Getting old sucks and it is expensive.
Covering kids and young adults had been an easy fall-back option for Democrats and some Republicans prior to the passage of PPACA because it is an easy thing to do. SCHIP expansion was one of the first bills that passed the 2009 Congress with only two Democrats in the House defecting to vote against it, and nine Republican Senators voting for it. The Vermont Dr. Dynasaur program that was a strong selling point for Howard Dean was primarily near universal healthcare for people under the age of 18. The Rahm Emmanual fall-back plan after Scott Brown (R-MA) got elected to the Senate from Massachusetts in January 2010 was to take another whack at covering more kids.
These plans are simple because they are cheap. Kids and yound adults are cheap to cover. The Incidental Economist is passing along some great data that I’ve reformated on how cheap kids and young adults are to cover:
People under the age of 50 cost less than average while people over 50 cost more than average. Costs accelerate as people get older and statistically sicker. Medicare currently takes care of most of the very high cost individual population groups. Dropping Medicare buy-in age to 55 would have removed the next most expensive cohort that is overwhelmingly on private insurance from the private insurance market and thus would have lowered premiums for both group and Exchange products. This would have worked as Medicare tends to pay less per procedure than private group insurance. Quality payment system reform would probably also decrease utilization.
Howard Beale IV
Seems there’s a huge problem on the non-physical side of the healthcare equation...
Oooh, a Richard thread. I have some fun health insurance questions which suddenly arose in my personal life today and I was surprised to not already know the post-Obamacare answer to some of these:
1. It turns out that our current insurance plan limits the number of outpatient visits per year which are covered (for mental health) to 25 days per year. Are those kind of restrictions still legal in the post-ACA world? I didn’t see them advertised anywhere in the plan details laid out for various plans on HealthCare.gov but that kind of restriction (which took us by surprise) seems fairly important.
2. Our current health insurance plan apparently excludes co-insurance costs for mental health visits from the year out-of-pocket maximum, in addition to only covering 50% of those visits in the first place.
2a. Is that legal under the ACA or is there a rule which demands that ALL expenses count towards the OOP max? I also didn’t see anything about this in any plan on HealthCare.gov.
2b. Are mental health visits counted as “specialist provider” office visits (with a typical co-pay of $40-50 in most plans I saw on HealthCare.gov) or are they a separate category? I didn’t see any information about this on HC.gov either, and I would be surprised if they counted as “preventive care” which has other, special regulations applied? What’s the deal here?
3. Since we suddenly went over the 25-visit limit, now we’re being socked with rack-rate charges from the provider for the past 1.5 months of appointments. Is there any way (now or in the future) to prevent that sort of thing from happening? I feel like we’re being screwed 5 ways from Sunday and I was pretty surprised to not know if the ACA will actually fix any of these things.
Thanks. Sobering post, since I am creeping on up there in column D
From the article, says this is data from the 2004 CMS study, and nice that the link also has some survey data estimates. It will be interesting to compare the two.
Dean Baker of CEPR at his Beat the Press blog has been saying that for fiscal purposes, it is more important to get healthy middle aged than younger, since so many young adults will qualify for subsidies. I don’t see where Baker gives any sources. I’m curious whether RM has an opinion on that.
Edit: What I wonder is whether the compression of age specific rates I think that are mandated by ACA weakens Baker’s argument. Any good info available to answer that question?
@Howard Beale IV: They haven’t been taking it forever. They can knock down $250+ for a fifteen minute med management visit. Why would they even think of taking insurance rates for maintenance visits, much less tying up an hour of their time to do psychotherapy at Medicare+ rates?
Howard Beale IV
@dr. bloor: Fifteen minutes?
I’m a bit worried that there was a fake deaf translator behind the Prey sident, waving his arms around. Who let that clown through? It’s all funny but it isn’t funny, not one damn bit.
so, honest question, is “Medicare Buy In at 55” the next “we can fix it” solution folks should push for? Is this a way to pivot towards a legislative solution to reducing higher costs for those in the 39-55 age bracket using private insurance?
Isn’t there an age group multiplier in the insurance rates that tends to soften the disparity, while keeping insurance roughly affordable for the oldies? (Sitting pretty and ignorant over here with employer insurance.)
Even so it’s deceptive to tell young people how great a deal it is that they’re getting good health insurance for $150 per month or whatever they going rate is. The fact is that they are subsidizing the older population and those unfortunate enough to get a serious illness. It’s insurance over a very nonhomogeneous pool. But it’s needed to spread out the cost so that people age 50-65 don’t have to spend $15,000 per year for an individual policy. And when the young’uns get older they’ll benefit from the system.
Let’s face it – there’s a reasonable chance that before you’re 65, you’re going to incur medical expenses roughly the price of a small house. So you’re going to have to pay off that mortgage, starting from your 20’s. For the “invincibles” screaming that they’re healthy and why should they have to pay so much, and those who want to skirt paying insurance when they’re healthy but expect “insurance on demand” as soon as they get sick: TOO BAD! If you want health care for everyone, everyone is going to have to contribute, whether healthy or sick, young or old. That’s how it works so that when YOU get sick, someone else’s money will bail YOU out.
/are the invincibles screaming about it? I haven’t seen many credible cites about that. It’s mostly people SAYing that that is the case. I could be wrong.
Please re-phrase as “getting old-er”…as the trajectory that we are all on, vs. a place called old. Moving up in those pay brackets and body changes are enough already…
Richard, I’ve been following your posts pretty carefully, but don’t think I’ve seen my issue, which appears to be a variation of your “family trap,” come up: Self-employed, Family of 5, in PA, previously on Cobra, then individual plan to the tune of $1700/month (wife, 47, with preexisting condition, me, 51, on statins). Three kids, 13, 10 and 7.
Question: if your kids qualify for State CHIP, are they then foreclosed from purchasing and/or getting subsidies on the exchange?
Background: I’d been trying without success to get my application past the final “verification system is down, it’ll be fixed within 24 hours, try again later” message on the very last page of the application for probably 3 weeks. Recently, when I logged back in to start the “review” from the beginning, my kids had disappeared from the main body of the application, though they were still listed in the left hand column.
After speaking to a couple supervisors, one of them noted that, although my app was incomplete, the “my plans and programs” section of my account had my kids listed as being eligible for CHIP, which may explain why they no longer appeared in the application. Either way, the app wouldn’t let me proceed without naming dependents who were no longer there, but if I tried adding them (again) it would tell me they were already there.
Any response appreciated.
@: I think so. 55 year olds are generally healthier than 65 year olds. If they could get Medicare at 55 they would on the whole maybe not cost so much in treatment. Relatively healthy cohort
Make them pay in bitcoin. Then only 19 year old glibertarians would use health care, saving us a gazillion dollars.
pseudonymous in nc
There’s also the moral-pragmatic argument that children a) are indeed the future; b) aren’t complicit in their state of health, which gets past the bullshit Health Calvinism that affects America. The idea that it costs out-of-pocket money for the medical elements of having and raising a child frankly disgusts me. It’s a collective investment in the health of the nation.
But once you buy into that line of thinking, you end up accepting a kind of “lump of healthcare” fallacy. Certain forms of healthcare are not priced for end-user purchase. They just aren’t, regardless of the actuarial number-crunching that goes in the background. As Ezra Klein said a good few years back, the US is rich enough to cover this as a collective, but not when every bill is individuated.
The idea shouldn’t be that you’re paying now in order to getting your treatment in 40 years, because that just reinforces the whining of middle-aged men about paying for a standard benefits package that includes maternity or mental health care. it’s that we all pay enough so that everyone can get treated.
@pseudonymous in nc:
No, it’s blaming the nations problems on poor brown urchins that insist on reproducing so you can get the white guy in the singlewide to vote to cut taxes on corporations.
And it’s very effective.
The unthinkable happened to my family almost 13 years ago. Two half grown kids, super healthy working parents, one freak fall, and BOOM.
Now we got a quadriplegic dad who can’t be left alone and our college savings for the kids looking like they’re gonna be gone lickety split. Would he ever work again? Could we keep our house? How does Medicaid work, anyway?
We had a private insurance policy, which cost as much as our mortgage. It covered about 3 weeks worth of physical therapy . . . and he needed 15 or 20 times that, just to hold on to the physical strength he still had, not even to regain what might be possible.
My biggest fear in those days was that we’d somehow lose our insurance, and that would mean the end of everything, because we’d never, ever get it back. GWB was inaugurated about six weeks before the injury, so for 8 years I didn’t even imagine that THERE MIGHT BE AN END TO THE PRE-EXISTING CONDITIONS thing.
My husband, like most people with spinal cord injuries, has had a number of complications over the years. Some required surgeries, and two were scary enough to land him back in ICU. He survived, he went back to work, I’m not complaining.
I’m just saying . . . anything can happen. Our family was hanging by a goddamn thread because of this stupid, dysfunctional health care system. Whatever happens is going to be better than what we used to have, and if you haven’t lived in my house you don’t even know what it means to hear the words “no pre-existing condition refusal” and “no lifetime cap.”
Strong statement, indeed. Just you wait, whippersnapper.
Actually no, it just requires adjustments. Like so much else in life, there are advantages and disadvantages.
@fleeting expletive: According to a CBS TV story this evening, the man has done this before when SA President Juma has spoken. Apparently no one knows who he is, although I think they may investigate him more fully now. And he was only waving hands around, he doesn’t know signing and was producing gibberish.
@hitchhiker: I understand the situation. After a year of unemployment in the early 1990s, I was in a job almost a full year when I experienced herniated discs. Had they happened before I got a job, I’d have been out of luck — no money and no health insurance. By luck I was able to hold off on surgery until after my first anniversary on the job so I was able to get disability pay while I was out for recovery. You truly never know when something can happen that will upend your life and situation.
I hope you and your family continue doing as well as possible.
Thanks, and same to you. I get a little tired of healthcare policy wonktalk, much as I wish it had all taken place decades before our particular crisis.
My husband once bumped up a set of stairs on his butt to attend a local Dem party meeting, because the location wasn’t wheelchair accessible. He was a precinct captain. He can walk — slowly — but he falls down sometimes, and his bladder control is unreliable.
I’m saying, I’m married to someone who wets the bed every so often. This is life with a pre-existing condition in your forties, with kids, before the ACA. You can deal with that, and on top of it you can go bankrupt, all because you took a weird fall one day.
There’s so much more, though. One of our kids spent some time in France while she was in college . . . she told me about sitting around with all the other foreign students one night, talking about the cost of university. She told this international group that most of her friends were deeply in debt, and they didn’t believe her. “Are you sure?” they asked. “It costs how much?” Yeah, $25,000, that’s a low number.
My husband got better enough to go back to his software job, and so she didn’t have debt. Most guys like him can’t. Their kids don’t go to college, much less France. We have a really strange, really unfair system.
Oh, yes. And for years now our household has been struggling with disability insurers, who are a special kind of heartless. For instance, one phone call was so abusive we asked to speak to their complaint department. We get a call back… to discover that it is someone from the insurer, complaining about us.
We wound up suing and getting a settlement, because it was going to literally kill my husband with stress and frustration and impossible demands. They had already put him into a years long setback with their last set of demands.
If you have disability insurance in America; you aren’t really insured against not being able to work. We’ve heard stories of blind people being accused of faking it, those bedridden with lupus told they were just lazy, and quads with no movement told they can make a living as a telemarketer.
To the disability insurance companies, you can work unless you are actually dead. And actually dead… they don’t have to pay for.
Also dropping the age to 55 or lower reduce the difference between spending and income with Medicare (i.e. the premiums would actually cover more of the cost requiring the government to pick up less of the tab).
Or is this incorrect?
@Howard Beale IV:
I’ve just started to find this out. My oldest (17) has been diagnosed with Major Depression Disorder.
@jl: The age band compression has minimal impact (The Incidental Economist has the data here)
a 3:1 or 5:1 compression would matter if we included the 85+ band, but Medicare takes care of the really expensive cohorts already.
How do you get to this conclusion?