Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
@msf: Thanks for the reminder about the March 2010 signing into law of the Affordable Care Act, with some provisions going into effect that year. I remember the huge joy of those with chronic conditions who could now access care. I specified in an earlier post that my "grandfathered" plan was unchanged, as there seemed to be confusion in other posts, namely, that a plan could be "changed" to be compliant with ACA and still continue on as the "same plan." That would seem to present difficulties (though not impossible, depending on what was in the plan to start with), and for the most part, old plans would have to be shelved or continued on a parallel, noncompliant path, the decision being up to the issuer. Plans that were started in 2013 and were not on the health care exchange seem to fall into a special category.
Thanks for the many links. I've read a few and will look more closely at others.
I like to make my own decisions regarding my own life and I realize there are many things I cannot control. For the things I can control, such as taking care of myself and managing my own portfolio (which I'm sure most people on this website do, as well), I like to do my own research and make my own decisions, not be required to follow a mandate from DC. My health insurance used to be this way, as well...lots of choices with lower premiums and deductibles. My options at this point include moving to a different state, going without insurance, or paying for things I don't need on my current policy. Informal Economist...I don't think ANYTHING should be mandated! I want my insurance to cover catastrophes and my former policy did this to my satisfaction. I prefer paying out of pocket for whatever else I need and taking care of myself! If my situation changes in the future, I will pay for a more comprehensive policy that suits my needs. Through careful investing in my HSA (thanks in large part to MFO and all of you contributors), I have a amassed a nice nest egg! Thanks to all!
you, msf, are de man --- do you write regularly somewhere?
David,
Thank you for the kind words - I likewise appreciate your posts and calm style.
No, I don't write anywhere. Just comments and thoughts here and there from time to time when something piques my interest.
ACA is a particularly fascinating subject from so many perspectives - political, economic, legal, and systems design. (The more I read, the more impressed I become on how complex and how well thought out it is). And of course, the personal - losing my plan at the end of 2014 (the plan had gotten a one year reprieve).
msf, you are the only nonpro on the face of the Earth to write about how well thought out ACA is. Wow and good Lord, your house is going to be firebombed. Talk about being de man.
You must be (he claimed without evidence), if not a writer or academic or pol assistant, someone familiar with policy and law and the brutal and often ugly draftings thereof.
I do hope your new plan(s) are close to what you and yours need.
Calm style is not always something I have had applied to me, or not overwhelmingly, throughout my writing and editing career, although one certainly does learn to modulate. I must notify friends and family tonight.
l5bee: >> I don't think ANYTHING should be mandated!
Got it. I think we all properly infer your libertarian stance. Assault weapons for all, crazies and children included? I doubt you believe what you write. I guess I do not mind paying firefighters to douse your enflamed house, maybe even would help pay to rebuild it near a regularly flooding shoreline, one time anyway. But I gotta tell you, if you ride without a helmet (no mandates for my biker freedom, dammit, screw all you fascists), some of us would pay for your ER care once only, grudgingly, and wrt your next collision might hope for a different outcome.
And if you don't, oh, lemme grope for an example, vaccinate your children, another of those God-damned libtard-plot freedom-denying Obama-related mandates, oh, no: well, you might well have an actual fight on your hands, and from HC pros and other parents, too, not from just us collectivist-oriented citizens.
davidrmoran...I was referring to the ACA and Informal Economist's question...that's the topic of this discussion. I understand some people prefer government to help with their decision making and that's fine... I prefer making my own decisions, whether it concerns my insurance or my investments. When one of the authors of the ACA, Jonathan Gruber, admits its passage depended on the "stupidity of the American people", I don't think it instills a lot of confidence in the Act.
Mona, I admire clarity and precision of thought and expression enormously, its having been my field for a half-century. Just enormously. Rather less so erotically. Aligned with the penchant for doing deep and disinterested research, it becomes that rare thing on the web: usable discourse. msf is that rare find in a public forum. Like Snowball's work. Look back at all of the questioning and parsing and weighing of your initial claims, for example.
l5b: I apologize for having overinferred when you were delimiting. Sorry about that.
You do realize of course that all Gruber was doing, with bluntness, was explaining how insurance works, and always has. This is gov-enforced redistribution of moneys, forcibly taking from us hardworking clean-living wealthy (comparatively) and not so wealthy and effectively giving to the Frito-eating chainsmokers (heeeyuge numbers in red states of course, all of them chanting hatred of libtards and the prez).
It is a little bit as if I went up to NH and pointed out that their extremely high property taxes go, in part, to paying for treating trauma to legally unhelmeted bikers' heads, living (tax)free or dying, in a redistribution of moneys from lucky property-holders to the foolish, and that only a state with voters as stupid, oops, I mean independent and fiercely freedom-loving, as NH would permit such a money-redistribution situation to persist.
Gruber's frank but politically suboptimal characterization did not affect my confidence in ACA whatsoever, and I was very surprised it would change anyone's. What did people think ACA did, and how it did it? It's mandated insurance! Wisely conceived by rightwingers, bless 'em. Mandated individual responsibility and all that stuff. I mean, seriously. Stupid is actually a nice way to put it. Thank God SS is not voluntary but 'enforced', like so many smart things.
My view is that people have a right to health care (with some limitations, perhaps). I think where things go wrong is that you have this system where people can go to a hospital and be charged $25 for an aspirin. Obamacare is problematic but more problematic is this view that, "Ok, now you all have to have healthcare or pay a tax."
That doesn't do anything to change the core problem of the healthcare industry having a bank-like situation of "heads we win, tails we win." It's not that the health care industry has to lose, but it didn't even give an inch. Everyone has to have health care - healthcare industry cheers for more customers and goes right on charging what it was charging (and hey, if everyone has to have insurance, why not charge even more?)
This is not the best comparison, but I guess I think of it in the way that I think of student loans and college costs. College costs have gone through the roof from the standpoint of pretty much anyone can get a loan. If everyone has to get health insurance, how has the core problem of soaring costs even been approached? It hasn't and - I believe - it won't, which is why I remain long healthcare.
WHO passes out "rights"? I thought Health care (insurance) was a "product" to be purchased? Go into any Emergency room and you will hear/see people who think they have "rights" and they know how to get the care they need, thus the cost of Health care for those of us who PAY
WHO passes out "rights"? I thought Health care (insurance) was a "product" to be purchased? Go into any Emergency room and you will hear/see people who think they have "rights" and they know how to get the care they need, thus the cost of Health care for those of us who PAY
Ignoring that insurance and healthcare aren't the same thing at all, if you're so incensed at paying other people's ER bills, why are you opposed to making people buy insurance?
Or do you think people should just not get any medical care if they can't afford it, that whole bit in the Declaration of Independence about the "right to life" endowed by the creator be damned?
@scott I think David and others have adequately addressed Gruber's description of what insurance does, but I'll add one comment about Forbes' assertion that the law was designed to be opaque - how often did you hear that "we need to sign up enough young, healthy people to make this work", or the more pessimistic "Obamacare is going to fail because young people won't sign up for it"?
One may not have understood all the mechanics, but IMHO those remarks communicated the fact that younger people's premiums would tend to support those of older people. Nothing opaque there.
To some extent, it's a matter of "paying it forward". Younger people are paying more now in order to ensure that when they're older, they aren't hit with excessively high rates. That's the way whole life works too - you pay in "too much" at an early age in order to lock in the rate for when you are older. (There are various reasons why I don't think whole life is a good idea, but this is not explicitly one of them.)
Regarding medical cost inflation - it's a real problem, and one of the justifiable complaints against ACA is that it doesn't do enough to contain costs. But that's not to say ACA has no provisions to address costs - just that they're not direct.
ACA requires an 80%-85% medical loss ratio, meaning that at least 80% (or 85% for large employer plans) of premiums must go toward actual medical expenses, and not toward insurer overhead/profit. My insurer did not raise rates in 2012 or 2013, yet in both those years I got (small) refunds because their medical payouts were less than they had anticipated. (This ACA provision became effective in 2011.)
The ACA has changed the insurance landscape, both explicitly and implicitly. It explicitly provided for the creation (and initial subsidization) of non-profit "Consumer Operated and Oriented Plan (CO-OP) insurers.
In placing an emphasis on value delivered, it seems to have spurred an increase in provider-owned health plans. (These are plans that own and operate their own facilities). At their best, these can provide some of the best and most efficient care in the country - think Kaiser. Historically, the concept goes back at least to the Little Flower, Fiorello LaGuardia, who instigated the creation of "a new type of community health program", that became the Health Insurance Plan of Greater New York (now just another commercial cog in a larger insurer).
If ACA plans are going to have narrow networks, the provider-owned plans may be a good approach. They should be more efficient (so the theory goes) because the providers are not fighting the insurers. Perhaps that means that there's even less pressure to keep costs down, but in a competitive world, they'll lose business to other insurers (like the nonprofit Co-ops) if they don't at least match pricing.
The ACA has created an environment for a lot of experimentation. Give it time to see what the industry comes up with. (I hope something good pops out before I get to Medicare.)
I think where things go wrong is that you have this system where people can go to a hospital and be charged $25 for an aspirin.
Everyone has to have health care - healthcare industry cheers for more customers and goes right on charging what it was charging.......
.......how has the core problem of soaring costs even been approached? It hasn't.......... .
@scott, you're right. The core problem of soaring costs has not been addressed. You mentioned $25 for an aspirin on an inpatient bill. Add to that blood tests and diagnostic tests which are billed for thousands of dollars but only cost a tiny fraction of that to perform, generic meds which can often be paid for out of pocket for less than the cost of some insurance co-pays, and much more. There's a physician named David Belk in primary practice who has a lot to say about the true cost of healthcare.
This information is very important in understanding healthcare costs.
david r moran...Do you self-insure or does your employer cover your insurance? If you self-insure, could you please name your provider? I would love to save some money on premiums. If your employer pays....lucky you!! I would hope you could muster some sympathy for those of us who don't have that benefit. And I hope your employer will continue to cover employees.
Scott...I totally agree with your comment. I feel fortunate that I can absorb the higher premiums, I just wish I had more options.
I realize that my decision to retire at age 47 came with the added expense of funding my own health insurance. I didn't realize, however, that this expense would rise so quickly. On this Thanksgiving weekend, I am thankful for all MFO contributors who have helped me manage my investments effectively.
@l5b, Medicare for me, as I have said elsewhere. And thank goodness. Everyone should be on it and have it, period. Expensive and not very good Cobra before that for a couple years due to (another) layoff. I do have terrific sympathy for those who must spend so much on healthcare, especially when straitened.
Perhaps less so for someone able to retire at 47 yet now surprised at how expensive health insurance is. I certainly hope you get what you need and can afford it and have been able to plan for it more or less. I would suggest you work in longterm-care and umbrella liability insurances too, and no, I am not connected to the industry. It is great to hear that MFO is helpful that way; it has been to me too.
I would have expected you to be a major cheerleader for ACA, since your costs would be much higher with things staying as they were, at least over time.
@scott I think David and others have adequately addressed Gruber's description of what insurance does, but I'll add one comment about Forbes' assertion that the law was designed to be opaque - how often did you hear that "we need to sign up enough young, healthy people to make this work", or the more pessimistic "Obamacare is going to fail because young people won't sign up for it"? s up with. (I hope something good pops out before I get to Medicare.)
Hey, davidrmoran, new found friend ;), finally a post with some concrete suggestions and a hint of humor! For a while there, I thought I had been time traveling to a college lecture hall with a boring professor droning on. I have had umbrella insurance in place for years...no problem with that! LTC...no thanks...have a few friends working in home care who advise against it. I would prefer to self-insure (in case you didn't read my prior posts).
I can't speak for Mona, although I have tried defending her on this thread, but the dilemma that those of us who self-insure have, is the lack of choices...all of them bad. Here are mine: 1) status quo...when I retired 11 years ago, I realized that I would be responsible for my own health care costs and acted accordingly, but who could predict 35%/year increases in premiums? And how long do I have to live to make the ACA work for me?? 500 years?? I was doing just fine with my catastrophic HSA compatible plan and paying for other costs out of pocket. Well, at least my HSA has done well!
2) get married...boyfriend is retired automotive engineer from Big 3 automaker (the one that didn't take a government bailout). Upside... low premiums and great health care; downside...crazy relatives.
3) start another business...have thought about this seriously. Was lucky once, but so much government regulation now. As you probably know, I don't like that! Also have learned to manage downside risk by reading MFO forum posts...lots of that in starting a biz.
4) work at Starbucks...less time to golf, invest, work out, and work at food bank.
This, in my opinion, is a prime example of "health care inequality"; those of you who have it, please be a little considerate of those of us who don't. This would be the equivalent of me driving up to the food bank where I volunteer in a Mercedes. Not good optics...as they say in the media.
Gotta go...Black Friday sales await and because I have been posting on this thread, I am way behind on Ted's posts and need to get caught up. I am one of those who sincerely appreciate his work and I wish I had defended him when the knives were out!
Hope I don't get injured in the Black Friday melee...would my insurance cover that?
Many of you did an incredibly perceptive job at dissecting and explaining the intricacies of the Affordable Care Act ( ACA, Obamacare). Kudos to all participants.
I initially chose to stay away from this often heated, and expected controversial Healthcare debate. But I succumb to temptation by dipping my oar into this quagmire. A few of the postings are purely speculative assertions and opinions that are totally devoid of supportive evidence.
Hippocrates said: “There are in fact two things: science and opinion; the former begets knowledge, the latter ignorance.” It is crucial to understand the world as it is, not as each of us want it to be.
From a pragmatic perspective, the Health plan itself is highly complex with unfathomable and unknowable interactions. This was and is a highly charged issue with each individual’s views dictated by his personal experiences and circumstances.
A true test of the plan to accumulate sufficient data to make an informed assessment requires the passage of time. Perfectly good outcomes and perfectly bad outcomes at this juncture are illusive and incomplete. A final judgment (likely one doesn’t exist because of a dynamic marketplace) is premature.
As Seneca observed: “When a man does not know what harbor he is heading for, no wind is the right wind.” When making a business decision, Buffett and Munger strongly recommend walking away from the project if the potential benefits 10 years in the future can not be reasonably estimated. Given the uncertainties of ACA, I suspect that adhering to the Buffett-Munger rulebook suggests a pass .
Is Healthcare really free? Of course not! Those who benefit from the program easily see its merits. That’s a first-order effect. What we don’t immediately see is the secondary interactions. The incremental resources committed to the ACA program will be diverted from other alternate opportunities. What is the government’s record relative to the efficiency and effectiveness of their other social programs? The Buffett-Munger rulebook requires scrutinizing this database for a signal. Each of us will answer that question differently, and likely with much emotional energy.
In an 1850 essay, Claude Frederic Bastiat wrote: “Between a good and a bad economist…....the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee.”
All this is difficult for me. I’m not a health expert, and I do not plan on becoming one. I leave that chore to my wife. I do try to apply Occam’s Razor when sorting through complex options: I prefer to choose that option which has the fewer unproven assumptions and/or at least some experimental data to backstop it. As Confucius advised: “Study the past if you want to divine the future.”
I try to deploy Charlie Munger’s Mental Model framework to illuminate the dark future. From Economics 101, the standard supply-demand curves suggest that costs will increase given that demand will increase because of added participants, whereas supply will basically be inelastic, remaining somewhat fixed, at least for a rather long period. Secondary feedback loops will exasperate the effect since new participants will be encouraged to use the services more frequently and service providers will chafe under newly minted rules, regulations, and cost containment practices. There will likely be a nonlinear, non-predictable interaction.
Historical (National experimental data sets) records suggest that simple, one-payer systems have not generated anything close to perfect outcomes. In both England and Canada, wait lines are long for conventional ailments, and when more challenging treatments are required, patients often travel to the US for medical service when financially possible.
I have some anecdotal evidence from friends in New Zealand. In New Zealand, their healthcare system has evolved from a single payer concept into a two-tier subset. A private network necessarily reinforces the government program. With increased demand and a truculent, limited supply, quality will deteriorate. Incentives to increase supply under tight government controls is an uphill battle.
Also, scalability is an unsettled issue. Single payer systems have only been tested in rather small countries when contrasted against the immense population of the United States. On the other hand, if any agency can handle scale miracles, the USA has so demonstrated time and time again.
I recognize that I’m assessing the issue from a very broad, overarching macro-perspective, but that viewpoint should be included as part of any discussions. It’s my attempt to drive some of the emotions and policy biases out of the debate.
The emotions have been deep in many of the MFOer’s submittals. I’m not overly riled by the topic, and have only read a small fraction of the comments. On a personal level, my wife’s health plan will see very modest program changes and cost adjustments; my health plan will see more extensive changes and a large, but manageable increased cost increment. It’s intriguing that she’s more incensed by the mandatory changes than I am. There is a priority ordering difference between men and women.
I hope this belated entry does not add more fuel to the fire; it’s hot enough without my participation. This is a fire that will burn hot and long into the foreseeable future. Final resolution demands more experimental data. That’s the way of science. It requires patience. It requires an examination of ongoing national experiments.
Something like 60 nations are currently doing single-payer or two-tier health experiments. We should critically examine their effectiveness, efficiencies, and shortfalls. It is far better to learn from their outcomes than to replicate the same mistakes.
One surprising projection from our current plan is that the wiz-kids anticipate that roughly 10 % of our population will still remain off the covered roles given the current operational rules. Much work needs to be done.
Until then, good health and good investment success to all MFO members. There is a coupling here that alert MFO members can exploit.
3) start another business...have thought about this seriously. Was lucky once, but so much government regulation now. As you probably know, I don't like that! Also have learned to manage downside risk by reading MFO forum posts...lots of that in starting a biz.
To ease the pain of health insurance premiums keep in mind that health insurance premiums can be deducted dollar for dollar from your gross income (to arrive at AGI) so long as you have reportable self employment income.
Don’t Miss the Health Insurance Deduction if You’re Self-Employed: irs.gov/uac/Newsroom
l5b, pal -- can you perhaps be on bf's insurance without marriage? Or is that not an option anymore in some places (maybe ACA-related)?
There is nothing ACA related that prohibits this. I am aware of insurance companies that allow a "domestic partner" (not boy or girl friends) of the employee, to be on the employers plan. In turn, I am also aware of employers, who allow the "domestic partner" of the employee to be on the the company health plan.
Back from Black Friday shopping....in one piece!! YAY!!! Also won a $100 gift card at Sports Authority (shhh...don't tell the King...he might take $40 of it!)
davidrmoran...so appreciative of your concern! We already tried the "domestic partner" approach years ago with his former employer...to no avail. It seems like hetero domestic partners are discriminated against!! I would have to be a male, or my boyfriend a female, for me to get benefits. Apparently, so long as marriage between a man and a woman is an option in the state where you reside, you are not entitled to "domestic partner" benefits if you are a hetero couple. Obviously, extenuating circumstances, such as inheritance issues, are not considered. VERY difficult and scary to get remarried in my position and at my age, but I appreciate you thinking of me! And I was starting to think you were one of the "mean girls" on this thread!
Thanks, Bee and Mona...I'm glad this thread has taken a more constructive turn, instead of the "haves" pontificating to the "have nots"!
Back from Black Friday shopping....in one piece!! YAY!!! Also won a $100 gift card at Sports Authority (shhh...don't tell the King...he might take $40 of it!)
davidrmoran...so appreciative of your concern! We already tried the "domestic partner" approach years ago with his former employer...to no avail. It seems like hetero domestic partners are discriminated against!! I would have to be a male, or my boyfriend a female, for me to get benefits. Apparently, so long as marriage between a man and a woman is an option in the state where you reside, you are not entitled to "domestic partner" benefits if you are a hetero couple. Obviously, extenuating circumstances, such as inheritance issues, are not considered. VERY difficult and scary to get remarried in my position and at my age, but I appreciate you thinking of me! And I was starting to think you were one of the "mean girls" on this thread!
Thanks, Bee and Mona...I'm glad this thread has taken a more constructive turn, instead of the "haves" pontificating to the "have nots"!
Apparently, so long as marriage between a man and a woman is an option in the state where you reside, you are not entitled to "domestic partner" benefits if you are a hetero couple.
little bee, in my example, the state is Pennsylvania and the company's headquarters is in Pennsylvania. The state of Pennsylvania does not recognize domestic partnerships. My friend's (female) boyfriend is on her plan. It is still very costly because the health plan is extremely rich in benefits and the monthly premium for the employee and domestic partner coverage is in excess of $1,800 per month! The imputed income portion is over $800 per month. Then she (he in turn) pays 28% to the emperor's minions, 3% to the state, and 4% city wage tax on the imputed income.
I'm glad this thread has taken a more constructive turn, instead of the "haves" pontificating to the "have nots"!
Now wait a minute! msf told me:
You had written that that your new plan had "three times the cost with half the benefits". Perhaps that means to you the same benefits (payments for doctor visits, hospital care, etc.), but with higher copays/coinsurance. And "3x" has now become "far [more]." As you said, words can be misleading.
So I must now be a "have" because he told me I have the same benefits on my old and new plan and 3x the cost is not far more.
Mona...Yes, you are most definitely a "have" in the eyes of the Administration! Now stop gloating, will you??
Don't know why we were told in two states...Michigan and Florida...that I could not be on his benefits as a domestic partner. Going to look into this more...maybe go through every state till I find one that allows this? Better sell the house and buy an RV!!
Dave, where you been, dude? I thought maybe you had gotten injured in a scuffle over Doorbusters at the mall! Actually, I was starting to feel really bad that maybe I hurt your feelings with that pontificating wisecrack I made
Glad you're back in the fight! Unfortunately, I'm a bit under the weather today with a bad cold...were you sticking pins in your little5bee voodoo doll? I should be good as new in a couple days (would probably be better in a few minutes if had my old healthcare plan...you know, the one Obama said I could keep?)
Anyways, can't wait to pick up where we left off! See ya soon!
Comments
I specified in an earlier post that my "grandfathered" plan was unchanged, as there seemed to be confusion in other posts, namely, that a plan could be "changed" to be compliant with ACA and still continue on as the "same plan." That would seem to present difficulties (though not impossible, depending on what was in the plan to start with), and for the most part, old plans would have to be shelved or continued on a parallel, noncompliant path, the decision being up to the issuer.
Plans that were started in 2013 and were not on the health care exchange seem to fall into a special category.
Thanks for the many links. I've read a few and will look more closely at others.
Thank you for the kind words - I likewise appreciate your posts and calm style.
No, I don't write anywhere. Just comments and thoughts here and there from time to time when something piques my interest.
ACA is a particularly fascinating subject from so many perspectives - political, economic, legal, and systems design. (The more I read, the more impressed I become on how complex and how well thought out it is). And of course, the personal - losing my plan at the end of 2014 (the plan had gotten a one year reprieve).
You must be (he claimed without evidence), if not a writer or academic or pol assistant, someone familiar with policy and law and the brutal and often ugly draftings thereof.
I do hope your new plan(s) are close to what you and yours need.
Calm style is not always something I have had applied to me, or not overwhelmingly, throughout my writing and editing career, although one certainly does learn to modulate. I must notify friends and family tonight.
l5bee:
>> I don't think ANYTHING should be mandated!
Got it. I think we all properly infer your libertarian stance. Assault weapons for all, crazies and children included? I doubt you believe what you write. I guess I do not mind paying firefighters to douse your enflamed house, maybe even would help pay to rebuild it near a regularly flooding shoreline, one time anyway. But I gotta tell you, if you ride without a helmet (no mandates for my biker freedom, dammit, screw all you fascists), some of us would pay for your ER care once only, grudgingly, and wrt your next collision might hope for a different outcome.
And if you don't, oh, lemme grope for an example, vaccinate your children, another of those God-damned libtard-plot freedom-denying Obama-related mandates, oh, no: well, you might well have an actual fight on your hands, and from HC pros and other parents, too, not from just us collectivist-oriented citizens.
Mona
l5b: I apologize for having overinferred when you were delimiting. Sorry about that.
You do realize of course that all Gruber was doing, with bluntness, was explaining how insurance works, and always has. This is gov-enforced redistribution of moneys, forcibly taking from us hardworking clean-living wealthy (comparatively) and not so wealthy and effectively giving to the Frito-eating chainsmokers (heeeyuge numbers in red states of course, all of them chanting hatred of libtards and the prez).
It is a little bit as if I went up to NH and pointed out that their extremely high property taxes go, in part, to paying for treating trauma to legally unhelmeted bikers' heads, living (tax)free or dying, in a redistribution of moneys from lucky property-holders to the foolish, and that only a state with voters as stupid, oops, I mean independent and fiercely freedom-loving, as NH would permit such a money-redistribution situation to persist.
Gruber's frank but politically suboptimal characterization did not affect my confidence in ACA whatsoever, and I was very surprised it would change anyone's. What did people think ACA did, and how it did it? It's mandated insurance! Wisely conceived by rightwingers, bless 'em. Mandated individual responsibility and all that stuff. I mean, seriously. Stupid is actually a nice way to put it. Thank God SS is not voluntary but 'enforced', like so many smart things.
Gobble to all for our blessings.
Then, of course, there's:
http://www.forbes.com/sites/theapothecary/2014/11/10/aca-architect-the-stupidity-of-the-american-voter-led-us-to-hide-obamacares-tax-hikes-and-subsidies-from-the-public/
That doesn't do anything to change the core problem of the healthcare industry having a bank-like situation of "heads we win, tails we win." It's not that the health care industry has to lose, but it didn't even give an inch. Everyone has to have health care - healthcare industry cheers for more customers and goes right on charging what it was charging (and hey, if everyone has to have insurance, why not charge even more?)
This is not the best comparison, but I guess I think of it in the way that I think of student loans and college costs. College costs have gone through the roof from the standpoint of pretty much anyone can get a loan. If everyone has to get health insurance, how has the core problem of soaring costs even been approached? It hasn't and - I believe - it won't, which is why I remain long healthcare.
Or do you think people should just not get any medical care if they can't afford it, that whole bit in the Declaration of Independence about the "right to life" endowed by the creator be damned?
One may not have understood all the mechanics, but IMHO those remarks communicated the fact that younger people's premiums would tend to support those of older people. Nothing opaque there.
To some extent, it's a matter of "paying it forward". Younger people are paying more now in order to ensure that when they're older, they aren't hit with excessively high rates. That's the way whole life works too - you pay in "too much" at an early age in order to lock in the rate for when you are older. (There are various reasons why I don't think whole life is a good idea, but this is not explicitly one of them.)
Regarding medical cost inflation - it's a real problem, and one of the justifiable complaints against ACA is that it doesn't do enough to contain costs. But that's not to say ACA has no provisions to address costs - just that they're not direct.
ACA requires an 80%-85% medical loss ratio, meaning that at least 80% (or 85% for large employer plans) of premiums must go toward actual medical expenses, and not toward insurer overhead/profit. My insurer did not raise rates in 2012 or 2013, yet in both those years I got (small) refunds because their medical payouts were less than they had anticipated. (This ACA provision became effective in 2011.)
The ACA has changed the insurance landscape, both explicitly and implicitly. It explicitly provided for the creation (and initial subsidization) of non-profit "Consumer Operated and Oriented Plan (CO-OP) insurers.
In placing an emphasis on value delivered, it seems to have spurred an increase in provider-owned health plans. (These are plans that own and operate their own facilities). At their best, these can provide some of the best and most efficient care in the country - think Kaiser. Historically, the concept goes back at least to the Little Flower, Fiorello LaGuardia, who instigated the creation of "a new type of community health program", that became the Health Insurance Plan of Greater New York (now just another commercial cog in a larger insurer).
If ACA plans are going to have narrow networks, the provider-owned plans may be a good approach. They should be more efficient (so the theory goes) because the providers are not fighting the insurers. Perhaps that means that there's even less pressure to keep costs down, but in a competitive world, they'll lose business to other insurers (like the nonprofit Co-ops) if they don't at least match pricing.
The ACA has created an environment for a lot of experimentation. Give it time to see what the industry comes up with. (I hope something good pops out before I get to Medicare.)
The way ACA is structured, a lot of responsibility still rests with the state insurance regulators. You can see how they've done with 2015 rates here:
http://www.pwc.com/us/en/health-industries/health-research-institute/aca-state-exchanges.jhtml
This information is very important in understanding healthcare costs.
http://www.truecostofhealthcare.org/summary
" -Almost all prices in health care are hidden from both doctors and patients. Any cost that’s hidden or confusing is easy to inflate."
"-Most diagnostics tests and procedures are inexpensive to perform."
"-The charges for these tests, however, have no relation to the actual cost (or expected reimbursement) of these tests."
"-Hospital Bills are, for the most part, works of complete fiction."
" -Inflating the charge on every service a hospital provides has two major consequences:
a. It gives an unrealistic (inflated) impression of how much health care really costs.
b. It further allows hospitals and insurance companies to abuse people."
Scott...I totally agree with your comment. I feel fortunate that I can absorb the higher premiums, I just wish I had more options.
I realize that my decision to retire at age 47 came with the added expense of funding my own health insurance. I didn't realize, however, that this expense would rise so quickly. On this Thanksgiving weekend, I am thankful for all MFO contributors who have helped me manage my investments effectively.
Perhaps less so for someone able to retire at 47 yet now surprised at how expensive health insurance is. I certainly hope you get what you need and can afford it and have been able to plan for it more or less. I would suggest you work in longterm-care and umbrella liability insurances too, and no, I am not connected to the industry. It is great to hear that MFO is helpful that way; it has been to me too.
I would have expected you to be a major cheerleader for ACA, since your costs would be much higher with things staying as they were, at least over time.
@Mona, name deinsulting noted.
http://www.theatlantic.com/politics/archive/2013/11/what-the-brosurance-and-creepy-uncle-sam-ads-dont-get-about-millennials/281667/
I can't speak for Mona, although I have tried defending her on this thread, but the dilemma that those of us who self-insure have, is the lack of choices...all of them bad. Here are mine:
1) status quo...when I retired 11 years ago, I realized that I would be responsible for my own health care costs and acted accordingly, but who could predict 35%/year increases in premiums? And how long do I have to live to make the ACA work for me?? 500 years?? I was doing just fine with my catastrophic HSA compatible plan and paying for other costs out of pocket. Well, at least my HSA has done well!
2) get married...boyfriend is retired automotive engineer from Big 3 automaker (the one that didn't take a government bailout). Upside... low premiums and great health care; downside...crazy relatives.
3) start another business...have thought about this seriously. Was lucky once, but so much government regulation now. As you probably know, I don't like that!
4) work at Starbucks...less time to golf, invest, work out, and work at food bank.
This, in my opinion, is a prime example of "health care inequality"; those of you who have it, please be a little considerate of those of us who don't. This would be the equivalent of me driving up to the food bank where I volunteer in a Mercedes. Not good optics...as they say in the media.
Gotta go...Black Friday sales await and because I have been posting on this thread, I am way behind on Ted's posts and need to get caught up. I am one of those who sincerely appreciate his work and I wish I had defended him when the knives were out!
Hope I don't get injured in the Black Friday melee...would my insurance cover that?
Many of you did an incredibly perceptive job at dissecting and explaining the intricacies of the Affordable Care Act ( ACA, Obamacare). Kudos to all participants.
I initially chose to stay away from this often heated, and expected controversial Healthcare debate. But I succumb to temptation by dipping my oar into this quagmire. A few of the postings are purely speculative assertions and opinions that are totally devoid of supportive evidence.
Hippocrates said: “There are in fact two things: science and opinion; the former begets knowledge, the latter ignorance.” It is crucial to understand the world as it is, not as each of us want it to be.
From a pragmatic perspective, the Health plan itself is highly complex with unfathomable and unknowable interactions. This was and is a highly charged issue with each individual’s views dictated by his personal experiences and circumstances.
A true test of the plan to accumulate sufficient data to make an informed assessment requires the passage of time. Perfectly good outcomes and perfectly bad outcomes at this juncture are illusive and incomplete. A final judgment (likely one doesn’t exist because of a dynamic marketplace) is premature.
As Seneca observed: “When a man does not know what harbor he is heading for, no wind is the right wind.” When making a business decision, Buffett and Munger strongly recommend walking away from the project if the potential benefits 10 years in the future can not be reasonably estimated. Given the uncertainties of ACA, I suspect that adhering to the Buffett-Munger rulebook suggests a pass .
Is Healthcare really free? Of course not! Those who benefit from the program easily see its merits. That’s a first-order effect. What we don’t immediately see is the secondary interactions. The incremental resources committed to the ACA program will be diverted from other alternate opportunities. What is the government’s record relative to the efficiency and effectiveness of their other social programs? The Buffett-Munger rulebook requires scrutinizing this database for a signal. Each of us will answer that question differently, and likely with much emotional energy.
In an 1850 essay, Claude Frederic Bastiat wrote: “Between a good and a bad economist…....the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee.”
All this is difficult for me. I’m not a health expert, and I do not plan on becoming one. I leave that chore to my wife. I do try to apply Occam’s Razor when sorting through complex options: I prefer to choose that option which has the fewer unproven assumptions and/or at least some experimental data to backstop it. As Confucius advised: “Study the past if you want to divine the future.”
I try to deploy Charlie Munger’s Mental Model framework to illuminate the dark future. From Economics 101, the standard supply-demand curves suggest that costs will increase given that demand will increase because of added participants, whereas supply will basically be inelastic, remaining somewhat fixed, at least for a rather long period. Secondary feedback loops will exasperate the effect since new participants will be encouraged to use the services more frequently and service providers will chafe under newly minted rules, regulations, and cost containment practices. There will likely be a nonlinear, non-predictable interaction.
Historical (National experimental data sets) records suggest that simple, one-payer systems have not generated anything close to perfect outcomes. In both England and Canada, wait lines are long for conventional ailments, and when more challenging treatments are required, patients often travel to the US for medical service when financially possible.
I have some anecdotal evidence from friends in New Zealand. In New Zealand, their healthcare system has evolved from a single payer concept into a two-tier subset. A private network necessarily reinforces the government program. With increased demand and a truculent, limited supply, quality will deteriorate. Incentives to increase supply under tight government controls is an uphill battle.
Also, scalability is an unsettled issue. Single payer systems have only been tested in rather small countries when contrasted against the immense population of the United States. On the other hand, if any agency can handle scale miracles, the USA has so demonstrated time and time again.
I recognize that I’m assessing the issue from a very broad, overarching macro-perspective, but that viewpoint should be included as part of any discussions. It’s my attempt to drive some of the emotions and policy biases out of the debate.
The emotions have been deep in many of the MFOer’s submittals. I’m not overly riled by the topic, and have only read a small fraction of the comments. On a personal level, my wife’s health plan will see very modest program changes and cost adjustments; my health plan will see more extensive changes and a large, but manageable increased cost increment. It’s intriguing that she’s more incensed by the mandatory changes than I am. There is a priority ordering difference between men and women.
I hope this belated entry does not add more fuel to the fire; it’s hot enough without my participation. This is a fire that will burn hot and long into the foreseeable future. Final resolution demands more experimental data. That’s the way of science. It requires patience. It requires an examination of ongoing national experiments.
Something like 60 nations are currently doing single-payer or two-tier health experiments. We should critically examine their effectiveness, efficiencies, and shortfalls. It is far better to learn from their outcomes than to replicate the same mistakes.
One surprising projection from our current plan is that the wiz-kids anticipate that roughly 10 % of our population will still remain off the covered roles given the current operational rules. Much work needs to be done.
Until then, good health and good investment success to all MFO members. There is a coupling here that alert MFO members can exploit.
Best Regards.
Don’t Miss the Health Insurance Deduction if You’re Self-Employed:
irs.gov/uac/Newsroom
Agree, this has with struggle led toward a productive set of discussions. Yay!
However, there will be imputed income.
Mona
ah, got it; good catch.
davidrmoran...so appreciative of your concern! We already tried the "domestic partner" approach years ago with his former employer...to no avail. It seems like hetero domestic partners are discriminated against!! I would have to be a male, or my boyfriend a female, for me to get benefits. Apparently, so long as marriage between a man and a woman is an option in the state where you reside, you are not entitled to "domestic partner" benefits if you are a hetero couple. Obviously, extenuating circumstances, such as inheritance issues, are not considered. VERY difficult and scary to get remarried in my position and at my age, but I appreciate you thinking of me! And I was starting to think you were one of the "mean girls" on this thread!
Thanks, Bee and Mona...I'm glad this thread has taken a more constructive turn, instead of the "haves" pontificating to the "have nots"!
little bee, in my example, the state is Pennsylvania and the company's headquarters is in Pennsylvania. The state of Pennsylvania does not recognize domestic partnerships. My friend's (female) boyfriend is on her plan. It is still very costly because the health plan is extremely rich in benefits and the monthly premium for the employee and domestic partner coverage is in excess of $1,800 per month! The imputed income portion is over $800 per month. Then she (he in turn) pays 28% to the emperor's minions, 3% to the state, and 4% city wage tax on the imputed income.
Now wait a minute! msf told me:
So I must now be a "have" because he told me I have the same benefits on my old and new plan and 3x the cost is not far more.
Mona
Don't know why we were told in two states...Michigan and Florida...that I could not be on his benefits as a domestic partner. Going to look into this more...maybe go through every state till I find one that allows this? Better sell the house and buy an RV!!
boss.blogs.nytimes.com/2014/12/01/its-not-all-about-the-premiums/
Glad you're back in the fight! Unfortunately, I'm a bit under the weather today with a bad cold...were you sticking pins in your little5bee voodoo doll? I should be good as new in a couple days (would probably be better in a few minutes if had my old healthcare plan...you know, the one Obama said I could keep?)
Anyways, can't wait to pick up where we left off! See ya soon!
Your favorite red state Conservative...little5bee
Dude?!?!
Oh, I get it.