8 ms·

This is such a US-centric view that the free market will just magically fix things. I used to hold the same view. Now? I think truly individual insurance would

by cletus 9y ago

This is such a US-centric view that the free market will just magically fix things. I used to hold the same view. Now? I think truly individual insurance would be an unmitigated disaster. The problem? Pre-existing conditions. Let's say you have lifelong degenerative condition that will require constant medical care. What incentive does an insurance company have to take you on? You can try to make discriminating against pre-existing conditions illegal but insurance companies know who their most expensive clients are and will try and find a reason to invalidate them. Why employer-based insurance works is that it groups people. It's really a form of collective bargaining. If you insure one person you look at how much that person costs you vs their premiums. If you insure 50,000 employees of a company then you're looking at revenue vs cost of 50,000 vs 0. This is something insurance companies are exceedingly good at. Large numbers even out individual variance (and thus risk). This idea can go too far. In Australia we have (had? I haven't lived there for 7 years and we have a conservative government so who knows what they'e done to the health system while I've been gone) what's called a "community rating" for private health insurance. Emergency care is largely the government's responsibility (through Medicare). Community rating means insurance companies basically treat everyone the same other than allowed factors (eg # of children). The downside to this is that elderly people cost more but get charged the same as young people. This makes no sense for young people so they leave the private system and health premiums go up. This has been a decades-long problem. The solution here is for there to be an alternative for employer health insurance. So someone else needs to come in and negotiate for a group rate. It needs to be small enough so there's no Walmart like situation of all but one company getting squeezed out. It needs to be large enough so the number of plan participants averages out individual variance. The question then becomes who should that be? In smaller states it should probably be the state. Maybe there should even be more than one supplier? In larger states, maybe it might be split further? Cover this with state taxes. Decide what this covers. It should at a minimum include basic preventative care, affordable access to a GP (PCP), ER visits, emergency medical care, big-ticket medical items like transplant surgery and cancer treatment and so on. Then maybe employer health insurance is just for extras like better elective cover. Americans in particular have a real false dichotomy view of health insurance as in the choice is between a free market and a 100% state-run system where all hospitals and medical professionals are government employees. This is patently false. The current US system has providers deal with any number of insurance companies with the differences between their various billing systems (eg there are jobs where people simply have to convert between billing codes used by different companies). It's insanity. State-run insurance would grealty simplify this.

conanbatt 9y ago
> This is such a US-centric view that the free market will just magically fix things Funny that I'm not american :) > The problem? Pre-existing conditions. Let's say you have lifelong degenerative condition that will require constant medical care. What incentive does an insurance company have to take you on? You can try to make discriminating against pre-existing conditions illegal but insurance companies know who their most expensive clients are and will try and find a reason to invalidate them. This is a serious concern. However, bear in mind that when the state is the one that faces that issue, they can easily end up simply not providing care at all. What is better, very expensive insurance premiums or no treatment at all? In the end, in a free market, I would expect that some insurances will be precisely for sick people, they will have expensive premiums but optimize the value provided and the client they take. There is something you cant run away from: very sick people are very expensive. And the one that bears the cost for their own health is ultimately yourself. > The downside to this is that elderly people cost more but get charged the same as young people. This makes no sense for young people so they leave the private system and health premiums go up. This has been a decades-long problem. The great case for price differenciation. I dont know the details in the US, but in argentina the elderly pay a lot more. I'm talking about 3-5x. There is a public system but those that can afford it get better care in private. > Why employer-based insurance works is that it groups people. It's really a form of collective bargaining. > If you insure one person you look at how much that person costs you vs their premiums. If you insure 50,000 employees of a company then you're looking at revenue vs cost of 50,000 vs 0. This is something insurance companies are exceedingly good at. Large numbers even out individual variance (and thus risk). Its great in that sense, but its terrible in others: businesses now spend a lot more on healthcare organization and decisions, which means they pay less salaries. They are also constraint by insurance companies: employees that prefer one insurance mean that cant choose any employer. There is a high cost to making companies do this, and although collective bargaining is a great benefit, misaligned incentives is another one. A healthy employee pays the same as a sick one, and that is not reasonable. I think people with healthy lives and diets, and less doctor visits should pay less. > The current US system has providers deal with any number of insurance companies with the differences between their various billing systems (eg there are jobs where people simply have to convert between billing codes used by different companies). It's insanity. State-run insurance would grealty simplify this This is true, and its insane how handling different insurances is a pain. But that is also brought by the state. Medicare pays this way. Completely vertical systems are very hard to setup, like Kaiser does, mostly due to regulation. Let me make one last argument against state run insurance: Medicare is like 6% of GDP taking care of 10% of the americans. If expanding medicare for all had the same cost, it would basically eat away the entire economy. There are multiple reasons why healthcare is expensive. All of them contribute a part and not all of the problem, and all are needed. State run insurance will not reduce physician cost: free immigration of doctors will. State run insurance will not reduce pharma prices: the state actually made itself unable to negotiate drug prices and prohibits drug importation, even from Canada and Germany. State run insurance will not solve hospitals having the legal capacity to block other hospitals from opening near by: that was invented by the state. Etc etc.

by cletus 9y ago

conanbatt 9y ago

> This is such a US-centric view that the free market will just magically fix things Funny that I'm not american :) > The problem? Pre-existing conditions. Let's say you have lifelong degenerative condition that will require constant medical care. What incentive does an insurance company have to take you on? You can try to make discriminating against pre-existing conditions illegal but insurance companies know who their most expensive clients are and will try and find a reason to invalidate them. This is a serious concern. However, bear in mind that when the state is the one that faces that issue, they can easily end up simply not providing care at all. What is better, very expensive insurance premiums or no treatment at all? In the end, in a free market, I would expect that some insurances will be precisely for sick people, they will have expensive premiums but optimize the value provided and the client they take. There is something you cant run away from: very sick people are very expensive. And the one that bears the cost for their own health is ultimately yourself. > The downside to this is that elderly people cost more but get charged the same as young people. This makes no sense for young people so they leave the private system and health premiums go up. This has been a decades-long problem. The great case for price differenciation. I dont know the details in the US, but in argentina the elderly pay a lot more. I'm talking about 3-5x. There is a public system but those that can afford it get better care in private. > Why employer-based insurance works is that it groups people. It's really a form of collective bargaining. > If you insure one person you look at how much that person costs you vs their premiums. If you insure 50,000 employees of a company then you're looking at revenue vs cost of 50,000 vs 0. This is something insurance companies are exceedingly good at. Large numbers even out individual variance (and thus risk). Its great in that sense, but its terrible in others: businesses now spend a lot more on healthcare organization and decisions, which means they pay less salaries. They are also constraint by insurance companies: employees that prefer one insurance mean that cant choose any employer. There is a high cost to making companies do this, and although collective bargaining is a great benefit, misaligned incentives is another one. A healthy employee pays the same as a sick one, and that is not reasonable. I think people with healthy lives and diets, and less doctor visits should pay less. > The current US system has providers deal with any number of insurance companies with the differences between their various billing systems (eg there are jobs where people simply have to convert between billing codes used by different companies). It's insanity. State-run insurance would grealty simplify this This is true, and its insane how handling different insurances is a pain. But that is also brought by the state. Medicare pays this way. Completely vertical systems are very hard to setup, like Kaiser does, mostly due to regulation. Let me make one last argument against state run insurance: Medicare is like 6% of GDP taking care of 10% of the americans. If expanding medicare for all had the same cost, it would basically eat away the entire economy. There are multiple reasons why healthcare is expensive. All of them contribute a part and not all of the problem, and all are needed. State run insurance will not reduce physician cost: free immigration of doctors will. State run insurance will not reduce pharma prices: the state actually made itself unable to negotiate drug prices and prohibits drug importation, even from Canada and Germany. State run insurance will not solve hospitals having the legal capacity to block other hospitals from opening near by: that was invented by the state. Etc etc.