to Fight

"Insurers led by WellPoint Inc. (WLP), the biggest by membership, recorded their highest combined quarterly net income of the past decade after the law was signed in 2010, said Peter Gosselin, the study author and senior health-care analyst for Bloomberg Government. The Standard & Poor’s 500 Managed Health-Care Index rose 36 percent in the period, four times more than the S&P 500."

Okay, the statute in question has had the predictable effect of inflating demand, but there is also a correlation with consumption and cyclical downturns. And in addition to market determined inflation, forecasts of future losses---not limited to predictions of the statute's direct impact---has given providers an incentive to raise costs in areas that are either permitted, or not covered by federal law. So at least superficially, it doesn't seem clear to me that PPACA is deserving of a majority share of causality.

[david ellis]

Good news again. In my last Obamacare post, Aetna had to give up $100,000,000 dollars because they spent too much on overhead. The goal is to spend 80% on medical care. Good thing Obamacare has enforcement teeth. Profit and overhead is limited to 20%. (Medicare's overhead is 3%- so a 20% limit is reasonable)

So here is the latest good news from Obamacare.

Insurers Profit From Health Law They Spent Millions to Fight

"Insurers led by WellPoint Inc. (WLP), the biggest by membership, recorded their highest combined quarterly net income of the past decade after the law was signed in 2010, said Peter Gosselin, the study author and senior health-care analyst for Bloomberg Government. The Standard & Poor’s 500 Managed Health-Care Index rose 36 percent in the period, four times more than the S&P 500."

Okay, the statute in question has had the predictable effect of inflating demand, but there is also a correlation with consumption and cyclical downturns. And in addition to market determined inflation, forecasts of future losses---not limited to predictions of the statute's direct impact---has given providers an incentive to raise costs in areas that are either permitted, or not covered by federal law. So at least superficially, it doesn't seem clear to me that PPACA is deserving of a majority share of causality.

You bring up a good point. But my point was simply that they are doing well, even though they are preparing for 2014. This is In contrast to Aetna, who spent $100,000,000 million too much on overhead, and had to cough it back up. (this is another post of mine)
I focused on this statement in the linked article in my post.

"Still, the companies saw their average operating profit margins expand to 8.24 percent in the six quarters since the overhaul became law, compared with 6.88 percent for the 18 months before it was passed."

From reading the article, the gist to me about Obamacare was that they were looking forward to new business generated by Obamacare.

Here is a piece of the article with the interesting to me parts bolded. The author Gosselin said Obamacare might be risky, but I didn't find anything negative from the insurance companies. They seem to be taking a positive attitutde and looking forward to the challenges and opportunities.

"Commercial business now accounts for less than half of the companies’ combined revenue for the first time in at least two decades, according to the study. That’s partly a result of the companies’ growing investments in plans that provide services to Medicare and Medicaid patients, the report said.
Medicare Revenue
At the same time, quarterly revenue from Medicare, the $525 billion federal health program for the elderly and disabled, increased by one third, to $16.39 billion, for the four insurers that reported figures, the study shows. Medicaid revenue more than doubled to $4.11 billion.
The companies run managed-care plans for Medicare that may see revenue rise by $10 billion by 2015 as more baby boomers retire, industry analysts have said. The insurers also administer benefits for Medicaid, which is being expanded under the health-care law starting in 2014 to cover more uninsured people. States have turned to private plans to manage Medicaid caseloads and help control health spending.
Health plans will be able to bid on an estimated $40 billion in state Medicaid contracts from now to 2014, the study found.
The top five insurers have completed at least 10 deals to add Medicare HMO’s or programs dealing with the chronically ill, which usually involve Medicare or Medicaid enrollees. The deals include UnitedHealth’s $2 billion purchase of XL Health Corp. and Cigna’s $3.8 billion for HealthSpring Inc. (HS)
The push toward government programs may prove to be a risky wager, Gosselin said in an interview."

[Rational Madman]

The opposition to Obamacare is not based on insurer profit, it is based on consumer choice. In the short term, Obamacare may be beneficial to insurers, but it will almost certainly destroy them in the slightly longer term.

I would agree, but there should also be concerns about the statute's impact on consumer choices outside of health care spending.

Since it's an important household expenditure that's crowding out more productive forms of spending and investment, a convincing case can be made to sustain and supplement programs that deflate this sector's burden on households. However, I remain unconvinced that in a context of acute political discord, and a fragile economic recovery that remains vulnerable to the animal spirits, that it was wise to expend scarce capital---in all its forms---on an initiative that had a scope that was certain to elicit a strong response from the opposition. Indeed, I think investments in reducing labor costs, a more conditional unemployment insurance---and assistance, and the stabilization of strained asset prices would have been more sound targets. But unfortunately, the dual effects of the 2008 election and the last recession led to irrationally exuberant---or intransigent---behavior that greatly distorted the calculations that political actors would've made in normal conditions, leading to a needlessly messy political battle that has destroyed the prospect of pursuing targets that were deserving of greater precedence. Returning to my original point, though, and leaving the opportunity costs aside, I think households should be given sovereignty over their use of federal funds. To be sure, the extent of household debt suggests that their consumption choices may have dubious or detrimental values, but the unchangeable reality is that they still possess a greater knowledge of how to more efficiently spend public money that they're entitled to receive. As this applies to the individual mandate, I believe we're making the mistake of mandating the spending of scarce funds on health care, which demonstrates a clear disregard of the variable conditions in each household---whom are more inclined to be worried about stagnating wages, commodity price behavior, and other living costs. So if it's not already clear, the point is that since health care is not a concern that sits at the top of the preferences of all households, and because of this attitude, a better outcome should be achieved if households were to be given greater freedom of choice through a cash transfer. Of course, dispensing with the individual mandate will most assuredly reverse the positive fiscal impact of PPACA, but such an argument looks very narrowly on the broader costs that will come in the form of inflation, and the precipitous drop in the existing number of employer provided health insurance.

Anyway, it should be clear that my post is not targeting the views of rwac, which are in greater harmony with my own views.

Edited by Rational Madman, 08 January 2012 - 03:52 AM.

[Rational Madman]

The opposition to Obamacare is not based on insurer profit, it is based on consumer choice. In the short term, Obamacare may be beneficial to insurers, but it will almost certainly destroy them in the slightly longer term.

You should use more facts, it would save time and improve my understanding of how you got to a particular point. I don't know what you are talking about. To me it looks great, profit margins are up already, and soon everybody can be insured. There are going to be some problems, but time and adjustments to Obamacare will cure them. Obama has been flexible, exceptions have been made for stuff that didn't work well. And the wrinkles will be ironed out. It works great in Massachusetts, why not for the whole country?

Increased profit margins is a big deal. The insurers thought there would be losses, and spent almost a hundred million lobbying against Obamacare. Big surprise for the insurance companies and it should be a big surprise for you. I know some consumers who will be thrilled.

Those with pre-existing conditions can get coverage soon. The only people to feel sorry for are the lawyers and private detectives needed to enforce the pre-existing conditions, they are out of their jobs. Maybe that was the improvement to profit margins.

But health care inflation will hardly be checked with PPACA, which is understandable, since the combination of insurance coverage and federal subsidies should incentivize greater consumption. To be sure, this might reduce the incidence of catastrophic costs, but it's not clear that aggregate costs have a strong causal relationship with the normative method used by OECD states, and the level of federal spending. Indeed, it would be stretch to claim that health outcomes are largely dependent on the aforementioned variables, and that alternative explanations of income, education, culture, and health habits are of limited significance. Rather, I believe that supplementing incomes would be a more efficient way of indirectly addressing the problem. More directly, though, there could be an effort to cover costs that pass a threshold in the low thousands---dependent on household income.

[maxwatt]

There are some 36 nations with health care systemsthe World Health Organization has ranked as better than the US. Why must we reinvent the wheel? Why not choose one that works and model ourselves on it?

Saudi Arabia (26) and United Arab Emirates (27) may not be appropriate models, where oil revenue pays the cost. France is number one, but you might think it too socialistic for American ideology. The English at number 18 would also arrouse suspicions of socialism though the United Kingdom is anything but a socialist state; doctors there are well-paid and satisfied, as are the majiority of citizens..

What I recommend to for the US is the Swiss System (20th). Switzerland has recently been rated as the most competetive capitalist system by the World Economic Forum for the third consecutive year. The US ranked 5th
How do the Swiss do it? There is no public health insurance. But insurance companies, if they wish to sell health insurance, must provide a basic policy on which they cannot make a profit over expenses; they can only break even. The government audits and sets rates, determines what must be covered, but is otherwise hands off; If one does not purchase health insurance, one is fined when paying taxes. So why do the companies enter the market? They sell up from the basic policy. Want a private room in hospital? Want a better meal plan? Maybe you can get that too. But the basic policy will take care of anyone at reasonable cost, and those who want more can get it. The insurance companies fought it at first, but find it sufficiently profitable.
So if you want to repeal Obama-care, replace it with the Swiss pure capitalist system.

Edited by maxwatt, 08 January 2012 - 03:29 AM.

[Rational Madman]

Good news again. In my last Obamacare post, Aetna had to give up $100,000,000 dollars because they spent too much on overhead. The goal is to spend 80% on medical care. Good thing Obamacare has enforcement teeth. Profit and overhead is limited to 20%. (Medicare's overhead is 3%- so a 20% limit is reasonable)

So here is the latest good news from Obamacare.

Insurers Profit From Health Law They Spent Millions to Fight

"Insurers led by WellPoint Inc. (WLP), the biggest by membership, recorded their highest combined quarterly net income of the past decade after the law was signed in 2010, said Peter Gosselin, the study author and senior health-care analyst for Bloomberg Government. The Standard & Poor’s 500 Managed Health-Care Index rose 36 percent in the period, four times more than the S&P 500."

Okay, the statute in question has had the predictable effect of inflating demand, but there is also a correlation with consumption and cyclical downturns. And in addition to market determined inflation, forecasts of future losses---not limited to predictions of the statute's direct impact---has given providers an incentive to raise costs in areas that are either permitted, or not covered by federal law. So at least superficially, it doesn't seem clear to me that PPACA is deserving of a majority share of causality.

You bring up a good point. But my point was simply that they are doing well, even though they are preparing for 2014. This is In contrast to Aetna, who spent $100,000,000 million too much on overhead, and had to cough it back up. (this is another post of mine)
I focused on this statement in the linked article in my post.

"Still, the companies saw their average operating profit margins expand to 8.24 percent in the six quarters since the overhaul became law, compared with 6.88 percent for the 18 months before it was passed."

From reading the article, the gist to me about Obamacare was that they were looking forward to new business generated by Obamacare.

Here is a piece of the article with the interesting to me parts bolded. The author Gosselin said Obamacare might be risky, but I didn't find anything negative from the insurance companies. They seem to be taking a positive attitutde and looking forward to the challenges and opportunities.

"Commercial business now accounts for less than half of the companies’ combined revenue for the first time in at least two decades, according to the study. That’s partly a result of the companies’ growing investments in plans that provide services to Medicare and Medicaid patients, the report said.
Medicare Revenue
At the same time, quarterly revenue from Medicare, the $525 billion federal health program for the elderly and disabled, increased by one third, to $16.39 billion, for the four insurers that reported figures, the study shows. Medicaid revenue more than doubled to $4.11 billion.
The companies run managed-care plans for Medicare that may see revenue rise by $10 billion by 2015 as more baby boomers retire, industry analysts have said. The insurers also administer benefits for Medicaid, which is being expanded under the health-care law starting in 2014 to cover more uninsured people. States have turned to private plans to manage Medicaid caseloads and help control health spending.
Health plans will be able to bid on an estimated $40 billion in state Medicaid contracts from now to 2014, the study found.
The top five insurers have completed at least 10 deals to add Medicare HMO’s or programs dealing with the chronically ill, which usually involve Medicare or Medicaid enrollees. The deals include UnitedHealth’s $2 billion purchase of XL Health Corp. and Cigna’s $3.8 billion for HealthSpring Inc. (HS)
The push toward government programs may prove to be a risky wager, Gosselin said in an interview."

Yes, but since profit maximization will forever remain the paramount concern of private enterprise, both policymakers and the public will steadfastly oppose a broader involvement of insurance carriers. Further, the savings that you cite are immaterial, since they amount to roughly $30 billion per annum, which constitutes less than 4% of the spending that was allocated to both programs in the last fiscal year. So even assuming that this trend continues indefinitely to 2035, the savings will decline to approximately 2% of outlays, since total spending is projected to increase by 4.7% of GDP---from 5.3% of GDP. And with the capital flight, loss in productivity, changes in investor behavior, the effects on unemployment, the likely changes in risk assessments, and the probable reduction in potential output, I seriously doubt that the inevitable loss in net tax revenue will justify this expenditure.

Edited by Rational Madman, 08 January 2012 - 04:26 AM.

[Sillewater]

Glad this discussion got started so someone could explain the idea behing setting MLRs at 80% when for the big five they are already at 0.80:

http://yahoo.brand.e...93125-09-033022
http://yahoo.brand.e...93125-09-025587

Just divide medical costs by premiums. Wouldn't it be the little guys that get hurt? What exactly is the point of this policy.

[Rational Madman]

There are some 36 nations with health care systemsthe World Health Organization has ranked as better than the US. Why must we reinvent the wheel? Why not choose one that works and model ourselves on it?

Saudi Arabia (26) and United Arab Emirates (27) may not be appropriate models, where oil revenue pays the cost. France is number one, but you might think it too socialistic for American ideology. The English at number 18 would also arrouse suspicions of socialism though the United Kingdom is anything but a socialist state; doctors there are well-paid and satisfied, as are the majiority of citizens..

What I recommend to for the US is the Swiss System (20th). Switzerland has recently been rated as the most competetive capitalist system by the World Economic Forum for the third consecutive year. The US ranked 5th
How do the Swiss do it? There is no public health insurance. But insurance companies, if they wish to sell health insurance, must provide a basic policy on which they cannot make a profit over expenses; they can only break even. The government audits and sets rates, determines what must be covered, but is otherwise hands off; If one does not purchase health insurance, one is fined when paying taxes. So why do the companies enter the market? They sell up from the basic policy. Want a private room in hospital? Want a better meal plan? Maybe you can get that too. But the basic policy will take care of anyone at reasonable cost, and those who want more can get it. The insurance companies fought it at first, but find it sufficiently profitable.
So if you want to repeal Obama-care, replace it with the Swiss pure capitalist system.

Well, I pay little heed to the WHO assessment, because I think that the report's chosen measures provides a very incomplete picture of the relative qualities of health care approaches in each country---not to mention the uncertain relationship between health outcomes and public health spending. As for the Swiss approach, I sympathize with their chosen model as well, but I'm more sympathetic to greatly broadening Medicaid spending---and eligibility, and covering health care costs that exceed a reasonable catastrophic threshold.

To be clear, I sympathize with the notion of universal care, but I'm afraid that I can't think of a convincing justification in conditions of perpetual scarcity, and when it seems clear that competing interests are likely to have a greater multiplying effect.

[david ellis]

"Leslie Moran, a spokeswoman for the Health Plan Association of New York, says HMOs are forced to jack rates to shoulder $4 billion in state taxes and antiquated benefits laws while medical costs rise.
"It's the same thing we're seeing on the federal level where we're 'reforming' and controlling health insurance, but we're not doing anything to reform and control health care costs," she said."
Those high costs are not Obama care costs - keep looking.

Read closer. Obamacare is a 'reform'.

You should read closer too.

Obviously this problem cannot be Obamacare's because Obamacare is not in full force and there is not a full complement of insurance pools until 2014. Then, Obamacare will be responsibile for rates and control of insurance pools.

What you have linked to is an excellent example of how the free market does not work sometimes, as a matter of fact, how it can fail spectacularly . Keep in mind that Obamacare starts in 2014, so none of this can be blamed on Obamacare. However in 2014, this problem will be gone. Obamacare was created to solve this problem.

The problem is that insurance rates for the self-insured are skyrocketing in New York.

Examples: (from the article)
A Daily News review of state Insurance Department records found six of the eight HMOs that sell policies to individuals in the city hiked rates by double digits in the past 12 months.

GHI HMO, which has the highest premiums in the city and raised rates 15% over the past year, now charges an eye-popping $7,786 a month, or nearly $93,500 a year, for "family point of service coverage" - which lets people choose their own doctors.
Individuals pay GHI a whopping $3,053 a month, or $36,638 a year.

Explanation of the problem (from the article)
More than a decade of double-digit increases has created what industry officials call an "adverse selection death spiral."
That's where the young and healthy who have fewer claims and help smooth out premium costs drop their coverage as rates soar, leaving only the chronically ill in the pool, which pushes rates up even further.
The sky-high rates force many to forego insurance. The number of people in the city purchasing their own coverage dropped 21% this year.
How the adverse selection death spiral works (from me)
It is the interaction of two reasons. Probably the primary reason was the recession caused a lot of people, many of them young and healthy to be laid off. So rates for the group had to go up. Then the death spiral started, with the first wave of price increases precipitating the second cycle of people droppping coverage And the third cyle, each with every increasing rates. A death spiral.

One good thing happened - Obamacare can help this situation before 2014
To cut that rate, the state this month rolled out the first significant portion of President Obama's major health care program - offering coverage for the uninsured with preexisting medical conditions.

The program is expected to cut costs by about $600 monthly per enrollee - a "bridge" for folks with preexisting conditions until the landmark legislation is fully implemented in 2014.

Outlook for 2014
State officials don't know how much Obamacare will help
State officials and watchdogs expect Obama's plan to slow rate increases by private insurers - but they say by how much is unclear.
A health plan spokeswoman comments
She blames the problem on state taxes and antiquated state benefits laws
Leslie Moran, a spokeswoman for the Health Plan Association of New York, says HMOs are forced to jack rates to shoulder $4 billion in state taxes and antiquated benefits laws while medical costs rise.
She says federal law (Obamacare) will reform and control health insurance
And says the Health Plan Association is not going to do anything
"It's the same thing we're seeing on the federal level where we're 'reforming' and controlling health insurance, but we're not doing anything to reform and control health care costs," she said

Comments
This is the Free Market in Action. Flying along in the air, an ordinary event occurs, a recession and layoffs, and very quickly the free market collapses and people are either with out insurance or with very expensive insurance. Obamacare will not go into a death spiral because people will not be dropped from the pool when laid off. They will be subsidized so that they can continue to pay for their insurance. The insurance pool remains intact. It is like flying in a Piper Cub or an airliner. Many things that upset a small plane will not not disturb an airliner. The difference is life and death. To get this stability, regulation is necessary.


rwac your link was to an argument for Obamacare, thank you, please look for examples to support your statements.

[david ellis]

Yes, but since profit maximization will forever remain the paramount concern of private enterprise, both policymakers and the public will steadfastly oppose a broader involvement of insurance carriers. Further, the savings that you cite are immaterial, since they amount to roughly $30 billion per annum, which constitutes less than 4% of the spending that was allocated to both programs in the last fiscal year. So even assuming that this trend continues indefinitely to 2035, the savings will decline to approximately 2% of outlays, since total spending is projected to increase by 4.7% of GDP---from 5.3% of GDP. And with the capital flight, loss in productivity, changes in investor behavior, the effects on unemployment, the likely changes in risk assessments, and the probable reduction in potential output, I seriously doubt that the inevitable loss in net tax revenue will justify this expenditure.

Yes, I am defending Obamacare from rwac's statements. But that doesn't mean I think Obamacare is the best. I am in Medicare, and it is the best thing since HMO's started. And Medicare has a low overhead rate of 3%. I don't think medical care and profits go together. Cancer will be a long time in finding a cure. Reason, there is too much profit with things the way they are going now. Of course I can't prove that. But I think things will go better when the goal is not profit.

[david ellis]

The opposition to Obamacare is not based on insurer profit, it is based on consumer choice. In the short term, Obamacare may be beneficial to insurers, but it will almost certainly destroy them in the slightly longer term.

You should use more facts, it would save time and improve my understanding of how you got to a particular point. I don't know what you are talking about. To me it looks great, profit margins are up already, and soon everybody can be insured. There are going to be some problems, but time and adjustments to Obamacare will cure them. Obama has been flexible, exceptions have been made for stuff that didn't work well. And the wrinkles will be ironed out. It works great in Massachusetts, why not for the whole country?

Increased profit margins is a big deal. The insurers thought there would be losses, and spent almost a hundred million lobbying against Obamacare. Big surprise for the insurance companies and it should be a big surprise for you. I know some consumers who will be thrilled.

Those with pre-existing conditions can get coverage soon. The only people to feel sorry for are the lawyers and private detectives needed to enforce the pre-existing conditions, they are out of their jobs. Maybe that was the improvement to profit margins.

But health care inflation will hardly be checked with PPACA, which is understandable, since the combination of insurance coverage and federal subsidies should incentivize greater consumption. To be sure, this might reduce the incidence of catastrophic costs, but it's not clear that aggregate costs have a strong causal relationship with the normative method used by OECD states, and the level of federal spending. Indeed, it would be stretch to claim that health outcomes are largely dependent on the aforementioned variables, and that alternative explanations of income, education, culture, and health habits are of limited significance. Rather, I believe that supplementing incomes would be a more efficient way of indirectly addressing the problem. More directly, though, there could be an effort to cover costs that pass a threshold in the low thousands---dependent on household income.

See the death spiral post to see an example of why costs are high.

[rwac]

Obviously this problem cannot be Obamacare's because Obamacare is not in full force and there is not a full complement of insurance pools until 2014. Then, Obamacare will be responsibile for rates and control of insurance pools.

Some provisions from the PPACA have already taken effect. http://en.wikipedia...._Act#Provisions

A number of provisions that went into effect in 2010 have increased insurance costs.

Edited by rwac, 08 January 2012 - 06:04 AM.

[david ellis]

Yes, healthcare is a horrible mess, it's a horrible combination of free market and socialist mechanisms. You can buy your own insurance, but companies get tax breaks for providing insurance. So most people never see the true cost of their healthcare. You can either go left or right from this position, to the left is of course Obamacare. To the right is something like remove the tax breaks for companies, and let people see the costs of healthcare first hand, rather than hiding the costs by having insurance pay for treatment. And that is probably the way to do it, simply show people how much treatments and patented drugs cost, and people will cut costs voluntarily.

First, try again to support your first link. Thanks

[david ellis]

Glad this discussion got started so someone could explain the idea behing setting MLRs at 80% when for the big five they are already at 0.80:

http://yahoo.brand.e...93125-09-033022
http://yahoo.brand.e...93125-09-025587

Just divide medical costs by premiums. Wouldn't it be the little guys that get hurt? What exactly is the point of this policy.

For small companies it is a big problem, and they have been granted exemptions, until Obamacare figures out what to do. I know Aetna (the one who gave back $100,000,000) is one of the big six. Is it one of the big five?

[rwac]

Some provisions from the PPACA have already taken effect. http://en.wikipedia...._Act#Provisions

A number of provisions that went into effect in 2010 have increased insurance costs.

First, try again to support your first link. Thanks

I guess you missed my response.

[david ellis]

I guess you missed my response.

I give up. Forget about it. Thanks for trying.

[david ellis]

My intention was to discuss Obamacare, identify things that were good about it, things that were bad, really understand healthcare. And I wanted to discuss using facts, actual experiences that are happening.or have happened. I am tired of ideological discussions and wanted to actually learn something, something real. Something that everybody could understand and accept. I was insisting on links because I wanted facts I wasn't interested in opinions. I am such an amateur at this, and I failed. Instead of just jumping in, I should have found out if there was any interest in doing things this way. And then there should have been a discussion about how to do it. If anybody is interested in having discussions that have to be based on facts, start a thread and let us see what happens.

[maxwatt]

Well,..., for an example: my own company provides health care insurance through a city of New York sponsored small business group using a prvivate insurance carrier. I believe this is much like the insurance exchanges are supposed to look like. Since we began the program in 2005 rates have doubled. The biggest increase came in the past six months, a 30% increase. From what I can gather from Oxford/United Healthcare's literature, the increase is proactive as a hedge against anticipated increased costs. The city did approve the increase FWIW. Then this month, they announced that except for those grand-fathered, only the high-deductible program will be available. This only covers costs after the first $6000, so I believe it will effectively kill the program for those not already in it.

Whether the costs are real, justified or ginned up, I cannot say though I suspect the latter.. We did receive one small refund for overcharges over the past six years.