During a speech in the Rose Garden today, President Obama expressed his frustration regarding the problems with the healthcare.gov website developed to allow people to sign up for health insurance under the Affordable Care Act.
While President Obama acknowledged that the website was experiencing problems at the moment, he encouraged us to be patient and consider other means to enroll; e.g. by phone or in person. The main thing, he said, was to sign up, IT WILL SAVE YOU MONEY.
The President obviously doesn't understand how insurance works. EVERYONE can't save money. Everyone pays premiums and claims get paid to those who are sick. For the sick, it saves money IF and only IF their illness results in expenses that are greater than the premiums they paid. The un-sick never save money.
Showing posts with label health insurance cost. Show all posts
Showing posts with label health insurance cost. Show all posts
Monday, October 21, 2013
Friday, October 11, 2013
Obamacare
One of the big advantages of the Affordable Care Act is that previously uninsured people will now be able to afford coverage. One big benefit is that conditions can be treated in the early stages instead of after they get out of hand. Let's think about this a little.
I don't have any health insurance and I'm not feeling very well. Something's just not right. A doctor visit costs $100 and I just can't afford to go. I put it off for a month.... maybe 2.... maybe a year. The next thing I know, I've had a heart attack when I could have started taking a statin a year ago and avoided the whole thing.
Along comes the Affordable Care Act to save the day. Because I don't have much income, I qualify for a subsidy, which means I can get coverage for $60/month. It won't be easy, but I"ll find a way to pay for it. Now, here we go again... I'm not feeling well, I really should go to the doctor. But guess what. My $60/month Bronze plan has a $3000 deductible. It still costs me $100 to go to the doctor and not only couldn't I afford it before, now certainly can't afford it with a $60/month insurance payment. I still don't go to the doctor and I still have a heart attack. The difference now is that I have insurance to cover part (maybe only 50%) of the hospital bill. Seems like I'm just as sick and just as bankrupt either way.
I don't see how the "early stage detection" outcome is going to be achieved. Perhaps some will be discovered during a covered yearly physical exam, but from my experience: a) other than the routine blood work, there really isn't much depth to an annual physical exam, and b) if something is discovered, any likely required follow up is NOT covered until the deductible is reached. I couldn't afford $100 for a doctor visit, how am I going to afford $200 to see a specialist?
I don't have any health insurance and I'm not feeling very well. Something's just not right. A doctor visit costs $100 and I just can't afford to go. I put it off for a month.... maybe 2.... maybe a year. The next thing I know, I've had a heart attack when I could have started taking a statin a year ago and avoided the whole thing.
Along comes the Affordable Care Act to save the day. Because I don't have much income, I qualify for a subsidy, which means I can get coverage for $60/month. It won't be easy, but I"ll find a way to pay for it. Now, here we go again... I'm not feeling well, I really should go to the doctor. But guess what. My $60/month Bronze plan has a $3000 deductible. It still costs me $100 to go to the doctor and not only couldn't I afford it before, now certainly can't afford it with a $60/month insurance payment. I still don't go to the doctor and I still have a heart attack. The difference now is that I have insurance to cover part (maybe only 50%) of the hospital bill. Seems like I'm just as sick and just as bankrupt either way.
I don't see how the "early stage detection" outcome is going to be achieved. Perhaps some will be discovered during a covered yearly physical exam, but from my experience: a) other than the routine blood work, there really isn't much depth to an annual physical exam, and b) if something is discovered, any likely required follow up is NOT covered until the deductible is reached. I couldn't afford $100 for a doctor visit, how am I going to afford $200 to see a specialist?
Friday, September 14, 2012
Health Care: Pre-existing Conditions
Now that the convention is over and Mitt is the anointed Republican candidate, his story is starting to shift in an attempt to appeal to the masses. While the rhetoric before the convention was REPEAL OBAMACARE, now he is saying that parts of the law are good and should be kept. One of the parts that he likes is not allowing insurance companies to deny coverage based on pre-existing conditions.
First, by admitting that insurance companies should be compelled by law to insure a certain class of people is an admission that the free market economy will NOT deliver the best result for the people in all cases. It is not in any insurance company's interest to insure someone known to be sick.
Second, given that insurance is to be provided, how is it to be paid for. There are basically three scenarios. 1. You just add them to the pool of those already insured, in which case the cost of insurance goes up for everyone in order to cover the added expense of insuring people with known health issues. 2. You create "high risk pools" into which these people fall and for which insurance companies will provide coverage. Unfortunately, insurance companies are "for-profit" entities and they must set the premiums at a level that, on average, will cover the expenses of the group of sick people plus administrative overhead and profit. To take a simple example, let's say the "high risk pool" consists of people with cancer, the treatment of which costs $50,000/year. In order for the insurance company to survive, it must charge $50,000/year plus 15% for administration and profit. Who can afford that. 3. You can spread the risk, and cost across all people by insuring the healthy as well as the infirm. This is how insurance works, the people who are fortunate enough to never need it are the ones who pay for the less fortunate. This is exactly what the "individual mandate" in the affordable healthcare law is supposed to enable.
If you already have insurance and you really don't care if someone else does or not, I guess you're going to ignore this line of reasoning. Just remember though: as we learned in 2008, most of us are one "economic downturn" away from being jobless or switching jobs. When that happens, perhaps your current beloved insurance will no longer be available. If you've got diabetes, you're screwed.
Of the 3 options above, the only one that seems reasonable is exactly what the Affordable Care Act is trying to do. The biggest issue I have with it is that it keeps the "for-profit" insurance companies in the middle of the whole thing. Get them out of the way and go for a Single Payer system and we'll be on our way to a modern, affordable health care system.
First, by admitting that insurance companies should be compelled by law to insure a certain class of people is an admission that the free market economy will NOT deliver the best result for the people in all cases. It is not in any insurance company's interest to insure someone known to be sick.
Second, given that insurance is to be provided, how is it to be paid for. There are basically three scenarios. 1. You just add them to the pool of those already insured, in which case the cost of insurance goes up for everyone in order to cover the added expense of insuring people with known health issues. 2. You create "high risk pools" into which these people fall and for which insurance companies will provide coverage. Unfortunately, insurance companies are "for-profit" entities and they must set the premiums at a level that, on average, will cover the expenses of the group of sick people plus administrative overhead and profit. To take a simple example, let's say the "high risk pool" consists of people with cancer, the treatment of which costs $50,000/year. In order for the insurance company to survive, it must charge $50,000/year plus 15% for administration and profit. Who can afford that. 3. You can spread the risk, and cost across all people by insuring the healthy as well as the infirm. This is how insurance works, the people who are fortunate enough to never need it are the ones who pay for the less fortunate. This is exactly what the "individual mandate" in the affordable healthcare law is supposed to enable.
If you already have insurance and you really don't care if someone else does or not, I guess you're going to ignore this line of reasoning. Just remember though: as we learned in 2008, most of us are one "economic downturn" away from being jobless or switching jobs. When that happens, perhaps your current beloved insurance will no longer be available. If you've got diabetes, you're screwed.
Of the 3 options above, the only one that seems reasonable is exactly what the Affordable Care Act is trying to do. The biggest issue I have with it is that it keeps the "for-profit" insurance companies in the middle of the whole thing. Get them out of the way and go for a Single Payer system and we'll be on our way to a modern, affordable health care system.
Friday, January 20, 2012
Health Insurance
Why do I feel like we're about to be screwed yet again. Over the last couple years, we have been "tempted" by health insurance alternatives that lower monthly premiums at the expense of higher deductibles and co-pays. When you do the math, unless you know you are going to have some major medical event, it appears that you will come out ahead with the higher deductible plan. In my case, even a worst case scenario only exposes me to $2000 risk. So, the insurance company is offering me the "opportunity" to manage my healthcare costs and share the resulting savings with them. Nice of them isn't it?
But, what's really going on here? For years we have been told that the most important aspect of managing an illness of any kind is early detection and intervention. Let me tell you something folks. 90% of the people out there who have been told to "manage their own healthcare costs" and whose deductible and co-pay have doubled are going to think twice before heading out the door to the doctor. Yeah, I've got this funny pain in my chest.... but if I wait a few days, it will probably go away. Oh, that lump on breast, I think it's been there a while, I don't think it's anything serious. I've been feeling very tired lately. I guess I just need more sleep.
These high deductible plans, at least in my case, are an alternative right now. I can choose the old plan (which still has a deductible and co-pay) or the high deductible. My fearless prediction is that most people who don't have a known medical condition will jump to the high deductible plan. In a couple years the insurance company song will be: "Well, nobody wants these low deductible plans anymore, so we don't offer them". The healthy will be ok. Unfortunately it is the sick, who insurance is supposed to protect, that will pay most dearly.
But, what's really going on here? For years we have been told that the most important aspect of managing an illness of any kind is early detection and intervention. Let me tell you something folks. 90% of the people out there who have been told to "manage their own healthcare costs" and whose deductible and co-pay have doubled are going to think twice before heading out the door to the doctor. Yeah, I've got this funny pain in my chest.... but if I wait a few days, it will probably go away. Oh, that lump on breast, I think it's been there a while, I don't think it's anything serious. I've been feeling very tired lately. I guess I just need more sleep.
These high deductible plans, at least in my case, are an alternative right now. I can choose the old plan (which still has a deductible and co-pay) or the high deductible. My fearless prediction is that most people who don't have a known medical condition will jump to the high deductible plan. In a couple years the insurance company song will be: "Well, nobody wants these low deductible plans anymore, so we don't offer them". The healthy will be ok. Unfortunately it is the sick, who insurance is supposed to protect, that will pay most dearly.
Tuesday, March 1, 2011
Health Care Cost
When are we going to start separating the cost of Health Care from the cost of Health Insurance. Certainly then are connected, but the media doesn't seem to treat the two any differently.
The cost of Health Care should simply be the cost to provide any given procedure or service, regardless of who pays for it. With nearly zero inflation over the past couple years, the cost of Health Care should not have gone up.
The cost of Health Insurance is, of course, be a horse of a different color. If the insurance pool of which you are a member has seen an increase in the claims associated with a certain type of procedure, the cost of insurance will probably rise so the insurance company can continue to make a profit.
So, why has the cost of Health Care risen in the last couple years? Or has it? Has the cost of Health CARE risen, or has the cost of Health INSURANCE risen? Certainly the second. I'm not sure about the first. And, regarding the second; what are the real underlying causes of the increase?
The cost of Health Care should simply be the cost to provide any given procedure or service, regardless of who pays for it. With nearly zero inflation over the past couple years, the cost of Health Care should not have gone up.
The cost of Health Insurance is, of course, be a horse of a different color. If the insurance pool of which you are a member has seen an increase in the claims associated with a certain type of procedure, the cost of insurance will probably rise so the insurance company can continue to make a profit.
So, why has the cost of Health Care risen in the last couple years? Or has it? Has the cost of Health CARE risen, or has the cost of Health INSURANCE risen? Certainly the second. I'm not sure about the first. And, regarding the second; what are the real underlying causes of the increase?
Subscribe to:
Posts (Atom)
