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Thread: Health Care Bill and Insurance Co.

  1. #11
    Senior Member Gerry Clinchy's Avatar
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    I think many businesses will announce cut backs in benefits over time and say things like "It's cheaper to pay the penalty than to pay for benefits." Those that say this are blowing smoke.
    Sending jobs to other countries is a reality. I can think of only two reasons to do that: to control labor cost or seek out a better tax environment.

    The Ultimate 2-3% penalty for individuals is roughly equivalent to what people with employer sponsored health insurance pay for their coverage. Once subsidies are in full force, it is also pretty close to the cost that would be faced by lower income participants after the effect of subsidies is considered.
    We can't really assess this until we see whether the CBO is right about the cost of coverage increasing by $2300 to $2500 per year. It may not help those employees of smaller companies not required to provide health coverage.

    Over the next 20 years I expect that all American businesses will stop providing health care benefits simply to preserve their competitive position in a world where no other country places this burden on the private sector.
    Under this bill, the employers are required to provide coverage (if they have "X" # of employees or more; or have average payroll of "X"). Does this mean that you anticipate that this will be changed, i.e. the requirement & attendant penalty will be removed? I guess they just had to say that everyone could keep their present coverage so that they could get a bill passed?

    Where the government currently provides claim payment services (Medicare through State governments and Medicare through the Federal government), private third party payer companies provide almost all services.
    At this point the govt provides a subsidy (Medicare or Medicaid), and then provides the claim service. At this point the Medicare coverage is designed by the govt. Where it falls short, the participant then acquires additional coverage at their own expense.

    When the provisions of "basic" coverage are ultimately precisely delineated, then individuals will know whether and to what extent they will want/need to add additional coverage to fill any gaps. But they will have to be careful about getting into the "luxury" plan category (which, as I understand it are NOT indexed; so if costs for coverage increase, more people will find themselves in "luxury" plans?).

    There will also now be a provision for govt regulating the increases that private insurors propose. How long before private insurors decide to get out of the business, and just provide the "gap" coverages as they do with Medicare? Without control of the costs of the services themselves, insuring the costs of those services inevitably has to increase as the costs of the services increase.

    While the govt has no present intention to employ the doctors and own the hospital facilities, by controlling the reimbursement schedules, I feel it is inevitable that there will eventually be rules such as exist in UK and Scandanavian countries whereby treatments are allocated on a cost v. benefit basis.

    There are no Federal bureaucrats processing medical claims now.
    So, the private insurors could ultimately simply become claims processing subcontractors. Thus, not all their employees will have to seek out jobs with the Federal govt OTOH, Federal employees do not have to belong to Soc Security; they get a better deal.
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  2. #12
    Senior Member YardleyLabs's Avatar
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    Quote Originally Posted by Gerry Clinchy View Post
    Sending jobs to other countries is a reality. I can think of only two reasons to do that: to control labor cost or seek out a better tax environment.
    That is exactly what is happening now and a major driving force is the cost of health benefits being paid for US based employees.

    Quote Originally Posted by Gerry Clinchy View Post

    ...

    While the govt has no present intention to employ the doctors and own the hospital facilities, by controlling the reimbursement schedules, I feel it is inevitable that there will eventually be rules such as exist in UK and Scandanavian countries whereby treatments are allocated on a cost v. benefit basis.
    I'm not really familiar with the Scandanavian systems. The UK and Canada started out as government budgeted and operated providers from the beginning. I see no impetus for that here. Historically, the hospital system in this country began with a mix of government and charity operaty hospitals. Many of the public hospitals remain -- particularly in NYC, but most closed with the end of the tuberculosis epidemics. Prior to the 1980's there were almost no for profit hospitals and none of those that existed were in the ranks of the nation's best hospitals. That too has shifted over time. I don't see a lot of impetus for the creation of new public hospitals, but I am not sure that it would be a bad thing. y the way, insurance companies now decide what services to approve based on their own cost/benefit assessments. That is why many services require prior approval and approvals are not assured not matter how important your doctor believe the treatment may be. I have two severely arthritic knees. The treatment I receive is based entirely on what my insurance company thinks is appropriate, not my doctor, unless I choose to pay 100% of the cost.

    Quote Originally Posted by Gerry Clinchy View Post
    Under this bill, the employers are required to provide coverage (if they have "X" # of employees or more; or have average payroll of "X"). Does this mean that you anticipate that this will be changed, i.e. the requirement & attendant penalty will be removed? I guess they just had to say that everyone could keep their present coverage so that they could get a bill passed?
    Employers are required to provide coverage or pay a penalty (tax). Each year, the percentage of our population covered by employer sponsored plans declines as businesses stop proving health benefits or outsource jobs to companies that do not provide benefits. My forecast that employer supplied benefits will essentially disappear over the next 20 years stands with or without the new law. How can American businesses compete effectively in a global market if they are providing benefits that are either not available at all in other countries or are provided by the government. The first jobs to be outsourced to other countries are those for which the benefits are the greatest as a percentage of total compensation. That has been going on for years and is a major reason why job growth has been so slow even when economic growth has been high over the last decade.

    Quote Originally Posted by Gerry Clinchy View Post
    So, the private insurors could ultimately simply become claims processing subcontractors. Thus, not all their employees will have to seek out jobs with the Federal govt ...
    What do you think they are now? There is very little insurance component to health benefits. It is viewed as a straight transaction management process with a lot of marketing to provide the icing. That is why many true insurance companies don't bother with health benefits now.

  3. #13
    Senior Member M&K's Retrievers's Avatar
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    Quote Originally Posted by YardleyLabs View Post


    I'm not really familiar with......What??



    That is why many true insurance companies don't bother with health benefits now. Most companies don't write health insurance today because State and Federal mandates make it almost impossible to make a profit. Now it will be impossible.
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    Senior Member kjrice's Avatar
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    They will have even more power to deny claims or procedures. My company will decrease benefits and raise costs even more than usual to support this unconstitutional act.
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  5. #15
    Senior Member Gerry Clinchy's Avatar
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    That is exactly what is happening now and a major driving force is the cost of health benefits being paid for US based employees.
    And this legislation does not appear to change that.

    By the way, insurance companies now decide what services to approve based on their own cost/benefit assessments. That is why many services require prior approval and approvals are not assured not matter how important your doctor believe the treatment may be.
    True. But I don't see where this legislation changes that either. May change some parameters of how the decisions are made, but still won't be in the hands of the doctor & patient.

    The first jobs to be outsourced to other countries are those for which the benefits are the greatest as a percentage of total compensation. That has been going on for years and is a major reason why job growth has been so slow even when economic growth has been high over the last decade.
    And this legislation changes this situation how? It seems to reinforce what may be a bad concept to begin with by requiring employers to provide health insurance benefits. Remember, I much earlier (on another thread) agreed that individual policies that "travel" with the individual were probably a better solution.

    What do you think they are now? There is very little insurance component to health benefits.
    Okay, so this legislation doesn't change that either.

    Ultimately, however, if the private insurors (since the product they sell is still called *insurance* even if it is a misnomer) can see no benefit to remaining in business ... with the govt telling them what they can charge or not charge for their product ... then, I see the govt ultimately becoming the insuror. Oila ... everyone who wanted single-payer gets their wish. It may take a while, but there doesn't appear to be any other ultimate result.

    I am also very much in favor of co-pays. Nearly everyone I can think of could afford $10 for a doctor visit. No more than the cost of 2 stops at McDonalds. Those who really can't afford any co-pay at all are likely already eligible for Medicaid. And even many on Medicaid could probably afford $5 per visit.
    G.Clinchy@gmail.com
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  6. #16
    Senior Member YardleyLabs's Avatar
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    Quote Originally Posted by Gerry Clinchy View Post
    And this legislation does not appear to change that.
    Correct. Only reducing direct corporate responsibility for health costs will change that -- a point I have made before.


    True. But I don't see where this legislation changes that either. May change some parameters of how the decisions are made, but still won't be in the hands of the doctor & patient.
    It does change the ability of insurance companies to deny services without meeting some basic standards for minimum coverage, avoidance of improper rescissions, elimination of lifetime caps, and requires a minimum level fo due process for rejections,


    And this legislation changes this situation how? It seems to reinforce what may be a bad concept to begin with by requiring employers to provide health insurance benefits. Remember, I much earlier (on another thread) agreed that individual policies that "travel" with the individual were probably a better solution.
    There is no way to have policies "travel" with the person except in the context of a national program. Effectively you would be forcing either the current employer to accept responsibility for administering a relationship to the old plan, or the prior employer to accept some residual responsibility for the departed employee, or the insurance company to administer and track participation in prior plans continued by prior client employees. This would simply not work. Even COBRA involves substantial administrative effort and cost for the former employer. That's why most are quick to drop people who are even a little bit late with payments. More importantly, however, I agree that this legislation doesn't make it more likely initially to retain jobs ere because it does not reduce employer responsibility. Over time, as employers begin to drop coverage to save money, it will ease the landing for employees.


    Okay, so this legislation doesn't change that either.

    Ultimately, however, if the private insurors (since the product they sell is still called *insurance* even if it is a misnomer) can see no benefit to remaining in business ... with the govt telling them what they can charge or not charge for their product ... then, I see the govt ultimately becoming the insuror. Oila ... everyone who wanted single-payer gets their wish. It may take a while, but there doesn't appear to be any other ultimate result.

    I don't think that there will be any lack of private companies looking to handle health care claims administration. Once exchanges go into effect, the market will be more price sensitive and much more competitive. That may result in some shakeout, but presumably that is a benefit of capitalism, not a weakness.


    I am also very much in favor of co-pays. Nearly everyone I can think of could afford $10 for a doctor visit. No more than the cost of 2 stops at McDonalds. Those who really can't afford any co-pay at all are likely already eligible for Medicaid. And even many on Medicaid could probably afford $5 per visit.
    Nothing in this bill stops or reduces co-pays, although there are limits on maximum deductibles and maximum total out of pocket liability. Most of the complaints with HR 3200 were that these limits were too high, not too low. Nothing prevents people from buying policies with lower limits (more generous coverage).

  7. #17
    Senior Member Gerry Clinchy's Avatar
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    Correct. Only reducing direct corporate responsibility for health costs will change that -- a point I have made before.
    And this legislation doesn't do so. It just places a larger responsibility on corporations; with larger costs. Thus, making for a worse economic situation.

    It does change the ability of insurance companies to deny services without meeting some basic standards for minimum coverage, avoidance of improper rescissions, elimination of lifetime caps, and requires a minimum level fo due process for rejections,
    And if people believe that this will mean that everyone will get the treatments they & their doctors believe they should get in a timely fashion ... I've got this waterfront property in Arizona ... It may take a while before those effects become visible.

    There is no way to have policies "travel" with the person except in the context of a national program.
    Maybe not across state lines ... but state exchanges could be used for that purpose.

    Over time, as employers begin to drop coverage to save money, it will ease the landing for employees.
    First, Jeff, you have said they would have already done so; that this law will not be an encouragement to do it more. But, more important, this law will not allow employers to drop coverages ... if they are over 50 (I think) employees. No easing of a landing that is not allowed to occur. Until, that is, this mish-mash becomes unsustainable, and single-payer becomes a necessity.

    I don't think that there will be any lack of private companies looking to handle health care claims administration.
    Absolutely agree. Why would they not be happy to get paid for doing something they already know how to do?

    Once exchanges go into effect, the market will be more price sensitive and much more competitive.
    Depends on how much profit margin there is to "play with". There appear to be differing opinions on that. With the mandates of this law for basic coverages and disallowance of part of the actuarial basis for insuring, that could well impact those profit margins. There will have to be a balance of enough young/healthy participants to offset the pre-existing condition participants (and the costliness of those presently uninsurable conditions).

    Nothing in this bill stops or reduces co-pays, although there are limits on maximum deductibles and maximum total out of pocket liability.
    I was unclear. I did not mean to imply that this bill would preclude co-pays, but was simply stating a position I hold.
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  8. #18
    Senior Member YardleyLabs's Avatar
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    Quote Originally Posted by Gerry Clinchy View Post
    ...
    First, Jeff, you have said they would have already done so; that this law will not be an encouragement to do it more. But, more important, this law will not allow employers to drop coverages ... if they are over 50 (I think) employees. No easing of a landing that is not allowed to occur. Until, that is, this mish-mash becomes unsustainable, and single-payer becomes a necessity.
    ..
    The law allows employers to drop coverage. It simply places a price tag on how much they will need to pay if they do drop coverage. The penalties paid would then help finance the cost of Federal subsidies as employees then purchase replacement coverage through the exchanges. In theory, I would have preferred a bill that simply created a national health insurance program and terminated tax deductibility for employer sponsored health plans. However, that would have been to radical politically and administratively and would fail. By creating national coverage as has been done with this law, there is now a safety net for employees of companies that terminate coverage, making such a decision easier for both.

  9. #19
    Senior Member Leddyman's Avatar
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    The mandate is unconstitutional. It taxes people who are not participating in any commerce. This is why it is unconstitutional. Those of you who think it is not unconstitutional are wrong. There is no precedent for a tax on people who are just standing around.

    There is a tax on income. Check. activity occurs, it is taxed.

    There is a tax on property. check. activity. (you own property, you sell property tax goes away)

    Mandate for insurance. A tax for which no activity has occurred. That is not a tax it is a fine for non-participation in commerce. The constitution is violated under such a rule. There is no way around it.
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  10. #20
    Senior Member Gerry Clinchy's Avatar
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    The law allows employers to drop coverage. It simply places a price tag on how much they will need to pay if they do drop coverage.
    If there is a penalty for an action, that is not equal to "allowing" that action. The penalty is meant to discourage an action.

    If the cost of health coverage exceeds the penalty, the employer will drop coverage and pay the penalty. However, if the penalty is then raised to continue to discourage the dropping, then employers pay an ever higher price for providing it.

    Remember, you and I are agreeing that employers providing health insurance is not the best answer. The issue we are discussing is whether this law makes the situation any better. I don't think it does. It perpetuates the status quo on this issue.

    We are also making a presumption that if employers did not have to pay for health insurance benefits, they would be reducing costs to be more competitive in the world market. However, if workers "demanded" higher wages to pay for their benefits purchased individually, (i.e. unions bargain for higher wages rather than benefits), the reduction in labor costs might not materialize after all.

    One factor in that is that we, as Americans, have become used to a certain standard of living, and are unwilling to compromise that. Had the "system" for health insurance paid by employers not been so ingrained for so many years, it might be different. Those of us who are self-employed (Realtors are independent contractors), have always had compensation separate from "benefits" and have accepted that as our reality.
    G.Clinchy@gmail.com
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