Question to those smarter than me: why must there be a distinction between the “individual” market and the “employer” market? Why can’t insurance simply be offered to the entire population as one big pool?
When I said consumers choose narrow networks, I was talking about consumers in the individual market. The big insurers who had wider networks aren’t leaving the group insurance market. They’re leaving the individual market because they were losing money.
Tatin, the trouble with that is that, again, the people who need more services are segregated from the healthier people. Great for the healthy people. Not so much for the sick people.
prospect1 — Great question. Not only would it solve the network problem, it would avoid all of these complications people want to place on insurance, such as monitoring lifestyle or chopping up the population into ever-smaller risk pools or selling someone only the insurance they “need.” Also, administration costs would plummet. Makes a lot of sense.
@prospect1 because then we get into the reasonable, sane, and effective type of system that we’re not allowed to talk about here on CC 
Is your proposal, then, that each age group ought to be charged for the costs of their age group? Thirty year olds should bear the cost of maternity coverage, plus the minimal cost of cancer, heart attacks and strokes in their age group, and 55-year-olds should bear the cost of heart attacks, cancer, strokes, and chronic diseases of middle age, but not maternity?
OK then. So you think premium prices for 55-year-olds should go UP sharply, and prices for 30-year-olds should go DOWN. That would be the result of your proposal. Right now, in the individual market, 64-year-olds can be charged only three times as much as 21-year-olds. But in fact, 64-year-olds cost five or six times as much as 21-year-olds. You want to trade off a pregnancy for three breast cancers and a heart attack (something like that)? That’s what you’d be doing. Be careful what you wish for.
To actually save money, you have to stop covering conditions people actually have. You can’t save money by not covering pregnancies in 60-year-old women.
I’m subsidizing pregnancy care and child coverage, sure. And others helped me with some of my costs. Yep, it’s the nature of a pool. Do you want me to pay more because I may need another MRI or I have had kidney stones? (And you may not need those treatments.) But save me some $ cuz I won’t get pregnant? Or hey, price differently for men, who don’t get pregnant, or women who won’t need Viagra? If romani got her gall bladder out, she won’t be costing me those ER and doc costs. Should we give her a discount? Or do we deny child med expenses, let nature take its course? After all, I’m not a child.
And still streamline the admin costs?
That would require enough subsidies or vouchers, and/or a stronger individual mandate (than exists with ACA), to bring the entire population into the pool, rather than some people deciding that they are healthy but not wealthy and risking going without until they get sick (adverse selection problem). Employer (or union) medical insurance pools include the healthy as well as the sick because entrance into them is not self-selected primarily based on health status (note that they do not allow employees to opt out without proving that they have medical insurance from some other source).
While guaranteed issue is popular, it requires some means of getting the entire population into the pool to avoid the adverse selection problem. Those methods (subsidies paid for by additional taxes, individual mandate) are not popular. People seem to have trouble making the connection.
@prospect1 we cant get to universal yet because some big loud influencers insist it’s socialism, which they equate with worse.
@prospect1 - a simple fix to the law would allow employees that retire early or are let go to stay on the former employers plan via COBRA. Cobra rates were cheaper than ACA rates. And the plan was better. I don’t know why this wasn’t included in the ACA.
ucb, when I was very young and understood literally nothing about insurance, I was outraged that seniors are required to be in Medicare. After all, freedom! Being forced to buy insurance before you “need” it! But I’ve grown up. I now know that this is How. Insurance. Works. Many people still don’t, unfortunately.
664 Yes, I do think it's not right that 30 year olds are subsidizing 64 year olds. As a group, 64 year olds are better off financially than 30 year olds. If the pool needs 30 year olds because they are healthier, then the costs for 30 year olds should be less to entice them in.
We always talk about how wrong it is putting future costs on the young (the national debt, Social Security etc.). Well here’s another example.
Wait so under this prorated system based on conditions, do I get a discount because I have an implant? Do I get a greater discount than women who have been sterilized since the implant is statistically a more effective birth control method?
And as for men? Men father children at all ages so they should really never be exempt post-puberty.
No, Tatin. We are not “putting future costs on the young.” What insurance does is ensure that when the young get old, there’s someone there to pay their medical bills.
And BTW, under ACA, the premium cost for 30 year olds is less than for 64 year olds. Significantly less. You didn’t know that?
Let’s be real. COBRA rates depend on the coverage one previously had. Our COBRA costs were nearly 2k month. And no, it does not necessarily mean “better,” unless one had a Cadillac plan. As soon as ACA was available, darned right I chose a much, much less expensive option that suited our needs and was compatible with what we could afford. (I know that’s not always the case. But dang, you would’ve wanted me to keep paying 2k?)
LM, when I was younger, I railed when my employer mandated coverage and all I ever did was go to the gyn once a year. Later, when I had an emergency and all that went with that, oh boy, did I understand.
The cost is less, but the young are paying more than they would actuarially in order to subsidize the old. As a result, not enough young are buying into the system.
I estimate that we’ll be at 2K/month in two years, with the cheapest plan available for the three of us.
The point is, if you’re buying individual insurance, you’re not subsidizing pregnant women. They’re subsidizing you. Every time you mention that you have to cover pregnancy, as if that makes your insurance cost go up, you are being deceptive, or disingenuous, and you should stop saying such things right now if you have any interest in having an honest conversation. Pregnancies do not make your insurance cost go up. The pool of costs that includes pregnancy also includes the expensive ailments that your age group suffers in much greater amounts than young women, and those young women have to shoulder more than their share of those costs.
Now, that being said, we can consider whether the 3-1 age premium ratio is the right answer, given, as we have now agreed, that it makes your and my insurance cheaper while making young people have to pay more. But an honest discussion requires that we acknowledge that saving a 30-year-old $80/month is going to cost me $110/month.
Maybe it should; I don’t have a position on this. But kicking a less healthy 60-year-old off insurance in order to enroll a healthy 30-year-old makes the overall situation worse, not better. So if the result of going to a 5-1 premium means we enroll health young people but lose older people, that is not a tradeoff I think we ought to make. The ultimate point of health insurance coverage is to allow people who need health care to get it. If we enroll healthy people who don’t need any health care, and kick out older sicker people who do need health care but now can’t afford to get it, we’re moving in the wrong direction.
ML, you’re in the exchange? This is where I bring it back to the states. (And this is where I find the state-based inequities to be patently unfair.)
We’re over 2K for 2017, for two people. COBRA cost more, by the way. It was better-- but then, my husband retired from a company whose average employee age is something like 27. Of course their insurance is cheaper.
“a simple fix to the law would allow employees that retire early or are let go to stay on the former employers plan via COBRA. Cobra rates were cheaper than ACA rates. And the plan was better. I don’t know why this wasn’t included in the ACA.”
Eh? One can still get Cobra under the same provisions as before - coverage for 18 months. Cobra policies are generally more expensive then ACA plans and, of course, there is no subsidy.