Obamacare 5 years later. Crow, anyone?

[Nihilianth]

You can get a hamburger for 99 cents??? Wow... The last time I tried going into McD's, the basic burger was $1.29! (Their 'Dollar Menu' included a 3-pc Chicken Nugget and several non-meat-related items, and that was it.)

Considering the Whopper was $4.75 across the street (for just the burger), I think it's some kind of inflated-price neighborhood. But they have a Deals at the corner... Got a jumbo burrito there for a dollar!

Well, it depends on where you live. There is no such thing as a "dollar menu" in a NYC McD's. But here in Bum **** Nowhere PA, they still have the 99 cent burger. (With tax, it's a $1.06.)

But that wasn't really my point. My point is that, sure, the fresh vegetables may be more expensive than the burger, however, they are not prohibitvely expensive for most people. Not to mention, you would be saving a heck of a lot more money in the long run eating veggies than you would eating burgers from McDonald's. For one, you wouldn't eat as much, as vegetables have lots of fiber, which will make you feel fuller, longer, therefore, eating less. For another, you would be a lot healthier, saving money from having to go to the doctors more often.

That's what Obamacare is like. Sure, some people's premiums may be higher, especially if they don;t shop around, but in the long run, health care costs will be a much lower. People would be going to see primary-care doctors more often, before a sickness or an injury gets out of hand. Preventative medicine, like eating veggies, keeps you healthier, and saves a lot more money.

 

[paulhutch]

Preventative medicine, like eating veggies, keeps you healthier, and saves a lot more money.

.. and many, maybe most, people don't like to do it.

But seriously, good post Nihilianth.

 

[Emily's Cat]

The NY Times dumps this story on the Fourth of July:

Health Insurance Companies Seek Big Rate Increases for 2016

Interesting (to me) bit of info regarding Oregon. OR Dept of Ins forced many carriers to raise their rates for 2016. All the carriers were underpriced for 2014 - when the final info fell out, everyone lost money. the firs tpass guess at what the cost of ACA would be in OR was simply wrong. There's a lot of reasons for it - network agreements didn't materialize, sicker than expected population, whatever.

There was also some predatory pricing going on. In order to compete, prices need to be somewhat comparable.... and there were a couple of larger companies who filed at a considerable loss, simply because the smaller carriers wouldn't be able to live on capital for that long.

Oregon Insurance Commissioner pretty mush said "No, you don't get to undercut everyone this way, you have a duty to be solvently priced. You must raise your rates to a level that covers your expected costs... and those costs must be based on reality not wishful thinking".

It sucks for OR right now, but it will make a more sustainable market long term.

 

[Emily's Cat]

It's a valid point. If ACA premiums jump by 20+ points in multiple states, it's going to look very bad.

Keep in mind though, that these are preliminary premium hikes that are being requested. They have to be negotiated with the states.

I think Brainster is going to be proven partly right: there will be some states with double digit premium increases, with the majority of states settling on high single digit increases. It won't be devastating to the ACA, but it won't look all that good either.

It's going to be a few years until there's stability. Right now, we're dealing with a really long information lag.

Most carriers had to file 2016 rates by April of 2015. At that point, we don't even have all the information from 2014 in yet - we don't have the Risk Adjustment info at all, and won't until August. The Risk Adjustment portion can make a huge difference in financial outcomes.

So basically, a lot of carriers made a guess for 2014, and just sort of ran with another guess piled on top for 2015... and when 2014 came back looking kind of bad, they ran the other direction.

I am expecting to see the trends regain some normalcy around 2018.

 

[Emily's Cat]

It amazes me that these insurance companies are so incredibly bad at estimating expenses when issuing quotes (actually with those magnitude of errors they're more accurately described as pure guesses than estimates). Once they adjust their rates they'll probably loose a lot of customers to the companies that correctly estimated expenses and where actually cheaper for the consumer once the other companies errors are accounted for.

It's not that simple. Most insurers are fairly good at estimating their costs... but the rules for how it works changed, and they changed in ways that aren't straightforward. Part of the new rules includes a redistribution of profit within each state market. There's no good way to estimate how that's going to play out until we have a few years of experience to look at.

It's vastly more complex than our old market was.

 

[Z]

Well, it depends on where you live. There is no such thing as a "dollar menu" in a NYC McD's. But here in Bum **** Nowhere PA, they still have the 99 cent burger. (With tax, it's a $1.06.)

But that wasn't really my point. My point is that, sure, the fresh vegetables may be more expensive than the burger, however, they are not prohibitvely expensive for most people. Not to mention, you would be saving a heck of a lot more money in the long run eating veggies than you would eating burgers from McDonald's. For one, you wouldn't eat as much, as vegetables have lots of fiber, which will make you feel fuller, longer, therefore, eating less. For another, you would be a lot healthier, saving money from having to go to the doctors more often.<snip>

((off-topic))
Unfortunately, nothing's cheaper for filling the belly than Ramen noodles (at least, around here) - For 40 cents, you can fill your belly for a day and have energy to keep going. It's bloody rotten on the body, but you can survive. And for some people, that's as good as it's gonna get for a while. Me, I eat ramen about a week every month, as I wait for food stamps to reload (since I work, I don't get nearly enough to survive - but the job only pays the rent, and that just barely).

Of course, I'm not fat any more! Oh, that's 'cuz I walk to work... and to the library... and everywhere else...

((on-topic))
I personally think one of the problems with the way Obamacare is done is that it still carries a hidden assumption about people's financial conditions. I've noticed this before - the general assumption that everyone has X. "Oh, our day labor now requires you to take a photo of your daily work slip on your smartphone and email it to the central office in another city. What do you mean, you can't? Everyone has a smart phone."

And so forth.

Everyone STILL can't afford health insurance. And those who can't aren't necessarily covered by government programs - quite a few people who don't qualify can't afford coverage - or the fines that not getting coverage produces. So we're still by no means at a universal status.

Is it better? Who knows. Frankly, it doesn't seem from my limited POV to be any different than it was. But then again, the only health care centers I ever see are VA hospitals, so there's that to consider.

 

[Z]

The big problem with a lot of 'save money in the long run' concepts, is that you too often have to have some money to begin with.

Not everyone does.

 

[Nihilianth]

.. and many, maybe most, people don't like to do it.

But seriously, good post Nihilianth.

I know they don't. Hence: The myth that premiums are "higher" for those who already have insurance. It isn't necessarily, if you shop around.

Thank you.

 

[sunmaster14]

<snip>

That's what Obamacare is like. Sure, some people's premiums may be higher, especially if they don;t shop around, but in the long run, health care costs will be a much lower. People would be going to see primary-care doctors more often, before a sickness or an injury gets out of hand. Preventative medicine, like eating veggies, keeps you healthier, and saves a lot more money.

There's no support for these claims. Preventative medicine does not save money typically, and Obamacare has very few cost-saving measures in it, as Jonathan Gruber has admitted in his rare moments of candor. In fact, Obamacare is designed to increase health care demand, without stimulating supply, so it likely will drive costs higher. In the long-run the Cadillac tax will remove the tax subsidy for health insurance, so that will have a beneficial effect. If, of course, it isn't rescinded. Which is a pretty big if.

 

[Nihilianth]

If I go see my primary care physician, it would cost about $75 or so, and a cheap prescription for a drug that could shorten the length of time I am sick. If I had to go to the ER, $800 right off the bat, just for stepping foot in the place, while taking up valuable space that someone else with a more serious condition may need. If I dont go to see a doctor at all, it would prolong my sickness, and possibly keep me out of work longer and/or spread the sickness my coworkers, potentially costing the company in productivity. If a more serious condition, like say, cancer, it may be discovered in a later stage, thereby, potentially shortening my life. Preventing disease and shortening a sickness is far more valuable than treating a disease or sickness that has already set in

 

[thaiboxerken]

If I go see my primary care physician, it would cost about $75 or so, and a cheap prescription for a drug that could shorten the length of time I am sick. If I had to go to the ER, $800 right off the bat, just for stepping foot in the place, while taking up valuable space that someone else with a more serious condition may need. If I dont go to see a doctor at all, it would prolong my sickness, and possibly keep me out of work longer and/or spread the sickness my coworkers, potentially costing the company in productivity. If a more serious condition, like say, cancer, it may be discovered in a later stage, thereby, potentially shortening my life. Preventing disease and shortening a sickness is far more valuable than treating a disease or sickness that has already set in

not if you hurry up and die......the conservative plan for healthcare.

 

[Nihilianth]

not if you hurry up and die......the conservative plan for healthcare.

I originally broke a JREFF rule when I responded to sunmaster 14, and decided to quickly edit it.

 

[sunmaster14]

If I go see my primary care physician, it would cost about $75 or so, and a cheap prescription for a drug that could shorten the length of time I am sick. If I had to go to the ER, $800 right off the bat, just for stepping foot in the place, while taking up valuable space that someone else with a more serious condition may need. If I dont go to see a doctor at all, it would prolong my sickness, and possibly keep me out of work longer and/or spread the sickness my coworkers, potentially costing the company in productivity. If a more serious condition, like say, cancer, it may be discovered in a later stage, thereby, potentially shortening my life. Preventing disease and shortening a sickness is far more valuable than treating a disease or sickness that has already set in

You can rationalize all you want, but the cost-effectiveness of preventative healthcare has been studied a lot, and the conclusions are pretty solid. This is not to say that it's not good public policy, but it doesn't save money.

As an aside, I'll just point out that the $800 for your ER visit is the price you or your insurer pays, but it is not really the cost to society. The price is inflated for accounting reasons, but in fact the actual amount of health care resources being deployed for you (both in marginal and amortized costs) is rather modest. The ER is actually a rather efficient use of resources, since the patients are queued up and ready to go. You don't have a problem with no-shows that you do with doctor's appointments either.

 

[Bob001]

((off-topic))
Unfortunately, nothing's cheaper for filling the belly than Ramen noodles (at least, around here) - For 40 cents, you can fill your belly for a day and have energy to keep going. It's bloody rotten on the body, but you can survive. And for some people, that's as good as it's gonna get for a while. Me, I eat ramen about a week every month, as I wait for food stamps to reload (since I work, I don't get nearly enough to survive - but the job only pays the rent, and that just barely).
....

Without weighing in on the larger, enormously complex topic, a suggestion: Instead of eating ramen for the last week of the month, could you scatter your ramen days across the month, so you're only eating ramen one or two days at a time? Seems like it would be healthier and more enjoyable without costing any more.

 

[Nihilianth]

You can rationalize all you want, but the cost-effectiveness of preventative healthcare has been studied a lot, and the conclusions are pretty solid. This is not to say that it's not good public policy, but it doesn't save money.

As an aside, I'll just point out that the $800 for your ER visit is the price you or your insurer pays, but it is not really the cost to society. The price is inflated for accounting reasons, but in fact the actual amount of health care resources being deployed for you (both in marginal and amortized costs) is rather modest. The ER is actually a rather efficient use of resources, since the patients are queued up and ready to go. You don't have a problem with no-shows that you do with doctor's appointments either.

Huh? But that's that I was talking about! The $800 ER visit costs a lot more than the $75 doctor's visit. It doesn't matter what the "cost to society" is. It still costs more!

In any case, this thread is about "Obamacare" and what it does. As it turns out, without "obamacare," all those ER visits by all those 50 million people who could not previously afford insurance, were going to the ER. Without insurance, the vast majority of physicians will not see you. Therefore, the only option for those without insurance who end up with something as common as the flue would either:

~ Go to the ER to get a prescription to lessen the time they are sick, and the severity of the cold. Or:

~ Don't go see any doctor at all, allow it to pass on it's own. This option results in more people calling off from work, or spreading the flue around to more people. Thereby, potentially reducing productivity in the workplace. (A very real "cost to society," as it turns out.)

Those who do go to the ER obviously cannot afford the $800 if they could not afford insurance to begin with. The money does not get paid to the hospital, the hospital has to eat that cost. The hospital then has to turn around and raise the costs of doing business, which in turn, gets passed on to the consumers: The patients and the insurance companies. That is exactly why there was an annual 20% increase in health care costs each and every single year. Compared to about a 2.5% increase in inflation! And this has been going on for 20+ years! Gods, health care in this country was headed for complete collapse at this rate!

Preventative medicine is still MORE VALUABLE (those are the words I used,) than not! And yes, it can save money. Lots and lots of money. Sometimes, on the order of hundreds of thousands of dollars. As I have said, if I went to see a physician and he caught a small lump, say, on one of my testicles and it was early, I would have a 99% chance of survival with very little stress on my body, and at relatively little cost. Compared to if I had not gone to the doctor and it started spreading. All those cancer treatments to treat a disease that is growing like wild fire....IS NOT CHEAP!

(I don't and never have had cancer, *knock on wood.* I'm just using this as a very common hypothetical that happens to millions of people.)

The end of the article you posted:

Our ruling

As a general notion, the idea that "preventive care … saves money, for families, for businesses, for government, for everybody" is no more true today than it was in 2009. Yes, preventive measures often save lives and keep patients healthier. Certain preventive measures may save money as well. But the findings of CBO and physicians who have studied the medical literature indicate that Obama’s sweeping generalization that preventive services save money is not accurate. We rate the statement False.

It seems your article is rating a statement that OBAMA said regarding "general" preventative medicine funded by the government, and he said it back in 2009 before the ACA was even passed. Not what I said, nor even what this thread is even about right now; the ACA providing cheap insurance to the most vulnerable of the population, so they can get regular check-ups by physicians at a cheap cost, who can then make decisions based on a patient's symptoms. It increases the likelihood of discovering odd lumps on specific areas of the body.

Besides, the article did agree that preventative medicine, as Obama described it in 2009, can save lives. I happen to find that quite valuable.

 

[3point14]

The ER is actually a rather efficient use of resources, since the patients are queued up and ready to go. You don't have a problem with no-shows that you do with doctor's appointments either.

Can you prove this?

 

[Skeptic Ginger]

You can rationalize all you want, but the cost-effectiveness of preventative healthcare has been studied a lot, and the conclusions are pretty solid. This is not to say that it's not good public policy, but it doesn't save money.

As an aside, I'll just point out that the $800 for your ER visit is the price you or your insurer pays, but it is not really the cost to society. The price is inflated for accounting reasons, but in fact the actual amount of health care resources being deployed for you (both in marginal and amortized costs) is rather modest. The ER is actually a rather efficient use of resources, since the patients are queued up and ready to go. You don't have a problem with no-shows that you do with doctor's appointments either.

This suggests you have no clue about health care funding.

 

[sunmaster14]

Huh? But that's that I was talking about! The $800 ER visit costs a lot more than the $75 doctor's visit. It doesn't matter what the "cost to society" is. It still costs more!

The $800 that the ER charges to put a band-aid on little Jimmy's scraped knee is used to subsidize other services that the hospital provides. It doesn't actually cost $800 of medical resources, whether it be a doctor's time, amortized cost of an x-ray machine, electricity, maintenance, or whatever. The cost in terms of real resources is what truly matters. Not that the hospital is charging ridiculous prices in the ER because that's where they have a captive customer who isn't about to get into the details of billing before they're treated. Conveniently, the ER is also where most of the uncompensated care happens. If you were a hospital administrator, wouldn't you like to inflate the costs of uncompensated care so it makes it look like your hospital is providing all of this charity to society?

The important points are these: (1) unnecessary use of the ER is not a material driver of rising health care costs; rather unnecessary use of medical care in general is; and (2) the cost of uncompensated care is not being solved by Obamacare. All Obamacare does is shift more of the burden of the care for those people to taxpayers from other health care consumers (whether insured or not). In general, Obamacare increases demand for healthcare, by increasing its subsidization. This can only drive costs higher.

<snip>

Those who do go to the ER obviously cannot afford the $800 if they could not afford insurance to begin with. The money does not get paid to the hospital, the hospital has to eat that cost. The hospital then has to turn around and raise the costs of doing business, which in turn, gets passed on to the consumers: The patients and the insurance companies. That is exactly why there was an annual 20% increase in health care costs each and every single year. Compared to about a 2.5% increase in inflation! And this has been going on for 20+ years! Gods, health care in this country was headed for complete collapse at this rate!

That makes no sense. Uncompensated care is a well-understood cost to the system of about 3% of all health care spending (and it's an inflated number to boot). And ER care is about 2% of all health care spending (and that's an inflated number to boot). The reason health care costs have been spiraling out of control is that there is no sane price mechanism to mediate between the demand from consumers and the supply from providers. Obamacare does nothing to solve this.

<snip>


It seems your article is rating a statement that OBAMA said regarding "general" preventative medicine funded by the government, and he said it back in 2009 before the ACA was even passed. Not what I said, nor even what this thread is even about right now; the ACA providing cheap insurance to the most vulnerable of the population, so they can get regular check-ups by physicians at a cheap cost, who can then make decisions based on a patient's symptoms. It increases the likelihood of discovering odd lumps on specific areas of the body.

The article refers to studies which show that preventative medicine does not save money, as you seem to believe. There are some areas where it will (e.g. vaccines), but for the most part screening for disease actually costs money on net.

Besides, the article did agree that preventative medicine, as Obama described it in 2009, can save lives. I happen to find that quite valuable.

Of course it saves lives. There's no question that having annual colonoscopies starting at age 30 would save lives too. How come my insurance company says I have to wait until I'm 50?

 

[sunmaster14]

Can you prove this?

No, but I'm happy to work with you to do an analysis. Why do you think emergency rooms cost so much?

 

[Nihilianth]

It doesn't actually cost $800 of medical resources, whether it be a doctor's time, amortized cost of an x-ray machine, electricity, maintenance, or whatever.

It still costs an individual $800 to recieve a prescription drug from an ER physician, compared to $75 by going to a family physician! If you do not have insurance, you have two options:

Go to the ER and spend $800 to shorten the duration and lessen the severity of the flue

Or:

Not see a doctor at all, potentially getting sick enough to miss work (which could inevitably cost more than $75 out of your paycheck!), and/or spread the flue further and wider, potentially getting your coworkers sick in the process, and thereby, potentially slowing down production.

With Obamacare, you have insurance that you can afford. Period. You can go to see a family physician, the insurance company typically pays about $25, and you would pay $50. Get your prescription drug and be done with it.

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

Now, I get your point that the ER still has an X-Ray machine to pay for, whether it gets use or not. I get that. But the cost of that use does not get randomly passed onto people who have no use for an X-Ray! That's why it costs the individual (together with his/her insurance company) $75 to see a family physician, as opposed to $800 to go to the ER.

Now, using your X-Ray as an example. I actually happen to work an X-Ray machine to do my job at a company that assembles PCBs (Printed Circuit Boards. The X-Ray is used to check for solder balls and what-not.) While yes, the X-Ray machine itself costs a lot of money, the USE of the X-Ray machine also costs a lot of money. It requires quite a bit of energy to power it. And the filament costs between $100 (for the Nikon X-Ray,) up to $1600 (for the Phoenix X-Ray). The less often the machine are in use, the less power is being used, and the less often those (sometimes very expensive), filaments must be replaced.

If someone were to go see a family physician (for about $75,) and discovers the patient is at risk for osteoporosis, the doctor can easily prescribe medication and a proper diet to reduce the risk for osteoporosis. This means, less broken bones in the elderly population. Less use of a (VERY!) expensive resource.

I would have to see something a little more significant than factcheck.org.

Conveniently, the ER is also where most of the uncompensated care happens. If you were a hospital administrator, wouldn't you like to inflate the costs of uncompensated care so it makes it look like your hospital is providing all of this charity to society?

Absolutely not! That would be TERRIBLY irresponsible! It would eat into those charity funds. In fact, most hospitals have Urgicenters set up, specifically to reduce uncompensated care. Urgicenters use less resources, and less expensive resources, in order to deal with non-emergency-related issues.

I also find it funny that you just admitted that "the ER is also where most of the uncompensated care happens." Of course it is! That is my entire point!

That makes no sense. Uncompensated care is a well-understood cost to the system of about 3% of all health care spending (and it's an inflated number to boot). And ER care is about 2% of all health care spending (and that's an inflated number to boot). The reason health care costs have been spiraling out of control is that there is no sane price mechanism to mediate between the demand from consumers and the supply from providers. Obamacare does nothing to solve this.

Au Contrare. Obamacare specifically forces insurance companies to request permission from Congress anytime they want to raise their rates. This necessarily forces doctor's offices not to raise their rates, if they want customers to be able to continue to come in after a few years.

Another huge issue for health care costs is indirectly related: Education. The education of doctors is prohibitively expensive for a lot of people. Doctors go HEAVILY into debt (actually, a huge problem with our education system all-around.) Mal-practice insurance is also extremely expensive.

In the end, I would have to see one of these "exhaustive studies" that you claim have been done, showing how spending $800 for an ER visit is "cheaper" than spending $75 to go see a family physician.