Not really, at least for large companies. Heck, even some smaller employers with as few as 300 employees will self-insure. To avoid massive expenses, such as from a premie, the company will purchase top-hat insurance which kicks in at say, $5 or $10M.
There are lots of people whom society as a whole supports (through government programs) even though they may not currently be seen as “contributors”:
- Senior citizens (receiving Social Security and Medicare).
- People too disabled to work (receiving SSDI).
- K-12 students (in schools, though they are seen as future "contributors").
- People with no money and no medical insurance who show up at the emergency room.
- Prisoners (whose "contribution" to society is seen as negative, so they are prison because it was decided that they are too dangerous to others).
Of course, people disagree on the definition of “contributors” and what level of societal support should be given to those who are unable to support themselves.
I know, right? Speaking of a flawed system, think of all the unsuspecting rubes out there right at this very moment spending their money and time giving amazing benefits to freeloading infants and toddlers! My mom was such a dupe.
For this conversation, the relevant part is that they pay large insurance companies to set up the networks, which is to say they pay the insurers to negotiate rates with providers. The self-insuring companies pay the claims, but they don’t set up the networks. And if the federal government self-insures for employees (they probably do) the federal government does the same thing-- they pay the insurers to set up networks and negotiate rates.
That a self-insuring company would need to purchase top-hat insurance to protect against $5 million claims underscores why the $75,000 yearly cap for the California high risk pool was so ludicrous.
Sure, it’s a flawed system but it’s better than what we had before.
It also only work well if people don’t try to “game” the system. Unfortunately, many people who do are never caught 
Well, it could work perfectly fine even with bad actors “gaming” the system–the country would just have to make the decision to prioritize the health and wellness of its citizens as much as that of its military budget.
More importantly–and relevantly–I really hope the healthcare reforms make things better. Healthcare in the US is an embarrassment of profiteering and waste, and it affects real people’s lives all the time. I wish the US had a viable single-payer system, but barring that, whatever’s next will have to reign in voracious pharmco greed. I may want to return to the US one day, but if healthcare isn’t fixed, that won’t be a viable option when virtually every other wealthy country takes so much better care of its citizens’ basic medical needs.
Look at how many profit points are in the medical system…that tells you everything you need to know. I’m not saying profit is bad, but when you have it layered to this extent the fact is you’re going to pay enough that everyone makes a profit. In theory that would be fine as these companies with a piece of the pie become more profitable/valuable and those with stock benefit financially. But in the real world that falls apart as middle and lower class individuals rarely have stock holdings of these companies to offset their health care costs.
More people are dependent on stock holdings than you think. Most pension funds have significant holdings in stock. You would be shocked at how much Wal-Mart stock is indirectly held by unions.
I just asked my H, who works in Budget, if NYS self insures and he said no. I wouid be surprised if the Feds self insured.
For me, the most important ACA benefits are the pre-existing conditions exclusion and the ability to keep children on the plan until 26.
The current ACA premiums and deductibles are astronomical. This is the reason young people will rather go without. You are paying a monthly premium towards something that you might not ever reap the benefits if you are quite healthy. Some of the premiums this year were larger than my mortgage payment and deductibles at 6,500!
Beyond ACA, I would love to see the insurance not tied to the employers. If you lose your job, you are dead in the water and have to go with ACA or Cobra. Both not the best choices for people who lost income, Cobra is more expensive than what you were paying when you had a job. Who thought that was a good idea? In my state, you would have to be really low income to qualify for an ACA subsidy and even then, you still have the large deductible to pay out of the income you no longer have. I know people who would love to work elsewhere but stay on for the health insurance. I also see how employers start shedding aging employees. I could venture to think that it has to do with self-insurance. Not having health insurance tied to employment would give people the freedom to move around and that might be better for their health.
COBRA plan costs are basically the same as what they were under the employer plan, but the employer does not subsidize the costs after the employee departs. Most people are not aware of how high the cost of medical insurance plans is, so the full price of the insurance as a COBRA plan after the employee departs and no longer gets the employer’s subsidy comes as a shock.
Yes, I do realize that Cobra plan costs are the full cost of the insurance and it is very high. However, it is not a help for people who lost their income. Some employers are kind enough to keep paying the subsidy for a little while but most are not. So here is the employee that just lost their income having to figure out how they will pay the full cost of that health insurance. How is that beneficial? What happens is people go without and pray they don’t get sick, unless they have a spouse on an employer plan they can latch on to.
The federal employee health plan (FEHB) is not self-funded. The federal government contributes 72% of the weighted average premium of all plans, not to exceed 75% of the premium for any one plan.
https://en.wikipedia.org/wiki/Federal_Employees_Health_Benefits_Program
Employee can choose a wide range or plans and options. You can get coverage for a family anywhere from under $300 to over $500 a month. The plan also covers all retirees who have enrolled in the program for a specified number of years before retirement.
What are you saying? That someone who lost their job should have cheaper insurance than someone who doesn’t have a job or is self-employed or works for a small company that doesn’t offer insurance? If you don’t have insurance through your employer, because you lost it or you never had it, then you have to buy your own insurance. People who had employer insurance are no less worthy of help, and no more worthy of help, than people who never had employer insurance. COBRA is not the problem here.
You can’t have the good without the bad. You can’t have the french fries without the calories. The pre-ex exclusion only works if everyone has to buy insurance. Otherwise, people who are healthy wait until they are sick to get insurance, and people who are sick have to pay astronomical rates. They tried that plan in New York State. It didn’t work. And it can’t work.
So if you like the pre-ex exclusion, as many people do, you need to find a way to make it work.
What was the MA plan that was in place pre-ACA? Didn’t that work relatively well and wasn’t Romney involved with it?
For our discussion, it doesn’t matter. (Though it is interesting to know that NYS doesn’t self-insure. I wonder why. Maybe there’s a thought that it’s a possible corruption point. Or maybe giving the state’s lucrative insurance business to private insurers IS corruption.) Self-insuring is cheaper and a bit more risky, but from our point of view it works the same as insurance: insurers create a network by negotiating prices with providers.
A company self-insuring is nothing like a person going without insurance. Let’s go through the difference between buying health insurance from an insurer, getting health insurance from a company that self-insures, and having no insurance.
I buy insurance on the private market. Before the plan year starts, the insurer has already set up a provider network. They have negotiated prices for everything, before any subscriber gets care. I crash my bike and break my collarbone. I go to the emergency room. I pay whatever copay I agreed to when I bought the plan. The hospital and the doctors submit a claim to the insurer, and the insurer pays the providers the amount they agreed on for broken collarbones when they set up the network.
Now suppose I work for an employer that self-insures. Before my plan year starts, my employer paid an insurer to set up a provider network and negotiate prices. (Probably the same network is sold to many employers.) I crash my bike and break my collarbone, go the emergency room, pay the copay. The hospital and doctors submit a claim to the insurer. The insurer gives the claim to the employer, who pays the amount the insurer had already negotiated for broken collarbones.
The point is, before I break my collarbone, in both cases, the insurer and the providers have agreed what a broken collarbone costs.
Now suppose I don’t have any insurance. I crash my bike and break my collarbone. I go to the emergency room. I’ve never agreed on any price for broken collarbones before my crash. The hospital sends me an enormous bill. I try to negotiate it down, but I don’t have much leverage.
Romneycare
- requires individuals to buy insurance,
- requires employers to insure their employees,
- subsidizes people who can't afford to buy insurance,
- and prohibits insurers from charging more or denying insurance to people with pre-existing conditions.
Does that sound familiar?
I haven’t worked in group insurance in twenty years, but large employers always self-insured when I worked. They would purchase stop loss insurance, typically at 125% of projected annual claims, from the carrier who administered their plans. They also paid a fee to the carrier to handle all claim payment, customer service, network administration, daily ACH administration, etc. These combined charges were expressed as monthly employee & dependent rates, but the carrier only absorbed claims above the stop loss level of 125%.
I am surprised things have changed that much in the large employer market.