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> The Affordable Care Act kept profit margins in check by requiring companies to use at least 80 percent of the premiums for medical care. That’s good in theory

> The Affordable Care Act kept profit margins in check by requiring companies to use at least 80 percent of the premiums for medical care. That’s good in theory but it actually contributes to rising health care costs. How did this little gem sneak into the ACA? It seems like it was put in by somebody who doesn't understand game theory.

deleted 8y ago
[deleted]
lotsofpulp 8y ago
It wasn’t snuck in. In theory, if you have sufficient # of health insurers, then the ones with lower costs will be able to offer lower premiums, and win more business.
- slededit 8y ago
  Except in most cases the person paying is not the one that chose the insurer - the employer did.
  - namibj 8y ago
    Maybe make up to x% of health care premiums tax-deductible, and disallow employers from providing health insurance? As far as I see, the only reason the employer pays health insurance is that the employee does not need to pay taxes on it.
- mmt 8y ago
  That is, to start with, a very big "if". It seems safe to say that, even at the time, the number of insurers was nowhere near sufficient (in any given geographic area). That number is even lower today, something feared by the law's critics. There are some other shaky assumptions built in, as well, including the one that price alone is enough to win more business, even assuming identical/equivalent networks (another shaky assumption). A reputation for terrible claims practices might be enough to dissuade someone from saving that extra $3/month in premiums.
- koolba 8y ago
  And in the far more common case in many parts of the US where you have exactly one insurer, which was already the case in 2010, you get the exasperated situation we have now. Either Obama and the Democrat super majority of 2010 were complete idiots when they wrote the ACA or they fleeced the American people with a false bill of goods. Note that “or” is meant to be interpreted as the Boolean algebra definition.
  - timr 8y ago
    Oh, stop. There's no way a bill of any substance -- on any matter, let alone health care -- makes it through congress without unintended consequences. You could just as easily point at any of a thousand other laws, passed by both parties, and conclude the same thing. In a functioning system of government, you go back and fix the things that break, and not just, say, throw an eight-year political tantrum that gridlocks government and ultimately leaves the system in a partially broken heap of half-repealed regulations, simply because you cannot have 100% of your way. It certainly doesn't help that the GOP systematically blocks any attempt to reduce the influence of private industry in health care. Medicare manages to control costs, but a Medicare-for-all proposal never had a chance of making it through congress because it needed GOP votes to pass. If one party consists of "complete idiots", the other consists of corporate lackeys and paid shills.
    - masonic 8y ago
      a Medicare-for-all proposal never had a chance of making it through congress because it needed GOP votes to pass. Incorrect. For awhile, Democrats controlled the Presidency and the House, and the Senate Democrat caucus had a cloture-capable 60 vote supermajority. They didn't need a single GOP vote for anything. For ACA, no GOP amendments were even given the dignity of a simple up/down floor vote.
      - perl4ever 8y ago
        What do you make of the following: "the Democrat-controlled House and Senate committees adopted nearly 190 Republican amendments while writing the legislation, according to data compiled by The New York Times." Source: https://www.nytimes.com/interactive/2017/07/21/us/health-care-amendments.html https://www.nytimes.com/interactive/2017/07/21/us/health-car...
bsder 8y ago
> How did this little gem sneak into the ACA? It seems like it was put in by somebody who doesn't understand game theory. It didn't sneak in. The issue was that before the ACA we had insurers that were below 60%. They managed this by cutting people off of healthcare once they started using it aka recission panels. The problem is that the ACA is a working solution and was meant to be updated once we got real data as to how things were or were not working. Of course, that was before Republican intransigence. Personally, I'm glad for Republican intransigence. We're going to get to single payer long before I ever expected to.
- berbec 8y ago
  > We're going to get to single payer long before I ever expected to. I think you're right, but I think it will take a pair of full pendulum swings: 1. The GOP gets its way, and trashes the ACA more than it already has. Followed by: 2. A huge backlash, including "middle America" who finally realize they shouldn't vote for the people most interested in cutting the programs they actually depend on. I just worry the gap in time between #1 and #2 will be drawn-out, painful and; to some; deadly.
  - k_sh 8y ago
    Maybe this is my blue city bubble talking, but I think we're slightly past the apogee of the right swing right now. The GOP (barely) failed to hack up the ACA this Congressional term, and I would be shocked if they came out of the midterms in the same or better shape than they're in right now.
    - berbec 8y ago
      > I would be shocked if they came out of the midterms in the same or better shape More shocked than when Trump won in 2016?
gabeh 8y ago
This is called Medical Loss Ratio (MLR), the thinking was to limit healthcare companies from charging exorbitant rates for "profit" and not care. It got strange though because "cost of care" also included wellness programs. So what do you think these insurance companies do coming into the year end when they are under their estimates for care? A) Refund premium dollars to their members, HA! or B) Spend millions of dollars in the last days of the year building step counting programs and other half-baked wellness efforts Healthcare in America is terminally ill. In it's current form, commercial insurance, like Aetna in this article, are rewarded for pumping up the total cost of care as big as possible while keeping their members just healthy enough to dump off at the doorstep of medicaid when they're old enough to qualify for it.

deleted 8y ago

[deleted]

lotsofpulp 8y ago

It wasn’t snuck in. In theory, if you have sufficient # of health insurers, then the ones with lower costs will be able to offer lower premiums, and win more business.

slededit 8y ago
Except in most cases the person paying is not the one that chose the insurer - the employer did.
- namibj 8y ago
  Maybe make up to x% of health care premiums tax-deductible, and disallow employers from providing health insurance? As far as I see, the only reason the employer pays health insurance is that the employee does not need to pay taxes on it.
mmt 8y ago
That is, to start with, a very big "if". It seems safe to say that, even at the time, the number of insurers was nowhere near sufficient (in any given geographic area). That number is even lower today, something feared by the law's critics. There are some other shaky assumptions built in, as well, including the one that price alone is enough to win more business, even assuming identical/equivalent networks (another shaky assumption). A reputation for terrible claims practices might be enough to dissuade someone from saving that extra $3/month in premiums.
koolba 8y ago
And in the far more common case in many parts of the US where you have exactly one insurer, which was already the case in 2010, you get the exasperated situation we have now. Either Obama and the Democrat super majority of 2010 were complete idiots when they wrote the ACA or they fleeced the American people with a false bill of goods. Note that “or” is meant to be interpreted as the Boolean algebra definition.
- timr 8y ago
  Oh, stop. There's no way a bill of any substance -- on any matter, let alone health care -- makes it through congress without unintended consequences. You could just as easily point at any of a thousand other laws, passed by both parties, and conclude the same thing. In a functioning system of government, you go back and fix the things that break, and not just, say, throw an eight-year political tantrum that gridlocks government and ultimately leaves the system in a partially broken heap of half-repealed regulations, simply because you cannot have 100% of your way. It certainly doesn't help that the GOP systematically blocks any attempt to reduce the influence of private industry in health care. Medicare manages to control costs, but a Medicare-for-all proposal never had a chance of making it through congress because it needed GOP votes to pass. If one party consists of "complete idiots", the other consists of corporate lackeys and paid shills.
  - masonic 8y ago
    a Medicare-for-all proposal never had a chance of making it through congress because it needed GOP votes to pass. Incorrect. For awhile, Democrats controlled the Presidency and the House, and the Senate Democrat caucus had a cloture-capable 60 vote supermajority. They didn't need a single GOP vote for anything. For ACA, no GOP amendments were even given the dignity of a simple up/down floor vote.
    - perl4ever 8y ago
      What do you make of the following: "the Democrat-controlled House and Senate committees adopted nearly 190 Republican amendments while writing the legislation, according to data compiled by The New York Times." Source: https://www.nytimes.com/interactive/2017/07/21/us/health-care-amendments.html https://www.nytimes.com/interactive/2017/07/21/us/health-car...

bsder 8y ago

> How did this little gem sneak into the ACA? It seems like it was put in by somebody who doesn't understand game theory. It didn't sneak in. The issue was that before the ACA we had insurers that were below 60%. They managed this by cutting people off of healthcare once they started using it aka recission panels. The problem is that the ACA is a working solution and was meant to be updated once we got real data as to how things were or were not working. Of course, that was before Republican intransigence. Personally, I'm glad for Republican intransigence. We're going to get to single payer long before I ever expected to.

berbec 8y ago
> We're going to get to single payer long before I ever expected to. I think you're right, but I think it will take a pair of full pendulum swings: 1. The GOP gets its way, and trashes the ACA more than it already has. Followed by: 2. A huge backlash, including "middle America" who finally realize they shouldn't vote for the people most interested in cutting the programs they actually depend on. I just worry the gap in time between #1 and #2 will be drawn-out, painful and; to some; deadly.
- k_sh 8y ago
  Maybe this is my blue city bubble talking, but I think we're slightly past the apogee of the right swing right now. The GOP (barely) failed to hack up the ACA this Congressional term, and I would be shocked if they came out of the midterms in the same or better shape than they're in right now.
  - berbec 8y ago
    > I would be shocked if they came out of the midterms in the same or better shape More shocked than when Trump won in 2016?

gabeh 8y ago

This is called Medical Loss Ratio (MLR), the thinking was to limit healthcare companies from charging exorbitant rates for "profit" and not care. It got strange though because "cost of care" also included wellness programs. So what do you think these insurance companies do coming into the year end when they are under their estimates for care? A) Refund premium dollars to their members, HA! or B) Spend millions of dollars in the last days of the year building step counting programs and other half-baked wellness efforts Healthcare in America is terminally ill. In it's current form, commercial insurance, like Aetna in this article, are rewarded for pumping up the total cost of care as big as possible while keeping their members just healthy enough to dump off at the doorstep of medicaid when they're old enough to qualify for it.