The Lesson of Anthem Blue Cross

http://www.nytimes.com/2010/02/19/opinion/19fri1.html?ref=opinion

by terra_t • 16 years ago

14 33 16 years ago

nytimes.com

CoryMathews• 16 years ago

No way, California and money problems.. Never saw that one coming. </sarcasm>

downvote away but you know its true.

fnid28• 16 years ago

The less healthy are staying with Anthem, where their higher medical costs are driving up premiums.

The new healthcare bill is great, except of course if you are young, healthy, and don't need insurance at all, in which case, your premiums will go up and you will be forced to buy insurance or face fines.

And, because the health care laws in congress will require a maximum premium variability of 2-3x, meaning the most expensive insurance plans (for older unhealthy people) can only be 2-3 times the cost of the cheapest ones (for young, healthy people) then what I predict the insurance companies will do is dramatically increase premiums for the young to keep the upper end of premimum costs, which are currently 10x or more than the cheapest, right where they are and raise the lower levels to come in line with 1/3 of the most expensive.

Essentially, this health care bill legally requires young healthy people to buy insurance at high rates to pay the medical bills for the older people.

It's a TAX on the YOUNG to care for the OLD.

anigbrowl• 16 years ago

Well, that's demographics for you. Although this article is about Britain, I'd guess the relevant #s in the US are within a few per cent: http://www.economist.com/books/displayStory.cfm?story_id=154...

coolnewtoy3• 16 years ago

it's impossible to buy non-group health insurance for a planned pregnancy. and there's enough scary stuff that COULD happen that you wouldn't want to be pregnant without. Old people have medicare. It's young people who have any medical needs at all who are screwed by the current system.

cschneid3• 16 years ago

Please refer to my post below that starts out with "Insurance companies are not money piñatas". Explain why a planned pregnancy is a candidate for an insurance payout?

(not that I don't think pregnancy should be covered, just not by an insurance company, but by a morally based public plan without the profit motive, or insurance model).

fnid28• 16 years ago

It's impossible to buy car insurance for a planned wreck as well. This is by design and exactly why this new health care bill is already a failure.

People who take care of themselves and reduce their medical risk are being required to pay just as much as people who, every day, consume a liter of coke, 3 packs of cigarettes, and 8 hours of television.

It's not equitable. It fosters resentment, inequality, and discrimination. Not good.

JeremyStein• 16 years ago

"It's a TAX on the YOUNG to care for the OLD."

<sarcasm> Yeah! Who do those old people think they are, getting all weak and sickly!? </sarcasm>

Most of the western world believes that society should be taxed to provide health care for everyone. Like education, welfare, and social security, it's something we all pay for to live in a moral, civilized society. Thank God Ayn Rand doesn't run the universe and the government forces you and me to pay for Grandpa's medication.

cwan3• 16 years ago

I have no problems paying taxes - but let's not be disingenuous about it claiming that they are forcing the young to pay for insurance for their own good. If we need taxes to pay for services of the elderly, then let's call it like it is.

The screwed up part of the system is that the idea used to be that you'd pay into the system with an expectation that you would eventually get the same services as you got older - but have you even looked at the actuarial tables lately? Practically ever western country has massive unfunded liabilities especially as the baby boomers retire.

Personally I like Megan McArdle's solution - let people buy catastrophic loss insurance and fund the rest out of your own pockets. The premiums would be relatively minimal - but the idea that we have to have the government provide insurance / or that even what's proposed in the current legislation solves this problem is frankly nuts. I find it absolutely bizarre that as a Canadian, that while the US government spends more per capita on publicly funded Medicare/Medicaid than Canadians do, coverage for Americans is spotty at best - and you want the US government to get even more involved in healthcare through regulation and direct interventions?

billjings• 16 years ago

That's incredibly shortsighted. The young are the only people who really do need to insure their health, because by and large they're the only people who don't know how they're going to die yet, or how much it's going to cost. They're the only ones with any uncertainty.

The fact that a healthy young person can fail to buy insurance because they "don't need it" (because they're never going to get sick - hah!) and then obtain it later on in life when they need medical coverage is completely broken. How are insurance companies supposed to make money like that? Why, by dropping people when they actually get sick.

Who would ever buy this product? How on earth can you sell it? The only way that it even begins to make sense is if you have to have it for your entire life.

fnid28• 16 years ago

Quite the contrary sir, I'm thinking 10 decades into the future, because that is probably how many I have yet to live. The older generation is thinking just a decade or two, maybe three.

terra_t3• 16 years ago

Young people today will be old people tomorrow.

fnid28• 16 years ago

At this rate, there won't be any young people in America at all. They'll all go to other countries that treat all citizens equally.

I know many believe elders deserve respect, but I disagree. The older generation in this country has sapped our energy sources, polluted the planet, and robbed other nations of their resources for decades.

Now, they want to continue to require other people to pay their bills, ensure their quality of life, and help them live even longer at the expense of all those things for the young.

When the younger generation has nothing positive to look forward to in this nation, they are going to go to another nation that will welcome them and treat them with the same respect and decency that the U.S. currently showers on the baby boomers. The older generation is already rich. They've already saved up their money. They are already getting free rent through social security and medical care through medicare. They are set.

The young don't have jobs and can't get them. They can barely feed their own families and here the government wants to take even more money from them. It is unsustainable.

joezydeco• 16 years ago

Young people are convinced they will live forever, until they reach 31.

icey3• 16 years ago

People who think they are impervious to illness who do get sick without insurance are a measurable part of the reason for high medical costs. Those people end up not being able to pay for their care, so everyone in the system has to absorb the cost that was incurred and could not be recouped.

fnid28• 16 years ago

I believe people should be required to pay according to their ability. Right now, a young person 20 yrs old right out of college earning 40k a year, will pay < $200 a month for insurance. Under the new health care plan with the same premiums for the young, an older person who earns $400k/yr will pay about $600 a month for insurance.

See where the inequality erupts? This is the vision for the new health care plan and it is carrying much future baggage.

cschneid3• 16 years ago

I'm crossposting my comment from a very similar Reddit thread (although that thread was more about "omg, insurance companies are teh evilz"). Hopefully I get some more meaningful discussion about it here.

------------

Insurance companies are not money piñatas. They are insurance. The premise is that you have a low probability of having a massive expense. You pool your money with others (via the insurance company) to cover it if it happens to be you who gets unlucky.

The insurance model falls apart when somebody is already sick. Then it's no longer a low probability of having the expense, it's almost guaranteed. So now insurance is the wrong financial model. Charity, or a publicly funded option is, since it becomes a moral issue (we don't let people die of stuff we can fix), rather than a financial (I pay in a bit, possibly need large payout).

That's not to say they aren't evil, and want their profits, and go out of their way to be dicks about it, but all the hubbub about existing conditions just shows that insurance is the wrong model for health care coverage.

I fully support a public option, which is effectively an insurance company that also has the moral backing of paying for blatantly unprofitable cases. It won't be perfect, and might suck in many cases, but it sure would be much better than any insurance based health care system could be.

akeefer• 16 years ago

Exactly: the incentives are wrong for everyone under an insurance model. Healthier people have an incentive to leave the risk pool and/or only keep catastrophic coverage, increasing premiums for everyone less fortunate. Insurance companies have no incentive to insure anyone who seems like a high risk, i.e. due to a pre-existing or likely-to-emerge condition. Consumers have no incentive to manage their own care expenses or make decisions for themselves, because if they have insurance they're not really paying the full costs. Insurance companies have incentives to deny care whenever possible. Hospitals and doctors have an incentive to charge uninsured people more than insurance companies so that the insurance companies can provide a value-add and because they have to make up for all the care provided to un-/underinsured people who can't pay their bills.

If you believe that a wealthy society like ours has a moral imperative to take care of its poor and sick and elderly, then the insurance model is hopelessly broken. It doesn't mean there's some perfect model out there that has perfectly aligned incentives and no moral hazard, just that this one is probably one of the worse ways to organize things.

If you don't believe that there's any such moral imperative, then that's an entirely different debate.

lutorm2• 16 years ago

Yeah, when I moved to the US I was wondering why everyone called it health "insurance" since it basically works completely opposite from how "real" insurance (home, liability, etc) works.

Maybe this is why people are hung up on it, because of the word? It's not insurance and it's never been intended to be insurance. IMHO, medical care is a basic human right, and needs to be treated as such.

Whether people with "risky lifestyles" should be forced to pay something more is a separate issue. (Incidentally, smoking is a bad example, though, because lung cancer tends to kill relatively early and quickly. I've seen figures that it actually lowers the lifetime health care cost compared to decades of geriatric care.)

The Lesson of Anthem Blue Cross

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