Insurance Insanity (Non-Aviation)

[francisco collazos]

Hey, I was against Obamacare.

I was against obamacare as well because it seemed like HDCP (high deductible catastrophic plans) were cheap before OC came around and after it was implememted, they became the norm. Also the government subsidies stopped at about 30k/yr so it really was a tax increase of the middle class. So not you get a 13k deduc 80/20 plan that used to be a couple of hundred for $700 plus/mo.
Sure you can't get denied health insurance and that's great but the rest is crap. I really wish he would have just expanded medicare for all and then add in supplemental plans as needed. But like most politicians they are beholden to who knows what and kept the insurance companies in the same position.

 

[DJTorrente]

Those are profitable because the vast majority of roadside assistance customers will never need roadside assistance; those customers fund the ones who do need a tire changed or a jump start or a tow. You can assume that pretty much everyone will need to see their doctor.

Yes, everyone will need medical care of one kind or another eventually.

I think far more people than you anticipate will need roadside assistance. When that happens, and your car is smoking on the side of the road, you have zero negotiating leverage with the tow driver. If they want to charge you $500 to tow you to the nearest garage (which they may well own) you have little choice but to pay. (Of course in the era of cell phones, you can now just start dialing for alternatives. If you have service. Depends on where you drive. And AAA ain't what is used to be.)

On the other hand, an organization like AAA can solicit one of many providers in a given area, and say "We will refer you ALL of our members who need service in this defined territory -- and our data says will average (e.g.) 35 calls per year -- if you agree to charge them no more than this menu of prices/services. Will you take that deal?" Some may even compete for that position, and pay a fee to AAA. Then AAA turns around and market that 'insurance' to drivers for an annual fee.

Not understanding the parallel with Costco here... my Costco membership in and of itself gets me nothing other than through the door of a Costco store.

Costco members pay a fee for access to products at prices it negotiates. They lean hard on producers', particularly targeting high-markup items (Like Optical! Just keeping it on-topic! ). They drive pricing down and put a low and relatively flat markup on their products, which they can afford because they also have membership revenue coming in.

In my case, despite being a cash customer (no collection costs; no overhead salaries for coding and billing and paperwork via insurance claims), I was charged $1000 for an emergency tooth extraction. When all was said and done, the insurance company had negotiated that same service down to the $600 range, and that required all the overhead costs I mentioned. Being a 'member' of that insurance plan saved me $400. That negotiating service alone is worth a fee. In addition to that, medical insurers do the actuarial business of pooling money for extraordinary expenses. The latter starts to break down because, as we agree, everyone will need medical care of one kind or another eventually.

I simply bring it up to throw a wet blanket on the whole "insurance companies are nothing but scummy leeches" populist clap trap. In my case, in that situation, the leech was the medical provider. Oh, and the Human Refuse department -- don't forget them.

 

[DJTorrente]

HDCP (high deductible catastrophic plans) were cheap before OC came around ... So [now] you get a 13k deduc 80/20 plan that used to be a couple of hundred for $700 plus/mo.

Those HDCP plans were cheap because they WERE insurance, not a prepaid medical scheme that included the cost of every aspirin.

 

[francisco collazos]

I remember listening to NPR and someone went around trying to get a CT scan either by paying insurance or out of pocket. What he found was that in many cases, the scans with insurance cost more out of pocket with insurance than without. I'm a veterinarian and I have access to buying medication from distributors and it's incredible what they charge me for the same medications at walgreens on an insurance plan. IT's like you are double screwed; once for paying the insurance premium and then again with the medication upcharge.

 

[Clip4]

I was against obamacare as well because it seemed like HDCP (high deductible catastrophic plans) were cheap before OC came around and after it was implememted, they became the norm. Also the government subsidies stopped at about 30k/yr so it really was a tax increase of the middle class. So not you get a 13k deduc 80/20 plan that used to be a couple of hundred for $700 plus/mo.
Sure you can't get denied health insurance and that's great but the rest is crap. I really wish he would have just expanded medicare for all and then add in supplemental plans as needed. But like most politicians they are beholden to who knows what and kept the insurance companies in the same position.

The best thing about no preexisting condition is you can change jobs or start your own company and obtain health insurance that will cover a preexisting condition. The other good crap in the plan is it requires employers with 50 or more employees to provide health care at a minimum level of coverage and at a somewhat affordable premium. If an employee opts out of the employer insurance and on to subsidized ACA plan, the employer is penalized.

What I find amazing most aircraft owners have a lower deductible on their plane than on their health insurance. Kinda of a strange priority mix.

 

[francisco collazos]

What I find amazing most aircraft owners have a lower deductible on their plane than on their health insurance. Kinda of a strange priority mix.

well you can always not fly your plane if it breaks. The way I see deductible is that you either save it in a bank acct throughout the year and you MIGHT need it or spend it on the monthly premium and it will definitely be used. I'm not a insurance guru or anything but i figured I keep my deductible and out of pocket cost in line with what I can afford to payout from my bank account. I mean why just hand it over per month. Tell me if i'm wrong or not.

 

[kyleb]

I remember listening to NPR and someone went around trying to get a CT scan either by paying insurance or out of pocket. What he found was that in many cases, the scans with insurance cost more out of pocket with insurance than without. I'm a veterinarian and I have access to buying medication from distributors and it's incredible what they charge me for the same medications at walgreens on an insurance plan. IT's like you are double screwed; once for paying the insurance premium and then again with the medication upcharge.

Had that experience with a colonoscopy earlier this year. Something like $1700 bucks out of pocket for a colonoscopy that was supplimented by insurance. When I told the GP he needed to refer me to a different place due to the cost he said "I can set you up for a $1500 colonoscopy on a cash basis any day."

 

[Bob Noel]

I wonder what doctors (and medical facilities) pay for malpractice insurance...

 

[Ed Haywood]

Last Friday, the PT clinic called to give me a heads up that the PT was going to be very expensive because (as it turns out), I'm out of network. How expensive, I inquired?

Why didn't you go to a PT clinic in network?

 

[Ed Haywood]

every single hand that touches the paperwork and payment in between you and the doctor adds cost and reduces efficiency.

So you think it is a cost effective use of the doctor's time to process payments?

 

[kyleb]

Why didn't you go to a PT clinic in network?

There are two in town. My primary care doc recommended this one. I didn't realize that PT was in/out of network... I assumed that it was network neutral.

 

[Clip4]

Yes, I am. Basic preventative and scheduled care should be burdened with as little extra cost as possible. When you know you're going to go to the doctor every year for a physical, every single hand that touches the paperwork and payment in between you and the doctor adds cost and reduces efficiency. None of those added costs improve the quality of the physical you get, either, so the cost and labor of everyone other than the doctor (and perhaps a nurse and receptionist) is completely wasted.

The same is not necessarily true for catastrophic events, however, and that's where insurance provides a benefit.

For many families in the US, a $2500 medical expense is a catastrophic event and the funny thing is, just like you, doctors want to be paid.

 

[2-Bit Speed]

For many families in the US, a $2500 medical expense is a catastrophic event and the funny thing is, just like you, doctors want to be paid.

Average monthly car payment in the US is over $500 (whether new or used). Get a cheaper car, lose the payment, and in five months, you'll have the $2,500. All of which assumes that a routine medical procedure (like a check-up or physical) would cost $2,500, which has not been established.

 

[Bob Noel]

So you think it is a cost effective use of the doctor's time to process payments?

What's the value added by the various paper shufflers, submitting bill to the insurance company, getting the bill rejected because a comma was missing, resubmitting the bill, getting it rejected again for some other stupid reason, resubmitting the bill...

I doubt a doctor would need three office staff (or more) for billing, bookkeeping, and scheduling, except for....

 

[DaleB]

I think far more people than you anticipate will need roadside assistance. When that happens, and your car is smoking on the side of the road, you have zero negotiating leverage with the tow driver. If they want to charge you $500 to tow you to the nearest garage (which they may well own) you have little choice but to pay. (Of course in the era of cell phones, you can now just start dialing for alternatives. If you have service. Depends on where you drive. And AAA ain't what is used to be.)

I think if that were the case, AAA would have much higher rates. The math on this stuff is not terribly hard to do. I used to work in an industry that consisted of selling maintenance plans for very, very expensive equipment. It ALL needed preventive maintenance; that expense was rolled into the price. It COULD potentially need replacement parts that cost many times the annual maintenance contract cost. Somehow we still managed to make money, even charging half what the equipment manufacturer charged for a maintenance contract. It's a numbers game, like life insurance.

In my case, despite being a cash customer (no collection costs; no overhead salaries for coding and billing and paperwork via insurance claims), I was charged $1000 for an emergency tooth extraction. When all was said and done, the insurance company had negotiated that same service down to the $600 range, and that required all the overhead costs I mentioned. Being a 'member' of that insurance plan saved me $400. That negotiating service alone is worth a fee. In addition to that, medical insurers do the actuarial business of pooling money for extraordinary expenses. The latter starts to break down because, as we agree, everyone will need medical care of one kind or another eventually.

I simply bring it up to throw a wet blanket on the whole "insurance companies are nothing but scummy leeches" populist clap trap. In my case, in that situation, the leech was the medical provider. Oh, and the Human Refuse department -- don't forget them.

Odd, I've had exactly the opposite experience both recently and in the past. One of our kids was born shortly after I'd lost medical coverage due to a job change. The "no-insurance" rate from the doctor was less than half what he'd have charged an insurance company, and we got a significant price break from the hospital as well. Right now I'm pricing prescriptions, and the price without insurance is lower on most of them than with insurance - though there are exceptions.

 

[Clip4]

So, converting a $2,500 annual cash cost into $400/month insurance premium deducted from your paycheck is supposed to be good for those families?

Seriously?

You have just stated that it's all about ensuring that the medical profession collects as much $$$ as humanly possible, and not about helping anyone nor ensuring the best care at the lowest possible price.

I think that many doctors would disagree...but the reality is that the insurance system is exactly as you describe. It solely exists to maximize payments into the medical system, and has nothing to do with providing quality medical care.

Beats saving $400 a month and paying $80,000. Like it or not, insurance companies negotiate the fees both the insured and the insurance company pay for services. If you follow health care news, those negociafions have resulted in insurance companies removing various hospital networks and vice versa until they can agree on cost of services.

Bloomberg - Are you a robot?

 

[Clip4]

I think if that were the case, AAA would have much higher rates. The math on this stuff is not terribly hard to do. I used to work in an industry that consisted of selling maintenance plans for very, very expensive equipment. It ALL needed preventive maintenance; that expense was rolled into the price. It COULD potentially need replacement parts that cost many times the annual maintenance contract cost. Somehow we still managed to make money, even charging half what the equipment manufacturer charged for a maintenance contract. It's a numbers game, like life insurance.


Odd, I've had exactly the opposite experience both recently and in the past. One of our kids was born shortly after I'd lost medical coverage due to a job change. The "no-insurance" rate from the doctor was less than half what he'd have charged an insurance company, and we got a significant price break from the hospital as well. Right now I'm pricing prescriptions, and the price without insurance is lower on most of them than with insurance - though there are exceptions.

I agree there are a lot of prescriptions, especially generics, you can purchase less expensive without insurance and you can shop online using various discount cards and pharmacies to get the cheapest price.

Do you really want to be doing that when you need your gall bladder out?

 

[DaleB]

I agree there are a lot of prescriptions, especially generics, you can purchase less expensive without insurance and you can shop online using various discount cards and pharmacies to get the cheapest price.

Do you really want to be doing that when you need your gall bladder out?

Emergency surgery? You may or may not have a choice of where you end up. Anything other than that, if you're smart you can shop this stuff around ahead of time. My wife gets imaging done twice a year. She can go the hospital that the insurance insists we use, and we pay over $2K per until we meet our ridiculously high deductible. Or she can go to a dedicated imaging place near our house, pay about half that out of pocket, and even her neurosurgeon is happy with the results.

As repeatedly stated above, insurance makes sense for emergency or catastrophic care. It makes no sense whatsoever for routine care.

This. And some of the coverage makes zero sense. We have dental and vision coverage, each of which will pay out far more than the total of the premiums for both of us, every year, just for routine care. It's nuts.

 

[2-Bit Speed]

... and we pay over $20 per...

I'm assuming that's a typo.

 

[DaleB]

I'm assuming that's a typo.

It was. Fixed it, thanks.

 

[Albany Tom]

"Ignorance" is an amusing claim.

Perhaps if medical professionals had more say than insurance staff I'd believe you.

Look how well it's working:

I'm not going to talk about health insurance. But I will talk about that graph. It might as well be a graph of life expectancy vs chord changes in the national anthum.

US life expectancy is miserable because we eat what can only loosely be called food and most people can't see their own feet.

 

[Lindberg]

So, converting a $2,500 annual cash cost into $400/month insurance premium deducted from your paycheck is supposed to be good for those families?

If I take the high-deductible plan at work, I get an HSA, and my company will put $1000/yr in the HSA.

When they introduced this option, I did the math on the premium/deductible/out-pocket max for the high- and low-deductible plans and figured that there's no scenario where the low-deductible plan is a better deal.

I thought I must be mistaken, so I asked our benefits coordinator about it. She confirmed my analysis. I asked her why, if the HD plan was a better value for both the company and employee, we even offered the low-deductible plan. She said some people want the comfort of knowing they have a low deductible even if they wind up paying more than they could potentially save.