
Sky-High Deductibles Broke the U.S. Health Insurance System - Markusj1
https://www.bloomberg.com/news/features/2018-06-26/sky-high-deductibles-broke-the-u-s-health-insurance-system
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pascalxus
Employers are already paying more and more for health insurance and so are
employees, it's eating up this country. 20% of GDP on healthcare is absolutely
ridiculous.

They're not really focusing on the root cause of the problem: the sky high
medical bills. We need to figure out what's causing such high costs and
mitigate it. There are many causes: limited number of doctor/nurse seats
available, monopoly problems, etc. Healthcare is not something that should be
merely governed by the free market. This is the one area where govt can be a
force for good. Step in and put some cost ceilings on the most predatory
pricing: for example pills and ambulance service for 4000$ should be an
absolute no-no.

~~~
ChrisLomont
Drugs eat up a tiny fraction of total medical cost. If you dig into the
breakdowns of where money is spent, and look at other countries, you'll find
we are more expensive at every step. This includes doctor and nurse salaries,
and litigation costs. It includes forcing drug companies to lower costs, which
will reduce R&D since many rare conditions need high cost drugs to cover the
R&D to bring a drug for a few people to market. It includes forcing everyone
to pay into the system, so the insured aren't paying the medical bills of the
uninsured emergency visits, which is proving difficult to do. It would involve
denying care to those costing too much, which we do to some part, but not like
many countries.

If you want to make our costs similar to other countries, we'd need to lower
costs at each place, including doctor and nurse salaries (which will be
politically impossible), cap litigation (which consumers complain about), and
dozens of other components.

There is no one area that is the cause. It's death by 1,000 papercuts.

~~~
mjcl
> There is no one area that is the cause. It's death by 1,000 papercuts.

Yup. A few minutes (of unnecessary) oxygen in an ambulance cost my insurance
company about $500. A single oral dose of generic Keppra while in the hospital
cost more than the cash price an entire month’s supply from CVS. The room I
stayed in was billed at about $7300/day, but hey, it did include unlimited
room service.

In fact, the only clearly reasonably priced item from my hospital stay was the
generic Tylenol, I assume because it’s common enough to generate complaints.

~~~
megaman22
I've been charged (or rather my insurance was) $42 for two slices of white
bread, a slice of turkey, and 12 ounces of skim milk. Prices are outrageously
padded everywhere.

It really boils my blood that I can take my dog to a vet and get a procedure
done or procure drugs that would cost one or sometimes two orders of magnitude
more if I was the one getting work done. I'm half tempted to dress up like
Goofy and see if they'll be fooled...

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alexanderdou
Created an account to comment on this, so I'm new, but I read the Welcome and
Guidelines.

This is something deeply interesting to me and I'd love to see more comments
around it. Here are some questions I have, as someone who has been in the
health insurance brokerage space for 3 years early on in my career.

In the case of the Jordans, they had a $2K deductible that the article fingers
as the main source of their obligation. However, it further says that they
ended the year owing ~$8K (on top of their monthly payments of $501). That
just seems like a bad plan: high deductible, low lifetime max or bad
coinsurance split. So on top of a high deductible, it offers bad coverage in
the case of catastrophe. To me, that brings up two things: 1) lack of savings
(I think there's a statistic that like 50% of americans couldn't get $500
together in case of an emergency) and 2) high deductible plans that can bury
families. This strikes me as similar to the problem of treating addiction; it
takes so many people to treat addiction: psychiatrists, therapists, internal
medicine, financial support, job searching, housing support. Healthcare,
specifically how an employee navigates it, seems to be a similar problem,
requiring budgeting, finding time to find a doctor, etc etc. Are there any
companies or people working on this kind of stuff right now?

It also appears that short-termism is another factor in play here. Because of
changes to the tax code, companies began offering cheaper plans, thinking that
it would cause employees to be more frugal but instead it just caused them to
cut back on all preventative care. Does anybody know of example companies that
didn't do that? That recognized the risk up front and resisted the short term
gains on quarterly guidance?

Lastly, I think it's admirable what the new Gawande-led venture stands for,
but I just had a vision of a future where only giant mega-corps will have the
leverage—both financially and politically—to properly insure their select few
Chosen employees. Is that at all likely? Or have I been watching too much 3%?

~~~
volkl48
The theory behind high deductible plans (as the article notes) is that it'll
make people shop around for health care and find better prices and so it
should bring down healthcare costs the same way the free market works on other
things.

Some of the reasons this doesn't work:

\- A significant amount of care, especially the most expensive sorts of care,
are not things where shopping around is something that's an option. (emergency
care).

\- Consumers are not and likely will never be, educated enough to actually
make informed decisions about costs. Yes, generic vs name brand is typically
easy. On the other hand, there's a half-dozen different medications to treat
this thing, all with different price tags. Do I know if the cheaper one is
good enough? No, I'm just going to follow what the doctor suggests. Same goes
for most other conditions with multiple treatment options.

\- Pricing is opaque, and not always unreasonably so. "What will this surgery
cost?" is not a question most places can answer before you've had it done.
Medicine is prone to wide variation in outcomes that make price estimation
problematic. That surgery went well and you're discharged in a day? Cheap. It
didn't go well and you're in intensive care for a week and with a dozen
doctors working on you? Very, very expensive. Which one will you be? No one
knows.

\-------------

To add to why it's breaking the market, high deductible plans are attractive
to all the wrong people. They're attractive to:

\- Broke people, because they get more in their paycheck, even though they
can't afford the deductible if they do need care.

\- The young and healthy who would be subsidizing the sickly in traditional
plans, which is making the costs of those plans spiral.

~~~
perl4ever
"Consumers are not and likely will never be, educated enough to actually make
informed decisions about costs."

Most consumers have no idea how their car works. But you can get estimates,
and comparison shop. You can get an explanation, even if it has shortcomings.

~~~
jdeibele
Yes, and I've gotten called to approve additional expense because there was
more work needed than they estimated once they got in there.

Or the door latch on my van seized up. Tried two different independent shops I
like and they both referred me to the dealer. If your general practitioner
says they can't help you and you need a specialist, what are you going to do?

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FlyingSideKick
The cost of healthcare and need for health insurance prevent many people from
becoming entrepreneurs. Case in point one of my best friends is a talented
physiotherapist who has dreamed of starting his own clinic for years, however
he has a chronic genetic health condition that keeps him reliant upon working
for employers whom provide “good” health insurance. I think a nationalized
health system would provide a boost to the startup economy.

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stephengillie
Morally, as a single 30-something with no children, it seems preferable to pay
the IRS fine than to purchase health insurance. Paying the IRS means there's a
chance some of my money will go towards roads or schools or another beneficial
cause. While if I buy the absurd amount of health insurance required by law -
enough to insure a family of 5 - I'd only be lining the pockets of insurance
executives.

~~~
thebooktocome
The individual mandate is gone; you can stop complaining about it.

[https://www.vox.com/policy-and-
politics/2018/4/13/17226566/o...](https://www.vox.com/policy-and-
politics/2018/4/13/17226566/obamacare-penalty-2018-individual-mandate-still-
in-effect)

