16 replies »

  1. Good question. I’m arguing that there is no answer, yet!
    Whenever there is talk about consumer driven health, some commentators argue against the consumer driven healthcare, based on the assumption that people do not want to take responsibility to educate themselves sufficiently to be able to make their own health decisions. This clearly is a huge assumption, based on little data. Fact is, we, (US or the world) never had consumer or market driven healthcare. Never. If you want to call high-deductible insurance plans combined with an HSA or websites like localdentist4less.com market driven health care, you ain’t seen nothing yet. So basically, we never had consumer really make decisions so far. So there is no data. Get seriously started with it, collect your data, and then create opinions. Otherwise its all hot air and keyboard clicking 😉

  2. Here’s something fun about these plans – when you do pay out of pocket, I have discovered that not everything is applied to your deductible. We had a $276 bill, and when I did the math, I discovered the company had only applied $131 to the deductible. When I called the insurance company, they said that they deemed that our doctor performed unnecessary tests, and they wouldn’t apply that amount to the deductible. I asked since it was coming out of my pocket, what did they care? I figure we will pay about $6000 to reach our $4000 deductible.

  3. JD are you a janitor for Anthem? You sound like a janitor I know there. What wax are you using on the floors these days? I bet the administration costs are through the roof for Mr. Clean. I would personally use Ajax just like the name. Any way if you want to save on health insurance give me a call love to chat. 513-677-6262

  4. Gee… imagine that. An insurer claiming HSA plans are “more costly to manage”.
    And fraud is everywhere. It happens quite often with all kinds of investments. I am working on a securities case at the moment in which several individuals bilked their own FRIENDS and FAMILY out of roughly 86 million over a period of 6 or 7 years. Nothing like selling fake debenture notes and unregistered securities for a quick windfall. Except for that federal lawsuit thing… that’s gotta suck.
    The fact that someone ripped of HSA money and 401k money is just that. It was a pool of money that he had access to and abused it. No different than any other corporate financial fraud and embezzlement.

  5. David,
    Several mistakes here. First, the point was about health insurance, not the “health care industry” as a whole. As in, within health insurance, this area is more than usually filled with a kind of fast and loose attitude that is compatible with outright fraud. Second, he wasn’t claiming that fraud is not committed elsewhere. We all know full well that it is. Your point doesn’t even make sense. It’s like if I said, “Retired Americans are more attracted to warm climates than Americans of other ages” and you responded “You’re wrong on that. Old people live in all parts of the country.” It’s a non sequitor.
    As for the apples and oranges comparison: I think you’re helping my case. By admitting that the cost structure is higher for individual than for group policies, you’ve just given an argument in favor of group policies. But I actually don’t think we need to get away from the direct purchase of insurance, so long as we create highly efficient exchanges that let us cut out the middleman and standardize options so that people can easily and clearly compare. I’m happy with something like Medicare Advantage for all under the right conditions (subsidies for the poor, cost controls, etc.)
    As for your point about admin expenses for HD policies being lower than comprehensive ones, I think you’re saying that the total PMPM cost is lower. Maybe, maybe not. But it would have to be a lot lower in order for the AER to be the same because the total premium is so much lower. And we all know that the total premium is so much lower because the benefits are so much lower, not because of any admin efficiency. So, a policy with an actuarial value of $200 PMPM and an admin cost of $40 PMPM may have a lower admin expense than a policy with an actuarial value of $400 PMPM and an admin cost of $50 PMPM, but that fact doesn’t help anyone. We’re still dealing with an AER that’s almost twice as high, and actually a less efficient product.
    I’m assuming, by the way, that the relatively high admin cost for high-deductible policies does not come from having more tools in the area of price and quality comparisons for providers, and health and wellness services. If that’s where the higher admin is coming from, then it could actually be a good thing. As best I can tell, these truly consumer-directed features are not yet a significant component in admin costs, nor are they yet well-developed enough to have an appreciable impact on medical costs. I’m all for trying harder on that score, even if it only gets us a small part of the way.

  6. jd,
    If Matt was arguing that crooks are especially attracted to one area of the health care industry, then he is wrong on that too. Crooks are attracted to all areas of the health care industry.
    Also, your write:

    And as someone who is gainfully employed by a health insurer, I have no patience for those who blithely tout high-deductible policies to individuals as some kind of fix to our problems, meanwhile the administrative expense ratio on these products is about twice as high as on products with more complete coverage that are sold to groups, and profit margins (though data is sketchy here) are substantially higher.

    That’s an apples to oranges comparison. Of course administrative ratios in group insurance are lower than in the individual market. The relevant comparison is that of high-deductible polices with those of comprehensive ones. I’m betting you’ll find that the adminstrative expenses for high-deductible policies are lower than comprehenive ones, whether they are in the group market or individual one.

  7. Ah, bankruptcy, the final refuge for corporate crooks that leave the victims holding squat.

  8. Instead of ranting and raving, the posters on this thread should actually read the article. This is simply a guy who had a total lack of ethics and embezzled a lot of money. Subsequently, he got caught and is rightly facinga possible lengthy jail sentence.

  9. It’s remarkable how an emotionally-charged subject can make people’s reading comprehension skills go into the toilet.
    Matt wasn’t claiming that all private health insurance has a special appeal to crooks. Rather, the point was about a specific, small segment of the health insurance industry.
    And as someone who is gainfully employed by a health insurer, I have no patience for those who blithely tout high-deductible policies to individuals as some kind of fix to our problems, meanwhile the administrative expense ratio on these products is about twice as high as on products with more complete coverage that are sold to groups, and profit margins (though data is sketchy here) are substantially higher. Note that I didn’t make a comparison with nationalized health insurance.
    High-deductible health plans are a solution to health care cost and accessibility issues in the same way that subprime mortgages are a solution to the problem of capital formation among the working poor. On an individual level, sometimes it works, but it also creates new problems and doesn’t address the root causes of the original problems on a societal level. It can only delay the day of reckoning.

  10. Stuart,
    No, I think Matt is correct on this one. Being a crook isn’t a flaw of human nature, it is a flaw of markets. Clearly there is no fraud in government-run health care systems. There is no fraud in Medicare or Medicaid.
    Fraud only exists in market-based health care. Therefore, we must adopt government-run health care.

  11. Indeed. How wrong all those other 1st world, industrialized nations must be to assume healthcare is a right and not a monied priveledge!
    Vote now for anarchy! Um. Oh. Wait.

  12. Aha. One of those who believes “free market economy” means “everyone gives me his or her money, for free.”
    Such things always carry the seeds of destruction within the overwhelming ego. If only he’d stuck it in an offshore account instead of classing up the joint with Japanese art…

  13. Who could possibly have imagined that the character who runs this blog would be attracted to the business of rationed health care (with all the coercion and statism that that implies)?

Leave a Reply

Your email address will not be published. Required fields are marked *