patrick.net

rich_wicks says

See what happens when the government creates a cartel which everybody is required by law to purchase from?

No, all these price hikes are BEFORE the mandate, which still hasn't even started yet.

Insurance is definitely a private cartel, not created by the government except in that the insurance companies are exempted from anti-monopoly laws. It's a massive ongoing failure to regulate.

ragingpinko says

Helene Jorgensen notes that medical care isn’t like expensive TVs, and the “free market” doesn’t, and I think cannot (although she wouldn’t be responsible for my opinion), work in health care. First, comparing costs for health care is nearly impossible. Not only is it impossible for people to compare costs on hospital websites, but the treatment for various conditions is based on individual medical history. In addition, you can’t check out a doctor’s performance before submitting yourself to treatment. (And even were it possible, you don’t know if a given surgeon will do as well with you as she did with the surgery you observed.) And of course, there’s no return window for medical services. You can’t ask for your cancer back because you’ve found someone who would do a better job. And finally medical services aren’t optional. You can live without a big expensive TV, but you can’t live without treatment for many medical problems.

Like most necessity markets, medical care doesn’t operate according to supply and demand, which requires a buyer and seller both equally able to walk away from the deal.

Wow, yes, all that is totally true!

OK, should I create a website like gasbuddy.com, but for medical care, where everyone enters what they actually pay and the quality of service they feel they got?

Then you could look up any medical exam, condition, or treatment and see what various places near you are charging and what the quality is. At least for non-emergencies.

It would be fiendishly complicated though, because the costs are split among individuals, employers, insurers, and government. It would be hard to know what each of them paid.

FalconMaster says

are you familiar with the term Fractional Reserve Banking? Banks can take your $10 and loan $100 (or more). How can they loan $100, when you only have $10 (ten) on deposit ???

you've actually got it backwards. They take my $10 and loan $9 (or actually $10, it depends on the type of account).

They magically “create” $90 out of thin air, loan it to poor suckers, and charge them interest on it!

What happens is that the person who borrowed my $9 then -- if he doesn't need to spend all of it -- ALSO puts it in a bank, and then the bank lends $8.10 out again.

But at no time is debt-money actually created without a balancing "savings" somewhere.

http://mises.org/

why does that not surprise me. Goes well with the Gary North crap you've also posted here.

Patrick--

Unfortunately buying health care isn't like buying a TV or a new dress. You know enough about TVs to know what you want (size, plasma, lcd etc.) pretty easily. What if you have knee arthritis? What treatment will work, and how well it will work, have a lot to do with things you, as a patient, know little about. You're dependent to a large extent on what others tell you to buy.

Troy says

FalconMaster says

are you familiar with the term Fractional Reserve Banking? Banks can take your $10 and loan $100 (or more). How can they loan $100, when you only have $10 (ten) on deposit ???

you’ve actually got it backwards. They take my $10 and loan $9 (or actually $10, it depends on the type of account).
They magically “create” $90 out of thin air, loan it to poor suckers, and charge them interest on it!

What happens is that the person who borrowed my $9 then — if he doesn’t need to spend all of it — ALSO puts it in a bank, and then the bank lends $8.10 out again.
But at no time is debt-money actually created without a balancing “savings” somewhere.
http://mises.org/
why does that not surprise me. Goes well with the Gary North crap you’ve also posted here.

That was their "traditional" way. During the bubble it got changed. Banks actually made loans first and borrowed "reserves" after just to meet reserve requirements.

Yes, bankruptcy is a viable alternative, except for that 7 year limit. If I self-insure and am then bankrupted by medical costs, I’ll have 7 years where they won’t even provide anything but emergency care, right?
Then I or a family member could easily die because they refuse to treat us.

They won't refuse to treat you. You will sign some kind of paper promising to pay later on. Later on they will negotiate with you for payments you can afford.

ChrisLosAngeles says

All of the insurers right now are raising rates to cover the costs for incoming healthcare reform.

Yes, I think that’s it, except that it’s not to cover the costs of incoming healthcare reform, it’s to take as much as possible right now, for the executive bonuses, before healthcare reform starts to really kick in.

So what? It did not start yet, but they are already insuring themselves by raising premiums...

Or at least, that's their excuse to raise premiums. After all, the whole "healthcare" reform (from insurers perspective) was nothing but an attempt to redistribute money streams in and around health care. They just use any opportunity to max their gains and to lower their loses.

Patrick, You are getting locked in denial about the fact that this reform has created those opportunities.

michaelsch says

You are getting locked in denial about the fact that this reform has created those opportunities.

The 80% MLR apparently came in to the legislation behind their back.

"UnitedHealth, for instance, has about 392 subsidiaries, according to Goldman Sachs health-care analyst Matthew Borsch. Its average MLR for individual policies is 69%, dragged down by a 63% ratio at its dominant Golden Rule subsidiary"

. . .

"Humana Inc. could owe $63 million in rebates, said Mr. Borsch. The Louisville, Ky., insurer's 2009 MLR for the individual business was 68%, with a 54% ratio at a unit in Georgia"

. . .

"American National Insurance Co., of Texas stopped marketing individual policies last month. A spokesman for the company said it operates its plans at about a 60% MLR, and didn't want to retool its business model to meet the new requirements."

http://online.wsj.com/article/SB10001424052748703374104575336951608609446.html

Without the MLR regulations the reforms would be awful. With them, I'm willing to see what happens. The previous status quo is not something I want to return to, in 2004 I personally got burned by the preexisting condition thing and that's simply no way to run a railroad.

http://www.angrybearblog.com/2011/01/mlr-provisions-kick-in-today.html

michaelsch says

During the bubble it got changed. Banks actually made loans first and borrowed “reserves” after just to meet reserve requirements.

yeah yeah vague counter-argument without numbers. Just more bullshit on the internet.

FalconMaster says

Here’s a MAJOR reason your insurance premiums are skyrocketing. My wife just got a letter from her employer telling her of changes to her health insurance plan, complements of Obama Care. First change - before there was a lifetime $1 Million maximum payout (total which the health insurance company would pay over the life of the policy), now there is NO LIFETIME MAXIMUM. NO MAXIMUM! Second change - now dependent children can receive health coverage under their parents’ plan until they are 26 years old! AND THERE WILL NO LONGER BE A REQUREMENT THAT THE DEPENDENT CHILD BE A FULL-TIME STUDENT. How’s that for skyrocketing insurance premiums?

Okay, I'll bite.

First of all, why are you yelling at me? Your anger over changes with your wife's insurance policy only mean that some people have the opportunity to be treated. Like that's a bad thing?
Secondly, you mention the removal of the million dollar cap. Imho, that amount affects an extremely small percentage of patients that your reaction is exactly what the insurance industry is hoping for - outraged ignorance. Patients who meet the cap shouldn't have their treatment stopped because the insurance company doesn't feel like paying any more - when they stop paying their CEO a hundred million dollars in compensation, they can complain about having to pay over a million dollars for a very sick person with a disease like cancer or an accident victim to possibly recover. I don't have any sympathy for the insurance companies (no matter how loudly you yell).

Thirdly, the 25 year old non-student who is a dependent of a person should have insurance. The insurance company is able to charge for the coverage - but without this law, this same person might die without treatment. Not everyone is able to qualify for Medicaid or other assistance.

An example is a friend of mine whose daughter was just diagnosed with Ovarian Cancer - she can't afford the treatment outpatient and the hospital won't admit her because it's not an emergency. By the time that it is an emergency, she'll be dead. This law won't affect her, tho - her mother has no health insurance.

elliemae says

FalconMaster says
Secondly, you mention the removal of the million dollar cap. Imho, that amount affects an extremely small percentage of patients that your reaction is exactly what the insurance industry is hoping for - outraged ignorance.

You're right. However, insurance companies use the argument to justify higher premiums.

Thirdly, the 25 year old non-student who is a dependent of a person should have insurance. The insurance company is able to charge for the coverage - but without this law, this same person might die without treatment. Not everyone is able to qualify for Medicaid or other assistance.
An example is a friend of mine whose daughter was just diagnosed with Ovarian Cancer - she can’t afford the treatment outpatient and the hospital won’t admit her because it’s not an emergency. By the time that it is an emergency, she’ll be dead. This law won’t affect her, tho - her mother has no health insurance.

First, one under 26 DOES NOT NEED to be a dependent to get coverage.

Second, one who really is a dependent needs coverage even being older than 26yo.

Third, and the most important, insurers try to abuse it as well by sharply cutting coverage to chronically ill patients even when they are insured. For example, my coworker has a grown up son with very severe kidney illness. He is insured by KP. Note, this is HMO. For years he's been on strong and expensive drugs prescribed by KP doctors. However, since fall 2010 KP denies coverage for the drugs. This is extra several $hundreds for her to pay monthly.

Sorry, repeated post.

It’s not Obama’s fault. It’s the insurance company lobbyists, who prevented:
1. caps on premiums

2. the public option
Obama was definitely for a public option, and they killed it so that you would be forced to pay them, no matter what they charge.

So If I'm selling you a Cadillac but a bum comes along and craps on it and kicks in the windshield, before I give you the keys. Do you drive it away, or would you expect me to clean it up first?

Obama drove the car off the Lot he Owns it.

Tenouncetrout says

Obama drove the car off the Lot he Owns it.

You simply don't know whereof you speak, dude.

elliemae says

Tenouncetrout says

Obama drove the car off the Lot he Owns it.

You simply don’t know whereof you speak, dude.

I, um, agree with TOT on this. Obama could have vetoed what came out of Congress, and it was his initiative who got us the reforms we have. 'Course, if Obama had vetoed it, the Republicans would have voted to override the veto, cuz that's how they're rolling now.

http://www.latimes.com/health/healthcare/la-fi-insure-rates-20110106,0,6975599.

Blue shield is up to screwing more individual policy owners - according to the LA Times they're raising rates as much as 59%. I wonder how much he makes?

elliemae says

Blue shield is up to screwing more individual policy owners - ... they’re raising rates as much as 59%.

I expect European style riots, before this is over. Except, we're not polite and don't take Tea and biscuit breaks between ruckuses.

APOCALYPSEFUCK says

the market is never wrong about anything

You're kidding, right? There is no freakin market for health insurance. Your choices are:

1. Pay whatever they say.
2. Die.

Note the similarity to your choices during an armed robery:

1. Pay whatever they say.
2. Die.

APOCALYPSEFUCK says

Patrick,
I never kid.
I didn’t even know you could kid on The Internet.
Do people do that?

This is your best (seriously). I'd be a fan. But you already have too many. Power corrupts. Absolute power corrupts absolutely. Travel well AF.

OK, you're kidding now meaning you were kidding then. I think.

ROTFL!

You wanted Obama care patrick, and now you got it! Right in the pants.

The govt. is interjecting into the market, so of course, prices are going to go up.

You want to stop "price" gouging? So you are going to legislate against it? THen you get rationing.

You made your bed, now lay in it.

What is wrong with you?

You KNOW govt. money & credit creation created the RE bubble, but for some reason, you can't see it in "healthcare".

Get rid of Obama care

Get rid of medicare.

Allow insurance companies to compete in the whole USA.

AND create tourt reform, so people can't sue for gagilion dollars,

AND quit govt. funded school loans.

Then you will see prices drop.

larrypatrickmaloney says

You KNOW govt. money & credit creation created the RE bubble, but for some reason, you can’t see it in “healthcare”.

Government did not create the $6T credit bubble of 2003-2007, the free market did, thanks to the deregulated actions of 1) major lenders like Countrywide and Wamu, 2) Wall Street that was pushing them their money, and the 3) private ratings agencies that were deceiving the 4) private investors that were the source of the money being lent to deadbeats and speculators.

There was a worldwide SAVING glut that Wall Street tapped to hook up the world's wealth with an investment that was "as safe as houses".

The main government active role in this was cutting taxes too much on wealthy people 2001-2003. All that money injection started chasing yield, and Wall Street had just the offerings. . .

Get rid of Obama care
Get rid of medicare.

yeah yeah let's roll back to the 1950s when doctors visited you with their black bag and took a pot roast as payment.

Let's ignore the rest of the OECD states that actually have MUCH more efficient systems than we are ever going to do with our half-assed fear of socialism.

AND create tourt reform, so people can’t sue for gagilion dollars,

a person who can't spell 'tort' should stay the fuck out of adult conversations. Tort damages are not a major cost driver of medicine in the US.

"But even large savings in premiums can have only a small direct impact on health care spending--private or governmental--because malpractice costs account for less than 2 percent of that spending."

http://www.cbo.gov/doc.cfm?index=4968&type=0

But this is not to argue your overall thesis that government's regulation of insurance is not going to address the cost side, but only make it worse once the mandates and subsidized premium regime goes into effect in 2014 or whenever.

Cost side will have to be tackled someday, probably through single payer, ie an expansion of Medicare to make it look and work more like Canada's Medicare.

larrypatrickmaloney says

Get rid of Obama care

Get rid of medicare.

larrypatrickmaloney says

Then you will see prices drop.

What on earth (literally) makes you think that? Most Western countries have healthcare that is better than ours and costs half as much. And they have it because healthcare is ironclad regulated, from top to bottom.

The problem here in the US is that the public control of healthcare is watered down and worth nothing, due to all the political "compromises" that basically compromised our laws.

By the way, have y'all seen the NAME of the proposed house healthcare repeal law?

1. [112nd] H.R.2 : Repealing the Job-Killing Health Care Law Act

I kid you not, you can see it for yourself at

http://thomas.loc.gov/cgi-bin/thomas

with a search on "repeal".

The Republicans are like petulant little fascist children. Can you think of anything more dangerous than angry little fascist children with real power? I can't.

I think you're blaming the wrong party if you're blaming Blue Shield.

Blue Shield is non-profit, so it pays nothing to shareholders. Executive compensation is a very tiny sliver of costs. Administrative expenses eat up about 10%.

ALMOST ALL the money goes to hospitals, doctors, lab technicians, test & drug & equipment makers, etc. Perhaps THEY are they ones gouging the insurance company and their subscribers?

Yeah, the whole system is broken, but by calling this "price gouging" by Blue Shield your missing what's really going on IMO.

Troy says

a person who can’t spell ‘tort’ should stay the fuck out of adult conversations. Tort damages are not a major cost driver of medicine in the US.

Damages were never the supposed cost. It was the likely unnecessary procedures and tests that were done to avoid potential damages ("defensive medicine").

Thing is, Texas already enacted tort reform in 2003. And it had negligible impact on the growth of health care costs in Texas.

I'm all for tort reform, but I'm really sick of people that believe this is a significant factor in health costs, and politicians that pander to their ignorance.

larrypatrickmaloney says

Allow insurance companies to compete in the whole USA.

Competition is great in most markets, but not a panacea. California has 30 million people, more than many countries, and about 20 major health insurers.

How much bigger a test case do you need?

The problem is largely the nature of insurance itself, where market forces don't work because everything is "free". But you have to have insurance, because many conditions will cost half a million or more over a lifetime, but you don't know if you'll be one of those people, so saving half a million makes no sense.

So you're left with a market failure that cannot be fixed by simply making the market freer. Something the "conservatives" still won't admit.

MarkInSF says

Something the “conservatives” still won’t admit.

can't admit, because they've boxed themselves in ideologically

MarkInSF says

Blue Shield is non-profit, so it pays nothing to shareholders. Executive compensation is a very tiny sliver of costs. Administrative expenses eat up about 10%.

Non-profit my ass. Blue Shield is being told right now that they have to stop keeping over 30% of premiums as gravy, and keep "only" 20%.

Yes, they have a motive to collude with hospitals to rape us, because that 20% is 20% of a larger number if BS approves larger payments to hospitals.

But Blue Shield is definitely gouging. Look at the graph. They themselves admit their own costs went up only 19% in the last year.

Blue Shield of CA is a California not-for-profit mutual benefit corporation

https://www.blueshieldca.com/bsc/aboutbsc/fast-facts/index.jhtml

Blue Shield of CA is one of the franchisees (under Blue Shield/blue cross national), independent of the association (and traditionally each other including Wellpoint and Anthem), offering insurance plans within defined regions (California in this case).

In essense, Blue shield of CA has nothing to do with Wellpoint except just a member of the larger association. Wellpoint operates under the Anthem blue cross brand in CA. They are separate organizations and compete with each other.

Financial Summary
Blue Shield earned $9.7 billion in revenue in 2009, an 8.8% increase over 2008. Health benefit spending reached nearly $8.4 billion, a 12.9% increase from the previous year.

Operating income declined to $57 million due to the following factors: high medical expenses for certain products, economic conditions that resulted in an older member population and the subsidized extension of COBRA coverage, plus an investment of $111 million in new information technology systems.

Membership grew by 134,000, to more than 3.5 million. Administrative expense (as a percent of revenue) declined by 0.3%. We continued to receive "A" ratings from AM Best and Standard & Poor's.

https://www.blueshieldca.com/bsc/aboutbsc/annual-report/index.jhtml

The reason for the rate increase has to do with increased health spending cost and flat membership enrollment.

Has anyone checked out this article: http://money.cnn.com/2011/01/07/news/companies/California_blue_shield_rate_hike/
----> note the quote(below) from it that caught my eye

"But responding to this most recent increase the company said, "our individual market medical costs are rising rapidly due to higher provider prices, increased utilization, and the fact that healthier people are dropping coverage during a bad economy," the company said.

Despite the steep double-digit hike, the insurer maintained it still expects to lose tens of millions of dollars on its individual healthcare business in both 2010 and 2011."

I'm saying that being a "non-profit" means nothing. They still price-gouge and they still grossly overpay their executives at our expense. They have no motive to lower payouts, only a motive to charge as much as possible until the public finally gets wise and demands a bunch of heads on plates.

Their own site says: "Health benefit spending reached nearly $8.4 billion, a 12.9% increase from the previous year."

So their benefit spending went up 12.9% but they raised my premiums 73.8%. That's simply criminal extortion.

I'm starting to conclude that ultimately there will be a civil war between the mega-corporations who continue to exploit us like this, and the majority, who are being exploited. The government has utterly failed, because it's been infiltrated and taken over by the exploiting corporations to guarantee their profits by law. That article talks about banks, but insurance is very similar.

’m saying that being a “non-profit” means nothing. They still price-gouge and they still grossly overpay their executives at our expense.

Exactly right. There is really no such thing as a "non-profit".

So their benefit spending went up 12.9% but they raised my premiums 73.8%. That’s simply criminal extortion.

This is the essence of it. MarkSF and SFAce, how do you explain that? To me it looks simply like exploitation, blamed on Obamacare.

Break even operations? Are you kidding? I just can't tell who is joking anymore.

Blue Shield had to be forced to reduce their gross margin from over 30% down to 20% as of Jan 1st to comply with the new laws, and they still have not complied yet AFAIK.

You know how much money 30% of thousand-dollar premiums from millions of people is every month? It's a giagantic rushing waterfall of human blood being slurped up by Blue Shield executives.

It’s a giagantic rushing waterfall of human blood being slurped up by Blue Shield executives.

Tell us how you really feel, Patrick.

BTW, this time I am kidding with you. The other stuff from me here was serious. We have to fix healthcare.

Why would the new insurance commissioner have to propose emergency regulations to force the insurers to spend at least 80% of premiums on health care then?

http://www.californiahealthline.org/articles/2011/1/4/jones-proposes-plan-to-enforce-medicalloss-ratio-regulations.aspx

Note also that the legally required payouts for individual policies like mine are lower than the payouts for groups. They can keep more from people like me, because as an individual, I can't hire a lobbyist or threaten to take 1000 employees elsewhere.

Where is their balance sheet? I can't find it online. Are their numbers secret because they are "non-profit"?

There is just no way to justify a 73% increase in my premium from one year to the next. Why don't they spell out the numbers and tell us exactly where the money is going and how they arrived at 73%?

Medical loss ratio is meaningless anyway as long as Blue Shield gives the green light to hospitals to charge ridiculous fees so that the 20% is 20% of higher "medical costs". What we really need is a cap on premiums.

It doesn't work. It starts at the "Company profile search" page. When I enter Blue Shield it just shows me some data about their registration with the state. When I then click on "Annual statements" it sends me back to the initial "Company profile search" page.

It's a loop. No useful info. Where's the balance sheet?

It works. I just looked at it. look at the drop down menu on the left of the registration screen.

This premium-hike stuff might also be part of the strategic political battle, in addition to the tactical nature of getting premium rises. Blue Shield competes with Kaiser here in California, and Kaiser probably loves ACA since they own the care side too and AFAICT are free to game the MLR as much as they want.

Kaiser is the place that was laying out how ACA was so similar to the 1993 Chafee plan:

http://www.kaiserhealthnews.org/Stories/2010/February/23/GOP-1993-health-reform-bill.aspx
http://www.kaiserhealthnews.org/Graphics/2010/022310-Bill-comparison.aspx

PPACA didn't require BCBS to not price premiums based on gender until 2014 but they're doing it now. Wonder why.

Or it could be that the CA Blue Shield is in a death spiral.

CA has a larger uninsured population than other states. Healthcare costs were beginning the expected rise as aging populous needed the more expensive end of life care. Younger people (50s and 60's) are developing diabetes, heart disease, etc. Costs and therefore premiums started rising.

I didn't notice that Patrick had an $8k deductible. So he has catastrophic care. It's going to be a big problem if the premiums get so high that all the healthy people walk away totally. Then, the pool just has unhealthy people (adverse selection) & it will be impossible to cover the costs.

artistsoul says

Then, the pool just has unhealthy people (adverse selection) & it will be impossible to cover the costs.

In 2014 we will get the mandated (and subsidized entry of millions of people into better programs), assuming the Republicans don't destroy government over this 2011-2013 (not likely) or take over completely in 2012 (entirely possible).

Most families will basically have government-subsidized health insurance, with the subsidies being $500/mo for a family of 4 earning $66,000 per year.

How we're actually going to pay for that subsidy is an open question.