For Kim Holland

[nathanm]

As we've been over many times, individual rates will probably increase during this period where some of the restrictions have been implemented, but the individual mandate has not. That's simply what has to happen as more high risk people enter the pool without a corresponding increase in low risk people in said pool. On the bright side, you do get new tax deductions to help with some of that cost. Once the individual mandate kicks in prices should decrease, thanks to healthy people also being required to pay in, barring significant increases in charges from the provider end. (which is likely, given that their pricing has been increasing well in excess of inflation for many years now, which is a large part of the problem of high health insurance cost)

As far as employer sponsored plans through which most people are covered, the changes do little to nothing with regard to pricing. Group plans have long had restrictions on pre-existing condition exclusions and price discrimination.

[Conan71]

Nathan, with all due respect, I'm more apt to listen to someone who is directly responsible for determing risk and appropriate premium rates and someone who markets insurance for a forecast of what this will look like.

The problem with your scenario is assuming the healthier risks will come into the pool. FMC markets BCBS, United, and Humana (I think it's Humana).

A lot of her younger clients are talking about paying the penalty and self insuring or simply seeking out catastrophic coverage with high deductibles. In other words, rather than pay someone else to shoulder the risk, they are willing to take all or most of it rather than take a drain on their monthly cash flow.  Look at it this way: let's say you go in for a check up once a year and have an ill visit as well. You are in perfect health. Why pay $5000 a year for comprehensive health care when you only need about $250 a year in visits and meds?  Save your money, hope for the best.

I can understand where your theory comes from, it's simply not taking into account the reality of human behavior. 

[DolfanBob]

Hmmm. I like her haircut. 

[nathanm]

A lot of her younger clients are talking about paying the penalty and self insuring or simply seeking out catastrophic coverage with high deductibles.

There's no accounting for stupid. If her younger clients are single and making less than $43,320 (this year..will be higher by the time the mandate kicks in), they will be eligible for a tax credit to offset all or part of the cost of a qualified plan (depending on exactly how much they make). If people are so stupid as to prefer to pay the penalty rather than buying insurance at a similar or lower cost (depending on their income level) I don't really know what to say except that capitalism depends on rational actors to function correctly, and therefore is or will shortly be imploding.

Or as the Wall Street Journal says, More Small Businesses to Offer Health Insurance.

[Conan71]

There's no accounting for stupid. If her younger clients are single and making less than $43,320 (this year..will be higher by the time the mandate kicks in), they will be eligible for a tax credit to offset all or part of the cost of a qualified plan (depending on exactly how much they make). If people are so stupid as to prefer to pay the penalty rather than buying insurance at a similar or lower cost (depending on their income level) I don't really know what to say except that capitalism depends on rational actors to function correctly, and therefore is or will shortly be imploding.

Or as the Wall Street Journal says, More Small Businesses to Offer Health Insurance.

The problem is, not enough people understand about the tax credit, and those making above the cut-off consider it money ahead to pay a $750 penalty.  A lot of the "healthy" people they seek to bring into the pool aren't buying health insurance now because they consider it prudent to self-insure or simply have other priorities like buying a new car, paying for a house they can marginally afford, or a bunch of electronics.  There's still a lot of unknowns and flat-out misinformation out there to confuse the issue for many of these people who may be impacted by the individual mandate.

I think there will be a far clearer picture after the first year of the individual mandate after people do their taxes and figure out if they are better off buying coverage or paying the penalty. 

[nathanm]

The problem is, not enough people understand about the tax credit, and those making above the cut-off consider it money ahead to pay a $750 penalty.  A lot of the "healthy" people they seek to bring into the pool aren't buying health insurance now because they consider it prudent to self-insure or simply have other priorities like buying a new car, paying for a house they can marginally afford, or a bunch of electronics.  There's still a lot of unknowns and flat-out misinformation out there to confuse the issue for many of these people who may be impacted by the individual mandate.

I think there will be a far clearer picture after the first year of the individual mandate after people do their taxes and figure out if they are better off buying coverage or paying the penalty. 

Fully half of US families will qualify for some sort of subsidy (probably closer to 60%), and that subsidy will get paid directly to the insurer. You don't have to wait to be reimbursed at the end of the year. Between that and the new loss ratio requirements, I think there's a good chance that the rate of premium increases will decrease, even if we don't see the cost drop in absolute terms.

I agree that there's a lot of misinformation and fear being promulgated by the usual suspects, and that it won't be clear exactly what will happen until the individual mandate goes into effect. On the bright side, state insurance commissions now have federal law backing them in forcing insurance companies to articulate a good reason for raising rates and allowing them to tell them no. What remains to be seen is whether or not this power will actually be used. In states where the commissions are populated by insurance industry alums, I doubt that much of anything will change in that respect.

As I've said many times, the bill we have isn't the bill I wish we had, but it's very likely better than the nothing we had before.

[Conan71]

Along the lines of misinformation from the usual suspects, Obamacare was sold as lowering health insurance costs.  Nice to know the goal post was moved from lowering to simply slowing the rate of increase.  Aside from that, I don't think it's a good practice for the federal government to require someone to purchase a product or service they don't want.

Before anyone pipes up with a comparison to compulsory auto liability, the difference is if you don't wish to drive or own a car you do not have to buy it.  As well, this is a state level mandate.  If someone doesn't want health care they should not be required to purchase health insurance.  It's a matter of individual liberty.  Why should it be incumbent upon me to help secure lower cost health care for everyone else with my participation if I'm not interested in using the system?

[nathanm]

Lowering the rate of increase is lowering the cost. If the rate of increase would be, say, 8% before the law and 4% afterwards (numbers pulled out of thin air for the purpose of illustration), you're paying less each year than you would have otherwise. That's called saving money.

It's entirely possible that the cost, in real terms, will decrease, but I think that expecting that is expecting too much. Inflation drives the cost of everything higher, and the bill doesn't do anything to break the AMA's quota policy that prevents us from training more doctors. Nor does it do anything to contain the cost of medical malpractice insurance, which has been rising at rates far higher than inflation, because of which the average profit margin on medical malpractice lines in the industry last year was over 30%. (at least one insurer was up at 74.8% last year)

I'd love to see a loss ratio requirement on medical malpractice like there will be for health insurance.

[heironymouspasparagus]

Conan,
The auto liability comparison is more than valid, it is perfect.  If someone wants to "self insure" their car, they are responsible for the consequences - they will be sued into the ground for that Bentley they crash.

In like fashion, if someone wants to "self insure" for health, then let them stay out of the emergency room and don't make me use 40% of my bill to cover theirs!

Lame.

And according to CBO - the definitive arbiter used by both sides - the cost is down the $ 188 billion.  Wow!  Wouldn't it be nice if Murdochian World would actually deal in truth??

[Red Arrow]

Lowering the rate of increase is lowering the cost. If the rate of increase would be, say, 8% before the law and 4% afterwards (numbers pulled out of thin air for the purpose of illustration), you're paying less each year than you would have otherwise. That's called saving money.

I disagree that it is lowering the cost.  If I spend $100 this year and expect to spend $108 next year but only spend $104,  I will still spend more money.  I call that a price increase.  

[Red Arrow]

Conan,
The auto liability comparison is more than valid, it is perfect.  If someone wants to "self insure" their car, they are responsible for the consequences - they will be sued into the ground for that Bentley they crash.

In like fashion, if someone wants to "self insure" for health, then let them stay out of the emergency room and don't make me use 40% of my bill to cover theirs!

Lame.

And according to CBO - the definitive arbiter used by both sides - the cost is down the $ 188 billion.  Wow!  Wouldn't it be nice if Murdochian World would actually deal in truth??

I don't know if it is still available but at one time in Oklahoma a driver was allowed to post a bond in lieu of purchasing liability insurance. 

[heironymouspasparagus]

I think it is still available.  More crap.

Shame the math is so easy, but so many in Murdochian World just can't add.

[Conan71]

I disagree that it is lowering the cost.  If I spend $100 this year and expect to spend $108 next year but only spend $104,  I will still spend more money.  I call that a price increase.  

He comes up with interesting premises when moving the goal posts.

Voters turn out en masse to upset the House, Senate, and countless state races in anger over soaring Federal deficits & debt due to out of control spending and corruption and the rebuttal is that overall government spending hasn't increased  because states are spending less due to budget short-falls (which have been buttressed by Federal funds).

He's a master at parsing.

Sound like you and I heard similar things in the run up to this.  Was it your understanding that health care and insurance costs would be reduced?  Reduced means subract to me.  What Obama and his minions were selling, from what I understood, wasn't a convoluted formula to reduce the growth in cost while taking into account inflation would be a reduction...HUH?  I'm not being dense here, I understand what Nathan is saying, that's simply not the claim used to sell the program.

[Conan71]

Conan,
The auto liability comparison is more than valid, it is perfect.  If someone wants to "self insure" their car, they are responsible for the consequences - they will be sued into the ground for that Bentley they crash.

In like fashion, if someone wants to "self insure" for health, then let them stay out of the emergency room and don't make me use 40% of my bill to cover theirs!

Lame.

And according to CBO - the definitive arbiter used by both sides - the cost is down the $ 188 billion.  Wow!  Wouldn't it be nice if Murdochian World would actually deal in truth??

Completely different.

Compulsory auto liability protects others from your stupidity and negligent behavior.  This insurance is a condition, much like a driver's license is to operate a 4000 pound projectile on public roads.

Health insurance protects you from your own stupidity, neglect, and bad genes.

Go have an apple while I enjoy my orange.

[Cats Cats Cats]

Completely different.

Compulsory auto liability protects others from your stupidity and negligent behavior.  This insurance is a condition, much like a driver's license is to operate a 4000 pound projectile on public roads.

Health insurance protects you from your own stupidity, neglect, and bad genes.

Go have an apple while I enjoy my orange.

You are partially wrong.  Health insurance pretty much doesn't do anything for 1) Own stupidity 2) neglect.  All it sreally gets you on mostly is bad genes.