5 ms·

Congrats! How do you handle discrimination in your case? I'll give you an example: 50% of your employees are young and healthy and they opt out of the health pl

by jbkiv 7y ago

Congrats! How do you handle discrimination in your case? I'll give you an example: 50% of your employees are young and healthy and they opt out of the health plan offered and go with Savvy. How do you handle the remaining 50%, assuming that some of them are older, have cancer, or have kids with disabilities, diabetics or whatever. Would ANY health plan accept to cover only the sick and old? This is based a concept called mutualization. I'll be interested by your point of view, or if any of your clients came across cases like that?

kevc 7y ago
To prevent this kind of thing from happening, regulations state that you cannot offer both Savvy and a traditional group health plan within the same "class" of employees (IRS-defined, things like full-time vs. part-time vs. seasonal, etc.). If you were to offer Savvy, you can scale your employer contribution based on age and number of dependents to help address the higher costs of healthcare for those employees. Small groups can get large price increases if their members have serious health issues, and for them it can be cheaper to use us and get employees all the same tax savings, but buy on the individual market.
thaumasiotes 7y ago
> Would ANY health plan accept to cover only the sick and old? Yes, of course. Would any health plan charge the same premiums to cover only the sick and old as it would to cover only the young and healthy? No, but how is that relevant?
- jbkiv 7y ago
  Not sure where you are but healthcare companies in the US decline to cover companies if they don't cover most, if not ALL employees, just to avoid discrimation
snarf21 7y ago
You really can't stop it without more regulation. It is also why Obamacare didn't work for a lot of people, payors simply pulled out of states or raised rates on existing customers. Although ICHRA is a baby step forward, it is optional. Employers can offer this but they aren't forced, it isn't illegal. We need healthcare to be completely detached from employment. Employers should still be able to contribute to the HSA (no need for separate HRA) just like they do to a SIMPLE/401K and employees can spend it on any medical expenses they want. The HSA is portable and gives people choice. We also need to move to reference based pricing (1.2 * Medicare) instead of the payors negotiating with each health system. This also gets rid of "out-of-network" as that just doesn't matter. This also removes all the brokers and other rent seekers from the system. The last thing we need is to stop treating healthcare like insurance. Insurance products are for unlikely catastrophic events. You are going to need a checkup each year and a flu shot and you'll get a sinus infection. These are known and expected events. Being able to pay for these out of HSA gives good savings and insurance can be used to treat things like cancer and hospitalization and knee replacements. Medicare could also be expanded slightly to automatically cover an annual physical and age based cancer screenings. Then health insurance is mostly a risk management construct and since you are likely to stay with your carrier, they are incentivized to get you healthy and lose weight. Today, payors don't want to push on wellness since your employer will switch carriers each year looking for savings and the new payor benefits.
- AnthonyMouse 7y ago
  > Medicare could also be expanded slightly to automatically cover an annual physical and age based cancer screenings. It doesn't even have to be Medicare. Just give everyone a $100 voucher for a physical every year and let them take it to any licensed physician. Then there will be some who do it for the $100, others who charge $120 but maybe it's worth the extra $20 from your HSA because it's 3 miles out of your way instead of 30 (and has to charge more because real estate costs more there). The way Medicare "negotiates" prices involves a lot of wrangling and distortion and politics. Vouchers solve the same problem while still allowing people to choose to pay a little more for something they find to be worth a little more.
  - deleted 7y ago
    [deleted]
  - skrtskrt 7y ago
    How about we add everyone to Medicare, adjust what it covers to be more relevant to the average person, and use the massively diversified risk pool plus minuscule administrative costs (compared to private insurance) plus price negotiation power to save trillions of dollars and keep everyone healthy, for the larger benefit of society?
    - AnthonyMouse 7y ago
      > use the massively diversified risk pool Diversified risk doesn't reduce average costs, it only averages the cost across everybody. Doing this generally raises average costs significantly by making people insensitive to price, resulting in over-consumption, i.e. unnecessary tests and procedures. We already have this problem with employer-provided coverage, but covering more stuff makes it worse. > plus minuscule administrative costs (compared to private insurance) Most of the administrative cost of private insurance is related to investigating insurance fraud. Doctors and patients can still collude to claim procedures were done without actually doing them and then keep the money, so somebody still has to do that. Putting it in the police budget instead of the Medicare budget is an accounting difference. It doesn't actually save the money. Also, the administrative costs of private insurance are only a small percentage of overall healthcare costs. > price negotiation power Passing a law that everybody has to pay taxes for an insurance program which then out-competes private insurance by having a taxpayer subsidy and becomes a monopsony is not "negotiating" prices. It's price controls. It allows Medicare to set whatever price they want because the provider's alternative is having no patients. They can absolutely dictate lower prices that way, but then more providers go out of business. It's less profitable to make new drugs and new medical devices, so fewer companies do and we get fewer new drugs and new medical devices. Things that could have been cured then have to be treated. How much does that cost, in terms of both money and lives? Also, how does it address the real causes of high healthcare costs, like the shortage of doctors (and medical residency slots), or the difficulty of getting generic medicines approved by the FDA without a patent holder to pay for the clinical trials, or the lack of price transparency that causes patients to choose providers without respect to cost differences? > for the larger benefit of society? How many programs claim to be "for the larger benefit of society" and then go on to be worse than the status quo? Once upon a time it was easy to point to bread lines as an example of this not working. Today it's more subtle. First they regulate private industry in ways that produce inefficiency and reduce competition, then the effects of bad regulations are used as evidence that the market is broken and we need more regulations.

by jbkiv 7y ago

kevc 7y ago

To prevent this kind of thing from happening, regulations state that you cannot offer both Savvy and a traditional group health plan within the same "class" of employees (IRS-defined, things like full-time vs. part-time vs. seasonal, etc.). If you were to offer Savvy, you can scale your employer contribution based on age and number of dependents to help address the higher costs of healthcare for those employees. Small groups can get large price increases if their members have serious health issues, and for them it can be cheaper to use us and get employees all the same tax savings, but buy on the individual market.

thaumasiotes 7y ago

> Would ANY health plan accept to cover only the sick and old? Yes, of course. Would any health plan charge the same premiums to cover only the sick and old as it would to cover only the young and healthy? No, but how is that relevant?

jbkiv 7y ago
Not sure where you are but healthcare companies in the US decline to cover companies if they don't cover most, if not ALL employees, just to avoid discrimation

snarf21 7y ago

You really can't stop it without more regulation. It is also why Obamacare didn't work for a lot of people, payors simply pulled out of states or raised rates on existing customers. Although ICHRA is a baby step forward, it is optional. Employers can offer this but they aren't forced, it isn't illegal. We need healthcare to be completely detached from employment. Employers should still be able to contribute to the HSA (no need for separate HRA) just like they do to a SIMPLE/401K and employees can spend it on any medical expenses they want. The HSA is portable and gives people choice. We also need to move to reference based pricing (1.2 * Medicare) instead of the payors negotiating with each health system. This also gets rid of "out-of-network" as that just doesn't matter. This also removes all the brokers and other rent seekers from the system. The last thing we need is to stop treating healthcare like insurance. Insurance products are for unlikely catastrophic events. You are going to need a checkup each year and a flu shot and you'll get a sinus infection. These are known and expected events. Being able to pay for these out of HSA gives good savings and insurance can be used to treat things like cancer and hospitalization and knee replacements. Medicare could also be expanded slightly to automatically cover an annual physical and age based cancer screenings. Then health insurance is mostly a risk management construct and since you are likely to stay with your carrier, they are incentivized to get you healthy and lose weight. Today, payors don't want to push on wellness since your employer will switch carriers each year looking for savings and the new payor benefits.

AnthonyMouse 7y ago
> Medicare could also be expanded slightly to automatically cover an annual physical and age based cancer screenings. It doesn't even have to be Medicare. Just give everyone a $100 voucher for a physical every year and let them take it to any licensed physician. Then there will be some who do it for the $100, others who charge $120 but maybe it's worth the extra $20 from your HSA because it's 3 miles out of your way instead of 30 (and has to charge more because real estate costs more there). The way Medicare "negotiates" prices involves a lot of wrangling and distortion and politics. Vouchers solve the same problem while still allowing people to choose to pay a little more for something they find to be worth a little more.
- deleted 7y ago
  [deleted]
- skrtskrt 7y ago
  How about we add everyone to Medicare, adjust what it covers to be more relevant to the average person, and use the massively diversified risk pool plus minuscule administrative costs (compared to private insurance) plus price negotiation power to save trillions of dollars and keep everyone healthy, for the larger benefit of society?
  - AnthonyMouse 7y ago
    > use the massively diversified risk pool Diversified risk doesn't reduce average costs, it only averages the cost across everybody. Doing this generally raises average costs significantly by making people insensitive to price, resulting in over-consumption, i.e. unnecessary tests and procedures. We already have this problem with employer-provided coverage, but covering more stuff makes it worse. > plus minuscule administrative costs (compared to private insurance) Most of the administrative cost of private insurance is related to investigating insurance fraud. Doctors and patients can still collude to claim procedures were done without actually doing them and then keep the money, so somebody still has to do that. Putting it in the police budget instead of the Medicare budget is an accounting difference. It doesn't actually save the money. Also, the administrative costs of private insurance are only a small percentage of overall healthcare costs. > price negotiation power Passing a law that everybody has to pay taxes for an insurance program which then out-competes private insurance by having a taxpayer subsidy and becomes a monopsony is not "negotiating" prices. It's price controls. It allows Medicare to set whatever price they want because the provider's alternative is having no patients. They can absolutely dictate lower prices that way, but then more providers go out of business. It's less profitable to make new drugs and new medical devices, so fewer companies do and we get fewer new drugs and new medical devices. Things that could have been cured then have to be treated. How much does that cost, in terms of both money and lives? Also, how does it address the real causes of high healthcare costs, like the shortage of doctors (and medical residency slots), or the difficulty of getting generic medicines approved by the FDA without a patent holder to pay for the clinical trials, or the lack of price transparency that causes patients to choose providers without respect to cost differences? > for the larger benefit of society? How many programs claim to be "for the larger benefit of society" and then go on to be worse than the status quo? Once upon a time it was easy to point to bread lines as an example of this not working. Today it's more subtle. First they regulate private industry in ways that produce inefficiency and reduce competition, then the effects of bad regulations are used as evidence that the market is broken and we need more regulations.