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> But plenty of healthy holdouts remain, and their resistance helps explain why insurers are worried about the financial viability of the exchanges over time. T

> But plenty of healthy holdouts remain, and their resistance helps explain why insurers are worried about the financial viability of the exchanges over time. They say they sorely need more healthy customers to balance out the costs of covering the sicker, older people who have flocked to exchange plans. Ah, the tragedy of the commons at work. Healthy people don't buy insurance because it's too expensive. Insurance is more expensive because there are too many expensive sick people and not enough healthy people paying into it. It's a terrible feedback loop, one which the IRS penalties were designed to solve.

dibujante 11y ago
As a Canadian, I am astonished at how expensive even the cheapest of these plans are. My monthly healthcare cost amounts to $178, once you factor in the taxes I pay that go to healthcare. That's cheaper than any of the plans in this article. How do people find these prices bearable?
- mikeash 11y ago
  They're cheaper than getting sick and not having insurance. I'll pay almost anything to ensure that a sudden medical event doesn't bankrupt me.
  - eplanit 11y ago
    > "I'll pay almost anything to ensure that a sudden medical event doesn't bankrupt me." Exactly, and reflects the mafia-esque choice imposed on the consumer when rates are increased: pay the absurd rate or face absolute ruin if (when) a sudden medical event occurs.
    - mikeash 11y ago
      It's mildly terrifying. If you're unlucky enough to break a major bone or get cancer or something like that, you could literally be on the hook for millions of dollars. I lived overseas for a couple of years, and when I got back to the US one of the first things I did was obtain health insurance because of this.
      - lotsofpulp 11y ago
        Might be a better option to just declare bankruptcy.
        mikeash 11y ago
        In many cases that's true. Medical debt is the cause of most personal bankruptcies in the US. But it's not a good option either, so better to avoid both if you can. If you have substantial savings then you'd stand to lose those to your creditors in bankruptcy. If you have no savings and don't plan on taking out any loans for a long time then it might be a decent option.
      - geomark 11y ago
        This is one of several reasons I have written off moving back to the US. A unexpected bonus of being an expat is I have no Obamacare requirement. I don't have to buy US insurance (since I couldn't use it anyway) and I don't face an IRS penalty.
        tronreg 11y ago
        Where's your greener pasture?
        geomark 11y ago
        Thailand. It's not for everybody. But you can get world class medical care at a fraction of the price here.
  - Cyberdog 11y ago
    The end result of the "Affordable" "Care" Act for myself and many others is that we pay more for lesser insurance. So we do pay "almost anything," then sudden medical events can, if not bankrupt us, still cost a pretty penny thanks to the high deductibles.
    - jonlucc 11y ago
      How high is your deductible? I think the highest I've seen is $5k, which is nothing to sneeze at, but also not really in the realm of bankrupting most families.
      - Cyberdog 11y ago
        The plan I have currently has a $6k deductible for my family, for in-network care - $10k outside of network. This would not bankrupt us currently, no, but it would have as recently as a few months ago, and almost all other times in my life.
        jonlucc 11y ago
        I thought that the vast majority of healthcare providers are amenable to payment plans and other forms of assistance.
        mikeash 11y ago
        Definitely, they'd much rather collect late or partially than have you try to evade collection or declare bankruptcy. However, your room for negotiation is much smaller when you're paying a huge insurance deductible than if you're completely uninsured. Hospitals charge outrageous prices for the uninsured, partly so they have room to make a profit when insurance companies negotiate down, partly to make up for the fact that a lot of uninsured people will never pay, and partly because some people will pay it so they might as well try. If you're insured with a high deductible, the insurance company has already negotiated prices down by an order of magnitude. Any further negotiation with your deductible starts to really hurt their bottom line, and might run into problems with their arrangement with the insurance company too. I have to imagine that a payment plan could be arranged without too much difficulty, but actually reducing the total amount could be challenging.
- douche 11y ago
  I had an emergency appendectomy done in a little rinky-dink Quebec hospital. I was driven in an ambulance 150 miles, had general anesthesia, scope surgery, and an overnight stay in the hospital. Had to pay out-of-pocket for the procedure in cash. It was, all told, less expensive than the half-hour echocardiogram I had a couple years ago. Similar surgeries in the States have cost my insurance north of twenty grand. It's insane.
  - chimeracoder 11y ago
    > Similar surgeries in the States have cost my insurance north of twenty grand. I'm assuming you're referring to the amount your insurance company had to pay, not the amount that you had to pay. If so, keep in mind that the prices insurance companies pay for procedures are not designed to make sense on an individual level[0]. I've explained this in more detail on previous comments, but basically, hospitals lose money on publicly-insured patients (Medicare/Medicaid), and so they have to make up the difference by overcharging private insurers. This is why the sticker price for procedures is so heavily inflated - they're intended to be the starting point for negotiation, and the insurers then negotiate standard rates (still inflated, but less so) for in-network providers. In other words, the amount that your insurer had to pay for your ECG includes an amortization of the amount of excess cost that your insurer bears in order to (effectively) subsidize the patients on public insurance. In theory, this should not affect your out-of-pocket costs (though of course, in the end, it all does come out of patients fixed monthly premiums, so you still are paying for it in some way). Yes, this is unnecessarily complicated, but that's the way billing works. [0] That is not to say that the amount that the insured patients pay for procedures shouldn't make sense on an individual level - just the amount that the insurer pays on top.
    - douche 11y ago
      I still had to pay my $2500 deductible on the $2600 ECG, so the insurance company didn't worry about haggling them too much. If you're young, relatively healthy, non-clumsy, male, and childless, chances are you might not go to the doctor once in a year, so it'd be a gamble, but you might very well statistically be better off pocketing the insurance premiums. Better yet, put on a furry suit, bark convincingly, and go to a vet if you need some common medications or procedures that are mind-bogglingly expensive when prescribed for humans.
- x3n0ph3n3 11y ago
  They don't, which is why they won't pay for them...
- ghaff 11y ago
  That's because, at least in part, the costs in Canada and much of Western Europe are paid for indirectly through other taxes.
  - dibujante 11y ago
    No, I factored taxes into my calculation. I am aware that "free" healthcare is not "free" unless you do not pay tax.
    - ghaff 11y ago
      According to this [1] which is fairly consistent with other things I've read, US costs are maybe 25% higher than in Canada. What that means is debatable in the context of waiting times, etc. [1] https://en.wikipedia.org/wiki/Comparison_of_the_healthcare_systems_in_Canada_and_the_United_States https://en.wikipedia.org/wiki/Comparison_of_the_healthcare_s...
      - davidw 11y ago
        Looks like it's almost double in the US: https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... Anecdotally, waiting to see a regular old doctor was faster in Italy than in the US. Some specialist visits involved longer waiting times in Italy. Going private in Italy was generally both fast and cheap: something like 100 euro for a chest X-ray done the next day. Canada's health care system is good, I guess, but it's generally not ranked quite as highly as places like France and Italy, IIRC. More comparisons tend to be made with Canada and the UK because of the common language.
        dibujante 11y ago
        My understanding is that the Canadian system is a step above the US system but not otherwise that great on a global scale. This is pretty much Canada's national motto.
      - JoBrad 11y ago
- nommm-nommm 11y ago
  We don't.
- zurn 11y ago
  In the macroeconomic figures Canada is reported to spend 10% of GDP[1] or about 4300 USD per capita on healthcare vs your 1524 USD/year[2]. There's two thirds missing right there, and if you are one of the higher payers (average includes kids, pensioners, students, unemployed/disabled etc), there's an even bigger gap. What explains it? [1] https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... [2] 178 CAD -> 127 USD, times 12 - ok this is missing the PPP correction because [1] GDP is PPP corrected, so might be a little off
- novalis78 11y ago
  we don't. It is akin to a mafiosi stopping by every month asking for his "protection" money in case a terrorist group will take you hostage and ransack your place. In all other "normal" cases where you need security that said mafiosi says you have to pay for it yourself. The ACA proponent gladly accepts this outrageous proposition.
  - rlpb 11y ago
    AIUI, your mafiosi are also obliged to protect you if you are a veteran, when you get old and when you have an emergency, and this makes regular protection much more expensive for you unless he gets protection money from everyone.
Avshalom 11y ago
Health insurance is expensive because health insurance companies love money.
dpweb 11y ago
Also a dark calculation in these people who won't carry (even catastrophic) coverage. If I get a major disease and a half million or million dollar medical bill, I'm not going to pay it anyway.
privong 11y ago
> It's a terrible feedback loop, one which the IRS penalties were designed to solve. But it shouldn't be surprising that the IRS penalties (in current form) could not solve this. This eventuality was predicted before the law was passed in the Senate (e.g., [0]). It seems fairly obvious that this would happen unless fines are somehow pegged to the cheapest insurance rates (as dpweb notes in this same HN story[1]). [0] https://reason.com/blog/2009/11/06/higher-premiums-less-coverage https://reason.com/blog/2009/11/06/higher-premiums-less-cove... [1] https://news.ycombinator.com/user?id=dpweb https://news.ycombinator.com/user?id=dpweb
- methodover 11y ago
  Wouldn't the problem with that be, insurance companies would have an incentive to raise prices as high as they can, knowing that the public would basically be required by law to pay them (or an equivalent penalty)? That incentive sounds pretty terrible for the public. Great for insurance companies though.
  - privong 11y ago
    > Wouldn't the problem with that be, insurance companies would have an incentive to raise prices as high as they can, knowing that the public would basically be required by law to pay them (or an equivalent penalty)? The public is already required by law to pay the insurance companies. But with a fixed, lower fine, I suppose there's a "laffner curve", where insurance companies can't raise their prices too much or enough people will opt for the IRS penalty that the insurance market would stop having enough buy-in.
  - SapphireSun 11y ago
    https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-... Insurers are now limited to making 20% profit maximum under ACA to prevent pathological scenarios like that. Will there be a reduction in "innovation"? Maybe, but how much innovation do you need from a payment scheme? In any case, the game now is to increase their subscriber base by stealing from competitors or the uninsured, both likely to result in benefits to consumers. I found this site helpful too: http://obamacarefacts.com/obamacare-control-costs/ http://obamacarefacts.com/obamacare-control-costs/
stvswn 11y ago
"If only the plan worked as intended! We were close!" -- the same refrain after every single failed socialist endeavor. But in this case we had the smartest people study the problem! Economists from the top universities designed the incentives! How could it fail?
- tempestn 11y ago
  Has it failed? It definitely sounds imperfect, unsurprisingly, but to me it sounds better than the prior situation.
white-flame 11y ago
I'd have no problem with an actually centralized single-payer plan. However, the ACA is shoehorning private, for-profit insurance companies into the middle of this, all the while constraining them and driving everybody's costs up by approximately 3x to most observations I've seen of myself and others. To properly implement a government health care system would be to effectively destroy most if not all the for-profit insurance companies* and set up a system with a mandate for national health. Nobody's going to want to do that, politically. * = Having a central system covering a lot of the basics, and insurance companies to provide "upsell" coverage could still exist, but those insurance companies would likely not be in the same ballpark of financial movement as they are today.

dibujante 11y ago

As a Canadian, I am astonished at how expensive even the cheapest of these plans are. My monthly healthcare cost amounts to $178, once you factor in the taxes I pay that go to healthcare. That's cheaper than any of the plans in this article. How do people find these prices bearable?

mikeash 11y ago
They're cheaper than getting sick and not having insurance. I'll pay almost anything to ensure that a sudden medical event doesn't bankrupt me.
- eplanit 11y ago
  > "I'll pay almost anything to ensure that a sudden medical event doesn't bankrupt me." Exactly, and reflects the mafia-esque choice imposed on the consumer when rates are increased: pay the absurd rate or face absolute ruin if (when) a sudden medical event occurs.
  - mikeash 11y ago
    It's mildly terrifying. If you're unlucky enough to break a major bone or get cancer or something like that, you could literally be on the hook for millions of dollars. I lived overseas for a couple of years, and when I got back to the US one of the first things I did was obtain health insurance because of this.
    - lotsofpulp 11y ago
      Might be a better option to just declare bankruptcy.
      - mikeash 11y ago
        In many cases that's true. Medical debt is the cause of most personal bankruptcies in the US. But it's not a good option either, so better to avoid both if you can. If you have substantial savings then you'd stand to lose those to your creditors in bankruptcy. If you have no savings and don't plan on taking out any loans for a long time then it might be a decent option.
    - geomark 11y ago
      This is one of several reasons I have written off moving back to the US. A unexpected bonus of being an expat is I have no Obamacare requirement. I don't have to buy US insurance (since I couldn't use it anyway) and I don't face an IRS penalty.
      - tronreg 11y ago
        Where's your greener pasture?
        geomark 11y ago
        Thailand. It's not for everybody. But you can get world class medical care at a fraction of the price here.
- Cyberdog 11y ago
  The end result of the "Affordable" "Care" Act for myself and many others is that we pay more for lesser insurance. So we do pay "almost anything," then sudden medical events can, if not bankrupt us, still cost a pretty penny thanks to the high deductibles.
  - jonlucc 11y ago
    How high is your deductible? I think the highest I've seen is $5k, which is nothing to sneeze at, but also not really in the realm of bankrupting most families.
    - Cyberdog 11y ago
      The plan I have currently has a $6k deductible for my family, for in-network care - $10k outside of network. This would not bankrupt us currently, no, but it would have as recently as a few months ago, and almost all other times in my life.
      - jonlucc 11y ago
        I thought that the vast majority of healthcare providers are amenable to payment plans and other forms of assistance.
        mikeash 11y ago
        Definitely, they'd much rather collect late or partially than have you try to evade collection or declare bankruptcy. However, your room for negotiation is much smaller when you're paying a huge insurance deductible than if you're completely uninsured. Hospitals charge outrageous prices for the uninsured, partly so they have room to make a profit when insurance companies negotiate down, partly to make up for the fact that a lot of uninsured people will never pay, and partly because some people will pay it so they might as well try. If you're insured with a high deductible, the insurance company has already negotiated prices down by an order of magnitude. Any further negotiation with your deductible starts to really hurt their bottom line, and might run into problems with their arrangement with the insurance company too. I have to imagine that a payment plan could be arranged without too much difficulty, but actually reducing the total amount could be challenging.
douche 11y ago
I had an emergency appendectomy done in a little rinky-dink Quebec hospital. I was driven in an ambulance 150 miles, had general anesthesia, scope surgery, and an overnight stay in the hospital. Had to pay out-of-pocket for the procedure in cash. It was, all told, less expensive than the half-hour echocardiogram I had a couple years ago. Similar surgeries in the States have cost my insurance north of twenty grand. It's insane.
- chimeracoder 11y ago
  > Similar surgeries in the States have cost my insurance north of twenty grand. I'm assuming you're referring to the amount your insurance company had to pay, not the amount that you had to pay. If so, keep in mind that the prices insurance companies pay for procedures are not designed to make sense on an individual level[0]. I've explained this in more detail on previous comments, but basically, hospitals lose money on publicly-insured patients (Medicare/Medicaid), and so they have to make up the difference by overcharging private insurers. This is why the sticker price for procedures is so heavily inflated - they're intended to be the starting point for negotiation, and the insurers then negotiate standard rates (still inflated, but less so) for in-network providers. In other words, the amount that your insurer had to pay for your ECG includes an amortization of the amount of excess cost that your insurer bears in order to (effectively) subsidize the patients on public insurance. In theory, this should not affect your out-of-pocket costs (though of course, in the end, it all does come out of patients fixed monthly premiums, so you still are paying for it in some way). Yes, this is unnecessarily complicated, but that's the way billing works. [0] That is not to say that the amount that the insured patients pay for procedures shouldn't make sense on an individual level - just the amount that the insurer pays on top.
  - douche 11y ago
    I still had to pay my $2500 deductible on the $2600 ECG, so the insurance company didn't worry about haggling them too much. If you're young, relatively healthy, non-clumsy, male, and childless, chances are you might not go to the doctor once in a year, so it'd be a gamble, but you might very well statistically be better off pocketing the insurance premiums. Better yet, put on a furry suit, bark convincingly, and go to a vet if you need some common medications or procedures that are mind-bogglingly expensive when prescribed for humans.
x3n0ph3n3 11y ago
They don't, which is why they won't pay for them...
ghaff 11y ago
That's because, at least in part, the costs in Canada and much of Western Europe are paid for indirectly through other taxes.
- dibujante 11y ago
  No, I factored taxes into my calculation. I am aware that "free" healthcare is not "free" unless you do not pay tax.
  - ghaff 11y ago
    According to this [1] which is fairly consistent with other things I've read, US costs are maybe 25% higher than in Canada. What that means is debatable in the context of waiting times, etc. [1] https://en.wikipedia.org/wiki/Comparison_of_the_healthcare_systems_in_Canada_and_the_United_States https://en.wikipedia.org/wiki/Comparison_of_the_healthcare_s...
    - davidw 11y ago
      Looks like it's almost double in the US: https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... Anecdotally, waiting to see a regular old doctor was faster in Italy than in the US. Some specialist visits involved longer waiting times in Italy. Going private in Italy was generally both fast and cheap: something like 100 euro for a chest X-ray done the next day. Canada's health care system is good, I guess, but it's generally not ranked quite as highly as places like France and Italy, IIRC. More comparisons tend to be made with Canada and the UK because of the common language.
      - dibujante 11y ago
        My understanding is that the Canadian system is a step above the US system but not otherwise that great on a global scale. This is pretty much Canada's national motto.
    - JoBrad 11y ago
nommm-nommm 11y ago
We don't.
zurn 11y ago
In the macroeconomic figures Canada is reported to spend 10% of GDP[1] or about 4300 USD per capita on healthcare vs your 1524 USD/year[2]. There's two thirds missing right there, and if you are one of the higher payers (average includes kids, pensioners, students, unemployed/disabled etc), there's an even bigger gap. What explains it? [1] https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... [2] 178 CAD -> 127 USD, times 12 - ok this is missing the PPP correction because [1] GDP is PPP corrected, so might be a little off
novalis78 11y ago
we don't. It is akin to a mafiosi stopping by every month asking for his "protection" money in case a terrorist group will take you hostage and ransack your place. In all other "normal" cases where you need security that said mafiosi says you have to pay for it yourself. The ACA proponent gladly accepts this outrageous proposition.
- rlpb 11y ago
  AIUI, your mafiosi are also obliged to protect you if you are a veteran, when you get old and when you have an emergency, and this makes regular protection much more expensive for you unless he gets protection money from everyone.

Avshalom 11y ago

Health insurance is expensive because health insurance companies love money.

dpweb 11y ago

Also a dark calculation in these people who won't carry (even catastrophic) coverage. If I get a major disease and a half million or million dollar medical bill, I'm not going to pay it anyway.

privong 11y ago

> It's a terrible feedback loop, one which the IRS penalties were designed to solve. But it shouldn't be surprising that the IRS penalties (in current form) could not solve this. This eventuality was predicted before the law was passed in the Senate (e.g., [0]). It seems fairly obvious that this would happen unless fines are somehow pegged to the cheapest insurance rates (as dpweb notes in this same HN story[1]). [0] https://reason.com/blog/2009/11/06/higher-premiums-less-coverage https://reason.com/blog/2009/11/06/higher-premiums-less-cove... [1] https://news.ycombinator.com/user?id=dpweb https://news.ycombinator.com/user?id=dpweb

methodover 11y ago
Wouldn't the problem with that be, insurance companies would have an incentive to raise prices as high as they can, knowing that the public would basically be required by law to pay them (or an equivalent penalty)? That incentive sounds pretty terrible for the public. Great for insurance companies though.
- privong 11y ago
  > Wouldn't the problem with that be, insurance companies would have an incentive to raise prices as high as they can, knowing that the public would basically be required by law to pay them (or an equivalent penalty)? The public is already required by law to pay the insurance companies. But with a fixed, lower fine, I suppose there's a "laffner curve", where insurance companies can't raise their prices too much or enough people will opt for the IRS penalty that the insurance market would stop having enough buy-in.
- SapphireSun 11y ago
  https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-... Insurers are now limited to making 20% profit maximum under ACA to prevent pathological scenarios like that. Will there be a reduction in "innovation"? Maybe, but how much innovation do you need from a payment scheme? In any case, the game now is to increase their subscriber base by stealing from competitors or the uninsured, both likely to result in benefits to consumers. I found this site helpful too: http://obamacarefacts.com/obamacare-control-costs/ http://obamacarefacts.com/obamacare-control-costs/

stvswn 11y ago

"If only the plan worked as intended! We were close!" -- the same refrain after every single failed socialist endeavor. But in this case we had the smartest people study the problem! Economists from the top universities designed the incentives! How could it fail?

tempestn 11y ago
Has it failed? It definitely sounds imperfect, unsurprisingly, but to me it sounds better than the prior situation.

white-flame 11y ago

I'd have no problem with an actually centralized single-payer plan. However, the ACA is shoehorning private, for-profit insurance companies into the middle of this, all the while constraining them and driving everybody's costs up by approximately 3x to most observations I've seen of myself and others. To properly implement a government health care system would be to effectively destroy most if not all the for-profit insurance companies* and set up a system with a mandate for national health. Nobody's going to want to do that, politically. * = Having a central system covering a lot of the basics, and insurance companies to provide "upsell" coverage could still exist, but those insurance companies would likely not be in the same ballpark of financial movement as they are today.