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This is all coming from a hardcore capitalist, so know that going in: Health Insurance, as a concept, is disgusting. You "Insure" property. You "Insure" speci

This is all coming from a hardcore capitalist, so know that going in: Health Insurance, as a concept, is disgusting. You "Insure" property. You "Insure" specifically against loss of that property, and the cost of insurance is determined (forgetting an awful lot of math, but the basics are) by: The value of the property in question, the amount of payout required to replace said property in the case of full loss, put up against the security of said property and the odds of loss occurring. For cars, this presents as the value of the car, factoring in where you live and work (the two places the car is most likely to be), the costs to repair or replace the car, the security devices the cars have, and obviously your driving record. To insure a life, you need to first establish the value of a human life, specifically your life. Your life (probably) is infinitely valuable to you. The cost to repair you in our current system could also be infinite, given the numerous and terrible things that can happen to a person with literally no fault of their own. By the same token, the odds of you needing that payout are also damn near incalculable; every place you go, every activity you engage in from skydiving to eating turtle soup in Mexico all have a probability of killing you. By the same token you can trip and crack your skull open in Harlem, NY or in the center of the Pentagon, it makes no difference. Therefore, you have an asset with incalculable worth, incalculable cost to repair or replace, that is exposed to hundreds of things per day that could result in a full-policy payout, with barely a hint of predictability. Even if the industry behind it weren't legendarily corrupt and full of fraud and nonsense from every player in it, this would be completely insane to attempt. The solution (the first part anyway) is to outlaw health insurance, completely, full stop. Then hospitals must be instructed to destroy their chargemasters and go back to charging for services at reasonable rates. After that, everything else should more or less be solved.

throwaway0255 9y ago
I completely agree, but I don't think it's a winnable fight. I think it's so big and so entangled with everything that the only thing that could ever pry it loose is some kind of fundamentally transformative event that results in the complete dissolution of our entire economy and/or nation. Trying to make any progress through typical political avenues is hopeless. You're casting your vote into an ocean of voters that don't even see health insurance as a financial product, they see it as healthcare itself.
- kelnos 9y ago
  I think this is something where individual US states need to blaze a trail. California passed a (light-on-details) single-payer healthcare bill through the state Senate, though unfortunately the matter has been tabled for now by the Assembly, and funding it would require creative use of Medicare dollars that a) would require federal approval, and b) may not even exist much longer if the GOP gets its way. I agree that major health care reform at a US national level is pretty unlikely at this point, even if Democrats manage to gain a supermajority in both houses of Congress and win back the presidency. I'm not even sure trying out something novel at a national level is a good idea, since it carries a lot of risk. I think doing something new at the state level, if they can get around federal interference, has a decent chance of getting somewhere.
  - briandear 9y ago
    > [Medicare dollars] may not even exist much longer if the GOP gets its way. Has the GOP actually suggested eliminating Medicare? That doesn’t seem to be accurate at all.
    - kasey_junk 9y ago
      Not eliminating but Paul Ryan was fairly specific on the radio recently that they plan to start cutting back on funding it. https://khow.iheart.com/featured/ross-kaminsky/content/2017-12-06-speaker-of-the-house-paul-ryan/ https://khow.iheart.com/featured/ross-kaminsky/content/2017-...
    - FussyZeus 9y ago
      No, as usual the GOP doesn't remove anything, they just make it as difficult as possible for anything to receive the funding it needs, and then go on TV and moan about how nothing the Government runs works properly.
    - kelnos 9y ago
      Eliminating, no, but definitely slashing funding. The proposal in CA would have required federal Medicare funding to make it viable, and less of that would probably kill it. The thing that pisses me off is that the GOP wants to slash funding for a ton of public services, but not materially lower taxes for people. So if states want to bring back those public services, they need to raise taxes, which overall causes a person's tax rate to be higher. I'd be fine with the federal gov't even entirely killing Medicare if that would cause my effective federal tax rate to drop by several percentage points, points that I'd be happy to turn around and give to CA for them to implement something like single-payer. (The downside, of course, is that residents of less progressive states get screwed, which is why I'd rather the federal gov't leave things alone, but give states like CA more latitude in how they use those dollars.)
kelnos 9y ago
I've always had this same objection. I prefer to think of it as a "health plan" rather than "insurance". You can't "insure" someone's health (well, ok, you can, but it's a case of "I don't think this word means what you think it means"). You can merely create a structure where people pool their money on a large enough scale such that it's affordable to fix a person when they break in most (if not all) of the myriad ways they can break. That's similar to insurance in some ways, but isn't in one crucial way: you generally don't know the "repair" cost up-front; the repair is done, and then you get the bill. If you insure your car against damage up to $50k, you get an estimate when it gets damaged, and ask the insurance company for approval for that amount before the work is done. If the insurance company disagrees on cost, you can find another auto shop that agrees with the insurance company's cost, choose to bear the difference in cost yourself, or decide to forego the repair entirely. You can't do any of that when it comes to healthcare. > The cost to repair you in our current system could also be infinite, given the numerous and terrible things that can happen to a person with literally no fault of their own. By the same token, the odds of you needing that payout are also damn near incalculable; every place you go, every activity you engage in from skydiving to eating turtle soup in Mexico all have a probability of killing you. This isn't entirely true though, or, rather, it doesn't matter. Health "insurance" companies have a ton of data that allows them to predict pretty well how much it will cost to fix people when they break, in the ways that they usually break. They collect premiums based on that data and are doing a pretty decent job of not going bankrupt while actually fixing people, even outliers who fall outside of the "usually break" range. (Yes, I know, that's certainly debatable; they're dicks and deny coverage for things they should absolutely cover, and that helps with their bottom line; in principle, however they can afford to cover everything that medical science can perform and still stay afloat.) > Then hospitals must be instructed to destroy their chargemasters and go back to charging for services at reasonable rates. After that, everything else should more or less be solved. The problem here is that "reasonable" means different things to different people, and for some procedures, even if the price were dropped down to "at cost" (if that's even a calculable thing), you'd still have people who couldn't afford it. Health care itself isn't free. It costs money to develop medicines. It costs money to train doctors. Those doctors, once trained, need to make a living. It costs money to run hospitals and private practices. Someone needs to bear this cost. So you still have the same problem of inherently deciding that the life of a rich person is worth more than the life of a poor person; in some cases the rich person can afford to get healed, while the poor person can't and dies (or lives, but goes into crippling debt or bankruptcy to do so). I agree that healthcare costs in the US are out of control, but even if you fix that problem, you still need some system in place to ensure everyone gets the care they need, regardless of their financial situation. (That is, of course, if you believe health care should be a basic right. If you don't, then we're not going to have a productive discussion.) I think the concept of a pooled health plan is fine; just payments into it need to be dependent on means, and payments of $0 don't disqualify you from coverage. The person who can't afford to pay into it gets the same treatment that everyone else gets. I don't care how we achieve that, whether it's government-single-payer, or something similar to what we have now, just with price controls and government subsidies/credits for those who are unable to pay. Absolutely agree that the current corrupt health "insurance" industry needs to go, though.
adamnemecek 9y ago
How does your solution solve the problem?
- smallnamespace 9y ago
  It adds one crucial feature every healthy, functioning market needs: honest feedback. Right now nobody, and I mean literally nobody, makes rational economic decisions for medicine in the US. Neither the hospital, doctor, administrator, insurance company, or patient really has any real idea 1) the cost of the health care being provided 2) the amounts being charged or 3) the dollar amount of benefit gained by the patient. The actors above who do have some pieces of the data largely aren't the ones making the decisions. If you abolish insurance and state prices up front, at least you force hospitals to charge something closer to the true cost for services, and you force patients to evaluate whether they would rather have care or dollars in their pockets. Over time, they would figure out what's good value for their health and what isn't. Of course one could argue that the government should be making all these decisions because it has access to more information, and that's probably true; but that's not what's happening in our Frankenstein ('s monster) of a system.
  - adamnemecek 9y ago
    The root cause tho is that the consumer of the product (patient) is generally different from the payer (employer). Insurance isn’t the real problem. The invaluable argument could be applied to your house too.
    - smallnamespace 9y ago
      Currently though, even if the patient is paying for insurance out of their own pocket, the real decisionmaker is generally still bureaucrats (in the literal sense) at the insurance company + hospital.
  - briandear 9y ago
    Not entirely true.. https://surgerycenterok.com https://surgerycenterok.com
barrkel 9y ago
The reason you must get car insurance isn't to cover the cost of the car, it's to cover the very high variance in potential payouts to third parties should you cause an accident. Health insurance in principle works on a similar basis: it's a cost smoothing mechanism for unexpected large costs that not everyone is expected to incur. It breaks down if everyone incurs the big costs (old age) or not everyone insures (only at risk people insure, which increases costs, which pushes out people who aren't as risky, which pushes up the price further, in a cycle.) It also doesn't make much sense for regular care that doesn't directly prevent major payouts. So it seems to me that health insurance is only workable if it is mandatory, old age spending is rationed, and checkups that find things that can become very expensive are covered, but other bits and bobs aren't. Obviously gold plated coverage could cover more, but that's all the mandatory insurance should cover. It's all far too politically charged for any kind of rationality to prevail though. I think single payer state care can work, but it has high overhead and suits high tax countries better, not the US, where there is less acceptance of the social contract of taxation.
- logfromblammo 9y ago
  GP was referring to the car insurance, not the driver insurance. Those are separable concepts. If your rear-view mirror is broken off by a punk with a baseball bat while parked on a Chicago street, that is property damage to your car that would be covered by your car insurance. If you t-bone another car, the damage to their vehicle is covered by your driver insurance, while the damage to your own vehicle might be covered by your car insurance, if that possibility is listed in the policy. Generally speaking, if your car insurance doesn't pay for damages incurred by the owner while driving, you-as-car-owner can't file a claim against you-as-car-driver under the driver insurance policy, and end up getting any money out of it. When the policies are offered by the same insurance company, the actuaries for each can share information, such that the risk of owner-caused damages can be assessed for the car policy, and can therefore be rolled into its premiums. This is why those policies are often combined. Where states mandate insurance, the mandate is always for driver insurance. So the car insurance then becomes an upsell option for those who already have to buy something from an insurance company. With health insurance, there is the one big problem that you just can't get around. Everybody dies, eventually. You can sort of predict when and how in a large enough population, but everyone has a very high, statistically predictable likelihood of needing medical care at some time during their lifespan. There is also another big problem. Most people incur their highest medical costs in the year before their death. Obviously, after you die, you can't work off your medical debts. That's not a good looking model for healthcare providers, and a tough one for healthcare insurance actuaries to squeeze profitable premiums out of. There is a perverse incentive to drop a client or raise their premiums right after a claim is paid, on the presumption that any uptick in medical payments might be a harbinger of greater future medical expenses. There is also perverse incentive to drop customers immediately after the first payment related to chronic disease is made. We paid for an office visit to an oncology specialist and for biopsy lab tests, so our model says that we should drop you right now before your lab results come back. We hope you don't have cancer, so you can prove it before coming back to us as a customer, but otherwise, good luck with your treatment bills....
caresource_ta 9y ago
Insurance does not replace value, insurance is fundamentally and always a value transfer vehicle. Although in some implementations insurance can act as a value replacement mechanism this is the result of the implementation and not a fundamental property of insurance. You seem to base your understanding of insurance on some common implementations that do replace value but these are not the rule for all insurance.
peteretep 9y ago
> you have an asset with incalculable worth Actuaries, national health providers, governments -- generally they all have hard cash valuations for human life.

throwaway0255 9y ago

I completely agree, but I don't think it's a winnable fight. I think it's so big and so entangled with everything that the only thing that could ever pry it loose is some kind of fundamentally transformative event that results in the complete dissolution of our entire economy and/or nation. Trying to make any progress through typical political avenues is hopeless. You're casting your vote into an ocean of voters that don't even see health insurance as a financial product, they see it as healthcare itself.

kelnos 9y ago
I think this is something where individual US states need to blaze a trail. California passed a (light-on-details) single-payer healthcare bill through the state Senate, though unfortunately the matter has been tabled for now by the Assembly, and funding it would require creative use of Medicare dollars that a) would require federal approval, and b) may not even exist much longer if the GOP gets its way. I agree that major health care reform at a US national level is pretty unlikely at this point, even if Democrats manage to gain a supermajority in both houses of Congress and win back the presidency. I'm not even sure trying out something novel at a national level is a good idea, since it carries a lot of risk. I think doing something new at the state level, if they can get around federal interference, has a decent chance of getting somewhere.
- briandear 9y ago
  > [Medicare dollars] may not even exist much longer if the GOP gets its way. Has the GOP actually suggested eliminating Medicare? That doesn’t seem to be accurate at all.
  - kasey_junk 9y ago
    Not eliminating but Paul Ryan was fairly specific on the radio recently that they plan to start cutting back on funding it. https://khow.iheart.com/featured/ross-kaminsky/content/2017-12-06-speaker-of-the-house-paul-ryan/ https://khow.iheart.com/featured/ross-kaminsky/content/2017-...
  - FussyZeus 9y ago
    No, as usual the GOP doesn't remove anything, they just make it as difficult as possible for anything to receive the funding it needs, and then go on TV and moan about how nothing the Government runs works properly.
  - kelnos 9y ago
    Eliminating, no, but definitely slashing funding. The proposal in CA would have required federal Medicare funding to make it viable, and less of that would probably kill it. The thing that pisses me off is that the GOP wants to slash funding for a ton of public services, but not materially lower taxes for people. So if states want to bring back those public services, they need to raise taxes, which overall causes a person's tax rate to be higher. I'd be fine with the federal gov't even entirely killing Medicare if that would cause my effective federal tax rate to drop by several percentage points, points that I'd be happy to turn around and give to CA for them to implement something like single-payer. (The downside, of course, is that residents of less progressive states get screwed, which is why I'd rather the federal gov't leave things alone, but give states like CA more latitude in how they use those dollars.)

kelnos 9y ago

I've always had this same objection. I prefer to think of it as a "health plan" rather than "insurance". You can't "insure" someone's health (well, ok, you can, but it's a case of "I don't think this word means what you think it means"). You can merely create a structure where people pool their money on a large enough scale such that it's affordable to fix a person when they break in most (if not all) of the myriad ways they can break. That's similar to insurance in some ways, but isn't in one crucial way: you generally don't know the "repair" cost up-front; the repair is done, and then you get the bill. If you insure your car against damage up to $50k, you get an estimate when it gets damaged, and ask the insurance company for approval for that amount before the work is done. If the insurance company disagrees on cost, you can find another auto shop that agrees with the insurance company's cost, choose to bear the difference in cost yourself, or decide to forego the repair entirely. You can't do any of that when it comes to healthcare. > The cost to repair you in our current system could also be infinite, given the numerous and terrible things that can happen to a person with literally no fault of their own. By the same token, the odds of you needing that payout are also damn near incalculable; every place you go, every activity you engage in from skydiving to eating turtle soup in Mexico all have a probability of killing you. This isn't entirely true though, or, rather, it doesn't matter. Health "insurance" companies have a ton of data that allows them to predict pretty well how much it will cost to fix people when they break, in the ways that they usually break. They collect premiums based on that data and are doing a pretty decent job of not going bankrupt while actually fixing people, even outliers who fall outside of the "usually break" range. (Yes, I know, that's certainly debatable; they're dicks and deny coverage for things they should absolutely cover, and that helps with their bottom line; in principle, however they can afford to cover everything that medical science can perform and still stay afloat.) > Then hospitals must be instructed to destroy their chargemasters and go back to charging for services at reasonable rates. After that, everything else should more or less be solved. The problem here is that "reasonable" means different things to different people, and for some procedures, even if the price were dropped down to "at cost" (if that's even a calculable thing), you'd still have people who couldn't afford it. Health care itself isn't free. It costs money to develop medicines. It costs money to train doctors. Those doctors, once trained, need to make a living. It costs money to run hospitals and private practices. Someone needs to bear this cost. So you still have the same problem of inherently deciding that the life of a rich person is worth more than the life of a poor person; in some cases the rich person can afford to get healed, while the poor person can't and dies (or lives, but goes into crippling debt or bankruptcy to do so). I agree that healthcare costs in the US are out of control, but even if you fix that problem, you still need some system in place to ensure everyone gets the care they need, regardless of their financial situation. (That is, of course, if you believe health care should be a basic right. If you don't, then we're not going to have a productive discussion.) I think the concept of a pooled health plan is fine; just payments into it need to be dependent on means, and payments of $0 don't disqualify you from coverage. The person who can't afford to pay into it gets the same treatment that everyone else gets. I don't care how we achieve that, whether it's government-single-payer, or something similar to what we have now, just with price controls and government subsidies/credits for those who are unable to pay. Absolutely agree that the current corrupt health "insurance" industry needs to go, though.

adamnemecek 9y ago

How does your solution solve the problem?

smallnamespace 9y ago
It adds one crucial feature every healthy, functioning market needs: honest feedback. Right now nobody, and I mean literally nobody, makes rational economic decisions for medicine in the US. Neither the hospital, doctor, administrator, insurance company, or patient really has any real idea 1) the cost of the health care being provided 2) the amounts being charged or 3) the dollar amount of benefit gained by the patient. The actors above who do have some pieces of the data largely aren't the ones making the decisions. If you abolish insurance and state prices up front, at least you force hospitals to charge something closer to the true cost for services, and you force patients to evaluate whether they would rather have care or dollars in their pockets. Over time, they would figure out what's good value for their health and what isn't. Of course one could argue that the government should be making all these decisions because it has access to more information, and that's probably true; but that's not what's happening in our Frankenstein ('s monster) of a system.
- adamnemecek 9y ago
  The root cause tho is that the consumer of the product (patient) is generally different from the payer (employer). Insurance isn’t the real problem. The invaluable argument could be applied to your house too.
  - smallnamespace 9y ago
    Currently though, even if the patient is paying for insurance out of their own pocket, the real decisionmaker is generally still bureaucrats (in the literal sense) at the insurance company + hospital.
- briandear 9y ago
  Not entirely true.. https://surgerycenterok.com https://surgerycenterok.com

barrkel 9y ago

The reason you must get car insurance isn't to cover the cost of the car, it's to cover the very high variance in potential payouts to third parties should you cause an accident. Health insurance in principle works on a similar basis: it's a cost smoothing mechanism for unexpected large costs that not everyone is expected to incur. It breaks down if everyone incurs the big costs (old age) or not everyone insures (only at risk people insure, which increases costs, which pushes out people who aren't as risky, which pushes up the price further, in a cycle.) It also doesn't make much sense for regular care that doesn't directly prevent major payouts. So it seems to me that health insurance is only workable if it is mandatory, old age spending is rationed, and checkups that find things that can become very expensive are covered, but other bits and bobs aren't. Obviously gold plated coverage could cover more, but that's all the mandatory insurance should cover. It's all far too politically charged for any kind of rationality to prevail though. I think single payer state care can work, but it has high overhead and suits high tax countries better, not the US, where there is less acceptance of the social contract of taxation.

logfromblammo 9y ago
GP was referring to the car insurance, not the driver insurance. Those are separable concepts. If your rear-view mirror is broken off by a punk with a baseball bat while parked on a Chicago street, that is property damage to your car that would be covered by your car insurance. If you t-bone another car, the damage to their vehicle is covered by your driver insurance, while the damage to your own vehicle might be covered by your car insurance, if that possibility is listed in the policy. Generally speaking, if your car insurance doesn't pay for damages incurred by the owner while driving, you-as-car-owner can't file a claim against you-as-car-driver under the driver insurance policy, and end up getting any money out of it. When the policies are offered by the same insurance company, the actuaries for each can share information, such that the risk of owner-caused damages can be assessed for the car policy, and can therefore be rolled into its premiums. This is why those policies are often combined. Where states mandate insurance, the mandate is always for driver insurance. So the car insurance then becomes an upsell option for those who already have to buy something from an insurance company. With health insurance, there is the one big problem that you just can't get around. Everybody dies, eventually. You can sort of predict when and how in a large enough population, but everyone has a very high, statistically predictable likelihood of needing medical care at some time during their lifespan. There is also another big problem. Most people incur their highest medical costs in the year before their death. Obviously, after you die, you can't work off your medical debts. That's not a good looking model for healthcare providers, and a tough one for healthcare insurance actuaries to squeeze profitable premiums out of. There is a perverse incentive to drop a client or raise their premiums right after a claim is paid, on the presumption that any uptick in medical payments might be a harbinger of greater future medical expenses. There is also perverse incentive to drop customers immediately after the first payment related to chronic disease is made. We paid for an office visit to an oncology specialist and for biopsy lab tests, so our model says that we should drop you right now before your lab results come back. We hope you don't have cancer, so you can prove it before coming back to us as a customer, but otherwise, good luck with your treatment bills....

caresource_ta 9y ago

Insurance does not replace value, insurance is fundamentally and always a value transfer vehicle. Although in some implementations insurance can act as a value replacement mechanism this is the result of the implementation and not a fundamental property of insurance. You seem to base your understanding of insurance on some common implementations that do replace value but these are not the rule for all insurance.

peteretep 9y ago

> you have an asset with incalculable worth Actuaries, national health providers, governments -- generally they all have hard cash valuations for human life.