
Health-insurance premiums could rise 40% or more next year - droptablemain
https://www.nytimes.com/2020/03/28/health/coronavirus-insurance-premium-increases.html
======
digi59404
Fantastical notions of universal healthcare aside..

This was to be expected, and it won’t be well received. It’s also not
necessary, and shouldn’t happen. Much of the US Healthcare expense when
insurance companies are involved is fake.

For example, last week I got a medical statement from my insurance. The total
cost was a couple grand. I paid 20$ co-pay, and insurance paid a couple
hundred. The remainder was “negotiated down, look at this great value your
insurance provided!”

If I were to pay out of pocket the 220$ instead of my health insurance premium
that month I could have easily paid it. The same is true for emergency
surgeries, the actual medical cost of things like brain surgery is around
10-15k. Atleast at some providers, and not hospitals that gouge.

My point here is - Insurance companies have spend decades rewriting the
healthcare system to their advantage. They’ve spent years boosting the cost of
healthcare, while paying only a fraction and making the remainder of the money
disappear. Hospitals have spent years reducing costs while charging 100k for
some surgeries in hopes they’ll get even 20k. And have 80k “negotiated”.

There’s plenty of money in the system between insurance companies and
healthcare systems. The resolution here isn’t single-payer. The resolution is
to force insurance companies to pay their fair share instead of hoarding
money.

There’s no reason they should increase their rates right now. They should be
breaking into their reserves to handle this.

~~~
airza
Are you saying "fantastical" about a system that every other industrial nation
has?

~~~
BurningFrog
There is a huge amount of diversity in non American industrial nation health
care systems.

Saying they're all the same is a bit like saying all foreigners speak the same
language.

~~~
jjoonathan
That's like tying your shoelaces together, complaining that you can't run, and
pointing at the variety in other peoples' footwear when someone suggests that
the tied shoelaces might be the problem.

~~~
BurningFrog
I'm not at all defending the absurd US system.

My point is more that there is no single other well thought out system that
works in every other country.

Those 30+ systems are _very_ different from each other. Most of them are also
in some kind of crisis, if you ask local public opinion.

I'm arguing against the simplistic "let's just convert to the other system"
idea. This isn't like going metric.

------
isoprophlex
[https://data.oecd.org/healthres/health-
spending.htm](https://data.oecd.org/healthres/health-spending.htm)

And already, US healthcare spending is at least twice that of other developed
countries, at arguably much reduced availability to the average American.

as an outsider, the inability of the USA to change its healthcare system is
baffling.

~~~
CPLX
If you’re baffled you can start with the concept that all that extra money
being spent is going to specific people and organizations, who will work to
preserve it.

It’s a textbook tragedy of the commons example.

~~~
kstenerud
> It’s a textbook tragedy of the commons example.

It's not tragedy of the commons.
[https://en.wikipedia.org/wiki/Tragedy_of_the_commons](https://en.wikipedia.org/wiki/Tragedy_of_the_commons)

This is an example of an inefficient system with powerful stakeholders working
to preserve the gravy train that's developed around it.

~~~
CPLX
My analogy was that the pool of money available to fund health care was a
“commons” and without being rationed by a government it would be exploited.

Perhaps the better public policy jargon to use would be logic of collective
action, in the sense that the profiteers are the special interest group and
the rest of us are the diffuse group, but the concepts are pretty conceptually
related in my opinion.

------
rayhendricks
$72k estimate for a hospital case. That is above the median yearly income, it
is absolutely time for the government to nationalize healthcare and provide
Medicare for all. I’m not worried about paying a few hundred for a premium for
Medicare per month, it’s the Monopoly money hospital bill that is the problem.

~~~
gridlockd
It may be premature to evaluate performance of different systems in the
current crisis, but I would like to point out that the Netherlands, Germany
and Switzerland _do not_ have nationalized healthcare.

Italy, on the other hand...

~~~
rayhendricks
I fully understand that, but NL/DE/CH do not allow their healthcare providers
to pull the shenanigans that we do in the United States.

It is incredibly frustrating to need to go to the urgent care for strep throat
or something and then not have any idea how much it will cost afterwards, and
also have a health plan with a $2000 deductible and $4000 out of pocket max.
This is literally the garbage that we in the USA have to deal with all the
time.

~~~
ac29
> It is incredibly frustrating to need to go to the urgent care for strep
> throat or something and then not have any idea how much it will cost
> afterwards

Isn't that stuff all defined though? I just looked at my insurance, and it
clearly states Urgent Care visit is $65 and a Strep Lab test is $28 (both out
of pocket, after insurance costs).

Granted, getting costs on something more complicated is more difficult, but
there's still the defined deductible and out of pocket maximums that can be
useful.

~~~
rayhendricks
Much of it is defined in their policies and imo Kalifesque reality, however if
the strep test accidentally goes to an out of network lab, then you will have
to pay their imaginary rate or argue with your insurance provider. Another
example would be using an out of network anesthesiologist, which one would not
be informed of and then receive a surprise bill three moths later.

Some states have passed legislation which somewhat protects against this
however here is a good example of it
[https://www.google.com/amp/s/khn.org/news/even-with-
insuranc...](https://www.google.com/amp/s/khn.org/news/even-with-insurance-
she-faced-227k-in-medical-bills-what-it-took-to-get-answers/amp/)

------
baq
This mixes elegantly with the upcoming recession. Less people being able to
afford health care compounded with even less people being able to afford
health care. Like the article states, either government steps up or this whole
system collapses financially.

~~~
toomuchtodo
It’s the ideal storm to push the US to universal healthcare. It would’ve
happened eventually, COVID simply pushed up the timeline by rapidly
overextending an already failing system.

~~~
_bxg1
Let's hope.

------
ghouse
From 2011, but the message is unchanged: the US spends more than 2x per
capita, but receives average results:
[https://thesocietypages.org/graphicsociology/2011/04/26/cost...](https://thesocietypages.org/graphicsociology/2011/04/26/cost-
of-health-care-by-country-national-geographic/)

~~~
coryrc
Because we spend too much on unhealthy elderly people. Guess who will vote
against fixing that?

~~~
coryrc
[https://journalistsresource.org/studies/government/health-
ca...](https://journalistsresource.org/studies/government/health-care/elderly-
medical-spending-medicare/)

[https://www.politifact.com/article/2013/jan/28/federal-
spend...](https://www.politifact.com/article/2013/jan/28/federal-spending-old-
young-numbers/)

The spending is almost entirely on the elderly. Cuts that matter mean less for
them. They've already got Medicare so there's no "wasteful" insurance company
to save on eliminating.

------
zrail
Or, and I’m just saying maybe, we could use this crisis as an opportunity to
create a Federal-level reinsurance program. This isn’t quite Medicare for all
but it would guarantee costs higher than some reasonable number are spread
across the entire population.

~~~
redis_mlc
> This isn’t quite Medicare for all

Why not have "Medicare for all"?

Like every other Western country.

~~~
seanmcdirmid
That isn’t true though. Switzerland has a much better predecessor version of
the ACA: everyone is required to buy insurance (with subsidies for those that
can’t). They got rid of the group market so everyone is in the same risk pool,
which is an improvement over our system. However, Switzerland has the second
highest healthcare costs when comparing developed countries in a per capita
basis.

~~~
karatestomp
AFAIK _every_ other rich country regulates some or all medical costs per
procedure or what have you (that is, they have price controls). Some do it
directly and others by establishing a monopsony on buying healthcare, but that
and a good fall-back insurance provider (or a system set up such that one
isn’t needed as everyone’s basically already on it) seem to be the common
necessary ingredients in keeping costs sane and everyone covered, as far as I
can tell.

~~~
seanmcdirmid
Sure, I can agree with that. But many countries have hybrid systems that mix
public and private insurance (Netherlands?) and then add it in a bunch of
regulation and control to keep things sane.

I’m not really sure what health insurer roles are in Switzerland, since the
cantons heavily regulate premiums and care. Maybe a Swiss could make light of
the situation.

------
claudeganon
Of course this will largely be a cynical maneuver by insurance companies to
make more money, who now, because of this pandemic, are seeing huge reductions
in non-COVID claims.

It’s always just an excuse to screw more people and these companies should be
abolished.

------
brandmeyer
COVID-19 is going to have severe economic impacts on many different
transactions. Renters versus landowners. Patients versus insurance providers.
Insurance providers versus care providers. Oil producers versus refiners.
Refiners versus retailers.

In each case, both sides are going to try as hard as they can to isolate the
losses to the other party. In situations where their bargaining power and
leverage are balanced, both parties will bear some of the loss. In cases where
one side has much more economic power, well, you can see where this is going.

In the insurance and health care markets, barring radical restructuring, it
will come down to state regulators to ensure that the costs come out well-
balanced. Some state boards are going to find this easier to do than others,
but I don't think it will trend out on left-right political lines.

------
bogomipz
From the linked report("new analysis") referenced in the first paragraph:

>"The potential impacts detailed in this report reflect what could happen
absent decisive federal action. If these impacts are not mitigated, the public
health and economic consequences to consumers, small and large employers and
health insurers are potentially staggering, including:

• Consumers and employees not getting needed testing or treatments due to cost
barriers, both for COVID-19 but also for other health conditions.

• Employers no longer being able to offer affordable coverage, or dramatically
shifting costs to employees.

• Consumers and employers no longer being able to afford coverage, leading to
employer groups dropping coverage or individuals deciding to go uninsured.

• Even more unsubsidized marketplace enrollees being priced out of individual
markets.

• Small insurers risk insolvency, and if they close, put covered consumers at
financial risk, damaging competition that benefits consumers and the employers
that purchase on behalf of millions of Americans.

• Dramatic cost increases, many of which will be borne by the federal
government in the form of higher Advanced Premium Tax Credits (APTC), or by
both federal and state governments paying for increased Medicaid enrollment as
individuals and employers drop coverage"

Aren't almost all of these things not only already true but have also been
true for years now?

------
redis_mlc
> Insurance premiums could spike as much as 40 percent next year

Don't they every year? Not even kidding.

~~~
ac29
No? That would mean going up by 30x every decade, which would obviously
quickly exceed people's entire income.

I checked mine, and the past 3 annual increases were 7.7%, 13.3% and 6.9%.

edit: I should add I'm on an individual plan purchased directly from an
insurer, not a group or employer plan.

------
dankohn1
The uniquely terrible US healthcare system succeeds in privatizing profits
during most years but socializing losses, just like the finance industry in
2008-09.

------
jimnotgym
This is not inevitable. The government could stop it.

~~~
luckylion
Yeah, they could force doctors and nurses to work overtime for free.

~~~
egypturnash
Or they could pull money out of thin air and give it to the doctors and nurses
instead of sinking it into the stock market.

~~~
karatestomp
This’ll kill more people and likely hurt the economy more than 9/11 did. How
much money did we spend on wars and security junk after that? Seems like a
reasonable amount to ask for over the next couple decades to help fix our
healthcare system and support people.

------
mnm1
This is unbelievably absurd. Insurance companies don't want to do their one
and only job, paying healthcare costs, so they want a bailout from the
government too. How much money are we going to pour into these useless
entities before we just get rid of them altogether? How backwards does America
need to be on this issue before there's a will to fix it? How many people need
to die and go bankrupt over medical bills while insurance companies make 100%
profit off of any premium raises? Is being the new epicenter of the global
pandemic of the century not enough? The greed and cruelty is just
unbelievable. So much for helping others when it really matters.

------
cryoshon
rising health insurance premiums will drag down any notion of economic
recovery once the pandemic recedes, much like rising health insurance premiums
led to the middle class being hard-pressed in the aftermath of the great
recession.

quite simply, there is no economy without consumer demand for services. and
consumers who pay higher rents to their health insurance company have less
money to spend. the money doesn't ever trickle back down into the economy once
it is lost inside of the insurance system.

nevermind that millions of people have lost their employer-provided health
insurance after being laid off. for them, these discussions of health
insurance premiums rising are a bit academic; there is no chance of care being
accessible or affordable, even if the monthly toll of maintaining expensive
insurance is rising astronomically.

it's clear the the US healthcare system cannot continue in its current form.
it is my hope that people will no longer entertain delusions of perseverating
the present system. it's decidedly non-serious to consider that the ACA might
be reformed further to keep the current system.

the only true debates remaining are about how much of the healthcare system
should be under the public's control, which we can boil down to two camps:
above 70% public ownership, or above 40% but less than 70%. the former camp
includes ideas like single payer and medicare for all, whereas the latter camp
includes hybrid systems which are closer to switerland's or germany's systems.

~~~
bogomipz
I'm not familiar with the 70% vs 40%. What are the significance of those two
numbers in the context of healthcare reform debate in the US?

------
a_c
So...when the insurance company profits, they are not lowering premium. when
the lose money, the ramp up premium. Sounds like a solid business

------
xenadu02
Healthcare can be the difference between life and death. It is very much
unlike any other market good. It is also somewhat unique in that failure to
seek early care often leads to much more extensive need of care later, and any
imparement is a deadweight loss in human capital terms (unless you're a
sociopath who thinks we need to clear out "surplus" population)

A free market requires price discrimination to establish prices. By definition
some people must be priced out of the market. There is no free market in
healthcare that will deliver anything close to the correct care for the people
who need it, and as mentioned delaying the purchase of care or substituting
the wrong care is often the worst of both worlds.

Health insurance is uniquely terrible: denying care is the quickest way to
increase profits, and unlike fire insurance healthcare is needed by everyone
at some point (most people never have their house burn down).

There are some things the free market is bad at. Natural monopolies are one.
Healthcare is another.

