What would individual health insurance cost if the court strikes the mandate down and still requires insurers to cover everyone?

With the Supreme Court justices sounding like they might strike the mandate down, this is a question I’ve been getting a lot lately.

I have pointed to New Jersey as a real life example of what can happen when insurance reforms take place but there is no incentive for consumers to buy it until the day they need it.

In 1992, New Jersey passed health insurance reform that required insurance carriers to either offer individual health insurance on a guaranteed issue basis or pay an assessment to carriers that did. Other elements of the legislation were:

  • Guaranteed coverage and renewability for all eligible people regardless of their health status. A pre-existing condition exclusion does allow insurers to limit coverage during the first 12 months (a limitation which is not contained in the Affordable Care Act).
  • Guaranteed renewal of policies, provided (1) the insured does not become eligible for coverage under a group plan; (2) premiums are paid in a timely fashion; and (3) no fraud is committed by the insured.
  • Community rating of the premiums, with variation allowed only for family status (single, adult plus child, husband and wife, and family). (The Affordable Care Act allows rate variations of up to three times from young to old.)
  • Standardized insurance plans, referred to as Plans A, B, C, and D (indemnity options) and a single HMO plan.

New Jersey does not have a individual mandate or any other means to encourage participation in the health insurance pool.

What does the health insurance market look like today in New Jersey?

First, there are relatively few insurance plans participating in the New Jersey insurance market. According to the New Jersey Department of Banking and Insurance, if you want to buy a two adult plan with a $2,500 deductible and 80% coinsurance for example, there are only three carriers offering it. Aetna at $4,913 per month, Celtic at $12,322 a month, and Horizon a $6,127.78 per month. These rates do not vary by age.

You can buy a $2,500 deductible, 80-20 coinsurance plan for a family. Only one health plan, Oxford, offers it and it is age rated. If you are age 25, it will cost $2,498.20 a month, at age 40 it will cost $2,978.75 per month, and at age 60 $4,054.97 per month.

The cheapest family plan I found on the state site is a Horizon plan with a $10,000 deductible that costs $1,434.72 a month–$17,217 a year. The cheapest HMO plan was a Horizon plan for $1,546.08 a month–$18,500 per year. Although, the state does also offer very limited and scheduled benefit plans that cost as little as about $600 per month.

You can see the complete chart of rates at the New Jersey state website by clicking on the icon: “See Monthly Rates for All Standard Plans.”

If anyone has Anthony Kennedy’s email address I’d appreciate your sending this over.

Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. Before forming HPSA in 1992, Robert served as the COO, Group Markets, for the Liberty Mutual Insurance Company. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog, where this post first appeared.

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100 Responses for “What If We End Up with a Health Care System Like the One they Have In New Jersey?”

  1. BobbyG says:

    Gotta love the foreground placard.

    “Goverment”

    An obvious failure of the Goverment Edukashun System.

    That said, we’ll let Nate take over from here to explain NJ’s great affordable plans.

  2. John Ballard says:

    After thinking more about the matter, I am coming to the conclusion that mandates, both federal and state, are nothing more than red meat for the insurance business. The law was carefully crafted to allow states to retain a significant measure of control by establishing exchanges, but even then there is no mechanism aimed at capping health care inflation.

    The adverse selection argument is easy to grasp. Unless everyone is in the risk pool some will always game the system. If getting insurance is optional but sold with guaranteed acceptance, what’s to stop anyone from picking up a policy after they get sick or on the way to the emergency room?

    A smoke and mirrors game is going on to distract both consumers and taxpayers that the real driver of medical costs is not how best to cover the uninsured but at what point to either stop or limit treatments and/or make providers quit putting such outrageous numbers on their bills.

    I can hear the screaming already about tort reform and defensive medicine, but sooner or later the only way that real costs will get controlled is that an actual safety net, clearly defined AND LIMITED is going to have to come into existence in the US, same as in most of the rest of the world.

    Some countries have a pitiful safety net because they are too poor to provide anything better. Others, like Canada, have a Medicare-like plan for all that only costs about eleven percent of GDP, is tax-supported and the object of well-known spitballs from US talk show hosts and Conservative pundits, and the UK and Germany have a hybrid of both. Private insurance is not allowed in Canada, but private alternatives in the UK flourish.

    In all cases those at the bottom of the economic ladder are more or less cared for some kind of way, poor though it be. The best we have come up with in the US is Medicaid, and although states may negotiate rates with providers the national picture is a Duke’s mixture of plans ranging from excellent to embarrassingly poor, all of which are supported more with federal funds than from the respective states.

    Even under this plan, states want to have the money with no strings attached. I can’t speak for others, but I have no confidence that in my state that money will be appropriated any better than the local option sales tax or highway tax money… all of which is tossed into the general fund (following the federal example of how our Social Security taxes have been “borrowed” for other purposes, replaced by that so-called “trust fund” that GW Bush called worthless IOUs in a file cabinet in West Virginia).

    As the years pass I’m getting closer to the time in view of human mortality, when medical care will be a total waste. When I think about my children and grandchildren my only hope is that they will be blessed with good health and no serious accidents. because absent some serious changes which I have yet to see coming, they won’t be able to afford insurance anyway other than a very high deductible policy.

    Why? Because I sure don’t see any evidence that providers are competing to treat sick or injured patients at lower prices. I hear the advertisements (some even disguised as PSAs) trolling for new customers, inviting the public to get screened for all kinds of medical problems of which they may not be aware. Paranoia is being marketed wholesale when demonstrable problems like substance abuse and all those “non-emergency” cases clogging the ED are multiplying in their face. TV ads invite Medicare beneficiaries to call for a “free” motorized chair or scooter, even to get a free something or other for taking that initiative.

    I see the private sector flush with success as literally millions of Americans are going without basic care. The system we have now is an economic and social train wreck and the arguments I’m hearing have more to do with how to limit care rather than figure out ways to make it more accessible to those who need it most, most of whom are the working poor and their children.

    And all the while the insurance industry smiles in the corner like a cat watching a mouse, knowing that no matter which way the cookie crumbles they will still have a profitable piece of the action.

    • BobbyG says:

      Excellent.

    • Nate Ogden says:

      “Private insurance is not allowed in Canada”

      Your 5 years behind or more.

      “Approximately 70% of Canadian health expenditures come from public sources, with the rest paid privately (both through private insurance, and through out-of-pocket payments). ”

      There has been private insurance in Canada for years, there is also a group health market. Private insurance came into existance because of failures in the single payor model. Court ruled people had the right to private insurance.

      Do you wonder if you had the facts correct if your opinions might change?

      • Nate Ogden says:

        Actually your 7 years behind

        In Quebec, a recent legal change has allowed this reform to occur. In June 2005, the Supreme Court of Canada overturned a Quebec law preventing people from buying private health insurance to pay for medical services available through the publicly funded system and this ruling does not apply outside the province. See: Chaoulli v. Quebec (Attorney General).[47]

      • Peter1 says:

        Another view Nate:
        http://www.cbc.ca/news/background/healthcare/public_vs_private.html

        “By accessible, the CHA means “insured persons in a province or territory have reasonable access to insured hospital, medical and surgical-dental services on uniform terms and conditions, unprecluded or unimpeded, either directly or indirectly, by charges [user charges or extra-billing] or other means [e.g., discrimination on the basis of age, health status or financial circumstances].”
        What is private health care?

        Anything beyond what the public system will pay for. For instance, should you have to spend some time in the hospital, the public system will cover the cost of your bed in a ward, which usually has three other patients. If you want a private room, the extra charge will come out of your pocket, unless you have extended health coverage either through your employer or through a policy you have bought yourself.

        Need an ambulance ride? Expect to receive a bill. If you have extended health care coverage, your insurance company will likely pick up the tab.

        Dr. Albert Schumacher, former president of the Canadian Medical Association estimates that 75 per cent of health-care services are delivered privately, but funded publicly.”

        Maybe you can give us an example (and specifics) of a “group” health insurance plan in Canada?

        • Nate Ogden says:

          http://www.standardlife.ca/en/group/insurance/products/health_dental.html

          you can do a yahoo search and see pages of results.

          From other sites

          The second largest cost as a percentage of all Group Health Insurance claims is paramedical practitioners usually accounting from 15% to 25% of claims within a Group Health Insurance plan.

          Great West’s byline

          Healthcare and dentalcare benefits are important features of any group benefits plan. These benefits help your plan members bridge the widening gap between provincial health insurance plans and the coverage your members and their families need.

    • lhf says:

      Absolutely. This is the fraud behind the ACA – it was managed by Max Baucus, owned and operated by the insurance industry, and insurance stocks went UP when it passed.

      I don’t know if a single payer is the answer or if we should return to the days when we paid out of pocket for our routine care, and carried catastrophic insurance. I don’t know that anyone has really looked at the latter option.

      I do know that as a Medicare participant now it is difficult to find a GP who will take a new Medicare patient. We finally started going to one of those urgent care operations – not bad, but not optimal either. It’s hard to know if you can “develop a relationship” with a doctor in that setting, as all of the advice given old people states. If your doctor doesn’t know you you are not likely to receive the end of life care you want.

      Some say that’s why we have pistols.

  3. John Ballard says:

    Thanks.

    Barring unforeseen circumstances I see health care in the US becoming something like dental care, with those who can afford to pay getting the best of care, including cosmetic dentistry that can cost more than transportation. In the main, however, crooked teeth and dentures are still fairly common and even now I see some with rotten teeth or no teeth at all.

    Unfortunately the results of little to no medical care is far more serious. I hate to think about that that means.

  4. Maggie Mahar says:

    Bob L.–

    You’re entirely right– and NJ is not the only state that has seen insurers leave
    (and premiums climb) when they attempt to have community rating without
    an individual mandate.

    Moreover, the NJ rule that lets “insurers o limit coverage” of a preexisting condition ” during the first 12 months” is very important. If a patient is diangosed with cancer, he doesn’t want “limited coverage” during hte first 12 months, and most people couldn’t afford to pay for ful, comprehensivel treatment out of savings.

    I would guess that most citizens of NJ are not willing to take the gamble, and so buy insurance of they possibly can.

    As you point out, under the Affordable Care Act, insurers would have to
    offer full coverage from the moment a sick person bought insurance.
    I would think that many companies would just close up shop and get out of hte business, leaving patients with fewer choices and much high premiums.

    A disaster.

    John-

    The Affordable Care Act really does put downward pressure on prices. First, the Secretary of Health & Human Services can reduce Medicare payments for ‘Overvalued services” at any time–just as she can lift payments for “undervalued services.” They have already lowered payments for many
    diagnonstic imaging services and we know that there are more cuts to come.

    Private insiurers have said they will follow Medicare’s lead.

    Meanwhile, the Medicaure’s annual inflation adjustment in payments to hospitals and nursing homes is going to be automatically reduced by 1%
    a year. Over time, that adds up. The goal is to put pressure on hospitals to become more efficient– to reduce preventable errors, etc. We know that when under financial pressure, hospitals Can in fact become more efficient and even turn a profit on Medicare payments. This will give them an incentive to do that.

    Hospitals will suffer financial penalities if there are too many preventable readmissions. Peter Orszag, who is on the board of Mt. Sinai in Manhattan, has told me that they are working hard to do a better job of discharing patients and following up with them after they go home to make sure they understnad their meds, have follow up appt. with doctors, etc. And they’ve succeeded.

    MOre and more providers are foroming “Accoutnable Care Organizations” that will be paid for quality of care, not volume. No more fee-for-service. No financial incentive to “do more”

    It will take time for all of these finanical carrots and sticks to kick i n, but they will.

    Hospitals know this– and are preparing by trying to figure out how to be more efficient, knowing that they will be receiving lower payments. Doctors also realize that fee-for-service payments will be lower, and a great many (particuarly younger doctors) are happy to go on salary–like docs at Mayo, Kaiser etc, who all report greater job satisfaction than the majority of docs in private practice who are paid piece-work.

    • John Ballard says:

      Thanks, Maggie, and I know you’re right. I was just venting a bit trying to remain cool.

      As you say, the new law applies downward pressure on prices. But think how that approach stands in sharp relief to the “competition results in better services at lower prices” arguments of those who worship at the altar of market economics, complaining to Heaven if they smell even a hint of “downward pressure” from government or other source.

      I am so ready for someone prominent enough to be heard respond to those complaining about government telling us what we can or cannot have — by saying plainly, “You can have anything you want and can afford. Those in charge of spending your tax money are simply practicing good stewardship.”

      Those TV ads for free motorized chairs drive me up the wall.

  5. Paolo says:

    “You can buy a $2,500 deductible, 80-20 coinsurance plan for a family. Only one health plan, Oxford, offers it and it is age rated. If you are age 25, it will cost $2,498.20 a month”

    On the MA health connector, a similar plan ($2k deduct., 80/20 coins.) for the same age group is offered by 5 different companies starting at $721/mo. Definitely not cheap, but it’s less than 1/4 of the NJ price.

    • BobbyG says:

      So, “starting at $721 / mo,” x 12 = $8,652 / yr, plus, you’re additionally on the hook for the first $2k (and your meds co-pays don’t count in that tally). Hmmm…

      So, even if you’re a 99214 Chronic and you go to the doc 4x / yr, you’re effectively paying ~ $2,750 per visit (excluding labs etc).

      And, the insuror is paying $ _________ per visit? what’s a 99214 in MA?

      “Starting at”…

      • Paolo says:

        In MA, all the insurers are not-for-profit and have pretty thin margins. The cost of insurance is pretty much the cost of health care, which is pretty high because some providers have strong market power and charge a lot. But that’s another story.

        My point is that two states with very similar demographics and cost of health care end up with very different guaranteed-issue insurance premiums (4:1 ratio) because one of them didn’t know how or didn’t want to spread health care costs across both the healthy and the sick.

  6. Peter says:

    John,

    Dental care is rather cheap. Every 6 months a cleaning costs 125.00. So all one has to do is save a bit of money every month and at the end of 6 months you will easily have 125.00 unless you can’t prioritize well.
    People act is if dental exams are outrageously expensive when i think 125.00 out of pocket is cheap. Of course, every few years i have to have x-rays which is a bit more, but not bad.

    • John Ballard says:

      Those of us reared with the right sense of responsibility are not the ones with problems. My comparison of dental care with medical care is meant to underscore the challenge of education, social values and the advancement of good habits. Periodic dental checkups and maintenance are, as you point out, both easy and comparatively cheap. But good habits, like good hygiene, has to be a part of one’s social fabric. Your phrase “unless you can’t prioritize well” is not to be overlooked.

      I use the dental example not to argue for universal dental care, but to underscore the social consequences of not having a baseline of universal medical care. I’m willing to allow those who neglect their teeth be ugly or get by with cheap dentures from a low-end lab. But I’m less willing to feel okay with loads of expenses going for overpriced or unnecessary medical care, especially that which might be less with better preventive attention, the kind that people at the low end of the economy don’t receive, not because they don’t want it but because it is totally out of their imagination.

      Uninsured people simply don’t seek medical attention until they are sick or injured. Period. If there is any advantage to having everyone insured it is nothing more than allowing them to actually darken the door of a clinic or doctors office for well visits. I’m not an expert, but from what I’ve read if just a portion of diabetics or those with hypertension could be put on a maintenance regimen sooner the overall savings would be tremendous.

      Years ago one of my employees was complaining about how much it was going to cost him to have a tooth filled. I asked him how much it would cost to replace a tire on his car, compared with the cost of a filling. When he said it was about the same, I said to him, “Okay, ten or fifteen years from now, where is the tire? And where is the tooth?”

      He looked surprised, then realized that the cost of the filling was not all that high when you think about it. The problem was not the cost of the filling, but the fact that he had never even thought about it.

      A change of thinking is going to have to happen if medical costs are to be brought down. With complaints increasing about too many non-emergency problems coming to the ER, something constructive needs to happen to get those cases cared for elsewhere, preferably before they get to that point. That trend is symptomatic of a much bigger problem.

    • Peter1 says:

      “Dental care is rather cheap.”
      “People act is if dental exams are outrageously expensive”

      Might want to look at the condition of people’s teeth who know, not think, that dental care is not so cheap. You might want to say because the “exams” are cheap the rest is too, but give us some costs of the actual work.

      My own dentist can tell you of what people do when they can’t afford to get their teeth fixed – they just pull them. Do you consider that care?

      Car repair shops also offer “cheap” exams, maybe even free as loss leaders, but if you need some work you find out how cheap.

  7. DeterminedMD says:

    Maybe not the best place to give example of what mandates do, but here it is why I know that mandating people buy insurance is a bad idea before, during, and hopefully after this legislation is buried as currently written:

    I worked part time for a hospital who was part of a big corporation system that included other hospitals, and then one day a few years ago, before this bs mandate crap of PPACA became apparent, the idiots of administration decided unilaterally to ‘mandate’ that ALL employees of their system HAVE to be inoculated for flu prevention. OK, well fine for those who work in the hospitals, but why enforce employees who do not work in the hospital, not even on the grounds mind you, have to get these shots? And what if someone signs a legitimate waiver that puts the employee at risk to not be offered reimburseable sick time if ill with flu? Or what if you had a reaction in the past and are legitimately exempt from another shot? Hell, what if you were a conscientious objector?

    Yeah, no lie, the administration through their HR said no to these options. I was actually threatened to be fired if I did not get a flu shot. And, I did not work over 95% of my time in the hospital itself. Having worked for the system over 5 years with no negative issues to my employment had no bearing on my position I was not going to risk my physical, mental, or spiritual well being to get a shot. So, I quit. And didn’t look back.

    When you let politicians or people who do not directly provide the health care options or interventions set policy without any regard to exceptions, you are approving tyranny and legitimizing harming people, and if per laws, allowing such disruptions and harm to be excusable.

    The Democrats f—-d up in creating legislation that was not well thought out nor respecting honest and fair input from those working in the system that the legislation was going to control. Remember this opinion if it resonates at all in readers, because who in their right mind would blindly and passionately continue to demand this legislation continue as is without seeing the facts and problems resulting now that Pelosi et al either did not or would not want the public to know.

    Some of these posters are frauds. Are the authors of this site aware of this, or just creating outrage for hits to validate their site be read?

    • BobbyG says:

      “When you let politicians or people who do not directly provide the health care options or interventions set policy without any regard to exceptions, you are approving tyranny and legitimizing harming people”
      __

      Straw Man. You use your one anecdotal (non-govt, btw) episode to infer that ALL government health policy is set by [1] non-clinicians, and [2] set forth “without exception.”

      Neither is true.

  8. John Ballard says:

    @DeterminedMD
    Help me understand how hospital HR policies is connected with insurance.

    As I understand it, the proposed law doesn’t require that employers actually insure all their employees, only that they offer it under certain circumstances (companies with 50 or fewer employees being exempt). I may be wrong, but I think employees have the option of buying their insurance elsewhere if they choose.

    In the case of mandatory fly shots, what that being required by an insurance TPA or the hospital?

    • DeterminedMD says:

      Mandated policies are about intruding into everyone’s life, claiming everyone has the same endpoint. Do you really appreciate that kind of mentality?

  9. Peter says:

    John,

    I don’t know what we can do to help people that aren’t reared to take care of themselves. That may be a lost cause. I guess i just don’t understand not thinking about or imaging taking care of oneself money or not.

  10. First of all, nobody would be able to buy insurance in an ambulance or at the ER front desk. Here is the actual legislation text (it helps to actually read it even though it may be an infringement of the 8th amendment):

    “‘‘SEC. 2702. GUARANTEED AVAILABILITY OF COVERAGE.
    ‘‘(a) GUARANTEED ISSUANCE OF COVERAGE IN THE INDIVIDUAL
    AND GROUP MARKET.—Subject to subsections (b) through (e), each
    health insurance issuer that offers health insurance coverage in
    the individual or group market in a State must accept every
    employer and individual in the State that applies for such coverage.
    ‘‘(b) ENROLLMENT.—
    ‘‘(1) RESTRICTION.—A health insurance issuer described in
    subsection (a) may restrict enrollment in coverage described
    in such subsection to open or special enrollment periods.
    ‘‘(2) ESTABLISHMENT.—A health insurance issuer described
    in subsection (a) shall, in accordance with the regulations
    promulgated under paragraph (3), establish special enrollment
    periods for qualifying events (under section 603 of the Employee
    Retirement Income Security Act of 1974).
    ‘‘(3) REGULATIONS.—The Secretary shall promulgate regulations
    with respect to enrollment periods under paragraphs (1)
    and (2).”

    Second, I would suggest that everybody fretting over “death spirals” read and listen to Mr. Farr’s arguments at the Supreme Court on Wednesday, including the references.

    Third, I find it bitterly ironic that AHIP and those it finances, are overly concerned with those not “reared with the right sense of responsibility” gaming the system, seeing how AHIP & Co. are currently gaming all of us out of billions of dollars that were supposed to pay for actual care.

  11. Maggie Mahar says:

    John– thanks re: the ACA putting downward presure on prices.
    .
    Also, in defense of those with bad teeth. This is not always due to neglect.
    My daughter religiously brushed her teeth from the time she was very young,. She was always pretty obseessive about personal hygeine.

    Her brother always resisted brushing.: “I’ll do it later.”
    I sent them for annual check-ups and professional cleaning from the time they were 5 or 6. (I always had bad teeth.)

    Emily always had cavities. (She inherited my teeth.) Michael never did. (He inherited his Dad’s teeth. When my ex-husband was 45 or 50 he still had never had a cavity.)

    By the time she was in high shcool, she was having root canals. VERY EXPENSIVE. Michael has never had a root canal, or a serious cavity.

    But I agree that since few people die from tooth decay, when it comes to universal coverage, it’s a second priority .

  12. DeterminedMD says:

    My god, reading some of the comments by the usual suspects who just champion this legislation solely because Democrats forwarded it, is there any fault in this legislation you would honestly and candidly comment on to let us know you are invested in the public and not your party!?

    • John Ballard says:

      …honestly and candidly comment on to let us know you are invested in the public and not your party,

      Perhaps you missed what I said above…
      http://thehealthcareblog.com/blog/2012/03/30/the-what-ifs/comment-page-1/#comment-196136

      Uninsured people simply don’t seek medical attention until they are sick or injured. Period. If there is any advantage to having everyone insured it is nothing more than allowing them to actually darken the door of a clinic or doctors office for well visits. I’m not an expert, but from what I’ve read if just a portion of diabetics or those with hypertension could be put on a maintenance regimen sooner the overall savings would be tremendous.

      That is not a partisan argument or statement. As an opinion with which you may disagree, but it is my opinion based not on any party identity but from personal experience in my life and those of others. I’m sure as a doctor you experience is far greater than mine and if you have found that uninsured people do, in fact, seek preventive care in significant numbers I will happily stand corrected. Until then, as much as I don’t like paying for insurance (which would be far more economical if we had a public option), that remains my opinion.

      (Speaking of which, the opposite of “mandate” is “option.” And it was mainly the opposition of the insurance lobbies manifest in BOTH parties that killed the notion of a public option.)

      • DeterminedMD says:

        I really wasn’t thinking of you JB, in the comment, but appreciate the reply.

        The health care system needs fixed, no g-d doubt about that, but, this legislation needs to die for the phoenix to be resurrected. And this Democrap machine to just keep flagellating that it must stay as is, frankly, is not just disturbing, but disruptive and counterproductive to the process that is our Constitution.

        Politics of convenience, just like faith of convenience, is shallow and non productive to the society it allegedly serves. We are reading first hand what the defenders and apologists want to scream down are lies and half truths at best.

        Again, what is worse, an Iraq war, or health care law proposed by a minority of representation? Trick question, they both SUCK!!!

      • BobbyG says:

        ” the opposite of “mandate” is “option.” And it was mainly the opposition of the insurance lobbies manifest in BOTH parties that killed the notion of a public option.”
        __

        Spot on. I will be citing that.

      • Nate Ogden says:

        15 million are eligibile for insurance now and don’t bother signing up. Millions more can get affordable insurance through work and wont take it. Just giving someone insurance doesn’t mean they will use it.

        I also have big concerns about abuse of these plans, think of all the pill abusers who can now get free insurance to feed their pill habits. Rx is our biggest drug problem right now and free insurance is throwing gas on the fire.

        • John Ballard says:

          Thanks, Nate for your input. And thanks even more for not phrasing it in condescending language. It makes me think these comments threads are not altogether a waste of time and energy.

          Regarding Canadian private insurance, I’m now better informed thanks to your good research. But no, that is not persuasive for me that Canada’s single-payer system is a failed model, especially if it really delivers 70% of care.If anything, it illustrates either the expense and scarcity of private alternatives. It’s a glass half-full or empty analogy. One might argue that the scarcity of private insurance is due to either costs or restrictions.

          But the larger discussion lately here at The HEALTH CARE Blog is about medical care, not insurance. And although insurance plans are a vital part of that subject, the real purpose of all plans (hopefully), both private and public, is the affordable delivery of good health care regardless of how it is funded.

          Commenter Paolo (above) said something yesterday of which I was unaware, that health insurance plans in Massachusetts are all non-profit, which by a strict accounting definition in that state may actually mean non-profit (as opposed to the GAAP definitions which seem blind to the contradiction of “not-for-profit” and obscenely outsized compensation packages for high-performing sales people and executive types).

          If his information is even close to being true regarding the four-fold difference in the cost to consumers in NJ vs MA that is a very important piece of data. His admission that Massachusetts costs are also high reflecting the high prices charged by some of the most expensive systems in the world (or as he says, they have “strong market power,” an understatement for certain) sounds right to me (Beth Israel Deaconess and Brigham & Women’s come to mind immediately) but even so, the arithmetic is breathtaking. I even told my wife last night that I learned something about Massachusetts that makes me feel better about Mitt Romney.

          I share your concerns about substance abuse and the widespread availability of prescription drugs. I also share your fears about widening the insurance net for that reason alone, but an important component of ACA (underway even as we speak, btw) is the tedious and expensive advancement of better HIT programs and the creation of a portable, nationally accessible data base that can, among other things, coordinate care across specialty and state lines.

          I have watched substance abuse up close and personal, both at work and in the family, and it is not a pretty picture. I doubt any family in the country is free of that problem. But that is not a compelling reason to restrict the delivery of good health care, whether it be via insurance or some public means. It does, however, underscore the importance of good coordination of care, close monitoring of drugs and the early identification and treatment of individuals with substance abuse problems.

          (Related to this challenge is the swollen prison-industrial complex, but that is related more to yet another profit-driven species of corporate animals sucking up tax dollars and subsidies. I saw a statistic yesterday that California is spending more on prisons than education!)

          Thanks again for your input. I enjoy a civil discussions far more than slinging insults and put-downs. (But I have to admit, I enjoy a good bon mot as much as anyone and sometimes I can’t pass up the chance to hurl one.)

          • Peter1 says:

            “Regarding Canadian private insurance, I’m now better informed thanks to your good research.”

            John, you may want to dig deeper on that “research”. How much of “private” care is actually paid for by government. As well you might also want to know exactly what type of care Canadians are actually paying for privately. I do know that budgets in Canada are as tight as here and there has been a push for more private involvement in health care, but overall it’s still a very public system. Wait times are being addressed with more dollars being spent to reduce them for certain inflictions – usually for the increases in old age problems such as cataracts, hips, knees. Drugs can be expensive (private insurance available), but prices are regulated and dental is still not covered by Canadian Medicare unless required to be done in a hospital.

            To think that Canadians have found the errors in their ways and see the light for a U.S. private system is just bunk.

          • Paolo says:

            “If his information is even close to being true regarding the four-fold difference in the cost to consumers in NJ vs MA that is a very important piece of data. ”

            John, there is no need to take my word for it. All this information has been public for the last 6 years on the MA exchange: mahealthconnector.org . It’s quite easy to punch in the right numbers (just zip code, age, family type) and get the current rates.

          • Nate Ogden says:

            Paolo wouldn’t we need to compare the small group market as well to be accurate? MA keeps their individual market affordable by integrating it with the small group market, this is great for individual but had an affect on the small group market.

            Great study on what could have been and what became and the ramificationas

            http://www.heritage.org/research/reports/2010/09/massachusetts-health-care-reform-has-left-small-business-behind-a-warning-to-the-states

            The strain on small businesses has been docu­mented in recent published accounts of small firms beginning to drop coverage.[3] While Common­wealth Care,[4] the state’s subsidized program, has seen annual premium rate hikes of around 5 per­cent, rates for small businesses have increased 15 percent per year over the past five years, according to a survey commissioned by the Retailers Associa­tion of Massachusetts.[5] State-collected data from 2007 and 2008 also show a small decrease in pre­mium contributions by small employers as costs continued to rise. [6] This trend could help to explain declining employee participation in employer-offered insurance at small companies.[7]

            If you fix the individual market and cover 1 million more people but that fix strains the small group market and 4 years later 1.5 million lose coverage you haven’t fixed the problem just moved it.

            Historically that has been the problem with our reforms, they don’t solve problems they just move them

          • Nate Ogden says:

            http://www.statehealthfacts.org/comparetable.jsp?typ=4&ind=270&cat=5&sub=67

            Group
            NJ Single $5,153
            MA Single $5,413

            Some others even higher.

            Individual
            NJ $364
            MA $437

          • Paolo says:

            “Paolo wouldn’t we need to compare the small group market as well to be accurate?”

            Well, the average insurance premium for MA and NJ across all insurance types is probably very similar since their demographics and costs of health care are pretty similar as well. Most people in both states have some form of insurance so average insurance premium reflects average health care costs.

            However, the topic that is being discussed in this thread (started by Bob) is how the lack of an individual mandate or incentive to buy insurance affects the rates in the INDIVIDUAL market. That is the market that people are concerned about when talking about the individual mandate. It is also the only market available to anyone whether or not they have employer-based health-care. I don’t think anybody is arguing that the lack of an individual mandate will have much of an effect on the group market.

          • Paolo says:

            “If you fix the individual market and cover 1 million more people but that fix strains the small group market and 4 years later 1.5 million lose coverage you haven’t fixed the problem just moved it.”

            Interesting hypothesis, but completely devoid of empirical evidence. In the real world, after 6 years (from 2005 to 2011) the percentage of employers offering health care in MA has actually grown from 70% to 77%.

          • Nate Ogden says:

            “However, the topic that is being discussed in this thread (started by Bob) is how the lack of an individual mandate or incentive to buy insurance affects the rates in the INDIVIDUAL market.”

            That sort of sums up my point, there is no such thing as an individual market in MA. There is a combined Individual/Small Group market but no individual market.

            http://www.mass.gov/eohhs/docs/dhcfp/cost-trend-docs/cost-trends-docs-2011/premium-report-executive-summary.pdf

            Since the passage of the Commonwealth’s landmark health reform legislation in 2006, the Massachusetts health insurance market has undergone several key regulatory changes.
            In addition to the expansion of subsidized coverage, the establishment of an individual mandate, and the creation of incentives for employers to offer coverage, the law also
            combined the individual and small group markets into a single “merged market” to provide greater premium affordability, stability, and product offerings to individuals. The merged market allows individuals to purchase the same range of products available to small groups. Premium rates are based on the projected claims experience of the entire merged market, which consists of more small group members than individual purchasers.

            There literally is no individual market in MA.

            If we ignore this fact then we could really solve the problem by allowing individuals to buy into any large group plan at that groups rates. Short term it would work wonders for the individual market but would quickly destroy the large group market.

  13. Peter1 says:

    Yea, I think New Jersey is a good example of how private insurance can “innovate” an affordable solution.

    • John Ballard says:

      Now Peter1, quit picking on Nate.
      He and I are having a civil discussion this morning. In my experience that has never happened before.

      • Peter1 says:

        John, it’s refreshing when Nate can engage in non-insult peppered comments, but that doesn’t mean that to keep his inner rage caged we need to not argue his points.

    • John Ballard says:

      To think that Canadians have found the errors in their ways and see the light for a U.S. private system is just bunk.

      Yes, Peter1, I know, I know…I have done my own homework and also know a few Canadians.
      I’m trying hard to be civil with Nate. Help me out here…

      • Nate Ogden says:

        Do they see the US system as a solution, probably not, do they know, by a vast majority, that their present system is unsustainable and will be changing, yes.

        SASKATOON — The incoming president of the Canadian Medical Association says this country’s health-care system is sick and doctors need to develop a plan to cure it.

        “We all agree that the system is imploding, we all agree that things are more precarious than perhaps Canadians realize,” Doing said in an interview with The Canadian Press…

        His thoughts on the issue are already clear. Ouellet has been saying since his return that “a health-care revolution has passed us by,” that it’s possible to make wait lists disappear while maintaining universal coverage and “that competition should be welcomed, not feared.”

        In other words, Ouellet believes there could be a role for private health-care delivery within the public system.

        He has also said the Canadian system could be restructured to focus on patients if hospitals and other health-care institutions received funding based on the patients they treat, instead of an annual, lump-sum budget. This “activity-based funding” would be an incentive to provide more efficient care, he has said…

        Doesn’t that sort of sound like they are saying they need to look at something more like FFS then global budgeting?

        • John Ballard says:

          …the Canadian system could be restructured to focus on patients if hospitals and other health-care institutions received funding based on the patients they treat, instead of an annual, lump-sum budget.

          Sounds more like capitation than FFS.
          That’s the dynamic driving ACO models, a rather bureaucratic effort at replicating the economics of Mayo and others who get better outcomes at lower per patient rates.

        • Peter1 says:

          Nate, doctors (for the most) have never been in favor of government control of health care, and as here have always fought that same fight in Canada. “doctors need to develop a plan to cure it.”, which is the same plan here, gut it and reap the financial rewards.

          Rather than saying “the system is imploding”, from a doctors view, they should ask Canadians how much they want to pay to “save” it. The word “imploding” has been picked up by all the Fox News-a-likes and implies impending doom is just around the corner.

          Canada isn’t going to economic ruin.
          http://thenewamerican.com/economy/commentary-mainmenu-43/8801-canadas-remarkable-economic-recovery

          Even though “The New American” touts government inaction as the solution, Canada was already heavily involved in government support systems, including health care.

          Health care in Canada is changing, but so is every other system.

          • Nate Ogden says:

            “Canada isn’t going to economic ruin.”

            Because they have strong conservative leaders fixing things.

            Sorry you walked into that one.

            They did just increase their retirement age.

            They exploit their natural resources

            They are enacting immigration reform

            If we were governed by their conservatives we would be in much better shape as well

          • steve says:

            A canadian conservative is an American radical liberal. Besides, it was the liberal party that began the reforms to cut spending and taxes IIRC.

            Steve

    • Nate Ogden says:

      NJ sitution was created by politicians, how can that be blamed on private insurance?

      NJ politicians mandated community rating and other provisions private insurance must operate in, and your say by operating in those laws private insurance is a failure?

      • John Ballard says:

        I have nothing intelligent to say about “rating.” The fine points of insurance are out of my depth. Nevertheless I still have opinions.

        All I know is that insurance is a second cousin to the lottery, a way of splitting risks. In the case of life insurance you bet you’re gonna die and the company is betting you ain’t.

        Health insurance is a safety net against unaffordable high costs. Unlike auto insurance, health insurance doesn’t have to option to “total it out” and settle for some fixed amount…. that end-of life stuff is almost a blank check for the patient and his family (not to mention the doctor) (and let’s don’t forget the attorney).

        When I hear the terms “community rating” or “group rates” my first reaction is they sound a lot like “states rights” or “private schools,” select populations that enjoy not having to share in the risks/ costs of the larger one in which they live and work.

        There are plenty of respectable ways that those with assets are able to protect them against the needs of others without. Offshore accounts, tax exemptions and a litany of trusts come to mind.

        But sooner or later everyone within the boundary of one’s social group will need to participate, like it or not, in the health care of its population. Many will argue for Darwinian alternatives but those arguments tend to melt in the face of personal tragedies.

        • Nate Ogden says:

          “Unlike auto insurance, health insurance doesn’t have to option to “total it out” and settle for some fixed amount”

          In a way it sort of did until PPACA. Policies had lifetime max’s of 1 million or some amount. That was your total it out payment. This protected the plan from doctors and patients spending money just to spend money.

          It’s important to note if you survived that episode later you could buy a new policy with a fresh limit. Just like a car, you total it out get a new car then get a new policy.

          My of my biggest fears from PPACA is now that we made it mandatory to have unlimited spending providers will find a way to spend it. We just blew up one of the few remaining cost controls.

          Which was even more interesting becaues we all seem to agree that at some point care needs to be rationed. Why did we just eliminate the ration?

          Life has a set amount in wrongful death, travel, dieing in war. Why does it not have a set amount in healthcare? Your entitled to $2,000,000 in healthcare, sorry as a society that is all we can afford.

          I don’t think anyone would argue its poissible for everyone to spend $5 million on healthcare so why not set the limit so we all know what it is

          • BobbyG says:

            “My of my biggest fears from PPACA is now that we made it mandatory to have unlimited spending ”

            That is documentably false.

          • BobbyG says:

            “My of my biggest fears from PPACA is now that we made it mandatory to have unlimited spending ”

            That is documentably false. I guess, you, like Scalia, didn’t bother to read the “2,700 pages.” (there are only 906, btw)

          • Nate Ogden says:

            typical bobby, then why don’t you document it? Your not exactly a bastion of intelligent thought, why would anyone believe you saying its documentably false without any proof.

            I know I have been required to remove annual and lifetime caps from our benefit plans. There is some guidance for gradual phasing out but in short order all of my plans will have no spending limit.

            Document where I am wrong.

          • Nate Ogden says:

            http://www.whitehouse.gov/healthreform/healthcare-overview

            “End to Limits on Care: In the past, some people with cancer or other chronic illnesses ran out of insurance coverage because their health care expenses reached a dollar limit imposed by their insurance company. Under the health care law, insurers can no longer impose lifetime dollar limits on essential health benefits and annual limits are being phased out by 2014. More than 105 million Americans no longer have lifetime limits thanks to the new law.”

            You and Maggie Mahar must get your information from the same sources.

          • Nate Ogden says:

            “That is documentably false. I guess, you, like Scalia, didn’t bother to read the “2,700 pages.” (there are only 906, btw)”

            In oral arguments in the Supreme Court on Wednesday, Justice Stephen Breyer “promised” he had not read the entirety of the 2,700-page health-care legislation the court was examining.

            He also suggested it would be unreasonable for the lawyers arguing over the constitutionality of the law to expect the justices to “spend a year reading all this”

            Why don’t you Maggie and the other uninformed liberal propaganda cabal ever mention Breyer? Or is it ok for a liberal justice to literally say he doesn’t want to read 2700 pages but a conservative justice can’t joke about the 8th amendment?

            “Also on Wednesday, Justice Antonin Scalia jokingly invoked the Eighth Amendment—which prohibits cruel and unusual punishments—when discussing the “severability” issue with Deputy Solicitor General Ed Kneedler. Scalia’s remarks elicited laughter from the audience in the court chamber.”

            I think its time for your to shut up and go away again.

      • Peter1 says:

        Would have a government to buy mandate done something positive in that “market”?

  14. bob hertz says:

    The subsidies envisioned under the ACA were projected to cost at least $90 billion a year, and that is just in 2014. The subsidies were going to increase by some inflation factor, and will probably increase far more because of corporate dumping of employees. (Douglas Holtz-Eakins has some powerful writing on this.)

    Just noodling with the numbers……………..

    for less than half of $90 billion, you could have a very respectable network of public urgent care clinics, public dental clinics, and mental health clinics.
    Whether they were free, or charged very low subsidized rates, is important but could be worked out in practice.

    For another $30 billion or so, you could fund EMTALA, i.e. actually pay hospitals at the time of care when they stabilize the uninsured.

    Steps like these would move America to what I think is fiscal honesty about health care………where we say to the public “Your taxes can create a public health system, which will treat you to the best of its ability. We cannot afford to give everyone free access to any private doctor or hospital, or cure every disease that appears.”

    Rather like the public library, which gives you temporary access to a great variety of books. You have to return the books and you may have to wait for the one you want, so it is a step down from private bookstores.

    I know that is a crude analogy, but I was a public librarian and the concept is worth keeping.

    My model does require an admission that taxes are needed. There are communities which do not fund their public libraries, shame on them, and Paul Ryan’s latest budget proposal took money away from Community Health Clinics, shame on him.

    But my loose proposal for a public health service still seems like a way out
    of logjam that the mandates have created.

  15. Nate Ogden says:

    “For another $30 billion or so, you could fund EMTALA, i.e. actually pay hospitals at the time of care when they stabilize the uninsured.”

    This would be a HUGE first step. When groups ask how they fix their insurance plan the first thing I always tell them is you have to have the data. If you don’t know what is going on yiour just guessing at solutions.

    Hospitals claims they provide $x of charity care. They have to charge private insurance more to cover it etc. But if you look at most of the hospitals in the country if employers could pay cost plus 12% they could pay for all of the supposed charity care a few times over.

    It would also help to get a better picture of who is using free care. or in many cases stealing it. If someone truly needs assistance then Medicaid should be paying for it, thats why it is there, those that don’t need it either need cut off or forced to start paying.

    • Paolo says:

      I agree (it’s nice to agree sometimes). If there is a law that forces hospitals to give treatment, there should be a law that funds that treatment and provides some data and accountability.

      Before 2006, MA actually used to pay hospitals for the treatment of the uninsured. But then came Mitt Romney and argued that instead of paying hospitals to treat the uninsured, it would be better to divert that money to finance everyone’s insurance.

      • Nate Ogden says:

        “If there is a law that forces hospitals to give treatment, there should be a law that funds that treatment”

        I would make that a constitutional amendment, not only specific to healthcare but anything.

  16. bob hertz says:

    There was a piece in Health Affairs, I think by John Holohan, which showed that hospitals do eventually recover some portion of what it costs them to treat the uninsured.

    There is a special supplement in Medicare called DSH I believe, but the money has to travel through an intricate formula where we pay a little more for seniors when the seniors use a hospital that also treats younger uninsureds.

    It is not honest or direct.

    EMTALA was yet another unfunded mandate. If a Congressional majority wants something to happen, then that majority should have the courage to raise taxes.

    John Goodman had a solid idea about ten years ago. We could impose a tax on people who are uninsured, and the revenues from that tax could go straight to the hospitals which care for them.

    If you made $40,000 and were uninsured, and the tax for staying uninsured was 2%, then you would pay $800 more on April 15th, and the money would go into a fund for hospitals.

    End of problem, really, at least foremergency care.

    Now — That person who makes $40,000 and stays uninsured would admittedly not have coverage for office visits, drugs, and medical testing.

    Is that a national crisis? It need not be. If you remove the worst instances of price gouging, an awful lot of office care does not cost more than a brake job on your car. And we have no federal program for brake jobs.

    If people with no insurance could get MRI’s at their real cost of about $250 and generic drugs at their real; cost of $4 a month and most blood tests at their real cost of $35 and contraceptives at $30 a month, then a lack of health insurance would be no big deal — until you hit cancer or AIDS or a hideous injury that needs some sort of special provision.

    • Nate Ogden says:

      As a start uninsured people with out standing medical bills should have their tax refunds confiscated. Either sign up for free Medicaid if your eligible or get insurance or the rest of the tax payors aren’t going to get stuck with your bills.

      It would be very easy for hospitals to turn over uncollected debt to the IRS to withhold like they do other liabilities. Would end some of the free riding.

      • John Ballard says:

        Some time ago, speaking with someone in the accounting/ claims recovery department where I worked, I learned that after a week or two they routinely tossed uncollected claims into a pile to be “written off” for accounting purposes as noncollectable. This may or may not be accurate, but it fits perfectly with the idea that today’s so-called not-for-profit model has a laundry list of ways to claim all kinds of “community benefits” by citing crap like that.

        I know individual clinics and practices aren’t prone to doing that because I have once or twice received bills for services nearly a year after they were done. Somebody was combing the records to see what they could find and sure enough came up with something. I tossed the bills into the trash and heard nothing further about them.

        I’ll never forget years ago when I went to work in a retirement community setting I asked one of the residents to explain how the Medicare claims and supplemental insurance worked. (This was long before I graduated to Medicare myself.) His answer was delightful — “The doctor sometimes charges a small co-pay and sends the rest to Medicare. The insurance company sometimes then sends me a bill for more money that Medicare didn’t pay. We just throw that away and sooner or later they work it out.”

        I have learned since there is more to it than that, especially now that MA is kidnapping beneficiaries, sucking them into the New HMO Redux Plans.

        Short answer: I seriously doubt we really want the IRS with their paws in that already messy financial quagmire.

        • Nate Ogden says:

          “tossed uncollected claims into a pile to be “written off” for accounting purposes as noncollectable.”

          It has changed slightly, and there are others that can speak to the exact numbers much better then I, but after a few months they consider it bad debt but they don’t toss it they sell it for pennies on the dollar. The market for this is actually sort of fascinating if your into that sort of thing.

          Bad debt purchased directly from a doctors office might go for $0.30 cents on the dollar. They will try to collect then what they can’t they sell to someone else for $0.15 on the dollar. Eventually it gets to a point where it is almost worthless debt but there is even a market for that. People will buy up all the worthless debt and sit on it until someone wants to buy a house or something and has to pay the bill off.

          The debt market has been very helpful to the provider community to help recapture some of that lost income.

          “especially now that MA is kidnapping beneficiaries, sucking them into the New HMO Redux Plans.”

          Not to jeopardize our collegial exchange but MA has actually been shown to be very beneficial to the poor. They get better care and better access to care in a more controlled financial environment. A lot of the billing and multiple policies is eliminated when Medicare and a supp is replaced with a MA plan.

          • John Ballard says:

            That makes sense. Poor people who finally make it into Medicare after a lifetime of little or no medical attention must think they have gone to Heaven. I hadn’t thought of that. I can see where even the most parsimonious managed care would be an improvement.

            Hmm…

            I suppose Medicare Advantage is not irredeemably negative. No wonder the industry keeps peddling it even with subsidies being pinched off by ACA. I read somewhere that over a third of Medicare beneficiaries are already going with MA, likely because they are getting in with little or no premium.

            My wife and I had MA the first year. Why? Premium was ZERO. Had we lived 25 mile to the South it would have been about $40 monthly. She had a hospital stay and when we looked closely we learned that with co-pays and such we came out about the same as with a traditional supplement, but had there been really high expenses we would have faced punishing costs. Consequently, given the chance we went back to traditional Medicare plus a supplement.

            When it comes to Medicare, gimme that old time religion.

        • steve says:

          In our group, most uninsured earn so little it is not worth chasing them. A bigger problem, in some ways, are those who are supposedly insured but really are not. We put people into collections at 6 months. I expect to collect about 2%-5% of that money.

          Steve

          • John Ballard says:

            Thanks for your comment. I presume “our group” indicates you are connected with some provider, perhaps in some administrative capacity.
            I’m curious if you have any opinion regarding Medicare Advantage versus original Medicare. Reimbursement rates, response times, co-pays, limits, whatever…
            And what does it mean to be “supposedly insured”?
            Does that mean counterfeit or out of date insurance cards, poor or no phone verification, fake ID or what?

            Your 2%-5% range for collectibles sounds right to me.
            Does that reflect what you actually collect in house or what can be brought in by peddling bad bills to collection agencies?

          • Nate Ogden says:

            Have you seen the healthplans that pay 100% of the contracted fee then the plan collects the employees out of pocket cost? It works for the plans if they can get deeper discounts. I assume it would work for the providers.

            Hard to get the provider panel in place to start, would work best in a community healthplan but you don’t see many of those any more.

          • steve says:

            I have been president of an anesthesia group for many years. I was also self-incorporated for about 5 years.

            In general, Medicare has been our fastest, most reliable payer. The private insurers were pretty bad until the clean claims law was passed. For the last 10 years, they have been better. We see little difference in collection rates between Medicare and MA, though MA pays better.

            Some people have out of date insurance. A few have fake insurance info. Some people lose their jobs. Some people are out of network, and d not realize it until we send bills.

            Accounts receivable more than 6 months old comes in at such a ow rate that it costs us more to work it than have a collection agency work on it, so we use one.

            I have not seen what Nate describes below, but sometimes private insurers send payments directly to patients, then we have to try to get them. That doesnt always work out so well.

            Steve

          • Nate Ogden says:

            Do you receive payment electronically from Medicare and private insurers, just Medicare or neither?

            We have been trying to push electronic payment, saves 5-7 days mailing, and can’t get any signup.

          • steve says:

            Almost all of our billing is electronic now. Same with our payments. We use a lockbox. Some smaller insurers still send checks.

            Steve

  17. Peter1 says:

    “They did just increase their retirement age.”

    No Nate they didn’t, it’s proposed in the budget, not law yet and open for change, especially when voters get wind of it.

    http://www.theglobeandmail.com/report-on-business/economy/economy-lab/the-economists/does-harper-really-need-to-raise-the-retirement-age/article2316982/

  18. bob hertz says:

    Selling old medical debt can have a huge human cost. Patients are stunned to be sent old bills, and their credit rating can be savaged if they cannot pay them.

    The gain to society from paying 7-year old bills is very minimal. The damage to relatively innocent (and often rather poor) former patient is large.

    A federal government which gave AIG about $180 billion in a month can certainly pay off old medical bills for perhaps $15 billion, and it could be done tomorrow morning. Medicare could pay off these old bills, and it would be a rounding error in the federal budget.

    Medical debt is barbaric. Most doctors feel the same way.

    Personally I give the Canadian system a lot of slack because it eliminates most medical bills. I will tolerate a fair amount of bureaucracy and waste and waiting lists to achieve that humane goal.

    Although I advocate quite a few libertarian solutions to health care, I

    • Nate Ogden says:

      innocent is an interesting choice of words, they incurred bills then didn’t pay them, what could be further from innocent? The provider that treated them expecting payment is innocent. Other patients that pay higher bills to make up for it are innicent.

      If we start paying off people’s bad debt why would anyone pay their bill? They could just wait for the government to pay it off for them.

  19. bob hertz says:

    Apologies, I hit the send button before I finished the prior post.

    I was going to say that I turn into Karl Marx on the subject of medical debt.

    Which reminds me, does anyone else notice the wild generational inequality on the subject of Medicare Advantage?

    We spend $20 to $30 billion a year to remove much of the curse of medical debt from senior citizens, and I am fine with that.

    But under age 65, even our mandates will force younger people to buy private insurance that by design covers just 60 or 70 per cent of ther medical costs.

    The fact that seniors make up our largest voting bloc leads to this very extreme seniority system in health care relief.

    • Nate Ogden says:

      But under age 65, even our mandates will force younger people to buy private insurance that by design covers just 60 or 70 per cent of ther medical costs.

      Insured patients only pay 13% of healthcare cost out of pocket, down from 50% in 1965.

      This study says its even lower

      http://www.american.com/archive/2010/january/the-high-cost-of-no-price

      What is really perverse is what Medicare covers vs what it was suppose to cover.

      Where I think you went wrong was to look at first dollar plan design, once a member pays a few thousand out of pocket insurance pays 100%. $5000 of a million dollar claim is .5%

      Medicare which was suppose to cover large claims and proloned illness actually cuts off and the member is liable for everything. If not for Medicaid 19% of Medicare enrollees would be broke and headed for BK.

      • Peter1 says:

        “innocent is an interesting choice of words, they incurred bills then didn’t pay them, what could be further from innocent?”

        They required needed medical care and were forced to use a rigged system.

        “But under age 65, even our mandates will force younger people to buy private insurance that by design covers just 60 or 70 per cent of ther medical costs.”

        Would the other 30% to 40% be incurred medical debt? Aren’t those the plans you tout as being “the insurance they want” at a price they can afford? Medical costs are not just the premiums, it’s also the piled on deductibles and co-pays which blind side patients.

  20. bob hertz says:

    Back about 15 years ago when I started studying health care costs in earnest, I sat up all night thinking about the following question:

    What part of health carer is voluntary, like buying furniture, and what part of health care is somethat that happens to you, like a fire?

    I decided that most of the expensive items in health care are like a fire, in which you might have some responsibility, but not enough responsibility so that society should make you pay for all of it.

    That is why I detest medical debt. By debt I do not mean owing the dentist
    $100 on the last crown he put in. I mean owing a hospital $10,000 and having to beg and deal to get the cost down.

    Like most Americans, I do not like haggling and find it demeaning. I find it
    especiallly repulsive in what is supposed to be a gift relationship.

    That is my philosophy, take it as it is. Can we find an accomodation on medical debt?

  21. DeterminedMD says:

    Bob Hertz raises a good point, what is voluntary and what is inherent for society to pick up. As the designated “Social Darwinist” at this thread by another commenter, here is an example that will instinctively raise eyebrows as much as pause, because does society have to pay for this:

    A 7 year old, J.L., is blind, suffers from cerebral palsy, chronic lung disease, and a form of diabetes. Per the article about him, his care was covered by Medicaid for the early part of his life, but when his father’s income rose above the rate Medicaid sets for all, irregardless of individual circumstances (gee, like a mandate, right?!), the child became ineligible for assistance. The parents tried to get insurance but were refused repeatedly because, yes you all guessed right, because of his preexisting conditions. And because of this the parents ended up filing for bankruptcy in 2010. How lucky PPACA was passed that same year and the child now has coverage again.

    Yeah, but the pro-PPACA writer of the article doesn’t tell us what are the expenses being created to keep this child alive. Can I pick a number for the sake of argument, just to illustrate my point of how many JLs can we as society support and not drain the FINITE health care system resources that PPACA is about? If you agree, let’s say $2000/mos for meds, doctor’s visits, adjunctive services and ancillary products.

    OK, let’s propose there are 100,000 JLs out there, different medical issues but all with chronic care needs as pediatric patients, and so at $24K for 100K each year that is $2.4 billion a year to keep these children alive and try to access a quality of life to appreciate and enjoy their presence. OK, so where do we cut from other limited monies to allow us to enjoy keeping these kids alive with the current technology and opportunity? That is the reality of limited health care funds, which does not change with PPACA.

    Look, I am not a heartless, insensitive bastard, as I have seen chronically ill kids and adults who are so fortunate they have caring parents, significant others, and other invested community members to try to help them survive what are at times a nearly unsurvivable life, but, I seem to be one of the very few who ask “when is it when”?

    The other thing I read in the article, which really incenses me, is now that kids under 26 can still be covered under their parent’s insurance, is that these “children” are having children and now getting coverage for that choice? Umm, what is that message to society? “Oh, ok, I can have irresponsible sexual behavior and the consequences are still society’s responsibility, at least as much my parents’, to bail me out.” You could argue that premise is already in place, but it squarely puts the financial demand on the parents, which I would hazard to guess the law would force the parents to maintain the policy even if mom and dad appropriately said “sorry junior/juniette, we’re out of the loop per your poor choice.”

    You know, I don’t like to see kids be at risk because of adults who are their guardians are so damn clueless and inattentive to having a dependent, but does legislation like this build in mechanisms to create more accountability that society needs enforced? I don’t think so.

    Cookie cutter approaches are not solutions, but rules need a template, that I acknowledge. You can’t expect politicians to think about individuals, because hey, they can’t even think about their own constituents over half the time. Kill the law, have the full input of all the players involved in a re-draft, and let’s see something that is better, not perfect I agree, but better than what Democrats alone could ponder.

    I other words, do the job they should have done 3 years ago in the first place!!!

  22. John Ballard says:

    Don’t be so hard on yourself, Dr. D. Your concerns are both valid and ongoing. I wish I could propose a good solution, but I have figured out in my lifetime that looking to Congress or The Law to provide a remedy is only a few paces away from playing Mega-Millions, hoping for the prince to arrive or asking Santa for a mate to go with last year’s pony.

    I just had the following exchange for someone in a Facebook comments thread….

    [S*** said] What we need is for preexisting conditions be covered,and women and men have the same coverage and care for those that have no cobra and are out of a job
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    [John Ballard] Interesting you mention COBRA. Anyone who has had to face the double shock of losing a job and health insurance at the same time has had a costly insult added to those two other injuries by the breathtaking increase in what they then must pay to retain their insurance. This is a subject too complicated for a comments thread, but the short version has to do with another piece of congressional legislation with unfunded MANDATES. (There’s that word again.) We think of COBRA as an insurance animal, but the acronym stands for Consolidated Omnibus Budget RECONCILIATION Act, a bipartisan bur mainly Republican piece of sausage which also gives us EMTALA, a law we have come to take for granted that MANDATES that hospital emergency departments are obligated to provide medical treatment for anyone who presents with a medical problem, regardless of their ability to pay.

    When I recall the furor of controversy arising from the fact that PPACA was the result of bicameral (if not bipartisan) reconciliation (which has come to mean “cramming it down our throats”) and the outrage that Congress-critters Left, Right, D and R alike love to excoriate when it involves unfunded mandates — it makes me want to hurl.

    And you are correct, S***. The needs you listed are untreated bleeding sores in the system. And unfortunately, with so much of the safety net allowed to remain among the “several states” the opponents of federalism — along with climate zombies, gun nuts, anti-women and anti-immigrant extremists — the best we can hope for, even with ACA not taken off life support, is the legislative equivalent of prostheses in the aftermath of trauma.

    It seems to me we have short memories, all of us, and are prone to conflate bicameral with bipartisan. It’s tempting to imagine that Congressional Reconciliation is one of those features of our system handed down by the Almighty along with Scripture (perhaps the Koran and Book of Mormon) just before He gave us the US Constitution.

    But those of us who remember more of the past and study history know well how imperfect is the world in which we live. It is a mistake to think that Congress or any other representative body (and yes, that includes corporate boards and stock-holders as well — all of whom bear a fiduciary responsibility to insure the immortality of their respective investments as much as family members wish to prolong Aunt Whoever’s life long past the time when she should have met the Angel of Death).

    I read once about an archaeological dig, somewhere in the Northeast I believe, that included the skeletal remains of a young man who appeared to be in his twenties, who clearly had a serious spina bifida condition. This may seem unremarkable until we remember that in a tribal environment where issues of survival (food, defense, hunting, gathering and everyday contributions to the common good) are not only expected but sometimes essential to survival — a condition of spina bifida is one that calls for a lot more in the way of contributions than a dedicated mother, or even a strong immediate family can furnish. The survival of this individual for twenty or so cold winters and hot summers, eating part of the food ration, needing special attention when moving from one campsite to another, all point to a level of social sophistication that most people don’t associate with primitive social groups.

    I mention this simply to help us all remember that as a society we have advanced past that stage of civilization. I am of the opinion that if the rest of the world can figure out how to craft a baseline safety net for health care for those unable to provide their own, the US is at least equal to, if not better than that.

    Having said that, Dr. D, I also admit that you are totally correct to say that we have now arrived at a developmental stage (thanks, Mr. Social Darwinist) which enables all kinds of scientific remedies for medical challenges that just a few years ago would be called “miracles.” We no longer consider organ transplants, advanced prosthesis or implanted pumps, pacemakers and defibrillators to be miracles. A few years ago I heard a guy refer to open heart surgery as “like tuning up an engine — they go in there and pull out the old plugs and wires and put in new ones and you go away running like a sewing machine!”

    I might add that end-stage renal disease, as a benefit to Medicare AND MEDICAID beneficiaries is a widespread illustration already on the books for what amounts to a blank check for both beneficiaries and providers. Twice a week I see an ambulance near where I live taking an elderly neighbor to and from his dialysis appointments. Hell, he may be paying the bills himself for all I know. In this case there could be two or three generations of wealth yet to be depleted. But that is where your question and that of Bob Hertz looms.

    “What is voluntary and what is inherent for society to pick up?”

    I have to add to that question the issue of affordability. In the end (no pun intended) it comes down to who can pay. And as a society we must face the question of “How much can we actually afford?” The the most recent economic bubble illustrates nothing else, it shows that there is no such thing as a blank check that will not eventually be part of a fairly big economic collapse.

    As I said, I wish I had an answer. But before we go for the answers, we first have to agree on what are the correct questions and get over the sloppy habit of blaming each other. We are all together in the same boat, –Democrats and Republicans, Liberals and Conservatives — and it is clear that what we have done in the past may be a step in the right direction but is far from finished.

    • DeterminedMD says:

      Agreed.

    • Nate Ogden says:

      I thought EMTALA can from Rep Rostenkowski, Dan, a Democrat. It was the house that introduced both EMTALA and Continuation of Coverage, both of which have been disasters

      • John Ballard says:

        Nate, I’m not going to look it up. I’m sure you are correct. As I said, the reconciliation process may be bicameral but that does not assure it will be bipartisan. The final bill (COBRA) was not vetoed but signed into law by President Reagan, patron saint of the modern GOP. As such both political parties participated in its creation, including all its various unintended consequences. As I said, trying to be as neutral as possible, we have short memories, all of us, and are prone to conflate BICAMERAL with BIPARTISAN.
        ~~~~~~~~~~~~~~~~~~~~~~~
        That said, Nate, by now I think readers at this site already know where you stand politically. And I have no doubt that new readers will figure it out very soon. Don’t you think the time is right for you to follow the good examples of a few other commenters and begin instead to argue in detail and depth in lieu of the angry bumper sticker stuff? As someone else pointed out, it’s substantive, and I might add would be a valuable contribution to lowering tensions that discussions like these are certain to generate.

        You are too intelligent to keep letting your image be that of a smart-ass. I can’t speak for others, but after avoiding threads in which your name appears (or dropping off when it does) I have only recently rejoined the conversations here at THCB. I don’t want to resume that tack but whether or not I do is up to you.

        • Nate Ogden says:

          I do frequently hear that I should be less politicial or I am to partisan. But I am only like that in responce.

          “mainly Republican piece of sausage”

          Could we not have avoided this if you had left this comment out?

          People on the left make these off handed comments, second nature it seams, then get mad when I correct them.

          I would be happy to have civil detailed discussions if those on the left would stop slapping me. Sorry I am not one to turn the other cheek in these situtions.

          Stop bashing republicans for no reason and I promise not to correct those mistaken attacks.

          For the record here is the bill;

          H.R.3128
          Latest Title: Consolidated Omnibus Budget Reconciliation Act of 1985
          Sponsor: Rep Rostenkowski, Dan [IL-8] (introduced 7/31/1985)

          Pete Stark was responsible for that gem continuation of coverage.

  23. John Ballard says:

    Touché.
    You don’t miss a trick, do you?

    In my defense, that was in a forum of other Liberals hosted by Deborah White, an old cyber-friend from many years past. In that context my use of that bumper sticker cutie was well understood and stepped on no one’s toes. In this place I strive to be less partisan, but it’s not easy for a Yellow Dog Democrat.

    Sorry for the offense. I will strive to be more careful.

    • Nate Ogden says:

      I enjoy the back and forth, being challenged is the only way to improve.

      Have a great rest of the weekend, I’m sure we’ll pick this up again soon:)

  24. DeterminedMD says:

    Quite the threads following this week’s legal forays. It’s like watching the condemned prisoner being lead to the gallows, the rope is now around his neck, and everyone is watching both the guy holding the lever as well as the phone for the governor’s call for stay of execution.

    But, we have to wait until June! And that is assuming these 9 people are not all lining at the 20 yard line ready to use 9 feet to punt the ball out of the stadium! And you thought waiting to learn who shot JR was a bitch about 30 years ago! You all know TNT is bringing the show back, wait for it, in JUNE!!!

  25. bob hertz says:

    I talk to quite a few liberals who are OK with losing the mandate. They sense that forcing people with comparatively little money to buy an expensive private policy could actually ruin the Democratic party — ironically, right at the very moment when in terms of non-white demographics the Democrats could be taking over.

    If you asked every American who will benefit from the ACA to step forward and vote for it, I do not think you would get a tidal wave of votes. This is not all due to propaganda by Fox News.

    Without a mandate, the answer is to keep expanding Medicare and Medicaid, with all their own budget problems.

    Look at it this way:

    In a free market, health insurance premiums for persons over age 50 will be about six times higher than premiums for persons under age 30 (at least males under 30, who cannot have babies.)

    Now plenty of those persons over 50 do not have high incomes.

    If we do nothing about this “market failure”, then we will have millions of people uninsured just at the time when they need insurance most. That is where the individual and poss the small group markets are headed if we do nothing. In this instance the libertarians are no help.

    Now to prevent this, we can either invoke individual mandates, employer mandates, penalties, and the minute regulation of insurance companies, who will eventually just leave the market —

    or we can let the insurance market do what it will, and just let the 50+ persons into Medicare, though not for free.

    It does not make one a communist to confess that free markets cannot solve everything.

    The markets for long-term care insurance are collapsing also

    Private insurance is uneven everywhere. I have sold life insurance, and it is getting cheaper all the time — but millions of persons do not have it, and it is a good thing that Social Security pays death benefits if a breadwinner dies and their children are under 18.

    Social insurance is.just plain necessary. We do have to keep it from gobbling budgets like Pac-Man, of course.

    But honest social insurance is better than spending vast amounts of money and resources to try and reform private insurance.

    • DeterminedMD says:

      again, good comment above. Touche on the end there, “better than spending vast amounts of money and resources to try and reform private insurance.”

      With the way Obama and his ilk are trying to take over businesses, ie see GM and Chrysler as exhibit A, maybe this was the end around to get insurance industry folks under the government thumb.

      But, you don’t read that assessment from most of the posters at this site, do you?

    • John Ballard says:

      Generally I agree with what you said. But I have two inputs to consider…

      ►Regarding forcing people with comparatively little money to buy an expensive private policy that is misleading. It’s true that most of those with comparatively little money may be the target population, but the impact is eased two ways. First, those at 400% of FPL (federal poverty level) and below will be subsidized by the feds. They will not have to sink to the Medicaid eligibility level. Second, the “expensive” part of what they purchase may very well be less than the high-priced policies now available to those with group plans.

      (Or they may, in fact, be among those who have never participated in their employer plans and will finally be able to afford to do so. As a cafeteria manager all my career I managed mostly the working poor. Probably less than five or ten percent of eligible employees even had health insurance simply because they couldn’t afford even the plan offered by the company.)

      ►Your mention of long term care is totally critical to the rising costs of health care. Of all the challenges being discussed in this debate, the horrendous costs of long-term care are mostly not mentioned. The CLASS Act portion had to be tossed as being actuarily and politically unfeasible (which is unfortunate to the point of tragic) but nothing was put in its place to do something about the maintenance of old people.

      As matters stand now, the protocol to get aging people into long term care is to first hospitalize them for three days,. after which they can be discharged to a skilled nursing facility for what is typically tagged “rehabilitation,” and after they have been there 99 days they are considered “custodial” and will either have to pay the difference between their “medical” care and their “custodial” care. Without long-term care insurance this expense is “out of pocket” (deep pockets, if you please at sixty or seventy grand a year) or “spend down” to Medicaid eligibility.

      The long-term care scene is entirely in need of revision.
      ==>Rehab should mean actual rehabilitation. My observation is that once in that setting every rehab specialty on staff and a few from outside can’t wait to get at the patients, the quicker the better (before they pass on) to get the bills in quickly. I have seen occupational, psychiatric, physical and speech therapies all administered to residents who had no more need of them than I. One man, an actual rocket scientist in his working life and a member of MENSA was given daily speech therapy the whole time I was with him. This is a nutty and wasteful use of tax money.

      ==>The 99-day care cap for Medicare patients is totally arbitrary. I’m sure many patients benefit from actual rehabilitation and are discharged appropriately because I have seen that myself. But I have also seen that even when it is clear that the maximum allowed therapy is sometimes allowed to continue way past when it is futile, milking the system for all that is available.

      The same applies to hospice providers. I was shocked when my mother was discharge from the hospital to return to her long-term care situation on hospice that there are scores of hospice providers in the metro Atlanta area. I thought “hospice” meant a change of protocol, silly me. It means an outsourced company will sign up the family and make it their business to do whatever they call themselves doing up to the four thousand dollar limit paid by Medicare. I am an enthusiastic advocate for hospice and palliative care, and I never miss a chance to evangelize about it with families I come into contact with as a senior caregiver. But I know well that it is an area that could benefit from closer scrutiny, perhaps calling for more than one opinion after some interval of time about what is needed, especially when the person is at home, well cared for by willing and able family members, or in a facility already populated by skilled medical people.

      Just a couple of ideas I had to get off my chest…
      Sorry for ranting.

  26. Bob Hertz says:

    As I understand the ACA, a family of four making $50,000 a year must spend about $3000 of their own money each year in order to receive a qualified health policy that by 2014 will cost about $15,000 a year.

    In some parts of the country, families like this are living right on the edge in terms of affording gas and mortgage. The $3000 they now have to spend is not cruel punishment, granted, but the money does have to come from somewhere. $250 a month of new spending is going to hurt. In some cases they will choose to stay uninsured. And they will resent the Democrats, who of course intended to help them.

    America has what is euphemistically called a ‘flexible labor market’ — weak unions, easy to get hired or fired, little or no severance pay, part time status and low wages are common.

    This is not all bad. Flexible labor is probably a safety valve, in that it is better for society to have a job with no health insurance, vs. no job and no health insurance.

    (The nations which do not have ‘flexible labor’ (like Germany or Sweden) also have zero or even negative population growth. They do not create new jobs and on the whole do not need to create new jobs.)

    Anyways, the downside of flexible labor is that employee benefits disappear. The ACA can be seen as the government stepping in to take the role of the generous employer.

    I am not opposed to that at all — the question is whether we can afford it.

    All of Medicare and now the ACA implicitly depend for their financing on rising wages over time. And yet there are ominous signs that this will not happen.

  27. “Tuve que actualizar los tiempos página para ver esta página, por alguna razón, sin embargo, la información que aquí era la pena la espera.”

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