aceventura3

If virtually everyone who owns a car has insurance on their car, without government, why don't people buy health insurance the same way?

If virtually every building in this country has fire insurance without government, why don't people buy health insurance?

If a person is willing to pay for insurance on an auto, why won't they pay for health insurance on their children?

If every worker in this country is covered by workers' compensation (most states its run through private insurance companies) why isn't there health coverage for the non-working hours and for those who don't work?

If a 20-ish year-old is willing to send $xxx.xx on whatever they spend money on, why aren't they willing to buy health insurance?

If there is a crisis in this country with uninsured people, I generally wonder why people have not taken initiative on their own to protect the most important thing they have, their health? Perhaps some of you can help me understand.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Daniel_

a) people insure cars because the law requires them to (in the UK at least)

b) people insure their houses because the mortgage lenders make it a condition of the loan

c) 20 year olds don't buy health insureance because they KNOW that illness is a character flaw suffered by old people who just didn't try hard enough

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In labyrinths of Coral Caves,
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snowy

Because at age 23, I can pay $60/mo. for comprehensive coverage on my car, but it will cost me $90/mo. for health insurance--and that health insurance STILL doesn't cover everything. It has a deductible that has to be met, and a $20 copay every time I do go to a preferred provider as well as copays for my prescription drugs. My car insurance also has a deductible, but I'm less likely to have to pay that, versus one for health insurance.

Quite frankly, I can't afford that. If I DID have the money every month for health insurance, trust me--I'd have it. But as is, I have student loans to pay, car insurance to pay, rent, food, and other basic bills. I don't go out often and I don't waste my money--but I still can't afford health insurance.

__________________
If I am not better, at least I am different. --Jean-Jacques Rousseau

AngelicVampire

Car payments are optional, mortgage payments are optional, health is one of these things I haven't worked out how to live without yet.

highthief

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pan6467

In most areas you need a car to get to work.

Health insurance with their deductibles, what they will cover and co-pays. The product isn't worth the money for people in their 20's. Even as I close into 40 I wonder what benefits insurance would help me with. If I had had insurance and gone into the ER when I thought I had had bronchitis, would the company have covered the x-rays and the Sarcoidosis tests and such? I seriously doubt it.

__________________
I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

BigBen

What is insurance?

Insurance is a way of paying someone a small amount consistently to avoid a very large amount in an unlikely event.

Car insurance? $60 a month, but I don't have to pay $20,000 when someone smashes my car.

House insurance? $40 a month, but I don't have to pay $200,000 when my house catches fire, or a tornado rips it apart.

Health insurance? $X a month, but I don't have to pay $X when my health goes.


Hold on.

Notice that I can put a price on the value of the car, the house, and everything else that is normally insured. Hell, you can buy mail insurance.

And these things that I have insured, they are for UNLIKELY events, not routine maintenance. If your car breaks down because you didn't change the oil, your insurance doesn't cover it. Insurance won't cover the replacement of your roof in 25 years when it starts to leak.

Let us put health insurance into the normal insurance category;

1. What is your life worth? I argue that it is infinitely priceless. You are willing to spend any amount of money you have to stay alive. All things staying the same (Ceteris Paribus), money is worthless if you are not here to spend it. Lets keep your kids and your legacy out of this for brevity sake.
How do I put a value on you feeling good? If you are in pain, how much money would you be willing to spend to have the pain go away? I would argue that it is a lot of money, but not EVERYTHING YOU OWN. Thus, we are now in an argument of relativity.

2. What are the chances that you will die? I argue that it is 100%. Did you know that if every person lived long enough, everyone would get cataracts? Those who don't just died before their cataracts came. Using this logic, it is a certainty that we will need healthcare, and it is no longer an unlikely event, as in fire and accident insurance.

With normal insurance, I can take the EXPECTED VALUE of the cost of repair or replacement of the insured item, and then multiply that by the LIKELIHOOD of a bad event occuring. I factor in inflation rates, types of vehicles and types of homes, and using statistical models I can come very close to predicting what my costs are going to be in the future; Statistics being what it is, I can only do this when large number of people are involved. Thus, if I want to take my risk away, I need large numbers of insured people. I won't go into the mathmatics here, you can research the statistical principles of insurance elsewhere.

But health... it is different. It is a state of being. Your body is the only one you have. Look at yourself in the mirror. Count the scars. What is your health worth?

What about that scary story you read about here (and elsewhere) about that healthy guy that got cancer, or that funky rare disease? The media is always sure to tell the public the costs of treatment in the private sector. Why? People want to avoid that, and they are interested in reading about someone else's misfortune. "Boy, am I glad that wasn't me!". Think of it like mental rubber-necking at a car accident.

How do you insure against that? The costs of my cancer treatment may very well be different than yours. You may live through your bout of prostate cancer, and I may die. I can't go back to the dealership and ask for a new prostate. I can't phone the real estate agent and ask to move to a different body. I can't (as a Canadian) comparison shop for my cancer surgery. How in the hell would I? I am not the expert...

So what do you do with private health insurance? You cover people for a list of very uncommon, yet very expensive medical procedures. You put people into groups (smoker/non-smoker, male/female, over 35 yrs old/under 60 yrs old) and you run a very complex algorithm to see what their monthly payments should be. Then you need large numbers of people in each category to round out the statistical model, and you make money as an insurance agency.

If you want more common procedures covered, then the expected value of your insurance will go up, because the odds are changing.

But what if you got a rebate on your insurance for putting in sprinklers in your home to prevent fires, and you went to a defensive driving course to be a better driver? You are changing the odds of very bad things happening, and you should be compensated for that... Is health the same way?

Should your insurer pay you to eat healthy, work out, get a good nights sleep, quit smoking, and have regular health check-ups? Some people say yes. Others argue that free will is more valuable than that.

Still reading? I would like to take this opportunity to thank you. I will finish by saying that comparing normal insurance with health insurance is a straw-man argument. They are not the same, and are so fundamentally different at the basic statistical level that comparing them only confuses matters.

Your final question is an Economic one, and one that frankly fascinates me; Why would you choose to spend your money on X instead of Y? You obviously see the benefit in health insurance, and cannot understand why someone would spend their money instead on cigarettes and alcohol, spinning rims and subwoofers... That is why people started studying human economic behaviour hundreds of years ago.

All I can tell you is that people get more personal good (utility) with their consumption set than they would by replacing some of their purchases with insurance. People are risk-adverse, that is true. They also try not to think about getting sick, old or dying.

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Hey, if you are impressed with my memorizing pi to 10 digits, you should see the size of my penis.

aceventura3

In one respect you are correct comparing auto insurance to health insurance is an apples to oranges comparison. They are different. However, there are similarities. If your resources are limited you can make a choice between an apple and an orange for nurishment.

The probing question like you state, is how one goes about making that choice. How do people come to the conclusion to buy auto insurance and not buy health insurance.

"Auto insurance is mandated by law", but owning a car is not. I find the "by law" point to be somewhat superficial.

My gut tells me that people do not value health insurance because if they don't get it from government or work they won't make a sacrifice to pay for it.

My gut also tells me that there is no healthcare crisis in this country. People are generally satified with the level of healthcare they receive in this country. And, they generally choose the level of health insurance they want if they want it at all. I know there are exceptions and personally I think we have an obligation as a sosciety to care for the old, children, and the mentally disabled.

O.k. you might have to make me re-think my entire outlook. If people are so short-sighted that they don't do what is in their best interest over the long-run, perhaps we do need government to make their decisions and therefore require by law everyone to buy health insurance or provide it. I always thought that people wanted to be free to make their own choices, but if we conclude that most can't or don't understand the consequences of the choices they make, I guess we may have no choice but to make decisions for them. I would of course have to be one of those making the decisions for everyone else.

Free healthcare and manditory military service, does that sound fair?

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"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

flstf

Probably because young people find it to be too expensive and not justified on a risk/reward basis. The chances of a major illness at that age is probably very remote and approaches lottery winning odds. I'm just guessing here and don't have any data to back this up.

stevo

Because I can go to the ER at a not-for-profit hospital in town if something happens to me, conveniently forget my SSN and accidentally write down the wrong name. See, we have universal healthcare.

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BigBen

Peoples resources are always limited. Yours may be more or less limited than mine, or Bill Gates, but limited nonetheless. Hence my statement about relativism.


My gut tells me to look at health insurance expenditures across the entire economy, and make an informed decision. Americans are paying a large amount of money on healthcare insurance. I leave it up to the reader to find the evidence.

I agree with this statement entirely. It is often media sensation that produces the "Oh My God WE ARE ALL GOING TO DIE IN THE STREETS!" news story.

Granted, those exceptional circumstances make for good television, but the public is misinformed to think that those exceptions are the norm.

That's what I am here for. I cannot think of a better compliment in a debate. I appreciate that. Thank you.
Well, this is where Democrats and Republicans differ fundamentally in their ideology. Democrats would provide government programs to ensure societies best interests in the long run, and Republicans would educate the public to make good decisions on thier own. Alas, I think both ideas are good, and would prescribe to a third option of fairness and balance if given the oportunity.

I would agree that all citizens who have served their country in the Armed Forces should be given universal healthcare coverage. I also think that the term "Free Healthcare" is wrong, and it is my personal mission to have people stop using that terminology.

Everyone knows it is not free. It is paid by tax dollars. Taxes are high. Let us instead use the term "Universal Health Care", which represents the idea that every citizen is entitled to the same level of healthcare as every other citizen.

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ScottKuma

Don't get me started on healthcare....

I am 33 years old, have paid into private health insurance since I was 18. My family and I have made very few claims against health insurance....until this past year.

My son was born with multiple birth defects that have left him on a ventilator. It is likely that he will wean off of the vent within 2 or 3 years. I make too much for Medicaid, but due to my son's handicaps, have been placed on a waiver waiting list to receive some sort of government care. It is likely that we will receive aid within 2 years of the date of application.

IN THE MEANTIME...

My private health insurance company has thrown up roadblocks at every juncture when asked to provide the care necessary for my son. We get 30 nights of nursing a year, yet my son needs 24 hour supervision (read as, a competently trained adult awake with him) per his doctors' orders. At the end of the 30 days, they took the following stand:

1) We won't pay for more nursing, because our contract doesn't cover it.
2) We won't pay for your son to go into the hospital, because he's well enough to be cared for at home.
3) We won't pay for Durable Medical Equipment (his vent & supplies) beyond your contract...and by the way, you'll be at your yearly limit at the end of the 30 days.

If I were home every night, we MIGHT be able to make the supervision thing work. Problem is, I travel 80% of weekdays as a condition of my job. My wife can't stay up with him all the time, and care for him and our 4 year old daughter.

You want to talk about a rock and a hard place? They were basically leaving my son without ANY of the care he needed! (This has since been resolved - the terms of that resolution are confidential, but we're satisfied - but it took an act of GOD, signed in triplicate, sent in, sent back, queried, lost, found, subjected to public enquiry, lost again, and finally buried in soft peat for three months and recycled as firelighters. That and media intervention. ;-) )

Personally, I don't believe that we need more universal healthcare. I DO believe that better management of the current system will result in better care. I DO believe that care should be provided that has the best outcome for the patient, and at the best cost. In many cases, this means care at home...even when the contract doesn't specifically cover it. I DO believe that the legal shield of protection enjoyed by these companies when faced with bad consequences to their decisions should be lowered.

and I DO believe I'm done for now - my blood pressure is going up again....

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Jinn

The only insurance I will ever have is car, and that is because it is legally mandated. House insurance I may accept, simply because its often a condition of the loan.

Insurance companies calculate MY risk based on the risk of people SIMILAR to me. And by similar, its usually age. I know that I'm not like most people my age, and have a much smaller risk of car accidents and dehabilating health problems. I've never been ill enough to go to the hospital, and I'm rarely sick to the point of perfect attendance.

I know my risk far better than the insurance company, simply because they're basing it on my bracket and not me. Therefore, I budget for MY risk and save accordingly. I still insure myself from risk, without being subject to an inherently flawed probability model and accompanying outrageous prices.

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flstf

I also believe both sides have merit but really wish the Republican philosophy was viable. Unfortunately it seems like healthcare especially hospitals are becoming less and less competitive.

Unless we can figure out how to instill free market competition we may be forced to adopt universal healthcare.

Charlatan

ScottKuma's example is a good one for the differences between auto and home insurance and health insurance. How do to plan for something like that?

If it was a car or a home you would write it off and get a new one. With a child, this is just a little impractical.


By the way, I don't have a problem with demanding public service in exchange for Universal Healthcare. I actaully think it would be a very good thing to mandate one or two years of service for everyone once they turn 18. This could be military service but it could also be community service or foreign service (like a peace corps type of thing).

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ratbastid

The unconscious elitism expressed in the OP is simply staggering.

Here's an idea. How about if the people who own cars get to have their health care taken care of, and those who don't--say, the 27 million Americans below the poverty line--be permitted to crawl into gutters and die?

The crisis isn't people unwilling to pay for health insurance. The crisis is people unable to.

Jesus Christ. I've never seen such a "let them eat cake" sort of argument.

snowy

Exactly. I am sitting in this position right now. I need a car to get to my job and make money--therefore car insurance is one of those bills that has to be paid. But I don't make enough money to pay an additional bill such as health insurance. Consider this--I am a 23 year old non-smoking healthy female. Yet my health insurance will cost me $90/mo--and that STILL doesn't cover everything. That is coverage for a single female. Imagine what it would be if I had a family.

I wish there was a more affordable solution for everyone.

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pan6467

If health insurance were so affordable to the masses, companies would offer it.

I find it sad that supposedly the best healthcare system in the world is not a viable option for many.

You pay an outrageous sum for what? To be told what doctor tot see, to have to have referrals, second opinions, what THEY will pay for what they won't, high deductibles, easily reached lifetime maximums, co-pays on expensive and ever growing more expensive meds (if you are lucky).

So the service is not there for the people. The choices are limited and if you don't believe you'll get sick you weigh the negatives described above to the benefits and the negatives far outweigh the positives.

I suggest changing the system and making the industry more responsive to the needs of the people... not the other way around.

__________________
I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

maleficent

A few weeks back, i was half paying attention to one of hte talking heads on one of the sunday news programs - they were pontificating about the state of healthcare in the US...

they raised an interesting point...

Why should healthcare be tied to employment - so that when/if you lose your job for whatever reason - you are basically insuranceless...

Interesting perpective... but where else is insurance going to come from? Taxes? you can only pay taxes if you are working- but if you aren't working- you don't pay taxes..... but in some scenario where taxes pay for healthcare -- do even non working people get the same healthcare as those that do work? I'd ask the question is that fair... because I don't think it is - -but I'm sure someone would point out to me all the stay at home mothers and children that are entitled to get healthcare.

If taxes were to pay for healthcare, what about the person who has 6 kids - that's their choice... they should pay more than I do... but it seldom would work out that way because some bleeding heart would make the argument that 6 kids cost more money.

My employer allows me several choices of healthcare- and some cost more than others - I prefer to go to my own doctors rather than a 'managed care' type program -- I pay more for that... I'm not sure I'd want to lose that option. So would i have to pay more taxes for that? Already - -I tend to pay more than my share for insurance because 1. I rarely go to the doctor.. .and 2, as a single person, I don't pay half of what married people pay for insurance.. .they are covering two people (one of which is not working)

eh - i'm rambling...

Insurance is a very broken situation right now, and I'm not sure if it's even possible to right it...

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Marvelous Marv

You have said this over and over. I sure wish you'd post the basis for your opinion, because it couldn't be further from the truth.

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Marvelous Marv

It originated as a way to increase the compensation of employees without getting them taxed to death. Everything has grown from that original premise.


The question I want answered is "Why can't a self-employed (non-incorporated) person write off his health insurance premiums?"

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kutulu

Exactly. At my previous employer it cost $660/month to insure myself, my wife and our daughter. It was pre-tax but the fact is that most people don't have 8 grand per year to spend on insurance.

ubertuber

Bigben,
Those are some really interesting posts with a lot of useful ways of framing this issue. Lots of food for thought - thank you.

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Marvelous Marv

There are some people who truly need a car for work, but in my opinion, the vast majority WANT a car. Because it's faster, more convenient, and less plebeian than riding a bus.

I would maintain that for almost anyone whose work does not require him or her to drive a personal vehicle, they have CHOSEN the convenience of a car instead of choosing health insurance. Or, if you prefer, some have chosen cableTV/broadband for $90 a month instead of health insurance. Or, they've chosen to spend their time surfing the internet instead of working 4 hours a week at $7 an hour, which would net them the same $90. And yes, some people choose to have children they really can't afford. I'm not talking about children with health problems--I'm talking about people with minimum wage jobs and no plans for an education who decide to have kids, and then, once again, expect everyone else to pay for their choice.

I would further maintain that most supporters of government health insurance are just the same old group of people who want "everyone else" to pay their expenses. Except for politicians, who are happy to stir up class envy if it will get them re-elected.

If having health insurance were a condition of using an X-Box, we'd see a dramatic drop in the number of uninsured, without a new government program.

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stevo

Thanks to Bush's HSA's you can. Too bad they need to be tied to an insurance plan and you can't just have a HSA without insurance if you wanted to DIY.

edit...oh, that was the deductibles. yeah sorry. Why can't you write off your premiums? damn.

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BigBen

A wise man (not me) once said "A tax is a tax is a tax". If you are paying part of your wage to your employer for health insurance, what is the difference than paying that money to the government in tax, and having a government run healthcare system? In my mind, there is no difference, other than taking out the middle-man (read private insurers)

So you want a tax break? How about this: "A tax-cut is a tax-cut is a tax-cut..."

Would you feel better knowing that your tax dollars went to provide ScottKuma's son with top of the line medical care?

Sorry to offend anyone with that statement, but I truly believe that it helps my side of the argument. The reality: Someone has to pay, or people are put between rocks and hard places.

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Hey, if you are impressed with my memorizing pi to 10 digits, you should see the size of my penis.

kutulu

That's a really short-sighted comment. Half of the country clears less than 30k. Most of those people can't afford kids but they still do. If they stopped having kids our population would shirnk and the system would collapse. Maybe CEO's need to take a pay cut so that people can be paid fair wages. There is no excuse for someone to make 10,000 times that the lowest person on the ladder makes.

flstf

I think it's the nature of the business. When you are taken to the emergency room after a serious illness/injury you are in no position to negotiate price. It's not like deciding whether you wish to buy their life saving service or not or have time to shop around. It does not seem to be competitive like other consumer goods and services.

Sorry if I have repeated myself, these topics come up from time to time and I just write whats on my mind at the moment and do not take the time reference the links of previous discussions.

Nimetic

It's interesting to me, the tradeoffs between private and public run systems.

On the one hand, government run stuff is generally considered innefficient. There is no direct competition driving performance increases - and at least in AU, we seem to have a proliferation of forms, procedures and stuff in government departments that look silly to an outsider.

However.... there is a flipside.

In AU, the only country that I have direct experience of, government is such as big buyer (or subsidiser... to me more accurate) that they have a strong influence on prices. The two examples that I can think of are general practice billing costs and drug costs.

Looking at general practice. Doctors can charge whatever they like, but in effect they are a bit of a club. The AMA (medical association) sets fees in a way that would not be acceptable in some other industries (petrol sales for example).

Ok then. The government here gives us a rebate on GP visits. Now - if the doc charges no more than this amount, then we can see a GP without paying a cent and there are arrangements for the bill to be settled directly between Medicare (govt) and the doc/centre. On the other hand - if the GP charges more, the patient pays it all upfront, then partially recoups the cost from the government later.

In effect, there's a strong pressure on GPs to charge no more than the govt set fee, at least in poorer areas.

Looking at drugs, we have a different situation with some similar outcomes. We pay a set fee for most drugs, now about AU $20 I think, regardless of their actual cost. The government rules on which drugs are eligable for support. For new drugs, my understanding of the process is something along the lines of

1) Drug company offers drug. Price per pack $500 say.
2) Govt agency says, no. Too expensive. Not effective enough.
Not enough need to get on the supported list
3) Drug company says, if approved, we can sell in volume for $450
4) Negotiation
5) Sale price, $400. Government pays $380. Patient pays $20. Volume
sales occur.

Obviously there are pros and cons. I'm not a policy expert. I'm just hoping that some of this is interesting/useful. I'm not saying that this is the best method or anything.

Nimetic

Private insurance is paid by individuals in AU. It's not tied to employers/employees in any way...

The fact that it is tied to work in the US seems somewhat of a quirk. No doubt there's an explanation and some advantages to your system.

Nimetic

That's extreme.

I was just checking some prices here. The top cover (family) with a local insurer costs AU $6200 per year.

At the same time, basic hospital cover with excess (some out pocket, no physio/dental etc) costs $35 / month for a single person. This probably excludes procedures relevant to older people though.

Most youngsters here (say 18-25) would just rely on the public hostpitals to patch them up, if they get into a scrape.

I think the key difference might be drug costs. Drug costs are covered seperately in AU - these are subsidized by govt (with the exception of the very new stuff). Otherwise, there must be something else you have which pushes costs higher.

BigBen

Now THAT is helpful healthcare debate.

I want to give you a little kiss right now.

Hmmm. I studied the New Zealand healthcare system, because it tried and failed miserably.

I think you and I are on the same page. Tell me, what is the procedure to see a specialist (orthopedic surgeon) where you are? What if Diagnostic Imagery is required?

I wait, with bated breath.

Finally, someone who is not arguing, but contributing. God bless the TFP.

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Hey, if you are impressed with my memorizing pi to 10 digits, you should see the size of my penis.

aceventura3

Why stop at CEO's? Why not entertainers, athletes, lawyers, doctors, commissioned sales people, pilots, trades people, middle managers, engineers, architects, politicians, investment bankers, or anyone else who might make an above average salary? Who do you want to decide the value of someone's labor, the market or a central committee somewhere?

Getting back to the point of healthcare, if everyone purchased health care especially healthy young people, premiums would generally be lower, assuming generally the same cost spread over a bigger pool of people.

If people got activly invovled in shopping and buying their own health coverage, the market would respond, service and product options would improve. Generally we have a small group of executives at major companies buying health insurance. So health insurance companies target their products and services to make those executives happy. It is ironic, but most working people with health coverage delegate that important decision to an "over-paid" executive. Perhaps they should take that responsibility, cut that executive, split the money and buy their own coverage direct.

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"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

aceventura3

The OP asks 6 questions. Asking questions is elitism? How do you go from questions being asked to having people "crawl into gutters and die"? Questions don't form arguments, stating a position with support does. I am actually seeking support or contrary points for an argument.

You state that it is not true that people are unwilling but that they are unable, do you really think this is true of 27 million Americans? Do you have any support for this?

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

BigBen

Ace, you lost me on that one...

If everybody bought healthcare insurance, that does not necessarily mean that the average cost will be lower. Profits could easily increase, and the increased demand for insured services would cause the price to go up as well, negating any savings...

Executives are forcing insurance plans down their employees throats? They are choosing the wrong plans? I don't buy that, as a blanket statement.

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Hey, if you are impressed with my memorizing pi to 10 digits, you should see the size of my penis.

flstf

I was wondering the same thing. It would seem like the gov would want to encourage folks to get insurance by making the premiums deductible for those not covered by an employer's plan.

When I was downsized/retired a few years ago the cost to maintain my employer's insurance plan was over $800 per month for my wife and I. Instead we signed up for $10,000 deductible catastrophic insurance for around $300 per month and even that is not tax deductible. At least the money put into our HSA is deductible.

aceventura3

If we have an insurance pool of 50 people who generate $1,000 in health care costs (keeping it as simple as possible). The average cost or premium for this insuance pool would be $20. If we added another 50 who generate $500 in healthcare costs, the new total is $1500, and the new premium for each in the pool would be $15. Insurance company profits are often based on investment income or managing the "float" more than it is on underwriting profit. If the insurance company has a bigger pool of money to manage, their profits will be higher, but that normally won't effect the underlying costs. So in this case if the insurer got advance premiums of $1500 rather tha $1000 and earned 5%, they would make $75 rather than $50. And, actually with a bigger pool of money the insurance company is less likely to want underwring profits and would use less risky investments to meet their profit objectives.

Who is the customer? The employer is writing the check for the plan, the employer picking the plan, the employer defines the specs for the insurers being considered to bid on. So I would say the employer is the customer. Therefore the insurance company want to serve the employer much more so than the employee. I think this is true even when the employee is paying part or all the premium costs when it is being done through the employer. If the employer says cost is more important than choice - the employees won't get to make choices, if the employer picks a plan that has $1 million cap - the employees get a plan with a $1 million cap, ettc, etc.

I am not suggesting that the insurance company doesn't care about the employee. It just seems clear to me that there is a hirerarcy, and the employee isn't at the top.

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BigBen

Okay, but what I am saying is

What if the 50 new people in the insurance plan consume the same amount as the last 50? Instead of them consuming half, they consume an equal portion?

Your example has them consuming half as much. What do the numbers look like if they consumed MORE?

What if we insured the people that had higher risk factors? They consume double?! Uh oh, those numbers don't look so good anymore.

Insuring everyone (even the really, really sick and 'expensive' ones) means that the rich people who can afford lots of bells and whistles in their coverage will actually get WORSE care. We don't allow them to buy their way to the front of the line, and we make them wait with the dregs.

Now, this is kind of the classic trade off, and Vilfredo Pareto talked about the optimisation process. Take one dollar away from Bill Gates, and give it to a starving guy so he can buy a meal. Bill doesn't miss one dollar, and the starving guy is infinitely more happy, because he got fed... Keep doing that, across the board, until people's marginal utility rates are equal.

If me taking something away from you does not make you unhappy, but makes someone else happy, I have created happiness by re-distributing the wealth between the participants, in a closed system. Hmmmm. This is a lot easier to say this than it is to tell you "You have to wait for your hip surgery because a small boy needs the funds so he can breathe. You will get your hip fixed, just not right now."

Who wants the job to tell rich people that theydon't get to buy healthcare anymore?
That is almost Un-American!

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aceventura3

I think we have young healthy adults who avoid health insurance because they don't think they need it or would rather spend the money on other things. Then you have the people who really need it now and if it is available they will make sure they have it. Then there are the people you know they are close to really needing it and they make sure they have it if it is available. There is a tendancy for adverse selection when it comes to insurance. Perhaps, that is one of the bigger problems with premiums in this country.

Very theoretical. What if Bill Gate values his dollar more than his time, and you take his dollar, he wastes his time, and the guy you feed values wine more than food. It is possible that marginal utility rates don't change or actually worsen. Where on the otherhand Bill Gates would have happily given his time to train the individual who would have been happier receiving the training and then be in a situation where he could buy his own food and wine. I don't think you can manage marginal utility, I think each person has to be free to make choice, both the giver and reciever. I think any time you "take" it is a net bad thing.

Why not look at it on an individual level. If I stop doing X and it doesn't make me unhappy, and therefore I can do Y, which does make me happy, I have created happiness. You do this without taking from another. Would this be the most effecient way to generate increased happiness? I say yes, otherwise how do you determine what will make someone happy or unhappy. I don't think you can, you can only do that for yourself. It begs the question do we want a central committee somewhere deciding on what makes people happy and unhappy? I think those kinds of systems have always failed.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

roachboy

it seems to me that the entire logic of this thread is geared around an inability to think in social-system terms--which is of a piece with the refusal to take class stratification seriously--which leans on the assumption that an uneven distribution of wealth is a simple fact of nature and not a social problem---which enables a reductio ad absurdum of the question of health care coverage to an abstract matter of isolated, unqualified individuals and choices that are equivalent across all class positions.

there is nowhere to go with this way of thinking.

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