(Scott Meyer’s website)
.
Heh, indeed.
Apart from explaining why Obamacare is indeed a Good Thing, what’s on the agenda today?
Friday Morning Open Thread: Good Enough, BroPost + Comments (70)
This post is in: Open Threads, World's Best Healthcare (If You Can Afford It)
(Scott Meyer’s website)
.
Heh, indeed.
Apart from explaining why Obamacare is indeed a Good Thing, what’s on the agenda today?
Friday Morning Open Thread: Good Enough, BroPost + Comments (70)
by David Anderson| 125 Comments
This post is in: Anderson On Health Insurance, C.R.E.A.M., Domestic Politics, First Posts, Politics, World's Best Healthcare (If You Can Afford It), All we want is life beyond the thunderdome
I’m a bureaucrat at a health insurance company which most of you have never and will never hear about. My job is to be a subject matter expert on a fairly arcane set of knowledge. I have seen some posts and some great comment threads at Balloon Juice where great questions are being asked and basic mechanical knowledge would be very useful. I will be writing a series of posts over the next couple of weeks/months that attempts to explain why a profit seeking insurance company does what it does.
And yes, before I get started, I agree with the vast majority of the commenteriat here that absent massive path dependency and being able to make policy behind a veil of ignorance, I would not choose the US model or the modifications to the model that are being made by Obamacare. I would have chosen a far more comprehensive single payer system that is not a kludge of multiple previous kludges. However, that is not the world that we live in, so I am assuming profit seeking insurance companies will be around for a while.
Why do insurance companies charge deductibles, co-payments and co-insurance? What is the point of three forms of making the buyer of insurance pay? Why wouldn’t there be a single form? What are the incentives and how do the different cost share payments save the insurance company money?
These three types of pocket payments have slightly different purposes but they all serve to minimize costs for the health insurance company. One things that we need to remember as we go through the mechanics of non-universal health insurance along the lines of either Canadian Medicare or British NHS is that members/buyers of insurance know way more about their health than the insurers. That knowledge fuels the buyer’s ability to seek the best deal. This is known as adverse selection.
Let’s look at JC for an example. A mid-40s something male still on average has reasonably low health care costs without too many high expense outliers. Someone of his general demographics is still in the sweet spot for insurance risk as the long term chronic conditions of late middle age and old age aren’t too common yet. John knows he is a klutz and that Steve is plotting to kill him slowly. So if he selects a plan with low cost sharing because he knows that in the next year he needs to worry about a repeat of the mop incident or the first failed attempt on his life by Steve. That is unusual and therefore valuable information for an insurance company as John would have self-identified as riskier than typical for someone his age.
Deductibles serve two purposes. The first is to transform insurance from being purely pre-payment of average medical expenses for a particular population into an insurance product. Insurance is the payment of defined sums for protection against uncertain losses for an individual. The first purpose of deductibles is to get the insurance company off the hook for the first chunk of expenses.
A zero deductible plan is very attractive to people who know that they have major medical expenses coming their way. A very high deductible plan is attractive to people who anticipate very low health care expenses due to their general good health or belief in their own invincibility. An employer group that offers a $500 deductible plan and a $2,500 deductible plan to its employers will not see random selection of those two choices by its employees. Most of the time, older, sicker employees will choose the lower deductible plan, which is extremely valuable information for the insurance company. They expect high usage of expensive services, so premiums are higher. Conversely, the high deductible plan is more attractive to the younger, healthier and typically a more male population that statistically don’t use expensive services all that much. Bigger spreads between deductible amounts allows for insurance companies to aggressively identify adverse selection risks and then appropriately price that risk.
Co-payments are fixed dollar amounts that members pay for services that don’t apply to deductible sums. There are two reasons for co-pays. The first is to make a service slightly less expensive for the insurance company. This is a minor factor. The main factor is to add a marginal cost for a service from the member’s perspective after a deductible has been satisfied. This is supposed to make members slightly cost sensitive. A $100 co-pay for an MRI is supposed to get the member to question whether or not they really need an MRI or whether the no co-pay X-ray is sufficient. Co-pays for cost sensitivity purposes are extremely common for prescription drug benefits where generic or cheap brand name drugs have nominal co-pays, while patented drugs that have reasonably available and effective substitutes have very high co-pays.
Co-insurance is a percentage of costs that a member is responsible for after their deductible has been satisfied. The primary purpose is to make the member become extremely cost sensitive. For instance, a 20% co-insurance for a non-complicated labor and delivery when my wife gave birth to Reproductive Success #1 and #2 could have put me on the co-insurance hook for roughly a paycheck at the local mid-wife center or a couple of paychecks at the hospital. These type of variable marginal costs for identical services are designed to get people going to the cheaper providers or to eliminate the less essential services.
To review – deductibles are designed for adverse selection identification and effective repricing of risk while co-payments are designed to steer people to cheaper option with fairly simple incentives. Co-insurance is designed to get members to price compare between a variety of providers for a single array of services. Finally, total out of pocket exposure is often capped because there is no reasonable ability of people to finance $30,000, $40,000, or $50,000 in medical expenses from a single incident.
The more cost-sharing through deductibles, co-pays and co-insurance, the less risk the insurance company bears, and the more risk the individual carries on their own. A high deductible, high co-pay, high co-insurance plan is an adequate plan for individual members who either have significant free cash flow OR have a high degree of confidence in their health AND have some ability to access assets in an oh-shit hit by a bus scenario. High deductible, high co-payment, and high co-insurance plans will be the dominant plans on the Catastrophic and Bronze exchanges. Conversely, low deductible, low co-payment and low co-insurance are “rich” coverages that are used by people who can either afford a high premium but few surprises, OR know they need to use a lot of medical resources.
The next post will talk about how insurance is regulated.
NB: Actually going through all the Balloon Juice categories for the first time is pretty damn awesome
This post is in: Excellent Links, Open Threads, Republican Venality, World's Best Healthcare (If You Can Afford It)
(Drew Sheneman via GoComics.com — click link to enlarge)
Mad props to Tim Egan in the NYTimes:
Just now, a cell of several hundred people has been dispatched into the American summer, to picnics, town halls, radio stations, hospitals and Little League playing fields, with a mission to derail the economic recovery and drum up support for sabotaging federal law. They’re not terrorists, nor are they agents of a foreign government. This is your United States Congress, the Republican House, on recess for the next five weeks.
They even have a master plan, a 31-page kit put together by the House Republican Conference, for every member to follow while back home with the folks. It’s called “Fighting Washington for all Americans,” and includes a prototype op-ed piece, with a political version of the line usually reserved for dumping lovers: “This isn’t about me. It’s about you.”…
And what if I have a child with cancer, and the insurance company plans to dump him if Republicans stop Obamacare in its tracks? Can I attend? Or what if I’m counting on buying into the new health care exchanges in my state, saving hundreds of dollars on my insurance bill?
The kit has an answer: planting supporters, with prescreened softball questions, will ensure that such things never get asked. More important, this tactic will assure that any meeting with the dreaded public will go “in the direction that is most beneficial to the member,” as the blueprint states.
I thought this wasn’t about you.
Oh, and Republicans should be sure to “engage with all demographics,” the memo insists. It’s very specific about what that means: Asians, Latinos and women. Blacks aren’t mentioned. Lost cause. But millennials are included, because nothing works with young people like inauthenticity….
Also worth reading, Jonathan Cohn in TNR with “Six Reasons Hipsters Will Bite on Obamacare“.
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What’s on the Friday doc dump agenda for the end of another work week?
Early Morning Open Thread: “Saboteurs in the Potato Salad”Post + Comments (64)
This post is in: Excellent Links, Open Threads, Republican Venality, World's Best Healthcare (If You Can Afford It)
(Walt Handelsman via GoComics.com)
From Professor Krugman’s column to the FSM’s noodly appendages…
Leading Republicans appear to be nerving themselves up for another round of attempted fiscal blackmail. With the end of the fiscal year looming, they aren’t offering the kinds of compromises that might produce a deal and avoid a government shutdown; instead, they’re drafting extremist legislation — bills that would, for example, cut clean-water grants by 83 percent — that has no chance of becoming law. Furthermore, they’re threatening, once again, to block any rise in the debt ceiling, a move that would damage the U.S. economy and possibly provoke a world financial crisis.
Yet even as Republican politicians seem ready to go on the offensive, there’s a palpable sense of anxiety, even despair, among conservative pundits and analysts. Better-informed people on the right seem, finally, to be facing up to a horrible truth: Health care reform, President Obama’s signature policy achievement, is probably going to work.
And the good news about Obamacare is, I’d argue, what’s driving the Republican Party’s intensified extremism. Successful health reform wouldn’t just be a victory for a president conservatives loathe, it would be an object demonstration of the falseness of right-wing ideology. So Republicans are being driven into a last, desperate effort to head this thing off at the pass…
So will Republicans actually take us to the brink? If they do, it will be crucial to understand why they would do such a thing, when their own leaders have admitted that confrontations over the budget inflict substantial harm on the economy. It won’t be because they fear the budget deficit, which is coming down fast. Nor will it be because they sincerely believe that spending cuts produce prosperity.
No, Republicans may be willing to risk economic and financial crisis solely in order to deny essential health care and financial security to millions of their fellow Americans. Let’s hear it for their noble cause!
by Kay| 66 Comments
This post is in: World's Best Healthcare (If You Can Afford It), Meth Laboratories of Democracy
The health care law goes into effect in January, but people can sign up beginning in October. The campaign to inform and enroll people has begun. I thought I’d focus on the health care law education/enrollment effort this summer, if you’d like to follow along. The group I’ll be following locally are national. They will work on the ground in 8 states where there are high numbers of uninsured and GOP-led opposition to the law, but they are just one piece of the effort. I know one of the organizers in NW Ohio so I’ll follow some national news and also tell you what this individual organizer is up to in Toledo and surrounding counties as best I can, my schedule permitting. My pal is a great and extremely hard-working organizer who has won three out of three of the Ohio campaigns he’s been involved with, but he’ll have to work under the insane national din without losing his mind, which I imagine will be the real challenge.
Ohio is a particularly heavy lift for organizers, because the GOP base (Tea Party) are blocking the Medicaid expansion over Governor Kasich’s support of the expansion and the Republican political appointees who head our state agencies have done nothing and will do nothing to educate on or implement the law. That means there’s a lot of uncertainty for people. As you know, “uncertainty” is a horrible state of affairs that must be avoided at all costs when we’re talking about Wall Street and the stock market, but is perfectly acceptable when we’re talking about Republicans deliberately creating chaos that directly impacts ordinary people and their lives
For background on the political state of play from the other side, rather than what might or might not be going on as far as enrollment/education in real life we’ll start nationally, with a look at what Republicans are planning:
Republican lawmakers say they anticipate a flood of questions in the coming months from constituents on the implementation of ObamaCare, which will pose a dilemma for the GOP.
People regularly call their representatives for help with Medicare, Social Security and other government programs. Yet, Republicans believe healthcare reform spells doom for the federal budget, private businesses and the U.S. healthcare system. They’re also enormously frustrated that the law has persevered through two elections and a Supreme Court challenge and believe a botched implementation could help build momentum for the repeal movement.
Some Republicans indicated to The Hill they will not assist constituents in navigating the law and obtaining benefits. Others said they would tell people to call the Department of Health and Human Services (HHS).
“Given that we come from Kansas, it’s much easier to say, ‘Call your former governor,'” said Rep. Tim Huelskamp (R), referring to HHS Secretary Kathleen Sebelius. “You say, ‘She’s the one. She’s responsible. She was your governor, elected twice, and now you reelected the president, but he picked her.'” Huelskamp said. “We know how to forward a phone call,” said Rep. Jason Chaffetz (R-Utah).
“I have two dedicated staff who deal with nothing, but ObamaCare and immigration problems,” he added. “I’m sure there will be an uptick in that, but all we can do is pass them back to the Obama administration. The ball’s in their court. They’re responsible for it.”
House leaders have organized a group known as HOAP — the House ObamaCare Accountability Project — to organize a messaging strategy against the law that will trickle down to constituents.
The group has an eye on August recess, when member town halls will inevitably turn to healthcare issues.
Republicans are confident that the government’s most ambitious undertaking in recent memory will collapse under its own weight.
Rep. George Miller (D-Calif.), who helped draft ObamaCare, called GOP inaction on educating constituents “outrageous.”
“For many families, this may be the first time they have access to real healthcare coverage. This can be a matter of life and death,” said Miller. “This is a real dereliction of duty for Republicans,” he added.
In other words, they have no plan to either inform constituents on the law or actually do anything towards improving health care with their own ideas, but they do have an elaborate plan – complete with catchy title (“HOAP”)- to sabotage the law politically. We should probably anticipate the same incredibly informative and unbiased Town Hall meetings on The Government Take-Over of Health Care this August that we saw in Death Panel Summer, run on a continuous loop on cable.
by Kay| 98 Comments
This post is in: World's Best Healthcare (If You Can Afford It), Meth Laboratories of Democracy, Our Awesome Meritocracy
Justice Scalia, expressing his deep concern for young people during hearing on the health care law:
SOLICITOR GENERAL VERILLI: To live in the modern world, everybody needs a telephone. And the — the same thing with respect to the — you know, the dairy price supports that — that the court upheld in Wrightwood Dairy and Rock Royal. You can look at those as disadvantageous contracts, as forced transfers, that — you know, I suppose it’s theoretically true that you could raise your kids without milk, but the reality is you’ve got to go to the store and buy milk. And the commerce power — as a result of the exercise of the commerce power, you’re subsidizing somebody else –
JUSTICE KAGAN: And this is especially true, isn’t it, General –
VERRILLI: — because that’s the judgment Congress has made.
KAGAN: — Verrilli, because in this context, the subsidizers eventually become the subsidized?
VERRILLI: Well, that was the point I was trying to make, Justice Kagan, that you’re young and healthy one day, but you don’t stay that way. And the — the system works over time. And so I just don’t think it’s a fair characterization of it. And it does get back to, I think — a problem I think is important to understand –
JUSTICE SCALIA: We’re not stupid. They’re going to buy insurance later. They’re young and — and need the money now.
VERRILLI: But that’s –
As the country gears up for implementation of the major provisions of the Affordable Care Act (ACA), this month’s Kaiser Health Tracking Poll takes a step back and examines views on health insurance more broadly among some key subgroups, including young adults, the uninsured, and those with pre-existing conditions. The poll finds that the large majority of Americans want and value health insurance. More than seven in ten young adults – a special focus of outreach and enrollment efforts – say it is very important to them personally to have insurance. Cost remains the biggest barrier for the uninsured, with four in ten citing the expense of coverage as the main reason they don’t have it. Roughly half of those under age 65 believe they or a household member has what would be considered a pre-existing condition, and a quarter of them say they have either been denied insurance or had their premium increased as a result. With the expected marketing effort for the ACA’s health exchanges still not in full swing, negative views of the law continue to outpace positive views, with 43 percent unfavorable and 35 percent favorable. However, unfavorable views are a mix of those who feel the law goes “too far” in changing the health care system (33 percent) and those who feel it “doesn’t go far enough” (8 percent). The poll also shows that differences in how the law is branded may make a difference in how it is perceived by the public. When asked how they feel about “Obamacare” rather than the “health reform law,” higher shares express both favorable (42 percent) and unfavorable (47 percent) views, and Democrats are more enthusiastic.
Among the public overall, 87 percent say it is “very important” to them personally to have health insurance, 88 percent describe health insurance as “something I need,” and two-thirds (68 percent) say insurance is worth the money it costs.
Even among younger adults – a group that many have speculated may be resistant to getting coverage under the ACA – more than seven in ten rate having health insurance as “very important,” and similar shares feel it is something they need and that it is worth the money. Overall, just a quarter of those ages 18-30 feel they are healthy enough to go without insurance.
An advocacy group called “Young Invincibles” argued exactly this during the health care debate. They even submitted a brief to the Court with polling info that came out roughly same as that quoted above, but apparently Scalia didn’t read it.
One way to find out what people think is to ask themPost + Comments (98)
by Kay| 71 Comments
This post is in: World's Best Healthcare (If You Can Afford It)
My husband sent me an email yesterday headed “ultrasound bill-wow.” I opened it immediately because I was wondering why we got a bill for an ultrasound when nobody had one, but that isn’t what he meant.
He meant this bill in the Ohio legislature. From Plunderbund, an Ohio political site:
The House GOP wants Ohio to adopt the Irish law that led to the death of Savita Halappanavar. I’ll let others delve into the implication of forcing transvaginal ultrasounds on rape survivors, as this bill does. I’m going to look at the way that the Politicians Playing Doctor Act will lead to maternal deaths during miscarriage of a wanted pregnancy.
First, the bill increases the waiting period between all-options counseling and termination from 24 hours to 48 hours. Failure to abide by the 48 hour waiting period will now be a felony for the doctor,who can no longer get a waiver if the abortion is medically necessary, meaning when the mother’s health is at risk.
Instead, the House GOP creates a new classification: the “medical emergency” abortion. That is “a condition… that… so complicates the medical condition of the woman… that the death of the woman would result from the failure to immediately terminate the pregnancy.”
This is the law in Ireland. Abortion is legal to save the life of the mother, but it’s a felony if a doctor terminates to protect a woman’s health. To protect themselves from the state, doctors were afraid to treat the miscarriage of Ms. Halappanavar until the fetal heartbeat stopped. The heartbeat only stopped after the woman had already died of septicemia.
I think this is a legitimate issue, and I’ve raised it here before in terms of religious hospitals merging with non-profit and for-profit secular hospitals. We always argue “choice” in terms of a woman seeking an abortion to terminate a pregnancy. But as these laws get stricter and stricter, are we now in the realm where they apply to any woman seeking care for a medical emergency during a wanted pregnancy, too? I think we are, and it should be discussed. It’s called “miscarriage management” and it’s outside the way we think and talk about abortion.
You can read the bill at the link. The language and definition they hope to replace has a line through it, and the new, proposed law comes after the lined-thru portion.