
Iowa insurance market collapse could ground young entrepreneurs' dreams - itamarst
http://www.desmoinesregister.com/story/news/health/2017/06/11/iowas-young-entrepreneurs-early-retirees-ditching-their-dreams-insurance-collapse-looms/370967001/
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awareBrah
Obamacare, the proposed trump care, its all a failure.

Get rid of the employer sponsored plans, that makes no sense at all and makes
me hesitant to lose my job because my health relies on it? That is simply
absurd. Get rid of this. I'm so frustrated with the healthcare here and I
don't understand how Washington can't come up with any real solutions

~~~
coldpie
Single payer has been proposed many times and works well in the rest of the
first world.

Edit: Don't forget to vote every November.

~~~
shard972
What about drug R&D in those countries?

For all the issues of the US healthcare system, one thing it has going for it
is most of the new developments in medicine comes from the US.

~~~
toomuchtodo
Great for pharma stockholders, terrible for American citizens.

Let's stop subsidizing drug R&D for the world on the backs of US citizens who
are being squeezed to death by Washington and a for profit healthcare system.

~~~
shard972
That's a fair argument but I'm more interested in how much R&D happens under
single payer systems.

~~~
toomuchtodo
Does the NIH and NSF not provide a pipeline for drug research in the US?

Did you know the CEO of Mylan, the company that makes epipens made $98 million
last year? Is that reasonable?

[http://money.cnn.com/2017/05/31/investing/epipen-mylan-
chair...](http://money.cnn.com/2017/05/31/investing/epipen-mylan-
chairman-98-million/index.html)

~~~
pc86
Well the board felt it was reasonable, and I'd expect the board of a publicly
traded company to know more about its finances than me.

The question was about how much R&D happens in single-payer counties, _not_
how much one particular CEO made. I am a proponent of single-payer health care
in the US but responding to unrelated, valid questions with, "yeah, but this
one person made a lot of money and that makes me mad!" is ridiculous.

~~~
toomuchtodo
That CEO only made that amount because of FDA regulations related to the
manufacture of generics, as well as her family connections.

[http://amp.timeinc.net/time/money/4502891/epipen-pricing-
sca...](http://amp.timeinc.net/time/money/4502891/epipen-pricing-scandal-big-
pharma-politics/)

My point is that the entire for profit healthcare system in the US is broken,
and it's time to burn it to the ground.

~~~
pc86
> _responding to unrelated, valid questions with, "yeah, but this one person
> made a lot of money and that makes me mad!" is ridiculous._

~~~
toomuchtodo
Waste is waste, and must be eliminated from the system with extreme prejudice.

Excessive profits are waste.

------
rbritton
The part in all of this that has bothered me more than anything is that it's a
diversion to mask the real problem: healthcare service and products are
unsustainably expensive.

Casinos use chips and vouchers to distract gamblers from actually grasping
just how much money they're playing with. Health insurance sure feels like the
same thing, but it's even worse in that when you're in need, you're not always
in a state of mind to make rational choices nor are those choices even
adequately defined prior to receiving a bill. Why is this acceptable? Since
when are contracts entered into under duress admissible? I suspect it's
probably a massive success on the part of lobbyists.

I don't know the solution, but I can confidently say it's probably not reached
by tackling the insurance side of healthcare. Maybe the current system needs
to collapse under its own weight before a new approach even stands a chance?
Unfortunately, it's probably more likely it'd just receive a government
bailout at taxpayers' expense so it could continue the status quo.

~~~
kaitai
Healthcare services and products are unsustainably expensive in the US. This
is not quite true in the rest of the world. Part of this is economic and
structural, and part of it is American psychological and societal problems
with letting people die when they are going to die (end-of-life care is hugely
expensive and we even love treatments that do not necessarily lead to
increased lifespan, because we'd rather feel like we're doing something
medically than actually take evidence-based steps that might include doing
nothing). Part of it is that "healthcare service" in the US includes the
amazing overhead charged by private insurance.

Certainly before Obamacare, private insurance companies spent about 30% on
overhead (enrolling & dropping people, advertising, dealing with referrals,
arguing with hospitals and doctors, auditing people, hiring lawyers to get
someone else's insurance to pay for treatment). That's a lot of money and it
figures into "healthcare costs" in the US.

We spend so much more than any other country on healthcare, so much more.

You are absolutely right that "the current system needs to collapse under its
own weight before a new approach even stands a chance". I believe it will take
people dying publicly to make the US consider a change. First we will be
bamboozled by the "freedom" and "choice" we'll get with the new plan, foremost
the choice not to have coverage or care at all :)

------
jballanc
I always wonder why, in all the coverage about health care and insurance
groups "pulling out" of the marketplace, no one seems to want to state the
obvious:

* Insurers are not pulling out of the insurance _market_.

* Insurers are pulling out of _selling to individuals_.

* This is happening because selling to large groups (like entire companies) is easier/more profitable.

* It is easier to sell to larger groups because you have greater numbers across which to amortize risk.

* The _largest_ group of Americans one could envision selling insurance to is... _ALL_ Americans.

So, by pulling out of the unprofitable _individual_ marketplace in order to
focus on selling to larger groups, these insurance companies are practically
shouting at us what anyone with half a head already knows: single payer is the
_only_ practical, efficient, and cost effective solution for universal
coverage.

~~~
harryh
I know what you are getting at here but almost any individual market at the
state level is going to be bigger than almost any entire company from a risk
pool amortization perspective.

Given that, your fourth bullet point would point in the direction of insurance
companies preferring the state pools to selling to companies one at a time.

The problem with the state pools is not (for the most part) one of size, but
of adverse selection.

~~~
jballanc
I'd actually be interested to see the numbers. Obviously, as you say, it's not
just size but also the risk profile of the group...but add to that the fact
that this pool is being split between as many companies as are selling on the
marketplace, I wouldn't be surprised if size is part of it.

Regardless, if _universal_ health coverage is a goal, the only way to _truly_
amortize risk is to have everyone in one pool. Anything less pits some very
perverse incentives against an inherently inefficient market. It's no wonder
no one wants to participate!

~~~
harryh
Even small states like Iowa (total population ~3 million) are going to have
10s of thousands of people on the individual exchanges. That's bigger than all
but very large corporations (who tend to self insure anyways).

I hear you about universal health coverage. I've come around to the idea that
we should have it at the national level above some sort of cap. I think free
markets can still work when it comes to your annual checkup or small expenses
like a broken arm or a monthly prescription for non esoteric drugs.

------
harryh
It's worth noting that Iowa is in particular trouble because of a single
patient that costs ~1M a month[1]. In a relatively small market you end up
with an unstable situation when there are more than 1 insurers because none of
them know if they will have to take on this very expensive patient in any
given year.

1\. [https://www.balloon-juice.com/2017/04/21/catching-the-
fallin...](https://www.balloon-juice.com/2017/04/21/catching-the-falling-
knife-in-iowa/)

~~~
rasz
How exactly do you run a $1 million/month health bill? In EU that would mean
one open heart surgery/heart/lung transplant done by world class specialists
flown from all over the place every single month.

This sounds like a scam.

~~~
harryh
Apparently the patient is a teenage boy with hemophilia. I'm fairly confident
that it isn't a scam.

[https://www.usatoday.com/story/news/nation-
now/2017/06/01/io...](https://www.usatoday.com/story/news/nation-
now/2017/06/01/iowa-teens-1-million-per-month-illness-no-longer-
secret/360919001/)

~~~
rasz
Hemophilia Federation of America: "A million dollars per month is something
we've never heard of," sure makes it sound like a scam, maybe by hospital?

~~~
harryh
Given that the insurance companies know exactly who the patient is, exactly
what treatments he is receiving, and exactly when and where they are happening
it seems like it would be pretty easy to uncover a scam if there was one. And
they have a lot of incentive to do so!

~~~
rasz
Would you consider $1 mil/month a good incentive to scam?

------
creaghpatr
Iowa has only one ACA insurer left and they are raising their rates 43.5%.

Basically providing Obamacare was hemorrhaging so much money that Wellmark and
BCBS left, leaving a single payer, that ACA users are forced to use.

[http://www.thegazette.com/subject/news/health/medica-to-
stay...](http://www.thegazette.com/subject/news/health/medica-to-stay-in-iowa-
sell-marketplace-plans-in-2018-20170619)

~~~
antisthenes
Did people actually think ACA was sustainable or anything but a payout to
insurance companies as it was passed?

Knowing that insurance companies can willingly just abandon the market makes
the ACA even more of a joke than one would have originally thought.

And no, before anyone tries to suggest it, temporarily insuring a few million
poor people and people in poor health (at the cost of fucking over young and
healthy people) is not a success.

~~~
dragonwriter
> Did people actually think ACA was sustainable or anything but a payout to
> insurance companies as it was passed?

Well, they thought it was the former (in part because of the ways in which it
was the latter; a sustainable public service not provided directly by
government typically involves payment from the government to the service
providers.)

Much of the collapse and withdrawal is due to payments they were mandated
under the ACA not being funded by Congress (resulting in a giant stack of
lawsuits and at least one $200 million+ judgement against the government in
favor of an unpaid insurer), with the deliberate intent of causing a collapse
of just the kind that is occurring. (And the recent acceleration is that
exacerbated by additional uncertainty deliberately injected by the Trump
Administration with the intent of producing exactly that result.)

------
madengr
That's probably the main factor preventing me from quitting and working for
myself. Crazy high medical insurance for a family of 4. That and educational
savings for kids.

"Free" medical and college would cause a hell of a disruption that
corporations would not like.

~~~
vsipuli
Do employers really negotiate that much lower health insurance rates compared
to what a self-employed can get?

~~~
avs733
1) yes 2) you are assuming that it was even possible to buy health insurance
as a single person prior to the ACA. I actually tried and found it incredibly
difficult.

~~~
vsipuli
So what realistic options did self-employed have before the ACA: either pay
for an expensive insurance or be uninsured? What did most typically choose?

~~~
avs733
(Obivously the IAMAE note applies here)I choose uninsured because I was
young...and dumb. There were some options out there, especially for add on
things like dental and vision. Insurance was available, but it was hard to
find as an individual and very expensive in my experience. COBRA was an option
but was still tied to a previous job and had limits.

As an entrepreneurship scholar, I see health insurance as one really strong
limiter of entrepreneurial activity in the US. The lack of single payer
significantly privileges those with the means, the young, and those without
children to conduct entrepreneurial activity.

------
gwbas1c
When I read the article, I wonder how viable the business really is. The
business started in 2015 and he's still below the poverty line: "He needs the
subsidy, because he’s taking only about $17,000 in salary per year from the
fledgling engineering company."

I attempted to run a company prior to ACA. Because I had a pre-existing
condition, I had to buy COBRA. This forced me to get something running within
18 months. I also paid much more than "$100 per month" for my insurance.

18 months went by and I was nowhere. With the ACA, I might have lasted a few
more months; but I'll never know if I would have gotten anywhere. Either way,
after 18 months I did not have anything close to a viable business.

I think it's important that people are able to start businesses, and health
insurance should not be an obstacle to that. There's a fine line, though,
between fair access and an outright subsidy of a fledgling business. It's hard
to see where that line is when reading this article.

------
iamthepieman
I have an employer sponsored plan through the small business (25 employees)
that I work for. The rates the company pays has gone up around 10% a year
since I started working here. Two years ago, rates were going to go up 35% but
the company found another insurance provider and (after polling employees)
went with a higher deductible plan to keep the increas just under 20%.

This does not seem sustainable.

------
bspn
This isn't just an Iowa issue. When I talk to early stage entrepreneurs
looking to raise seed capital healthcare is almost always one of their biggest
concerns - both for their own families as well as the impact it will have on
recruiting the necessary talent.

PEOs help early stage companies to a certain extent, but for a pre-revenue
company the cost of healthcare is almost always going to be a significant
burden that funnels valuable cash away from the product and shortens the
runway. But without a decent benefits package, start-ups have almost no hope
of attracting key talent especially if those prospective employees have kids,
so they (and their investors) are forced to just suck it up.

Healthcare in the US is a ticking time bomb with the potential to
significantly impact our long term growth (if it isn't already). Unfortunately
we're in a situation where for-profit insurance companies, for-profit health
networks, and for-profit pharma companies are all fighting for their share of
the pie while pushing increasing costs onto the average consumer. I wish I
knew what the fix was - other than an unattainable single-payer system - but
we need to find something and find it fast.

------
davidw
This is all such bullshit. Single payer has problems, but it works well and is
a _whole_ lot cheaper in terms of % of GDP as implemented in places like
Italy. Also in Italy you have a decent, parallel private system where you can
simply call up and ask how much basic stuff is. I once got some chest X-rays
and a consultation with an ear-nose-throat doctor for 150 Euros out of pocket
(oh, and I got to do both the day after I called). They apologized because it
was so expensive. I barely kept a straight face.

------
tsunamifury
The people who claim to be protecting your freedom are shifting the economy
into the worlds largest extortion play.

Its maybe the penultimate stage of a truly free market.

------
notadoc
I got a letter from my insurance provider saying they're pulling out of the
local market in 2018. I pay full price directly, no subsidy, not through any
exchange, it's very expensive and I've poured tens of thousands into premiums
over the years.

I can't help but relate the entire industry to a ponzi scheme.

~~~
gruez
>I can't help but relate the entire industry to a ponzi scheme.

In what way is the insurance industry a fraudulent investment operation where
the operator generates returns for older investors through revenue paid by new
investors, rather than from legitimate business activities?

Seriously, I feel that phrase to be misused so often it has lost all of its
original meaning. /rant

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s73ver
Basically, do we want to send the signal that entrepreneurship is for
everyone, or just the rich and healthy?

~~~
anovikov
Entrepreneurship is not for everyone. It is for people who take risks. And yes
it takes being healthy, because it is a stress which even most absolutely
healthy and young people can't endure. And preferably rich because it sucks
being left at the mercy of investors.

~~~
darkpicnic
You're implying that the risk a young, healthy person takes is entirely within
their control, but even a healthy person can get hit by a car or get injured
in some way unrelated to their "fitness" level.

The reason we need to fix health care is simple: if you are dying or seriously
injured, and you don't have health insurance, you are going to the ER
regardless and someone, somewhere will end up paying for it. Let's all be
adults about the situation and just implement something that works.

------
bajki
test

~~~
hellbanner
It worked. Are you botting?

