Hacker News Reader

Comment by sambull | Hacker News Reader

Guaranteed strategy for a progressive wave 2020 and a democratic president. Expect massive executive action to address climate change and end corruption. There's nothing more evident than the greed of the insurance companies, it cuts bipartisan. Finally the hope of adults in the reigns again

View on HN

I'm a proponent of universal healthcare, but pointing to "insurance industry greed" is a dishonest narrative. Health insurers are having a banner year, and that means their profit margins are approaching 6%. (By contrast, Facebook is regularly over 40%.) For the year ending Q3 2018, health insurer profits amounted to $25 billion, industry wide, which is about the same as Google alone makes in a year.

If running a business that makes 6% profit margins is "greedy" then the word literally means nothing. The only reason health insurer profits are even part of the discussion is because Democrats reflexively lean to anti-corporatism to explain any societal problem. But it's like republicans blaming everything on the decline of two-parent households. It's rah-rah narrative that has no basis in reality.

People are dying over healthcare, not over facebook.

With Instagram contributing to a decline in young adult mental health[1] perhaps Facebook should be taxed so their profit margins drop down to similar levels as health companies.

[1]https://time.com/4793331/instagram-social-media-mental-healt...

Does the fact that people might die create an obligation to run your business like a charity?

What even is your moral theory? That a company that makes 6% profits saving lives is evil, but a company that makes 40% profits and doesn't save any lives in the process is not evil? Apple makes laptops that, for the price of a single one, could save someone in Africa from malaria. The opportunity cost of every MacBook Pro is a death in Africa. If there is an affirmative obligation to save lives, how evil is Apple?

This is an incoherent--but extremely common--ideology. It would be one thing if these people followed their ideas to the logical conclusion. It's evil for anyone to make more than 6% profits because that money could be spent saving lives. But it makes no sense to impose that moral obligation on a selected group.

My "moral theory" is you can't claim market rates to a hostage.

An insurance company should be operating at cost though. They should all eventually compete on the lowest prices until someone reaches close to operating cost. It should be a race to the bottom.

Also, part of the costs are related to inflated health care and med costs. Because insurer can pay more, health care can charge more. Their profit should come from them working to lower those prices, not from lowering their coverage.

No, economic theory says that perfectly competitive industries will operate at a nominal profit, not at cost. A 6% profit margin is probably not quite "nominal profit," but is below the average for all industries: https://www.forbes.com/sites/sageworks/2016/10/03/the-15-lea....

I consider nominal profit to be pretty much "at cost", that's why I said "close to operating cost". OPs 6% number is neither. Your link even clearly demonstrate that, by listing 14 industries all with smaller margins and showing the average to be 7.7%, making 6% profits a farcry from nominal profits.

Also I believe you are mistaken, see: https://www.investopedia.com/ask/answers/031815/why-are-ther...

And https://2012books.lardbucket.org/books/microeconomics-princi...

To see why in the long run perfectly competitive industries will earn zero economic profits.

The problem I'm afraid isn't the 6% margin, but the regulations that inhibit a truly competitive insurance market. To start with, state-based insurance is a legacy that makes no sense today.

I'll gladly pay 6% if insurance companies went to bat on cost instead of half-colluding with providers, and innovated.

I agree with you, I believe there are even laws in place that prevent Medicare and Medicaid from negotiating on price. We're far from a free market utopia here. I'd be curious to hear some of the rational our downvoters have for downvoting us, hopefully some will leave a reply doing so.

The profit margin is irrelevant when they lobby against proper regulation and against allowing the government to negotiate prices. It's especially irrelevant when they deny coverage and kill people to get that profit. These companies have no business existing without proper regulation, if at all. If the regulation puts them out of business so be it. But as we can see from other countries in Europe, that's not necessarily the case. Murder is not moral regardless of whether you make 6% or 40% profit off of it.

If Democrats in California can't muster the votes to outlaw something as uniformly hated as balance billing while they have the Governor's office and a supermajority in both houses, I'm afraid I don't have much faith in their ability to fix any of this at the federal level.

In 2009 California SC ruled that Balance Billing for emergencies is illegal https://caselaw.findlaw.com/ca-supreme-court/1001051.html

In 2017, a state law extended it for non-emergency services https://californiahealthline.org/news/you-are-now-protected-...

The bill in question is for self-funded health insurance which is pretty rare https://californiahealthline.org/news/for-millions-of-insure...

Overall Summary https://www.benefitspro.com/2019/07/11/hospitals-block-calif...

Everybody likes a simplistic explanation of the high cost of health care like "blame the insurance industry" but the reality is more complicated. Yes they are middlemen and need to make profits which adds cost. But look at doctor salaries, particularly specialists, many of whom make over $1m/yr. Look at testing costs, often run by private companies (sometimes owned by the doctors who order the tests) that also need to make a profit. Look at the costs of hospital and hospital systems whose administrative and facilities costs rival that of higher education. And not to mention the whole pharmaceutical-industrial complex. Reducing healthcare costs is going to have to happen at the input side of the industry, not just by taking out payer inefficiencies.

IDK, the last "progressive" action on insurance more than doubled my rates and I had a distinct feeling of some kind of corruption like insurance companies were cashing in.

> IDK, the last "progressive" action on insurance more than doubled my rates...

Sounds like you might've had one of the useless plans cited in the article. Sure, they've got low rates - they don't cover anything when you actually need it.

Obamacare was better than nothing but it really avoided all difficult issues so I think it was a bad law. Problem is that the republicans want to make it even worse.

Right now I’m for Medicare for All. This seems to be the most sane and possible approach.

It dealt with the preexisting condition loophole which was the largest issue with private insurance.

True, that was a good thing. But it didn't address the cost side.

I wonder if that would have been the case had the public health option been part of the ACA?

the public option would basically have been Medicare for All.

I had a plan that covered inpatient care 100% after my deductible. Tests, doctor visits, etc., weren't covered. My HSA and other savings were fine for that. Along came thr ACA and killed it. My premiums skyrocketed and my money went into premiums instead of savings or investment.

Anyone can claim anything. What state do you live in?

Lucky for us, there are published guidelines for which plans did not qualify.

I live in Ohio. I had this plan from 2003 to 2014. I paid a bunch of stuff out-of-pocket over the years. I also saved a lot of money in my HSA and paid off debts. Had I been paying the kind of premiums I paid from 2014 to date all those years I would have far less net worth.

The shitty plans work out really well for folks who don't wind up needing them. That's how they succeed - 90% of people are satisfied customers!

The problem is, it's like having car insurance that'll only pay out $100 if you have an accident. Fine if you never have one, but not if you do. They give you the illusion of insurance.

Your prior plan was part of what made care more expensive for sick people.

Absolutely. And we should have just gone to a single-payer system. Instead we have this useless compromise that further transfers wealth from the middle class to the rich. I don't want what I had back, but I don't want what we have now either.

A single-payer system will require significantly more taxes, and those taxes will come out of your pocket. Which is exactly why we'll never get a single-payer system. Everybody wants better this or that, but nobody wants to pay for it. Which, in a nutshell, is precisely what your rant amounts to.

Here's the a rundown of what single-payer would cost in California:

* $400 billion total (2x the entire existing California budget)

* $200 billion in additional expenditures (the first $200 billion being covered by what people, employers, and state and federal programs already pay)

* "Under one scenario, the average statewide sales tax rate would have to jump from 8.5 percent to nearly 37 percent to generate the amount of revenue needed. Under another, California would have to create a new 15 percent payroll tax, withholding $150 from a $1,000-a-week paycheck."

Source: https://www.sacbee.com/news/politics-government/capitol-aler...

So, yeah, good luck with that, considering that we can barely keep the ACA alive. Of course you paid less before the ACA. It's a fairly safe assumption you were a healthy, young or middle-aged person without any pre-existing health conditions. But one day that will change; hopefully your fellow Americans won't be as indignant about having to fork over more money to benefit someone else.

Perhaps you were paying more than what other people in other states had to pay (for example, in California premiums never really went up much), but whatever the amount you were paying more to subsidize healthcare for others who previously didn't have it or had too little of it. If you think this country is going to get single-payer without you paying significantly more....

And even if you were okay with that, 40-50% of Americans aren't okay with any tax increase. The amount of Americans willing to vote for a 10-20% across the board tax increase is probably in the single-digits. So no matter how many people want a better system, even more more people have a stronger aversion to more taxes. (The overlap is, of course, enormous.) It's irresponsible to advocate for a system that isn't politically viable. Just like the previous broken system, and just like with the ACA today, it will fail unless and until people are willing to accept more taxes or, at a minimum, commit to the existing system and make the best of it by refining it. (BTW, single-payer is the exception across Western Europe and Japan, the very same places Americans love to point at as better models.)

As a practical matter, the ACA went as far as it could in terms of costs that could be covered without a significant raise in taxes, and in retrospect it was overly optimistic in our ability to cut costs. Of course, many people--particularly healthy people--were taxed in hidden ways, such as you were. And, FWIW, the huge increase of premiums in certain states could be fixed by those states. For one thing, they could make the exchanges easier, as well as offer better state-funded healthcare. These are two reasons why premiums never really went up much in California with ACA. But if you're not willing to make it work in your state, why should I assume you, as a fellow citizen, wouldn't be equally lazy and cynical when we have to make even more difficult decisions on a national scale?

Everybody has answers. And every politician is making promises. I'm sure the proposals from candidates like Bernie Sanders are theoretically fiscally possible, but only if you vanished 80% of Americans, replaced them with French and Canadian citizens, and then did the same for our healthcare infrastructure.

Politics is the art of the possible. Ideas and promises aren't worth squat. That's the problem today--every grand idea and promise is an excuse to turn our backs from resolving the hard problems; problems that would also need to be resolved for those grand ideas to have a snowflake's chance in hell of delivering; problems that once resolved would make the existing system infinitely more tolerable without having to go through a revolution.

I am willing (desiring, even) for my money to go toward building a social safety net. Right now my inflated premiums aren't doing that. I would much rather pay taxes as a hedge against the fear of lack or loss of coverage that I have now. (Especially since my ability to hedge with savings has been completely obliterated by the continued spiral of cost increases for medical goods and services.)

I also think single-payer is our best shot at getting spiraling costs under control.

> A single-payer system will require significantly more taxes...

We know this isn't true. The rest of the developed world spends about half what we do per-capita on healthcare, including their taxes.

We pay almost as much in taxes as they do already. We just do it tremendously inefficiently. (Or efficiently, if you consider the goal to be shuffling money off to rent-seeking middlemen.)

https://www.kff.org/health-costs/issue-brief/snapshots-healt...

Reply on news.ycombinator.com