I hear this statement all the time...but what does it mean?
If employers didn't provide health insurance to employees wouldn't we just wind up with 40% of the insured uninsured? Its not like Corporate America is going to make up the difference and start paying cash to compensate for the lost benefit, at least thats what happened as pensions got stripped away from the workplace. Even if the employer's did make up the cash difference, its not like that will bring pricing down, individuals can't negotiate individual insurance rates, pools of employees can negotiate group rates, so if anything costs would probably go up.
How will this help: 1) insured more people; or 2) bring costs down?
We would do what every other country does and offer healthcare as a basic right? The whole point of "Medicare for All" is to divorce employers from their employee's healthcare. The gov't negotiates on behalf of everyone.
The government negotiating rates on behalf of all citizens is not the same as the government paying 100% of all citizens' costs. "Medicare for All" is the latter; but all we really need is the former. Basically the government could do on behalf of all citizens what it already does on behalf of government employees and elected officials: negotiate with providers to come up with a menu of plans, and then let each person/family select the plan from the menu that works best for them. Who pays what part of the premiums and costs is a separate question.
"Medicare for all" does not mean free healthcare. It's paid for by taxes. You taxes become your "premium" under that system. The concept of "private health insurance" outside of supplemental insurance would not exist under that system.
> "Medicare for all" does not mean free healthcare. It's paid for by taxes.
I didn't say "free healthcare". I said "government pays 100% of costs". Yes, that means ultimately we all pay them through taxes.
> The concept of "private health insurance" outside of supplemental insurance would not exist under that system.
Under Medicare, "government pays 100% of costs" also means "government is the only provider of health insurance". But my whole point is that you don't need to do that in order for the government to use its negotiating leverage to negotiate better rates; the government can do that even if the rates it's negotiating are with private insurance providers. That's basically what the government does now for Federal employees and elected officials; they aren't on Medicare, they have a selection of private insurance plans that have negotiated rates with the government. My suggestion is to simply extend this to all citizens, so the government can negotiate even better rates since they now have a much larger pool of people to negotiate for.
MFA is a single-payer option but there are plenty of multi-payer healthcare systems in the world which achieve universal coverage and contain costs. Germany would be the prime example, but see also Switzerland and France.
I like single payer, but I haven't had the luxury of living under either system of universal care.
I think in the US we have different issues than face Germany/Switzerland/France, and for the US to contain costs my opinion is we would have to rip private insurance out completely.
Our main Government provided system (Medicare for the elderly) is a combination of government and private, and to put that system in perspective, Germany spent 375B (not sure if $ or Euro) in healthcare total in 2017, and US Medicare spent $609B in 2017. Germany covered an entire country (82M people) Medicare covered 15% of the US (44M people).
I am a U.S. citizen. Yes, cost is a huge issue. We would not have to rip out private insurance, but we would probably have to regulate pricing, which is how it works in Germany. Folks should be welcome to buy supplemental insurance as they do with Medicare. There's basically four models[1] for providing health care, and the US has all of them:
The Bismarck model like Germany with multiple payers, but they are non-profit and pricing is regulated. Doctors and hospitals are private, and there is still supplemental private insurance. Financing is a combination of employer and taxes, where the government takes over the employer portion if the person is unemployed. This is sorta what the U.S. has for those with employer subsidized health care except for the insurers being for-profit and unregulated pricing.
The Beveridge model like in the U.K. financed through taxes and where the government provides care. This is so-called socialized medicine. In the U.S. we have this system for veterans in the form of the V.A.
The national health insurance model, with private doctors and hospitals but the government is a single-payer. Canada. Medicare.
And lastly, out-of-pocket.
We use all of these in the U.S. and it's insane.
We could in theory adopt a Bismarck system. Force the insurers to be non-profit. Make everyone work off Medicare pricing. Supposedly existing Medicare pricing is too low. Fine, let the doctors and hospitals negotiate that with Medicare. Allow supplemental insurance for those who want it.
MFA polls badly when you ask Americans what if they had to give up their current insurance. But I think this is misleading. Of course it's going to poll poorly if you ask someone to give something up. That's basic loss aversion. Turn the question on its head and ask a bunch of 65+ year olds how they'd feel about giving up Medicare in return for their Medicare withholdings back to buy their own private insurance. Guessing that wouldn't poll too well.
I don't think MFA is necessarily the best option. Americans value choice. But it seems to be the universal care option with the most political momentum right now. I'll take it. But I'd be happy with a Bismarck-type system too.
As long as people are covered it would be a good start (I won't bother engaging further on the single payer/private insurance/hybrid systems, not enough room and not the right forum)...it just scares me to hear the game plan to get there is political pressure after a critical mass of people are uninsured. I know that is not attributable to you, and you seem optimistic we get there anyway, I hope you are right.
One last thing I will note, is there are all kinds of hidden costs through other insurance that hopefully would come down under a single payer (maybe even under a public/private hybrid like Medicare Part D) , take car insurance one reason premiums and deductibles are so high is because a lot of that goes towards personal injury claims (medical costs). The same can be said for odd things like homeowners insurance for example. A lot of these insurance policies people already pay for in some ways supplement health care coverage.
Well in response to my questions about why people want to divorce insurance from employment before universal care becomes a law/right/option, one commented answered:
>>Having a critical mass of uninsured people is the foundation we need to resolve the healthcare crisis in America.
$375B for 82M people (~$4,500 per person) for Germany. Versus $609B for 44M people (~$13,800 per person) for Medicare.
FYI, USA currently spends about $10,800 per person on healthcare, roughly $3.5 trillion.
IMO, the discussion should revolve purely around pricing and efficiency. Negotiating power alone isn’t going to drive $1.5 trillion in costs out of the system.
I would like to see basic pricing reforms demonstrate that year-over-year price can be held constant. That would be a nice start.
> Negotiating power alone isn’t going to drive $1.5 trillion in costs out of the system
Of course it could. It works in Germany! And France! And Switzerland! Why not here?
Look, I don't know how this can possibly work with our current system. It cannot be solved by the market alone. There's no transparency in the current system. Insurers can just keep passing price increases along. And many Americans want "the best" and "right now" and that ends up increasing costs for all of us.
People will argue that the American system is so expensive because: reasons. e.g. we subsidize the rest of the world. Or we are overweight. Or we don't get enough exercise. Or we want the best of everything. Or health insurance profits and CEO salaries. Or fraud.
We also keep saying: America is exceptional. None of what other countries do will work here.
So what do you propose? At the end of the day, doctors, hospitals, and the payer or payers need to negotiate reasonable pricing for decent care. And that cost needs to be spread equally across all Americans. I'd favor doing it with cost-sharing from paychecks like we do now for Medicare, with the government picking up the bill for the unemployed, and with tax credits to offset income differences. I like the system than France has, where you have a co-pay, but it gets reimbursed. This makes the consumer at least aware that there is cost to using the system. Then allow supplemental insurance for people who want better.
And Americans will somehow need to realize that not every medical problem has to be solved right away. And that you don't need the most expensive treatment option for every issue.
We cannot continue to ration health care by ability to pay. It's immoral.
1) We cannot provide the same services with the same mechanisms, processes, and infrastructure at 50% of the current price. The margin simply isn’t that high. Everything from the design of the hospital, to the regulations around the equipment provisioned in each room, to the processes followed by staff throughout a given patient visit need to change, along with the specific tools and techniques used to perform procedures, before we even get into how and what procedures are chosen to treat or manage a given symptom or disease, whether acute or chronic.
2) Even with all of the above, a system that optimizes for price will absolutely have to make trade-offs in other areas to achieve that. Understanding where, when, and how those trade-offs are made and if they are being made fairly and uniformly based on malady, procedure, patient population, etc. is not a minor detail.
These are massive structural, policy, and economic changes which will impact a double-digit percentage of GDP. Why should anyone have any faith that this will be done in any semblance of a sane, reasonable, compassionate, let alone fair, efficient, or effective manner?
If the government has shown it’s entirely incapable of passing effective legislation to manage the cost of healthcare, why should government be granted an order of magnitude greater role in the provisioning of care?
And yet it manages Medicare. Poll Medicare recipients and ask them what they think of it. It also manages Social Security. And provides for the national defense. The government is entirely capable passing effective legislation, or at least half of it is.
In any case, the current system is both unfair and unsustainable. Something has to give.
Just to be clear, Medicare costs are roughly 50% higher again per person than the current average US cost per person. Patient population being a major confounder in that comparison, of course.
US defense spending is by far the highest of any other country in the world, and renowned for its wastefulness.
Social Security is going bust whenever we talk about it, and is merely a program which confiscated money today, in order to hand it out tomorrow, and doesn’t even invest it in the meantime.
And which half of government is it that’s capable of passing legislation again?
>Medicare costs are roughly 50% higher again per person than the current average US cost per person.
The numbers speak for themselves and it is ridiculous the US spends 100% more for half the people (e.g. Medicare) than Germany spends to cover 2x as many people and their entire country.
That said keep in mind Medicare patients are the most expensive patients in that they have the highest rate of chronic diseases of any other demographic. Its not apples to apples, but more importantly a Universal coverage could probably be extremely effective in preventing untold millions of chronic conditions through preventative care. What happens now is millions of people reach Medicare eligibility who had no coverage before and as a result have all these untreated chronic conditions, and then boom Medicare has to cover the tab when they become eligible. Its such a stupid system, there are even cases of heart surgery's and cancer treatments that are delayed until a patient hits medicare age, making the issue worse and more expensive to treat.
It may sound like I am taking a devils advocate position, but I 100% agree with you on governmental waste.
Getting insurance as an individual is expensive because you’re not part of a group plan. With a group plan the insurance company has some reason to believe you’re not collectively a bunch of dying people committing moral hazard, you’re just one of a generally similar looking company workforce.
If employers stopped providing it, I think it is presumed that the mentality towards individual plans would change
Sort of. This is true if everyone is required to participate in the system. And there’s only one provider. If you imagine there being a cheap plan and an expensive plan, you would probably expect that the expensive plan is a way better return on the dollar because there are fewer poor people on it weighing it down (because poor people are likely to have more health issues).
True meaning it averages out to a reasonably healthy person
>you would probably expect that the expensive plan is a way better return on the dollar because there are fewer poor people on it weighing it down
It is unfortunately true in the US (probably everywhere) there is worse health/higher incidences of chronic conditions in the poor (mostly because all chronic conditions are diet related). However, in the US the biggest weight would be the elderly who have chronic conditions at a higher rate than any other demographic (generally due to a lifetime of poor diet combined with irregular care over their life to treat the conditions until they are Medicare), but thats the irony these are the people already covered by Government healthcare (and they seem fairly happy with it. Its time to extend it to everyone.
It’s kind of created by the immoral environment of private insurance, but I would argue someone who doesn’t have health insurance to save a few backs, who can otherwise afford it, and waits until they suddenly have $100k expenses incoming to get insurance is a moral hazard even if they’re going to die.
Imagine there were no private companies but a perfect decentralized blockchain shamwow insurance system that magically worked and distributed all profits back to its participants.
I would think the dying man is committing moral hazard here. But it’s up for debate.
If you do this against a big private insurance company and they lose a penny, it doesn’t sound so bad, but I’m not convinced
> Getting insurance as an individual is expensive because you’re not part of a group plan.
I see people say this constantly. Insurance by definition is literally always a "group plan"—everyone who buys insurance is in the same group. That's literally the point of insurance. It's why it exists. That's what it is. That is fundamentally how insurance works. All insurance, in every category, of every type. There are no exceptions.
Insurance always pools risk across all payers (everyone is in the "group"), and then you expect only a fraction (but we don't know which fraction, of course) to require a payout in any given payment period.
If you're selling something that doesn't work like that, then it's not insurance—by definition.
You see it constantly because it is true. A group plan is a thing. Yes you’re still in a “group” when you register as an individual, but it is an “individual plan” and semantics doesn’t really help you out.
The difference is that if I know the mean and variance of expected health costs for the group, I can offer a lower premium to every individual member because the variance of total actual cost goes down by n^(-1/2) and I don’t need to cover my butt as much. Especially since almost all group plans are centered around relatively healthy working age people. The privilege of group plans is you’re in a healthier subset.
Individual plans are for people not on those plans and they suck dickballs. There is a high chance of moral hazard. There’s more retired old people. You offer little value to the insurance company so you don’t get to negotiate like a group plan does.
Medicare is mandatory in the US for retired old people. It's universal, it's mandatory, and it covers everything. They're literally not in the insurance pools, so I don't know what you're talking about.
As for the "group plans", those "groups" are too small for insurance purposes—they do not spread risk effectively. The entire "group plan" thing is a scam, and it would be trivial for gov't to just outlaw them entirely in the US, and force individual pricing on business-purchased health insurance like we do for every other kind of insurance we have. Costs would go down for everyone, and individual plans would no longer "suck dickballs".
That said, that is not how I would "fix" the health insurance issues we have. But it's at least better than what we do now...
> Medicare is mandatory in the US for retired old people. It's universal, it's mandatory, and it covers everything. They're literally not in the insurance pools, so I don't know what you're talking about
How about everyone who retired before 65?
As for your other points, I mean yeah, we shouldn’t have employers provide it. But they do, and you need to recognize it. There are definitely group plans large enough to spread risk.
That's all fine in theory, but do some shopping-around and you'll see it's simply untrue.
Personal anecdata:
2018, my employer didn't offer insurance. I signed up for a "silver" tier individual plan ($1250 deductible, good coverage) on the ACA marketplace and paid $170-something/mo. (after receiving ~$250/mo. in tax credit).
2019, my employer starts offering insurance, so I'm no longer eligible for the ACA tax credit. The only plan they offer costs me $125/mo., has a $4500 deductible, and extremely skimpy coverage. According to the literature they gave us, my employer's pitching-in another $400-something/mo.
So this group plan costs significantly more, has a much higher deductible, and covers significantly less (in my case, it's the difference between medication being covered and not).
Huh I didn’t know about the tax credit. That sounds like another layer of backwards thinking and another reason to get rid of the whole practice. I’m sorry for your situation.
The "Premium Tax Credit"[0] was a centerpiece of the Affordable Care Act (aka Obamacare), and widely publicized by the media and Obama. ACA exchange premiums are not affordable for most of the people it was trying to help without the tax credit.
I don't think I understand this. Take two scenarios. In both cases, I'm 22 years old, just exiting college, and starting my first job.
In scenario 1, I start working at a 1000 person company that offers insurance benefits. I sign up for their plan, and my employer pays for nearly all of it.
In scenario 2, I start working at a tiny company that doesn't offer insurance benefits. I find an individual plan (coincidentally from the same insurance company used in scenario 1) that suits me, and sign up for it, paying out of pocket.
The total amount paid to the insurance company in scenario 1 is, as is typical, lower than in scenario 2.
In both of these scenarios, the insurance company doesn't know anything about me. For scenario 1, sure, they might know the mean and variance of expected health costs of the 1000 people already at the company, but that does not extend to me. They cannot assume I will conform to the rest of the group. I am new, and an unknown, and they do not know how I will affect those statistics. For scenario 2, I'm just another independent signup. I might have health care costs in line with the average of all of their beneficiaries, or I might be an outlier (on either end), or something in between. But that's the same as scenario 1.
This feels like it has nothing to do with risk assessment; this is just a reflection of the company in scenario 1 having greater negotiation power because they're representing 1000 people, versus you just representing yourself.
Having a critical mass of uninsured people is the foundation we need to resolve the healthcare crisis in America. Those uninsured people still need healthcare. If enough people start calling up small clinics asking for pricing, a cottage industry of small health providers will pop up to service these people with transparent pricing.
The insurance industry has perverted our healthcare system. The major reason doctors moved from private practice to being associated with hospitals is to simplify billing because health insurance companies look for any reason to refuse payment. To reverse this trend, we need more people willing to bypass insurance and buy healthcare directly.
Health insurance is a failed experiment. People should pay for their healthcare directly, and the government should provide for those who require serious, expensive treatments (after a payment that is some percentage of their income).
>Having a critical mass of uninsured people is the foundation we need to resolve the healthcare crisis in America.
Thats actually exactly what I think the thought is for most people who advocate this...remove employer provided insurance and there will be so many uninsured that someone will have to do something. I think the hope is that something would be "Universal single payer healthcare coverage."
That may be right, but we already had 50 million uninsured american's and Obamacare barely passed and was pretty insurance friendly. I just don't see the political will to get it done, then we are just stuck with 40% of the currently insured uninsured.
Specialists that operate outside of most insurance networks, such as plastic surgeons do pretty well. As do specialties like dentists, orthodontics, and optometrists where insurance coverage is limited and a significant number of people pay out-of-pocket.
And I'd argue that the US is moving towards a similar system for healthcare. Lots of small clinics are popping up around the nation to provide limited care to individuals for price-conscious individuals.
What we need is something to cut the tether that insurance companies have. Insurance is nearly as important for determine the rates you pay for care as it is for covering costs.
> People should pay for their healthcare directly, and the government should provide for those who require serious, expensive treatments (after a payment that is some percentage of their income).
It's cheaper for the government to pay for everything. If you incentivize skipping check-ups and minor treatments they turn into large expensive care.
The rest of the western world has had universal health care for ~50 years now and it works better in every other western country than it does in the US. The US should just choose a country and copy it.
> and the government should provide for those who require serious, expensive treatments (after a payment that is some percentage of their income).
I'm for it as long as it doesn't involve the government micromanaging how the health care providers perform their services. This is a problem with all health insurance, public or private, but the micromanagement is done on a more direct level with government-provided insurance, with doctor report cards and so on. They do this now for at least some Medicaid and Medicare implementations, and some of the provisions of Obamacare even accelerated this process.
I think the implication of the GP's comment is that we still provide it, we just don't tie it to employment. There are a lot of nasty side effects of this coupling, including decreased employee mobility.
It's not mutually exclusive with a Universal Healthcare plan, for one thing. But I think it's still a worthwhile goal with or without a separate initiative for universal healthcare.
It brings costs down, because many more people are now on a level playing field. If we stick with the current market-based system, this would make a big difference in actually having it start to function like a market. The average, middle class American will actually have to evaluate the costs of their plan and shop around for the best value, and they will also be very aware of how much they're spending and push for measures to bring down costs. If we do also build up a universal healthcare system, then working, middle class people will end up actually using the universal healthcare system, and again will be incentivized to push to make it work well.
As things stand today, people on the "open market" plans are clearly being treated as second class citizens, they're paying more and getting worse coverage than people who have a special connection (whether that's a company plan, union, etc). The taxing is also wonky and unfair, at least if I understand this correctly if I pay for a marketplace plan I'm paying with after-tax money, but if my company pays for my plan it's untaxed.
In my opinion there are also additional reasons this would be a net good thing, even if it were merely neutral on the two criteria that you call out. It will give people more freedom to do what they want to do -- right now if you want to quit a job or work only part-time, even if you have a source of income or savings to make it feasible, healthcare is a major hurdle. If you want to start a small business and need to offer healthcare for your employees, it's an even bigger hurdle. I would rather live in a world where it's as easy as possible to make your own path, and people are not beholden to a full-time job to have access to healthcare.
> individuals can't negotiate individual insurance rates, pools of employees can negotiate group rates, so if anything costs would probably go up
This is why the exchanges exist. They're huge pools of people on a group rate. New York state negotiates with insurers on my behalf, and is additionally able to regulate their premium increases each year.
And the nice, healthy white collar lived are locked away in employer group health plans, resulting in fewer insurance companies being able to offer insurance on healthcare.gov, resulting in higher premiums for lives on healthcare.gov.
Another advantage for big businesses over small businesses.
Who is in charge of negotiating for this pool? Just as an example between 2017-2018 the average silver plan went up 32% and the average gold plan 20%, who the hell negotiated that?
At least with the employer provided insurance the employer is negotiating, and you know who that is and you know they have a self-interest in keeping costs down.
The price of insurance jumped massively every year from the start of Obamacare to 2018. The fact that this has apparently mostly stopped now is the unusual thing; 2017-18 was a pretty typical year despite Trump's meddling. The article you linked suggests that this is because insurers have finally increases the cost of insurance to be in line with how much it actually costs them.
Sure the employer negotiates the plan, but they are not negotiating on behalf of their employees, they are negotiating based on how much the employer is willing to spend. When the squeeze happens, the employer pays the same amount for a slimmer plan and the employees pay more in the form of wages and deductibles.
1 - If my company buys health insurance for me, its tax deductible(pre-tax), if I buy it myself it is after-tax. Now companies are can just gross-up pay, and don't have to compete on healthcare...
2) Pooling remains an issue, but as it stands now, consumers have little to no choice, one would imagine that once a 125m households start shopping for insurance there is going to be competition on price...
I believe the pre-tax post-tax thing is actually wrong. The difference is that you pay for the plan with post-tax money until tax season rolls around, when if I remember correctly (from having an individual plan for several years) you get to deduct those costs.
So really, it's just the typical American thing of people being terrible at understanding tax codes and adjusting their withholdings correctly.
>You may deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income. You figure the amount you're allowed to deduct on Form 1040, Schedule A.
It’s another subsidy for big business in the US. If you work for a small employer that doesn’t offer health insurance, you’re paying with after tax money.
My reading of this [1] seems to match up with what I said:
"""
- If you buy health insurance through the state- or federally run health insurance marketplaces, you can deduct only the portion of the premium you pay out of your own pocket. You cannot deduct the amount of any subsidy.
- If you buy an individual or family health insurance plan, either on the open market or through a marketplace, and you pay all of the cost out of pocket, then the whole amount is deductible.
There's two proven paths to do this on different ends of the spectrum.
The first is single payer which has proven implementation and is able to lower costs by directly controlling prices.
The second is what Switzerland does which is where much of the inspiration for the ACA came from, except every single person would be required to buy from the exchanges rather than using some employer program. The ACA failed to properly acknowledge the negotiation power of certain large employers who often have large numbers of healthy young employees and have a deep understanding of their own risk pool, leaving the ~3% of people who use the exchanges paying more simply because they are a higher health risk population. Additionally, the ban/tax on "cadillac" plans absolutely needs to go into effect as it's an important mechanism for controlling costs in a market health insurance solution, as in demand doctors could just require patients have said cadillac plans that pay out more.
There are handfuls of solutions in the middle of this, but they generally involve the government controlling prices to a certain degree, but only single payer would be effective at both bringing costs down and insuring more people, as you absolutely have to create short term shortages in order to solve both problems at once.
I think the concept of separating healthcare coverage from employment is an important first baby step to bringing costs down in that it makes healthcare consumers more aware of how much they are spending instead of hiding it as off-paycheck compensation.
This awareness can be raised in other ways. For example, some employers have added a chart in HR websites that outline how much is spent on each employee (it is personalized for each employee) in categories of wages, taxes, retirement, healthcare and the like. It is a way of communicating how much money is expended on an employee.
If one were to know how much was spent on one's healthcare coverage, would the average person think "ok, need to be efficient to get that number down" or "gosh, I better get what I'm paying for?" In the sense that healthcare plans are transfers from the healthier to the sicker, one would hope the former. In the sense that healthcare plans are almost-all-you-can-eat buffets of medicine, I think the latter is more likely.
> Its not like Corporate America is going to make up the difference and start paying cash to compensate for the lost benefit, at least thats what happened as pensions got stripped away from the workplace.
They may not have compensated in cash (although surely some did), but they compensated elsewhere in the total compensation package. Benefits got better or salaries grew or vacation improved or 401K matches were introduced or etc etc.
As for insurance pools, what is stopping people from forming groups that can negotiate their own rates? If there is a law, why can it not be changed?
You should have both public and private options at the same time. In Spain you have a good public system but you also have a parallel private system. It keeps a check on the price rise of private insurance as people have the option. For a family of four I pay 300 EUR a month for the best plan. Most people pay about 180 EUR for four people.
If employers didn't provide health insurance to employees wouldn't we just wind up with 40% of the insured uninsured? Its not like Corporate America is going to make up the difference and start paying cash to compensate for the lost benefit, at least thats what happened as pensions got stripped away from the workplace. Even if the employer's did make up the cash difference, its not like that will bring pricing down, individuals can't negotiate individual insurance rates, pools of employees can negotiate group rates, so if anything costs would probably go up.
How will this help: 1) insured more people; or 2) bring costs down?