Comment by ThomPete | Hacker News Reader

Comment by ThomPete | Hacker News Reader

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The primary issue with the system before Obama was two-fold.

1) Too many young people didn't insure themselves meaning that the relatively low cost of having them as insured couldn't be used to balance out the higher cost needed for later on in life. This was putting the primary burden of the cost on the older generations.

By forcing everyone to pay the idea was that you could even out the cost.

2) Pre-existing conditions. I.e. the insurance agencies wouldn't cover you if you came into their plan with an existing condition. To give you an example of that from real life.

I had a stage 1 melanoma. They tried to excise it but didn't get everything out and I had to get more complicated operation.

My insurance wouldn't cover it because they claimed I had that coming into the system. I later convinced them otherwise but until that happened the only thing my doctor could offer me was to monitor my melanoma for the year I had to wait until they would cover me again. Imagine that.

> insurance agencies wouldn't cover you if you came into their plan with an existing condition.

Before ACA I went through a period of unemployment and had to buy my own health coverage. I had been on Kaiser previously through my employer, so they had my health records. And they rejected me for a pre-existing condition -- eczema. Seriously. A decidedly non-fatal skin condition, in my case a minor annoyance, and they won't cover me at all.

1) Too many young people didn't insure themselves meaning that the relatively low cost of having them as insured couldn't be used to balance out the higher cost needed for later on in life. This was putting the primary burden of the cost on the older generations.

This shouldn't be a significant problem. In an actuarial sense, the burden of the cost should largely be born by the party with the risk. If you aren't doing that, it isn't insurance. If you are providing healthcare instead of insurance, you don't pay for it by taxing poor young people (those are the young people opting out of the system, not the wealthier ones).

So the premiums the young people weren't paying should anyway only be high enough to cover the cost of insuring them.

The real problem with cost in the US healthcare system is that the majority of people have a third party payer that will cover almost anything, so they don't care whether prices are remotely fair or not. The "agency problem".

We should stop making it advantageous for employers to provide insurance (I'm sure someone will be outraged by my supporting this opportunity for employers to lower compensation, I don't care, I paid out of pocket for 2 CT scans last year and know our healthcare prices are nonsense).

I understand what you are saying. It's like asking people who don't have a car to pay for car insurance. And I agree generally.

But the whole point of insurance is that you make it work because most people wont be needing their insurance so it's a question of interpretation.

And yes I think you are right about your solution. I can compare same treatment in Denmark with those of here in the US and the difference is just too big to be true.

>It's like asking people who don't have a car to pay for car insurance

Because this is a bit bait-y, I think a better analogy would be to say: "it's like forcing safe drivers to also have insurance".

Obamacare was designed to shift the cost of healthcare for the old onto the young, by capping the maximum difference between the premiums paid by the two groups. This had the predictable effect that young people didn't sign up for health insurance in the numbers predicted. So insurance companies lost money and left the market, and the remaining companies are hiking prices at an astronomical rate, far beyond what even its critics predicted. Obamacare is failing because its creators failed to grasp either economics or insurance, and then shot the messenger rather than fixing it.

Worse still, Obamacare was structured with a bunch of subsidies that expire over the next few years, lasting just long enough to push the pain into someone else's presidency.

Let's be a little more careful than that. Obamacare is more than just the exchanges, and the exchanges aren't failing in every state (premiums are even going down in a couple states). There was also a provision for federal funding of the unpredicted expense that was blocked by congress.

Anyway, my point in my other comment was that while Obamacare did try to shift costs to younger people, low participation wasn't a problem to be solved, it was seen as an opportunity to grow the pools and make it sort of work. The pools probably should have been grown by ending group policies.

Broadly speaking, I probably agree with you. Spending is unlikely to solve a pricing problem.

> The real problem with cost in the US healthcare system is that the majority of people have a third party payer that will cover almost anything, so they don't care whether prices are remotely fair or not.

Why then are healthcare costs significantly lower in countries where everybody has "a third party payer that will cover almost anything" (i.e., the national health system)? People in these systems also "don't care whether prices are remotely fair or not"--in many cases people don't even know what the prices might be, because they aren't charged--and yet these countries spend much less than the US for health care. Why is that?

"a third party payer that will cover almost anything" (i.e., the national health system)

National health systems make choices about what to cover. Some of them fix prices.

edit: also, I meant stuff like 'all the expenses of a visit to the ER' rather than 'cosmetic surgery'. So the people I was talking about don't have a lot of visible expenses. If we fixed prices that would work out fine, but we don't fix prices.

https://news.ycombinator.com/item?id=12998163

> The real problem with cost in the US healthcare system is that the majority of people have a third party payer that will cover almost anything, so they don't care whether prices are remotely fair or not. The "agency problem".

Yes!

The funny thing is people in the U.S. are so indoctrinated and separated from costs that even smart doctors make fun of you (and eventually lash out at you if you EVEN DARE to ask what a specific procedure is going to cost): https://news.ycombinator.com/item?id=12522037

Or look at the condescending post at Quora: https://www.quora.com/How-do-I-find-a-general-physician-in-S...

If the participants in the healthcare industry itself have no understanding of the issues it faces, and suffer from such apathy in realizing when told about it, I am afraid there will never be a solution

> We should stop making it advantageous for employers to provide insurance (I'm sure someone will be outraged by my supporting this opportunity for employers to lower compensation, I don't care, I paid out of pocket for 2 CT scans last year and know our healthcare prices are nonsense).

Yes!

Employers should have no say who the provider/doctor/lab for an employee should be.

Quora: https://www.quora.com/Would-the-average-person-who-gets-his-...

The U.S. has ended up with a system where every party except the patient stands to benefit.

While this is inconvenient for me (I can just fly to another state or at worst, to India for very expensive procedures, it's embarrassing to see Americans get into debt to fix a broken leg!)

> 1) Too many young people didn't insure themselves meaning that the relatively low cost of having them as insured couldn't be used to balance out the higher cost needed for later on in life. This was putting the primary burden of the cost on the older generations.

As to one, ObamaCare is still failing, because too many young people are able to do the math and realize that, if they don't have chronic conditions or children, the IRS penalty for not having insurance is significantly cheaper than the premiums on the high-deductible, terrible plans that are available to them at any reasonable price. For anything less than a catastrophic illness or injury, the ObamaCare plans I have seen just don't make any sense.

Also, if you're young, low income, no kids and have no assets declaring bankruptcy (in the event of a high cost health event) seems like a better scenario than being out $150/month for insurance (and still paying for other healthcare costs out of pocket).

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