Simple facts about health insurance-decisions you need to make

The rhetoric both for and against the AHCA tries to mislead and deceive average Americans with talk of subsidies, premium calculations, deductibles, pre-existing conditions and more.

As you decide where you stand, consider the following facts of health benefits life:

  1. When deductibles go down, premiums go up
  2. If you mandate covered benefits, premiums will be higher than in their absence
  3. If you do not permit underwriting based on health status or likely risk, others who seek to buy that insurance will pay much more in premiums than their individual risk factors dictate
  4. If you do not mandate a diverse pool of insured and allow individuals to determine when they need health insurance they will select in their best interest
  5. Health care costs via paid claims make up the vast majority of a premium
  6. If you want premiums lowered, there must be some controls placed on access and/or utilization. Think narrow networks,  strong care management, high deductible plans
  7. Competition between insurance companies is of little value while competition among health care providers may lower some prices.
  8. Health insurance companies do not make outrageous profits. Their net profit is typically in the same range as a regulated utility
  9. The high drug prices you see displayed by politicians are retail prices that virtually no one pays. Drug prices are negotiated by pharmacy benefit managers which also develop formularies and promote generic use to lower net prices
  10. Few people can make objective decisions balancing cost and health care ie. become market driven consumers

And then we need to make decision:

Should spending on Medicaid and Medicare be fully open-ended without limits?

Can we accept any forms of rationing of care to control costs?

Can we accept government making decisions affecting our access to health care?

Are we willing to change our expectations for health care regarding convenience, speed and access?

How much interference by a third-party between patient and doctor is acceptable?


2 replies »

  1. I think you gave a large set of issues based of coverage and premiums. As much as I want to go with the cheapest cost to me, I have been struggling with the moral side of the issue
    Take two family men working at the same employer. One is in an entry level job, just starting out in life and another is top of the pay scale working on retirement. Let’s assume that they both have the exact same high deductible plan. No known risk factors.

    Both get the exact same cancer, get the same treatments and to make it a happy ending they both are cured.

    The young worker might end up paying 50% of his annual wages paying his deductible and out of pocket expenses just because of where he is in life. He may get in a hole so deep that he will never recover.

    The older worker, well, it is just a few weeks pay to him.

    Life is not fair, but there has got to be a way to balance out health treatment that does not depend on how rich you are. When it comes to babies, nobody dares to question spending $1 million on premature babies in ICU.

    This is my moral dilemma on this issue. Sometimes it is beyond the money. I can’t believe I just say that, but I look at my son and his family will never make the kind of money I made because he keeps getting deployed and starts all over when he gets back.


    • You have a point and life is not fair, but don’t forget there is a $6,650 annual limit on out of pocket costs for a single person so that is about as bad as it can get for the younger person. On the other hand, Medicare has no out of pocket limit so seniors must buy supplemental coverage which means many pay more in total premiums than a younger person getting subsidies.


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