I don't understand why you'd phrase it this way. Under the ACA, 80% of premiums have to go to medical care. A dollar saved providing care disproportionately benefits the premium payers, not the company.
People act like all this money comes out of insurance companies' profits. Cigna's (to pick a random example), operating profit margin is 6.5%. There isn't this fat margin that insurance companies can use to offer additional benefits without raising rates. That's just the math.
Saying that this is about what "benefits the insurance companies" is gas lighting the public. Lifetime caps insure that you, the ratepayer, aren't on the hook for unlimited liability. Now, I personally am willing to pay higher rates so people don't die when they hit their lifetime limit. But don't piss on my leg and tell me its raining, acting like the money isn't coming out of my pocket.
If we’re talking about “don’t piss on my leg and tell me its raining,” don’t sell me “health insurance” that will leave me high and dry if I ever really need it.
Again, I'm not arguing against having health insurance be unlimited. I'm taking exception to your rhetorical mode, which I think is dishonest. By making the issue about the "big greedy insurance company," you obscure the fact that the public will be paying for these benefits. You're selling the public something as a "you can have your cake and eat it too" but that's a bill of goods.
For example, my private liability insurance (50 EUR/a premium) is limited to 50 million EUR/event. So, yeah, if I ever accidentally create 60 million EUR damage (in one fell swoop), I'll be broke.
My travel health insurance is 12.50 EUR/a, and pays 100% of medically necessary out-patient and hospital treatments (for an unlimited number of trips up to 8 weeks), as well as repatriation, without limit. (This works, presumably, because if shit hits the fan, they'll fly you home and hand you off to the normal health insurance).
I can't emphasise enough how good it is to be in a civilised society where the existential risks are covered and shared. Furthermore, because they are borne by someone (either insurers or gov't), there are also experts dedicated to managing them, and reducing them.
It all works because everyone is insured, so the insurers don't have to worry about adverse selection.
The problem is simple - in most developed countries, health insurance doesn't bankrupt the people it serves. It also doesn't have policy limits for common terminal illnesses.
So why does this happen in the US - a country with insanely high costs and relatively mediocre health outcomes?
The problem isn't insurance, it's the influence that unregulated privatised insurance has had on health industry costs as a whole.
Hospitals, medical professionals, pharma companies, and insurance companies are all primarily motivated by profit, and will price gouge patients to the maximum extent possible.
Insurance companies may be regulated intermediaries, but in reality many insurance companies are actually owned by hospital chains.
They simply provide a layer of regulated bureaucracy that disguises and legitimises the price gouging.
So while technically it's true that insurance companies have regulated margins, it's also a misdirection. The true role of the insurers is to provide corporate and bureaucratic cover for the outrageous sharking and exploitative profiteering in the rest of the industry.
Customers - i.e. patients - most certainly do not benefit from this arrangement. Shareholders and CEOs very much do.
Huh? In the US, Kaiser is the only integrated provider of insurance and healthcare that I know of. It actually is a fairly good model. Otherwise Cigna, Bluecross etc.. are strictly insurance companies that have contracts with other providers to provide care to their members.
Only a couple of countries actually have single-payer healthcare[0]. For those that do, treatment for complex, expensive conditions like cancer is regulated by the government much more strictly than in the US, with the result that patients have far fewer options for (covered) treatment. Incidentally, those countries, like the UK, tend to have dramatically worse cancer survival outcomes than the US does.
[0] The UK (if we ignore the divisions between the NHS in England, Wales, Scotland, and Northern Ireland) is one of the only ones.
Oh good, we're going to hash this out from the very beginning.
The purpose of insurance is to provide me a way to pay for disasters that I otherwise could not afford. To that end I make payments that, on average, leave me poorer. But since I can afford the payments and can't afford the disaster, it leaves my expected quality of life better off by reducing the variance in my expected outcomes.
When I am paying a premium to pay for normal things that I can actually afford, that is not serving as insurance. It is now just a bad deal for me, pay extra for a middleman that I have no reason to want.
I may not want that middleman, but health care insurance companies want to be one. They therefore want me to pay a premium to them for things that I could have afforded, and not cover things that I couldn't afford. To that end they work to construct deals with employers+government so that employees don't have a viable alternative to entering this deal no matter what my opinion is.
This would give them a large amount of business with a guaranteed profit margin. And leaves me uninsured exactly when I would have wanted to be insured. I understand exactly why they want to be in that line of business. But none of the rest of us should support that.
Incidentally, while we are at it, the ACA has a really bad perverse incentive. As you say, 80% of premiums have to go to medical care. Which means that if health care providers charge more, then "insurance" companies are allowed to profit more.
Now look at this from the point of the insurance company's CEOs. As long as they can predict the growth in medical expenses, growing medical expenses are good for their bottom line. Where then the incentive for cost savings?
Better yet, if they know that some of those medical expenses are fraudulent and can readily expose it, they can always keep their predictions of expenses in line with the reality by exposing just enough fraud to make their predictions accurate. This is an incentive to turn a temporary blind eye to fraud.
And so the ongoing explosion of medical expenses is good for insurance companies.
This is also why states like Alaska have seen ACA premiums fall over the past year or two. They instituted a state-wide reinsurance program, which means insurance companies' losses are capped at a reasonable amount per claim, then the state comes in and pays for the rest. This reinsurance program is funded in sort of a complicated manner, but basically it funnels the ACA tax credits that would have been paid to taxpayers, absent the reinsurance program, into the reinsurance program.
Rates go down when insurance company losses are capped, either by a lifetime or annual benefit limit or by legislation that says they'll be made whole, because losses are predictable.
> According to an April 2010 report prepared by the Democratic staff of the Senate Committee on Commerce, Science, and Transportation, the nation’s largest health insurers in 2009 had medical loss ratios ranging from 68 percent to 88 percent in the individual market; 78 percent to 84 percent in the small-group market; and 83 percent to 88 percent in the large-group market.
Also keep in mind, prior to ACA buying a major medical plan without through a large group required one to have no preexisting conditions. If you had one you were either denied or got an exception written into your policy that said they didn't have to cover anything related to that thing. That's one of the other major things that ACA did away with, and another reason premiums are higher.
Private insurance is beholden to shareholders, universal healthcare is beholden to citizen stakeholders. It's plainly obvious that the private insurance market in the US has failed us. Politics aside, from an economic efficiency perspective, it would be illogical for us to continue to operate the system as it currently exists.
EDIT: This isn't an emotional appeal, it's an economic appeal to cut the fat of unnecessary, expensive bureaucrats who have no accountability except to their shareholders, and no involvement in the delivery of care. Private insurance interests are in the collection of their piece of total revenue, not care delivered.
> Either way, the public is on the hook if the system is more generous.
The public ends up on the hook regardless, whether that's through higher premiums, government subsidies, or diminished quality of life and lower life expectancy. Socialized losses, privatized gains.
The decision of whether to have limits on how much you're willing to spend for one case exists whether you have a private system or a public system. Either way, the public is on the hook if the system is more generous.
Of course, if you don't impose these limits, the costs must be borne by the collective insured. However, if there is one government/single payer insurer, nobody would ever dream up the insane idea of saying, hey, if you're really fucked, we'll stop paying your health bills, so we can shave off a few dollars of everyone's premiums.
Lowering premiums allows insurers to win customers away from competing insurers. It's e.g. why HP sells business laptops with awful LCD panels. It's not because HP makes fat profits on each laptop (their margins are razor thin). It's because the lower price allows them to take sales away from competitors.
> However, if there is one government/single payer insurer, nobody would ever dream up the insane idea of saying, hey, if you're really fucked, we'll stop paying your health bills, so we can shave off a few dollars of everyone's premiums.
Of course they would! You think government bureaucrats aren't under pressure to control outlays? https://www.dailykos.com/stories/2017/5/8/1660050/-Death-Pan...
> In the UK, the NHS has a system based on QALYs — quality-of-life years. In crude terms, it values a year of normal health at £30,000, so if the proposed course of treatment will cost £150,000, the patient would need to have good prospects of having five years of normal life once the treatment is over to get it. For a patient who would need assistance to live because they can’t walk more than a few steps or what have you, the QALY figure might drop to £15,000, so the patient would have to have an expectancy of 10 years of assisted life to get the treatment.
Note that in the example in the story, the lifetime limit was $500,000, or 380,000 pounds. In the UK, the guy would've needed to live 12-13 years to justify spending that much. He had an aggressive cancer and died a year later, while receiving treatment. Under the U.K. system, the NHS would've been willing to pay well under $100,000 with that prognosis.
The idea that "one government/single payer insurer" systems wouldn't have these sorts of limits is the product of the exact gas-lighting I was complaining about. By focusing on the insurance companies, and the fictional fat profit margins out of which benefits can be paid for with no cost to rate payers, it totally obscures the fact that, at the end of the day, a functioning healthcare system needs to make decisions about when to cut off care.
This is simply untrue.
There's too much wrong with your link to debunk it. It's almost entirely wrong. Mostly, there is a different QALY threshold applied when drugs are used for people with life expectancy of under 24 months, and also they're using an unsourced value for QALYs.
> Lowering premiums allows insurers to win customers away from competing insurers.
Absolutely. That's what leads to competition with insurance plans that are superficially more attractive ("hey, cheaper premiums"), while basically nullifying the benefits of insurance (by making you and your family broke when things turn bad - and then you die).
The alternate system doesn't need to optimise for "optics" & sales, but can optimise eg for QALYs.
Of course neither system can overcome the fundamental issue that you can't pay for unlimited treatment for all. But quite evidently, the US system leads to harrowing quandaries for many ill people and their families, worse overall health outcomes, higher overall costs, and richer health insurance CEOs than what's done in all other developed countries; and I still don't understand why you appear to defend it.
We're specifically talking about cancer treatment in this thread, where the data is pretty clear: the US has dramatically better survival rates for cancer in the US, and the gap is even wider for forms of cancer which are considered highly treatable.
Yes, people in the US pay a lot for cancer treatment, but the overall outcomes are not worse.
No, the US massively over-tests and over-diagnoses cancer at very early stages, but this does not lead to better quality of life nor to longer life.
Prostate cancer is considered one of the most treatable forms of cancer. It's lethal if not treated. But given the proper intervention, a person can live for literally years (if not decades). The treatment isn't fun, but it's very effective, and most people consider it better than, you know, death. As of a few years ago, the survival rate for people with prostate cancer was over 90% in the US. People are actually more likely to die from an unrelated cause than they are to die from prostate cancer after treatment.
The UK, on the other hand, has an abysmal track record of treating prostate cancer - worse than every other OECD country, in fact. As of a few years ago, the survival rate was barely more than 50%. That is shameful , and it's ridiculous to dismiss that as "overdiagnosis".
https://academic.oup.com/jnci/article/94/13/981/2519795
> Background: Overdiagnosis of clinically insignificant prostate cancer is considered a major potential drawback of prostate-specific antigen (PSA) screening. Quantitative estimates of the magnitude of this problem are, however, lacking. We estimated rates of prostate cancer overdiagnosis due to PSA testing that are consistent with the observed incidence of prostate cancer in the United States from 1988 through 1998. Overdiagnosis was defined as the detection of prostate cancer through PSA testing that otherwise would not have been diagnosed within the patient's lifetime.
> Methods: We developed a computer simulation model of PSA testing and subsequent prostate cancer diagnosis and death from prostate cancer among a hypothetical cohort of two million men who were 60–84 years old in 1988. Given values for the expected lead time—that is, the time by which the test advanced diagnosis—and the expected incidence of prostate cancer in the absence of PSA testing, the model projected the increase in population incidence of prostate cancer associated with PSA testing. By comparing the model-projected incidence with the observed incidence derived from the National Cancer Institute's Surveillance, Epidemiology, and End Results (SEER) registry data, we determined the lead times and corresponding overdiagnosis rates that were consistent with the observed data.
> Results: SEER data on prostate cancer incidence from 1988 through 1998 were consistent with overdiagnosis rates of approximately 29% for whites and 44% for blacks among men with prostate cancers detected by PSA screening.
> Conclusions: Among men with prostate cancer that would be detected only at autopsy, these rates correspond to overdiagnosis rates of, at most, 15% in whites and 37% in blacks. The observed trends in prostate cancer incidence are consistent with considerable overdiagnosis among PSA-detected cases. However, the results suggest that the majority of screen-detected cancers diagnosed between 1988 and 1998 would have presented clinically and that only a minority of cases found at autopsy would have been detected by PSA testing.
That's a lot of people being put through unpleasant surgery that has considerable side effects for no benefit.
See also this: https://scienceblog.cancerresearchuk.org/2018/03/06/overdiag...
The methodology of that study is highly suspect, but even if we took it at face value - the magnitude of the effect that they propose is nowhere near enough to explain the difference in survival rates by overdiagnosis alone. It's a drop in the bucket.
I thought the US had bad preventative healthcare.
Any sources you’d like to share? Sounds like BS.
https://scienceblog.cancerresearchuk.org/2018/03/06/overdiag...
That's a pretty significant exception, from the perspective of "designing" a social order.
It's a brute fact that humans measure their well-being in part by comparing their situations to those of their neighbors and of others with whom they come into contact. [0] People can become disgruntled, even envious, when they discover that they want things that others have but they don't. It's a fact of life: natural selection has hard-wired us to experience at least mild envy, which motivates us to try to improve our lot (by fair means or foul).
So how should we respond to that brute fact? I used to think that folks who resented high executive compensation should just get over it, or go and earn such compensation themselves. I remember listening approvingly to the old Eddie Chiles TV commercials: Don't have an oil well? Get one! [1]
These days, on the other hand, I'm increasingly realizing that this is unrealistic, and also that we broadcast an unrealistic message: You, too, can make it to the executive suite and pull down the big bucks if you just work hard enough and smart enough, starting when you're young. But that's akin to saying that if you just work hard enough and smart enough, you can play for an NBA team or win the British Open golf tournament. That's certainly true for a few people; for the vast majority, though, that message seems delusional and perhaps even fraudulent.
That in turn has led me to think that high executive comp, and the sense of vague disgruntlement among others to which it contributes, might be akin to the unremarkable public water pump that was discovered to have been the source of London's deadly 1854 Broad Street cholera outbreak, in which more than 600 people died in just a couple of weeks: [2] To outward appearances the water pump was innocuous and beneficial, but in reality it was silently poisoning the community and attacking the social fabric.
[0] https://academic.oup.com/qje/article-abstract/120/3/963/1841...
[1] https://en.wikipedia.org/wiki/Eddie_Chiles
[2] https://en.wikipedia.org/wiki/1854_Broad_Street_cholera_outb...
The retained premiums rule and the lifetime limit ban were both adopted as part of the ACA; lifetime limits only existed before the ACA, and indeed benefited the insurance companies.
> Lifetime caps insure that you, the ratepayer, aren't on the hook for unlimited liability.
No, ratepayers are not on the hook for unlimited liability without lifetime caps. They are on the hook for insurers expected costs plus capped profit margin, given the insurer being subject to uncapped liability for covered, medically necessary services, but the ratepayer’s exposure is well-defined upfront.
This makes the risk effectively zero since if the 'turtles all the way down' system can't pay out then we're probably in a state of national emergency.
I think it is merely misleading. Gaslighting is far more persistent and requires far more deliberateness than writing a comment on a forum.
I mean, if all of the insurance companies are really close to that already (or even marginally above it), then it shouldn't matter either way, right?
You mean, does away with the ban on such caps, right?