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The problem is that middle class Americans are charged outlandish rates for the plans. The plan for my family last year cost over $1200 per month, and this yea

The problem is that middle class Americans are charged outlandish rates for the plans. The plan for my family last year cost over $1200 per month, and this year rose to $1400/month. Previously, with employer-provided plans I paid at most $400/month for my family. Not only are the costs outlandish, there are no high deductible plans available for people who are generally healthy. All of the plans, gold, silver and bronze, are geared toward heavy users or highly risk-averse users. A healthy, disease-free family at an income level to afford $1400/month in health care costs surely ought to be able to purchase a plan that covers catastrophic scenarios and costs a lot less than $1400/month. In the past I'd had a plan via an employer that was a high-deductible plan. It cost $350/month but I had to pay the first $10K of all costs each year. Do the math, this was a better deal even in the worst case scenario than my ACA plan. The problem with bundling a progressive tax, a flat fee, a subsidy, and a prepayment plan into one "price" is that it is impossible to tell which dollars apply to what. I'd much rather have my actual taxes go up a small bit than pay an income-based penalty in my healthcare price. I'd also much rather self-insure the first $15-20K of risk each year in exchange for a much smaller payment. One other detail. Nearly all the plans by all the providers are essentially identical. The cheapest bronze plan I could have found was over $900/month! That's for a pretty abysmal level of coverage of most things compared to any other employer provided plan I've ever had.

jbarciauskas 10y ago
It's meaningless to compare employer funded plans to ACA plans without knowing what amount was being subsidized by your company. It's also a different risk pool. The idea is self-insuring $15-20k is absurd for most people, and most people who buy insurance on the exchanges will have government subsidized coverage. If you want to argue the government should subsidize more of the cost of this care, I'm all ears. But I don't think we should dismantle the system because it doesn't benefit your precise set of preferences.
- grandalf 10y ago
  > what amount was being subsidized by your company Around $200 per month. The risk pool aspect would be true if the risk were the dominant factor in the price, which I think it isn't. > The idea is self-insuring $15-20k is absurd for most people People who can afford $1400/month even if no healthcare is used? I'd much rather save the money and if someone in my household has a catastrophic scenario put it on a credit card or spend the next <12 months on a payment plan of $1000/month. > subsidize more of the cost of this care The key word in that sentence is this. What care are we talking about? The ACA plans cost a minimum of $900/month even if I use no care at all (and that's for the plan with very high co-pays, etc.). I've been on an ACA plan for the past two benefit years, and the plans keep getting much more expensive and offering worse coverage. The question is, why is this happening? And why is it that on the so-called "marketplace" there is not a high deductible plan that had been available via non-ACA plans via employers? I think the answer is that it is far from an actual marketplace. There must be some incentive for providers not to offer high deductible plans or actual risk-based plans. A risk pool is a way of packaging a lot of people into one financial model, but the larger and more heterogeneous the group, the more the prices should reflect actuarial reality. The exact opposite is the case. Considering that so much money and research has gone into building the healthcare.gov website, why can't I simply adjust sliders to optimize the plan the same way I book a flight? I'd like to slide the monthly premium slider to the bottom, slide the maximum out-of-pocket to about 15x the mid-high premium price, adjust the "worst case event" slider to about $20K and (hopefully) find a plan for a few hundred dollars a month, which I know exists in the actual market because I had it a few years ago! If anything, a larger risk pool should have allowed insurers to offer plans that strongly discourage adverse selection (such as high deductible plans) and reflect the actual risk of cost incurred to the insurer. The plans on healthcare.gov not only fail to offer this, but the wording, the pricing examples, and fine print is all out of some sort of bureaucratic nightmare scenario. I actually had a physician and a lawyer sit with me to try to understand the fine print and the likely cost of a few scenarios other than pregnancy and diabetes (which are shown), and we sat there confused for several hours. I'd like to see our president sit before the nation sharing his desktop screen and watch him navigate through the site and explain the answers to the very simple things we were wondering about, as well as explain some of the more confusing terminology, as well as things like "why are there two separate plans that are so similar being offered by this company?" or "which of the priced items on this list are excluded from the individual deductible?" I'm quite sure that he'd need to do quite a bit of research and rehearsal before he'd be able to give such a demo with confidence. When we put trust in our officials to handle things for us, there is a tremendous amount of responsibility that they take on in that capacity. Here we were, one highly computer-literate person, one doc, and one lawyer, utterly flummoxed for several hours. Imagine the average person after a long day trying to make this very important choice for his/her family. It's just wrong. Maybe the idea is to make all the plans more and more similar until there is really just one choice that is priced based on income and nobody feels it's worth the time searching or reading any of the coverage descriptions because we all realize that the plans are all nearly the same by design, and that we're just meant to pay our "share" based on income and be grateful that such great care has been provided for us. One thing is for certain. It's not a marketplace. There are simply not competitive plans. There is no way to sort the plans according to any differentiating factors. The "wizard" that the site offers tries to partition people into three groups based on expected usage, but does not offer any consideration to low users or users who are comfortable with the idea of getting a large bill and either taking on debt to pay it off or going on a payment plan with the provider. And, far worse, all any of the plans I reviewed do to create an incentive for low use is subsidize non-emergent primary care visits. There is zero incentive beyond that to reduce one's use of care. Since the spread between the cheapest and most expensive plan is so small, anyone who expects to need any healthcare at all is better off choosing a silver or gold plan. If this incentive is different for people whose coverage is subsidized, I'd consider it discriminatory fwiw.
  - em3rgent0rdr 10y ago
    "Considering that so much money and research has gone into building the healthcare.gov website, why can't I simply adjust sliders to optimize the plan the same way I book a flight?" The ACA instead helps the insurance companies optimize based on their interests.
  - RA_Fisher 10y ago
    There's only one insurer in the "marketplace" in Alabama. One hell of a market. The preexisting coverage mandate will need to be re-engineered because it's in direct tension with the fundamentals of insurance. Wide open and the system is just cost transfer.
    - convolvatron 10y ago
      closed and its not a health care system at all. as soon as you develop a problem you're screwed.
  - rgbrenner 10y ago
    There must be some incentive for providers not to offer high deductible plans or actual risk-based plans. ACA caps the maximum out of pocket for "essential health benefits". For 2017, that means a max deductible of 7150 for an individual, 14300 for a family. It's adjusted for inflation each year. It's to prevent people who can't pay the high deductible from signing up for these plans to avoid the penalty for not having coverage.
    - grandalf 10y ago
      Ahh, I see. I suppose there would be a lot of people choosing the cheaper, high deductible plan and then not paying their bills, which would have made it harder to sell the plan to healthcare firms. If it were fair it would be based on a percent of income like other tax-related laws.
      - deleted 10y ago
        [deleted]
zaroth 10y ago
ACA has got to be the largest tax increase ever foisted on the middle class. We already have a progressive tax, but let's add an individual mandate, tax credits that phase out at 400% FPL, and cost sharing subsidies which phase out after 250% of FPL. The maximum value of the tax credits for your family would be nearly the full cost of the premiums at 133% FPL, let's say $12,000. Then on top of that the cost sharing reductions would reduce your out-of-pocket maximum -- which if you're truly unlucky could run your family another $14,300 -- to a maximum of $4,500, so that's worth potentially another $10k. What this means is ACA is a $12,000 - $22,000 tax on your family depending on your health care utilization, as income rises from 133% - 400% FPL. For a family of 4 the 133% FPL = $32,250 and 400% = $97,000. So as you make that extra $64,750, in addition to all the other taxes you are paying, you are also phasing in $12,000 - $22,000 of increased payments for the same exact health care. Now that is one hell of a tax. So while you and your spouse are working your asses off to earn $150k, you can look back and appreciate how $10k went to the town, $10k to the state, $30k to the Fed and ~$15k to the SSA. So it's really just the cherry you're being charged an extra $15k for insurance, come on, you can afford it! I won't mention all the other subsidies you lose out on for being a productive member of society. Because when you realize the real tax rate approaches 100% on the first $97,000 it's a bit of a buzz kill.
- grandalf 10y ago
  Very true. And all that extra money is helping to fund companies like Mylan when they overprice the epi pen for several years. Why wouldn't they, customers are insulated from the sticker price but can't really complain because high priced health "insurance" is required. It's just a coincidence that Mylan took any flak for its abuse of the system. Many other pharmaceuticals are increasing in price way out of proportion to inflation, and way out of step with reality since the R&D costs are all borne before product launch.
- timr 10y ago
  "ACA has got to be the largest tax increase ever foisted on the middle class." That's just Not Even Wrong. Your health insurance premium is not a "tax". You're getting health insurance. Moreover, not getting a subsidy for your health insurance is also not a tax. You can only use that logic when the tax credit is offsetting another tax. Which it isn't. It's offsetting your health insurance bill. If, instead, you're trying to claim that every bit of increase in health insurance costs since the ACA is a "tax", that's maybe a bit more defensible, but still Wrong. Health insurance costs have been skyrocketing for decades. The ACA has probably slowed down that trend. Finally, if you're just complaining that you're healthy but you have to pay for health insurance now...take a walk, please. Eventually, we all get sick. Health insurance only works if healthy people foot the bill of the sick people. That's how insurance works.
amluto 10y ago
> I'd also much rather self-insure the first $15-20K of risk each year in exchange for a much smaller payment. Would that still be true if you had to pay retail for all your care?
- mathgeek 10y ago
  I fail to see the difference between paying the first $15k at retail and paying an extra $1250/month in premiums, when all other coverage is equal.
  - grandalf 10y ago
    Exactly. Also, it's worth noting that the "retail" price is a way that health care providers rip off the government by claiming a loss on their books after they are reimbursed by medicaid. The grandparent's intuition that by being on a high deductible plan I would not be eligible for the "buying club" benefits of negotiated pricing doesn't pan out: The price is negotiated so that there is a captive "in-network" market which guarantees some level of utilization and helps with planning. Insurance companies want to offer a large population to care networks in order to negotiate a volume discount. Also, if you consider a catastrophic plan that kicks in if something really bad happens and I use over $20K of care. Nearly any serious condition or accident would qualify. If it happened, I'd be able to switch to a lower deductible plan in the next open enrollment. Worst case, I'd end up paying my premium savings (and then some) toward that one event, but overall I would not be much worse off than if I'd just chosen the expensive plan to begin with. When I had the high deductible plan through an employer I did the math on it compared to the most deluxe plan offered. Worst case, if I maxed out the individual and family deductibles on the high deductible plan, I'd end up paying about the same as the annual premiums of the deluxe plan. But if, as is likely, I didn't have a catastrophic incident, I'd save a lot of money (which I did).
    - chimeracoder 10y ago
      > Also, it's worth noting that the "retail" price is a way that health care providers rip off the government by claiming a loss on their books after they are reimbursed by medicaid You've got it backwards - Medicare (and Medicaid, to a lesser extent) are the ones who rip off providers, by reimbursing less than COGS[0]. The "retail" price is actually a way that providers make up for these losses by passing on the costs to private insurers (who then pay for those increased costs by accounting for them as claims, improving their MLR, and allowing them to raise premiums for it). [0] Medicare's own financial statements attest to this; you don't have to take providers' words for it.
rifung 10y ago
> Not only are the costs outlandish, there are no high deductible plans available for people who are generally healthy. All of the plans, gold, silver and bronze, are geared toward heavy users or highly risk-averse users. Isn't this just because now insurance companies have to cover preexisting conditions and also not charge them exorbitant prices? Naturally, they would be taking a loss in order to do this so that burden is instead shifted onto the healthy people. To prevent healthy people from just not buying insurance, the mandate was made because it's economically unfeasible without them. If you're the type of person who would normally use a high deductible plan, you're worse off, but that's the way it was supposed to be. Presumably if one day you get very sick though, you will still be able to get insurance.
- rastapasta42 10y ago
  Subsidies only hide the real issue. We shifted the burden of healthcare from lower class and sick to middle class. But the fundamental problem is high cost of healthcare. Capitalism is usually a ruthlessly effective tool, but it doesn't seem to work with healthcare due to lack of choice. Maybe it doesn't make sense to invest so much money into health? Is it a worthy trade-off getting 80% of our current healthcare quality for say 50% of the cost? It's a tough call to make, but this country is in decline and we need to make tough choices. I'm a 19-year old developer working my ass off last 4 years for silly startups. Currently I make $30/hour but paying around 30% of my income in taxes. Baby boomers benefited from generation before them and borrowed money from gen x'ers/millenials and they run this country into ground. Once my agegroup starts seriously voting I feel like we won't have a lot of pity for older age groups and their retirement plans. I support raising minimum wage to livable standards, but I hope universal income comes soon. Over the last year I've been getting burned out working 60 hour weeks trying to use latest languages and libraries, while my company is hiring $3/hour phillipino php/WordPress codemonkeys...While all I wish in life is to Haskell in peace for next 30 years and then die. I'm still trying to work toeard American dream, but it's dead for all but the software industry. It's disilousining to see rich stealing the fruits of my labour while I have to pay government to keep the lower class alive. As kids we were told about wonders of globalization, democracy, and America. In the real world we now have to deal with fucked up environment, economics and Putin flexing his geopolitical dick. So you older folks got us into this mess, what the hell do we do now?

jbarciauskas 10y ago

It's meaningless to compare employer funded plans to ACA plans without knowing what amount was being subsidized by your company. It's also a different risk pool. The idea is self-insuring $15-20k is absurd for most people, and most people who buy insurance on the exchanges will have government subsidized coverage. If you want to argue the government should subsidize more of the cost of this care, I'm all ears. But I don't think we should dismantle the system because it doesn't benefit your precise set of preferences.

grandalf 10y ago
> what amount was being subsidized by your company Around $200 per month. The risk pool aspect would be true if the risk were the dominant factor in the price, which I think it isn't. > The idea is self-insuring $15-20k is absurd for most people People who can afford $1400/month even if no healthcare is used? I'd much rather save the money and if someone in my household has a catastrophic scenario put it on a credit card or spend the next <12 months on a payment plan of $1000/month. > subsidize more of the cost of this care The key word in that sentence is this. What care are we talking about? The ACA plans cost a minimum of $900/month even if I use no care at all (and that's for the plan with very high co-pays, etc.). I've been on an ACA plan for the past two benefit years, and the plans keep getting much more expensive and offering worse coverage. The question is, why is this happening? And why is it that on the so-called "marketplace" there is not a high deductible plan that had been available via non-ACA plans via employers? I think the answer is that it is far from an actual marketplace. There must be some incentive for providers not to offer high deductible plans or actual risk-based plans. A risk pool is a way of packaging a lot of people into one financial model, but the larger and more heterogeneous the group, the more the prices should reflect actuarial reality. The exact opposite is the case. Considering that so much money and research has gone into building the healthcare.gov website, why can't I simply adjust sliders to optimize the plan the same way I book a flight? I'd like to slide the monthly premium slider to the bottom, slide the maximum out-of-pocket to about 15x the mid-high premium price, adjust the "worst case event" slider to about $20K and (hopefully) find a plan for a few hundred dollars a month, which I know exists in the actual market because I had it a few years ago! If anything, a larger risk pool should have allowed insurers to offer plans that strongly discourage adverse selection (such as high deductible plans) and reflect the actual risk of cost incurred to the insurer. The plans on healthcare.gov not only fail to offer this, but the wording, the pricing examples, and fine print is all out of some sort of bureaucratic nightmare scenario. I actually had a physician and a lawyer sit with me to try to understand the fine print and the likely cost of a few scenarios other than pregnancy and diabetes (which are shown), and we sat there confused for several hours. I'd like to see our president sit before the nation sharing his desktop screen and watch him navigate through the site and explain the answers to the very simple things we were wondering about, as well as explain some of the more confusing terminology, as well as things like "why are there two separate plans that are so similar being offered by this company?" or "which of the priced items on this list are excluded from the individual deductible?" I'm quite sure that he'd need to do quite a bit of research and rehearsal before he'd be able to give such a demo with confidence. When we put trust in our officials to handle things for us, there is a tremendous amount of responsibility that they take on in that capacity. Here we were, one highly computer-literate person, one doc, and one lawyer, utterly flummoxed for several hours. Imagine the average person after a long day trying to make this very important choice for his/her family. It's just wrong. Maybe the idea is to make all the plans more and more similar until there is really just one choice that is priced based on income and nobody feels it's worth the time searching or reading any of the coverage descriptions because we all realize that the plans are all nearly the same by design, and that we're just meant to pay our "share" based on income and be grateful that such great care has been provided for us. One thing is for certain. It's not a marketplace. There are simply not competitive plans. There is no way to sort the plans according to any differentiating factors. The "wizard" that the site offers tries to partition people into three groups based on expected usage, but does not offer any consideration to low users or users who are comfortable with the idea of getting a large bill and either taking on debt to pay it off or going on a payment plan with the provider. And, far worse, all any of the plans I reviewed do to create an incentive for low use is subsidize non-emergent primary care visits. There is zero incentive beyond that to reduce one's use of care. Since the spread between the cheapest and most expensive plan is so small, anyone who expects to need any healthcare at all is better off choosing a silver or gold plan. If this incentive is different for people whose coverage is subsidized, I'd consider it discriminatory fwiw.
- em3rgent0rdr 10y ago
  "Considering that so much money and research has gone into building the healthcare.gov website, why can't I simply adjust sliders to optimize the plan the same way I book a flight?" The ACA instead helps the insurance companies optimize based on their interests.
- RA_Fisher 10y ago
  There's only one insurer in the "marketplace" in Alabama. One hell of a market. The preexisting coverage mandate will need to be re-engineered because it's in direct tension with the fundamentals of insurance. Wide open and the system is just cost transfer.
  - convolvatron 10y ago
    closed and its not a health care system at all. as soon as you develop a problem you're screwed.
- rgbrenner 10y ago
  There must be some incentive for providers not to offer high deductible plans or actual risk-based plans. ACA caps the maximum out of pocket for "essential health benefits". For 2017, that means a max deductible of 7150 for an individual, 14300 for a family. It's adjusted for inflation each year. It's to prevent people who can't pay the high deductible from signing up for these plans to avoid the penalty for not having coverage.
  - grandalf 10y ago
    Ahh, I see. I suppose there would be a lot of people choosing the cheaper, high deductible plan and then not paying their bills, which would have made it harder to sell the plan to healthcare firms. If it were fair it would be based on a percent of income like other tax-related laws.
    - deleted 10y ago
      [deleted]

zaroth 10y ago

ACA has got to be the largest tax increase ever foisted on the middle class. We already have a progressive tax, but let's add an individual mandate, tax credits that phase out at 400% FPL, and cost sharing subsidies which phase out after 250% of FPL. The maximum value of the tax credits for your family would be nearly the full cost of the premiums at 133% FPL, let's say $12,000. Then on top of that the cost sharing reductions would reduce your out-of-pocket maximum -- which if you're truly unlucky could run your family another $14,300 -- to a maximum of $4,500, so that's worth potentially another $10k. What this means is ACA is a $12,000 - $22,000 tax on your family depending on your health care utilization, as income rises from 133% - 400% FPL. For a family of 4 the 133% FPL = $32,250 and 400% = $97,000. So as you make that extra $64,750, in addition to all the other taxes you are paying, you are also phasing in $12,000 - $22,000 of increased payments for the same exact health care. Now that is one hell of a tax. So while you and your spouse are working your asses off to earn $150k, you can look back and appreciate how $10k went to the town, $10k to the state, $30k to the Fed and ~$15k to the SSA. So it's really just the cherry you're being charged an extra $15k for insurance, come on, you can afford it! I won't mention all the other subsidies you lose out on for being a productive member of society. Because when you realize the real tax rate approaches 100% on the first $97,000 it's a bit of a buzz kill.

grandalf 10y ago
Very true. And all that extra money is helping to fund companies like Mylan when they overprice the epi pen for several years. Why wouldn't they, customers are insulated from the sticker price but can't really complain because high priced health "insurance" is required. It's just a coincidence that Mylan took any flak for its abuse of the system. Many other pharmaceuticals are increasing in price way out of proportion to inflation, and way out of step with reality since the R&D costs are all borne before product launch.
timr 10y ago
"ACA has got to be the largest tax increase ever foisted on the middle class." That's just Not Even Wrong. Your health insurance premium is not a "tax". You're getting health insurance. Moreover, not getting a subsidy for your health insurance is also not a tax. You can only use that logic when the tax credit is offsetting another tax. Which it isn't. It's offsetting your health insurance bill. If, instead, you're trying to claim that every bit of increase in health insurance costs since the ACA is a "tax", that's maybe a bit more defensible, but still Wrong. Health insurance costs have been skyrocketing for decades. The ACA has probably slowed down that trend. Finally, if you're just complaining that you're healthy but you have to pay for health insurance now...take a walk, please. Eventually, we all get sick. Health insurance only works if healthy people foot the bill of the sick people. That's how insurance works.

amluto 10y ago

> I'd also much rather self-insure the first $15-20K of risk each year in exchange for a much smaller payment. Would that still be true if you had to pay retail for all your care?

mathgeek 10y ago
I fail to see the difference between paying the first $15k at retail and paying an extra $1250/month in premiums, when all other coverage is equal.
- grandalf 10y ago
  Exactly. Also, it's worth noting that the "retail" price is a way that health care providers rip off the government by claiming a loss on their books after they are reimbursed by medicaid. The grandparent's intuition that by being on a high deductible plan I would not be eligible for the "buying club" benefits of negotiated pricing doesn't pan out: The price is negotiated so that there is a captive "in-network" market which guarantees some level of utilization and helps with planning. Insurance companies want to offer a large population to care networks in order to negotiate a volume discount. Also, if you consider a catastrophic plan that kicks in if something really bad happens and I use over $20K of care. Nearly any serious condition or accident would qualify. If it happened, I'd be able to switch to a lower deductible plan in the next open enrollment. Worst case, I'd end up paying my premium savings (and then some) toward that one event, but overall I would not be much worse off than if I'd just chosen the expensive plan to begin with. When I had the high deductible plan through an employer I did the math on it compared to the most deluxe plan offered. Worst case, if I maxed out the individual and family deductibles on the high deductible plan, I'd end up paying about the same as the annual premiums of the deluxe plan. But if, as is likely, I didn't have a catastrophic incident, I'd save a lot of money (which I did).
  - chimeracoder 10y ago
    > Also, it's worth noting that the "retail" price is a way that health care providers rip off the government by claiming a loss on their books after they are reimbursed by medicaid You've got it backwards - Medicare (and Medicaid, to a lesser extent) are the ones who rip off providers, by reimbursing less than COGS[0]. The "retail" price is actually a way that providers make up for these losses by passing on the costs to private insurers (who then pay for those increased costs by accounting for them as claims, improving their MLR, and allowing them to raise premiums for it). [0] Medicare's own financial statements attest to this; you don't have to take providers' words for it.

rifung 10y ago

> Not only are the costs outlandish, there are no high deductible plans available for people who are generally healthy. All of the plans, gold, silver and bronze, are geared toward heavy users or highly risk-averse users. Isn't this just because now insurance companies have to cover preexisting conditions and also not charge them exorbitant prices? Naturally, they would be taking a loss in order to do this so that burden is instead shifted onto the healthy people. To prevent healthy people from just not buying insurance, the mandate was made because it's economically unfeasible without them. If you're the type of person who would normally use a high deductible plan, you're worse off, but that's the way it was supposed to be. Presumably if one day you get very sick though, you will still be able to get insurance.

rastapasta42 10y ago
Subsidies only hide the real issue. We shifted the burden of healthcare from lower class and sick to middle class. But the fundamental problem is high cost of healthcare. Capitalism is usually a ruthlessly effective tool, but it doesn't seem to work with healthcare due to lack of choice. Maybe it doesn't make sense to invest so much money into health? Is it a worthy trade-off getting 80% of our current healthcare quality for say 50% of the cost? It's a tough call to make, but this country is in decline and we need to make tough choices. I'm a 19-year old developer working my ass off last 4 years for silly startups. Currently I make $30/hour but paying around 30% of my income in taxes. Baby boomers benefited from generation before them and borrowed money from gen x'ers/millenials and they run this country into ground. Once my agegroup starts seriously voting I feel like we won't have a lot of pity for older age groups and their retirement plans. I support raising minimum wage to livable standards, but I hope universal income comes soon. Over the last year I've been getting burned out working 60 hour weeks trying to use latest languages and libraries, while my company is hiring $3/hour phillipino php/WordPress codemonkeys...While all I wish in life is to Haskell in peace for next 30 years and then die. I'm still trying to work toeard American dream, but it's dead for all but the software industry. It's disilousining to see rich stealing the fruits of my labour while I have to pay government to keep the lower class alive. As kids we were told about wonders of globalization, democracy, and America. In the real world we now have to deal with fucked up environment, economics and Putin flexing his geopolitical dick. So you older folks got us into this mess, what the hell do we do now?