[NA] Health Insurance. US vs. Elsewhere

[SixPapaCharlie]

I know this thread will be locked in a matter of minutes but here goes.

I just filled out my open enrollment paperwork for my company and the plan for me and my family is $1720 per month. My employer pays half so $860 per month for me for premiums.

This means to use zero medical services, my medical premiums add up to $20,640 per year.
That is the cost if I never use it. My deductible is $7500 so $28,140 annually. My share is $17,820.

I assume most of that money goes to the insurer's pockets but have no way of knowing for sure.
(Feels like it should be illegal)

I also stress that these are the prices irrespective of income. There are people at my company that make $20k / year. We have an option of a cheaper plan that is about 50% less but 15,000 deductible. For them that still seems impossible.

To those that don't live in the U.S. your medical is added into your annual taxes correct?
Does anyone know what that comes out to for an individual? Is it more or less than what I described above?

Are there alternatives here or is this the sandwich we have no choice but to eat?

I have been reading through the paperwork and it feels like the system is designed to be very expensive and try not to offer very much in the way of actually helping people.

I get. If I get cancer and have million dollar bills, it counts then but not much else.
If I paid my normal visits and preventative care out of pocket it sure wouldn't add up to 20k a year.

Ok, Lock the thread.

 

[PeterNSteinmetz]

To those that don't live in the U.S. your medical is added into your annual taxes correct?
Does anyone know what that comes out to for an individual? Is it more or less than what I described above?

Amazingly not locked yet. And so far as I can see, has nothing to do with aviation.

But in any case, I have looked into this a bit in the past. So far as I can tell it becomes extremely difficult if not impossible to really know what people are paying for healthcare in countries that run these expenses through government programs. There are just so many ways for an expense to be counted or not counted as part of healthcare expenses.

 

[PeterNSteinmetz]

Because of the high deductible — so high that most healthy individuals will never reach it — these plans won’t cover all the regular health care costs that most people have.

And really those are not an “insurable” risk in the classic sense.

What is sold as healthcare “insurance” in this country is really a combination of true insurance for a risk combined with a pre-paid set of purchases and a buyer’s discount club.

A variety of reasons for that historically. Largely due to the premiums being pre-tax benefits which encourages bundling things to lower the tax burden, regulations explicitly encouraging healthcare maintenance organizations, and regulation of drugs.

I have never met a doctor that actually knew the true cost of most recommended treatments. They are billed at a very high rate and then negotiated down by the insurers to often 50% or less of the list price. It is a very distorted marketplace.

 

[PeterNSteinmetz]

Cost?
https://www.healthcarebluebook.com/explore-home/

This is a nice attempt to make costs more transparent. However the ranges are so broad as to be almost meaningless for practical work. Consider the example they give for knee replacement - $21k - $51k a factor of 250%.

And if you then try to use this information and ask what the provider will charge for something, you will almost always be met with blank stares.

There are a few hospitals where they actually do cash only business now. Interestingly the costs for procedures there are about 50% of what insurers are paying elsewhere. So that is probably not a bad estimate of what our third party payment system presently costs us.

 

[PeterNSteinmetz]

That's because the actual cost to the patient is not controlled by the provider. That cost is entirely dependent on the insurance company the patient contracted with. That is a question you need to ask your insurance company.

In our office, you wouldn't get a blank stare. The provider would refer you to the office manager who can give you a good idea what to expect based on your insurance company and the service/surgery at issue. But in the end, it's the insurance who can give you an estimate based on your deductible and OOP status.

I’m glad to hear some offices can answer the question.

But this does illustrate my point about many of the issues here being driven by 3rd party payment rather than direct cash payment for most routine things. This does not allow a market and competition to develop and function. And the preference for employer provided health insurance is largely driven by the tax treatment as a pre-tax benefit as well as preferential treatment of HMOs.

 

[PeterNSteinmetz]

The best 'bang for the buck' we have in medicine would be to train more geriatricians and palliative care specialists. The 'problem' is often to get families to accept the reality of the situation and to move someone to geriatric or palliative care. The hospital/ER/ICU/SNF/rehab is a machine and once you feed someone in, the machine will do its thing. Of course it's not logical to do the tenth abdominal CT in as many weeks on a dying patient with abdominal pain. Scan #10 will have as little influence on the patients well-being as did #7 and #5. But once the private ambulance from the nursing home wheels the victim patient through the ER door, the machine will do it's thing. All of us who are involved in the farce care know its insane and futile, but until the family calls an end to it, it will continue.

I think to some extent driven by the way it was 60 years ago when the Blues were set up. Back then there wasn’t a lot of expensive stuff that could be done for most people. So the insurance said “we will pay for everything to be done” and we could afford that on average as a society.

Nowadays there are a lot more expensive things which can be done at the end of life. And since the average person makes perhaps $2M over the course of their working life, clearly we cannot on average be paying $1M in end of life care.

 

[PeterNSteinmetz]

Yes, if health insurance premiums were fully deductible to the individual, we would have a very different health insurance market. There would be no reason to get insurance through your employer. A health insurance customer who may be a source of premiums for the next 25 years is a different thing from a 'subject' whose contract is negotiated between the insurer/TPA and the employer. There could be a benefit to building in a life-insurance/investment component into the insurance product to stabilize the premiums later in life and the insurer would actually be interested in the long term health of their customer through things like weight management.

Hear hear! And yet this relatively simple market based solution was ignored and we got a healthcare reform bill that was so long the sponsors said it had to be passed to understand what was in it. Sigh.

In my view, if you want to get the best possible healthcare for all people, let a free market drive the prices down and things will become much more affordable for everyone.

 

[PeterNSteinmetz]

I have sometimes wondered what healthcare insurance would look like in a truly free market today.

Perhaps one would actually start buying it for a child prior to conception, when there is the big random event of recombination still to occur. After that you can know a lot more these days about genetic risks, etc. Then, like term health insurance, the company is on the hook for certain benefits for specific events and limits, as long as the premiums are paid. Seems like it would put a lot of the economic incentives in the right place.

 

[PeterNSteinmetz]

What is the preferential treatment HMO's receive?

It looks like most of the preferences were put in place back in the 70s when the Federal government was giving out funds to establish them - https://www.cchfreedom.org/cchf.php/171

Also they are apparently exempt from lawsuits for denial of coverage - “In 1974, buyer monopolization was strengthened during the Nixon Administration after the Employee Retirement Income Security Act exempted employee health benefit plans offered by large employers (e.g., HMOs) from state regulations and lawsuits (e.g., brought by people denied coverage).”

From https://www.intellectualtakeout.org/blog/how-government-regulations-made-healthcare-so-expensive/

That a rather large market advantage.

I remember this time when HMOs were offered as this big new alternative to the regular insurance.

It is a very heavily regulated market.

 

[PeterNSteinmetz]

There were no policies in the 60's that paid for everything even into the 70's and even early 80's traditional indemnity plans were the norm. Those plans had no first dollar coverage and you had to meet your deductible before any coinsurance payment from the insurer kicked in. Those plans forced people to make decisions like maybe little Johnny just needs to rest and take some aspirin for that fever and doesn't need to be seen by the doctor today. The advent of HMO's caused people to lose sight of how much an actual doctors appointment cost and the craziness started

Right. I was referring to expenses on the other end, not the little things. In other words we spend everything necessary to keep you alive after you’ve met your deductible. The idea of no upper limit on expensive procedures.