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Iowa insurance market collapse could ground young entrepreneurs' dreams

48 points by itamarst 9y ago

s73ver 9y ago
Basically, do we want to send the signal that entrepreneurship is for everyone, or just the rich and healthy?
- anovikov 9y ago
  Entrepreneurship is not for everyone. It is for people who take risks. And yes it takes being healthy, because it is a stress which even most absolutely healthy and young people can't endure. And preferably rich because it sucks being left at the mercy of investors.
  - darkpicnic 9y ago
    You're implying that the risk a young, healthy person takes is entirely within their control, but even a healthy person can get hit by a car or get injured in some way unrelated to their "fitness" level. The reason we need to fix health care is simple: if you are dying or seriously injured, and you don't have health insurance, you are going to the ER regardless and someone, somewhere will end up paying for it. Let's all be adults about the situation and just implement something that works.
  - mikeash 9y ago
    What about people with a chronic but completely controllable condition? Dismissing anyone with an illness from entrepreneurship because you think they can't handle the stress is ridiculous.
  - kaitai 9y ago
    This is not a full picture of entrepreneurship or small business ownership. Entrepreneurship, especially in "middle America", also encompasses starting your own hair salon chain with an innovative approach to curly hair, or trying to get your dog-washing device manufactured and into stores, or selling Ukrainian sausages and imported chocolates. Sure, on HN it's all about healthy and young people at the mercy of investors, but out in the world it's imperfectly healthy sometimes-old people who use savings and family and friends to get things going. Especially if we're talking about health insurance in Iowa.
  - avs733 9y ago
    Risk tolerance is neither a useful proxy/predictor for entrepreneurial activity or entrepreneurial success [0,1]. Instead, it is more appropriate to say that entrepreneurs have a higher tolerance for ambiguity [2]. The most current/best research on entrepreneurial ways of thinking suggests that successful entrepreneurs tend to look for systematic exploits that exist within current market conceptions by assessing the ambiguity in markets and products [3]. Within a pure conception of risk, risk is not the right term but rather uncertainty/ambiguity. However, it is very easy for that uncertainty to look very risky when existing models of risk are employed. That is how the competitive advantage is created...finding a new business model/prouct to address market uncertainty that is low risk by relying on a different conceptualization of the underlying risk model and its assumptions. This is why entrepreneurship so often results in creative destruction of existing solutions and markets...because the new risk model is more efficient and/or lower risk and it had yet to be pursued because existing models (for whatever reason...e.g., technological progress) made the new model look extremely risky. [0] http://journals.sagepub.com/doi/abs/10.1177/1476127004047617 http://journals.sagepub.com/doi/abs/10.1177/1476127004047617 [1] https://www.inc.com/kimberly-weisul/weve-got-the-relationship-between-risk-and-entrepreneurship-all-wrong.html https://www.inc.com/kimberly-weisul/weve-got-the-relationshi... [2] https://www.forbes.com/sites/acton/2012/05/17/the-one-key-trait-for-successful-entrepreneurs-a-tolerance-for-ambiguity/#216daf157604 https://www.forbes.com/sites/acton/2012/05/17/the-one-key-tr... (or you could just cite Schumpeter/Knight...this is just more readable) [3] Sarasvathy, Saras D. Effectuation: Elements of entrepreneurial expertise. Edward Elgar Publishing, 2009.
  - gwbas1c 9y ago
    When I quit my job to run a company, I was very healthy. I just couldn't buy health insurance on the open market because I had a pre-existing condition. This was prior to ACA, so I ended up paying through the nose for COBRA. Pre-existing conditions aren't always debilitating. They can be things that, when treated appropriately, don't impact your ability to start a company at all: diabetes, amputation, cosmetic issues like severe hair loss, sleep apnea, amputation, ect, ect.
  - s73ver 9y ago
    That's a terrible way to look at things. There are many people, myself included, who developed a pre existing conditions while a teenager. I require health insurance. So now, you're telling me I shouldn't be able to be an entrepreneur because of that?
- avs733 9y ago
  While your point is well made...it assumes that the objective function in these decisions is entrepreneurship. It isn't, in fact it is almost the opposite. Because of the way our elections work the objective function is entirely focused on increased/optimizing ROI for existing businesses that contribute to campaigns.
madengr 9y ago
That's probably the main factor preventing me from quitting and working for myself. Crazy high medical insurance for a family of 4. That and educational savings for kids. "Free" medical and college would cause a hell of a disruption that corporations would not like.
- yawz 9y ago
  They would have to adapt. This would create a good evolutionary pressure, and as a result, bad policies wouldn't survive. Not a bad thing overall.
- vsipuli 9y ago
  Do employers really negotiate that much lower health insurance rates compared to what a self-employed can get?
  - avs733 9y ago
    1) yes 2) you are assuming that it was even possible to buy health insurance as a single person prior to the ACA. I actually tried and found it incredibly difficult.
    - vsipuli 9y ago
      So what realistic options did self-employed have before the ACA: either pay for an expensive insurance or be uninsured? What did most typically choose?
      - avs733 9y ago
        (Obivously the IAMAE note applies here)I choose uninsured because I was young...and dumb. There were some options out there, especially for add on things like dental and vision. Insurance was available, but it was hard to find as an individual and very expensive in my experience. COBRA was an option but was still tied to a previous job and had limits. As an entrepreneurship scholar, I see health insurance as one really strong limiter of entrepreneurial activity in the US. The lack of single payer significantly privileges those with the means, the young, and those without children to conduct entrepreneurial activity.
bajki 9y ago
test
- hellbanner 9y ago
  It worked. Are you botting?
awareBrah 9y ago
Obamacare, the proposed trump care, its all a failure. Get rid of the employer sponsored plans, that makes no sense at all and makes me hesitant to lose my job because my health relies on it? That is simply absurd. Get rid of this. I'm so frustrated with the healthcare here and I don't understand how Washington can't come up with any real solutions
- coldpie 9y ago
  Single payer has been proposed many times and works well in the rest of the first world. Edit: Don't forget to vote every November.
  - ClassyJacket 9y ago
    It works so well in Australia that entire elections are basically predicated on who will protect it the best.
  - avs733 9y ago
    Single payer works well in the US. Despite claims and the continuously driven narrative of government inefficiency and waste, Medicare and Medicaid are easily the most efficient and effective health care options in America. It would take a one line act of congress...removing the income cap...to make America a defacto single payer state. The only problem is that it would disrupt a huge capitalist market, and our society has judged the protecting markets is more important than protecting people.
    - creaghpatr 9y ago
      Medicaid and Medicare are heavily subsidized in practice by private insurance covered patients. Hospitals that have too high of a proportion of Medicare patients get a bonus subsidy from the government to cover up the fact that the coverage alone can't financially sustain the provider. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/dsh.html https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Paymen... If we implemented single-payer in the form of Medicare as it is now, the healthcare industry would quickly collapse.
creaghpatr 9y ago
Iowa has only one ACA insurer left and they are raising their rates 43.5%. Basically providing Obamacare was hemorrhaging so much money that Wellmark and BCBS left, leaving a single payer, that ACA users are forced to use. http://www.thegazette.com/subject/news/health/medica-to-stay-in-iowa-sell-marketplace-plans-in-2018-20170619 http://www.thegazette.com/subject/news/health/medica-to-stay...
- vyrotek 9y ago
  Same thing happened in Phoenix last year. Our whole county was left with 1 ACA plan who raised rates too. Everyone is bailing. http://www.azcentral.com/story/money/business/health/2016/09/02/cigna-maricopa-county-only-remaining-obamacare-option/89781880/ http://www.azcentral.com/story/money/business/health/2016/09...
- jrowley 9y ago
  I heard this morning that in Iowa 94 out 99 counties will have no offering in the insurance exchange. We need single payer. Source: President of the AMA, 4:50 seconds in http://www.npr.org/2017/06/23/534056758/the-amas-take-on-gop-health-care-plan http://www.npr.org/2017/06/23/534056758/the-amas-take-on-gop...
- antisthenes 9y ago
  Did people actually think ACA was sustainable or anything but a payout to insurance companies as it was passed? Knowing that insurance companies can willingly just abandon the market makes the ACA even more of a joke than one would have originally thought. And no, before anyone tries to suggest it, temporarily insuring a few million poor people and people in poor health (at the cost of fucking over young and healthy people) is not a success.
  - dragonwriter 9y ago
    > Did people actually think ACA was sustainable or anything but a payout to insurance companies as it was passed? Well, they thought it was the former (in part because of the ways in which it was the latter; a sustainable public service not provided directly by government typically involves payment from the government to the service providers.) Much of the collapse and withdrawal is due to payments they were mandated under the ACA not being funded by Congress (resulting in a giant stack of lawsuits and at least one $200 million+ judgement against the government in favor of an unpaid insurer), with the deliberate intent of causing a collapse of just the kind that is occurring. (And the recent acceleration is that exacerbated by additional uncertainty deliberately injected by the Trump Administration with the intent of producing exactly that result.)
bspn 9y ago
This isn't just an Iowa issue. When I talk to early stage entrepreneurs looking to raise seed capital healthcare is almost always one of their biggest concerns - both for their own families as well as the impact it will have on recruiting the necessary talent. PEOs help early stage companies to a certain extent, but for a pre-revenue company the cost of healthcare is almost always going to be a significant burden that funnels valuable cash away from the product and shortens the runway. But without a decent benefits package, start-ups have almost no hope of attracting key talent especially if those prospective employees have kids, so they (and their investors) are forced to just suck it up. Healthcare in the US is a ticking time bomb with the potential to significantly impact our long term growth (if it isn't already). Unfortunately we're in a situation where for-profit insurance companies, for-profit health networks, and for-profit pharma companies are all fighting for their share of the pie while pushing increasing costs onto the average consumer. I wish I knew what the fix was - other than an unattainable single-payer system - but we need to find something and find it fast.
iamthepieman 9y ago
I have an employer sponsored plan through the small business (25 employees) that I work for. The rates the company pays has gone up around 10% a year since I started working here. Two years ago, rates were going to go up 35% but the company found another insurance provider and (after polling employees) went with a higher deductible plan to keep the increas just under 20%. This does not seem sustainable.
rbritton 9y ago
The part in all of this that has bothered me more than anything is that it's a diversion to mask the real problem: healthcare service and products are unsustainably expensive. Casinos use chips and vouchers to distract gamblers from actually grasping just how much money they're playing with. Health insurance sure feels like the same thing, but it's even worse in that when you're in need, you're not always in a state of mind to make rational choices nor are those choices even adequately defined prior to receiving a bill. Why is this acceptable? Since when are contracts entered into under duress admissible? I suspect it's probably a massive success on the part of lobbyists. I don't know the solution, but I can confidently say it's probably not reached by tackling the insurance side of healthcare. Maybe the current system needs to collapse under its own weight before a new approach even stands a chance? Unfortunately, it's probably more likely it'd just receive a government bailout at taxpayers' expense so it could continue the status quo.
- jt2190 9y ago
  Just to meta-riff on this a little bit... The issue here is that the mechanisms we have for price signaling are too crude to easily account for the things you're alluding too (i.e. an unconscious patient needing urgent medical treatment can't really negotiate; fluffy concepts like quality of life or the lifetime cost to manage an illness are hard to quantify monetarily, etc.) Yet in the U.S. we still try to use market forces jury-rigged with Medicaid, Medicare, Private Insurance, public hospitals, the Veterans Administration, etc., as a means to allocate health resources. Note that I'm not saying that we can't eventually devise a market-like system for allocating medical resources. I do wonder if we have the technology today for building such a system though. After all, we'd ideally have very good information very quickly so that we can make decisions about where to spend. I'm just not sure we have anything close to such a thing yet, and perhaps we should stop pretending that we've got one.
- kaitai 9y ago
  Healthcare services and products are unsustainably expensive in the US. This is not quite true in the rest of the world. Part of this is economic and structural, and part of it is American psychological and societal problems with letting people die when they are going to die (end-of-life care is hugely expensive and we even love treatments that do not necessarily lead to increased lifespan, because we'd rather feel like we're doing something medically than actually take evidence-based steps that might include doing nothing). Part of it is that "healthcare service" in the US includes the amazing overhead charged by private insurance. Certainly before Obamacare, private insurance companies spent about 30% on overhead (enrolling & dropping people, advertising, dealing with referrals, arguing with hospitals and doctors, auditing people, hiring lawyers to get someone else's insurance to pay for treatment). That's a lot of money and it figures into "healthcare costs" in the US. We spend so much more than any other country on healthcare, so much more. You are absolutely right that "the current system needs to collapse under its own weight before a new approach even stands a chance". I believe it will take people dying publicly to make the US consider a change. First we will be bamboozled by the "freedom" and "choice" we'll get with the new plan, foremost the choice not to have coverage or care at all :)
harryh 9y ago
It's worth noting that Iowa is in particular trouble because of a single patient that costs ~1M a month[1]. In a relatively small market you end up with an unstable situation when there are more than 1 insurers because none of them know if they will have to take on this very expensive patient in any given year. 1. https://www.balloon-juice.com/2017/04/21/catching-the-falling-knife-in-iowa/ https://www.balloon-juice.com/2017/04/21/catching-the-fallin...
- rasz 9y ago
  How exactly do you run a $1 million/month health bill? In EU that would mean one open heart surgery/heart/lung transplant done by world class specialists flown from all over the place every single month. This sounds like a scam.
  - harryh 9y ago
    Apparently the patient is a teenage boy with hemophilia. I'm fairly confident that it isn't a scam. https://www.usatoday.com/story/news/nation-now/2017/06/01/iowa-teens-1-million-per-month-illness-no-longer-secret/360919001/ https://www.usatoday.com/story/news/nation-now/2017/06/01/io...
    - rasz 9y ago
      Hemophilia Federation of America: "A million dollars per month is something we've never heard of," sure makes it sound like a scam, maybe by hospital?
      - harryh 9y ago
        Given that the insurance companies know exactly who the patient is, exactly what treatments he is receiving, and exactly when and where they are happening it seems like it would be pretty easy to uncover a scam if there was one. And they have a lot of incentive to do so!
        9y ago
jballanc 9y ago
I always wonder why, in all the coverage about health care and insurance groups "pulling out" of the marketplace, no one seems to want to state the obvious: * Insurers are not pulling out of the insurance market. * Insurers are pulling out of selling to individuals. * This is happening because selling to large groups (like entire companies) is easier/more profitable. * It is easier to sell to larger groups because you have greater numbers across which to amortize risk. * The largest group of Americans one could envision selling insurance to is...ALL Americans. So, by pulling out of the unprofitable individual marketplace in order to focus on selling to larger groups, these insurance companies are practically shouting at us what anyone with half a head already knows: single payer is the only practical, efficient, and cost effective solution for universal coverage.
- humanrebar 9y ago
  It's a big leap to say 400 million pools of one is inefficient therefore the best option is one pool of 400 million.
- harryh 9y ago
  I know what you are getting at here but almost any individual market at the state level is going to be bigger than almost any entire company from a risk pool amortization perspective. Given that, your fourth bullet point would point in the direction of insurance companies preferring the state pools to selling to companies one at a time. The problem with the state pools is not (for the most part) one of size, but of adverse selection.
  - jballanc 9y ago
    I'd actually be interested to see the numbers. Obviously, as you say, it's not just size but also the risk profile of the group...but add to that the fact that this pool is being split between as many companies as are selling on the marketplace, I wouldn't be surprised if size is part of it. Regardless, if universal health coverage is a goal, the only way to truly amortize risk is to have everyone in one pool. Anything less pits some very perverse incentives against an inherently inefficient market. It's no wonder no one wants to participate!
tsunamifury 9y ago
The people who claim to be protecting your freedom are shifting the economy into the worlds largest extortion play. Its maybe the penultimate stage of a truly free market.
davidw 9y ago
This is all such bullshit. Single payer has problems, but it works well and is a whole lot cheaper in terms of % of GDP as implemented in places like Italy. Also in Italy you have a decent, parallel private system where you can simply call up and ask how much basic stuff is. I once got some chest X-rays and a consultation with an ear-nose-throat doctor for 150 Euros out of pocket (oh, and I got to do both the day after I called). They apologized because it was so expensive. I barely kept a straight face.
greggeter 9y ago
Health cost sharing cooperatives are a tenth of the cost, are cash based, and skip all the insurance requirements. They require you take a more proactive role in your care. If you struggle with the cost of healthcare, take a close look. Ex., https://www.libertyhealthshare.org/ https://www.libertyhealthshare.org/ Edit: I'm not affiliated with this group, it's just an example. There are several.
gwbas1c 9y ago
When I read the article, I wonder how viable the business really is. The business started in 2015 and he's still below the poverty line: "He needs the subsidy, because he’s taking only about $17,000 in salary per year from the fledgling engineering company." I attempted to run a company prior to ACA. Because I had a pre-existing condition, I had to buy COBRA. This forced me to get something running within 18 months. I also paid much more than "$100 per month" for my insurance. 18 months went by and I was nowhere. With the ACA, I might have lasted a few more months; but I'll never know if I would have gotten anywhere. Either way, after 18 months I did not have anything close to a viable business. I think it's important that people are able to start businesses, and health insurance should not be an obstacle to that. There's a fine line, though, between fair access and an outright subsidy of a fledgling business. It's hard to see where that line is when reading this article.
notadoc 9y ago
I got a letter from my insurance provider saying they're pulling out of the local market in 2018. I pay full price directly, no subsidy, not through any exchange, it's very expensive and I've poured tens of thousands into premiums over the years. I can't help but relate the entire industry to a ponzi scheme.
- gruez 9y ago
  >I can't help but relate the entire industry to a ponzi scheme. In what way is the insurance industry a fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities? Seriously, I feel that phrase to be misused so often it has lost all of its original meaning. /rant

48 points by itamarst 9y ago

s73ver 9y ago

Basically, do we want to send the signal that entrepreneurship is for everyone, or just the rich and healthy?

anovikov 9y ago
Entrepreneurship is not for everyone. It is for people who take risks. And yes it takes being healthy, because it is a stress which even most absolutely healthy and young people can't endure. And preferably rich because it sucks being left at the mercy of investors.
- darkpicnic 9y ago
  You're implying that the risk a young, healthy person takes is entirely within their control, but even a healthy person can get hit by a car or get injured in some way unrelated to their "fitness" level. The reason we need to fix health care is simple: if you are dying or seriously injured, and you don't have health insurance, you are going to the ER regardless and someone, somewhere will end up paying for it. Let's all be adults about the situation and just implement something that works.
- mikeash 9y ago
  What about people with a chronic but completely controllable condition? Dismissing anyone with an illness from entrepreneurship because you think they can't handle the stress is ridiculous.
- kaitai 9y ago
  This is not a full picture of entrepreneurship or small business ownership. Entrepreneurship, especially in "middle America", also encompasses starting your own hair salon chain with an innovative approach to curly hair, or trying to get your dog-washing device manufactured and into stores, or selling Ukrainian sausages and imported chocolates. Sure, on HN it's all about healthy and young people at the mercy of investors, but out in the world it's imperfectly healthy sometimes-old people who use savings and family and friends to get things going. Especially if we're talking about health insurance in Iowa.
- avs733 9y ago
  Risk tolerance is neither a useful proxy/predictor for entrepreneurial activity or entrepreneurial success [0,1]. Instead, it is more appropriate to say that entrepreneurs have a higher tolerance for ambiguity [2]. The most current/best research on entrepreneurial ways of thinking suggests that successful entrepreneurs tend to look for systematic exploits that exist within current market conceptions by assessing the ambiguity in markets and products [3]. Within a pure conception of risk, risk is not the right term but rather uncertainty/ambiguity. However, it is very easy for that uncertainty to look very risky when existing models of risk are employed. That is how the competitive advantage is created...finding a new business model/prouct to address market uncertainty that is low risk by relying on a different conceptualization of the underlying risk model and its assumptions. This is why entrepreneurship so often results in creative destruction of existing solutions and markets...because the new risk model is more efficient and/or lower risk and it had yet to be pursued because existing models (for whatever reason...e.g., technological progress) made the new model look extremely risky. [0] http://journals.sagepub.com/doi/abs/10.1177/1476127004047617 http://journals.sagepub.com/doi/abs/10.1177/1476127004047617 [1] https://www.inc.com/kimberly-weisul/weve-got-the-relationship-between-risk-and-entrepreneurship-all-wrong.html https://www.inc.com/kimberly-weisul/weve-got-the-relationshi... [2] https://www.forbes.com/sites/acton/2012/05/17/the-one-key-trait-for-successful-entrepreneurs-a-tolerance-for-ambiguity/#216daf157604 https://www.forbes.com/sites/acton/2012/05/17/the-one-key-tr... (or you could just cite Schumpeter/Knight...this is just more readable) [3] Sarasvathy, Saras D. Effectuation: Elements of entrepreneurial expertise. Edward Elgar Publishing, 2009.
- gwbas1c 9y ago
  When I quit my job to run a company, I was very healthy. I just couldn't buy health insurance on the open market because I had a pre-existing condition. This was prior to ACA, so I ended up paying through the nose for COBRA. Pre-existing conditions aren't always debilitating. They can be things that, when treated appropriately, don't impact your ability to start a company at all: diabetes, amputation, cosmetic issues like severe hair loss, sleep apnea, amputation, ect, ect.
- s73ver 9y ago
  That's a terrible way to look at things. There are many people, myself included, who developed a pre existing conditions while a teenager. I require health insurance. So now, you're telling me I shouldn't be able to be an entrepreneur because of that?
avs733 9y ago
While your point is well made...it assumes that the objective function in these decisions is entrepreneurship. It isn't, in fact it is almost the opposite. Because of the way our elections work the objective function is entirely focused on increased/optimizing ROI for existing businesses that contribute to campaigns.

madengr 9y ago

That's probably the main factor preventing me from quitting and working for myself. Crazy high medical insurance for a family of 4. That and educational savings for kids. "Free" medical and college would cause a hell of a disruption that corporations would not like.

yawz 9y ago
They would have to adapt. This would create a good evolutionary pressure, and as a result, bad policies wouldn't survive. Not a bad thing overall.
vsipuli 9y ago
Do employers really negotiate that much lower health insurance rates compared to what a self-employed can get?
- avs733 9y ago
  1) yes 2) you are assuming that it was even possible to buy health insurance as a single person prior to the ACA. I actually tried and found it incredibly difficult.
  - vsipuli 9y ago
    So what realistic options did self-employed have before the ACA: either pay for an expensive insurance or be uninsured? What did most typically choose?
    - avs733 9y ago
      (Obivously the IAMAE note applies here)I choose uninsured because I was young...and dumb. There were some options out there, especially for add on things like dental and vision. Insurance was available, but it was hard to find as an individual and very expensive in my experience. COBRA was an option but was still tied to a previous job and had limits. As an entrepreneurship scholar, I see health insurance as one really strong limiter of entrepreneurial activity in the US. The lack of single payer significantly privileges those with the means, the young, and those without children to conduct entrepreneurial activity.

bajki 9y ago

test

hellbanner 9y ago
It worked. Are you botting?

awareBrah 9y ago

Obamacare, the proposed trump care, its all a failure. Get rid of the employer sponsored plans, that makes no sense at all and makes me hesitant to lose my job because my health relies on it? That is simply absurd. Get rid of this. I'm so frustrated with the healthcare here and I don't understand how Washington can't come up with any real solutions

coldpie 9y ago
Single payer has been proposed many times and works well in the rest of the first world. Edit: Don't forget to vote every November.
- ClassyJacket 9y ago
  It works so well in Australia that entire elections are basically predicated on who will protect it the best.
- avs733 9y ago
  Single payer works well in the US. Despite claims and the continuously driven narrative of government inefficiency and waste, Medicare and Medicaid are easily the most efficient and effective health care options in America. It would take a one line act of congress...removing the income cap...to make America a defacto single payer state. The only problem is that it would disrupt a huge capitalist market, and our society has judged the protecting markets is more important than protecting people.
  - creaghpatr 9y ago
    Medicaid and Medicare are heavily subsidized in practice by private insurance covered patients. Hospitals that have too high of a proportion of Medicare patients get a bonus subsidy from the government to cover up the fact that the coverage alone can't financially sustain the provider. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/dsh.html https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Paymen... If we implemented single-payer in the form of Medicare as it is now, the healthcare industry would quickly collapse.

creaghpatr 9y ago

Iowa has only one ACA insurer left and they are raising their rates 43.5%. Basically providing Obamacare was hemorrhaging so much money that Wellmark and BCBS left, leaving a single payer, that ACA users are forced to use. http://www.thegazette.com/subject/news/health/medica-to-stay-in-iowa-sell-marketplace-plans-in-2018-20170619 http://www.thegazette.com/subject/news/health/medica-to-stay...

vyrotek 9y ago
Same thing happened in Phoenix last year. Our whole county was left with 1 ACA plan who raised rates too. Everyone is bailing. http://www.azcentral.com/story/money/business/health/2016/09/02/cigna-maricopa-county-only-remaining-obamacare-option/89781880/ http://www.azcentral.com/story/money/business/health/2016/09...
jrowley 9y ago
I heard this morning that in Iowa 94 out 99 counties will have no offering in the insurance exchange. We need single payer. Source: President of the AMA, 4:50 seconds in http://www.npr.org/2017/06/23/534056758/the-amas-take-on-gop-health-care-plan http://www.npr.org/2017/06/23/534056758/the-amas-take-on-gop...
antisthenes 9y ago
Did people actually think ACA was sustainable or anything but a payout to insurance companies as it was passed? Knowing that insurance companies can willingly just abandon the market makes the ACA even more of a joke than one would have originally thought. And no, before anyone tries to suggest it, temporarily insuring a few million poor people and people in poor health (at the cost of fucking over young and healthy people) is not a success.
- dragonwriter 9y ago
  > Did people actually think ACA was sustainable or anything but a payout to insurance companies as it was passed? Well, they thought it was the former (in part because of the ways in which it was the latter; a sustainable public service not provided directly by government typically involves payment from the government to the service providers.) Much of the collapse and withdrawal is due to payments they were mandated under the ACA not being funded by Congress (resulting in a giant stack of lawsuits and at least one $200 million+ judgement against the government in favor of an unpaid insurer), with the deliberate intent of causing a collapse of just the kind that is occurring. (And the recent acceleration is that exacerbated by additional uncertainty deliberately injected by the Trump Administration with the intent of producing exactly that result.)

bspn 9y ago

This isn't just an Iowa issue. When I talk to early stage entrepreneurs looking to raise seed capital healthcare is almost always one of their biggest concerns - both for their own families as well as the impact it will have on recruiting the necessary talent. PEOs help early stage companies to a certain extent, but for a pre-revenue company the cost of healthcare is almost always going to be a significant burden that funnels valuable cash away from the product and shortens the runway. But without a decent benefits package, start-ups have almost no hope of attracting key talent especially if those prospective employees have kids, so they (and their investors) are forced to just suck it up. Healthcare in the US is a ticking time bomb with the potential to significantly impact our long term growth (if it isn't already). Unfortunately we're in a situation where for-profit insurance companies, for-profit health networks, and for-profit pharma companies are all fighting for their share of the pie while pushing increasing costs onto the average consumer. I wish I knew what the fix was - other than an unattainable single-payer system - but we need to find something and find it fast.

iamthepieman 9y ago

I have an employer sponsored plan through the small business (25 employees) that I work for. The rates the company pays has gone up around 10% a year since I started working here. Two years ago, rates were going to go up 35% but the company found another insurance provider and (after polling employees) went with a higher deductible plan to keep the increas just under 20%. This does not seem sustainable.

rbritton 9y ago

The part in all of this that has bothered me more than anything is that it's a diversion to mask the real problem: healthcare service and products are unsustainably expensive. Casinos use chips and vouchers to distract gamblers from actually grasping just how much money they're playing with. Health insurance sure feels like the same thing, but it's even worse in that when you're in need, you're not always in a state of mind to make rational choices nor are those choices even adequately defined prior to receiving a bill. Why is this acceptable? Since when are contracts entered into under duress admissible? I suspect it's probably a massive success on the part of lobbyists. I don't know the solution, but I can confidently say it's probably not reached by tackling the insurance side of healthcare. Maybe the current system needs to collapse under its own weight before a new approach even stands a chance? Unfortunately, it's probably more likely it'd just receive a government bailout at taxpayers' expense so it could continue the status quo.

jt2190 9y ago
Just to meta-riff on this a little bit... The issue here is that the mechanisms we have for price signaling are too crude to easily account for the things you're alluding too (i.e. an unconscious patient needing urgent medical treatment can't really negotiate; fluffy concepts like quality of life or the lifetime cost to manage an illness are hard to quantify monetarily, etc.) Yet in the U.S. we still try to use market forces jury-rigged with Medicaid, Medicare, Private Insurance, public hospitals, the Veterans Administration, etc., as a means to allocate health resources. Note that I'm not saying that we can't eventually devise a market-like system for allocating medical resources. I do wonder if we have the technology today for building such a system though. After all, we'd ideally have very good information very quickly so that we can make decisions about where to spend. I'm just not sure we have anything close to such a thing yet, and perhaps we should stop pretending that we've got one.
kaitai 9y ago
Healthcare services and products are unsustainably expensive in the US. This is not quite true in the rest of the world. Part of this is economic and structural, and part of it is American psychological and societal problems with letting people die when they are going to die (end-of-life care is hugely expensive and we even love treatments that do not necessarily lead to increased lifespan, because we'd rather feel like we're doing something medically than actually take evidence-based steps that might include doing nothing). Part of it is that "healthcare service" in the US includes the amazing overhead charged by private insurance. Certainly before Obamacare, private insurance companies spent about 30% on overhead (enrolling & dropping people, advertising, dealing with referrals, arguing with hospitals and doctors, auditing people, hiring lawyers to get someone else's insurance to pay for treatment). That's a lot of money and it figures into "healthcare costs" in the US. We spend so much more than any other country on healthcare, so much more. You are absolutely right that "the current system needs to collapse under its own weight before a new approach even stands a chance". I believe it will take people dying publicly to make the US consider a change. First we will be bamboozled by the "freedom" and "choice" we'll get with the new plan, foremost the choice not to have coverage or care at all :)

harryh 9y ago

It's worth noting that Iowa is in particular trouble because of a single patient that costs ~1M a month[1]. In a relatively small market you end up with an unstable situation when there are more than 1 insurers because none of them know if they will have to take on this very expensive patient in any given year. 1. https://www.balloon-juice.com/2017/04/21/catching-the-falling-knife-in-iowa/ https://www.balloon-juice.com/2017/04/21/catching-the-fallin...

rasz 9y ago
How exactly do you run a $1 million/month health bill? In EU that would mean one open heart surgery/heart/lung transplant done by world class specialists flown from all over the place every single month. This sounds like a scam.
- harryh 9y ago
  Apparently the patient is a teenage boy with hemophilia. I'm fairly confident that it isn't a scam. https://www.usatoday.com/story/news/nation-now/2017/06/01/iowa-teens-1-million-per-month-illness-no-longer-secret/360919001/ https://www.usatoday.com/story/news/nation-now/2017/06/01/io...
  - rasz 9y ago
    Hemophilia Federation of America: "A million dollars per month is something we've never heard of," sure makes it sound like a scam, maybe by hospital?
    - harryh 9y ago
      Given that the insurance companies know exactly who the patient is, exactly what treatments he is receiving, and exactly when and where they are happening it seems like it would be pretty easy to uncover a scam if there was one. And they have a lot of incentive to do so!
      - 9y ago

jballanc 9y ago

I always wonder why, in all the coverage about health care and insurance groups "pulling out" of the marketplace, no one seems to want to state the obvious: * Insurers are not pulling out of the insurance market. * Insurers are pulling out of selling to individuals. * This is happening because selling to large groups (like entire companies) is easier/more profitable. * It is easier to sell to larger groups because you have greater numbers across which to amortize risk. * The largest group of Americans one could envision selling insurance to is...ALL Americans. So, by pulling out of the unprofitable individual marketplace in order to focus on selling to larger groups, these insurance companies are practically shouting at us what anyone with half a head already knows: single payer is the only practical, efficient, and cost effective solution for universal coverage.

humanrebar 9y ago
It's a big leap to say 400 million pools of one is inefficient therefore the best option is one pool of 400 million.
harryh 9y ago
I know what you are getting at here but almost any individual market at the state level is going to be bigger than almost any entire company from a risk pool amortization perspective. Given that, your fourth bullet point would point in the direction of insurance companies preferring the state pools to selling to companies one at a time. The problem with the state pools is not (for the most part) one of size, but of adverse selection.
- jballanc 9y ago
  I'd actually be interested to see the numbers. Obviously, as you say, it's not just size but also the risk profile of the group...but add to that the fact that this pool is being split between as many companies as are selling on the marketplace, I wouldn't be surprised if size is part of it. Regardless, if universal health coverage is a goal, the only way to truly amortize risk is to have everyone in one pool. Anything less pits some very perverse incentives against an inherently inefficient market. It's no wonder no one wants to participate!

tsunamifury 9y ago

The people who claim to be protecting your freedom are shifting the economy into the worlds largest extortion play. Its maybe the penultimate stage of a truly free market.

davidw 9y ago

This is all such bullshit. Single payer has problems, but it works well and is a whole lot cheaper in terms of % of GDP as implemented in places like Italy. Also in Italy you have a decent, parallel private system where you can simply call up and ask how much basic stuff is. I once got some chest X-rays and a consultation with an ear-nose-throat doctor for 150 Euros out of pocket (oh, and I got to do both the day after I called). They apologized because it was so expensive. I barely kept a straight face.

greggeter 9y ago

Health cost sharing cooperatives are a tenth of the cost, are cash based, and skip all the insurance requirements. They require you take a more proactive role in your care. If you struggle with the cost of healthcare, take a close look. Ex., https://www.libertyhealthshare.org/ https://www.libertyhealthshare.org/ Edit: I'm not affiliated with this group, it's just an example. There are several.

gwbas1c 9y ago

When I read the article, I wonder how viable the business really is. The business started in 2015 and he's still below the poverty line: "He needs the subsidy, because he’s taking only about $17,000 in salary per year from the fledgling engineering company." I attempted to run a company prior to ACA. Because I had a pre-existing condition, I had to buy COBRA. This forced me to get something running within 18 months. I also paid much more than "$100 per month" for my insurance. 18 months went by and I was nowhere. With the ACA, I might have lasted a few more months; but I'll never know if I would have gotten anywhere. Either way, after 18 months I did not have anything close to a viable business. I think it's important that people are able to start businesses, and health insurance should not be an obstacle to that. There's a fine line, though, between fair access and an outright subsidy of a fledgling business. It's hard to see where that line is when reading this article.

notadoc 9y ago

I got a letter from my insurance provider saying they're pulling out of the local market in 2018. I pay full price directly, no subsidy, not through any exchange, it's very expensive and I've poured tens of thousands into premiums over the years. I can't help but relate the entire industry to a ponzi scheme.

gruez 9y ago
>I can't help but relate the entire industry to a ponzi scheme. In what way is the insurance industry a fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities? Seriously, I feel that phrase to be misused so often it has lost all of its original meaning. /rant