Good news for us re: Obamacare/ACA

[KJ.]

So... you're saying the payment plan/payout plan is different (which I grasp). But if you're implying in any way that a human can go through life without needing medical attention, there we're going to differ. Theoretically I'll give you that it's possible, but this isn't theory - people get sick, catastrophically in most lives, and require medical attention. So health insurance isn't an option, it's a requirement, especially in America, where the cost of even a moderate level of cancer treatment is enough to bankrupt all but the most wealthy.

I guess I don't see the point you're trying to make. I'm not making any claims about what is realistic or likely to occur. My point that health insurance isn't a 100% known variable was just meant to counter sd's point that you can't think of health insurance as self funded. It's a difference in how the law requires they report their profits, it's a difference in how you quantify your premiums, and it all comes back to that difference between life being inevitable and health only being highly probable. That's all I was going for.

 

[KJ.]

But if you're implying in any way that a human can go through life without needing medical attention, there we're going to differ.

Also, I'll note: you shouldn't be using "life" here, as a health insurance policy doesn't cover you for life. Replace life with "year" and it becomes more believable. But this goes back to the effective period that your premiums cover.

 

[sd'sker]

And for the last time, a bigger pool is not better (for purposes of this conversation). You seem to be forgetting that while a bigger pool does mean there's more people to pay for insurance, there's also more people that need insurance. Both these things increase at a linear rate, so the marginal value of one person to an insurance pool is zero on a cost basis. A bigger pool does have value in reducing the unpredictability of claims since variance increases linearly, but that's beyond the scope of this thread and not what you're talking about anyway.

it is true because there are more healthy people than unhealthy people and it is the healthy people who are needed to, but most likely not to, buy-in while they are healthy. otherwise the incentive is to just take a risk and wait until you begin to get unhealthy, which would create a pool of only high-risk insureds. that is too costly and unsustainable. and if we can get enough of your theoretical people that never need healthcare, well that would just be great.

 

[sd'sker]

Is Obamacare a War on Bros?

It is true — and nobody has ever denied this — that the hypothetical 25-year-old male will pay higher insurance premiums under Obamacare. Now, this 25-year-old male probably won’t pay higher premiums under Obamacare if he does smoke, or have any potentially worrisome medical history, or have family members with any potential medical history, or even if he’s a perfectly healthy non-smoker from a perfectly healthy family but has a low enough income to qualify for tax credits to cover his premium costs. And of course he’d be unaffected if he already gets insurance through his employer.
So, we have narrowed the class of Obamacare victims down to a very, very small group of victims preparing to be crushed beneath the burdens of Obamacare. But to hold up this tiny sub-category as implicitly representative of the entire health-insurance market is misleading to the extreme.

What’s more, the interests of these Victims of Obamacare may be a bit broader than their conservative champions let on. Suppose you are a non-smoking, non-sick, non-poor, completely healthy 25-year-old from a completely healthy family who does not get employer-provided health insurance. Yes, you will be paying higher premiums. Not 146 percent higher, likely Roy falsely claims, but higher. Yet you may also contemplate the varying probabilities that one day you will be one or more of the following:

• poor
  
• sick
  
• a son, husband, or father of somebody who is sick
  
• no longer 25 years old
  

At that point, the freedom-crushing regulatory burdens of Obamacare may turn into a blessing. And this, of course, is the entire concept of insurance. Insurance is the spreading of risk. What distinguishes health insurance from insurance against, say, fire, is that insurers can make a much better guess which customer is likely to need medical care than which is likely to have their house burn down. Some people are bad actuarial health risks, and some people are good actuarial health risks.

That’s the whole dysfunction of our horrendous health-insurance system. The individual health insurance market is a tragic mess: People who need insurance the most can’t buy it, while the only people who can afford insurance don’t need it. That’s the reason for health-care reform.

so, yes, if you look at what your premiums get you for just that year, obamacare might be more expensive, a worse value, and you will have to subsidize others. but if you have any foresight and ever want to go through life with a modicum of security that in time of medical emergencies and catastrophic illness you will be taken care of, then it should be more than worth it. because that is what insurance is, you subsidize others in their time of need knowing that you will be subsidized in your's.

knapplc was right to say 'go through life' rather than year, because there was a time when you would be denied coverage for preexisting conditions and they could place a life-cap on your coverage, no matter what premiums you were paying for the year.

 

[KJ.]

it is true because there are more healthy people than unhealthy people and it is the healthy people who are needed to

If this statement is representative of your mental state in this discussion, this lesson really has no chance of going anywhere. I've been trying to tell you that the sum of a random number of random variables increases proportionally to N. Your response is trying to tell me that insurance is about people sharing risk. Sweet, thanks for that advanced insight.

so, yes, if you look at what your premiums get you for just that year, obamacare might be more expensive, a worse value, and you will have to subsidize others. but if you have any foresight and ever want to go through life with a modicum of security that in time of medical emergencies and catastrophic illness you will be taken care of, then it should be more than worth it. because that is what insurance is, you subsidize others in their time of need knowing that you will be subsidized in your's.

knapplc was right to say 'go through life' rather than year, because there was a time when you would be denied coverage for preexisting conditions and they could place a life-cap on your coverage, no matter what premiums you were paying for the year.

Again, this isn't a discussion on what insurance is. We're talking about the difference between how insurance works with and without the ACA. Correct me if I'm wrong (that was sarcasm: I'm not), but the ACA is not the reason that insurance pays for your claims. That's just the same insurance that's been around for hundreds of years. I'm really not sure why you're bringing that up in a thread about a specific set of laws, but based on the random/irrelevant responses I've gotten so far I shouldn't be surprised.

 

[knapplc]

I clearly need to go back and re-read where this discussion between sd'sker, KJ. and myself started, because I'm not following your replies at all, KJ.

I'll try to get what you're saying, but it's gonna have to wait. Too busy right now. But one thing's for sure - we're having different discussions.

 

[QMany]

Correct me if I'm wrong (that was sarcasm: I'm not) ...

What's new?

 

[carlfense]

Here's a good start. It's a very interesting read, I think.

I'm sure that you noticed that this is the lobbying group for the health insurance industry.

. . . nobody can really deny that all the provisions and restrictions involved have an elegant relationship on each other.

Agreed. It's kitchen sink style legislation.

An insurance company has four policyholders for the next year, and there are no regulations on the discrimination of pricing (excluding race). The insurance company is free to charge all individuals whatever they want based on whatever factors they want. The insureds are:

Taylor - 22yo - Male - Unhealthier than average

Rex - 22yo - Male - Healthier than average

Hannah - 22yo - Female - Unhealthier than average

Gina - 22yo - Female - Healthier than average

The insurance company will charge these individuals what they would expect an average person with their three characteristics to cost. Empirical evidence shows that females cost more than males, and common sense shows unhealthy people cost more than healthy people. So let's say the insurance company comes up with and charges:

Taylor: $30

Rex: $15

Hannah: $35

Gina: $20

The insurance company collects a total of $100 that will be used to pay all claims of all four individuals. But when the next year comes, the ACA restricts insurers from charging anyone the same age a different rate. No matter what the law says, the underlying expected costs for each individual is still the same. The company still expects to pay $100 of claims throughout the year, so now they'll charge:

Taylor: $25 (decrease of $5)

Rex: $25 (increase of $10)

Hannah: $25 (decrease of $10)

Gina: $25 (increase of $5)

Some insured's premiums went up from one year to the next based only on the restrictions within the ACA, while some went down. But the change in the insurance pool did not change. I'd say that's about as close to the definition of redistribution as you can get.

The problem with your hypothetical is that it presumes that Taylor and Hannah could get insurance and/or had insurance before the ACA. If they didn't have insurance prior to the ACA how was their health care delivered? Who ended up bearing the costs if they were unable to pay? Is that not also a redistribution of wealth?

The impact on specific individuals will vary significantly depending on their age, gender, location, health status, income level, and what coverage they have today. The report found that “young, healthy males could see substantial increases due to the combination of the overall rate change and the age/gender rating requirements” while “older, less healthy individuals could see rate reductions.”

This is almost certainly correct. I wonder why the lobbyists for the health insurance industry want us to focus on young healthy males?

 

[sd'sker]

I clearly need to go back and re-read where this discussion between sd'sker, KJ. and myself started, because I'm not following your replies at all, KJ.

I'll try to get what you're saying, but it's gonna have to wait. Too busy right now. But one thing's for sure - we're having different discussions.

i tried and could not figure it out. i am still trying to solve for 'n'.

 

[Junior]

I clearly need to go back and re-read where this discussion between sd'sker, KJ. and myself started, because I'm not following your replies at all, KJ.

I'll try to get what you're saying, but it's gonna have to wait. Too busy right now. But one thing's for sure - we're having different discussions.

i tried and could not figure it out. i am still trying to solve for 'n'.

Duh... the N is for nowledge.

 

[C N Red]

Mark my words. Obamacare will not be good for those of us who pay for insurance already and it will be harder to find docs who will actually take your insurance. Things will soon get very real and things in healthcare will get very sideways for everybody.

 

[carlfense]

Mark my words. Obamacare will not be good for those of us who pay for insurance already and it will be harder to find docs who will actually take your insurance. Things will soon get very real and things in healthcare will get very sideways for everybody.

We'll see. I don't think that there is going to be anything in the way of a catastrophic failure. My prediction: some success stories and some failures.

 

[KJ.]

Here's a good start. It's a very interesting read, I think.

I'm sure that you noticed that this is the lobbying group for the health insurance industry.

I'm sure you noticed that the website is merely hosting a research study done by an actuarial consulting firm that doesn't play in the health insurance market and is widely considered as the premier research firm in the insurance industry. The report is nothing more than a description of the results of predictive modeling on the 91 variables that affect the ACA. I don't care if The Onion is who posted a link to the study, it doesn't change the contents of that pdf.

The problem with your hypothetical is that it presumes that Taylor and Hannah could get insurance and/or had insurance before the ACA. If they didn't have insurance prior to the ACA how was their health care delivered? Who ended up bearing the costs if they were unable to pay? Is that not also a redistribution of wealth?

The real problem with my hypothetical is that I tried to make it simple enough for people here to understand. The ACA obviously can not be boiled down to that, but nobody here is intelligent enough to understand (that's not a condescending jab, I'm not either) the aggregate effect of the entire ACA. That's what the study is for, their models are incredibly good at quantifying and projecting premiums based on all sorts of combinations of those 91 variables. I obviously can only give an example that focuses on the one or two most significant variables, which is what i did.

The impact on specific individuals will vary significantly depending on their age, gender, location, health status, income level, and what coverage they have today. The report found that “young, healthy males could see substantial increases due to the combination of the overall rate change and the age/gender rating requirements” while “older, less healthy individuals could see rate reductions.”

This is almost certainly correct. I wonder why the lobbyists for the health insurance industry want us to focus on young healthy males?

That is the exact point my original post was trying to make. I'm glad you get it now.

 

[KJ.]

I clearly need to go back and re-read where this discussion between sd'sker, KJ. and myself started, because I'm not following your replies at all, KJ.

I'll try to get what you're saying, but it's gonna have to wait. Too busy right now. But one thing's for sure - we're having different discussions.

Nailed it. I think Carl and I are on the same page. sd'sker is about 23 chapters behind.

 

[sd'sker]

I clearly need to go back and re-read where this discussion between sd'sker, KJ. and myself started, because I'm not following your replies at all, KJ.

I'll try to get what you're saying, but it's gonna have to wait. Too busy right now. But one thing's for sure - we're having different discussions.

Nailed it. I think Carl and I are on the same page. sd'sker is about 23 chapters behind.

i do get it, i just do not get why you think it is important. all insurance is a redistribution of wealth because you will probably get more out of it than you put in. so you are saying it is a redistribution of the cost of risk. well, employer-based plans already operate like that. so what is your point?

my point has always been that the aca will make insurance better (and overall cheaper and more accessible, which is why it was desperately needed). i do agree that we have been talking at each other rather than with each other, but why does that make my point any less valid and your point any clearer or more valid? again, so you see it as a redistribution of wealth. so what? that is the point of insurance and over time it should even out, thus the need of a mandate and how insurance needs to work. but i guess you would rather look at how insurance and premiums work for a group of people for one year and base your entire assessment of aca on that. that is fine, that is your prerogative.