Healthcare in the United States is a complex issue, but there are, ultimately, two categories of problems:<\/p>\n
First, the rising cost of healthcare in general, as it affect everyone:\u00a0 those insured by their employers, those with individual insurance policies, and taxpayers, insofar as the rising cost of Medicare, Medicaid, and other government-provided healthcare programs impact us.\u00a0 <\/p>\n
As a bit of background, I work as a pension consulting actuary in a firm which also has a practice advising companies on healthcare, so I\u2019m not an expert on healthcare topics, but learn quite a bit from training sessions, informational materials the company produces, etc.\u00a0 And this is what I see:\u00a0 employers, large and small, are looking for, and don\u2019t have, an answer.\u00a0 The current direction is \u201cconsumer directed health plans\u201d \u2014 that is, high deductible plans.\u00a0 (And we see the trends earlier than most, because the company offers them to its own employees right away.\u00a0 Thirteen years ago, when my fist child was born, we were covered by an HMO, where we paid $10 for everything related to the pregnancy and childbirth \u2014 not per visit, but in total.\u00a0 Later, that same child was in speech therapy, and we paid nothing, not even a co-pay.\u00a0 Now we have a $1,500 per person\/$3,000 family deductible.)\u00a0 The other approach is \u201cDefined Contribution\u201d or \u201cprivate exchanges\u201d \u2014 where the employer decides on a fixed amount per family type (single\/+1\/+family) and the employee goes on an \u201cexchange\u201d (administered by a benefits outsourcing firm such as my employer) to purchase healthcare, from what are hoped to be a greater variety of competing providers than if the\u00a0company had to make individual arrangements with all of these insurers itself.\u00a0 What remains to be seen is whether they take the next two potential steps of (1) moving from a contribution that varies by family size\/type to a fixed amount per employee regardless, and (2) increasing the employer subsizy by a fixed amount or by CPI, but not trying to keep pace with medical inflation any longer.<\/p>\n
I really don\u2019t believe that insurers are the bogeyman as far as high health insurance costs are concerned.\u00a0 They do compete with each other to offer employers the best price and I\u2019ve never heard any hint that insurers engage in anticompetitive practices.\u00a0 What\u2019s more, large employers are usually \u201cself-insured\u201d meaning that they bear the entire cost of their employees\u2019 health care, with the health insurance company whose name is on the insurance card the employee has in his wallet really providing \u201cadministrative services only\u201d (ASO in industry terminology) \u2014 processing claims for a fee.\u00a0 It\u2019s the providers \u2014 but I\u2019ll save that for another post.<\/p>\n
The second issue is cost to individuals.\u00a0 What I mean is that for many people, purchasing an individual insurance policy is genuinely cost-prohibitive, and healthcare without insurance, for any major healthcare need, is inaccessible (hospitals simply won\u2019t provide non-emergency treatment without an insurance card) or unfathomably sky-high \u2014 especially because of the quite nefarious practice of charging \u201csticker price\u201d (double, triple what the negotiated rates are for an insurance company) so that it\u2019s a matter of skill and no small degree of luck whether one can negotiate the price downwards.\u00a0 <\/p>\n
And people without insurance behave in ways that are, really, not rational \u2014 avoiding visiting a doctor for preventative care or early diagnosis, even if they could swing the private-pay cost, out of a fatalistic \u201cwhat\u2019s the use, I couldn\u2019t afford the treatment cost anyway, so I\u2019m better off not knowing.\u201d\u00a0 <\/p>\n
Decisions not to purchase health insurance are also often not rational \u2014 even in cases where people could genuinely afford a premium they go without because of a mindset that health insurance is something one gets through one\u2019s employer.\u00a0 My sense is that if a family has a middle-class life with all the accoutrements (single family home, cable, meals out), and a job change leaves them without insurance, there\u2019s a fairly strong likelihood that that family would deem health insuranc unaffordable if they had to sacrifice one of these markers of middle-classness.\u00a0 And someone leaving Medicaid due to success in a job hunt would never even consider a basic, high deductible policy.\u00a0 <\/p>\n
I have a lot of issues with Obamacare, which I hope to write about later, and one of them is the way they\u2019ve made insurance overpriced for the young by requiring cross-subsidies, but I am curious about what the \u201cexchange\u201d enrollment rates will be with respect to these groups that don\u2019t purchase insurance because they deem it to be too expensive.<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"
Healthcare in the United States is a complex issue, but there are, ultimately, two categories of problems: First, the rising cost of healthcare in general, as it affect everyone:\u00a0 those insured by their employers, those with individual insurance policies, and taxpayers, insofar as the rising cost of Medicare, Medicaid, and other government-provided healthcare programs impact […]<\/p>\n","protected":false},"author":2209,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-923","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\n