Why is US health care so expensive and ineffective?

[blainehodder]

Before I start, I'd like to request that everyone keep emotional responses under control in this thread.

 

I'd like to start a rational discussion about health care costs and results in the US vs other countries.  Can someone present a rational argument as to why US health care so expensive and ineffective.  Also, why not opt for a single payer system?  I appreciate the argument for small government but in this case the argument appears moot.  The private system is oddly more inefficient...not less.  Wouldn't single payer health care solve the problem?  If not, why is the US the exception?

 

The US has the highest per capita Health Care costs in the world:

http://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_(PPP)_per_capita

 

The results are poor by almost any metric:

https://www.cia.gov/library/publications/the-world-factbook/geos/us.html

 

21 deaths/100,000 live births (2010)

country comparison to the world: 136

 

Infant mortality rate:   

total: 6 deaths/1,000 live births

country comparison to the world: 173

male: 6.6 deaths/1,000 live births

female: 5.3 deaths/1,000 live births (2012 est.) 

 

Life expectancy at birth:   

total population: 78.49 years

country comparison to the world: 51

male: 76.05 years

female: 81.05 years (2012 est.) 

 

HIV/AIDS - adult prevalence rate:   

0.6% (2009 est.)

country comparison to the world: 64 

 

Obesity - adult prevalence rate:   

33.9% (2006)

country comparison to the world: 6 

 

 

 

[Palantir]

I'd like to start a rational discussion about health care costs and results in the US vs other countries. 

 

;D ;D ;D

[rkbabang]

The private system is...

 

Private system?

Please tell me about this unregulated private system?  I've lived in the US my entire life and didn't know it existed.  All this time I've been using the inefficient highly regulated system which gets worse and worse every year.  I'd love to know where this private system of which you speak is and how I gain access to it?

[ERICOPOLY]

I had an MRI done on my knee last week.  I have a fractured tibeal plateau!

 

The price was $451.  The bill said I saved $600 for paying cash (I'm prevented by law from getting insurance in California, so I pay cash).

 

Not sure why health insurance costs so much, but the cash price for an MRI seemed reasonable. 

price.tiff

[blainehodder]

The private system is...

 

Private system?

Please tell me about this unregulated private system?  I've lived in the US my entire life and didn't know it existed.  All this time I've been using the inefficient highly regulated system which gets worse and worse every year.  I'd love to know where this private system of which you speak is and how I gain access to it?

 

Valid point.  I meant the US system. 

[rkbabang]

I meant the US system

 

So did I.

 

Imagine, if you will, a system where the government made it hugely advantageous for employers to offer auto insurance to their employees.  Soon constituency groups formed to express their "outrage" that some employers didn't offer this insurance and laws were passed to mandate it (at least for full-time employment).  This would remove the average consumer completely from knowing or caring about the cost of such insurance and because companies are mandated to purchase it it for them in a third party type situation they have no control over how their employees use it.  Would this not be ripe situation for insurance companies to raise prices?  Now as deductibles started being limited by law and the number of things insurance was required to pay increased (oil changes, tuneups, fuel, and eventually even elective modifications to vehicles) wouldn't the price of such things sky rocket as the consumer ceased to care what any of these things cost?  What if mechanics needed to go through extensive education and government licensing to do even the most basic work to any vehicle massively restricting the number of experts?  Would not the cost of even the most basic and simple vehicle maintenance skyrocket? 

 

Then imagine someone on an online discussion board in such a world pointing out that the "private" system has so obviously failed and asking why the government doesn't just take over the whole damn thing?

 

[watsa_is_a_randian_hero]

Big cost inflators drive higher prices, in my opinion.  Non are related to the US being a "private" market.  All are related to government intervention. 

 

 

1.  US has a HIGHLY regulated managed care.  To call it insurance is a misnomer.  For the most part, these are are low-deductible plans which equates to prepaid healthcare.  The large cost drivers here are the government regulating what HAS to be covered by insurance.  A high-profile example: not everybody needs/wants a plan that covers contraception; but now regardless it is forced.  That is a low-cost example.  However, conceivably in a low-regulation environment you would have insurance plans that did not cover certain hospital procedures, such as open heart surgery; or certain high-cost cancer/aids drugs.  Basically you can not buy a kia health insurance plan; you have to buy a Cadillac. 

2.  US hospitals are forced to provide care regardless of ability to pay.  This burdens managed care companies for making up for those that don't pay, which drives higher prices.

3.  US pays higher prices for drugs (that cost the same to produce), basically covering the cost of innovation for everyone, because other countries will limit price that can be charged. 

4.  Insurance/medicare is on a pay-for-service model.  This incentives doctors to require additional tests, screening, etc they can charge for. 

5.  Tort reform is needed.  This affects costs in multiple ways, not just the judgments themselves.  Out of an abundance of caution, doctors will perform tests, screening, etc to cover-their-ass in situations where there is an unreasonably low level of risk.  Example - my uncle (a doctor) removed a skin tag from my back last summer, he asked if I wanted testing on it.  It would have cost about $125.  I asked what the risk level was; he said he would normally recommend it to patients but the risk level was extremely low.  I asked what he would do if it was him; he said he would not have it screened, and just monitor it to see if it grew back. 

6.  End of life care is extremely expensive.  We need death panels (or whatever you want to call it) to manage this care.  Medicare currently allows reimbursement for procedures that will not significantly extend life or a quality life.  This should not be paid by medicare.  If someone wants these services (ie, a $50,000 procedure expected to extend an 85 yr old's life by 2 years), they should be forced to pay privately (out of pocket or have a private insurance policy to cover this type of care).

[blainehodder]

Then imagine someone on an online discussion board in such a world pointing out that the "private" system has so obviously failed and asking why the government doesn't just take over the whole damn thing?

 

Yes , I was saying valid point.  As in, the US is not a private system. 

 

It is clear the US system is a failure. Maybe a "real" private system would work.  It seems the US is in some pergatory of getting all the bureaucracy of large government without the results that come from single payer.  What would a private system look like?  Is there a success story country out there?  I would regard many single payer systems as successes (measured against the current US system).  I'm not arguing "a true private system" doesn't work.  I'm just not familiar with the examples. 

[Olmsted]

It only takes econ 101 to understand why American healthcare is so screwed up.  Think about the conditions for perfect competition (infinite participants, perfect information, low barriers, low transaction costs, etc.) - and think about all the ways those conditions are currently violated.  Health industry “experts” almost invariably over-think it and fail to start from first principles.

 

My take: US healthcare is expensive because it is a dysfunctional marketplace.  I am not sure the debate should be restricted to only two alternatives: the status quo vs. moving to a single-payer system.  This is a false dichotomy.  The debate needs to be broadened to include status quo vs. single payer vs. policies to make the market more functional.

 

Why is the healthcare market dysfunctional? Each marginal decision on healthcare consumption is divorced from the cost of that consumption.  Price and consumption are divorced because of health "insurance" – which covers virtually the entire market in some form.  This means that the basic price discovery mechanism that enables capitalism to so efficiently provide goods and services in almost every other sphere of life is almost totally absent – or at least incredibly diffuse and ambiguous (i.e. opaque negotiations between provider and insurance administrative bureaucracies).  Americans are not under-insured, we are over-insured, and it is killing us.

 

In what world but healthcare does “insurance” cover routine and knowable consumption?  Insurance (without quotes) is the transfer of risk from a more risk-averse party to a more risk-neutral party, for a fee.  Simple.  But not in healthcare.  I know every year that I will require an annual physical.  This is not a risk.  I know I need a flu shot.  Not a risk.  I know I’ll probably get a cold – this is barely a risk.  Yet health “insurance” pays for all that.  Why? 

 

Perhaps it would help to think of another common area of consumption where everyone has insurance – car insurance.  If car insurance functioned like health “insurance,” we would demand that our car insurance policy paid for every minor repair, and even for gas to get to work.  Once we paid for our car insurance policy, we wouldn’t care about the price of every marginal tank of gas.  We would be profligate in our gas usage - where we chose to go, how we drove there, and whether to leave the car running if we stopped along the way.  We would all be incentivized to drive giant cars with terrible mileage.  In an effort to contain costs, the insurance company would start negotiating directly with gas stations.  Then they would tell us which gas stations is in our network, and we could only buy gas there.  Gas stations would stop posting prices – it wouldn’t matter.  Nobody would know what a retail gallon of gas actually costs.  Finally insurance companies would require their approval before every stop at a gas station – setting up a large and expensive bureaucracy to determine whether our required trip that day complied with the terms of our policy and whether they would cover the gas that day.  Car insurance premia would surely spiral out of control.  Eventually, Americans would vote for socialist politicians to "fix" the issue by seizing the whole system.  Fiscally-conservative politicians are too stupid to attack the issue themselves, because they feel that it should be left to “the market” without realizing that the market is failing and dysfunctional in a massive way.

 

Sounds a lot like healthcare to me.  Isn’t it just easier to pay for the damn gas ourselves?

 

Here are some common-sense ways to make the health industry work:

 

1) Everyone pays the same price.  Providers cannot charge different prices to those who are insured vs. those paying in cash. (Some states, like Maryland, do this already.  My parents got an MRI in Maryland, paid in cash, and it was extremely reasonable).

2) Ban non-catastrophic health plans.  Yep, ban ‘em. 

3) Set up a health savings account for everyone in the country.  You pay for routine health costs in cash out of the HSA.  You get back money you don’t spend.  Just watch routine medical costs plummet.

4) The first $X thousand dollars of everyone’s tax bill goes right into the HSA.  Mandatory contributions.

5) If you are concerned about the plight of the poor, etc. you could easily just fund their HSAs and (private) catastrohpic plan with a tax credit.  This would be infinitely more efficient than Medicaid.

6) Monitor catastrophic plans.  If the proliferation of catastrophic plans becomes too complicated for consumers to choose between, set up exchanges with a limited number of reasonably standardized products that people can understand.

 

Eventually phase out the controlled reforms if the market starts to function on its own again.

 

Functioning markets create prosperity.  If the market is failing, figure out why it is failing and address it.  Make it competitive, aid price discovery, make information accessible, lower barriers to entry.  Don't seize a broad swath of the US economy and an important part of our lives and turn it into a single-payer (socialist) commissariat.  When has that ever worked?

[blainehodder]

Interesting proposals Olmsted.  I'd like to add that mandating prescriptions for basic drugs is outrageous as well.  No need to see a doctor if you know you need penicillan. 

 

 

A few questions:

 

How would such a system deal with chronic (non cat) illnesses?

 

What happens if the HSAs won't cover the cost?

 

Don't seize a broad swath of the US economy and an important part of our lives and turn it into a single-payer (socialist) commissariat.  When has that ever worked?

 

Single payer in other nations seems to be working better than the current US offering, but I'm not saying that is ideal.  I quite like your proposal.  Are there any countries which follow a similar proposal?  If so, how are the stats?

 

[JEast]

Costs are high in the US due to cultural issues and lack of any pricing mechanism.  This is changing though.

 

On the cultural side and for the most part, companies were the one’s that provided healthcare in the US starting around the ‘50s.  As a benefit, companies usually had either zero (0) or very-very low deductibles.  This has educated an entire generation to go to the doctor when one has a toothache and to not have any clue of what healthcare truly costs.

 

This fact then leads to the lack of the pricing mechanism.  Just like when Cartier or Sees raises their prices and it becomes more desirable, same for healthcare.  If it is that expensive and someone else is paying for it, it must be good and I want it!!  And the feedback loop continues…

 

 

Cheers

JEast

 

[oddballstocks]

I have a fair bit of experience in this area, not that it matters, but I do see where the costs are down to the individual claim level..

 

The problem isn't people with cancer or these high cost one off issues, it's the fact that we have an unhealthy nation and insurance companies are paying a lot for coverage of ongoing issues.  For example, the top drugs aren't expensive ones, they're cheap ones used by a lot of participants.  If you have a company with 30k workers and 10k of them are on high blood pressure medication that adds up much quicker than the 7 people on cancer drugs.

 

As mentioned people using doctors more than they need.  But doctors aren't faultless either.  They're paid on a per-visit basis, it's in their paychecks interest to see as many people as possible.  So patients are going for a ton of tiny reasons and doctors are more than willing to support it because that's how they're paid.  They're not paid for outcomes, just for visits.

 

Costs are all over the place, doctors and hospitals have no idea what they're charging people.  A hospital could give care to two people from different employers with the same insurance carrier and the carrier pays two different amounts for the exact same care. 

 

The problem is we're going in a bad direction.  Insurance companies are worried about being locked out of the process so they're buying up hospital systems.  This is the industry trend, insurance players are going all in buying hospitals.  Once they own the hospital they can direct care to their facilities, and it ensures they'll never be cut out of the loop.  The issue is insurance companies are profitable, hospitals are not.  Profitable insurances companies are not shackling themselves with marginally profitable or money losing hospitals. 

 

The last issue is an intangible but important.  The entire health system is run by doctors, they are not business people.  Business acumen is lacking or non-existant, no one watches costs.  I proposed doing a cost benefit analysis for a project, was told it was pointless there is endless money to do anything the project requester wanted if it was reasonable or not.

[ERICOPOLY]

Insurance is regulated by state.  Once I left Washington state, my insurance carrier was allowed (if not required) to drop me.

 

The California carriers interviewed me and said that due to my pre-existing condition (ankle problems) they did not want to insure me.

 

That sounded reasonable though -- I'm not expecting them to insure a chronic injury.  So I asked them to design a policy for me that excluded my ankle.  You know, so I can have coverage for accidents, heart attacks, brain cancer, etc... etc...

 

They told me it's illegal for them to provide such a policy for me.  I am the one asking for it!

 

California state law prevents exclusions.

 

I thought, okay, that's pretty lame.  I can't get any insurance at all due to state law.

 

[Olmsted]

Interesting proposals Olmsted.  I'd like to add that mandating prescriptions for basic drugs is outrageous as well.  No need to see a doctor if you know you need penicillan. 

 

 

A few questions:

 

How would such a system deal with chronic (non cat) illnesses?

 

What happens if the HSAs won't cover the cost?

 

I was kind of thinking of catastrophic insurance as covering you past your HSA running out.  Probably not the way it works now. 

 

I've struggled as I think about pre-existing conditions, which Eric brings up too.  It sucks that our system is set up so that if you lose your job you get dropped and cannot get something else - this stifles labor mobility and entrepreneurialism.  Then again, asking every insurance carrier to cover every pre-existing condition is not the point of insurance.  That's stupid too.  Plus it results in unmitigated premium increases and a pretty bad adverse selection problem (i.e. healthy people without pre-existing conditions are better off opting out if they have the means).  If we go back to the model of insurance as paying someone to take your risk, it seems that whoever covered you at the time your chronic condition started is on the hook for it.  Until it goes away.  Not sure how the actual mechanism would work, and it would certainly force a re-think of premium pricing.  But it would be more efficient than it is now.

 

Don't seize a broad swath of the US economy and an important part of our lives and turn it into a single-payer (socialist) commissariat.  When has that ever worked?

 

Single payer in other nations seems to be working better than the current US offering, but I'm not saying that is ideal.  I quite like your proposal.  Are there any countries which follow a similar proposal?  If so, how are the stats?

 

I agree that single-payer in other countries works as well or better than the US system.  But the dysfunctional US market is a blatant straw man for those who argue that single-payer, in any absolute sense, is a good idea.  Relative to our current system, it may be a good idea.  But this choice unnecessarily limits our alternatives.

 

Not familiar with countries that follow a functional market model.  Will ask some of my health thinktank friends.

 

 

[Olmsted]

Insurance is regulated by state.  Once I left Washington state, my insurance carrier was allowed (if not required) to drop me.

 

The California carriers interviewed me and said that due to my pre-existing condition (ankle problems) they did not want to insure me.

 

That sounded reasonable though -- I'm not expecting them to insure a chronic injury.  So I asked them to design a policy for me that excluded my ankle.  You know, so I can have coverage for accidents, heart attacks, brain cancer, etc... etc...

 

They told me it's illegal for them to provide such a policy for me.  I am the one asking for it!

 

California state law prevents exclusions.

 

I thought, okay, that's pretty lame.  I can't get any insurance at all due to state law.

 

That's insane.  Thanks, government.

[ERICOPOLY]

Insurance is regulated by state.  Once I left Washington state, my insurance carrier was allowed (if not required) to drop me.

 

The California carriers interviewed me and said that due to my pre-existing condition (ankle problems) they did not want to insure me.

 

That sounded reasonable though -- I'm not expecting them to insure a chronic injury.  So I asked them to design a policy for me that excluded my ankle.  You know, so I can have coverage for accidents, heart attacks, brain cancer, etc... etc...

 

They told me it's illegal for them to provide such a policy for me.  I am the one asking for it!

 

California state law prevents exclusions.

 

I thought, okay, that's pretty lame.  I can't get any insurance at all due to state law.

 

That's insane.  Thanks, government.

 

It makes me curious how such a law is Constitutional.

 

Making it illegal for me to have a customized insurance policy?

 

It also makes me wonder how many of the millions of uninsured people are simply going uninsured because their states have effectively made it illegal for them to have any insurance at all.

 

[Kiltacular]

It makes me curious how such a law is Constitutional.

 

Making it illegal for me to have a customized insurance policy?

 

It also makes me wonder how many of the millions of uninsured people are simply going uninsured because their states have effectively made it illegal for them to have any insurance at all.

 

Yes, they can't write an insurance policy that excludes certain pre-conditions because that would be discriminatory.  So, the completely exclude you -- law of unintended consequences.

 

What you have described is similar to the whole issue with someone just wanting "catastrophe" health insurance.  I've researched this issue. 

 

It doesn't exist.  A "high" deductible policy starts with a few grand out of pocket.

 

But, I want something that covers me for something that costs $100,000+...a serious bout of cancer or the like.  It isn't allowed to be sold.  I am in New York (city).

 

I am not quite 40...have always been healthy with no pre-existing conditions.  I pay almost $800 PER MONTH just for myself.  So, that's almost $10,000 per year for ONE PERSON.

 

These high rates exist in New York because they can't exclude anyone.  Get ready rest of the United States -- this is what's coming.  It's a "right" -- right?!

 

My wife is covered by her job -- a small business.  With a couple of kids, we will (if it happens) be paying about $30,000 per year to cover the family.  In addition, we paid about $15,000 in Medicare taxes.  That's before the 3.8% Obamacare tax that is now put into place.

 

Now, as a nod to my post on the other thread, suppose I have 4 or 5 children?  Yet, lots of people with no wages and assets are fully covered.  Who's the sucker? lol

 

Fair share?  lol

[MVP444300]

Before I start, I'd like to request that everyone keep emotional responses under control in this thread.

 

I'd like to start a rational discussion about health care costs and results in the US vs other countries.  Can someone present a rational argument as to why US health care so expensive and ineffective.  Also, why not opt for a single payer system?  I appreciate the argument for small government but in this case the argument appears moot.  The private system is oddly more inefficient...not less.  Wouldn't single payer health care solve the problem?  If not, why is the US the exception?

 

The US has the highest per capita Health Care costs in the world:

http://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_(PPP)_per_capita

 

The results are poor by almost any metric:

https://www.cia.gov/library/publications/the-world-factbook/geos/us.html

 

21 deaths/100,000 live births (2010)

country comparison to the world: 136

 

Infant mortality rate:   

total: 6 deaths/1,000 live births

country comparison to the world: 173

male: 6.6 deaths/1,000 live births

female: 5.3 deaths/1,000 live births (2012 est.) 

 

Life expectancy at birth:   

total population: 78.49 years

country comparison to the world: 51

male: 76.05 years

female: 81.05 years (2012 est.) 

 

HIV/AIDS - adult prevalence rate:   

0.6% (2009 est.)

country comparison to the world: 64 

 

Obesity - adult prevalence rate:   

33.9% (2006)

country comparison to the world: 6

 

No a single payer system would not solve the problem with why healthcare is so expensive.  First, in order to have a single payer system the federal govt would have to exceed its authority as it has done numerous times such as the creation of Obamacare, Medicaid, or Medicare.  I can not lay my finger on any provision within the constitution that grants the federal govt the authority to provide a single payer system as you're advocating.  In fact, I would go as far to say that the govts involvement in the healthcare industry is the primary reason healthcare is so expensive.  The govt over the past 50 years have been encouraging a third party payment system to flourish in this nation in which the patient and doctor have been completely removed from cost.  The people on Medicare and Medicaid do not give a damn about cost of the healthcare they are receiving because they don't pay for it.  The govt even with its encouragement of employer provided private health coverage has created a disconnect between patient and doctor relationship with regard to treatment and more importantly cost.  When a person has no concern about what its going to cost them, they are not going to shop for the best price. 

[twacowfca]

Then imagine someone on an online discussion board in such a world pointing out that the "private" system has so obviously failed and asking why the government doesn't just take over the whole damn thing?

 

Yes , I was saying valid point.  As in, the US is not a private system. 

 

It is clear the US system is a failure. Maybe a "real" private system would work.  It seems the US is in some pergatory of getting all the bureaucracy of large government without the results that come from single payer.  What would a private system look like?  Is there a success story country out there?  I would regard many single payer systems as successes (measured against the current US system).  I'm not arguing "a true private system" doesn't work.  I'm just not familiar with the examples.

 

The best health care system in the world, all things considered, is arguably Switzerland's.  it costs about 10% to 12% of GDP vs 17% approaching 20% in the US.  The insurance is mandatory for a policy that covers the basics, but no more.  Coverage is provided by private companies.  People shop for the policy that suits them.  If the cost is more than 8% of income for a basic policy, the state subsidizes the rest of the cost. 

 

Surprise! People are smart shoppers.  They generally choose a policy from a company that keeps a lid on costs and thus keeps the premium low.  But they can buy an expensive policy if they think it's worth it. 

 

Insurance companies have the legal right to recover fees paid to doctors that order unnecessary tests or surgeries or treatments.  They will put a doctor on notice if he runs up costs too much on most policies.  This gets  their attention.  Doctors don't have quotas,  they generally spend more time getting to know their  patients and their ailments than in the US.  The Swiss legal system discourages ambulance chasing lawsuits.  Therefore, doctors put the health of their patients ahead of playing defensive medicine .

 

Bottom line:

 

Outcomes and general health are among the best in the world.

 

Satisfaction among the citizens is off the charts.

 

Why?  Incentives are more or less market based,

 

 

[ERICOPOLY]

I can well understand why people don't want the Federal government at all involved with insurance.

 

However leaving the regulation of the insurers up to the states sucks like you wouldn't believe.

 

As I've learned...

 

Once I left Washington, my insurer legally dropped me.  So then a private insurer in the next state won't take me.

 

As a nation, we benefit from labor mobility.  Sure, I'm not working, but the point still stands.

 

There needs to be a comprehensive thread that ties all of the states together.  Unfortunately, I don't know how you do that unless the regulator of the insurers is the Federal government itself.

 

 

 

[rkbabang]

Yes, the feds leaving something alone doesn't make much difference if all the state and/or local governments are busy regulating it to death.

 

The founders of this country had a great idea when they demanded the separation of church and state.  I just wish they had also demanded the separation of medicine and state, science and state, education and state, transportation and state, banking and state, money and state, ...

 

[MVP444300]

I can well understand why people don't want the Federal government at all involved with insurance.

 

However leaving the regulation of the insurers up to the states sucks like you wouldn't believe.

 

As I've learned...

 

Once I left Washington, my insurer legally dropped me.  So then a private insurer in the next state won't take me.

 

As a nation, we benefit from labor mobility.  Sure, I'm not working, but the point still stands.

 

There needs to be a comprehensive thread that ties all of the states together.  Unfortunately, I don't know how you do that unless the regulator of the insurers is the Federal government itself.

 

I for one don't want the federal govt providing healthcare to citizens, in fact, I don't want the govt at all involved but there is an argument that the states do have the ability to do so.  I think that it is a personal choice whether one has health insurance or not.  If  a person forgoes homeowner's insurance they can be homeless and then have to get help from family or charity.  The same IMO should be true for healthcare.  When the govt forces healthcare to be provided to people even in emergency situations they are forcing the doctor's and nurses to provide free service--I think its tantamount to forced labor.  If the govt ordered farmers to provide free food, or clothing company to provide free clothing you have slavery. 

 

The federal govt  under the constitution does have an ability to regulate interstate commerce among the states and other nations.  What that means is to make commerce regular.  It ultimately means you should be able to purchase health insurance in other states and foreign nations.

[ERICOPOLY]

I for one don't want the federal govt providing healthcare to citizens, in fact, I don't want the govt at all involved but there is an argument that the states do have the ability to do so.  I think that it is a personal choice whether one has health insurance or not. 

 

I didn't propose the Federal government provides health insurance.  I proposed they regulate it (instead of the states doing it).

 

That's the only way you have a functioning system where you pay insurance and if you get ill the insurer pays for you.  That's how the market should work.  The insurer should price in risk, and then be on the hook for it if the risk goes bad for them.

 

But Washington state let the insurer drop me as soon as I became a California resident.

 

This means that in Washington state (not DC), they should offer insurance cheaper to Californians who have moved to western Washington.  If you look at the statistics, Californians don't last there long because the climate is grey and cold.  Thus, they should find Californians to be of lower risk because the are likely to leave the state at a higher than normal rate.

 

And in California, insurers should be allowed to charge less to rich people.  They are sure to flee California at a higher than normal rate.

 

So you see, this is dysfunctional when regulated at the state level.  It is nonsensical.

 

 

[MVP444300]

I for one don't want the federal govt providing healthcare to citizens, in fact, I don't want the govt at all involved but there is an argument that the states do have the ability to do so.  I think that it is a personal choice whether one has health insurance or not. 

 

I didn't propose the Federal government provides health insurance.  I proposed they regulate it (instead of the states doing it).

 

That's the only way you have a functioning system where you pay insurance and if you get ill the insurer pays for you.  That's how the market should work.  The insurer should price in risk, and then be on the hook for it if the risk goes bad for them.

 

But Washington state let the insurer drop me as soon as I became a California resident.

 

This means that in Washington state (not DC), they should offer insurance cheaper to Californians who have moved to western Washington.  If you look at the statistics, Californians don't last there long because the climate is grey and cold.  Thus, they should find Californians to be of lower risk because the are likely to leave the state at a higher than normal rate.

 

And in California, insurers should be allowed to charge less to rich people.  They are sure to flee California at a higher than normal rate.

 

So you see, this is dysfunctional when regulated at the state level.  It is nonsensical.

 

Erich I think we agree with each other.  :)  Your just saying one way and I'm saying it another. 

[bargainman]

I had an MRI done on my knee last week.  I have a fractured tibeal plateau!

 

The price was $451.  The bill said I saved $600 for paying cash (I'm prevented by law from getting insurance in California, so I pay cash).

 

Not sure why health insurance costs so much, but the cash price for an MRI seemed reasonable.

 

I have just learned that the bill probably lied! :-)  Here is what just happened.  My doctor sent me a 'prescription' to a MRI place.  I noticed that this place was not 'in network' in my insurance.  I called them up and asked them about it.  They said that the MRI price was $2700!!!  I asked them what my insurance would pay?  They said probably $2100!  Amazing..  Then I called up a few of the "in network" MRI places which agreed to the Insurance 'contract pricing'.  When I asked them the price they said the same thing about $2500.  But then I asked about the cash price and one place quoted $500!  Then I asked them about the insurance contract pricing and they said it was $475!  (called 3 places and they were all within that range..  list price 2500, contract price 475)

 

So like many things, it seems that the 'list price' or "MSRP" is a bunch of baloney.  I still can't believe that the out of network place would cost $2100 vs $475.  I suspect I would not know the actual price unless I actually went through with the procedure, but I'm not going to tempt fate.  I will go "in network".