4 ms·

>> They can't always do what's best for the patient, only what the insurance company agrees with. > Because that is what the patient can afford. What is the p

>> They can't always do what's best for the patient, only what the insurance company agrees with. > Because that is what the patient can afford. What is the point of paying for insurance, then? Nothing legitimizes for-profit insurance companies having any role or prerogative in health care, other than the status quo.

lotsofpulp 5y ago
The point of insurance is to protect against unaffordable losses. An insurance business only works if the losses are, by and large, randomly distributed and unexpected. The more predictable the losses, the more an insurance offering resembles a payment plan where you are simply setting aside money with a third party to save for the eventual loss. This is because as losses become more probable, the insurance company has to increase premiums eventually to the point where the sum of the premiums is equal to the losses if the probability of loss is 100%. This is the current state of health insurance in the US. It is not what would normally be called an insurance product. In fact, quite a few of the stipulations of ACA make health insurance premiums explicitly a tax from the young/healthy to the old/sick. Therefore, the industry term is to refer to health insurance companies as "managed care organizations" (MCOs), some of whom sell health "insurance". In the US, when you pay health insurance premiums, if you are young/healthy, you are mostly paying for the treatment of the old/sick, and only minority paying to protect against the risk of you breaking your arm. The profit that MCOs earn is actually more like an administration fee. The US could have implement an NHS style taxpayer funded healthcare system, but the politically viable option in 2010 was to outsource the administration of healthcare (pricing negotiations, healthcare rationing, auditing, etc) duties to MCOs, hence we have a system where the government (or employer) sets the rules, that abide by ACA rules, and then the MCOs execute them. For example, nearly half of Americans' healthcare is paid by the government, but it is administered by MCOs. The MCOs are not setting the rules, just carrying out the stipulations of their contracts with the government: https://crsreports.congress.gov/product/pdf/IF/IF10830 https://crsreports.congress.gov/product/pdf/IF/IF10830 Finally, to answer this question: >What is the point of paying for insurance, then? If you have future earning potential, or a little bit of wealth saved up, then health insurance in the US is valuable because your out of pocket maximum is capped. https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/ https://www.healthcare.gov/glossary/out-of-pocket-maximum-li... This is one of the policies that also helps make health insurance premiums more akin to a tax, along with, but not limited to, the following policies: Age Rating Factors (adds cost to young people's premiums and lowers old people's premiums) https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/state-rating https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-In... And insurance cannot be denied to someone for any reason, and has to only be based on age/location/tobacco use: https://www.healthcare.gov/how-plans-set-your-premiums/ https://www.healthcare.gov/how-plans-set-your-premiums/
- nescioquid 5y ago
  Apologies, I really didn't mean to make you rehearse for me how things work today. But I am curious about what your point of view is on whether the role for-profit health insurance providers play today is legitimate and salutory. We have our current system largely as a result of regulatory capture, so no amount of pointing to the status quo and shrugging at its complexity legitimizes it. Again, I fail to see the legitimacy of a regime in which I must either pay a for-profit corporation for the privilege of preventing my doctor from doing what is in my own best interest or be wealthy enough to pay everything out of pocket.
  - lotsofpulp 5y ago
    >Again, I fail to see the legitimacy of a regime in which I must either pay a for-profit corporation for the privilege of preventing my doctor from doing what is in my own best interest or be wealthy enough to pay everything out of pocket. The "legitimacy" lies in the fact that that is what was politically possible to accomplish. I put legitimacy in quotes because I assume you mean legitimate in the context of some type of moral or ideological sense, which I do not find terribly interesting in this case, where there are many real world constraints at play. At the very root of it all is the fact that demand for healthcare greatly dwarfs supply of healthcare, starting from the simple fact that changing bedpans is a highly undesirable task and going all the way to the fact that medicinal knowledge is very difficult and costly to acquire. And so politics will be involved in how healthcare is distributed. You can even go back to your statement of >from doing what is in my own best interest 99% of people have no idea how to evaluate what is in their own best interest when it comes to medicine. Even doctors outside of their specialty probably do not know, and the tiny minority that do would acknowledge that at some point they are also guessing at the machinations of something complex like the body. The for profit (and not for profit) labeling is mostly a distraction. Doctors do not treat people without a profit, programmers do not program without a profit, and a managed care organization does not sell its services without a profit. These 2 big constraints shape how much and what kind of healthcare system we can afford: -low supply of healthcare relative to demand - requiring a system of allocation of resources -medicine being extremely difficult and possibility of doctor making mistake or being corrupted requiring second opinion - i.e. doctors and pharmacists employed by managed care organizations Obviously, everyone would love if everyone could get all the healthcare they could ever want at anytime they want. But our parameters do not allow for that. Back to the original question of why a for profit managed care organization needs to be involved at all? It does not, except politically, that was the solution the leaders agreed upon. I suspect politicians also like MCOs in the middle because it keeps the heat on the MCOs and deflects from them. We could have gone the NHS way with taxpayer funded healthcare, and the NHS handling all the administrative functions that managed care organizations do. But there was significant political opposition to that, probably because a lot of politically influential classes stood to lose in that proposition. So we have what we have. Note that to counteract excessive profit incentives, the ACA implemented minimum medical loss ratios and a healthcare exchange so that companies could compete for customers and hence have an incentive to keep premiums lower (presuming the existence of sufficient competing MCOs). Why not just cut all that out and let government deal with it? Because that is what was possible. https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-...

lotsofpulp 5y ago

The point of insurance is to protect against unaffordable losses. An insurance business only works if the losses are, by and large, randomly distributed and unexpected. The more predictable the losses, the more an insurance offering resembles a payment plan where you are simply setting aside money with a third party to save for the eventual loss. This is because as losses become more probable, the insurance company has to increase premiums eventually to the point where the sum of the premiums is equal to the losses if the probability of loss is 100%. This is the current state of health insurance in the US. It is not what would normally be called an insurance product. In fact, quite a few of the stipulations of ACA make health insurance premiums explicitly a tax from the young/healthy to the old/sick. Therefore, the industry term is to refer to health insurance companies as "managed care organizations" (MCOs), some of whom sell health "insurance". In the US, when you pay health insurance premiums, if you are young/healthy, you are mostly paying for the treatment of the old/sick, and only minority paying to protect against the risk of you breaking your arm. The profit that MCOs earn is actually more like an administration fee. The US could have implement an NHS style taxpayer funded healthcare system, but the politically viable option in 2010 was to outsource the administration of healthcare (pricing negotiations, healthcare rationing, auditing, etc) duties to MCOs, hence we have a system where the government (or employer) sets the rules, that abide by ACA rules, and then the MCOs execute them. For example, nearly half of Americans' healthcare is paid by the government, but it is administered by MCOs. The MCOs are not setting the rules, just carrying out the stipulations of their contracts with the government: https://crsreports.congress.gov/product/pdf/IF/IF10830 https://crsreports.congress.gov/product/pdf/IF/IF10830 Finally, to answer this question: >What is the point of paying for insurance, then? If you have future earning potential, or a little bit of wealth saved up, then health insurance in the US is valuable because your out of pocket maximum is capped. https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/ https://www.healthcare.gov/glossary/out-of-pocket-maximum-li... This is one of the policies that also helps make health insurance premiums more akin to a tax, along with, but not limited to, the following policies: Age Rating Factors (adds cost to young people's premiums and lowers old people's premiums) https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/state-rating https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-In... And insurance cannot be denied to someone for any reason, and has to only be based on age/location/tobacco use: https://www.healthcare.gov/how-plans-set-your-premiums/ https://www.healthcare.gov/how-plans-set-your-premiums/

nescioquid 5y ago
Apologies, I really didn't mean to make you rehearse for me how things work today. But I am curious about what your point of view is on whether the role for-profit health insurance providers play today is legitimate and salutory. We have our current system largely as a result of regulatory capture, so no amount of pointing to the status quo and shrugging at its complexity legitimizes it. Again, I fail to see the legitimacy of a regime in which I must either pay a for-profit corporation for the privilege of preventing my doctor from doing what is in my own best interest or be wealthy enough to pay everything out of pocket.
- lotsofpulp 5y ago
  >Again, I fail to see the legitimacy of a regime in which I must either pay a for-profit corporation for the privilege of preventing my doctor from doing what is in my own best interest or be wealthy enough to pay everything out of pocket. The "legitimacy" lies in the fact that that is what was politically possible to accomplish. I put legitimacy in quotes because I assume you mean legitimate in the context of some type of moral or ideological sense, which I do not find terribly interesting in this case, where there are many real world constraints at play. At the very root of it all is the fact that demand for healthcare greatly dwarfs supply of healthcare, starting from the simple fact that changing bedpans is a highly undesirable task and going all the way to the fact that medicinal knowledge is very difficult and costly to acquire. And so politics will be involved in how healthcare is distributed. You can even go back to your statement of >from doing what is in my own best interest 99% of people have no idea how to evaluate what is in their own best interest when it comes to medicine. Even doctors outside of their specialty probably do not know, and the tiny minority that do would acknowledge that at some point they are also guessing at the machinations of something complex like the body. The for profit (and not for profit) labeling is mostly a distraction. Doctors do not treat people without a profit, programmers do not program without a profit, and a managed care organization does not sell its services without a profit. These 2 big constraints shape how much and what kind of healthcare system we can afford: -low supply of healthcare relative to demand - requiring a system of allocation of resources -medicine being extremely difficult and possibility of doctor making mistake or being corrupted requiring second opinion - i.e. doctors and pharmacists employed by managed care organizations Obviously, everyone would love if everyone could get all the healthcare they could ever want at anytime they want. But our parameters do not allow for that. Back to the original question of why a for profit managed care organization needs to be involved at all? It does not, except politically, that was the solution the leaders agreed upon. I suspect politicians also like MCOs in the middle because it keeps the heat on the MCOs and deflects from them. We could have gone the NHS way with taxpayer funded healthcare, and the NHS handling all the administrative functions that managed care organizations do. But there was significant political opposition to that, probably because a lot of politically influential classes stood to lose in that proposition. So we have what we have. Note that to counteract excessive profit incentives, the ACA implemented minimum medical loss ratios and a healthcare exchange so that companies could compete for customers and hence have an incentive to keep premiums lower (presuming the existence of sufficient competing MCOs). Why not just cut all that out and let government deal with it? Because that is what was possible. https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-...