Octopus Overlords

PLW wrote: Sure. But the point of insurance is to help with variance. Older people are more expensive on average. That's not a risk, it's a reality. The only alternative is worse.

Old people also don't have incomes, unless you are advocating taking away everything they worked their whole lives to accumulate. "Pay according to what you use" might sound great to a 20 year old, until that person realizes than when he's 50, all of his savings will be forfeit and when he's 60, he'll be asked to kindly not die on the hospital steps; it's a terrible inconvenience for paying guests.

PLW wrote:

Paingod wrote:

PLW wrote:Old people should pay more. That's not an idiosyncratic risk. People with health conditions should not. That's the point of insurance. I think individual markets where you set a list of dimensions along which firms are allowed to price discriminate is my ideal setup. Of course, they will try to game it with formularies and what not, so it will take some regulation.

Old people very often have more health issues. I'm not sure how you separate the two. At which point does someone stop being 'unhealthy' and become 'old and unhealthy' ... ?

Sure. But the point of insurance is to help with variance. Older people are more expensive on average. That's not a risk, it's a reality. The only alternative is worse.

You're going to have to regulate companies into losing money or convince individuals to pay substantially more to subsidize the pre-ex. See how that worked out on the exchanges?

Then you get into the issue with health issues that are aggravated by their habits. Why shouldn't they pay more? How do you know if the person with diabetes sits around drinking diet cokes all day?

Rip wrote:Then you get into the issue with health issues that are aggravated by their habits. Why shouldn't they pay more? How do you know if the person with diabetes sits around drinking diet cokes all day?

My company charges smokers $1000 extra for healthcare (technically, they give non-smokers a $1000 discount).

For anyone who wants to put their two cents in on Obamacare

Jeff V wrote:

Rip wrote:Then you get into the issue with health issues that are aggravated by their habits. Why shouldn't they pay more? How do you know if the person with diabetes sits around drinking diet cokes all day?

My company charges smokers $1000 extra for healthcare (technically, they give non-smokers a $1000 discount).

How about the people that live on Big Macs and Coca-Cola? The ones that drink a six-pack every night? We pay car insurance based on driving record, why not health insurance based on how healthy you live? I can get an auto discount for letting them monitor my car. How about getting a discount for letting them monitor vitals and living/eating habits?

The only way health insurance will actually help bring down health cost is when people are actually charged based on the risks they expose themselves to.

If you want to increase the subsidy with age, fine, but see it for what it is. Not insurance, but instead a transfer from young people to old people.

Rip wrote:The only way health insurance will actually help bring down health cost is when people are actually charged based on the risks they expose themselves to.

The only way costs will go down are

1) If we accept that the free market solution is not the best cost effective solution for when it comes to holding your well being hostage.
2) We accept that we are not entitled to cutting edge treatment for what ails us.
3) We accept that private corporations theoretically based in the US driving medical advancement is not synonymous with some sort of pride in the US driving medical advancement.

Rip wrote: The only way health insurance will actually help bring down health cost is when people are actually charged based on the risks they expose themselves to.

My current company gives you discounts on premium based on your exercise level, whether you get a biometric screening every year, being non-smoker, losing weight, etc. (there are all kinds of incentives that add up to different levels of discounts).

PLW wrote:Sure. But the point of insurance is to help with variance. Older people are more expensive on average. That's not a risk, it's a reality. The only alternative is worse.

Disabled people are more expensive on average. That's not a risk, it's a reality.

People with chronic medical conditions are more expensive on average. That's not a risk, it's a reality.

Unless I'm missing something in your argument (always a possibility - my brain is a bit fried this week), I have trouble understanding why we would charge the elderly more for their (risk or) reality, but not other groups with traditionally higher medical costs.

Rip wrote:Then you get into the issue with health issues that are aggravated by their habits. Why shouldn't they pay more? How do you know if the person with diabetes sits around drinking diet cokes all day?

Hey, Rip. Fuck you, ignorant asshole. Diet cokes have no carbs and zero calories.

Do you want to know how you know? They have a higher risk of death and organ damage. If living isn't enough to get someone to take action when they can, nothing will.

12-14% of the US population has diabetes. 37-38% of the US population are are risk. 0.5% have type I which has zero relation to weight or carb intake. Living with diabetes. It's a serious genetic condition that is affected by diet and weight, but not caused by diet. My rail-thin 9 year old has type I diabetes, the same as my linebacker proportioned 7 year old.

Diabetes isn't funny. If you had diabetes, knew anyone who had diabetes, or a single ounce of human empathy you wouldn't even try to make such ignorant jokes.

ImLawBoy wrote:

PLW wrote:Sure. But the point of insurance is to help with variance. Older people are more expensive on average. That's not a risk, it's a reality. The only alternative is worse.

Disabled people are more expensive on average. That's not a risk, it's a reality.

People with chronic medical conditions are more expensive on average. That's not a risk, it's a reality.

Unless I'm missing something in your argument (always a possibility - my brain is a bit fried this week), I have trouble understanding why we would charge the elderly more for their (risk or) reality, but not other groups with traditionally higher medical costs.

Some people turn out to have a severe medical condition and others don't. That's risk. Everyone gets old, unless they die. That's not.

PLW wrote:

ImLawBoy wrote:

PLW wrote:Sure. But the point of insurance is to help with variance. Older people are more expensive on average. That's not a risk, it's a reality. The only alternative is worse.

Disabled people are more expensive on average. That's not a risk, it's a reality.

People with chronic medical conditions are more expensive on average. That's not a risk, it's a reality.

Unless I'm missing something in your argument (always a possibility - my brain is a bit fried this week), I have trouble understanding why we would charge the elderly more for their (risk or) reality, but not other groups with traditionally higher medical costs.

Some people turn out to have a severe medical condition and others don't. That's risk. Everyone gets old, unless they die. That's not.

Someone born with disabilities has disabilities. That's not risk - that's reality.

ImLawBoy wrote:

PLW wrote:Sure. But the point of insurance is to help with variance. Older people are more expensive on average. That's not a risk, it's a reality. The only alternative is worse.

Disabled people are more expensive on average. That's not a risk, it's a reality.

People with chronic medical conditions are more expensive on average. That's not a risk, it's a reality.

Unless I'm missing something in your argument (always a possibility - my brain is a bit fried this week), I have trouble understanding why we would charge the elderly more for their (risk or) reality, but not other groups with traditionally higher medical costs.

We *do* charge people more they older they get, generally speaking. (There may be a premium for young males that drops as we get less stupid until we start to enter a higher risk age pool - I'm not sure) As for the rest, a least with the plans that I've administered, an annual increase can vary depending plan usage the previous year to some extent. So while it's not really factoring in behavioral risk ahead of time, it kind of does as a lagging indicator in a sense. (Though again, in my specific case, we got hit with some nasty increases because a bunch of my employees had (at the same time) young kids/first children that they rushed to the doctor every time they had a sniffle.

Not speaking as an insurance guy or someone who has ever had to administer insurance, I'd guess that distinction between why we'd charge more for the elderly, but not for the disabled or those with a chronic illness, is more societal than actuarial. It's not because of risk associated with the latter two - it's because we have, as a society, more or less determined that we don't want to add additional burdens to the disabled/chronically ill, but we are less sympathetic to the elderly. (This calculation changes if we get rid of pre-existing condition safeties - then we've determined that we're fine with adding the burdens to the disabled/chronically ill.)

My questions to PLW were really about the risk/reality dichotomy he set up. I think it's not real (at least, once the disability/illness establishes itself).

I recall that end of life care is significant and quantifiable. The older you get, the more actuarial risk of death and costlier medical care. Actuarial calculations weight the probability by the cost -- which I think both increase with age.

ImLawBoy wrote:Not speaking as an insurance guy or someone who has ever had to administer insurance, I'd guess that distinction between why we'd charge more for the elderly, but not for the disabled or those with a chronic illness, is more societal than actuarial. It's not because of risk associated with the latter two - it's because we have, as a society, more or less determined that we don't want to add additional burdens to the disabled/chronically ill, but we are less sympathetic to the elderly. (This calculation changes if we get rid of pre-existing condition safeties - then we've determined that we're fine with adding the burdens to the disabled/chronically ill.)

My questions to PLW were really about the risk/reality dichotomy he set up. I think it's not real (at least, once the disability/illness establishes itself).

As a practical matter I think you're right, FWIW. And I'm absolutely fine with the chronically ill or disabled being part of the pool that we all share. That's sort of the point of insurance, right? There but for the grace of God and all that... This is one of those situation where I think Rip, for example, makes a logically valid argument (knowledge of diabetes and Diet Coke notwithstanding), bit as a society we've thankfully decided that it's not humane to apply dollars and decimal points to human life on such a scale.

geezer wrote:

ImLawBoy wrote:Not speaking as an insurance guy or someone who has ever had to administer insurance, I'd guess that distinction between why we'd charge more for the elderly, but not for the disabled or those with a chronic illness, is more societal than actuarial. It's not because of risk associated with the latter two - it's because we have, as a society, more or less determined that we don't want to add additional burdens to the disabled/chronically ill, but we are less sympathetic to the elderly. (This calculation changes if we get rid of pre-existing condition safeties - then we've determined that we're fine with adding the burdens to the disabled/chronically ill.)

My questions to PLW were really about the risk/reality dichotomy he set up. I think it's not real (at least, once the disability/illness establishes itself).

As a practical matter I think you're right, FWIW. And I'm absolutely fine with the chronically ill or disabled being part of the pool that we all share. That's sort of the point of insurance, right? There but for the grace of God and all that... This is one of those situation where I think Rip, for example, makes a logically valid argument (knowledge of diabetes and Diet Coke notwithstanding), bit as a society we've thankfully decided that it's not humane to apply dollars and decimal points to human life on such a scale.

For me it's the same rationale that says I pay for public schooling even though I don't have kids and I'm good with that.

So am I supposed to save my entire life for retirement or medical bills? Because I have to tell you, the odds of me being able to do both are zero.

LordMortis wrote:

geezer wrote:

ImLawBoy wrote:Not speaking as an insurance guy or someone who has ever had to administer insurance, I'd guess that distinction between why we'd charge more for the elderly, but not for the disabled or those with a chronic illness, is more societal than actuarial. It's not because of risk associated with the latter two - it's because we have, as a society, more or less determined that we don't want to add additional burdens to the disabled/chronically ill, but we are less sympathetic to the elderly. (This calculation changes if we get rid of pre-existing condition safeties - then we've determined that we're fine with adding the burdens to the disabled/chronically ill.)

My questions to PLW were really about the risk/reality dichotomy he set up. I think it's not real (at least, once the disability/illness establishes itself).

As a practical matter I think you're right, FWIW. And I'm absolutely fine with the chronically ill or disabled being part of the pool that we all share. That's sort of the point of insurance, right? There but for the grace of God and all that... This is one of those situation where I think Rip, for example, makes a logically valid argument (knowledge of diabetes and Diet Coke notwithstanding), bit as a society we've thankfully decided that it's not humane to apply dollars and decimal points to human life on such a scale.

For me it's the same rationale that says I pay for public schooling even though I don't have kids and I'm good with that.

Agreed. Me too.

Allowing price-discrimination for same-age risk types is totally different from allowing it across ages. That's about smoothing inter-personal outcomes, you are either risky or not. If you allow price-discrimination on interpersonal risk type, you've bascially undone insurance. Age is totally different. Every one of us will be both old and young. There are ways to smooth consumption between those two states, but making the health insurance play that role is like using fork to eat yogurt. It might work, but there are better tools for the job.

Imagine the world consists of 100 young people and 100 old people, at a time (no early deaths, zero pop growth). They can either have something bad happen on not. If something bad happens, you lose $100. Young people have something bad happen 25% of the time, and old people have something bad happen 75% of the time. Assume insurance covers all your costs, is actuarially fair, and everyone's pretty risk averse, so they want insurance.

If you let insurers price discriminate by age, young people will be charged $25 for insurance and old people will be charge $75. And that's all you pay whether you get sick or not. If you don't allow price discrim, everyone will be charged $50, and that's all you pay. Under these assumptions, it doesn't really matter much whether you allow price discrimination. Everyone basically pays $50/year over their lifetime, regardless of their health status. Perfect insurance.

Now, what if we introduce early death, so (say), half the people die before growing old. If you allow price discrim, the prices don't change, $25 for young people $75 for old. But if you disallow it, the price for insurance goes down to ($25*100+$75*50)/150=41.6, since there aren't as many old people in the insurance pool. This is the exact same outcome you'd get if you allowed price discrimination and simply transferred $15 from every young person to give $30 to every old person. People who live their whole lives actually end up paying less than their actuarial risk for insurance, while those that die early pay more than theirs.

I guess you could call it "insurance against growing old", but don't we generally think those that don't die are actually getting the better outcome, here, do we want to take money from those who die early and give it to those who die late? That doesn't seem to equalize outcomes at all. And even if we do, we have a better way of handling that, called social security, that doesn't mess up the whole health insurance market at the same time.

Edit: I want to weaken my position a bit, and say the "insurance against growing old" arguments holds more sway with me when we are talking about the truly elderly, since the transfer you would need to allow them to buy insurance privately is so large. That's essentially what we do with Medicare and, even more so, Medicare Advantage.

Isgrimnur wrote:So am I supposed to save my entire life for retirement or medical bills? Because I have to tell you, the odds of me being able to do both are zero.

Medical bills of course, because once your bank account has been drained, you are expected to die. Retirement age meanwhile will be pushed even higher so why save for something you will never attain?

Isgrimnur wrote:So am I supposed to save my entire life for retirement or medical bills? Because I have to tell you, the odds of me being able to do both are zero.

Why would it be anyone's responsibility other than your own?

If it all goes "free market", and the selling point is the lowest price, you can bet that no one is going to want to subsidize a high-risk 63-year-old. Until they are one. You'll have insurance for the fit and insurance for the unfit. The price difference will be debilitating and the people that need it most will continue to go bankrupt.

LawBeefaroni wrote:If it all goes "free market", and the selling point is the lowest price, you can bet that no one is going to want to subsidize a high-risk 63-year-old. Until they are one. You'll have insurance for the fit and insurance for the unfit. The price difference will be debilitating and the people that need it most will continue to go bankrupt.

I'll start getting my filing papers in order right away!

ImLawBoy wrote:

LawBeefaroni wrote:If it all goes "free market", and the selling point is the lowest price, you can bet that no one is going to want to subsidize a high-risk 63-year-old. Until they are one. You'll have insurance for the fit and insurance for the unfit. The price difference will be debilitating and the people that need it most will continue to go bankrupt.

I'll start getting my filing papers in order right away!

Please. You have like 10 years before you're Jeff V's age.

LawBeefaroni wrote:

ImLawBoy wrote:

LawBeefaroni wrote:If it all goes "free market", and the selling point is the lowest price, you can bet that no one is going to want to subsidize a high-risk 63-year-old. Until they are one. You'll have insurance for the fit and insurance for the unfit. The price difference will be debilitating and the people that need it most will continue to go bankrupt.

I'll start getting my filing papers in order right away!

Please. You have like 10 years before you're Jeff V's age.

I'm thinking to afford insurance for my son.

(To be honest, I haven't looked into what Medicaid options would be available for him once he's priced out of private insurance in Trump's America. I'm not looking forward to dealing with that red tape, though.)

ImLawBoy wrote:

LawBeefaroni wrote:

ImLawBoy wrote:

LawBeefaroni wrote:If it all goes "free market", and the selling point is the lowest price, you can bet that no one is going to want to subsidize a high-risk 63-year-old. Until they are one. You'll have insurance for the fit and insurance for the unfit. The price difference will be debilitating and the people that need it most will continue to go bankrupt.

I'll start getting my filing papers in order right away!

Please. You have like 10 years before you're Jeff V's age.

I'm thinking to afford insurance for my son.

(To be honest, I haven't looked into what Medicaid options would be available for him once he's priced out of private insurance in Trump's America. I'm not looking forward to dealing with that red tape, though.)

Not something to look forward to but the good news is that Trump's bark is more likely worse than his bite when it comes to total healthcare reform. However, if you have to go that route let me know. I'm quickly becoming immersed in the world of Medicaid and I know a few people at Lurie from my previous life.

PLW wrote:

Isgrimnur wrote:So am I supposed to save my entire life for retirement or medical bills? Because I have to tell you, the odds of me being able to do both are zero.

Why would it be anyone's responsibility other than your own?

The economy is not sustainable when the removal of my tonsils would have set me back half a year's salary.

Isgrimnur wrote: The economy is not sustainable when the removal of my tonsils would have set me back half a year's salary.

Oh, the economics will take care of itself when life-sustaining operations, even routine ones, are something only the very rich can afford. One way to have less rabble complaining about things such as manufacturing jobs for rabble is to reset life expectancy to medieval norms.

Isgrimnur wrote:The economy is not sustainable when the removal of my tonsils would have set me back half a year's salary.

Would they set you back half a year's salary in a world where no one had insurance and just had to pay for medical expenses out of pocket?

RunningMn9 wrote:

Isgrimnur wrote:The economy is not sustainable when the removal of my tonsils would have set me back half a year's salary.

Would they set you back half a year's salary in a world where no one had insurance and just had to pay for medical expenses out of pocket?

Given that health insurance pays negotiated rates that often appear to be half of the billed amount, he'd likely be on the hook for a full year's salary.

Jeff V wrote:

RunningMn9 wrote:

Isgrimnur wrote:The economy is not sustainable when the removal of my tonsils would have set me back half a year's salary.

Would they set you back half a year's salary in a world where no one had insurance and just had to pay for medical expenses out of pocket?

Given that health insurance pays negotiated rates that often appear to be half of the billed amount, he'd likely be on the hook for a full year's salary.

Back in the days of being uninsured, when I told the doctor I was uninsured during my visit, they'd often slash the bill by about 50% or so. They submit a huge bill fully expecting it to come back underpaid by the insurance company. It's a really crappy game.

So he's back to 6 months' salary...

Jeff V wrote:

Isgrimnur wrote:So am I supposed to save my entire life for retirement or medical bills? Because I have to tell you, the odds of me being able to do both are zero.

Medical bills of course, because once your bank account has been drained, you are expected to die. Retirement age meanwhile will be pushed even higher so why save for something you will never attain?

We've already seen how replacing pensions with 401ks worked out.



I'd expect healthcare accounts to perform similarly.

So bankrupt pension > poorly performing 401K?

Kraken wrote: I'd expect healthcare accounts to perform similarly.

My HSA is getting the maximum allowable funding right now and that account is emptied every payday. And that's just from having a baby...can't imagine I had to pay for, say, a spinal transplant.

Rip wrote:So bankrupt pension > poorly performing 401K?

Most pensions are not bankrupt. The company I work for has a 100% funded pension that can't be touched because of corporate bylaws. Unfortunately (and par for the course since I've never worked for a company that contributed so much as a nickle toward retirement), the pension program was ended the day I started with this company.

Jeff V wrote:

Rip wrote:So bankrupt pension > poorly performing 401K?

Most pensions are not bankrupt. The company I work for has a 100% funded pension that can't be touched because of corporate bylaws. Unfortunately (and par for the course since I've never worked for a company that contributed so much as a nickle toward retirement), the pension program was ended the day I started with this company.

Any pension can be touched - via bankruptcy law. Naturally the company would have to go belly up though.

Jeff V wrote:Given that health insurance pays negotiated rates that often appear to be half of the billed amount, he'd likely be on the hook for a full year's salary.

That's true...in a system with high rates of insured. That's not what I said.

Apply economics. Things are worth what people are able and willing to pay. People are able and willing to pay a lot more when it's an insurance company doing the paying. If you just take that away from one person, nothing changes and that one person gets fisted.

I'm saying what happens if you take that option away from everyone. The market will only bear what the market can bear.

RunningMn9 wrote: I'm saying what happens if you take that option away from everyone. The market will only bear what the market can bear.

Then you wind up with an infrastructure that can only treat popular ailments. Truly expensive things like organ transplants and most invasive surgeries will become another perk that only the wealthy enjoy. Saddled with high student loans, malpractice insurance costs and declining income, the number of people entering the medical profession will decline as well, especially those going into specialties like neurosurgery.