You get downvoted but I believe it’s absolutely the truth.
However, the majority of Americans don’t see themselves as being exploited, they have been so brainwashed in my view that they operate against their self-interest.
They identify more with celebrity millionaires than the bum in the street, although they are just one medical bill away from becoming a bum too.
Meanwhile the Democrats are just as beholden to the capitalists unfortunately and now the capitalist will fully take over society. Maybe a CEO or two could fall, but that will only be the excuse to accelerate the surveillance state the USA will become.
And meanwhile these posts keep getting flagged, as though HN is not the right place to talk about disruption of the thing that will likely lead to the downfall of American exceptionalism, if not America itself.
We are taught that American democracy and free markets are special, unique, unparalleled prosperity and progress. But even the founders knew the tree of liberty had to be periodically refreshed with blood from time to time. January 6 is not a strange blip, and at some point it wont be the fringe crazys on the steps, but everyone who thought their 401k was equivalent to generational wealth. Ownership is generational wealth, and the majority are going to find out they don't have much of it.
Not one person in any health insurance company has the job to help someone heal. Insurance is a clerk function, jammed in between patient and doctor. They do no service that medicare doesn't do already.
Confusing things is the ACA is cheap for people who get subsidies (if you're near poverty) but for those us self employed or make medium income, our payments to health insurance companies are $1500 or more per month. For what? We get denials at our most vulnerable moments.
Abolish insurance. Let us buy into medicare or make M4A like most other countries have. Insurance is a old sick system that way outlived it's grifting life.
It's actually worse. Not only does insurance function as a clerk, but it acts as a clerk whose job is to find ways to not pay. This means that medical offices also hire clerks, whose job is to jump through all the hoops that insurance comes up with so that the medical office gets paid. You could make things much more efficient by getting rid of clerks on both sides. (I mean, you'd still need some clerks. Far fewer, though.)
Make your local hospital -- be your primary hospital, this is ALSO you're insurer. They tell you what doctors to go to, etc...but they pay for things when you're traveling too...so its in other hospitals' best interest to have okay rates so they all pay about the same and not crazy.
The hospital benefits because: Nearly guaranteed and predictable MRR based on monthly premiums (income based maybe 4% or something)...a lot less billers all around, etc.
Health Insurance companies do two things: (1) Negotiate price of services with hospitals and doctors, and drug companies. (2) Determine if the treatment is medically necessary.
You are not hiring insurance companies to do the second part but they do it any way in order to increase their profits. They should be removed from this role via legislation.
The first part is necessary, because hospitals and drug companies would charge even more if nobody tried to control the prices. But the consumer is the best person to keep prices in check. It is challenging because consumers of the knowledge asymmetry. Regardless, the consumer needs to feel the cost.
One employer I know of has an excellent solution to the problem: Make employees pay 100% of their medical bills up to an out-of-pocket maximum, such as $6000. That's a large amount, but the employer then contributes a large amount to your Health Savings Account (HSA), such as $4000. This amount is for you to keep regardless of whether you have any medical bills or not. (This money can be used for medical expenses only, but can be used any time, including after retirement). So the maximum you will spend out of pocket per year is $2000. How does this encourage the consumer to scrutinize and control medical expenditure? Because the first $6000 of medical spending in a year is "your money". This is money you'd be able to keep in your HSA if you didn't have any medical expenses. This gives the consumer a strong incentive to reduce costs, question charges, avoid unnecessary services, and so on. When physicians and hospitals know that patients are scrutinizing care plans it will force a cultural change. That cultural change will subsume older practices.
The employer provided $4000 and the $2000 are both "your money" because if you didn't have any medical expenses, you'd be able to keep $6000 in your HSA. As a consumer of healthcare you'll try to protect this money, which means you're more likely to question unnecessary services and overcharges.
This gives the consumer a strong incentive to reduce costs, question charges, avoid unnecessary services, and so on. When physicians and hospitals know that patients are scrutinizing care plans it will force a cultural change. That cultural change will subsume older practices.
This sounds great, until you are in a stressful or life-threatening health situation. Not only that, you are in a worse negotiation position if say, your leg is broken.
Also it might encourage people to postpone needed medical attention (e.g. dentist visits, don’t know if they are covered by insurance in the US) because they are worried that they blow through 4000 that year and don’t have the means to cover the additional 2000.
I have never been left in worse financial straits in my life than the time I learned what "coinsurance" is, and now I consider any health plan with that limitation to be essentially worthless. If health insurance can't protect you from being bankrupted by an unexpected medical experience, what is the point of it?
Meanwhile I pay 1800 euros for insurance plus the first -400 euros you have to pay yourself: 2200. I also pay 4000 euros to the government (as a contractor) so around 6200 Euros and never ever face the risk of medical bankruptcy.
I somewhat understand the reasoning for #2, though. Hospitals are charging insane prices. Perhaps prices are high because hospitals aim to keep the price profitable when it's negotiated lower with the insurance agency, but I fear that it's more because they feel they can do it because people's lives are at stake. Having the insurance agency step in and prevent hospitals from fleecing customers may actually be a benefit, though perhaps agencies have become corrupted and just as profit-seeking as the hospitals. I'm just not convinced that removing insurance agencies would suddenly lower prices.
Covid-19 pandemic supply chain issues caused prices to surge to meet the new costs, but when those issues were resolved, prices remained high because people absorbed the costs and the companies saw no reason to lower them after realizing incredible profit growth. I wonder if we would see the same problem if we removed insurance agencies without regulating the hospitals: with the powerful middle management of insurance agencies gone, hospitals would wield incredible billing power over individuals, who might end up seeing higher bills from their hospital visits.
I don't mean to advocate for things to stay the same; I definitely think things need to be changed. I just don't see the insurance agencies as the problem in the system, in that their removal would repair the majority of our billing issues. I instead see them as potentially a target of a lot of our grievances without actually potentially being the cause of every one of them.
I have sometimes the feeling neither Noah nor most of commenters here are aware that there are a few other countries outside the US, and most of them have a functioning health system - at least "functioning" compared to the US one. Otherwise we wouldn't need so many opinions and thoughts (and prayers) every time the malfunctions are uncovered.
Much like "perfect attendance" rewards in schools, I don't think this approach is very fair to people with chronic illness. Their condition is not their fault. These expenditures aren't really discretionary. And yet, under such a plan, they'll still be spending on health care while their peers get $4000 bonuses. To a large extent this also applies to people with kids, or even to older people. All that "scrutinizing and controlling medical expenditure" is a great deal for the young and childless and fully able, at the expense of every other demographic. It's almost anti-insurance, in a way. Instead of insulating people against catastrophic expenses for things beyond their control (the basic purpose of any insurance and the thing the current system fails at) it would force even more people into medical bankruptcy.
That doesn't sound like an excellent solution to me. Maybe some variant of it could work - I do like the part about eliminating the "use it or lose it" aspect of current HSAs - but as stated it sounds pretty unfair. "This will force a cultural change" has rarely worked out that way in practice. IMX it usually leads to a worse culture where all pretense of collaboration is abandoned in favor of chasing loopholes and bogus metrics, and more often than not that's intentional.
> they'll still be spending on health care while their peers get $4000 bonuses
Life is inherently unfair to some extend. Some people are born beautiful and others are born ugly. Some are born intelligent and others are born dumb. You can't equalize everything.
Yes, life is already unfair, but that's no excuse for advocating things that make it even less fair. After that response, I'll have to conclude that your "excellent solution" was just a money grab.
>(2) Determine if the treatment is medically necessary.
>You are not hiring insurance companies to do the second part but they do it any way in order to increase their profits. They should be removed from this role via legislation.
Okay, but in any system, even the beloved European ones, someone does this -- they can't just spend bottomless money on everyone, but draw a line based on the relative costs and benefits. US insurers are just unusually random, kafkaesque, and inconsistent about how they do it.
There is never one platonically optimal "medically necessary" treatment; everything's a tradeoff, and the calculation will always depend on considerations other than "maximize this patient's health/lifespan as a much as physically possible".
> So you could make the case that at this point private health insurance is, in large part, a parasitical racket. At which point at least some readers will ask me why I didn’t back Bernie Sanders in his call for single-payer, Medicare for all.
> The answer is that this call was and remains politically unrealistic.
The USA is so ff-ed for normal people and it will get so much worse. Not for the HN temporary embarrassed millionaire crowd here of course.
Meanwhile George Carlin said it best:
> it’s called the American Dream because you have to be asleep to believe it.
Health insurance is destructive entrepreneurship. It is essentially the equivalent of price gouging people needing to cross the river with an exorbitant bridge toll.
It's also a great example of why GDP is an imperfect measure of economic output.
The _THEORY_ of why these companies need to exist is to to more efficiently allocate limited available care to a pool of patients. However in practice they do this so inefficiently (by design), that any money paid to the employees of insurance companies would be better spent on educating additional doctors.
The accounting in this post is breathtakingly dishonest. I'd say I expect better of Krugman but I actually don't.
Consider this argument: "I think taxes should be 10% higher, therefore, the taxpayer subsidizes 10% of all your purchases".
It is structurally identical to "Employer healthcare comes out of untaxed income, therefore, the taxpayer subsidizes your healthcare to the amount of tax which would counterfactually get collected".
Or this one:
"State sales tax is not paid on food, therefore, the taxpayer subsidizes your groceries to the amount of sales tax which is not collected".
This behavior greatly detracts from an otherwise fairly thoughtful point. I don't understand why people think it's ok to conduct themselves this way, Krugman definitely knows what he's doing here.
Insurance "Discounts" in themselves are a huge problem; and one rarely discussed.
Imagine what would happen if you forced healthcare providers to offer flat pricing? Meaning the "cash price" is always THE price, and either insurance companies pay that cash price or you pay it with literal cash. No biased pricing.
Suddenly in-network/out-of-network cannot exist, insurance companies and cash-paying patients are on the same side; both fighting overcharging TOGETHER. You've massively reduced admin overheads and made the market more efficient.
If we want to continue this "for profit" model we have today, we could make two changes, and it would hugely reform the market. Make it almost competitive and healthy.
1) Ban healthcare discounts across the board. Everyone pays a sane cash price. Meaning no more fake price + fake "discount" games. No more $100 bandaids with 90% discount.
2) Ban employer provided healthcare. Instead, increase the HSA cap, have employers pay pre-tax into that, and then consumers get to pick their insurance from the market. Therefore, they can "punish" insurance companies for misbehavior since they're now the actual customer (rather than their employer).
You've now created actual price competition for healthcare services and actual competition for insurance. That is how this is MEANT to work, but currently doesn't because you cannot pick either your healthcare providers OR insurance options, someone else is doing that for you.
It absolutely floors me that this isn't already illegal.
I've been to healthcare providers that charge one a reasonable amount until you've hit your deductible and then they charge a higher amount. That was a real eye opener.
There would presumably still be some providers who charge more than others. The insurance company will need to set a limit on how much they're willing to pay for a given service. Providers who charge above this limit are out of network; other providers are in network.
I do still see the benefits of what you're proposing, but the question remains of what happens when you're accidentally at an out of network doctor.
This would probably be harder to implement in this manner than you think because insurers and hospitals have an increasingly financial/hedgefund owner slant and those guys basically specialize in fuckery to get around bans.
You would probably be better off mandating each provider take medicare/medicaid for up to some percentage of their work (say 40%), negotiate a hard bargain on that pricing, and then opening whichever one you choose up to people that don't currently qualify for some reasonable premium upcharge. You could even integrate that into business insurance plans so that businesses can provide more on top of this service as a benefit if they chose (but you wouldn't lose basic coverage if you got unemployed)
No value. There's no risk in providing health insurance to 200 million people. They are, like the journal publishers, just taking advantage of a collective action problem. Even worse, Obamacare enshrined them into law and attempted to make it a fineable offense not to buy their products. Its an entirely parasitic industry, and most of its overhead is dedicated to figuring out ways not to provide health care.
That being said, the only stable function of current Western governments are the graft networks. Everything else either runs by itself or doesn't run at all. They can only function as people expect government to function during emergencies, and that's largely because they can hand out contracts quickly with little review, and possibly use them as pretenses to put long planned projects into action. The countries that have had fully functioning state health care have been spending the 21st century trying their best to dismantle them and sell them off.
That being said, Krugman is another on the list of recently unemployed extreme partisan shills frantically trying to rebrand now that the corporate world sees the Democrats as a sinking ship. He was originally an amazing, careful economist, but happily prostitutes his achievements for praise and cash.
> So you could make the case that at this point private health insurance is, in large part, a parasitical racket. At which point at least some readers will ask me why I didn’t back Bernie Sanders in his call for single-payer, Medicare for all.
> The answer is that this call was and remains politically unrealistic.
It was politically unrealistic because Democrats campaigned day and night against it, suddenly becoming tax hawks and pretending that they didn't understand how much premiums were, because they were paid to, and Krugman lined up at the trough. Single-payer had far more than supermajority support from the Democratic base, and had achieved majority support from Republicans during the Obama administration, with bipartisan public disgust at Obamacare (other than the Medicaid expansion, which had nothing to do with the Heritage through Romney plan, but was used to confuse the public.)
He trots out the industry line:
> The more important problem is that most Americans with employer-sponsored health insurance are happy with their coverage
But ignores the direct questions about single payer that were asked, poll after poll. He's a dog, and stating the obvious. The reason 90% of the public landed between shrugging and cheering when a law-abiding, successful businessman with a wife and children was gunned down in public in cold blood is not because people are satisfied with their healthcare.
If the US spent the same % of GDP on healthcare as any other country, it would have been in surpluses for decades.
The problem here is that health insurance purchased privately is a legalized racket. These companies need to be prosecuted for cheating but obviously that will never happen.
A personal example. My dad was visiting from abroad and was diagnosed with pulmonary edema from the long flight. I had purchased health insurance. This was not a pre-existing condition. So he got treated and my expectation is that insurance should pay.
Instead, UHC basically keeps asking the hospital for “documents/records”, the hospital doesn’t respond and then the hospital just charges me.
Now my dad isn’t coming back. So I’m basically going to tell everyone coming to me to fuck off and tell them the person doesn’t live here anymore. But the fact of the matter is, insurance was purchased, it was denied for who knows what reason.
38 comments
[ 3.4 ms ] story [ 81.1 ms ] threadHowever, the majority of Americans don’t see themselves as being exploited, they have been so brainwashed in my view that they operate against their self-interest.
They identify more with celebrity millionaires than the bum in the street, although they are just one medical bill away from becoming a bum too.
Meanwhile the Democrats are just as beholden to the capitalists unfortunately and now the capitalist will fully take over society. Maybe a CEO or two could fall, but that will only be the excuse to accelerate the surveillance state the USA will become.
We are taught that American democracy and free markets are special, unique, unparalleled prosperity and progress. But even the founders knew the tree of liberty had to be periodically refreshed with blood from time to time. January 6 is not a strange blip, and at some point it wont be the fringe crazys on the steps, but everyone who thought their 401k was equivalent to generational wealth. Ownership is generational wealth, and the majority are going to find out they don't have much of it.
Confusing things is the ACA is cheap for people who get subsidies (if you're near poverty) but for those us self employed or make medium income, our payments to health insurance companies are $1500 or more per month. For what? We get denials at our most vulnerable moments.
Abolish insurance. Let us buy into medicare or make M4A like most other countries have. Insurance is a old sick system that way outlived it's grifting life.
The hospital benefits because: Nearly guaranteed and predictable MRR based on monthly premiums (income based maybe 4% or something)...a lot less billers all around, etc.
You are not hiring insurance companies to do the second part but they do it any way in order to increase their profits. They should be removed from this role via legislation.
The first part is necessary, because hospitals and drug companies would charge even more if nobody tried to control the prices. But the consumer is the best person to keep prices in check. It is challenging because consumers of the knowledge asymmetry. Regardless, the consumer needs to feel the cost.
One employer I know of has an excellent solution to the problem: Make employees pay 100% of their medical bills up to an out-of-pocket maximum, such as $6000. That's a large amount, but the employer then contributes a large amount to your Health Savings Account (HSA), such as $4000. This amount is for you to keep regardless of whether you have any medical bills or not. (This money can be used for medical expenses only, but can be used any time, including after retirement). So the maximum you will spend out of pocket per year is $2000. How does this encourage the consumer to scrutinize and control medical expenditure? Because the first $6000 of medical spending in a year is "your money". This is money you'd be able to keep in your HSA if you didn't have any medical expenses. This gives the consumer a strong incentive to reduce costs, question charges, avoid unnecessary services, and so on. When physicians and hospitals know that patients are scrutinizing care plans it will force a cultural change. That cultural change will subsume older practices.
Shouldn’t the your money figure be $2000, since the employer will only reimburse $4000 out of $6000?
Sorry, but my understanding is that because of Health Insurance companies, the price of many treatments skyrocketed.
Btw, your comment feels kind of GPT-ey but my apologies if you are a real human.
This sounds great, until you are in a stressful or life-threatening health situation. Not only that, you are in a worse negotiation position if say, your leg is broken.
Also it might encourage people to postpone needed medical attention (e.g. dentist visits, don’t know if they are covered by insurance in the US) because they are worried that they blow through 4000 that year and don’t have the means to cover the additional 2000.
Monopsony means that single-payer health care systems enjoy significantly lower prices than market systems.
Universal healthcare is so much better.
Covid-19 pandemic supply chain issues caused prices to surge to meet the new costs, but when those issues were resolved, prices remained high because people absorbed the costs and the companies saw no reason to lower them after realizing incredible profit growth. I wonder if we would see the same problem if we removed insurance agencies without regulating the hospitals: with the powerful middle management of insurance agencies gone, hospitals would wield incredible billing power over individuals, who might end up seeing higher bills from their hospital visits.
I don't mean to advocate for things to stay the same; I definitely think things need to be changed. I just don't see the insurance agencies as the problem in the system, in that their removal would repair the majority of our billing issues. I instead see them as potentially a target of a lot of our grievances without actually potentially being the cause of every one of them.
A different person on the internet had some thoughts that seem compelling: Noahpinion — Insurance companies aren't the main villain of the U.S. health system — https://www.noahpinion.blog/p/insurance-companies-arent-the-...
That doesn't sound like an excellent solution to me. Maybe some variant of it could work - I do like the part about eliminating the "use it or lose it" aspect of current HSAs - but as stated it sounds pretty unfair. "This will force a cultural change" has rarely worked out that way in practice. IMX it usually leads to a worse culture where all pretense of collaboration is abandoned in favor of chasing loopholes and bogus metrics, and more often than not that's intentional.
Life is inherently unfair to some extend. Some people are born beautiful and others are born ugly. Some are born intelligent and others are born dumb. You can't equalize everything.
>You are not hiring insurance companies to do the second part but they do it any way in order to increase their profits. They should be removed from this role via legislation.
Okay, but in any system, even the beloved European ones, someone does this -- they can't just spend bottomless money on everyone, but draw a line based on the relative costs and benefits. US insurers are just unusually random, kafkaesque, and inconsistent about how they do it.
There is never one platonically optimal "medically necessary" treatment; everything's a tradeoff, and the calculation will always depend on considerations other than "maximize this patient's health/lifespan as a much as physically possible".
> The answer is that this call was and remains politically unrealistic.
The USA is so ff-ed for normal people and it will get so much worse. Not for the HN temporary embarrassed millionaire crowd here of course.
Meanwhile George Carlin said it best:
> it’s called the American Dream because you have to be asleep to believe it.
It's also a great example of why GDP is an imperfect measure of economic output.
The _THEORY_ of why these companies need to exist is to to more efficiently allocate limited available care to a pool of patients. However in practice they do this so inefficiently (by design), that any money paid to the employees of insurance companies would be better spent on educating additional doctors.
Consider this argument: "I think taxes should be 10% higher, therefore, the taxpayer subsidizes 10% of all your purchases".
It is structurally identical to "Employer healthcare comes out of untaxed income, therefore, the taxpayer subsidizes your healthcare to the amount of tax which would counterfactually get collected".
Or this one:
"State sales tax is not paid on food, therefore, the taxpayer subsidizes your groceries to the amount of sales tax which is not collected".
This behavior greatly detracts from an otherwise fairly thoughtful point. I don't understand why people think it's ok to conduct themselves this way, Krugman definitely knows what he's doing here.
Imagine what would happen if you forced healthcare providers to offer flat pricing? Meaning the "cash price" is always THE price, and either insurance companies pay that cash price or you pay it with literal cash. No biased pricing.
Suddenly in-network/out-of-network cannot exist, insurance companies and cash-paying patients are on the same side; both fighting overcharging TOGETHER. You've massively reduced admin overheads and made the market more efficient.
If we want to continue this "for profit" model we have today, we could make two changes, and it would hugely reform the market. Make it almost competitive and healthy.
1) Ban healthcare discounts across the board. Everyone pays a sane cash price. Meaning no more fake price + fake "discount" games. No more $100 bandaids with 90% discount.
2) Ban employer provided healthcare. Instead, increase the HSA cap, have employers pay pre-tax into that, and then consumers get to pick their insurance from the market. Therefore, they can "punish" insurance companies for misbehavior since they're now the actual customer (rather than their employer).
You've now created actual price competition for healthcare services and actual competition for insurance. That is how this is MEANT to work, but currently doesn't because you cannot pick either your healthcare providers OR insurance options, someone else is doing that for you.
I've been to healthcare providers that charge one a reasonable amount until you've hit your deductible and then they charge a higher amount. That was a real eye opener.
...I don't think that's true.
There would presumably still be some providers who charge more than others. The insurance company will need to set a limit on how much they're willing to pay for a given service. Providers who charge above this limit are out of network; other providers are in network.
I do still see the benefits of what you're proposing, but the question remains of what happens when you're accidentally at an out of network doctor.
So no networks, but just like current vehicle coverage, the policy's estimation of the cost and what someone is trying to charge may not align.
You would probably be better off mandating each provider take medicare/medicaid for up to some percentage of their work (say 40%), negotiate a hard bargain on that pricing, and then opening whichever one you choose up to people that don't currently qualify for some reasonable premium upcharge. You could even integrate that into business insurance plans so that businesses can provide more on top of this service as a benefit if they chose (but you wouldn't lose basic coverage if you got unemployed)
Yes --- just like Bernie Madoff had a "public relations" problem.
His problem was keeping his profit making scheme hidden from the public.
That being said, the only stable function of current Western governments are the graft networks. Everything else either runs by itself or doesn't run at all. They can only function as people expect government to function during emergencies, and that's largely because they can hand out contracts quickly with little review, and possibly use them as pretenses to put long planned projects into action. The countries that have had fully functioning state health care have been spending the 21st century trying their best to dismantle them and sell them off.
That being said, Krugman is another on the list of recently unemployed extreme partisan shills frantically trying to rebrand now that the corporate world sees the Democrats as a sinking ship. He was originally an amazing, careful economist, but happily prostitutes his achievements for praise and cash.
> So you could make the case that at this point private health insurance is, in large part, a parasitical racket. At which point at least some readers will ask me why I didn’t back Bernie Sanders in his call for single-payer, Medicare for all.
> The answer is that this call was and remains politically unrealistic.
It was politically unrealistic because Democrats campaigned day and night against it, suddenly becoming tax hawks and pretending that they didn't understand how much premiums were, because they were paid to, and Krugman lined up at the trough. Single-payer had far more than supermajority support from the Democratic base, and had achieved majority support from Republicans during the Obama administration, with bipartisan public disgust at Obamacare (other than the Medicaid expansion, which had nothing to do with the Heritage through Romney plan, but was used to confuse the public.)
He trots out the industry line:
> The more important problem is that most Americans with employer-sponsored health insurance are happy with their coverage
But ignores the direct questions about single payer that were asked, poll after poll. He's a dog, and stating the obvious. The reason 90% of the public landed between shrugging and cheering when a law-abiding, successful businessman with a wife and children was gunned down in public in cold blood is not because people are satisfied with their healthcare.
If the US spent the same % of GDP on healthcare as any other country, it would have been in surpluses for decades.
A personal example. My dad was visiting from abroad and was diagnosed with pulmonary edema from the long flight. I had purchased health insurance. This was not a pre-existing condition. So he got treated and my expectation is that insurance should pay.
Instead, UHC basically keeps asking the hospital for “documents/records”, the hospital doesn’t respond and then the hospital just charges me.
Now my dad isn’t coming back. So I’m basically going to tell everyone coming to me to fuck off and tell them the person doesn’t live here anymore. But the fact of the matter is, insurance was purchased, it was denied for who knows what reason.