Why will health insurance coverage cost more under reform???

[Mags]

Many of us are being led to believe that it will cost less - for many of us with group coverage, it will likely stay the same.

But the focus of the legislation, and Obama, is on the individual marketplace - where all the "abuses" that Obama says occur.

Let me walk you through a little exercise to help explain why costs will increase signficantly.

Let's use the example of a fairly benefit rich insurance plan. For example's sake, lets say that this plan costs $300 per month on average (and this is an average monthly cost in the individual market).

Now, currently insurers are allowed to set prices based on the risk - in other words, they are allowed to set prices based on the expected claims of an individual - based on their gender and age. Currently the difference between lowest to highest rate is somewhere around 6 to 1. Since I'm not using the highest and lowest absolute age (you can buy as low at 17 and as high as age 65), I'll use 5.1 to 1 for this example. Let's use 4 examples to make this simple:

Male age 25: $100
Female age 25: $120
Male age 55: $510
Female age 55: $470

This comes out to an average of $300 per person - as young males cost less than young females, and then this relationship switches at the higher ages.

OK, now lets look at the claims an insurer would expect for each of them. Let's assume an 80% loss ratio (which is in the Senate bill). The actual claims would look something liike this:

Male, Age 25: $80 (80% of $100)
Female, Age 25: $96
Male age 55: $408
female age 55: $376

So, in total, that is $960 in claims for $1,200 in premium - and 80% loss ratio.

Now, let's look at the probable impact of the Senate health care bill.

It does the following:

1. It will increase claims by 10% (and premiums) due to benefit mandates - particularly wellness type benefits.
2. It mandates that the maximum rate differential by age is no more than 3 to 1, saying it is discriminatory to charge more.
3. It mandates that the rates for males and females are the same.

Ok, so we know costs are going to go up 10% due to the additional benefits that will be required to be covered, which means the new claims total will be $1,056. In turn, the premiums will have to go up by 10%, so now that premium total will have to be $1,320, to maintain the 80% loss ratio (and ensure the insurance industry still has a 2% profit margin).

With the restrictions listed above, the new premiums would look like the following (with the previous premiums shown):

Male, Age 25: Now $165, (was $100)
Female, Age 25: Now $165 (was $120)
Male, Age 55: Now $495 (was $510)
Female, Age 55: Now $495 (was $470)

So, as you see, there will be small changes in premiums at the higher ages, but very large increases at the younger ages. The government views this as "equitable" - having the young subsidize the older folks. There are a number of problems with this approach:

1. Young people tend not to buy insurance now, as they view it as unnessary or too costly. This bill will make it much more expensive to the younger group - and this is the group we want to insure to bring down the overall costs.

2. Young people tend to have lower incomes than older people, with less extra money to buy insurance. Now we will be asking the young to not only buy insurance, but to pay extra to subsidize the older people. This isn't gonna work!

3. Older people tend to have higher incomes, and since they also tend to have more claims, they get more "value" out of their insurance in terms of dollars of claims paid by the insurer.

Now, I know folks will say "there are subsidies to help young folks buy insurance, and penalties if they do not". That is true, but the penalties are very, very small. What will likely happen, is many folks will pay the small penalty ($95 in 2014) and not purchase insurance, as it is much cheaper. Even with a 50% subsidy by the government, young folks would pay $990 ($165 x 12 x 0.5), versus a $95 penalty in the 1st year. My guess, is that if you are young and healthy, you won't purchase insurance and just pay the penalty.

The premium examples above get much uglier when you don't have the 25 year olds paying into the system! The premium rates overall will increase even more signficantly, especially at the older ages and the young people, who are being forced due to the 3-1 mandate to subsidize the older folks, won't be in the insurance mechanism.

The problem is, the bill does nothing to cut the rise in costs, except going after the insurers (which is a personal vendetta for "O", as his mom died due to cancer and she did not have insurance). We need to find a way to bring down hospital, drug and doctor costs. Not passing the annual "doc fix" is a start - but you know the dems won't pass this, as they need the docs support. But the docs, drugs and hospitals is where 80% of the total cost comes from! Why isn't the bill addressing these costs? Have you ever seen a poor doctor or hospital administrator?

One more note about the "39%" percent rate increases by insurers (made famous by Wellpoint in CA). It is MORE profitable for insurers to keep rate increases as low as possible. Now, that might not make sense to you, but that is the profit maximizing strategy. See, by putting in large rate increases, the insurer drives away customers (and yes, it gets more premium on the ones that stay). BUT, the ones that leave are ALWAYS in much better health than the ones that stay - it is an economic decisions for the insured - if they are sick, they find a way to keep their coverage going (even going as far as borrowing money from relatives if necessary). The healthy ones decide to go without insurance. In the Individual marketplace, it is pretty easy for an insured to make the decision for which is in their best interest (this is called anti-selection). They add up what their annual premiums are, and compare it to what it would cost then to go without insurance. With so many people on meds, it is relatively easy to estimate how much the minimum health care spending will be for a family in the next year.

Bottom line - the Senate bill will not stop insurers from putting in necessary rate increases, because they will all be justified - just as I believe they are now. Yes, 39% is VERY high, but I believe (and I do know the actuary at Wellpoint and he is a reputable guy) they are justified. Many healthy people are dropping their coverage now, leaving the sick behind with higher costs in the pool. I'm sure Wellpoint would have much rather put in a 5% increase to ensure they retain all the healthy folks too - but the costs of the remaining group are just too high. They are going to have to hope that enough somewhat healthy people stay on the coverage and that the increase they've applied will be enough to cover the costs. The bad economy is causing way too many people to go bare and without coverage. It was not Wellpoints fault that projected costs were so high, and I'm sure putting in a 39% increase (actually it is a 24% increase, with some insureds getting up to 39%) is the LAST thing they wanted to do. You'll note that the state of CA is not stopping them from doing so (which they originally said they were going to do), so clearly Wellpoint was able to demonstrate why the increase was needed.

And, with the very low penalties for non compliance in the bill (in all years, not just 2014), I don't think that will change. And I don't see the government denying insurance company rate increases in the future (no matter what size they are), if they are justified that they are needed. Nothing will change until we reduce the cost drivers (hospital and doctor costs).

Hopefully the info above helped educate some (maybe more info than some wanted to see). Be careful what you wish for folks - the Senate bill won't kill the insurance industry, for sure, but it will certainly hurt consumers - in the short and long run.

We do need reform certainly - everyone needs access to coverage. But it will never be affordable to anyone until we find a way to slow the cost drivers.

For the individual marketplace, the one that "O" is trying to fix, this will do more harm than good.

 

[WhatsHisNuts]

Which Insurance Provider wrote that?

 

[Trampled Underfoot]

Which Insurance Provider wrote that?

The one Mags works for is my guess.

 

[Mags]

FYI - I don't work for a healthcare company....

Just trying to help explain the mathematics behind it....

Not surprised that the 2 responders so far have been drinking the Obama kool-aid...

It is important for everyone to realize that Obama has an agenda here too - and it's for the good of the country. It is all about his "legacy".

If Obama was truly for lowering costs, he would have embraced Democratic ideas such as reimportation of Rx drugs from other countries to lower the costs, and mandated lower prices from hospitals and doctors.

Anyway - I realize it is tough to go against the Obama propoganda. I just though I'd try to help by laying out some of the math behind the proposals......

 

[Trampled Underfoot]

FYI - I don't work for a healthcare company....

Just trying to help explain the mathematics behind it....

Not surprised that the 2 responders so far have been drinking the Obama kool-aid...

It is important for everyone to realize that Obama has an agenda here too - and it's for the good of the country. It is all about his "legacy".

If Obama was truly for lowering costs, he would have embraced Democratic ideas such as reimportation of Rx drugs from other countries to lower the costs, and mandated lower prices from hospitals and doctors.

Anyway - I realize it is tough to go against the Obama propoganda. I just though I'd try to help by laying out some of the math behind the proposals......

I don't need any help with the 'mathematics'. Thanks though for your kind assistance. I don't like Obama, but I really don't like corporations. If you actually think what we have is effective, you might need a doctor yourself.

 

[Chadman]

Mags, I do appreciate you making the effort, and will have more time over this coming week to look at things. Let me pose a couple questions per your description here, and maybe I can learn something about the logic and reasoning of some of this. I have to go actually enjoy myself for a few hours this afternoon (first time in a long time) and drink some beer and hit golf balls, so I'm not going to clutter my head with this too much today. More later. Thanks again for posting.

First, who do you make the majority of your money from? You are an insurance consultant now, right? Used to be in management with some kind of medical insurance provider, right? Just want to perspective, that's all. I know you have a much better handle on the background and inner workings of the system than probably anyone else here. Just wondering why it's so important to you that the insurance end of it is so closely scrutinized.

These are quick simple questions... honest questions. Maybe I won't phrase them very well, but here goes:

Why will the senate bill increase claims by 10%? You say those are tied in with wellness programs, right? Wouldn't a more aggressive wellness program be beneficial, helpful to health, and head off more serious issues later?

The current rates (standard, essentially, throughout the industry) are set by the companies, and have worked well for them for many years. So well, they have made huge sums of money and have been able to buy up competition, and control the market and those rates for years. Much like oil companies - big, invested in keeping the status quo and prices where they need them, interested in shareholder benefits and their company stock price, and growth. Can't they examine other parts of their business and cut costs? If they really were in competition and had to examine their business in a competitive way with other businesses, wouldn't they need to have a less standard operating system, and look for ways to cut their rates to consumers, and not always just raise rates - such as recently with extremely high rate increases being passed on across the country? Or, is it just that simple - they don't have to compete at all, and just keep raising their rates, no matter what?

Why couldn't they be proactive and not charge people the same, simply based on sex and age? Why haven't they done that before now? Could it be because they control a market and have had anti-trust protection since 1945 to avoid serious examination to their business practices and monopolistic business models?

Why have they been able to maintain a steady profit margin for years, even in tough times? Why have they recently shown more profit - especially at a time when so many eyes are on them?

That's enough for now. I'm sure my thoughts are off in many ways. And I do agree everything should be on the table in cutting costs. But I'm not against looking at even one thing at the moment, and just because there are other issues that COULD be looked at, doesn't mean we shouldn't look at some others.

Seriously, thanks for taking the time. I respect your knowledge on this a great deal.

 

[Mags]

I don't need any help with the 'mathematics'. Thanks though for your kind assistance. I don't like Obama, but I really don't like corporations. If you actually think what we have is effective, you might need a doctor yourself.

Trampled - you missed the point. Not arguing that what we have today needs to be improved... just saying that the bill that is there does nothing to improve the current system.

The only redeeming quality of the current bill is the subsidy system, which is an important element to help people that need help to afford coverage. The rest of it does nothing to slow the growth rate of costs - and in fact, as I showed, which raise costs for milliions of people.

 

[Mags]

First, who do you make the majority of your money from? You are an insurance consultant now, right? Used to be in management with some kind of medical insurance provider, right?

It is not appropriate to say who or how (personal info, and in many cases protected by non disclosure agreements) - but I am involved with the industry and I did work for a company in the industry at one time.

Why will the senate bill increase claims by 10%? You say those are tied in with wellness programs, right? Wouldn't a more aggressive wellness program be beneficial, helpful to health, and head off more serious issues later?

This is a fallacy - it costs more to provide the wellness services than the future claims it prevents. In fact, Obama was making the same statement early on - and then stopped making that statement when he was corrected that the wellness procedures actually increase overall health costs. Now, as a public policy, wellness visits are a good thing - as it DOES reduce serious episodes. But the savings of fewer serious future episodes are more than eaten up by the current costs of doing all the wellness procedures. They even came out with new Mammo guidelines - as they said they weren't cost effective in doing them as often as they were - but people went nuts, and the Senate included in the bill to ignore these recommendations. Make no mistake - wellness costs more than it saves, but you can't put a value on piece of mind for people, and it is good public policy to provide these services in my opinion.

The current rates (standard, essentially, throughout the industry) are set by the companies, and have worked well for them for many years. So well, they have made huge sums of money and have been able to buy up competition, and control the market and those rates for years. Much like oil companies - big, invested in keeping the status quo and prices where they need them, interested in shareholder benefits and their company stock price, and growth. Can't they examine other parts of their business and cut costs? If they really were in competition and had to examine their business in a competitive way with other businesses, wouldn't they need to have a less standard operating system, and look for ways to cut their rates to consumers, and not always just raise rates - such as recently with extremely high rate increases being passed on across the country? Or, is it just that simple - they don't have to compete at all, and just keep raising their rates, no matter what?

Rates are not standard throughout the industry - far from it. They can vary by as much as 50% for a given plan from different companies. Insurance companies pretty much work on a cost plus model. If medical costs are $80, they add $20 to cover overhead and profit, and they arrive at $100. Insurers are limited, even currently, to how much they can raise rates - certain loss ratios need to be attained. Companies are constantly battling for market share, and adjusting prices to attract new customers. What really hurts competition is that not all insurance companies pay the same for doctor/hospital services. A big company like BCBS pays much less than a small insurance company - because of their size, they can negotate better prices. This is the primary reason why BCBS has the best premium rates by state (and they are the biggest provider in each state). If they wanted to increase competition, they would not allow this differential - that way small companies could compete and we'd have more competition. Surely, companies are looking for ways to cut costs. Its one of the ways to be more competitive. And, big profits? As always, when looking at a big company, you have to look at margin - and 2.2% last year doesn't look very good to me. AND there are years where health companies lose money. It's a tough business - you don't know the cost of your goods sold before you sell it, unlike almost every other business in the world.

Why couldn't they be proactive and not charge people the same, simply based on sex and age? Why haven't they done that before now? Could it be because they control a market and have had anti-trust protection since 1945 to avoid serious examination to their business practices and monopolistic business models?

The anti-trust exemption, in my opinion, isn't a big deal to the industry. Premium rates are reviewed in most cases by states currently. I'm not sure if you are asking above "why don't they charge the same for everyone, regardless of age and sex"? If that is the question, well, to do so would be dumb. It would be the same as charging a driver with a DUI as a 35 year old married female with a clean history. Rates are matched to the risk. Risks are derived to be fair, based on the claims that each segment (age/gender) is expected to produce. While on one hand, you could argue that it isn't "fair" to charge a 20 year old less than a 60 year old, but on the other hand, why should a 20 year old pay 2 to 3 times as much to subsidize a 60 year old? More importantly, in an elective purchase system (which it will be even under the bills under consideration due to the lack of a real mandate), young people would never buy coverage if they had to overpay to subsidize th older folks. It would be a bad value, and a bad economic decision.

Why have they been able to maintain a steady profit margin for years, even in tough times? Why have they recently shown more profit - especially at a time when so many eyes are on them?

Actually, they don't. Company specific profitability varies considerably from year to year. And lately they've shown LESS profit. 2.2%? That isn't much. Most companies price for a 4-5% profit margin - which, compared to most industries, is peanuts. Look at the list of industries and profit margins - you'll see some at 10-15% by sector.

Obama has done a good job of villifying the insurance companies. This was a deliberate strategic twist in mid 2009, when he saw his health care plan was not getting any traction. The problem is, it still hasn't worked. The public is still solidly against the current bills.

Pelosi may ultimately get the votes (I'd say its 50/50 at best), but even if she does, I would expect that this entire thing will be repealed after November - because the Dems have really hurt themselves - whether it passes or not.

The interesting thing is, much of what has been driving the high rate increases is the poor economy, with people having to drop their coverage. If Obama has spent the last year on creating jobs, as the public has asked for again and again, the rate increases necessary would have been much lower - and the economy would be better.

This is just way too personal for Obama - the issue with his mom and all - and he has let that cloud his leadership and decision making. It is never a good idea to ignore the wishes of the majority of the American people. And I have yet to see a SINGLE poll that indicated that the American people want these bills - not a one. They want reform, but not Obamacare.

To quote FDC, "hope this helps"

 

[kcwolf]

Mags, I don't think there is much that can be done about jobs. History has always proven job growth lags considerably in a recovery. People are too impatient, basically unrealistic and fueled by 24/7 media coverage. Unless we invest in new and inovative products, unemployment will be bad for years. (and off topic, but I think we are not even close to recovery mode yet).

One other thought, the general public is just starting to wake up to these new, exorbent increases in premiums. Wait til businesses really get started passing along the cost to employees. People will be rioting at healthcare companies. You say the 40% increases are necessary, I say they are shooting themselves in the foot at a critical time.

Goldman-Sachs just came out with a report yesterday saying these companies will have more increases this year and and cares less what happens to their clients. They are desparate for short term gains and will continue in such manner. Not sure healthcare industry wants that publiicity right now.

 

[RAYMOND]

Mags, I don't think there is much that can be done about jobs. History has always proven job growth lags considerably in a recovery. People are too impatient, basically unrealistic and fueled by 24/7 media coverage. Unless we invest in new and inovative products, unemployment will be bad for years. (and off topic, but I think we are not even close to recovery mode yet).

One other thought, the general public is just starting to wake up to these new, exorbent increases in premiums. Wait til businesses really get started passing along the cost to employees. People will be rioting at healthcare companies. You say the 40% increases are necessary, I say they are shooting themselves in the foot at a critical time.

Goldman-Sachs just came out with a report yesterday saying these companies will have more increases this year and and cares less what happens to their clients. They are desparate for short term gains and will continue in such manner. Not sure healthcare industry wants that publiicity right now.

i have to say i agree with you here

 

[hedgehog]

Goldman-Sachs just came out with a report yesterday saying these companies will have more increases this year and and cares less what happens to their clients. They are desparate for short term gains and will continue in such manner. Not sure healthcare industry wants that publiicity right now.

yep, I think the same thing.

I go one step further, someone on the inside of the healthcare industry is a huge Obama supporter and will get his payback when we have a one payor system after Obama rams it through congress, they will get the contract for healthcare. Its Obama's agenda for socialized medicine that is my problem with all the change, something needs to be done about rising costs, more competition would be a start and tort reform:shrug:

 

[DOGS THAT BARK]

Mags, I don't think there is much that can be done about jobs. History has always proven job growth lags considerably in a recovery. People are too impatient, basically unrealistic and fueled by 24/7 media coverage. Unless we invest in new and inovative products, unemployment will be bad for years. (and off topic, but I think we are not even close to recovery mode yet).

One other thought, the general public is just starting to wake up to these new, exorbent increases in premiums. Wait til businesses really get started passing along the cost to employees. People will be rioting at healthcare companies. You say the 40% increases are necessary, I say they are shooting themselves in the foot at a critical time.

Goldman-Sachs just came out with a report yesterday saying these companies will have more increases this year and and cares less what happens to their clients. They are desparate for short term gains and will continue in such manner. Not sure healthcare industry wants that publiicity right now.

Huge portion of stimulus went for
- social programs (increase food stamps-elfare medicade)
http://projects.nytimes.com/44th_president/stimulus

--then raised taxes raised to increase schips (childrens ins) to familys up to $80,000 a year income

--Unemployment 79 weeks in many states and wanting to increase to 90's--graph per state
http://money.cnn.com/news/storysupplement/economy/unemployment_benefits/index.html

Cobra --Gov (tax payors) currently paying 66% of bill.

Excuse me but this appears more like social engineering rather than job stimulation.

Give a man a fish and you fed him for a day-teach a man to fish and you fed him for a lifetime.

On the health premiums--they been increasing at same rate for decades--every politician has had the answer until they are elected.

I am for any plan Dems or Rebs to cut cost--which they have failed to do

--but adding millions more to gov tit isn't the answer--if one is dilusional enough to think so--look at medicade/medicare and show us these savings/black ink the gov has provided.

Whats insane is you got Gumby running unprecedented deficits chastising companies that have to balance their books.

I'd like just one time for someone to have the nads to say--

Psst Gumby--until you have to balance your fucking books like everyone else has to-your really fucking clueless to reality.
++++++++++++++++++++++++

From a more civil perspective--

March 5, 2010
Why the Health Care Bill is a Failure

By Charles Krauthammer

WASHINGTON -- So the yearlong production, set to close after Massachusetts' devastatingly negative Jan. 19 review, saw the curtain raised one last time. Obamacare lives.
After 34 speeches, three sharp electoral rebukes (Virginia, New Jersey and Massachusetts) and a seven-hour seminar, the president announced Wednesday his determination to make one last push to pass his health care reform.
The final act was carefully choreographed. The rollout began a week earlier with a couple of shows of bipartisanship: a Feb. 25 Blair House "summit" with Republicans, followed five days later with a few concessions tossed the Republicans' way.
Show is the operative noun. Among the few Republican suggestions President Obama pretended to incorporate was tort reform. What did he suggest to address the plague of defensive medicine that a Massachusetts Medical Society study showed leads to about 25 percent of doctor referrals, tests and procedures being done for no medical reason? A few ridiculously insignificant demonstration projects amounting to one-half of one-hundredth of 1 percent of the cost of Obama's health care bill.
As for the Blair House seminar, its theatrical quality was obvious even before it began. The Democrats had already decided to go for a purely partisan bill. Obama signaled precisely that intent at the end of the summit show -- then dramatically spelled it out just six days later in his 35th health care speech: He is going for the party-line vote.
Unfortunately for Democrats, that seven-hour televised exercise had the unintended consequence of showing the Republicans to be not only highly informed on the subject, but also, as even Obama was forced to admit, possessed of principled objections -- contradicting the ubiquitous Democratic/media meme that Republican opposition was nothing but nihilistic partisanship.
Republicans did so well, in fact, that in his summation, Obama was reduced to suggesting that his health care reform was indeed popular because when you ask people about individual items (for example, eliminating exclusions for pre-existing conditions or capping individual out-of-pocket payments) they are in favor.
Yet mystifyingly they oppose the whole package. How can that be?
Allow me to demystify. Imagine a bill granting every American a free federally delivered ice cream every Sunday morning. Provision 2: steak on Monday, also home delivered. Provision 3: A dozen red roses every Tuesday. You get the idea. Would each individual provision be popular in the polls? Of course.
However (life is a vale of howevers) suppose these provisions were bundled into a bill that also spelled out how the goodies are to be paid for and managed -- say, half a trillion dollars in new taxes, half a trillion in Medicare cuts (cuts not to keep Medicare solvent but to pay for the ice cream, steak and flowers), 118 new boards and commissions to administer the bounty-giving, and government regulation dictating, for example, how your steak was to be cooked. How do you think this would poll?
Perhaps something like 3-1 against, which is what the latest CNN poll shows is the citizenry's feeling about the current Democratic health care bills.
Late last year, Democrats were marveling at how close they were to historic health care reform, noting how much agreement had been achieved among so many factions. The only remaining detail was how to pay for it.
Well, yes. That has generally been the problem with democratic governance: cost. The disagreeable absence of a free lunch.
Which is what drove even strong Obama supporter Warren Buffett to go public with his judgment that the current Senate bill, while better than nothing, is a failure because the country desperately needs to bend the cost curve down and the bill doesn't do it. Buffett's advice would be to start over and get it right with a bill that says "we're just going to focus on costs and we're not going to dream up 2,000 pages of other things."
Obama has chosen differently, however. The time for debate is over, declared the nation's seminar leader in chief. The man who vowed to undo Washington's wicked ways has directed the Congress to ram Obamacare through, by one vote if necessary, under the parliamentary device of "budget reconciliation." The man who ran as a post-partisan is determined to remake a sixth of the U.S. economy despite the absence of support from a single Republican in either house, the first time anything of this size and scope has been enacted by pure party-line vote.
Surprised?
You can only be disillusioned if you were once illusioned.
<SCRIPT type=text/javascript> checkTextResizerCookie('article_body'); </SCRIPT>

 

[WhatsHisNuts]

Wayne: Keep railing against reform!

Where is the Republican bill that does anything???

 

[kcwolf]

Huge portion of stimulus went for
- social programs (increase food stamps-elfare medicade)
http://projects.nytimes.com/44th_president/stimulus

--then raised taxes raised to increase schips (childrens ins) to familys up to $80,000 a year income

--Unemployment 79 weeks in many states and wanting to increase to 90's--graph per state
http://money.cnn.com/news/storysupplement/economy/unemployment_benefits/index.html

Cobra --Gov (tax payors) currently paying 66% of bill.

Excuse me but this appears more like social engineering rather than job stimulation.

Give a man a fish and you fed him for a day-teach a man to fish and you fed him for a lifetime.

On the health premiums--they been increasing at same rate for decades--every politician has had the answer until they are elected.

I am for any plan Dems or Rebs to cut cost--which they have failed to do

--but adding millions more to gov tit isn't the answer--if one is dilusional enough to think so--look at medicade/medicare and show us these savings/black ink the gov has provided.

Whats insane is you got Gumby running unprecedented deficits chastising companies that have to balance their books.

I'd like just one time for someone to have the nads to say--

Psst Gumby--until you have to balance your fucking books like everyone else has to-your really fucking clueless to reality.
++++++++++++++++++++++++

From a more civil perspective--

March 5, 2010
Why the Health Care Bill is a Failure

By Charles Krauthammer

WASHINGTON -- So the yearlong production, set to close after Massachusetts' devastatingly negative Jan. 19 review, saw the curtain raised one last time. Obamacare lives.
After 34 speeches, three sharp electoral rebukes (Virginia, New Jersey and Massachusetts) and a seven-hour seminar, the president announced Wednesday his determination to make one last push to pass his health care reform.
The final act was carefully choreographed. The rollout began a week earlier with a couple of shows of bipartisanship: a Feb. 25 Blair House "summit" with Republicans, followed five days later with a few concessions tossed the Republicans' way.
Show is the operative noun. Among the few Republican suggestions President Obama pretended to incorporate was tort reform. What did he suggest to address the plague of defensive medicine that a Massachusetts Medical Society study showed leads to about 25 percent of doctor referrals, tests and procedures being done for no medical reason? A few ridiculously insignificant demonstration projects amounting to one-half of one-hundredth of 1 percent of the cost of Obama's health care bill.
As for the Blair House seminar, its theatrical quality was obvious even before it began. The Democrats had already decided to go for a purely partisan bill. Obama signaled precisely that intent at the end of the summit show -- then dramatically spelled it out just six days later in his 35th health care speech: He is going for the party-line vote.
Unfortunately for Democrats, that seven-hour televised exercise had the unintended consequence of showing the Republicans to be not only highly informed on the subject, but also, as even Obama was forced to admit, possessed of principled objections -- contradicting the ubiquitous Democratic/media meme that Republican opposition was nothing but nihilistic partisanship.
Republicans did so well, in fact, that in his summation, Obama was reduced to suggesting that his health care reform was indeed popular because when you ask people about individual items (for example, eliminating exclusions for pre-existing conditions or capping individual out-of-pocket payments) they are in favor.
Yet mystifyingly they oppose the whole package. How can that be?
Allow me to demystify. Imagine a bill granting every American a free federally delivered ice cream every Sunday morning. Provision 2: steak on Monday, also home delivered. Provision 3: A dozen red roses every Tuesday. You get the idea. Would each individual provision be popular in the polls? Of course.
However (life is a vale of howevers) suppose these provisions were bundled into a bill that also spelled out how the goodies are to be paid for and managed -- say, half a trillion dollars in new taxes, half a trillion in Medicare cuts (cuts not to keep Medicare solvent but to pay for the ice cream, steak and flowers), 118 new boards and commissions to administer the bounty-giving, and government regulation dictating, for example, how your steak was to be cooked. How do you think this would poll?
Perhaps something like 3-1 against, which is what the latest CNN poll shows is the citizenry's feeling about the current Democratic health care bills.
Late last year, Democrats were marveling at how close they were to historic health care reform, noting how much agreement had been achieved among so many factions. The only remaining detail was how to pay for it.
Well, yes. That has generally been the problem with democratic governance: cost. The disagreeable absence of a free lunch.
Which is what drove even strong Obama supporter Warren Buffett to go public with his judgment that the current Senate bill, while better than nothing, is a failure because the country desperately needs to bend the cost curve down and the bill doesn't do it. Buffett's advice would be to start over and get it right with a bill that says "we're just going to focus on costs and we're not going to dream up 2,000 pages of other things."
Obama has chosen differently, however. The time for debate is over, declared the nation's seminar leader in chief. The man who vowed to undo Washington's wicked ways has directed the Congress to ram Obamacare through, by one vote if necessary, under the parliamentary device of "budget reconciliation." The man who ran as a post-partisan is determined to remake a sixth of the U.S. economy despite the absence of support from a single Republican in either house, the first time anything of this size and scope has been enacted by pure party-line vote.
Surprised?
You can only be disillusioned if you were once illusioned.
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Thanks Hedge and Raymond. It is getting serious for everyone.

The findings of Goldman Sachs The last few days have brought even more evidence that the health care status quo is working out great for the insurance companies - at the same time as it continues to fail American families and businesses. No wonder the insurance companies are spending millions and millions of dollars to block reform." "On Wednesday, a leading insurance broker laid out in clear terms what many Americans could already guess: the insurers' monopoly is so strong that they can continue to jack up rates as much as they like - even if it means losing customers - and their profits will continue to soar under the status quo.

What does it mean when the insurance companies "walk away?" It means more and more American families forced to choose between the mortgage and health care bills. It means being a hospital visit away from certain bankruptcy. And for Mr. Lewis's clients - business owners - it means not being able to do the right thing for their employees.

As for you DTB, you might as well quit posting, sorry to be so blunt. The old republican bible retoric you keep posting has several inches of dust on it. Charles Krauthammer has never said a thing in his life good about democrats, a worthless waste of time.

Republicans can take alot of blame here, never wanting to improve things when in the majority. The Rebs have forced this hand by no's and stalling.

Try qouting someone new, like Bob Dole and Jim Baker, who says the bill needs to pass, then make ammendments to include single payer or at least a public option. Many in the health industry need to be put in the unemployment lines with their actions over the last year.

 

[rusty]

If anyone does not think that our current healthcare system is a major obstacle to our country's recovery there blind or turning the cheek.

Keep raising our healthcare and our country ,meaning us suffer.It's pretty obvious.

 

[WhatsHisNuts]

Thanks Hedge and Raymond. It is getting serious for everyone.

The findings of Goldman Sachs The last few days have brought even more evidence that the health care status quo is working out great for the insurance companies - at the same time as it continues to fail American families and businesses. No wonder the insurance companies are spending millions and millions of dollars to block reform." "On Wednesday, a leading insurance broker laid out in clear terms what many Americans could already guess: the insurers' monopoly is so strong that they can continue to jack up rates as much as they like - even if it means losing customers - and their profits will continue to soar under the status quo.

What does it mean when the insurance companies "walk away?" It means more and more American families forced to choose between the mortgage and health care bills. It means being a hospital visit away from certain bankruptcy. And for Mr. Lewis's clients - business owners - it means not being able to do the right thing for their employees.

As for you DTB, you might as well quit posting, sorry to be so blunt. The old republican bible retoric you keep posting has several inches of dust on it. Charles Krauthammer has never said a thing in his life good about democrats, a worthless waste of time.

Republicans can take alot of blame here, never wanting to improve things when in the majority. The Rebs have forced this hand by no's and stalling.

Try qouting someone new, like Bob Dole and Jim Baker, who says the bill needs to pass, then make ammendments to include single payer or at least a public option. Many in the health industry need to be put in the unemployment lines with their actions over the last year.

KC: Another great post. Wayne keeps complaining about rhetoric, but NOBODY on this board buys into rhetoric like he does.

 

[DOGS THAT BARK]

Wayne: Keep railing against reform!

Where is the Republican bill that does anything???

--not ralleying against reform Garry--I'm ralleying against creating another social entitlement program and trillions of debt.

I'm all for tort reform-cutting waste and fraud-purchase of insurance across state line--you know things that reform and little to no cost--

Give us your best shot how adding these 30 million to the rolls at subsidized premiums is reform and not another entltlement of mass proportions-
-then give us your best shot - with the current gov entitlements medicare/medicade running massive red ink and bankrupting country -how yet another larger ran program is going to be solution.

When you've done that--I'll consider coming over to your side.

 

[DOGS THAT BARK]

Thanks Hedge and Raymond. It is getting serious for everyone.

The findings of Goldman Sachs The last few days have brought even more evidence that the health care status quo is working out great for the insurance companies - at the same time as it continues to fail American families and businesses. No wonder the insurance companies are spending millions and millions of dollars to block reform." "On Wednesday, a leading insurance broker laid out in clear terms what many Americans could already guess: the insurers' monopoly is so strong that they can continue to jack up rates as much as they like - even if it means losing customers - and their profits will continue to soar under the status quo.

What does it mean when the insurance companies "walk away?" It means more and more American families forced to choose between the mortgage and health care bills. It means being a hospital visit away from certain bankruptcy. And for Mr. Lewis's clients - business owners - it means not being able to do the right thing for their employees.

As for you DTB, you might as well quit posting, sorry to be so blunt. The old republican bible retoric you keep posting has several inches of dust on it. Charles Krauthammer has never said a thing in his life good about democrats, a worthless waste of time.

Republicans can take alot of blame here, never wanting to improve things when in the majority. The Rebs have forced this hand by no's and stalling.

Try qouting someone new, like Bob Dole and Jim Baker, who says the bill needs to pass, then make ammendments to include single payer or at least a public option. Many in the health industry need to be put in the unemployment lines with their actions over the last year.

Actually the post aren't for you KC ---If they were I'd be charging you for them :SIB

You can look at this thread -
http://www.madjacksports.com/forum/showthread.php?t=400703
--and basically see the demographics--appears you got Scott-TU etc that relate with you--I'll take the working class--thank you.

 

[Chadman]

It is not appropriate to say who or how (personal info, and in many cases protected by non disclosure agreements) - but I am involved with the industry and I did work for a company in the industry at one time.

No, I understand you can't give specifics, but my point in asking is that I'm guessing your main view and personal benefit would lean towards things being more status quo with the insurance industry than for it to be examined or modified. I would never blame anyone for sticking up for themselves, and perhaps I'm wrong. But I do think, it affects judgement and alliances to a degree. I would agree that my political views cloud my judgement many times, and this is probably one of those times. But a direct financial challenge usually trumps a theoretical one.

This is a fallacy - it costs more to provide the wellness services than the future claims it prevents. In fact, Obama was making the same statement early on - and then stopped making that statement when he was corrected that the wellness procedures actually increase overall health costs. Now, as a public policy, wellness visits are a good thing - as it DOES reduce serious episodes. But the savings of fewer serious future episodes are more than eaten up by the current costs of doing all the wellness procedures. They even came out with new Mammo guidelines - as they said they weren't cost effective in doing them as often as they were - but people went nuts, and the Senate included in the bill to ignore these recommendations. Make no mistake - wellness costs more than it saves, but you can't put a value on piece of mind for people, and it is good public policy to provide these services in my opinion.

Before I argue about these wellness procedures, can you explain what they are? I honestly don't know, and I probably shouldn't argue too much about them without knowing the specifics. Are they general checkups, or additional procedures done during general checkups? Is that number more purely based on more people having insurance after this bill, meaning extra people getting these services done - most who would never have wellness checks at all? Or is it a combo platter?

Rates are not standard throughout the industry - far from it. They can vary by as much as 50% for a given plan from different companies. Insurance companies pretty much work on a cost plus model. If medical costs are $80, they add $20 to cover overhead and profit, and they arrive at $100. Insurers are limited, even currently, to how much they can raise rates - certain loss ratios need to be attained. Companies are constantly battling for market share, and adjusting prices to attract new customers. What really hurts competition is that not all insurance companies pay the same for doctor/hospital services. A big company like BCBS pays much less than a small insurance company - because of their size, they can negotate better prices. This is the primary reason why BCBS has the best premium rates by state (and they are the biggest provider in each state). If they wanted to increase competition, they would not allow this differential - that way small companies could compete and we'd have more competition. Surely, companies are looking for ways to cut costs. Its one of the ways to be more competitive. And, big profits? As always, when looking at a big company, you have to look at margin - and 2.2% last year doesn't look very good to me. AND there are years where health companies lose money. It's a tough business - you don't know the cost of your goods sold before you sell it, unlike almost every other business in the world.

You say that the same insurance plan can cost 50% less for the same plan from one company to the next. That's the exact same plan? 50% less? Is that in one state compared to another? Apples and apples, and it's twice as expensive with one company over another? I find that difficult to believe. How could there be that much play in rates with these companies. I know I've never seen anything like that when looking at quotes, nor had an agent provide me with that kind of difference. Not even close. It may be true, and perhaps you could show examples. Or Wayne, could, perhaps? You say these companies adjust their pricing to get new clients. Do they ever adjust them down? Really? Maybe they do, I just haven't heard about that lately. It sure isn't the industry standard, nor average, which has been going up precipitously each year, especially of late.


Interesting that you mention the biggest insurance company having the best/cheapest rates by state. Being able to pay less to doctors, hospitals, etc., because of their size, and control costs. Seems to me that if we had single payer with the power of the government to determine costs and payments, it would be an even bigger benefit to the consumer, as they certainly would have more bargaining power as to what would be paid. Not to mention, not having to answer to shareholders and having to raise rates and keep a good bottom line simply for the profit of management and those shareholders. The greater good, not just the good of the few. And these companies that are big, and getting bigger, they are forcing these smaller companies either out of the market, or are buying them up, effectively controlling the market, and reducing competition - which as everyone would agree (I would think) probably won't result in lower prices when for-profit near monopolies with anti-trust protection have essential dominance. Here's a comment from an article referring to the recent AMA study on insurance practices:

One insurer held 70% or more of the health plan market share in 24 of 43 states measured, up from 18 in 42 states in the previous year's study. In 92% of the 313 markets in the report, one insurer held at least a 30% share.

In past releases of its survey, the AMA has noted that insurer market dominance has allowed health plans to force physicians into take-it-or-leave-it contracts. But this year the AMA -- echoing other experts -- noted that market dominance has allowed plans to give patients take-it-or-leave-it pricing.

"The near total collapse of competitive and dynamic health insurance markets has not helped patients," AMA President J. James Rohack, MD, said in a statement. "As demonstrated by proposed rate hikes in California and other states, health insurers have not shown greater efficiency and lower health care costs. Instead, patient premiums, deductibles and co-payments have soared without an increase in benefits in these increasingly consolidated markets."

This is good for the consumer how, exactly? And it's going to get better on its own, how, exactly? While certainly not the only concern in costs, I consider it to be worthy of reform, as far as consumers go.

The anti-trust exemption, in my opinion, isn't a big deal to the industry. Premium rates are reviewed in most cases by states currently. I'm not sure if you are asking above "why don't they charge the same for everyone, regardless of age and sex"? If that is the question, well, to do so would be dumb. It would be the same as charging a driver with a DUI as a 35 year old married female with a clean history. Rates are matched to the risk. Risks are derived to be fair, based on the claims that each segment (age/gender) is expected to produce. While on one hand, you could argue that it isn't "fair" to charge a 20 year old less than a 60 year old, but on the other hand, why should a 20 year old pay 2 to 3 times as much to subsidize a 60 year old? More importantly, in an elective purchase system (which it will be even under the bills under consideration due to the lack of a real mandate), young people would never buy coverage if they had to overpay to subsidize th older folks. It would be a bad value, and a bad economic decision.

My point was not to charge men and women the same (which would be dumb), my point was why don't people who don't use their insurance and cost the insurance company money paying less for insurance? Why don't we get cheaper rates down the road? I think companies have started to do this a bit more, but I don't know of many companies that show much difference for healthy people than non-healthy people after they've purchased insurance. I've never known my rates to go down, and I've been to the hospital once in my entire life, and it was an emergency room visit, with no extra expenditures. You say these costs are based on a set average based on fairness. Fairness for who? Is that a competitive thing? Is it competitive for me to pay a yearly increase in rates to help fund lobbying efforts, consultant fees, negative ad campaigns against legislation, bonuses for management, buying up competitors, and other things I probably don't even want to know about? Should Americans across the country experience 35% increases in premiums in basic health insurance rates out of the blue? Or even more, in some situations? Did costs this past year all of a sudden go up this much for the insurance companies? Perhaps they did, considering lobbying costs, negative ad campaigns, and legislator wooing and support costs. God knows how much more our costs will now go up after the Supreme Court ruled BCBS is the same as you and I when it comes to donating to a campaign. Dare to dream - now these companies can as much money as they want and buy legislators and causes that protect themselves, and pass the buck right along to the consumer. And it's in ALL of these companies best interests to do just that. It's SERIOUSLY in their best interest to get US to pay for legislation and lawmakers that will make sure they are protected, which will ultimately cost US more money. Quite a racket, I'd say.

As for young people paying more for insurance, while I'm not sure that's the right thing, if they choose not to purchase it, it's a bad overall decision, and one they will have to live with in the long run. I think the penalties should be higher, and I don't know why they aren't. I certainly don't have all the answers - probably very few of them. People will be paying more for insurance, which protects themselves. It doesn't have to be looked at as a subsidy, and many people with hardships will be receiving (as I understand it) subsidies to help them with costs, if they need it. And honestly, young people can make choices that save them $50 or so a month to pay a bit more for insurance. According to conservatives, it's the responsible thing to do, right? You have mentioned more than once here you don't consider these costs to be that high, compared to other costs. You think it's a great value, and for many people - especially young people - it is. And it still will be, paying about $50 more a month. Or, there employer paying it, or whatever. I honestly don't think not paying this much money and going without insurance would be a GOOD financial decision, as you put it. I think it would be foolish.

Actually, they don't. Company specific profitability varies considerably from year to year. And lately they've shown LESS profit. 2.2%? That isn't much. Most companies price for a 4-5% profit margin - which, compared to most industries, is peanuts. Look at the list of industries and profit margins - you'll see some at 10-15% by sector.

So, profitability varies considerably from year to year. But you doggedly hold to the 2.2% or 4-5%. They may have lost money a year or two in their history, but how many times has that happened, really? I don't think these companies have gotten to the place they are by losing money very often. How can they have gotten so big, and obtained a larger and larger market share (and control) by losing money? You know the recent profit margins are MUCH higher. At a time when the light is shining brightly on them. Does that show worry or fear on their part? Maybe so - sticking it to their customers while they still can, might be a way to look at it. Not an unrealistic way to look at it, I don't think.

And the effect is not just on the individual, it's on the private sector, and the economy. The companies that tend to provide health coverage for employees are showing bigger problems and less growth over the past few years, as a rule. While insurance is not the only villain, it's a direct one. These businesses pay what they have to, as long as they can, and these insurance companies get bigger, and buy more competition, and favor.

For the record, I have just as much problem with Big Pharma (more, really), and what hospitals and some providers do. Perhaps if we work on one area, the others will be on tap next? I don't know, but I think the current insurance situation is not helping anyone not attached to those companies, ultimately.

 

[Mags]

Chadman - great, lengthy response - I enjoy debating/discussing with you, as the messages tend to be on point, rather than rhetoric and party line responses. This is part of the reason I try to post info here - trying to get behind the partisan issues, and delve into what really is happening, and could happen, from my perspective at least.

but my point in asking is that I'm guessing your main view and personal benefit would lean towards things being more status quo with the insurance industry than for it to be examined or modified.

Fair point. Realistically, personally, I will be much more busy if and when health care reform passes, as it will add a lot of additional regulation - which adds complexity and confusion. I will be better off financially if this passes.

My reluctance to the legislation has more to do with a number of things: 1) what it doesn't do - control costs at all. Obama has made a scapgoat of insurance companies, and in my opinion, they are a relatively small part of the cost problem. The costs are the costs - we should be pointing a finger at ourselves. How many adults over age 30 are not on at least one prescription drug? It gets expensive in a hurry - and we aren't doing anything to get at the true cost drivers. 2) I've never been a big believer in entitlement programs and big government. The government's history of managing programs in a fiscally responsible way is poor at best. The postal service, Medicare, Medicaid and Social Security are great examples.

I also don't believe that our country can afford higher tax rates right now (maybe not ever). Tax increases will hurt our chances of a recovery signficantly. It is never a good time to add an entitlement program, but this is surely a terrible time to do so.

Before I argue about these wellness procedures, can you explain what they are? I honestly don't know, and I probably shouldn't argue too much about them without knowing the specifics. Are they general checkups, or additional procedures done during general checkups? Is that number more purely based on more people having insurance after this bill, meaning extra people getting these services done - most who would never have wellness checks at all? Or is it a combo platter?

These would include annual physicals (which really don't have much value before age 50 on a cost basis), mammograms, colonscopies (very expensive procedure), etc. Again, many of these make sense for the public good and piece of mind - my point is adding these adds to the overall cost levels, as the savings received for the population are not as great as the costs (medical costs, not out of pocket costs) for the procedures are greater. And, if you add these into the insurance mechanism, it will increase premium rates.

On a side note, I've always believed that our health insurance system is flawed by covering preventative and wellness type coverages. Insurance, by definition, is to cover unplanned medical expenses - to spread the cost across a large segment of people. Annual checkups, allergy drugs, etc are planned expenses - you know you will need this every year, not unlike knowing your car will need oil changes and tires from time to time. People (mainly due to excessive workplace coverage) assume that everything should be paid when accessing healthcare. I don't agree - healthcare should pay for unplanned events - such as acccidents, signficant illnesses, such as cancer. Not "day to day" routine medical expenses that should be planned and budgeted for. It's much cheaper to save the money yourself than give it to the insurance company and have them hold it for you - and mark it up by 20% for the opportunity to do so. Which is why HSA's make so much sense - pay for the predictible, minor stuff out of your own pocket, and have the insurance for the major stuff.

You say that the same insurance plan can cost 50% less for the same plan from one company to the next. That's the exact same plan? 50% less? Is that in one state compared to another? Apples and apples, and it's twice as expensive with one company over another? I find that difficult to believe.

Yep, that is exactly what I'm saying. Companies price based on their own experience (which most state DOI's require). It can vary significantly from company to company. Just a quick example (50% is probably the high end, I'll admit) - in TX, zip 75201, age 40 male - a $2,500 deductible plan with a doctor office copay for Aetna is $192. Checking Companion Life, using the same deductible and dr. office visit, the premium is $251. There are a couple of other subtle differences between the plans that provide some actuarial difference, but the price difference here is 31% - which is much more than any actuarial difference. The thought that companies shadow price each other and don't compete is ridiculous. The market is very competitive in most areas, but certainly not all areas.

Interesting that you mention the biggest insurance company having the best/cheapest rates by state. Being able to pay less to doctors, hospitals, etc., because of their size, and control costs. Seems to me that if we had single payer with the power of the government to determine costs and payments, it would be an even bigger benefit to the consumer, as they certainly would have more bargaining power as to what would be paid.

Clearly, this would be good for the consumer. But would it work? Currently, Medicare/Medicaid is a single payer program, paying 30-40% less to doctors/hospitals than what they charge the private market. The private market subsidizes the public market. So there would be 2 choices:

1. Mandate the Medicare/Medicaid market as a nationwide pricing scheme (some call this price fixing). This would bring down prices significantly for consumers. How would doctors/hospitals respond? We know that docs currently don't take Medicare patients due to inadequate reimbursement. But, part of that is due to physicians wanting to maintain their $250K and up salaries. Would hospitals really go out of business - would doctors keep going into the doctor field? I would bet that we'd have a severe access problem.

2. Pay all providers what the market for services currently is - which would be a huge increase for Medicare/Medicaid. This would likely bankrupt the country.

Changing to single payer isn't easy - the argument would be centered around doctor/hospital reimbursment. Not many docs would agree to a substantial reduction in income. However, that is where the majority of the costs of the system currently is.

Not to mention, not having to answer to shareholders and having to raise rates and keep a good bottom line simply for the profit of management and those shareholders. The greater good, not just the good of the few.

Here we differ philosophically: I believe people have rights under our constitution. One of those rights should be the opportunity to purchase health insurance. However, I have always believed that capitalism is good. Goods and services should always be sold by the private market, not the government.

"The near total collapse of competitive and dynamic health insurance markets has not helped patients," AMA President J. James Rohack, MD, said in a statement. "As demonstrated by proposed rate hikes in California and other states, health insurers have not shown greater efficiency and lower health care costs. Instead, patient premiums, deductibles and co-payments have soared without an increase in benefits in these increasingly consolidated markets."[/I]

Here's the problem: insurers use cost plus pricing, not unlike car dealers, gas companies, etc. So, if costs go up 24% (the wellpoint increase was a 24% average increase, not 39%), should insurance companies just eat the loss, or should they be allowed to set their prices to make a profit? What about gas stations? The cost of oil goes up, and prices go up. You don't see the government coming in and saying "No, you can't charge more than $3.00 a gallon, even if it costs more".

My point was not to charge men and women the same (which would be dumb), my point was why don't people who don't use their insurance and cost the insurance company money paying less for insurance? Why don't we get cheaper rates down the road? I think companies have started to do this a bit more, but I don't know of many companies that show much difference for healthy people than non-healthy people after they've purchased insurance.

This is EXACTLY what insurers would like to do! It is not only the profit maximizing strategy for the insurer, it leads to overall lower premium rates, as is incents the healthy to keep their coverage, keeping the pool of insureds more healthy than if you can't do this. However, many states expressly make this illegal, saying it is unfair to charge unhealthy more than healthy. Companies have gotten sued over this practice even when it is legal. Even in moderation (charging unhealthy slightly more than healthy), this practice is very effective in keeping rates lower - but there are too many lawyers, and too many sympathetic juries, that companies just won't do this anymore. On one hand, the argument that "this person is healthy and deserves a discount" gets countered by "it is not fair to charge this person more just because they are sick". You can't have it both ways - to give discounts to healthy at renewal time, you have to be able to charge unhealthy more.

As for young people paying more for insurance, while I'm not sure that's the right thing, if they choose not to purchase it, it's a bad overall decision, and one they will have to live with in the long run. I think the penalties should be higher, and I don't know why they aren't. I certainly don't have all the answers - probably very few of them. People will be paying more for insurance, which protects themselves. It doesn't have to be looked at as a subsidy, and many people with hardships will be receiving (as I understand it) subsidies to help them with costs, if they need it. And honestly, young people can make choices that save them $50 or so a month to pay a bit more for insurance. According to conservatives, it's the responsible thing to do, right? You have mentioned more than once here you don't consider these costs to be that high, compared to other costs. You think it's a great value, and for many people - especially young people - it is. And it still will be, paying about $50 more a month. Or, there employer paying it, or whatever. I honestly don't think not paying this much money and going without insurance would be a GOOD financial decision, as you put it. I think it would be foolish.

Chad - surely it is a dumb financial insurance for the young not to buy insurance. But many choose not to do so today - if rates are higher in the future, I doubt they will purchase then either. You must realize that most of the country is not as analytical and responsible as you are. Many young people would rather have a Blackberry and cable TV than health insurance - until they get sick or hurt, of course.

So, profitability varies considerably from year to year. But you doggedly hold to the 2.2% or 4-5%. They may have lost money a year or two in their history, but how many times has that happened, really? I don't think these companies have gotten to the place they are by losing money very often. How can they have gotten so big, and obtained a larger and larger market share (and control) by losing money? You know the recent profit margins are MUCH higher. At a time when the light is shining brightly on them. Does that show worry or fear on their part? Maybe so - sticking it to their customers while they still can, might be a way to look at it. Not an unrealistic way to look at it, I don't think.

Not sure what you mean about "recent" profit margins - the last published number I saw was 2008 - and it was 2.2% for the industry. It is funny that Obama says nothing about the 10-15% Big Pharma had in 2008. And look how much pharma pays for execs and advertising. They are on TV every night, telling us to buy their latest brand name drug. It is just easy to pick on health insurance companies. And he had to pick a villiian. It is his only chance to pass the plan.

I can't speak for the big companies out there and what they are doing, as I tend to work more with the smaller companies. But I can tell you, while there are some "bad" companies out there that don't do right by the customer, there are a lot of good ones out there that do care. To hear Obama slander the whole industry the way has - well, in my opinion, it is no different than saying all African Americans are evil due to the actions of a few, or all cops are bad due to a few bad cops out there. It's not fair - but again, Obama has sunk to many lows in his effort to obtain his legacy. His behavior through this, with the slander, name calling, backroom deals, etc has really disgusted me.

And the effect is not just on the individual, it's on the private sector, and the economy. The companies that tend to provide health coverage for employees are showing bigger problems and less growth over the past few years, as a rule. While insurance is not the only villain, it's a direct one. These businesses pay what they have to, as long as they can, and these insurance companies get bigger, and buy more competition, and favor.
[\quote]

Sure, it affects the economy. We do need to recognize that changing 16% of our economy will also have a huge effect too - likely negative. Many people own mutual funds with significant exposure to health care companies also which may get hurt by this.

So, again, personally, my income/life will not change due to reform - my opinions are formed by a combination of personal beliefs and insight into what will happen to the consumers in the event that this reform comes to pass.