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Trump administration deals another blow to Obamacare
Last Thursday, on the previous page, I made an honest and extensive attempt to engage @bartab in a non-combative exchange of viewpoints on one aspect of health care. No response, of course. Why is it that those who tend to his side of the political spectrum are great at lobbing grenades but not so good at actual attempts to deal with problems?
For years those on the right continually blasted Obama's attempt to deal with health care; when they got their turn at bat we all know what happened. And they somehow think that they are entitled to respect for this conduct.
Capitalism has become a religion for many, particularly those who don't have to worry about paying the bills. What is worshiped is the Triumvirate: Consumerism, Money and Greed. Humanity is diminished in the process. But we all have free will, so...
Last Thursday, on the previous page, I made an honest and extensive attempt to engage @bartab in a non-combative exchange of viewpoints on one aspect of health care. No response, of course. Why is it that those who tend to his side of the political spectrum are great at lobbing grenades but not so good at actual attempts to deal with problems?
For years those on the right continually blasted Obama's attempt to deal with health care; when they got their turn at bat we all know what happened. And they somehow think that they are entitled to respect for this conduct.
bartab plays the same games on the M* channel. Gets spanked their as well.
"No response, of course. Why is it that those who tend to his side of the political spectrum are great at lobbing grenades but not so good at actual attempts to deal with problems?"
I agree that there seems to be greater prevalence on one side of the spectrum, however people who merely toss grenades come in all stripes. (This is not an assertion of numeric or other equivalence; simply an acknowledgement of non-exclusivity.)
Though this is just a run of the mill, albeit self-acknowledged, troll: "it is fun to set you guys off". Like most trolls, the pattern here isn't toss and duck, but toss and run somewhere else. When questioned, a troll will scurry off with a distraction along the lines of: ... whatabout X? You may see assertions made and then disowned (e.g. by pleading ignorance), to avoid any need to defend them: "I suck at math, so please check it"
Recognize the patterns and just ignore.
With respect to constructive suggestions, IMHO that's hard to do because, well I hear that health care is "an unbelievably complex subject. Nobody knew health care could be so complicated."
For example, if we buy into the idea that an individual's state of health should not matter when getting insurance, then why do we allow insurers to charge older people (age serving as a proxy for health) three times as much as younger people? Shouldn't the rates be age- (health-) independent?
If the idea is that we can compromise our principle so long as the groupings (bands) are large enough to share the risk of similarly situated people, then why stop at 3x? The pre-ACA ratio of actual health costs was closer to 5:1. So if we're allowing bands at all, shouldn't the pricing match the actual health risks of each band? (For example, here's a comprehensive proposal from the Urban Institute that incorporates this ratio expansion.)
If one of the objectives is to get more people insured (IMHO the objective should be to get more people the care they need; insurance is a mechanism, not an objective), then according to Milliman, increasing expanding this ratio to 5:1 is a move in the right direction. You'll get 3-4% more subscribers under age 40, and lose only 1% of those 50-59, for a net increase in coverage of about 2%. (See Table 3 in their Jan 2017 study.) Full paper (24 pages).
It's a whole lot easier to offer objectives than suggestions on how to achieve them. Take cost reduction. I just read here that increasing preventive care (with the exception of immunizations) is, from a cost reduction perspective, pretty useless. Not what I would have expected. There are quality of life differences that one may consider, but strictly in terms of reducing costs, adding preventive care doesn't appear to be an effective way to achieve those reductions.
Age-variant health insurance pricing seems fairer to people than health-variant insurance pricing, since aging happens to all. But you know that, I bet, so not sure why your rhetorical question. Of course there is so much squawk about taking care of oneself etc. etc. that a not insignificant number of people say they back existing-conditions pricing, at least until they develop allergies or arthritis or PD or seemingly noncausal cancer or such.
“Our society must make it right and possible for old people not to fear the young or be deserted by them, for the test of a civilization is the way that it cares for its helpless members.” Pearl S. Buck
“Our society must make it right and possible for old people not to fear the young or be deserted by them, for the test of a civilization is the way that it cares for its helpless members.” Pearl S. Buck
I prefer the formulation incorrectly attributed to Gandhi: "A civilization is measured by how it treats its weakest members". Its weakest members, all of them, young as well as old, and only its weakest members, not its older billionaires.
Besides, Medicare already takes care of old people, as opposed to those merely older, i.e. middle aged. IMHO, it does so far better than does the ACA.
Age-variant health insurance pricing seems fairer to people than health-variant insurance pricing, since aging happens to all. But you know that, I bet, so not sure why your rhetorical question.
Which question was that? I initially asked why we allow any price discrimination at all. Your response appears to be that we discriminate on age because we can. Hardly a sound justification.
If we're going to discriminate based on age (again, why?) then why not 5:1 instead of 3:1? The latter may look good to some, but 5:1 is actually fair. Billy Crystal comes to mind: is it really better to look good than to be good?
To OJ: You asked for constructive suggestions. I offered one (with a study showing how it could work while improving coverage), as well as a link to a much more comprehensive proposal by the Urban Institute. The response has been minor potshots, not suggestions. (At least no grenades tossed)
@msf- Yes sir, I did, but it really was rather more in the hope that we could engage bartab in some sort of reasonable exchange of viewpoints. He is so adamant in his disapproval of everything that's been attempted so far that I though perhaps he had some ideas of his own which he felt were worthy of discussion. But no. How foolish of me.
>> Shouldn't the rates be age- (health-) independent?
I took the first part of this to be rhetorical, not serious; apologies if you are truly making some quasi-libertarian (?) free-market (or whatever it is) argument here.
No, my answer was hardly 'because we can', but because fairness perception is a huge part of all of this discussion and argument, is it not?
Maybe you don't think that, but that wouldn't sound like your nuanced and informed mind.
Age and insurance have always been linked. Seems to most quite different from the other variables. Rightly or wrongly.
Behaviors, saliently. I myself feel I should subsidize, to some extent, cheese-eating smokers (as my Midwestern cardiologist cousin characterizes his patients), and behavior-incent / -lobby them in other vigorous ways.
The taxes-ER-seatbelt-fine model, if that's what it is, seems to be marginally acceptable for many people.
It would be nice to have premiums be the same for 71yo me and my 4yo granddaughter, but I don't think that would seriously fly in any world. Do you? Do you think it should?
"...It would be nice to have premiums be the same for 71yo me and my 4yo granddaughter, but I don't think that would seriously fly in any world. Do you? Do you think it should?" That statement is logical solely if the healthcare "system" is assumed to be private, corporate and for-profit. As it is, our "system" is really a non-system deliberately designed NOT to serve people, but to maximize profit. It's a healthcare "system" designed NOT to do what it is ostensibly supposed to be there for??? Ya, that is the reality. ...I am hoping against hope that when I start Medicare in another year, it is at least as good as some have asserted here--- as opposed to the Healthcare Maze of Bullshit we must endure until we turn 65.
Crash, you stated: "I am hoping against hope that when I start Medicare in another year, it is at least as good as some have asserted here--- as opposed to the Healthcare Maze of Bullshit we must endure until we turn 65." I have included davidrmoran and Old_Joe and msf, as they may be able to provide other detail, too.
A rough calculation of a monthly cost for health insurance in Mass. : ---Medicare, $134/month ---Medicare, Part D (drug insurance) $20/month ---Supplemental insurance (covers costs not covered by Medicare) $225/month
Total: $379/month
---Don't recall if you have started SS, but the $134 will be pulled from SS or if not started SS, will be paid to Medicare directly from/by you. ---Part D, drug insurance is optional, but if you do not start a plan when starting Medicare and then obtain the insurance later, you will pay an additional "late start" penalty "forever" to Medicare. NOTE: Not all meds will be covered with most Part D plans. Michigan has/had about 36 different plans available. A lot of info to review. ---Supplemental insurance. Well, insurance is insurance. But, not unlike a house one may own (no mortgage), house insurance is not mandatory; but if the house burns to the ground, one is on the "hook" for the loss. Supplement insurance helps cover expenses, particularly in a case of a catastrophic medical circumstance.
Just a few trinkets to consider; and accurate to the best of my knowledge at this time. Others may provide additional info and/or corrections. Catch
@Crash I forgot to add that I know 2 married couples (Medicare, etc.) who have both had major medical expenses (cancer treatment and all that is related for 18 months) who would have had major out-of-pocket expenses, but the costs were covered by their supplemental insurance. Their 6 years of average premiums (couple) was about $23,000. This cost was offset from the costs they would have incurred, had they not had the insurance. Also, due to their taxable income levels, they were also able to itemize deductions, including the cost of Medicare, supplemental insurance premiums, etc. I doubt they'll be able to have this deduction with the "new" tax plan.
>> Shouldn't the rates be age- (health-) independent?
I took the first part of this to be rhetorical, not serious; apologies if you are truly making some quasi-libertarian (?) free-market (or whatever it is) argument here.
Thank you! I as asking in earnest whether premiums should be independent of age. Not a libertarian (free market, anything goes) idea, just the opposite. That government prohibits insurers from using certain factors like age in setting rates.
Age is being used as a proxy for health condition. It's not a great proxy, but not the worst. So perceptions aside, the underlying question is: should health (i.e. expectation value of expenses) be used in setting rates?
I'm of two minds here. On the one hand, if one views health care as a basic right (let's say, similar to education or clean water), then it should be provided by the government independent of need - whether you have kids or not, whether you are ill or well. Charge flat (or zero) rates.
On the other hand, isn't it fairer for people who are in a more expensive cohort (i.e. are at higher risk) to pay more? You somewhat accepted this idea in saying that it seems fairer to charge older people (age correlates with risk) more:
No, my answer was hardly 'because we can', but because fairness perception is a huge part of all of this discussion and argument, is it not?
Maybe you don't think that, but that wouldn't sound like your nuanced and informed mind.
Actually I don't think that perception should be a significant part of this or any discussion. That's a problem with most discourse these days. People think in terms of perceptions (aka alternative facts), and not the real world. Even if something isn't true, if it's perceived as likely or sensible, the heck with the facts.
It's a problem across the spectrum. If it seems sensible that startup insurers would cherry pick healthy people, that's enough. Pay no attention to the fact that five of the seven largest insurers (Aetna, Anthem, Cigna, Humana, UnitedHealthcare) set broker commissions to encourage selling away from plans that attract sicker customers. Pay no attention to the extensive experience that the established insurers have in rigging data to make it appear that they have sicker customers (and get higher risk adjustment payments). Surely startups hungry for money would cheat even more, despite their not having the data and experience to do so?
It would be nice to have premiums be the same for 71yo me and my 4yo granddaughter, but I don't think that would seriously fly in any world. Do you? Do you think it should?
I'm beginning to lean toward health-independent (which by implication means age-independent) charges. Though I'm still bothered by the idea that someone like Bill Gates would get effectively a free ride in the process.
Which brings us to a different consideration. Non-discrimination based on age/health does not mean equal rates. A good example of variable rates that I consider more fair is Medicare. Part A is paid through payroll taxes - the more you make, the more you can afford and the more you pay. IRMAA (applies to Parts B and D) was created in 2003 - you pay higher premiums if you earn more. Still age- and health-independent. But IMHO fairer than letting Gates off the hook until he turns 65 and becomes subject to IRMAA.
Age-independent rates flying in any world? They already do in much of the real world. Just not in the US. Even in the US, aside from Medicare (which does cover people younger than 65 under some conditions), large employer plans generally don't consider age either. Your granddaughter could be covered under an employer's family plan, while at age 71, you might also be still be working.
So your question isn't so much about most of the world or even much of the US. It's about the 7% of the population that buys individual insurance. Of these, most get subsidies so that they pay based on income, not age. Just 2% of the population pay individual insurance premiums based on age. While non-Medicare individual insurance doesn't reach past age 64, it's close enough to address your concern about feasibility. So let's look at how rates are handled for those 2%.
In Vermont, individual plans charge all adults are charged the same amount, regardless of age. A child in a family is charged 93% as much. Okay, not exactly the same, but close enough to demonstrate feasibility.
Where this example breaks down is in setting rates for multiple children. One child or many, family rates don't vary. This is only indirectly age-dependent (number of children doesn't matter while number of adults does). Still, is this fair or would you prefer that two grandchildren get charged twice as much as one grandchild?
@Crash Supplemental insurance is only my/our opinion at this house. We do have a supplemental plan via United Health/AARP (Plan F). Hopefully, others may add their opinions. Better yet is for you to post a separate thread with this being the question. There are more than enough "older" folks here to offer a proper opinion and experiences, yes?
I'm of two minds here. On the one hand, if one views health care as a basic right (let's say, similar to education or clean water), then it should be provided by the government independent of need - whether you have kids or not, whether you are ill or well. Charge flat (or zero) rates.
On the other hand, isn't it fairer for people who are in a more expensive cohort (i.e. are at higher risk) to pay more? You somewhat accepted this idea in saying that it seems fairer to charge older people (age correlates with risk) more:
I think your former mind is the right one and most of the rest of the discussion leads to barbarism and away from civilization. Consider children born with birth defects or genetic illnesses. Should their parents be charged more? Should they be charged more simply for existing? And if people can't afford the elevated premiums, should they be forced into bankruptcy or left by a rock to die?
There is a question of behavior though too. Should the smoker pay the same healthcare premium as the non-smoker? I would still say yes because I think the products which cause the health problems can be taxed at the consumption level to cover the additional costs to the healthcare system for that behavior. Cigarettes and sugar-filled products should be taxed to help pay for lung cancer and obesity-related illnesses. The person committing the unhealthy behavior will pay at the point of consumption and the more he/she consumes, the more he/she pays.
But then I think healthcare should be a basic human right paid for by taxes just as police protection and fire protection generally are. The house of a person who didn't pay their "private fire department company bill" shouldn't be allowed to burn to the ground. Then again, we could always have our healthcare system continue to be like this: nbcnews.com/id/39516346/ns/us_news-life/t/no-pay-no-spray-firefighters-let-home-burn/
Even for a basic human right I guess I have no problem with age basically, crudely, taken into account, with broad groupings, caps, and so on. Something like how it is now, very roughly. Not exactly sure why I think this, but I'm hardly alone. I always think about political feasibility of widely selling ideas. Preexisting-condition coverage being invariant is way easier to argue, seems to me. Must ponder this further.
@Crash Dang.......me !!! Okay, this is it for this morning; as apparently coffee is not doing the trick this morning for "very clear thinking".
Knowing you have ill feelings against capitalism in its current form; and are inclined to dividends/income from investments, I offer my view.
---First and foremost regarding our investments. It is our (this house) obligation to ourselves and family to grow and protect our investments that came from very humble beginnings. --- Our house can not change the current status of capitalism. --- Our house can not change pricing patterns regarding all areas of healthcare. --- Our house has some regard for dividends/income stream; but our continued overwhelming emphasis is "total return". We don't care how it arrives.
BUT, we can offset the costs. We can take advantage of a trend. I'll offer a circumstance I've placed here before. The complainers: Two folks I've known for years have bitched about the cost increases with their Comcast bills. I've asked both before whether they thought Comcast would continue to make money. The answer was "probably yes". They both had $10,000 they could invest, if they chose. Then invest in Comcast. Note: neither did. ---Comcast annualized return for 10 years, per M* = 15.1%. The profit math indicates they could have paid for their subscriptions without problem, eh?
Lastly, related to this health thread; applies to healthcare costs and investments. To offset the continued rise in broad healthcare costs, invest in the industry. --- Per M*, the average annualized return for healthcare for 10 years = 13.9% One of our favorites over the years has been FSPHX, our exposure/knowledge being 40 year account holders at Fidelity. FSPHX 10 year annualized return = 16.4% This type of return in this category definitely helps offset healthcare costs at this house.
@LewisBraham, I agree with 90% of what you wrote (about not forcing people into bankruptcy, about dealing with bad products via excise taxes). But the alternative to ignoring health risks in setting rates is not necessarily barbarism.
That's why we have subsidies. So that people do not pay more than they can afford. There are serious problems with what the "Affordable" Care Act considers affordable, and how its subsidies work. Nevertheless, they are fixable if one wants to go that route. (Remember that the ACA uses age as a proxy for health risk, so accepting it is tacitly accepting that people at higher risk should pay more.)
First, extend subsidies past 400% FPL. The inability of middle class families to get subsidies, even when rates go through the roof, put them at risk. Second, greatly expand CSRs or require insurers to offer low deductible plans that are truly usable and not merely insurance in name only. (They would have higher premiums, but that could be covered by the expanded premium subsidy range.)
Suppose Bill and Melinda adopt a child that turns out to have genetic defects. Through no fault of their own (in case it matters), they would be facing potentially high medical costs. Should they pay more because of that risk?
Of course we'll subsidize parents who can't afford it, but what about here? Should we set the Gates' rates lower than their risk calls for? That would constitute an implicit subsidy that they don't need, and takes dollars from where they could be better used.
That's the argument for charging based on risk. It's not barbaric, it can treat the less wealthy fairly while not subsidizing the rich. Alternatively, we can making essential services like health care available uniformly to all via taxes (or subsidies if you prefer). As with education.
The fire example invites a slippery slope: Just because the owner doesn't pay the fire department (or buy fire insurance), does that mean that the owner should be left homeless if the firefighters don't come (or do come but can't stop the conflagration)?
How does paying a yearly fee for fire protection (firefighters) differ from paying a yearly fee for fire protection (insurance)?
I do see a difference between fire protection and health care. You need property protection if you own property. Ownership carries with it an inference that you can afford the protection. In contrast, you need health care because you are alive. That carries no similar inference.
I think we're agreeing that all homes in the county (in the example) should have firefighter coverage. ISTM the fault was with the county for not assessing a mandatory $75 annual fee on all property owners. Just as we mandate insurance if you're going to drive.
All of this highlights how difficult this is to think about. Human rights (and frankly, dignity), responsibilities, affordability. It's hard to come up with good analogies, and then there are conflicting objectives. No easy answers.
@Catch22 Very logical. Quite. My abhorrence toward Comcast and the scumpigs in charge of fleecing us through healthcare insurance keeps me from wanting to give any of those corporations any more money than I have to. "If you can't beat 'em, join 'em." Yes. But I must find a different way to do it. Those rats don't even deserve a serving of my snot.
@MSF I think it's a fallacy to assume that income inequality needs to be addressed via healthcare premiums when it can far more easily be addressed via the income tax, capital gains and estate tax system--the proceeds from which can be used to help finance the healthcare system. If a base level of quality care is provided to all citizens free of charge but financed via taxation a lot of unnecessary complexity and administrative costs that currently plague the U.S. healthcare system could hopefully disappear. The Byzantine esoteric rip-off billing system Americans face that is unheard of in other developed nations--Google Chargemaster--could perhaps be done away with. A person--any person--ought to be able to walk into a doctor's office or emergency room and not have to worry they'll be bankrupt by the time they leave just as you can walk into a police station and tell them you've been mugged or call 911 when your house is on fire and not to have to worry about such financial issues when you're in your most vulnerable state. If Bill and Melinda Gates children have access to the same free coverage, so what? Their wealth's advantages can be addressed via income, capital gains and estate taxes, no doubt more than making up for the cost of their children's free healthcare.
@MSF I think it's a fallacy to assume that income inequality needs to be addressed via healthcare premiums when it can far more easily be addressed via the income tax, capital gains and estate tax system--the proceeds from which can be used to help finance the healthcare system. If a base level of quality care is provided to all citizens free of charge but financed via taxation a lot of unnecessary complexity and administrative costs that currently plague the U.S. healthcare system could hopefully disappear. The Byzantine esoteric rip-off billing system Americans face that is unheard of in other developed nations--Google Chargemaster--could perhaps be done away with. A person--any person--ought to be able to walk into a doctor's office or emergency room and not have to worry they'll be bankrupt by the time they leave just as you can walk into a police station and tell them you've been mugged or call 911 when your house is on fire and not to have to worry about such financial issues when you're in your most vulnerable state. If Bill and Melinda Gates children have access to the same free coverage, so what? Their wealth's advantages can be addressed via income, capital gains and estate taxes, no doubt more than making up for the cost of their children's free healthcare.
Comments
https://twitter.com/larry_levitt/status/1017857572991262720
For years those on the right continually blasted Obama's attempt to deal with health care; when they got their turn at bat we all know what happened. And they somehow think that they are entitled to respect for this conduct.
bartab plays the same games on the M* channel. Gets spanked their as well.
I agree that there seems to be greater prevalence on one side of the spectrum, however people who merely toss grenades come in all stripes. (This is not an assertion of numeric or other equivalence; simply an acknowledgement of non-exclusivity.)
Though this is just a run of the mill, albeit self-acknowledged, troll: "it is fun to set you guys off". Like most trolls, the pattern here isn't toss and duck, but toss and run somewhere else. When questioned, a troll will scurry off with a distraction along the lines of: ... whatabout X? You may see assertions made and then disowned (e.g. by pleading ignorance), to avoid any need to defend them: "I suck at math, so please check it"
Recognize the patterns and just ignore.
With respect to constructive suggestions, IMHO that's hard to do because, well I hear that health care is "an unbelievably complex subject. Nobody knew health care could be so complicated."
For example, if we buy into the idea that an individual's state of health should not matter when getting insurance, then why do we allow insurers to charge older people (age serving as a proxy for health) three times as much as younger people? Shouldn't the rates be age- (health-) independent?
If the idea is that we can compromise our principle so long as the groupings (bands) are large enough to share the risk of similarly situated people, then why stop at 3x? The pre-ACA ratio of actual health costs was closer to 5:1. So if we're allowing bands at all, shouldn't the pricing match the actual health risks of each band? (For example, here's a comprehensive proposal from the Urban Institute that incorporates this ratio expansion.)
If one of the objectives is to get more people insured (IMHO the objective should be to get more people the care they need; insurance is a mechanism, not an objective), then according to Milliman, increasing expanding this ratio to 5:1 is a move in the right direction. You'll get 3-4% more subscribers under age 40, and lose only 1% of those 50-59, for a net increase in coverage of about 2%. (See Table 3 in their Jan 2017 study.) Full paper (24 pages).
It's a whole lot easier to offer objectives than suggestions on how to achieve them. Take cost reduction. I just read here that increasing preventive care (with the exception of immunizations) is, from a cost reduction perspective, pretty useless. Not what I would have expected. There are quality of life differences that one may consider, but strictly in terms of reducing costs, adding preventive care doesn't appear to be an effective way to achieve those reductions.
Of course there is so much squawk about taking care of oneself etc. etc. that a not insignificant number of people say they back existing-conditions pricing, at least until they develop allergies or arthritis or PD or seemingly noncausal cancer or such.
@Old_Joe, quite possible.
Besides, Medicare already takes care of old people, as opposed to those merely older, i.e. middle aged. IMHO, it does so far better than does the ACA.
Could we move on past pithy quotes? Which question was that? I initially asked why we allow any price discrimination at all. Your response appears to be that we discriminate on age because we can. Hardly a sound justification.
If we're going to discriminate based on age (again, why?) then why not 5:1 instead of 3:1? The latter may look good to some, but 5:1 is actually fair. Billy Crystal comes to mind: is it really better to look good than to be good?
A "5:1 ratio would more closely align premiums to underlying costs by age."
American Academy of Actuaries, Jan 2017 (and many other references).
To OJ: You asked for constructive suggestions. I offered one (with a study showing how it could work while improving coverage), as well as a link to a much more comprehensive proposal by the Urban Institute. The response has been minor potshots, not suggestions. (At least no grenades tossed
>> Shouldn't the rates be age- (health-) independent?
I took the first part of this to be rhetorical, not serious; apologies if you are truly making some quasi-libertarian (?) free-market (or whatever it is) argument here.
No, my answer was hardly 'because we can', but because fairness perception is a huge part of all of this discussion and argument, is it not?
Maybe you don't think that, but that wouldn't sound like your nuanced and informed mind.
Age and insurance have always been linked. Seems to most quite different from the other variables. Rightly or wrongly.
Behaviors, saliently. I myself feel I should subsidize, to some extent, cheese-eating smokers (as my Midwestern cardiologist cousin characterizes his patients), and behavior-incent / -lobby them in other vigorous ways.
The taxes-ER-seatbelt-fine model, if that's what it is, seems to be marginally acceptable for many people.
It would be nice to have premiums be the same for 71yo me and my 4yo granddaughter, but I don't think that would seriously fly in any world. Do you? Do you think it should?
That statement is logical solely if the healthcare "system" is assumed to be private, corporate and for-profit. As it is, our "system" is really a non-system deliberately designed NOT to serve people, but to maximize profit. It's a healthcare "system" designed NOT to do what it is ostensibly supposed to be there for??? Ya, that is the reality.
...I am hoping against hope that when I start Medicare in another year, it is at least as good as some have asserted here--- as opposed to the Healthcare Maze of Bullshit we must endure until we turn 65.
Crash, you stated: "I am hoping against hope that when I start Medicare in another year, it is at least as good as some have asserted here--- as opposed to the Healthcare Maze of Bullshit we must endure until we turn 65."
I have included davidrmoran and Old_Joe and msf, as they may be able to provide other detail, too.
---Medicare is not totally free.
https://www.medicare.gov/your-medicare-costs/costs-at-a-glance/costs-at-glance.html
---Part D, meds
https://www.medicare.gov/part-d/costs/penalty/part-d-late-enrollment-penalty.html
---Supplemental insurance coverage for costs not covered by Medicare, Massachusetts
https://www.mass.gov/files/documents/2018/02/22/2018 Standard Medigap Plans and Rates List ver 01012018_0.pdf
A rough calculation of a monthly cost for health insurance in Mass. :
---Medicare, $134/month
---Medicare, Part D (drug insurance) $20/month
---Supplemental insurance (covers costs not covered by Medicare) $225/month
Total: $379/month
---Don't recall if you have started SS, but the $134 will be pulled from SS or if not started SS, will be paid to Medicare directly from/by you.
---Part D, drug insurance is optional, but if you do not start a plan when starting Medicare and then obtain the insurance later, you will pay an additional "late start" penalty "forever" to Medicare. NOTE: Not all meds will be covered with most Part D plans. Michigan has/had about 36 different plans available. A lot of info to review.
---Supplemental insurance. Well, insurance is insurance. But, not unlike a house one may own (no mortgage), house insurance is not mandatory; but if the house burns to the ground, one is on the "hook" for the loss. Supplement insurance helps cover expenses, particularly in a case of a catastrophic medical circumstance.
Just a few trinkets to consider; and accurate to the best of my knowledge at this time. Others may provide additional info and/or corrections.
Catch
I forgot to add that I know 2 married couples (Medicare, etc.) who have both had major medical expenses (cancer treatment and all that is related for 18 months) who would have had major out-of-pocket expenses, but the costs were covered by their supplemental insurance. Their 6 years of average premiums (couple) was about $23,000. This cost was offset from the costs they would have incurred, had they not had the insurance. Also, due to their taxable income levels, they were also able to itemize deductions, including the cost of Medicare, supplemental insurance premiums, etc. I doubt they'll be able to have this deduction with the "new" tax plan.
Age is being used as a proxy for health condition. It's not a great proxy, but not the worst. So perceptions aside, the underlying question is: should health (i.e. expectation value of expenses) be used in setting rates?
I'm of two minds here. On the one hand, if one views health care as a basic right (let's say, similar to education or clean water), then it should be provided by the government independent of need - whether you have kids or not, whether you are ill or well. Charge flat (or zero) rates.
On the other hand, isn't it fairer for people who are in a more expensive cohort (i.e. are at higher risk) to pay more? You somewhat accepted this idea in saying that it seems fairer to charge older people (age correlates with risk) more: Actually I don't think that perception should be a significant part of this or any discussion. That's a problem with most discourse these days. People think in terms of perceptions (aka alternative facts), and not the real world. Even if something isn't true, if it's perceived as likely or sensible, the heck with the facts.
It's a problem across the spectrum. If it seems sensible that startup insurers would cherry pick healthy people, that's enough. Pay no attention to the fact that five of the seven largest insurers (Aetna, Anthem, Cigna, Humana, UnitedHealthcare) set broker commissions to encourage selling away from plans that attract sicker customers. Pay no attention to the extensive experience that the established insurers have in rigging data to make it appear that they have sicker customers (and get higher risk adjustment payments). Surely startups hungry for money would cheat even more, despite their not having the data and experience to do so? I'm beginning to lean toward health-independent (which by implication means age-independent) charges. Though I'm still bothered by the idea that someone like Bill Gates would get effectively a free ride in the process.
Which brings us to a different consideration. Non-discrimination based on age/health does not mean equal rates. A good example of variable rates that I consider more fair is Medicare. Part A is paid through payroll taxes - the more you make, the more you can afford and the more you pay. IRMAA (applies to Parts B and D) was created in 2003 - you pay higher premiums if you earn more. Still age- and health-independent. But IMHO fairer than letting Gates off the hook until he turns 65 and becomes subject to IRMAA.
Age-independent rates flying in any world? They already do in much of the real world. Just not in the US. Even in the US, aside from Medicare (which does cover people younger than 65 under some conditions), large employer plans generally don't consider age either. Your granddaughter could be covered under an employer's family plan, while at age 71, you might also be still be working.
So your question isn't so much about most of the world or even much of the US. It's about the 7% of the population that buys individual insurance. Of these, most get subsidies so that they pay based on income, not age. Just 2% of the population pay individual insurance premiums based on age. While non-Medicare individual insurance doesn't reach past age 64, it's close enough to address your concern about feasibility. So let's look at how rates are handled for those 2%.
In Vermont, individual plans charge all adults are charged the same amount, regardless of age. A child in a family is charged 93% as much. Okay, not exactly the same, but close enough to demonstrate feasibility.
Where this example breaks down is in setting rates for multiple children. One child or many, family rates don't vary. This is only indirectly age-dependent (number of children doesn't matter while number of adults does). Still, is this fair or would you prefer that two grandchildren get charged twice as much as one grandchild?
Supplemental insurance is only my/our opinion at this house. We do have a supplemental plan via United Health/AARP (Plan F). Hopefully, others may add their opinions. Better yet is for you to post a separate thread with this being the question.
There are more than enough "older" folks here to offer a proper opinion and experiences, yes?
Plan F changes in 2020.
There is a question of behavior though too. Should the smoker pay the same healthcare premium as the non-smoker? I would still say yes because I think the products which cause the health problems can be taxed at the consumption level to cover the additional costs to the healthcare system for that behavior. Cigarettes and sugar-filled products should be taxed to help pay for lung cancer and obesity-related illnesses. The person committing the unhealthy behavior will pay at the point of consumption and the more he/she consumes, the more he/she pays.
But then I think healthcare should be a basic human right paid for by taxes just as police protection and fire protection generally are. The house of a person who didn't pay their "private fire department company bill" shouldn't be allowed to burn to the ground. Then again, we could always have our healthcare system continue to be like this:
nbcnews.com/id/39516346/ns/us_news-life/t/no-pay-no-spray-firefighters-let-home-burn/
Not exactly sure why I think this, but I'm hardly alone. I always think about political feasibility of widely selling ideas. Preexisting-condition coverage being invariant is way easier to argue, seems to me. Must ponder this further.
Dang.......me !!!
Okay, this is it for this morning; as apparently coffee is not doing the trick this morning for "very clear thinking".
Knowing you have ill feelings against capitalism in its current form; and are inclined to dividends/income from investments, I offer my view.
---First and foremost regarding our investments. It is our (this house) obligation to ourselves and family to grow and protect our investments that came from very humble beginnings.
--- Our house can not change the current status of capitalism.
--- Our house can not change pricing patterns regarding all areas of healthcare.
--- Our house has some regard for dividends/income stream; but our continued overwhelming emphasis is "total return". We don't care how it arrives.
BUT, we can offset the costs. We can take advantage of a trend. I'll offer a circumstance I've placed here before.
The complainers: Two folks I've known for years have bitched about the cost increases with their Comcast bills. I've asked both before whether they thought Comcast would continue to make money. The answer was "probably yes". They both had $10,000 they could invest, if they chose. Then invest in Comcast. Note: neither did.
---Comcast annualized return for 10 years, per M* = 15.1%. The profit math indicates they could have paid for their subscriptions without problem, eh?
Lastly, related to this health thread; applies to healthcare costs and investments. To offset the continued rise in broad healthcare costs, invest in the industry.
--- Per M*, the average annualized return for healthcare for 10 years = 13.9%
One of our favorites over the years has been FSPHX, our exposure/knowledge being 40 year account holders at Fidelity.
FSPHX 10 year annualized return = 16.4%
This type of return in this category definitely helps offset healthcare costs at this house.
Regards,
Catch
That's why we have subsidies. So that people do not pay more than they can afford. There are serious problems with what the "Affordable" Care Act considers affordable, and how its subsidies work. Nevertheless, they are fixable if one wants to go that route. (Remember that the ACA uses age as a proxy for health risk, so accepting it is tacitly accepting that people at higher risk should pay more.)
First, extend subsidies past 400% FPL. The inability of middle class families to get subsidies, even when rates go through the roof, put them at risk. Second, greatly expand CSRs or require insurers to offer low deductible plans that are truly usable and not merely insurance in name only. (They would have higher premiums, but that could be covered by the expanded premium subsidy range.)
Suppose Bill and Melinda adopt a child that turns out to have genetic defects. Through no fault of their own (in case it matters), they would be facing potentially high medical costs. Should they pay more because of that risk?
Of course we'll subsidize parents who can't afford it, but what about here? Should we set the Gates' rates lower than their risk calls for? That would constitute an implicit subsidy that they don't need, and takes dollars from where they could be better used.
That's the argument for charging based on risk. It's not barbaric, it can treat the less wealthy fairly while not subsidizing the rich. Alternatively, we can making essential services like health care available uniformly to all via taxes (or subsidies if you prefer). As with education.
The fire example invites a slippery slope: Just because the owner doesn't pay the fire department (or buy fire insurance), does that mean that the owner should be left homeless if the firefighters don't come (or do come but can't stop the conflagration)?
How does paying a yearly fee for fire protection (firefighters) differ from paying a yearly fee for fire protection (insurance)?
I do see a difference between fire protection and health care. You need property protection if you own property. Ownership carries with it an inference that you can afford the protection. In contrast, you need health care because you are alive. That carries no similar inference.
I think we're agreeing that all homes in the county (in the example) should have firefighter coverage. ISTM the fault was with the county for not assessing a mandatory $75 annual fee on all property owners. Just as we mandate insurance if you're going to drive.
All of this highlights how difficult this is to think about. Human rights (and frankly, dignity), responsibilities, affordability. It's hard to come up with good analogies, and then there are conflicting objectives. No easy answers.