I’ll summarize here for those who do not have time to read this, and please do include JC’s remarks in the comment section regarding payment of costs for people below poverty level to be better informed. What I found is that we are basically being sold catastrophic policies where we are on the hook for the first $6,350 of medical costs. If you have that much in costs, you can ignore all policy features except monthly premium. Go for the cheapest. The more expensive policies are an attempt to buy down the $6,350, but it’s a trap, as you end up spending more in medical expense plus premium than you would otherwise spend with a higher deductible and lower premium. If you have ongoing costs, go cheap.
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I was looking over the available policies on the Colorado Health Exchange, and it is very confusing, as it is designed to be. There are differing co-pays, co-insurance and deductibles. So I decided to do a side-by-side comparison, and selected twelve plans with varying monthly premiums, the low $430 (Kaiser) and the high $1,049 (Access Health Colorado). Bear with me here, as it will for a while seem confusing, but in the end be stone-cold simple.
There’s no way of anticipating what kind of health coverage anyone will need in a given year, so I decided to compare policies based on what might be typical for someone my age. I have an annual physical, blood tests, office visits, lab fees, an MRI and out-patient surgery, some physical rehabilitation after surgery, and ambulance and two ER visits, and a two-day hospital stay. I’ve done nothing but visit doctors for minor ailments (one knee surgery, outpatient) for decades, but am assuming that this year, SHTF. The total costs I imagined I would incur: $14,275.
What I found was quite amazing – there’s a dazzling array of no choices! All policies, due to the mandated coverages and individual $6,350 maximum-out-of-pocket limit (MOOP), are essentially catastrophic in nature. But before they hit MOOP, they will send you fifty different directions. So I decided on one key feature: All policies were required to cover all medical expenses – none of this non-coverage of office visit nonsense. With that in place, I constructed a spreadsheet to analyze how much of each charge was covered by the insurance company, and how much was paid by me via deductible, co-pay, and co-insurance. I then added the premium to my of-of-pocket costs for an annual total health care costs (TOOP) in a year where I had several things go wrong.
Keep in mind that if I have a catastrophic year in which I have cancer, chemo, an auto accident, that I am in no different position financially than if I have the costs I sampled with these policies – $14,275 in costs. That is one thing that Obamacare has done. But also keep in mind that most people don’t come near $6,350 in costs each year. So all policies are now essentially catastrophic coverage.
Also consider the following features of our private for-profit health care system:
- Many of our health care costs, maybe 50%, in this country are incurred by senior citizens, and are covered by Medicare*.
- Health care costs for the poor are covered by Medicaid, though the system from state-to-state is patchwork.
- If you are working poor, the government will subsidize the insurance company in order to buy or help you buy a policy. But you are still subject to the out-of-pocket costs that everyone else incurs up to $6,350. That’s a serious defect in this system, as I see it. [Note: See JC’s remarks in comments below.]
- On-the-job medical costs, mostly injury but often job-related illness, are covered under Workers Compensation, and not by the regular health insurance system.
- Non-job-related accidental injuries are often covered by the tort system, so that if I am not at fault in an auto accident, the other person’s auto insurance policy covers me.**
So in reality, health insurance covers only a small slice of our total medical exposure, with government assuming the vast majority through the ‘care and ‘caid and Workers Comp systems. The final step, to get private insurers out of the health care game in total, is cock-blocked by the privately funded campaign finance system, which is what gave us this torturous system nicknamed Obamacare.
All that in mind, I am going to list the critical results of my purchase of coverage via twelve policies. I’ll list the company, the grandiose-sounding policy name, the monthly premium (“MP”), my out-of-pocket costs for the $14,275 in costs I incur (“MOOP”), and my total out-of-pocket costs for the year counting the total premium (“TOOP”). (I would also list how much the insurance company pays out, but that is a separate can of worms. Most invoices we get from are fancy fiction. The amount changing hands, insurer to provider, is always far less.)
- Kaiser Permanente CO Bronze 5000/30%/HSA: MP $430, MOOP $6,350, TOOP $11,511
- HealthOp Bear EPO: MP $470, MOOP $6,350, TOOP $11,988
- Kaiser Permanente CO Bronze 4500/50: MP $526, MOOP $6,350, TOOP $12,661
- Humana Connect Bronze 6300/6300 Plan: MP $510, MOOP $6,300, TOOP $12,420
- Anthem Bronze DirectAccess – caca (their name): MP $600, MOOP $6,350, TOOP $13,550
- myCigna Health Savings 6100: MP $624, MOOP $6,350, TOOP $13,839
- Rocky Mountain View PPO Bronze HSA: MP $701, MOOP $6,300, TOOP $14,710
- HealthOp Bison PPO: MP $725, MOOP $6,000, TOOP $14,275
- myCigna Health Flex 1500: MP $735, MOOP $5,160 TOOP $13,979
- Rocky Mountain View PPO Gold: MP $993, MOOP $3,315, TOOP $15,236
- Anthem Blue Cross and Blue Shield Gold Direct Access: MP $1,028, MOOP $1,390, TOOP $13,731
- Access Health Colorado Silver (no pediatrics): MP $1,049, MOOP $4,125, TOOP $16,710
Confused? It’s really not that confusing. All of the fancy names and confusing terminology are really there for one purpose only: To confuse you. This is not rocket science. Under the new regime, we are going to be spending the cost of monthly premiums plus $6,350 each for health care. The $6,350 is a crap shoot, but the alternative, to buy it down with higher-cost insurance, is a guaranteed loser. Most of us are healthy, as risky people and exposures are under Medicare and Workers Comp, etc. Most likely we’ll visit the doctor, have some tests, sprain an ankle, have a funny-looking mole. I can pay as much as $1,049 per month to cover that gap between zero and $6,350, but isn’t that nuts? Isn’t my logical choice to buy a cheap catastrophic policy instead of an expensive one?
Duh.
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*One interesting difference between Medicare and private insurance is bureaucracy. With private insurance, all coverages are subject to prior approval, and can be disallowed if the doctor or hospital does not consult with the insurance carrier, usually non-medical staff. Medicare does not do that. It abides by the decisions of doctors and staff.
**This too can be a can-of-worms, as in some states legislation has made insurance companies the victims in accidents, allowing them to recover their medical payments from the victims if the victims receive a lump-sum settlement.
Piece of Mindful 
TOOP ranges from $11,500 to $16,700: seems significant.
Do you have any disagreement with the actuarial soundness of these numbers? Even if you cut 30% of the administrative costs out of these numbers, you are still paying a chunk: $8500 to $11,700.
A big chunk of cost control will have to be with the cost/number of procedures, which Obama care does not address. We’re re-arranging the deck chairs on a massive, overpriced cruise ship.
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You and I are not that far apart, Fred. Why our country’s per capita costs are so high as compared to other countries (that have 100% coverage and better outcomes) is a separate discussion, and I’ve heard from you that much of it is race or culture-based.
What I see is deeply systemic, with everyone in the system trying to dump their costs on everyone else. So those trying to collect their fees pad them incessantly so that what they get after cost dumping is what they wanted anyway.
That does not happen with single payer. That’s not all of it, but is a large part of it.
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everyone in the system trying to dump their costs on everyone else.
To some extent. But we do pay for a lot of care. I’m thinking of a few examples where people rush to the Hospital and get massive amounts of end-of-life care; where in other countries they would not have spent that money. Probably a better choice, given the mental toll of surrounding family members spending that bedside time etc. But those bills eventually get paid. And in America, even under single payer, those big bills would still get paid after circling through the single payer labyrinth instead of the multiple insurer labyrinth. Our culture demands it.
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Again, in the real world outside our bubble, that is not what happens. If there is such a thing as “death panels,” they are comprised of private insurance executives.
They make end-of-life decisions there just as they do here, and there’s not much talk about it as the ethics extremists get involved, but here we dose them with morphine until they peacefully die. All three of my brothers went that way.
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Ok, here’s a curveball.
For those who get subsidized premiums (100-400% of poverty), they will get some level of “cost-sharing” where the MOOP is subsidized. For instance, here in Montana, assuming my application sits in the 100-133% of poverty range, I get a premium subsidy of about $450/month, leaving me with about a $45/month premium for a $500 policy. And if my income is between 100-150% of poverty, I can sign up for what is called a “Silver 94” plan, which will pay 94% of out-of-pocket costs, leaving me with exposure to only $800 in out of pocket expenses. Which roughly is 94% of your average MOOP. Cost sharing reductions are offered to folks up to 250% poverty.
So, being a poor person, who is going to incur extensive medical expenses once I get insured (20 years of being excluded from health insurance), I can either work hard, and be subjected to your $14,000 average MOOP, and earn $28k a year. Or I can work half time, make $14k/year, let cost sharing cover the extra $14k. Comes out the same either way to me. Sometimes it’s nice to be self-employed so one can plan accordingly…
What’s the incentive for the greying generation to show more than $150% poverty income? None. I’d rather work half time.
Such be life under Obama/Baucus/United Health/Heritage/Romney care. Makes no sense. SIngle payer would have been so much fairer and simpler.
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What you said, JC, except one probably won’t be having the $14,000 in medical costs every year. So for the years where you just pay premiums, work full time.
But the meta-analysis you point out here is done to every program. It is eye opening to see the Mexican immigrants come here with a checklist of all the programs and benefits they can access; most I was not even aware of. Clearly the Mexican gov’t (or somesuch; word of mouth; might even be our State Dept) has filled them in and pointed them North. So they make just enough to max out the Earned Income credit; they claim independent contractor status to avoid SS; they go to the emergency room and know just what to say to get care; they are hip to all the state programs that are out there: every weakness in Medical is exploited to the max; etc.
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Americans living down there go to Mexico in large numbers to take advantage of their health care system. I am not fmailiar with its particulars. You might want to do some investigating there. Those that come to our country do not do so for heath care, and are simply trapped in this sytem. NAFTA forced them off the farms, there was no work down there, and so the came here to support their families.
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Americans living down there go to Mexico in large numbers to take advantage of their health care system.
I guess it depends on what you mean by “large numbers”. It is dwarfed by those coming North, and, yes, they may not come North for medical reasons, but the cost of servicing them once they are here goes on.
I’m familiar with some details of medical tourism — on the Mexican front I’ve heard positive stories at 20% of the cost, but you have to know where to go. But this avenue accounts for a small percentage of care.
Quit saying that about NAFTA. First of all, it is not really a free trade agreement, more like a managed trade agreement. The deal there was that some big players in Mexico set up some large hog feeding operations and wanted to import corn for the deal. So instead of importing the hogs, they imported the corn to feed them. There was no decrease in Mexican corn production, and hardly any decrease in the number of farm workers. Any change there was from the usual consolidation in Ag from mechanization etc. Your NAFTA thing is just a left-wing talking point. I challenge anyone who makes this statement to show me anyone they know who came North because of NAFTA. I have yet to be answered.
Illegal immigration from Mexico started its rise in 1965 after the Hart-Celler act passed with the intention of demographically replacing current Americans. There was a steady increase through the years until the big wallop came in 1986 with the Amnesty that opened the floodgates. (Thanks, Reagan). NAFTA wasn’t even a blip. The only thing there was a cut in legal immigrants from Mexico, but they all just switched to the illegal side.
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NAFTA resulted in a flood of subsidized corn into that market, depressing their prices, resulting in poverty and migration. Of course it is not a free trade agreement, as the powerful forces in this country who benefit form the agreement want that least of all. Things that they value (“intellectual property”) are protected.
I did not invent the term “Free Trade” – it’s naFTa.
One link of thousands:
http://www.mtholyoke.edu/~mindi22l/classweb/wp/crisis.html
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Cut and pasting the same talking point one thousand times does not make a debate.
What a crappy link. Just fluff. You make me cry. But it has references. So I check them. They are not hot-linked. Grrr. So I search for them: An article by Wendy Call about year 2008 protests in Mexico on the day of full implementation of NAFTA. 2008? A fourteen year implementation? “By 2003, 1.3 million Mexican peasants had lost their livelihoods because of NAFTA. Many of the displaced farmers came north in search of work.” 1.3 mil? That’s like one busy week of Mexican colonization into the US, and not all of those farmers came. And besides, the point of reducing your agriculture workforce via cheaper food is to free up labor for more productive enterprises. Nobody gets wealthier by putting more people in agriculture. “Mexican migration to the U.S. increased an estimated 75 percent in the five years after the trade agreement took effect.” Is that all? I think she meant 750 percent, and maybe five of them were former farmers.
If you followed any of this, you would know US corn prices doubled in the years around 2008, so I would think you’d be happy that Mexican comparative advantage would have increased; and Mexican farmers are subsidized as much or more than their US counterparts (plus they have cheaper and better health care. Pthbbbt.)
Anyway, the whole vibe here is, “illegal immigration is bad, we know, we really do, but it is because evil corporate amerikkka is metaphorically sodomizing everyone; so we have to grab our ankles and put up with illegal immigration until we can seize enough political power to rise up to the challenge; and show the door to the imperialist wreckers, and finally kill the Koch beasts in their own lair; by capturing the capital and liberating huge parts of color land from the capitalist yoke. After the workers and peasants in the countries liberated by the Green Army et al are free to organize themselves, people’s democracies will spring up spontaneously in these places everywhere. Soon all these places will be building socialism.
This was not something that the ever greedy and power-hungry imperialists in New York and London, or the fascist-revanchist leaders of Koch Industries will take lightly. So they will organize the aggressive imperialistic political blocTea Party Express, which will pose a danger to the freedom-loving peoples of the world. The people’s democracies should be quick themselves to improve their own respective defensive political capabilities, even if it somewhat slows down the process of building socialism.
I think this is enough for today, actually your question was only about immigration, and not about later heroic struggles. I guess many people will reeducate, they will parrot the new party line, or something. We might see some rearguard action from them here and there, but since they are loons, it will be easier for them to simply change points of view not to reveal they were out of their depths.
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Jesus Christ I’m getting hammered here – I haven’t done any diligence or sincere confirmation bias and don’t have time since we’re leaving on a jet plane.
At this point, I concede. Shall we continue this later this year?
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Sure, comrade. I’m sure the Gods of Dialecticism will smile on me in our next encounter.
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I meant to highlight the last half, which I paraphrased from someone else.
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Thanks JC for that much-needed addition regarding cost sharing for subsidized people, and for the perspective of the retiree. There is disincentive there.
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