Tuesday Talk*: Taking A Bullet For Health Insurance

The harder an industry tries to make you believe it cares deeply about you, the less it does. Health insurers don’t love you. They love your premiums. They want you to pay them, but they don’t want to return the favor. That they suck, however, doesn’t mean the alternative of Medicare for All is necessarily better.

There are three things you need to know about Medicare for all, which in the current debate has come to mean a pure single-payer health insurance system, in which the government provides all coverage, with no role for private insurers.

There are millions of things we need to know, because each of us has different needs and expectations of health insurance, but that would make for an unwieldy discussion. So Paul Krugman simplifies it for us groundlings.

First, single-payer has a lot to recommend it as a way to achieve universal health care. It’s not the only route — every major advanced country besides the United States achieves universal coverage, but many of them get there via regulations and subsidies rather than by relying solely on public insurance. Still, single-payer is clean and simple, and many health economists would support it if we were starting from scratch.

But we aren’t starting from scratch, which is the second thing you need to know. More than half of Americans are covered by private health insurance, mainly through employers.

It’s not that people love their current insurance, but that they know what they’re getting now and have no clue what the theoretical future brings. And not to belabor the obvious, but if employer-paid insurance is eliminated in favor of Medicare for All, will employees get a big raise from the monies that used to be paid for insurance, and which will be taxed from them personally later to pay for the grand new scheme?

Which brings me to the third point: In reality, single-payer won’t happen any time soon. Even if Democrats win in a landslide in 2020, taking control of the Senate as well as the White House, it’s very unlikely that they will have the votes to eliminate private insurance.

This may be true. It may not. It may mean we’ll get some fixes by committee.** While Krugman’s contention that if we were to invent a health care system from scratch today, a single-payer system certainly makes the most theoretical sense. It eliminates the middleman, the health insurers, who take a huge chunk out of our premiums for themselves, such that what we spend and what our health care providers receive don’t match. And needless to say, health insurers (not to mention hospitals and drug companies) don’t feel particularly bad about it.

But the great many personal and economic issues aside, there is a question that is too impolite to ask: What do most of us get for our health insurance dollar? For most of us, the answer is “peace of mind” in case of catastrophic need. Other than that, we don’t get much. If you have health insurance, chances are that you can’t make the deductible and copay, so as to enjoy the niggardly return.

If you have a chronic illness, then it’s not really insurance at all, but a straight out transfer payment. This may well be a worthwhile use of public monies, as no one in this country should suffer for the financial inability to pay for health care, but to what extent?

The problem that’s rarely discussed is whether people are willing to “take a bullet” to pay the cost for health care that never inures to their benefit but covers the cost of other people’s needs? Does this give rise to government telling people not to drink sugary drinks so as not to be obese? After all, it’s got medical ramifications, which we’ll all pay for. And the implications for sex can be enormous, since we’ll be paying for births, or not for births, as the case may be.

The discussion of health insurance is replete with sad stories, and they are, undeniably, sad. But what of your “sadness” working hard to provide your family with food and shoes? Do you believe that taxing the super-wealthy will pay for it, not to mention all the other goodies to be delivered free? Do you trust the government to run a system that could spell life or death?

Some believe. Some don’t. Does it matter, since our private health insurers are so awful and suck so much money out of the system now that government couldn’t be any worse? Or could it? And even if Medicare for All could be run well enough to accept, cost less than what it costs now (at least for most) and come close to fulfilling its promise, would we serve the next ten years riding government designed camels to the hospital?

*Tuesday Talk rules apply.

** As in, “a camel is a horse designed by committee.”

63 thoughts on “Tuesday Talk*: Taking A Bullet For Health Insurance

  1. B. McLeod

    Existing Medicare is rife with fraud and inefficiencies. Deliberately expanding a defective system will be a huge gift to those who are gaming that system currently. Also, irrespective whether “Medicare for All” includes an outright prohibition on employer-provided insurance, if employers are being taxed for the system, they will not want to also bear the expense of continuing alternative group coverages for employees.

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    1. SHG Post author

      For some odd reason, people extol medicare as an example of a wonderfully run government program, likely because it’s somewhat better than so many far worse run government programs. Is it “rife” or is it good enough for government work? Or better than private insurers?

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      1. B. McLeod

        It depends on the private insurers. Medicare provides basically no information on the detail of the claims it has received and covered. As a result, the covered person has no real ability to detect miscoding or bogus billing or to alert Medicare if services billed were not provided. Some private insurers are just as bad, but others provide enough claims detail for the insured to determine and alert the insurer as to erroneous billing. There was far more incentive for individual insureds to insist on claims detail and pay attention to it before Obamacare torpedoed caps and lifetime coverage limits.

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        1. Jim Cline

          Aah, some, others. Seems to me the solution would be enough detail for someone (even the gov’t worker processing the claims) to spot the $200 price for tylenol from the $20 charge to have two pills administered to the bedridden patient. While I would hate to have it turn in to the mess VA care has become maybe there’s a real solution. Granted it would take a house and senate looking for solutions and compromise but (naively) I would like to think they could actually put their constituents first for a change. Judge Kopf will back me up on this, while I disagreed with many of the things Elijah Cummings brought up in the Nebraska Legislature I never doubted the fact that he was representing his constituency. I always had the upmost respect for that and wished that more of our national leaders were the same. And some sort of rational, affordable healthcare is in everyone’s interest.

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    2. Norahc

      I’m struggling to come up with one government run program that has been successful and not a huge waste of taxpayer money. Why do people think Medicare for All would be any different, especially considering Medicare right now is an abject failure?

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      1. SRH

        Because it works here in the UK. It decommodifies your health care. Despite its flaws and despite the many attacks by Tories and centrists to privatise it, the NHS is easily one of the best things about being a British citizen. I don’t ever think about my health care except when I need some. Then I book an online appointment with my GP at the surgery which is a five-minute walk away. I see my doctor. If I need medicine, because I live on state benefits it’s free of charge.

        Come on, tell me that’s not wonderful. But you can’t have it because it’s socialist and unAmerican. Is your capitalist system really worth keeping?

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        1. Christopher Best

          On the other hand a friend of mine in the UK suffering from blinding eye pain was put on a five week waiting list to see someone about it. Granted that was 15 years ago, maybe it’s changed, but hey: anecdotes are fun.

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    3. OtherJay

      Your doctor is not required to accept whatever Medicare decides the reimbursement rates are, and no concierge doctor is going to take that much of a hit from private or employer sponsored plans. Most practices will accept a percentage of their business to Medicare patients, but I don’t know any that are ‘Medicare only’, Certain specialties such as Radiologists, Pathologists, ER Techs, and Anesthesiologists don’t usually accept Medicare reimbursement rates, and charge what they want. EMTALA doesn’t apply to botox or physical therapy or cancer treatment from MD Anderson.

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      1. SHG Post author

        You raise an important point. Under most reimbursement regimens, the docs can’t charge above whatever reimbursement rate is set. They don’t have to accept insurance, medicaid or medicare, but if they do, they accept their rates. If we become single payer, there will be two-tier medicine, one for private payers and another for medicare, which dictates the reimbursement rates.

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  2. Richard Kopf

    SHG,

    You (and Paul, your buddy) got me thinking about free lunches. Saloons in the 1800s sometimes offered a free lunch to patrons who kept ordering drinks as a way to bring in more business. We need more free lunches and more saloons.

    All the best.

    RGK

    Reply
  3. phv3773

    Almost all insurance involves “taking a bullet” for someone else.

    Much of the grunt work of running Medicare is contracted out to private firms. In fact, much of the grunt work of the major insurers is contracted out. So the shifting of employment from private to public employees would be less than might be expected.

    It’s true that egregious Medicare frauds show up in the news from time to time, but that doesn’t mean that the private insurers are not also the victims of fraud. I do think that Medicare keeps anti-fraud activities more limited than than they should in order to maintain the illusion of low overhead.

    I think that Krugman overestimates the degree to which corporations will continue to provide health insurance. They’ll stop as soon as the public option is generally agreed to be” good enough”, just as they dropped conventional pension plans as soon as 401Ks became accepted.

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    1. SHG Post author

      Whoa, Nelly. If the insurance pool consists of similar folks, we all bear the same risk/reward potential. If it’s a mix of healthy people and chronically ill people, then there’s no risk for the latter and only reward. That ain’t insurance.

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      1. B. McLeod

        Right, but the initial steps toward eroding actuarially based coverage have been crossed-off by Obamacare. For example, no pre-existing condition limitations, and letting healthy young adults ride their parents’ coverage. Concurrently, efforts to “mandate” coverage (or penalize non-coverage) were needed to coerce other healthy people to keep paying to support the modified risk pool. Mandatory Medicare for All will perpetuate all these “adjustments” to normal insurance models, and you are correct in observing that the end product is actually something different than “insurance.”

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      2. Jake

        Name an insurance pool that doesn’t include dissimilar risks. I pay a premium for car insurance despite a flawless driving record to subsidize olds ramming their buicks into pedestrians.

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        1. SHG Post author

          Before you were born, dear Jake, we didn’t have “community rating,” a very progressive idea at the time to spread the cost between the careful person and the incautious, as it was unfair that the bad driver had to carry the excess burden of his being so darn accident prone.

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          1. Jake

            Sweet dodge. Risk pooling is the basis of all insurance. The notion ‘I’m paying your costs’ is a figment of the terminally selfish, libertarian imagination. You’re paying a premium against the risk you will someday need help. If you get lucky and never need intervention in a catastrophe, there’s another way to look at that: gratitude.

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        2. B. McLeod

          AARP hawks an insurance program for seniors only, which offers discounted coverage to a pool of experienced drivers, excluding the rash and reckless youngsters who are so statistically more likely to wreak mayhem.

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          1. Jake

            Touché, but nice try. Some of those grey gangsters are going to get into accidents and some are not. They are certainly not all equal in their ability to drive and therefore not equal risks. This is the very nature of insurance.

            With all types of insurance, we’re all paying a premium against some statistical probability of a bad day.

            But perhaps you could have gone with the “well what about specialty insurance for one-off cases like Liberachi’s fingers? Or a Van Gogh painting?” Even Lloyd’s of London has insurance, allowing them to survive by managing risk in pools created by reinsurers.

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  4. PseudonymousKid

    All those other countries with single payer systems spend less and get more and better healthcare than we do. I’m jealous. There’s no reason a single payer system couldn’t work just as well here. Sadly there’s little chance of it happening anytime soon.

    Hopefully your other commenters fall in line and agree to be believers too. Otherwise, it’s time for some reeducation. The status quo sucks. We can do better.

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    1. SHG Post author

      Do they, PK? To the extent they do, are there differences between us and them that could make it different here than there? Remember, you can’t think harder after you get it all wrong, so you might as well do it before.

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      1. PseudonymousKid

        Sure, it’s immensely complex. I’m not suggesting we jump off a cliff and nationalize hospitals immediately though. Let’s take some bites out of the insurance companies first. The ACA was a first step to something better. Platitudes about how no one should suffer only go so far.

        Here’s a boatload of graphs and data if you like that sort of thing.

        https://www.healthsystemtracker.org/chart-collection/quality-u-s-healthcare-system-compare-countries/#item-start

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        1. SHG Post author

          You gave me whiplash from mindlessly simplistic to “it’s immensely complex.” If the latter, deal with complexity. If not, you’re just making noise.

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          1. PseudonymousKid

            I hate insurance companies and want healthcare for free for everyone. I don’t really care how it looks or who provides it. Just get me out of this high premium, high deductible nightmare. Everything else is noise and bullshit rationalizations.

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            1. SHG Post author

              I hate insurance companies. I don’t trust the government. But “if I shut my eyes really tight and click my heals three times, it will happen” doesn’t strike me as a better alternative, PK. That’s why we’re talking about it.

            2. OtherJay

              While your contempt at insurance companies is legit, they’re not the only ones to blame. It’s surprising you are singling them out. You should be equally angry at your doctor, because they signed a contract with the insurance company to provide service X at price Y.
              Have you seen a hospital chargemaster lately? Your insurance company will also pay seven figures for your preemie to stay in the NICU, and they will also pay for all of your care at the end, too.
              High deductibles suck, but your insurance company can’t cherry pick, and they can’t term your policy if you develop a chonic, long term illness.
              They are only a small part of the problem.

            3. PseudonymousKid

              I have anger aplenty to spread around, but insurance might as well be a trigger word for me. So, yes, I’m hyper-focused on that aspect. The doctors, drug peddlers, hospitals, etc. are also to blame.

              I also apparently have more trust in the government running health care than our host. Tricare was awesome and easy to use.

            4. OtherJay

              I don’t understand how you can want Medicare for All and appreciate Tricare for being such a good program. You know they aren’t the same right, that Tricare uses private insurance companies? Isn’t Tricare funded by the military?
              “The ultimate responsible organization for administration of Tricare is the U.S. Department of Defense Military Health System, which organized the Tricare Management Activity (TMA). The Tricare Management Activity contracts with several large health insurance corporations to provide claims processing, customer service and other administrative functions to the Tricare program.”

            5. PseudonymousKid

              The distinction is that the government was dealing with the insurance companies on behalf of those to be covered. The other distinction is that the military runs its own hospitals. It’s more a preferred provider network to my understanding. I spent my five days in a military hospital tended by airmen and officers.

              Whether it’s the employer or government dealing with insurance, there’s value in collective bargaining for services/coverage. Putting that all under one governmental roof also seems to be more efficient when compared to the current situation. Though comparisons to other countries might be problematic as discussed here.

        2. Julia

          I don’t buy comparison to cherry picked countries. Why do they include Japan but no Korea and Israel? One graph includes Belgium, Canada and Switzerland, another one doesn’t. Then you compare only to Belgium and Austria. Etc.

          Also, size matters! You can’t compare a big country consisting of *states* to smaller more homogeneous ones. But once you start looking at numbers state by state instead of meaningless averages for over 325 million, you see that the numbers vary quite a bit by state and correlate with other factors. For example, diabetes, life expectancy and infant mortality correlate with obesity rates, and “skinny states” are on par with similar first world nations. But very obese states (more so than the rest of the world) drive the country average life expectancy down. Medicaid expansion is another factor but it looks like looser correlation. Try this exercise yourself. BTW, correlation is still not causation.

          FYI, I actually lived with single payer for the most part of my life until moving to the US. The medical systems (i.e. doctors and hospitals) vary greatly, it’s like 2 people say “cat” but they mean 2 completely different animals. Single payer will not fit a medical system that’s not designed for it. The ACA works because it fits. Some states currently provide more coverage (in terms of demographics covered, services and money spent) than Canada. You don’t get more spending less, you get less! A commercial entity always tries to oversel (it’s overconsumption, but since you’re accustomed to it, you demand even more), but the government tries to save money cutting services unless absolutely needed. Cut on tests, procedures, equipment, anestesia, hand holding from a nurse and TV in the waiting room. Put patients on a wait list. It’s a tough love.

          When I hear those politicians “better and more” (better isn’t more and more isn’t better), I keep thinking they are either patently ignorant or lie to your face.

          If you believe you’d be better somewhere else, just move already.

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          1. PseudonymousKid

            There’s a link I posted above that goes more into the finer details in comparing healthcare between countries. You’re right that the U.S. system would not transition easily and maybe not well to a single payer system. I’m not moving anywhere, though thanks for the suggestion.

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      2. AH

        I am a huge proponent of single payer where I live (Canada), but there are significant differences between us and you beyond just population numbers.

        Philosophically, I think more people in the US embrace individualism for better or worse. As you point out above, a relatively healthy person (like I am) is likely to end up paying into the system more than I get out. That is a trade-off that many people don’t want to accept, but given that anyone, even healthy people, can be struck out of the blue by an unexpected health condition, there is benefit to having that back-up. In my mind the IDEAL situation is that I go to my grave having paid way more in than I ever take out. I will count myself lucky. It is also my understanding that currently, even with private insurance, the US devotes more public funds per capita to health care than virtually all nations with single payer.

        But leaving aside the philosophical debate, the biggest problem for the US is the logistics. From a legislative perspective, how does single payer get enacted with the division of power between the states? What happens to all the people who were previously employed by the insurance industry? One of the things that I think allows single payer work in Canada is a cap on general damages for personal injury, is that also something people are willing to accept as a trade off? Given the political climate and concessions that will be needed, will a workable solution ever be viable?

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        1. PseudonymousKid

          Thanks for your support here. Closest I had to government healthcare was glorious Tricare which was a benefit from my dad’s military service. Five days hospitalized for a collapsed lung cost me seventy dollars out of pocket. Healthcare isn’t a commodity. I couldn’t shop around or wait for a sale.

          Anyway, states might actually end up leading the charge if any one of them can pass a single payer system and guide us through the fog of uncertainty. It’s kind of like Colorado/Washington paving the way for mj legalization. Come on, California. You can do it. Otherwise, I’d agree with you that the current barriers are too high to surpass.

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        2. Julia

          Indeed, the medical system itself (doctors and hospitals) in the US is very different from Canada and those plans are absurd.

          I was fine with single payer back in Canada before I moved to the US. However, I personally prefer bankruptcy to dying because of waiting lists or the government deciding that the treatment is too experimental to give it to me. But nothing works better than staying healthy.

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    2. OtherJay

      Insurance is regulated by the state, so your shitty situation doesn’t equal the same for others. Our high prescription costs are one reason other countries pay less. Medicare for all works great for colds and flu and cut fingers. I would also prefer to keep my current paycheck and not see it drawn and quartered by Medicare in its current form.

      Medical tourism is a thing, but who pays for a malpractice claim?

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      1. PseudonymousKid

        So it’s my state that’s shitty. Yay. I feel better now. I’m sure the Republican controlled state legislature will help me out in my quest for single payer healthcare. Calling my rep now. Wish me luck.

        Why then are our prescription costs higher than other countries? I’m thinking insurance has something to do with that, but I’ve been told to think harder. Back to the drawing board.

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        1. OtherJay

          Short answer is regulation. The long answer is that countries with public healthcare programs have government entities that determine or negotiate the price of drugs, or more importantly, not to cover expensive ones. This doesn’t happen in the states.

          When the Medicare Drug benefit was drafted in 2003, they barred the program from negotiating drug prices. Medicaid, however, is required to cover all drugs approved by the FDA, regardless of alternatives, costs, or any other factor.

          Our healthcare system is somewhere between 20%-30% of our entire economy, and it’s simply impossible for Congress to make any meaningful reforms.

          Your doctor probably practices defensive medicine, and probably does more than needed because they don’t need a malpractice claim or an angry patient suing them. Malpractice insurance is ridiculous. Tort reform might help but that’s another animal. Your doctor likely chose a specialty, or will, because it pays more. With more and more people covered, we are seeing a shortage of primary care doctors coming out of college, mostly due to debt incurred for their education. That MRI machine costs millions to build and a seven figures to maintain, so over utilization might be a factor too, because that MRI clinic has to pay their employees too. Your doctor has likely had to hire someone just to handle billing and insurance over the last ten years.

          Where do you think we should start?

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          1. SHG Post author

            Shh. Malpractice suits are a red herring, despite the cost of malpractice insurance (which is a separate insurance issue). Let’s not dive down the rabbit hole.

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          2. phv3773

            The Part D insurers are permitted to negotiate drug prices. The largest insurers have millions of Part D insureds, and plenty of clout in negotiation. I doubt the prohibition on Medicare makes much difference.

            You’ll have to forgive me if I feel more positive about Medicare than others may. They just paid for my shiny, new pacemaker.

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            1. OtherJay

              *Current* Medicare beneficiaries have very valid concerns about the level of benefit they would get under a Medicare for All system, not to mention that you’ve probably worked much more than your 40 quarters.

  5. Curtis

    The problem is that people see the benefits of a single payer but not the problems. The median wait for “medically necessary treatment” in New Brunswick, Canada is over 45 weeks. In the rest of Canada, it is almost 20 weeks. In Britain, you are expected to wait 18 weeks. It the cost worth the wait? That’s debatable but it’s a debate that is not occurring on the left.

    If we wave the magic medicare-for-all wand, how do we actually knock hundreds of billions of dollars off the cost? The transition would probably be the biggest economic change in history. It will not go smoothly.

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    1. AH

      I have concerns about blanket statements about wait times in Canada, because they vary by location and what is determined to be medical necessity, etc. Anecdotal, I know, but I have never had someone I know wait for something truly “medically necessary”. A friend’s daughter was recently diagnosed with cancer and started treatment the next day. She has now had three surgeries and chemo, and her family will not be bankrupted as a result. They can focus all of there attention on helping their daughter get better without worrying about bills and submitting insurance claims.

      It is true though, there are problems as there are with any government program. I would never say single-payer is perfect. Amongst other things you do sometimes have to wait and there are situations where people aren’t triaged properly and may wait longer than they should. But I fail to see the difference between that and someone who is denied coverage by their insurance company, or people who will never get treatment because they don’t have insurance.

      It is the transition you note where I see the biggest problems.

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    2. B. McLeod

      Right. At the end of the day, any insurance system provides for costs, not for care. We have let the bean-counters take control of our hospitals, where, even under the current access system, staffing is bare bones and doctors’ orders are frequently not followed. This will be exponentially worse if everyone who currently lacks effective access to the system is suddenly handed financial means to go to the hospital whenever they want. It will be “equitable” only in the sense of a totally shitty and non-functional system for everyone. We will quickly be back to the days of handling our own minor surgeries and seeing the vet on the sly.

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  6. Skink

    Some of you sure find funny ways to dive. Health insurance is not healthcare. The lack of health insurance does not mean the lack of healthcare. If someone is uninsured and broke, they get treated. The laws are already in place.

    Don’t be dopey: this is just a way of shifting payment for the bills. Because it is to shift to the government, it will be much more costly. Medicare and Medicaid suck at managing the money compared with private insurers, who don’t get a huge allocation to offset bad practices.

    Otherwise, it’s a great idea: Medicare will go broke in 5-7 years without huge infusions of cash, especially with the continued reduction in workforce. It makes perfect sense to put everyone on the plan.

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    1. PseudonymousKid

      Yes, let’s not be dopey. The lack of financial means to pay for treatment means that some people will forego treatment due to lack of funds. Sure, if an uninsured person gets hit by a car we aren’t just going to let them die, but not all health problems require immediate response.

      Still, you’re spot-on. This is exactly a way to shift payment to the government who will then have to fund the damn mess. I doubt it would be more costly looking at what our neighbors spend in single payer systems. Though our government would probably find a way to fuck it up even with successful systems to imitate.

      Insurance must be destroyed.

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    2. B. McLeod

      People used to riding the Medicaid system get treated when they are broke. They even get much better care than uninsured, low income workers who are not on state assistance. This has been true for decades. In my early practice years handling indigent services, I often had to counsel single, working parents to quit their jobs and sign on the dole. But I can tell you that a great many people who are uninsured and broke either don’t understand that they can do this, or they are unwilling to do it as a matter of character, even though they would be financially better off.

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      1. OtherJay

        Medicaid has some weird stigma associated with it. Colorado expanded Medicaid to 140% of the poverty level, and has subsidies and tax credits for those earning up to 400% of the federal poverty level.

        Medicaid has some of the same problems that Canada has, and Medicare for All would look more like medicaid than current Medicare, but that’s another rabbit hole.

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      2. Casual Lurker

        “People used to riding the Medicaid system get treated when they are broke. They even get much better care than uninsured, low income workers who are not on state assistance. This has been true for decades.”

        Not anymore they don’t. At least not in the State of New York. Sometime back, when the ACA gave States a freer hand in managing their respective Medicaid programs, Governor Cuomo implemented something called “MUTS” (Medicaid Utilization Thresholds), creating usage limits. Other states have since taken notice.

        Some examples of annual limits, not all of which are presently enumerated in public docs, and are subject to arbitrary revision by the Commissioner of Health and/or the Governor:

        • Max number of doctor visits per year = 10.*

        • Max number of blood tests (not blood draws) = 12

        • Max total lab tests, including blood work = 18

        • Max number of [primarily, non-doctor] mental health clinic visits = 40

        • Max number of [non-part-D] prescription refills = 40**

        • Max number of dental visits (not including emergencies) = 3 (down from 4, just a few years ago)

        —The available dental services is also limited:

        • One annual checkup, including one set of dental X-Rays.

        • Fillings: If more than one, as many as can be done in one session.

        • Extractions: If more than one, as many as can be done in one session.
        Note: Once three-quarters of a patients teeth have been removed they are eligible for dentures.

        • Cleanings, if any unused visits remain after other required services are rendered for the specified benefit year (which does not coincide with the calender year).

        *This does not include emergencies, when treated at a qualifying hospital (a so-called “Article 28 facility”) or an external facility that is wholly owned and operated by a qualifying hospital, such as an amended Article 28 Diagnostic and Treatment Center (DT&C) off-site services clinic.

        Primary among the many requirements for a “qualifying hospital” is that it’s incorporated as a non-profit, and accepts both Medicare and Medicaid.

        **If someone is eligible for Part-D, the Part-D provider or their PBM (Pharmacy Benefit Manager) sets the limits, if any. Note: There are no limits (or co-pays) on psychiatric medications that qualify as mandatory for out-patients under New York law.

        It used to be that if a patient was “dually eligible” (for both Medicare and Medicaid), once Medicare kicked in, the Medicaid rules no longer applied and Medicaid was relegated to being the co-insurance that picked up the 20% not covered by Medicare. As delayed/phased-in ACA regulations took effect, the Medicaid rules were “back ported” to “dually eligible” Medicare recipients, not only limiting their care, but decimating Provider reimbursement rates.

        Anyone who thinks that “back ported” Medicaid rules and reimbursement rates won’t be applied to “Medicare For All” recipients, I’ve got some sad news for you… Coming Soon To A State Near You!: Medicaid For All!

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    3. Julia

      Similarly, health insurance doesn’t mean availability of medical services. No doctors available for the next 6 months or they don’t take your insurance. Clinics went bankrupt or moved to Mexico.

      It’s amazing how many things people take for granted.

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  7. Chris Ryan

    One issue that no one is addressing is the simple fact that due to the federal government’s interference, there simply is not enough primary care doctors to take care of the patients that have medical insurance in this country, much less if we suddenly add everyone else to the list. I am married to a PC doc, and its frustrating to see people tell her how medicare for all will fix everything, as she struggles to handle a patient panel that is already 50% bigger then when she started her career.

    if we wave the magic wand, all we will get is longer wait times. its probably a 10-15 year lag in getting doctors on board IF we started today and pushed hard with incentives to get more PC docs. there is no fix, simple or complex, to the “insurance” part of the problem, until the foundation of the system is addressed.

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  8. Jesse

    I find it funny that the choices in modern discourse are presented as either the rapacious capitalist private insurance model or the medicare government run program, and framing this as the free market against socialism.

    Medical care has been so far removed from any semblance of a free market in the last 60-70 years that nobody can even imagine what a truly free market in this commodity would even look like anymore. Thailand might be a lot closer. And gee whiz, medical tourism is quite a thing over there.

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  9. Julia

    I lived with single payer (I have nothing against it) until moving to the US 10+ years ago and can write a pageful of arguments why I think it’s complete political horseshit in this case.

    The short take, insurances don’t provide medical services, doctors do. The current system is designed to work with commercial insurers. In the interconnected system you can’t simply replace one part with whatever you like. It’s like putting a truck on car wheels because they are cheaper or feeding your horse cat food because your neighbor’s cat likes it.

    Another thing, single payer programs are local (provincial in Canada), not federal. No state succeeded implementing single payer so far. Is it a good idea for the federal government to take over?

    From what I’ve read, Obamacare is similar to the medical system in Switzerland but the latter has better cost management. Medicaid expansion for all states would make it universal healthcare. Why not to start from what you have and improve it instead of meaningless populism? I’m half thinking M4All will never even come to implementation, too much fantasy.

    Why are the same people who were scared of losing Obamacare a couple of years ago so enthusiastic to repeal it now? Also, the correct name would be “Medicaid for all”, not “Medicare”. Is it some kind of test to check how dumb the voters are?

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  10. Brian Gillen

    “The problem that’s rarely discussed is whether people are willing to “take a bullet” to pay the cost for health care that never inures to their benefit but covers the cost of other people’s needs? ”

    It’s hard to know if or when insurance will be beneficial. You can be healthy, until suddenly you’re not. So you’re not just paying for those who are sick now, but for the future possibility that you may be sick.

    An advantage that I like about government-run health insurance is that you don’t lose it when you quit or get laid off from a job. I would think that makes unemployment and job hunting a bit easier.

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  11. Ken Mackenzie

    Australia transitioned to universal insurance in the mid 1980s, negotiating both the issues of federal funding of State provided services, and the interests of private insurance companies. The answer to whether people were willing to pay turned out to be yes. No politician campaigns to wind it back. The transition can be done. Like any enterprise it might be done badly or well. The saddest theme to the comments here is the pervading sense that the United States’ government is incapable of delivering services well.

    Reply
  12. Joseph Masters

    Wow, you want to tackle the entirety of the health insurance industry with one posting? Without linking to any studies, or making any accommodations for micro versus macro requirements and vice versa?

    Seems doomed to fail, but here’s what is missing from the “argument.” Insurance companies have driven themselves off a cliff. BCBS (Blue Cross Blue Shield) insures 105 million Americans by their own estimate, yet hospital chargemasters clearly drive medical inflation despite the fact that BCBS should be dictating prices given the fact that they represent a full third of the population. This wasn’t so during the HMO era.

    Insurance already went through a series of massive changes from 1988-2013, before the PPACA was implemented in 2014:

    https://www.kff.org/report-section/2013-summary-of-findings/

    Exhibit E shows that 73% of private health care plans in the U.S. were conventional, 16% HMO and 11% POS. Remembering what insurance was like decades ago misses the fact that the dominant insurance plans from 30 years ago and earlier have essentially disappeared. A heavy expansion in HMO, PPO and POS plans drove conventional plans down to 10% of the market in a decade, as insurance companies fought to counter the rise of HMOs. All attempts by insurance companies to regain dominance failed as penny-pinching HMOs reversed the cost inflation curve for the first time in American history (outside of contractions in real GDP) during the 1990s. Then 2003 came along and the federal government bailed out the insurance industry.

    HDHP (High Deductible Health Care) plans came into existence as part of the same act that created Medicare Part D. Finally able to compete on price with HMOs by offering HDHPs (with the HSA carrot to further entice customers) medical inflation resumed its relentless rise. By 2013, the year prior to the disastrous roll-out of PPACA implementation, HDHPs had taken 20% of the market against the HMO share plummeting to 14%. Conventional insurance, which had represented almost three-quarters of the market 25 years earlier, was less than 1% of the total in 2013.

    Contrast this with CMS (the Centers for Medicare and Medicaid Services). Congress passed the BBA (Balanced Budget Act) in 1997, which empowered CMS to drastically change hospital and physician reimbursement rates, creating the Medicare “Doc-Fix” issue because the cost reduction targets were so draconian. Part of the PPACA was a requirement that CMS directly address hospital chargemasters, an aspect that it did not enforce until publishing a final rule earlier this year.

    Would it be better or worse if CMS dictated reimbursement rates across the board? For who? Providers, physicians, patients? For my money, I’d like to know why BCBS, which again is a behemoth that represents 105 million Americans, cannot directly use their market power to go after chargemasters. CMS and HMOs do, why do insurance conglomerates refuse to throw their weight around?

    I suspect it is a simple problem of insurance being in the wrong industry. Insurance, whose business model depends on taking in premium revenue and denying claims, works well in regards to catastrophic events…not so well in day-to-day payment operations, hence why there are problems the market simply cannot solve.

    HDHPs have turned everything on its side, as health insurance increasingly opens up patients to tens of thousands in bills that were previously covered (the out-of-pocket maximum, more than the the already-high deductible, makes HDHPs a major bankruptcy risk after catastrophic injury).

    Regardless of the path this country takes going forward, is the insurance industry sustainable? Without addressing chargemasters head-on, health insurance will become unworkable as unpaid bills pile up, which bizarrely are at massively inflated prices in comparison to insurance-reimbursed rates. Either CMS, primarily through its Medicaid side, pays the bills (at even lower prices, as CMS largely bypasses the chargemasters and simply reimburses at cost-plus) or the provider has to eat the unpaid bill. In lower density and/or economically-distressed areas, this can and does drive hospitals out of business. Is all this sustainable?

    Reply
    1. SHG Post author

      This isn’t really a post about tackling “the entirety of the health insurance industry.” What this tackles is the simplistic solutions being proffered in the absence of sound information about what the implications of change are, and providing an opportunity to address the broad problems that aren’t confronted in considering the efficacy of change. Why must I explain everything in small words for the hard of thinking?

      Reply

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