Obamacare 5 years later. Crow, anyone?

[Roger Ramjets]

Sure I work as an actuary and am well qualified

But apparently not qualified enough to know what the word 'insurance' means?

Obamacare is not insurance

Wrong.

The ACA was enacted to increase the quality and affordability of health insurance

and neither is Social Security

Again, wrong.

In the U.S., programs that meet these definitions include Social Security

Elf Grinder 3000 fail!

 

[psionl0]

Insurance is risk pooling with the concept of individual equity, where there is no individual equity you don't have insurance. Obamacare is not insurance and neither is Social Security because there is no individual equity.

You're just making this up. Paying insurance premiums doesn't give you equity in anything - just the promise of a payout if a certain event occurs during the time that the premiums are being paid. Stop paying the premiums and you end up with nada.

 

[jhunter1163]

I am a little bit familiar with Switzerland's system. It's actually more similar to Medicare Advantage in the US than to ACA... but that's a distinction that is probably lost on anyone who doesn't live and breathe health insurance

The Swiss use a subsidized private market. I believe that there's a minimum level of coverage that insurers must provide, and they're reimbursed by the government for that level. Insurers can sell richer benefits and charge consumers the difference in premium value. I'm not sure of the details though, and it's Friday and my brain is tired, so I'm not going to double check my recollections for accuracy. I could be wrong on how it works.

I understand exactly what you're saying here. Should I be worried?

I think that throwing the health insurance companies a bone by allowing the to sell richer plans (as in the Swiss model, and as they are allowed to do with Medicare Advantage plans) might ease passage of single-payor. Granted, it'll be an uphill fight due to the entrenched interests, but the status quo ante-ACA is simply unsustainable and the ACA itself is at best a temporary fix.

 

[Elf Grinder 3000]

You're just making this up. Paying insurance premiums doesn't give you equity in anything - just the promise of a payout if a certain event occurs during the time that the premiums are being paid. Stop paying the premiums and you end up with nada.

Individual equity means your rating is proportional to the risk you pose.

For example you sign up for term insurance, you get underwritten and receive a preferred plus rating. Your price is proportional to the risk you pose to the insurance company.

Same concept with health insurance, your risk is based on your age, weight, health history etc. If you are unhealthy you have to pay more for insurance.

Any program that eliminates individual equity moves it further from real insurance.

Social Security isn't insurance because the payout is distributed unevenly between different incomes. Obamacare isn't insurance because the coverage is mandated and the rating classes are mandated.

The only classes are smoker vs. non smoker & age. The two classes smoker and nonsmoker can have a maximum rating difference of 150%

This is government run health care, you would never see this in the free market.

 

[barehl]

This is government run health care, you would never see this in the free market.

In the free market a lot of people wouldn't have health insurance at all. Also, the system has never been a free market because of the federal reimbursements. So, rather than starting from a hypothetical free market you need to start with reality which was the old reimbursement system and explain why this one is worse.

 

[thaiboxerken]

Maybe eg should tell my insurance company that I should get maximum payout for any situation. After all, it's not insurance if the payout varies....

 

[Elf Grinder 3000]

In the free market a lot of people wouldn't have health insurance at all. Also, the system has never been a free market because of the federal reimbursements. So, rather than starting from a hypothetical free market you need to start with reality which was the old reimbursement system and explain why this one is worse.

Here is the alternative

Allow both companies and individuals to pay for health care pre tax - up to 85% the actuarial value of their risk

Use a high risk pool to deal with the unhealthy individuals. Use subsidies to pay for this pool.

Perhaps require guaranteed renewal, most states already have this requirement.

This is the best solution as it uses the power of the free market to reduce costs and drive innovation. Obamacare is terrible for costs and terrible for innovation.

 

[thaiboxerken]

Here is the alternative

Allow both companies and individuals to pay for health care pre tax - up to 85% the actuarial value of their risk

Use a high risk pool to deal with the unhealthy individuals. Use subsidies to pay for this pool.

Perhaps require guaranteed renewal, most states already have this requirement.

This is the best solution as it uses the power of the free market to reduce costs and drive innovation. Obamacare is terrible for costs and terrible for innovation.

You have this POE thing mastered.

 

[Nihilianth]

Sure I work as an actuary and am well qualified to explain to you what is fair and what is not fair.

It is not fair to force people to purchase a product against their will. It is unfair to force someone to purchase insurance that is not a transaction between two willing parties.

It is not fair for a person to NOT "purchase a product" (in this case, insurance,) if they are going to use the health care system; forcing everyone else to pay higher prices to pick up the unpaid hospital bills. It is especially not fair, being that the federal government is providing subsidies for people to be able to afford decent insurance!

If insurance is purchased in the free market this won't happen. I would purchase insurance commensurate with my individual risk.

No, but what will happen, is that health care costs will continue to increase at an annual rate of around 20%, like it has been doing every single year for decades! This is due to people not purchasing insurance, inevitably going to a hospital, not being able to afford the bills, and the hospital having to pass the bills to everyone else in the form of....*GASP!* "Increased Costs!"

Insurance is risk pooling with the concept of individual equity, where there is no individual equity you don't have insurance. Obamacare is not insurance and neither is Social Security because there is no individual equity.

Nobody ever said that the ACA is "insurance!" It isn't! As an actuary, I think you may have to review the law, and the purpose behind the law, if you think that it is somehow helpful to remind people that "it is not insurance!" Duh! It's like saying that a highway is a not a car!

Wrong.

To be fair, Obamacare is not actually insurance. It is a law that allows people to purchase decent insurance at a decent rate, and provides funds (subsidies) for those who cannot afford insurance.

Social Security, on the other hand, IS insurance.

You're just making this up. Paying insurance premiums doesn't give you equity in anything - just the promise of a payout if a certain event occurs during the time that the premiums are being paid. Stop paying the premiums and you end up with nada.

Thank you for pointing that out. I was terribly confused reading that post as to what in the hell elf grinder was even talking about. I didn't think of the reason why it didn't make any sense. You pointed it out. Thanks.

Individual equity means your rating is proportional to the risk you pose.

No. It isn't. At all. "Equity" is "ownership" over something of market value that the owner can sell or give away as collateral for something else of value. Insurance does not fit that description. When you purchase insurance, the only thing you can do with it, is receive medical care at a reduced outright cost. The purchaser of insurance does not actually "own" the policy, and cannot transfer ownership to someone else in exchange for cash, or used as collateral.

You have this POE thing mastered.

^^This

 

[barehl]

Allow both companies and individuals to pay for health care pre tax - up to 85% the actuarial value of their risk

You are saying that health insurance should be tax deductible. Okay, what if the value of your policy is more than the amount you owe in taxes? You wouldn't actually have to be poor for this to happen. So, people who already have money would get the full benefit and people with less money couldn't afford insurance. I'm not sure I see the advantage.

Use a high risk pool to deal with the unhealthy individuals. Use subsidies to pay for this pool.

Wasn't this the basis of the famous Fox "death spiral" for Obamacare? Are you saying that Fox and all the top Republicans were wrong?

Perhaps require guaranteed renewal, most states already have this requirement.

So, if you lose your job and have to drop your insurance...

This is the best solution

Can you name even one solution in your proposal? I'm failing to understand how this is better than the ACA.

 

[RandFan]

No. It isn't. At all. "Equity" is "ownership" over something of market value that the owner can sell or give away as collateral for something else of value. Insurance does not fit that description. When you purchase insurance, the only thing you can do with it, is receive medical care at a reduced outright cost. The purchaser of insurance does not actually "own" the policy, and cannot transfer ownership to someone else in exchange for cash, or used as collateral.

To be pedantic, there is a class of insurance (these plans are life insurance, NOT HEALTH) that is equity based (Universal and Whole Life). I'm not an expert and I might be completely off base though.

 

[psionl0]

Individual equity means your rating is proportional to the risk you pose.

The only thing I can find regarding "individual equity" relates to the purchase of an annuity. The more you pay into a retirement fund, the more the fund pays you when you retire. I have no idea if the term means anything in regards to insuring yourself against a disaster but if you say it does then it probably does not.

Social Security isn't insurance good for me personally because the payout is distributed unevenly between different incomes. Obamacare isn't insurance good for me personally because the coverage is mandated and the rating classes are mandated.

ftfy.

 

[Elf Grinder 3000]

You are saying that health insurance should be tax deductible. Okay, what if the value of your policy is more than the amount you owe in taxes? You wouldn't actually have to be poor for this to happen. So, people who already have money would get the full benefit and people with less money couldn't afford insurance. I'm not sure I see the advantage.

Um do you understand how taxes work?

If you make 50K and pay $500 in taxes, a policy cost 5K, then your taxes are now

50K - standard deductions - 5K for insurance, recalculate your tax. So the tax is now say $400

That is what tax deductible means. If you don't pay any taxes it won't make a difference either way.

 

[Elf Grinder 3000]

I
Social Security, on the other hand, IS insurance.

You can read this article on the topic

http://constitutionalism.blogspot.com/2011/05/social-security-is-not-insurance.html

With regards to individual equity
http://www.jstor.org/stable/30015054?seq=1#page_scan_tab_contents

 

[Elf Grinder 3000]

You have this POE thing mastered.

This is your contribution to the topic, absolutely nothing!

 

[Lowpro]

Ah Nihilanth, how does it feel to be tripped up based on a link to a blog post regarding a Supreme Court decision regarding the definition of property wrt SS (perish the thought that a google search using the key words "Social Security is not an insurance program" gives far more hits to sites that say that SS is a form of insurance, with one blog post being the contradictory in its title but not in its content...)

 

[paulhutch]

To be pedantic, there is a class of insurance (these plans are life insurance, NOT HEALTH) that is equity based (Universal and Whole Life). I'm not an expert and I might be completely off base though.

You got it exactly correct, it's the one truly smart thing I did back in 1978, buying a whole life policy which is a growing asset on my financial statement.

I laugh now thinking about how at the time most of my friends said I was nuts paying that much money per month for life insurance when their term life was a tenth the cost. Of course now that my premium is a tenth the cost of their term life and the spread will continue to increase I'm laughing all the way to the bank.

 

[Nihilianth]

To be pedantic, there is a class of insurance (these plans are life insurance, NOT HEALTH) that is equity based (Universal and Whole Life). I'm not an expert and I might be completely off base though.

Thanks. I guess in a way you are correct. The surviving family members get paid. So there is a little bit of gray between "insurance" (a very specific type), and "equity." One important part of "equity" I forgot to mention: "Equity" is usually an investment. Like this:

The only thing I can find regarding "individual equity" relates to the purchase of an annuity. The more you pay into a retirement fund, the more the fund pays you when you retire. I have no idea if the term means anything in regards to insuring yourself against a disaster but if you say it does then it probably does not.

hahaha

 

[RandFan]

Thanks. I guess in a way you are correct. The surviving family members get paid. So there is a little bit of gray between "insurance" (a very specific type), and "equity." One important part of "equity" I forgot to mention: "Equity" is usually an investment. Like this:

Purchasing Universal or Whole Life is an investment in a way that Term life insurance isn't.

Universal and Whole Life have face values that can be redeemed. They earn interest that increases the value of the policy that can be liquidated.

Permanent Life Policies: Whole Vs. Universal - Investopedia

Whole life insurance - Caters to long-term goals by offering consumers consistent premiums and guaranteed cash value accumulation.

 

[Nihilianth]

Ah Nihilanth, how does it feel to be tripped up based on a link to a blog post regarding a Supreme Court decision regarding the definition of property wrt SS (perish the thought that a google search using the key words "Social Security is not an insurance program" gives far more hits to sites that say that SS is a form of insurance, with one blog post being the contradictory in its title but not in its content...)

Very confusing. That's how it feels!

I wasn't going to click that link he provided, but you convinced me to. I am confounded as to how in the world that blog post supports elf grinder's argument.

As for using the phrase

"Social Security is not an insurance program" in Google: Good friggin' call!

Elf Grinder's link is the SECOND link down. (Not the first. this was the very first link: http://articles.latimes.com/2011/sep/19/opinion/la-ed-socialsecurity-20110919 )

Oh damn, and he didn't even read the link he provided!

Oh my, so much elf-fail in one post that is all of like 5 lines in total