hudebnik: (rant)
After the first attempt to repeal and "replace" Obamacare failed in the House of Representatives, President Trump suggested he would sit back and watch Obamacare fail, after which Democrats would fall on their knees begging him to rescue it. That hasn't happened yet, so he's made more noises about it this week, making clear with the subtlety of Al Capone that "I don't want anyone to get hurt. What I think should happen and will happen is the Democrats will start calling me and negotiating."

As Paul Krugman points out, this strategy is not only cruel (to all the people who will "get hurt") but stupid, in that it's not likely to work.

Let's put it in terms of deal-making, something the President claims to know something about. He's written in the past how important it is, when going into a deal, to show that you're willing to walk away from it. The same goes for the Democrats in Congress: they won't accept any deal that is worse than walking away. In fact, they won't even come to the negotiating table unless they hope to get something better than if they don't.

What do the Democrats get if they don't negotiate with Trump and/or Ryan? Medicaid expansion continues to work, at least in the states that have accepted it (and I gather several more red states have been considering that in the past few months, presumably because it puts hundreds of millions of dollars into their local economies without politically benefitting Barack Obama)., which has actually been working pretty well since its bad first few months, will collapse for lack of maintenance and P.R, which can be blamed directly on the Trump administration. Fewer young and healthy people will buy health insurance because the individual mandate isn't enforced, and fewer poor people will buy health insurance because the cost-sharing reductions are cut off, so health insurance companies will either drop out of many states completely or raise their rates much faster than at any time in the past eight years. Those rate changes will probably apply not only to people in the exchanges, but also to people with private or employer-based insurance, which means about 90% of Americans will see their insurance premiums jump, again as a direct result of Trump administration actions. State-run exchanges will continue to run, theoretically, but there will be few or no plans in them, so millions of people will completely lose the insurance that Obamacare gave them for the first time in their lives. Every health insurance company in the country will sue the Administration for breach of contract (and those are some DEEP pockets!) It will be painfully clear that the situation was "not perfect, but pretty good" in the Obama administration, and now that Republicans control all branches of government, it's gotten rapidly and dramatically worse -- especially for the demographics that voted for Trump. Bad for the American people, but pretty rosy for the party out of power.

What do they get if they do negotiate with Trump and/or Ryan? Well, that depends on what "negotiate" means. Since Trump is trying to force Democrats to the negotiating table with threats rather than luring them there with promises, he probably has no intention of offering very much. The Medicaid expansion goes out the window. All the rules saying "you must cover these things in order to be called 'insurance'" go out the window. The pre-existing conditions rule will be kept in name, but eviscerated so that if you ever miss an insurance payment and have a pre-existing condition, you'll never get insurance again in your life -- at least, not insurance that covers that condition. And they get their Democratic names on this mess. All in all, a worse deal for the Dems than "walking away".

Congressional Democrats have no incentive to negotiate away anything that's in current law unless the Republicans can offer them something they see as better, and they have no intention of doing that.

Unless... Trump can negotiate with the Democrats a collection of minor tweaks that stabilize the markets and make the system work better, but which Trump with his genius at branding and P.R. can describe as "repeal and replace" (or even as "the Democrats blinked"). Such a deal, if it happened, would serve as evidence that, however incompetent he may be at most tasks one expects of a President, Trump really is good at making deals. The question is, would Democrats accept such a deal, knowing it would make Trump look good with mainstream America? (Not with the Tea Partiers, but he has little of their love left to lose.)

If the teams were reversed, there's no doubt that Congressional Republicans would turn it down: they've made abundantly clear over the past eight years that they're willing to hurt the American people (extend the recession, sabotage health care, etc.) if that's what it takes to hurt President Obama and the Democrats.

I don't know what the current Democratic leadership would do if they were offered a deal that repealed a few inessential aspects of Obamacare (say, the employer mandate) and improved others, on the condition that Trump gets to say he won the negotiation. I don't even know what I would want them to do in that situation: is it worth improving the health care system if it lends credibility to an administration that is so corrupt and so malevolent on so many other issues?

But I very much doubt they'll be faced with that choice.
hudebnik: (Default)
I spent the last two days at an academic conference upstate, which is (relatively) Trump Country. And I found myself talking to a security guard who was no big fan of either Hillary or Donald, and didn't say whom he had voted for, but told the following first-person story.

"I work mostly as an EMT; the security guard thing is on the side. And since Obamacare, it's been impossible to get paid. After we go on a call, we bill the patient's insurance company, and they just refuse to pay, because under Obamacare, they don't have to. Before Obamacare, they paid just like that <snap>."

Now, I have a hard time believing insurance companies ever "paid just like that <snap>", at least in recent decades. And I confess to knowing nothing about how EMT and paramedic services are now, or have ever been, funded. But for those of you who do know something about it, does the above make any sense? What aspect of Obamacare could have caused (perhaps indirectly) the above phenomenon?
hudebnik: (Default)
Mixed messages from Trump and Ryan. Some indication that Trump never really cared about health care except "repeal Obamacare" as a campaign slogan, and he would be delighted to never hear the words for the rest of his Presidency; also some indication of an interest in "working with Democrats". It's clear that the Republicans don't have enough of a unified vision to pass any health care bill on their own, so any change from here on will need to be bipartisan. What if he/they actually meant it? What improvements could be made that would get a significant number of both Democratic and Republican votes?

I wouldn't shed many tears if health insurance were divorced from employment, and most Americans got their health insurance through an individual market rather than through group deals worked by their employers. (This would make cases such as Hobby Lobby moot: if your employer doesn't pay for your health insurance, your employer doesn't get to choose what your health insurance covers based on their religious views.) This could be accomplished by gradually decreasing the amount of employee health-insurance expenses that an employer can tax-deduct, making it gradually less attractive for them to offer health insurance. The effect would be to move a lot more employed, reasonably-healthy people into individual markets (including, unless changed, the state Obamacare exchanges) and make those markets more stable and sustainable. And it would arguably be a "pro-free-market" move that would attract ideological Republicans.

One of the problems with Obamacare as it stands right now is that in some states most insurers have pulled out of the market. A public option would guarantee that there IS competition in every state, which should bring down premiums... but it's competition by a gummint entity (even though it's not taxpayer-funded), so Republicans won't go for it. Never mind.

Perhaps the biggest possibly-bipartisan improvement would be clarity and fairness in health care pricing. At present, most of the financial benefit of having health insurance isn't the amount of your health care costs the insurance company *pays*, but the amount that the insurance company *negotiates away in a puff of smoke*. Providers have to give deep discounts to big insurers, or they'll be out-of-network and will never get any customers from that insurer.

So here's how we change that. Require health-care providers to publish price lists of their services, and limit the ratio (gradually decreasing over a number of years) between the maximum and the minimum they charge different customers. (Might want to allow large discounts based on personal income, but not based on insurance.) This would make illegal a lot of insurance-company "negotiations" with providers, and mean that uninsured and insured people paid more-nearly the same prices for things. Health care providers would compete with one another on price and quality, rather than merely on which ones are in-network for your insurance company. The whole idea of in-network and out-of-network providers would become less important; consumers would have more choice of doctors, and maximum prices would come down as minimum prices rose. I suspect most doctors would love this, but insurance companies would hate it, so there would need to be some other sweetener to prevent the latter from blocking it. Perhaps the first idea above would please the insurance companies enough to balance this. And it's a free-market reform, so it should get a fair number of Republican votes (although not those who see ANY government regulation as evil, even government regulation to open the markets).
hudebnik: (Default)
Of course, the simplest way to have a large, reasonably healthy pool of people paying for health insurance is to have EVERYBODY paying for health insurance -- universal enrollment. But socialism, totalitarianism, Hitler, dark days of the war, Kenya, end of civilization as we know it. So never mind that.

People do cost/benefit calculations. For any given person, under any given life circumstances, there's a cost C of buying insurance, and a benefit (financial, psychological, etc.) B from having health insurance. It makes sense for you to buy health insurance if B > C.

What are the units of B and C? They're really about personal choices, so they have to be measured in what economists call "utility": one scenario has more utility than another if you would choose the former over the latter. It's tempting to measure them in dollars, but in fact any given number of dollars has more utility (it matters more in decision-making) to a poor person than to a rich person, so anything measured concretely in dollars will have utility that's a decreasing function of income.

Furthermore, poor people tend to be liquidity-constrained: even if they know something would be a good long-term investment, they're less likely to make that investment if it means being unable to pay the rent or buy food this month. In other words, they necessarily discount the future more heavily than rich people do; while everybody values a predictable dollar now or soon over a hypothetical future dollar, this effect is more pronounced for poor people. C is typically stated in concrete, predictable dollars/year, while B is partly hypothetical dollars and partly psychological; for both of these reasons, C is effectively a decreasing function of income. (At the very-rich level, B decreases with income too: if you could just write a check for a course of chemotherapy, you don't need health insurance. Let's leave the very-rich -- perhaps the top 1% of the income distribution -- out of this analysis.)

B is also an increasing function of health risk: the older and/or sicker you are, the more valuable health insurance is to you.

In the U.S., it's always been possible to buy insurance at different levels, ranging from cheap, bare-bones plans (B and C both small) to expensive, comprehensive plans (B and C both large). In other words, B and C are increasing functions of coverage; one assumes a given customer will choose a coverage level (possibly zero) to maximize B relative to C. If even the cheapest plan available costs more than it's worth to you, you'll choose no coverage at all.

So, to sum this up: regardless of the legal environment, B will be an increasing function of age, coverage, and sickness, while C is increasing in coverage and decreasing in income. Which means in general, health insurance makes more sense for old, sick, and rich people.

Laws about health care are intended to tweak the shapes of these curves. For example, a system of pure universal coverage removes the "no coverage at all" option, and indeed removes the notion of coverage level entirely, as everybody gets the same coverage (which is more valuable to you the older and sicker you are). In a pure laissez-faire system, C tends to be not only increasing in coverage and decreasing in income but increasing in age and sickness, essentially infinite for people with pre-existing conditions whom nobody wants to insure at all. Medicare was put in place to limit how high C can go at the high-age end, so old people (or moderately-old with long-term health problems) were more likely to have health insurance; their higher actuarial costs were shared by taxpayers so the insurance market didn't buckle under their weight. Medicaid was put in place to limit how high C (measured in utility) can go at the low-income end, so really-poor people were more likely to have health insurance.

Obamacare made several changes to this. It expanded Medicaid to apply to somewhat higher income levels as well as the poorest, making moderately-poor people more likely to have health insurance. It provided subsidies for people just above that level, making middle-income people more likely to have health insurance. It required insurers to cover already-sick people, at a cost not enormously higher than the cost for healthy people, getting rid of that vertical asymptote. And it removed the most "bare-bones" plans from the system entirely -- if your coverage doesn't meet certain minimum standards, your coverage is zero -- so below a certain level of coverage, B is zero, while C is the nonzero penalty P for being uninsured. The penalty is still less than the cost of buying insurance, so some liquidity-constrained people will still "choose" to be uninsured, but again the effect should be to make poor people more likely to have health insurance.

In particular, if you currently have health insurance and are contemplating dropping it, you know that you'll lose all your benefits B, but will save only C - P on costs, which makes you less likely to drop it. If you're currently uninsured and are contemplating entering the market, the reverse applies: you'll get benefits B, at a cost of only C - P. The larger P is, the more likely people are to stay insured, or become insured if they're not. Which is why one of the Republicans' first tactics in pushing Obamacare off a cliff was to reduce P.

Ryan/Trumpcare takes a different approach. There's no penalty for being uninsured, but there's a penalty of 30% of your first year's premiums for rejoining the market after being uninsured. So if you currently have health insurance and are contemplating dropping it, you know that you'll lose all your benefits B, while saving C immediately; if you rejoin the market later, you'll pay 0.3C for one year, but that's farther in the future so liquidity-constrained people will discount it more. In other words, poor people are more likely to drop out of the insurance market if they're in it, unless they're old enough or sick enough that B is still greater than C. If you're currently uninsured and are contemplating entering the market, you know that you'll gain B, while paying 1.3C immediately and C in the long run. The longer you go uncovered, the more money you save before paying that one-time 0.3C for a year to re-enter the market. In other words, those who re-enter the insurance market after a lapse will be those old enough and sick enough right now that B > 1.3C, and sufficiently liquid that they can handle the one-time penalty. So at both ends of a lapse, Ryan/Trumpcare encourages younger, healthier, and poorer people to go uncovered, leaving an older, sicker, richer pool of people in the system and inevitably higher average premiums. Pushing Obamacare off a cliff wasn't enough; they're pushing their own system off the cliff even harder.

At the same time, Ryan/Trumpcare decreases government cost-sharing and subsidies, making poor people less likely to participate in the system unless they're really sick. It makes those subsidies age-based rather than income-based; this brings a small advantage in reduced paperwork, but tends to encourage younger people to go uninsured unless they're really sick. At the same time, it increases what insurers can charge old people, thus encouraging old people to go uninsured unless they're really sick. (If you're sufficiently old, you can discount the one-time penalty to re-enter the market because you'll probably die before paying it.) And it largely dismantles the minimum standards of Obamacare -- the "bronze", "silver", "gold", and "platinum" levels -- effective 2019, thus encouraging people to buy cheaper coverage than is currently possible without a penalty, until and unless they get really sick. All in all, it gives us an insurance system for middle-aged people (probably near their earning peaks), fairly-rich people, and really sick people of all ages -- a recipe for skyrocketing premiums.
hudebnik: (Default)
The CBO says it'll put 14 million people into "uninsured" status almost immediately (i.e. 2018), and "24 million over the course of ten years." I'm not sure how to read that latter statement, but let's assume conservatively that the average number of people uninsured because of this bill in any given year is halfway in between those numbers, 19 million.

The bill also saves the Federal government $337 billion over ten years. That's $1774 per year per uninsured person. So the obvious question is, how much more will those 19 million people's health care cost as a result of their uninsuredness? This is tricky. One would like to know how much a typical person's health care costs in a year, how much a typical person spends on premiums and deductibles under ACA, how much a typical person gets in subsidies under ACA... but are these 19 million people at all "typical"?

One could argue (and I imagine Paul Ryan will) that most of these are young and healthy people who will choose not to carry health insurance because they feel they don't need it. But if you look at how the bill will affect various kinds of people, the ones most adversely affected are poor and/or old and/or sick, so one would expect a substantial number of the uninsured to be poor and/or old and/or sick people who feel they can no longer afford health insurance. Others will indeed be "young invincibles" who, in many cases, wouldn't have cost much in health care anyway. I'm going to assume, lacking evidence one way or the other, that the 19 million new uninsured are neither healthier nor sicker than the general population. I'm confident that they are poorer than the general population.

According to the NY Times, the majority of the newly-uninsured people -- 14 million of 24 million -- will become uninsured because of cuts and restrictions to Medicaid. Another 7 million will become uninsured because their employers no longer offer health insurance. (Far more people than this are expected to lose employer-sponsored insurance, but the CBO assumes reasonably that most of them will be able to buy insurance on the individual market; the 7 million are the ones who can't or won't.) The remaining 3 million, I assume, are currently on the individual market but will no longer buy insurance because either they don't think they need it or they can no longer afford it. I haven't read the CBO report itself yet.


As for deductibles, the right-wing Daily Signal and Freedom Partners say "an average medical deductible in 2016 for gold plans is $1,247, for silver plans $3,064 (up from $2,556), and $5,765 for bronze plans (up from $5,328)". The Freedom Partners numbers are quoted, mostly accurately, from a Kaiser study (Kaiser is fairly reputable), but I think they don't consider the "cost-sharing reductions" for people with incomes between 100-250% of the poverty level, which effectively turn a Silver plan into a Gold or Platinum plan with a much lower deductible; the Kaiser study discusses these cost-sharing reductions but doesn't quantify their impact. (I don't know where they got the $1,247 figure for gold plans; the Kaiser report doesn't give a specific number for gold or platinum plans.)

The left-wing Mother Jones says "The [enrollment-weighted median] deductible decreased from $900 to $850 in 2016.... it looks like nearly two-thirds of all enrollees had deductibles under $1,000. Only about a fifth had the horror-story $6,000+ deductibles that we hear so much about." These figures are quoted accurately from a Centers for Medicare and Medicaid Services study which says

"In 2016, among all consumers purchasing Marketplace coverage, the median individual deductible is $850. This is lower than the $900 median deductible for 2015....
These facts may seem surprising given anecdotes about Marketplace policies with very high cost sharing. However, those reports, which often focus on the highest-deductible plans in a market, ignore two important factors.

Financial assistance. The figures in this analysis account for the fact that about 60 percent of 2016 Marketplace consumers qualify for financial assistance that reduces their deductibles, out-of-pocket maximums, and other cost-sharing obligations....

Consumer choice. Rather than choosing bronze plans, which generally offer the lowest premiums, Marketplace consumers are overwhelmingly choosing silver plans, which generally have higher premiums, but lower cost sharing....

The net result of these factors is that about a third of Marketplace enrollees have deductibles less than or equal to $250, and over half have deductibles below $1000 in 2016."

This is going to take more work than I want to put into it right now :-)
hudebnik: (teacher-mode)
Conservative Republicans on Capitol Hill, Breitbart, the Kochs, etc. are outraged by Ryancare because it doesn't completely repeal Obamacare and it provides Federal subsidies (albeit age-based rather than income-based) to help people pay for health insurance.

What would they prefer? What's the ideologically-pure, conservative answer?

No Federal mandates about what needs to be in a health insurance plan, about who needs to buy health insurance, about who needs to offer health insurance, about who needs to be offered health insurance. Health insurance is strictly a matter between consumers and insurance companies, in a free and competitive market. (With some State regulation -- for some mysterious reason, many conservatives are willing to accept regulation at the State level that they wouldn't accept at the Federal or local level.)

Are insurance companies required to insure anybody who comes along? Certainly not at the Federal level; some states might enact such a requirement, but many won't, which means people with pre-existing, expensive medical conditions in red states simply won't be able to get insurance. They have several choices: (a) get all their care from emergency rooms without paying for it; (b) get lots of money from friends and family to pay for health care; (c) go bankrupt paying for health care; (d) die without health care. Competition won't solve this, because insurers don't want the business of people with pre-existing, expensive medical conditions; if anything, they'll compete for who can lock those people out the fastest.

So, young and healthy people can buy cheap, high-deductible insurance, or no insurance at all. Rich people can self-insure with HSA's, buying cheap, high-deductible insurance or no insurance at all. Old and sick people can buy no insurance at all. Since anybody who actually wants health insurance is unable to get it, the result is dismantling the health insurance industry.

What if conservatives compromised on the popular "pre-existing conditions" clause, but not the rest? Without an individual mandate and without government subsidies, young, healthy, and/or poor people won't buy insurance, leaving only old, sick people in the pool, so their premiums will go through the roof, so they won't be able to buy insurance either, again dismantling the health insurance industry.

Which is ironic, because "dismantling the health insurance industry" is also the result of the ideologically-pure liberal solutions (either single-payer or socialized medicine). The difference is that in the liberal solutions, everybody gets preventive care, rich and poor get the same health care, and nobody dies for inability to pay, while in the conservative solutions, poor people don't get preventive care and end up either in inefficient, expensive emergency rooms, or dying for inability to afford health care. Oh, and taxes are higher under the liberal solutions, but total spending on health care is higher under the conservative solutions.
hudebnik: (teacher-mode)
Paul Ryan actually said this yesterday (link with video):

The fatal conceit of Obamacare is that we’re just gonna make everybody buy our health insurance at the Federal government level. Young and healthy people are gonna pay for older, sicker people. So the young, healthy person is gonna be made to buy health care, and they’re gonna pay for the person, you know, who gets breast cancer in her forties, or gets heart disease in his fifties.

So take a look at this chart. The red slice here are what I would call “people with pre-existing conditions” — people who have real health care problems. The blue is the rest of the people in the individual market — that’s the market where people don’t get health insurance with their jobs, or they buy it themselves. The whole idea of Obamacare is the people in the blue side pay for the people in the red side. The people who are healthy pay for the people who are sick. It’s not working and that’s why it’s in a death spiral.

Here’s how we propose to tackle this problem. We want to have a system where we encourage states, with Federal funding, to set up risk pools and reinsurance mechanisms. For example, in Wisconsin, we had a great risk pool that actually worked, so that people with real high health costs and diseases, and pre-existing conditions, could still get affordable health care. Well, Obamacare repealed that. They had a great risk pool reinsurance system in Utah, a good one in Washington State… all those are gone under Obamacare.

Here’s how they work, and here’s how our system would work. We would directly support the people with pre-existing conditions. [Red slice removed from pie graph] Let me give you a sense of this. 1% of the people in these insurance markets drive 23% of the costs. 1% of the people in the individual insurance market drive 23% of the costs. So a reinsurance program is to cover more than just the 1%, to cover the people who have high health care costs. So by having state innovation funds to go to the states to set up these reinsurance programs, we would directly subsidize the people who have pre-existing conditions. Direct support for the people with pre-existing conditions so that everybody else has cheaper health insurance.

What you do when you do this is, the individual market, the people who don’t have pre-existing conditions, they have much more stable prices.

Oh. My. Gawd. As lots of people on Twitter have pointed out, "the people who are healthy pay for the people who are sick" is literally the definition of health insurance. More generally, "the people who are lucky pay for the people who are unlucky" is the definition of insurance -- fire, flood, burglary, health, life, etc. We've been discussing Obamacare and alternatives for eight years now, and the Republican Party's anointed policy wonk doesn't pretends not to know how insurance works.

Anyway, let's consider his alternative. We'll take the high-risk people out of the pool, leaving the low-risk majority of people buying their own cheaper health insurance -- and that's probably true. So what do we do with the rest? The Federal government gives the states money to set up "high-risk pools" and "reinsurance programs" that subsidize insurance companies to get them to cover those high-risk people without astronomical premiums. In other words, the money to cover the high-risk people, which was coming from low-risk people in the market, will now come from... Federal taxpayers! The leader of the anti-Federal-government, anti-tax Republicans in the House of Representatives is proposing that instead of paying for something through the free market, we pay for it with Federal taxes.

Mind you, nobody expects Ryan to raise Federal taxes to pay for this added expense -- indeed, the bill in the House cuts Federal taxes. Which leaves several alternatives:

(a) the Federal budget deficit goes through the roof (which is OK when Republicans do it), or

(b) high-risk people will get much less health care, die, and decrease the surplus population, or

(c) total costs will magically drop sharply because the money goes from Federal government to State governments to insurance companies to providers, rather than from Federal government to individuals to insurance companies to providers, or

(d) the Federal government will provide less money than it does now, and State governments will be expected to make up the difference by substantially raising their own taxes. Which California, New York, and Massachusetts might be willing and able to do, while high-risk people in Kansas and Utah (and pretty much any state that voted for Trump) are back to option (b).

I'm betting on (a) and (d).
hudebnik: (Default)
Just got another EOB in the mail from the health insurance company. We have fairly good health insurance, so I can't complain about the $25 co-pay we owe. But...

The envelope contained EOB's for four procedures or office visits. The care providers billed a total of $686.10. Of that amount, we owe $25, the insurance company paid $218.32, and the remaining $442.78 is paid by... nobody. I assume the doctors, hospitals, and medical labs aren't running at a loss, because if they did they would go out of business quickly. So they must be able to provide these services for $243.32 (35 cents on the dollar), consistent with paying the staff and the rent and the insurance and a reasonable profit margin. So where did that $686.10 figure come from? What purpose does it serve?

It could be psychological jiu-jitsu on the provider's part: "hey, insurance company, see what a generous discount we're giving you?" But the insurance company is in this business, and is not likely to be fooled by it. Or maybe it's psychological jiu-jitsu on the insurance company's part, with the collusion of the providers: "hey, patient, see what a generous discount we negotiated for you? Pity something should... HAPPEN to it... like if you switched to a different insurer...."

I assume that $686.10 is what they charge uninsured patients. Some of those actually pay the full amount, while others, unable to pay it, get chased down by collection agencies, which take a cut of the money (whether their cut comes out of the $686.10 or is in addition to it, I don't know). But uninsured patients are almost certainly a small fraction of all patients, and an especially unreliable group as far as paying their bills, so I doubt the providers are buying yachts on the extra money brought in by uninsured patients.

I guess the other option is government. Do government programs like Medicare and Medicaid actually pay the billed amount?

Anyway, I'm quite certain that these "discounts" don't actually save a penny on the total cost of providing health care, but merely serve to shift those costs from insurance companies onto somebody else -- uninsured patients and/or taxpayers. Indeed, as a form of rent-seeking, the practice of "insurer-negotiated discounts" almost certainly makes the whole system more expensive rather than less.

How would we make this system cleaner and fairer? My naive answer (as long as we're in the fee-for-service world) is "providers charge everybody the same amount for a given service, and disclose that amount publicly." (I could see charging patients on an income-sliding scale, but no "discounts" based on who your insurer is.)

Providers would presumably set this amount at a level that covers their costs, but not much higher because public disclosure would force them to compete on price with other providers. Insurance companies would have a less-valuable commodity to sell -- they'd only be covering a fraction of your expenses, rather than using their negotiating power to shift most of those expenses to somebody else -- so they would probably lose some business. And since the club with which insurance companies do those negotiations is "exclusion from our preferred network," preferred networks would become irrelevant, and patients would be able to use whatever doctor they wished, thus again fostering competition among providers.

Sounds like a win on all fronts to me. And any Republicans who actually believe in market-based reform should like it, because it encourages competition among providers. Health care providers might not enjoy facing more competition, but would probably enjoy getting out from under the thumb of insurance companies and being more transparent with their patients.

How would one make this happen? Start with a disclosure rule: if you are a health care provider, you have to disclose publicly how much you nominally charge for Service X, along with how much discount you gave to various insurance companies and to Medicare/Medicaid/etc. Once you have some of these data, you publicize them and stoke some public outrage. Then, in the name of saving taxpayers money, you add a rule that says Medicare and/or Medicaid won't pay more for Service X than whichever insurance company got the deepest discount. At that point, insurance company discounts become a money-losing proposition for providers, so providers stop offering them, and the rest falls into place.

The biggest loser in this system is insurance companies, so they'll lobby hard against it.


May. 4th, 2016 11:22 pm
hudebnik: (rant)
I was in Indiana yesterday. It being primary-election day, I found myself in conversation with a Friendly Native about matters political (and trying hard to avoid giving offense). While assuring me that she hadn't voted for Trump, she also complained about Obamacare: apparently the last time she tried to renew one of her more-expensive prescriptions, the claim was denied on grounds that, as a sexagenarian without employment-for-pay, she's "no longer a productive member of society." As it turned out, her doctor called the drug provider and negotiated a deal whereby she gets the drug for free, so she's not suffering and dying without her drugs, but she's pretty certain the claim wouldn't have been denied this way before Obamacare instituted "essentially a national health care system."

Realistically, no Federal government bureaucrat made this particular claim-denial decision, nor ordered the insurer to make this individual claim-denial decision; even if they wanted to, there aren't enough Federal government bureaucrats in HHS to do that. And insurance companies were freer to deny claims ten years ago than they are today. So Obamacare cannot have directly caused this claim denial (although it's conceivable that an insurance company might say "we make less profit in area X because of Obamacare, so we have to deny more claims in area Y to make up for it.")

I find it unlikely (though not impossible) that any insurance company has a "productive member of society" criterion for fulfilling or denying claims. Even if they did, I find it completely unbelievable that any insurance claims adjuster would say to a customer "we're denying your claim because you're not a productive member of society." Perhaps the most plausible explanation, then, is that Friendly Native, already believing that Obamacare somehow involves government death panels, mis-heard something and interpreted it as "the death panel has heard your case and found you undeserving of life."

Of course, I didn't say at the time "that's impossible; you must have mis-heard something," because that would have been interpreted as an attack, and forced Friendly Native to defend and double down on her belief. So I just said "that's bizarre" and let the conversation go on to other topics.

But I'd like to understand what mindset leads to this kind of conspiracy theory seeming plausible. The ostinato repeat for eight years that Obamacare is "a government takeover of the health care system" would lead a reasonable person to ask why government would want to "take over" the health care system; if in addition one thinks of government as "them" rather than "us", then the "government takeover of health care" must be intended to benefit "them" at the expense of "us" -- specifically, to save money for "them" by skimping on "our" health. (I don't know why the same reasoning doesn't apply to insurance companies, which actually have spent decades unapologetically saving money for "them" by skimping on "our" health.)

Government is the enemy. Government (even a democratically-elected government) is "them", not "us". "Government doesn't solve problems; government is the problem," as dear Uncle Ronnie told us almost forty years ago. There was never any evidence that the statement was true, but it was a terrific sound bite, making the speaker sound cynical-worldly-wise, and Republicans have been repeating it ever since. They've made it an article of the faith that government can't do anything right: if government tries to do something right, they'll sabotage it in order to protect the faith; if government succeeds in doing something right, they'll deny the evidence in order to protect the faith; if you suggest that government might potentially do something right, you're excommunicated from the faith.
hudebnik: (devil duck)
I'm sure most of you have heard about this by now, but here's a Daily Kos link that includes the Congresswoman's video response to the oceans of pro-Obamacare comments she got in response to her Facebook call for Obamacare horror stories.  Apparently out of the hundreds of comments, she couldn't find even one that told the story she wanted to tell, so she cribbed some from a Republican Party web site.

Quotes from Congresswoman Rodgers on Obamacare )

After selecting four data points that support her desired conclusion (and weren't even in the original data set) and ignoring hundreds that don't, she turns her keen analytical skills to the Federal budget.

"American families all across this country balance their money to pay the bills, so they can afford the co-pays at the doctor's office and send their kids to school.  Families have to prioritize; they have to save; they have to live within their means.  The Federal government needs to do likewise."

No, that doesn't work )
hudebnik: (devil duck)
Thanks to [ profile] la_peregrina, this entertaining and thought-provoking talk from the late Sir Terry:

It has come to my attention that my first attempt to post this screwed up people's friends feeds, because LJ has some odd interpretations of HTML.  You know how
<html-tag params></html-tag>
is supposed to be equivalent to
<html-tag params/>
at least since HTML 4 or so? Not in LJ-land, it isn't....
hudebnik: (rant)
So I was reading a right-wing blog in which people were congratulating themselves over the court rulings saying that Federal subsidies can only be spent on people who buy their insurance through State-run exchanges, and that if the State refuses to run such an exchange and the Feds step in to fill the gap, all the citizens of that State have lost their eligibility for health insurance subsidies.  The glee in their online voices at the thought of making Obamacare unnecessarily painful for millions of people, so they'll learn the lesson never to vote for a Democrat again, is more than a little disturbing.

It's certainly true that that part of the law is poorly worded, under the naive assumption that States offered the opportunity to do things their own way would take that opportunity, and States offered billions of dollars of Federal aid to help their own citizens would accept it.  It's also true that Congress could fix the wording in a matter of days if it wanted the law to work.

For most of U.S. history, there have been two major political parties that disagreed on how to make government work for the benefit of the American people.  But in the past five years, we've had parties that disagree on whether to make government work for the benefit of the American people.  We have a large faction of one party that actively wants any government program (especially one with Obama's name on it) to fail.  Because they've staked their personal political identities on the notion that Government Can Do No Right, they're threatened whenever it tries to do right, they deny the evidence when it seems to be doing right, and they feel compelled to prevent it doing right, no matter how many people suffer the consequences.

Most Americans (including me) think Obamacare is a sub-optimal, overly-complicated plan, but they also think it's an improvement on the status quo ante.  Most Americans (especially the millions who have health insurance now for the first time in many years) want it fixed, not repealed.  They want it to work, which puts their interests at odds with those of many Republican politicians.

Let's be realistic.  Obamacare, for all its flaws, has progressed far enough that it won't be repealed unless it's replaced with something better; even most Republicans acknowledge this now.  Blocking all attempts to fix it doesn't bring us any closer to something better; it's just a temper tantrum thrown by spoiled children who didn't get everything they wanted and want everybody else to suffer for it.
hudebnik: (rant)
Of course, the Repubs calling this a "victory for individual rights against the government" are blowing smoke: it's a victory for the individual rights of a few corporation owners against the individual rights of their hundreds or thousands of employees -- or, if you prefer, a victory for the individual rights of a corporation to have its own religious views, against the individual rights of actual human beings.

Interestingly, like so many Republican suggestions in the past five years, it would actually be fairly harmless or even good if we were in a thriving economy: "if you want your insurance to cover contraception, and Hobby Lobby doesn't cover it, get a job somewhere else."  Of course, in a depressed economy, "get a job somewhere else" is frequently not an option.  Similarly, cutting Federal spending and hiring would be harmless or even useful if those were "crowding out" private hiring, and cutting Federal deficits would be harmless or even useful if those were "crowding out" private borrowing, and raising Fed rates to restrict the money supply would be harmless or even useful if there were an inflation problem.  All of which is not happening, and hasn't been happening for five years, and won't be happening until more people are working real full-time jobs at decent pay, but Republicans don't believe there is such a thing as involuntary unemployment or business cycles, so they blithely go on prescribing what might be the right medicine for a booming economy with full employment.

Anyway, back to the SCOTUS decision.  Hobby Lobby and friends actually do have a bit of a point: if you ran (say) a small business, and the law said you had to allocate a certain fraction of your payroll to the local Baby-Seal-Clubbing Program, which you considered immoral, you would have some cause to object, even if a few of your employees inexplicably believed in clubbing baby seals.

However, the "right" answer isn't to say "because of your religion, you don't have to obey this Federal law that all of your competitors do."  The "right" answer is to get employers out of the business of providing health insurance for their employees -- that way it wouldn't MATTER much what your employer thought were legitimate health expenses -- or lifestyle choices, for that matter.  And if you lost your job, it wouldn't mean losing your health insurance at the same time.  And and and.
hudebnik: (rant)
So I read a blog entry and followed a link to a blog entry where there was a link to a blog entry where there was... you get the idea.  And I ran into an interesting article written by a couple of "thinking conservatives" (remember them?) entitled How to Replace Obamacare.

cut for length )
hudebnik: (devil duck)
Following up on this post...

[ profile] shalmestere is undergoing physical therapy for a knee injury last month, and I just got the first insurance statement.

For the initial one-hour visit, the charges add up to $790, which is paid for as follows:
$660.40 "insurance plan discount"
$109.60 "insurance plan pays"
$20.00 "customer co-pay"
$180.00 "not covered"
$0.00 "you owe"

I had to look up the difference between "insurance plan discount" and "not covered": the former is "treatments for which the insurance company has agreed to pay a little bit," while the latter is "treatments for which the insurance company has agreed to pay nothing," but the effect is the same: nobody is paying it.  So why do they bother billing for it in the first place?  Do they hope to actually get the whole $790 from uninsured patients, while getting only $129.60 (about 1/6 of the total) for an insured patient?

The second one-hour visit adds up to only $540, because it doesn't involve an initial exam.  The other therapies cost exactly the same amount as before, despite presumably taking longer (because there's no initial exam).  This time it's broken down into
$464.46 "insurance plan discount"
$55.54 "insurance plan pays"
$20.00 "customer co-pay"
$180.00 "not covered"
$0.00 "you owe"
This time the provider is getting less than 14% of their claimed total from us.  If 95% of their customers have insurance, and our insurance company is neither better nor worse at negotiating discounts than the average company, then the average reimbursement they actually get for this sort of visit is $98.76, which means their actual costs for this sort of visit must be somewhere below that.  So why not just bill everybody the same $99 rather than loading 27% of the costs onto what are probably the poorest 5% of the customers?

When you buy a gallon of milk, there's a price tag on the shelf.  You can see the price before you decide whether to buy it, and everybody pays the same price (although some may do it with food stamps).  I could imagine charging less (for necessities like milk and health care) to the people least able to pay, but what kind of cockamamie scheme charges MORE to the people least able to pay?
hudebnik: (rant)
Thanks to [ profile] conuly and [ profile] siderea for this link.

The U.S. used to have a free-market health-care system in which you got what you paid for. Problem was, people who couldn't pay for health care didn't get it: they were turned away from emergency rooms, or treated briefly and immediately "dumped" onto other hospitals or the street, with predictably bad health outcomes. Pregnant women gave birth on the doorsteps of emergency rooms that wouldn't let them inside. This didn't look good for one of the world's richest nations.

So the well-known Socialist Ronald Reagan signed the Emergency Medical Treatment and Active Labor Act of 1986 forbidding most hospital emergency rooms to turn anybody away for inability to pay, or to "dump" patients who still needed urgent care. Problem was, the act provided no funding -- it was, in Reagan's words, an "unfunded mandate" -- so hospitals were on their own to figure out how to pay for care for all these indigent patients. Taxpayer-funded hospitals asked for more tax dollars; the rest had to charge everyone else more, double-charge Medicare and Medicaid, invent "facility fees", etc.

By guaranteeing emergency care to everyone, regardless of citizenship, insurance, or ability to pay, Reagan socialized the low end of health care: poor people's emergency health care was paid for by everyone else. Routine and preventive health care were not, so they naturally became rare luxuries for poor people. Since "an ounce of prevention is worth a pound of cure," total health care costs went up. Meanwhile, the high end was still a privatized Wild West, in which insurers could make a good profit by picking just the right people to insure and leaving the rest to fend for themselves in the E.R.

The result was the "worst of both worlds" health care system we've had for decades now, in which medical bills bear no relationship either to the provider's actual costs or what the provider expects to actually be paid, large numbers of people get their routine care from emergency rooms at exorbitant cost to the public, and the total money spent per capita is twice what it is in any other country in the world.

There are several ways we can go from here. We can re-privatize the low end (e.g. by repealing EMTALA), or we can partially socialize the high end (e.g. by requiring everybody to be insured -- although a single-payer plan would do this more effectively and efficiently). Or we can go on using taxpayer dollars to subsidize insurance company profits.
hudebnik: (rant)
To pass a bill into law, the Constitution says you have to get a majority vote in both houses of Congress, and then the President's signature. Failing that, you have to get a 2/3 majority vote in both houses of Congress.

Obamacare met those requirements; it is now the law of the land, for better or for worse. If you want to repeal it, you have to meet the same requirements: either a majority vote in both houses of Congress and the President's signature, or a 2/3 majority vote in both houses. Neither of those is going to happen in the next year, and almost certainly not in the next three years. In short, there is not the political support to repeal Obamacare through the Constitutional process any time soon.

When you can't get what you want through normal means, there are several ways you can react. If you're a civilized adult, you accept the loss and move on to another fight, at least until the balance of power has changed. If you're a two-year-old child, you throw a screaming temper tantrum until you get what you want. If you're a terrorist, you threaten mass annihilation until you get what you want.

John McCain and Mitch McConnell have decided it's in their interest to be civilized adults. Most House Republicans, and a few in the Senate, have decided differently; the question is whether they're better described as two-year-old children or terrorists.

I'm imagining a discussion between a Tea Party member of Congress and an older, wiser Republican.
"You folks are seriously risking a government shutdown or a default on our credit."
"You say that like it's a bad thing. We all know that 'that government governs best which governs least.' A temporary government shutdown and forced spending cuts are two steps in the right direction."
"Yes, it is a bad thing. A government shutdown hurts our side in the polls; we saw that in the 1990's. And not all of government shuts down. 'Mandatory' spending continues, as does 'discretionary' spending that is considered critical (to protecting lives, etc.) You know who gets to decide what's 'critical', or which bills to pay in case of a default? President Obama. And he might decide that Obamacare is 'critical' to protecting lives. In other words, your insistence on defunding Obamacare might end up defunding everything except Obamacare."
"I don't care about all of that cynical realpolitik gobbledegook; somebody's got to stand up for what we believe in."
"I hope you've got a good job lined up for January 2015."
hudebnik: (devil duck)
this story is mind-boggling. It's about the Social Security disability program, how it is being abused, and how it begs to be abused.
hudebnik: (rant)
If you care about the U.S. government's budget deficit...
If you care about the competitiveness of U.S. businesses...
If you care about economic fairness...
If you care about preventing individual bankruptcies...
If you care about health care for all...

you must read Steven Brill's detailed exploration of the costs of the U.S. health care system.

If you already know how incredibly inefficient and corrupt the system is, read the article anyway: it's even more inefficient and corrupt than you thought.
hudebnik: (devil duck)
In yesterday's mail, one of those "This is not a bill" things from the insurance company. I had a routine urinalysis, for which the provider billed a smidge over $2000. The insurance company is paying less than $800, I pay perhaps $20, and nobody at all is paying the remaining $1200.

This raises several questions.

(a) How can a routine urinalysis possibly cost $2000? Or even $800? It can't be more than an hour's labor; call that $100. And it uses a bunch of equipment that probably cost millions of dollars, but which processes many thousands of samples in its lifetime.
(b) Who, if anybody, actually pays the "billed" rate? Is that for people who don't have insurance at all?

The latter question in part answers the former. The actual cost of the test must be somewhere less than the average amount they get paid for the test. Close to 90% of Americans have health insurance, and many of the others probably wouldn't bother getting this test, so let's suppose 95% of the tests run are paid by insurance companies that have negotiated their own rates, and the other 5% are paid at the "billed" rate. Assuming my health insurance company is neither better nor worse than most at these negotiations, that leads to an average payment of about $850, so the actual cost must be less than this. So wouldn't things be much simpler if they just billed a real price and skipped the haggling?

A related question: when one of our dogs gets a routine urinalysis, it costs in the $200 range. I can't believe it's a factor of ten cheaper to do this test for a dog than for a human (although the accuracy standards are probably higher for the human), so I have to suspect most of the difference has to do with the health insurance industry.


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