Obamacare cost...

[Omaha 680]

Pssst! It's about to get a lot more "affordable"

http://online.wsj.com/article/SB1000...054496682.html

But how could this have been foreseen? It's not like anyone predicted it.

[dabrockster]

I would just like to publicly thank IC for his hard work..

One of the nation's premier experts in numbers has a tough diagnosis for President Barack Obama's health care law.

In a report that could prove a big political headache for the administration, the Society of Actuaries estimated Tuesday that insurers will have to pay out an average of 32 percent more for claims on individual health policies under the Affordable Care Act, a cost likely to be passed on to consumers.

http://www.washingtonguardian.com/st...-cost-32-pct-1

I will say. 80% increase in Ohio. WTF!!!!!

[Indy Coug]

I would just like to publicly thank IC for his hard work..

I'm not a health actuary, but you don't have to be a health actuary to know that Obamacare was going to significantly inflate healthcare costs.

[YOhio]

I will say. 80% increase in Ohio. WTF!!!!!

Good. Ohio should be kicked in the balls at every step for the next four years for that bullshit they pulled last November.

[dabrockster]

Good. Ohio should be kicked in the balls at every step for the next four years for that bullshit they pulled last November.

Agreed. I hope Cincy get double-kicked in the cajones..

[CardiacCoug]

Someone linked this on CB -- kid in a horrible longboarding accident.

http://www.gofundme.com/BensRecovery

Gotta say I think it's too bad we live in a country where these parents (yes, mostly due to their own negligence perhaps in not having health insurance) not only have to worry about their kid being brain damaged but also have to worry about an enormous hospital bill. I see it all the time with people who have a heart attack and are more worried about the huge bill than about their health and recovery.

[Color Me Badd Fan]

Someone linked this on CB -- kid in a horrible longboarding accident.

http://www.gofundme.com/BensRecovery

Gotta say I think it's too bad we live in a country where these parents (yes, mostly due to their own negligence perhaps in not having health insurance) not only have to worry about their kid being brain damaged but also have to worry about an enormous hospital bill. I see it all the time with people who have a heart attack and are more worried about the huge bill than about their health and recovery.

I have two cheap health insurance policies one covers me and one of my kids and the other one covers my wife and my other kids. Each has a $10k deductible. It costs me around $230 a month. It would have cost more for all of us to be under one policy. It's unlikely that two people on the separate policies will both have something happen in the same year.

What we should have done is end the preference towards group plans and encouraged more individual plans with high deductibles. If people discover they have to pay their own way, I imagine they and hospitals will adjust to this fact. It's funny how plastic surgery and LASIK costs seem to be on an even keel or even decline over time yet everything else has spiraled out of control. The reason why is the end consumer actually has to pay for it and the the doctors and device manufacturers realize that demand will be at least partially dictated by price and the ability of people to pay for it.

[Uncle Ted]

Union calls for repeal of Obamacare

A labor union representing roofers is reversing course and calling for repeal of the federal health law, citing concerns the law will raise its cost for insuring members.


Organized labor was instrumental in getting the Affordable Care Act passed in 2010, but more recently has voiced concerns that the law could lead members to lose their existing health plans. The United Union of Roofers, Waterproofers and Allied Workers is believed to be the first union to initially support the law and later call for its repeal.
[...]

Silly Union... Obama said if like it you can keep your plan and just pay less:

Obama wouldn't lie to you. You're the guys that put him in office.

http://washingtonexaminer.com/article/2527339

[Color Me Badd Fan]

Do you want to know why MRIs, which have been around for 30 years, still cost so damn much? Read this --

http://www.npr.org/templates/story/s...ryId=120545569

Basically, the MRI manufacturers charge twice as much to US buyers because they can. US buyers are willing to pay them because there are multiple foxes guarding the health care cost henhouse -- the costs are just spread out to health insurance premiums paid by employers. I've harped on this fact before but Lasik has gotten less expensive over time and it also happens to be a common procedure that is not covered by health insurance. I don't think the correlation is accidental. When hospitals and health insurance companies get involved, those are just two more parties wanting a piece of the pie. But it's compounded by the fact that the end consumer isn't shopping for the service/product. If you have a system that encourages rent seeking we shouldn't be surprised when that happens.

So what does Obamacare do about this? Absolutely nothing.

[CardiacCoug]

This ad would be funny if it didn't sort of make me sick about how screwed up our tax code, healthcare and our government generally is...

[snowcat]

Do you want to know why MRIs, which have been around for 30 years, still cost so damn much? Read this --

http://www.npr.org/templates/story/s...ryId=120545569

Basically, the MRI manufacturers charge twice as much to US buyers because they can. US buyers are willing to pay them because there are multiple foxes guarding the health care cost henhouse -- the costs are just spread out to health insurance premiums paid by employers. I've harped on this fact before but Lasik has gotten less expensive over time and it also happens to be a common procedure that is not covered by health insurance. I don't think the correlation is accidental. When hospitals and health insurance companies get involved, those are just two more parties wanting a piece of the pie. But it's compounded by the fact that the end consumer isn't shopping for the service/product. If you have a system that encourages rent seeking we shouldn't be surprised when that happens.

So what does Obamacare do about this? Absolutely nothing.

How dare you suggest free market solutions to our right to socialized medicine.

[Jarid in Cedar]

Do you want to know why MRIs, which have been around for 30 years, still cost so damn much? Read this --

http://www.npr.org/templates/story/s...ryId=120545569

Basically, the MRI manufacturers charge twice as much to US buyers because they can. US buyers are willing to pay them because there are multiple foxes guarding the health care cost henhouse -- the costs are just spread out to health insurance premiums paid by employers. I've harped on this fact before but Lasik has gotten less expensive over time and it also happens to be a common procedure that is not covered by health insurance. I don't think the correlation is accidental. When hospitals and health insurance companies get involved, those are just two more parties wanting a piece of the pie. But it's compounded by the fact that the end consumer isn't shopping for the service/product. If you have a system that encourages rent seeking we shouldn't be surprised when that happens.

So what does Obamacare do about this? Absolutely nothing.

The only quibble I have with this is that Lasik is a completely elective procedure. It is more of a commodity than most medical procedures/tests. For that reason, it is easily regulated by market pressures. IE, a procedure that only exists because of consumer demand.

[ERCougar]

The only quibble I have with this is that Lasik is a completely elective procedure. It is more of a commodity than most medical procedures/tests. For that reason, it is easily regulated by market pressures. IE, a procedure that only exists because of consumer demand.

In principle, you're right, but speaking specifically to CMBF's example, I'd argue that a pretty large proportion of MRI demand is also elastic. Or at least should be. Every sore knee or episode of low back pain does not need a MRI.

[Jarid in Cedar]

In principle, you're right, but speaking specifically to CMBF's example, I'd argue that a pretty large proportion of MRI demand is also elastic. Or at least should be. Every sore knee or episode of low back pain does not need a MRI.

I agree, and that fits into the crux of what I feel is the dilemma, demand for utilization by those who don't pay for it (or pay only a portion of actual costs)

[Color Me Badd Fan]

I agree, and that fits into the crux of what I feel is the dilemma, demand for utilization by those who don't pay for it (or pay only a portion of actual costs)

I understand that the demand for Lasik is more elastic than many MRIs. But everyone needs to buy milk yet we don't have the same kind of problems. As you said the problem is really the fact that those who consume the good/service usually don't directly pay for it. The costs are instead spread out to employers who have no control over the health care decisions of their employees. Unlike private individuals who would have to pay for their own health care, health insurance providers can always just incrementally increase their premiums -- of course they are limited to what prices are being charged by other companies. But the reality in the health insurance industry is they all have to increase their premiums ever year or else they can't continue functioning. One can't break from the pack and dramatically slash their prices to gobble up market share because they'll be out of business quickly (and I believe there are also laws on how much they can increase their premiums from year to year).

So overall there's a lack of control over prices. If everyone had to pay for the first, say, $5,000 of their medical care every year then I can guarantee that more people would be satisfied with the no frills MRI machines that they apparently use in Japan if they had to pay half as much. The demand for the machines that also provide what presumably must be a "happy ending" (judging by how much they cost, good hell) would lessen. MRI facilities that offer cheaper imaging would come into being -- and that would be good enough for a large share of those that want or need an MRI. I imagine in larger communities there would be more price competition between different large health care facilities. Potentially smaller facilities pop up that can provide cost savings but service that is "good enough."

This is a short list of things I would change:

1. Employers must stop providing health insurance. Health Insurance must have a $5,000 deductible. Co-pays are only allowed for one doctor visit for each family member per year.

2. Patent reform. The length of a patent should be dependent on the level and cost of testing required by the federal regulatory agencies. 20 years is still proper for many pharmaceuticals due to the massive amount of money that goes into getting the drug approved by the FDA. I'm not sure if medical devices receive the same amount of scrutiny -- if they don't then the patent term should be shortened to 10 years or even 5 years depending on the cost to wrangle with regulators.

3. Tort reform. I don't think we need to necessarily limit the amounts of med mal verdicts. What we do need to do is incorporate the British system of shifting legal costs to the losing party in litigation.

By far the most important thing is #1. Much more than blood-sucking med mal lawyers and too-lengthy patents, the shifting of costs from consumer to parties that have almost no control over those costs is the main problem.

I'm sure most people read this article from Time and it doesn't begin to address the real problems: http://swampland.time.com/2013/02/21...too-damn-high/

I've only read the excerpt here and in typical journalist fashion they simply point out the massive amounts of money going into the medical industry and seem to infer the simple conclusion that everyone involved are a bunch of greedy bastards. My argument is everyone, if given the opportunity, will be greedy bastards. So the examination should then focus on how they are given the opportunities to extract 20% of this country's GDP. In my post above I mentioned (perhaps improperly) the concept of rent-seeking. The best definition I can give of rent-seeking is parties seek to extract a premium through government laws and regulation. George Will wrote a column a few months ago on restrictions in Louisiana placed on monks that were producing and selling coffins. Basically in order to sell a coffin in Louisiana, you have to be a licensed funeral home. Not surprisingly, funeral homes in Louisiana charge an arm and a leg for coffins. The monks were undercutting the funeral homes, so the funeral homes then went to the state government to crack down on the monks.

I don't think the medical industry had the resources 30-40 years ago to build these compounds described in the Time article that seem to be reminiscent of something Rockefeller or Carnegie would have built when they were alive. I think when something like that is built it connotes that they have more money then they know what to do with. Something changed and it didn't happen overnight. Rent seeking may not be the correct term to describe the behavior engaged in by health insurance companies and hospitals. Health insurance was at first voluntarily provided by employers in order to attract employees. Then it started receiving favorable tax treatment which started putting it in the realm of a rent seeking (it should be noted, that most employers are small businesses and the people who run the business obviously want health insurance so naturally they decide to get the insurance through their business). Employer provided health insurance worked fine for the first few decades after WWII but things started spiraling out of control in the 1980s. Medical device manufacturers, pharmaceutical companies, and hospitals eventually found out that you could start charging more and more and the insurance companies discovered that they could just continually raise premiums and the employers would pay it. So, there has been a massive transfer of capital from employers all over the country to the medical industry. That 20% GDP figure should shock the conscience.