Health care: three simple questions for conservatives / libertarians

[Jeremy Mason]

Follow-up: are you aware that these are some of the main provisions of the Affordable Care Act, a.k.a. Obamacare?

Yes. I actually read the bill. I wonder how many other people thought to the same?

 

[dust1n]

Yes. I actually read the bill. I wonder how many other people thought to the same?

You read a 2000+ page bill?

 

[Jeremy Mason]

You read a 2000+ page bill?

Yes, it took me a couple months, but I did it.

 

[dust1n]

Yes, it took me a couple months, but I did it.

Well 1990 pages...

I imagine most people wouldn't think to do it everyday. I wouldn't think 33 pages a day would be on most people's list of things to do, and dense legal jargon which I doubt many people other than lawyers and judges are capable of understanding very well.

 

[Mr Spinkles]

If insurers cannot generally deny coverage based on pre-existing conditions, then: do you acknowledge that the financial incentive for most healthy people would be to forgo health insurance until they develop a medical condition, and this would be unsustainable?

Nope

Which part do you disagree with, that it would be a financial incentive, or that it would be unsustainable, or both?

 

[esmith]

Which part do you disagree with, that it would be a financial incentive, or that it would be unsustainable, or both?

well from your previous question:

Originally Posted by Mr Spinkles
If insurers cannot generally deny coverage based on pre-existing conditions, then: do you acknowledge that the financial incentive for most healthy people would be to forgo health insurance until they develop a medical condition, and this would be unsustainable?

Well, it all depends on what health issue arises if a person does not have health insurance and the cost of a policy that is not through the exchange and the ability to wait until the open period arrives once a year. Lot of variables there. So, I would assume it is a gamble. And my experience playing poker, for cash, is that there are a lot of gamblers out there vice percentage players. Now are you asking if the healthy people do not acquire a health policy through the exchanges will the ACA be sustainable? If that is your question, then again it will depend on the willingness of those that have health insurance policies to submit to higher and higher premiums and out of pocket expenses. So, the answer is who knows.

 

[Mr Spinkles]

Well, it all depends on what health issue arises if a person does not have health insurance and the cost of a policy that is not through the exchange and the ability to wait until the open period arrives once a year. Lot of variables there. So, I would assume it is a gamble. And my experience playing poker, for cash, is that there are a lot of gamblers out there vice percentage players. Now are you asking if the healthy people do not acquire a health policy through the exchanges will the ACA be sustainable? If that is your question, then again it will depend on the willingness of those that have health insurance policies to submit to higher and higher premiums and out of pocket expenses. So, the answer is who knows.

No I'm not asking about healthy people acquiring insurance through the exchanges. That's just one way to acquire coverage, and my question is not about the way people acquire coverage but whether they acquire coverage.

Let's not worry about whether everyone has a net incentive to buy health insurance, or not. Let's just consider one policy and the effect of that policy. E.g., if the effect of a cigarette commercial is to encourage people to smoke, and that's a bad thing, then we don't need to worry about the fact that a single cigarette commercial isn't going to make everyone run out and buy smokes right now (that would of course depend on many factors and vary by individual). We can still say, with confidence, that cigarette commercials have a detrimental effect not a positive one, even if we don't know the extent.

You have already said that for a pre-existing condition like mine, insurers should not be allowed to refuse to cover me. And you have also said that I should pay a higher premium.

Okay. So in that case, I could forgo insurance, thereby avoiding that high premium you were so keen on me paying. When the day comes that I need more medicine, I can buy insurance and get it. Then at the first opportunity, I could drop the insurance to avoid paying the premium. And so on. What measures would you take, if any, to prevent me from doing this?

You mentioned gambling. Notice that this would not be a GAMBLE for me. If insurers are not allowed to deny me coverage, then there is a 100% chance that I will get my medicine. I'm just not paying the premium sometimes, when I don't have to.

Is that what you want, for me to be able to reduce my "higher" premium payments this way by weaseling out of them? Again, how would you prevent me from doing this?

 

[9-10ths_Penguin]

Okay. So in that case, I could forgo insurance, thereby avoiding that high premium you were so keen on me paying. When the day comes that I need more medicine, I can buy insurance and get it. Then at the first opportunity, I could drop the insurance to avoid paying the premium. And so on. What measures would you take, if any, to prevent me from doing this?

You mentioned gambling. Notice that this would not be a GAMBLE for me. If insurers are not allowed to deny me coverage, then there is a 100% chance that I will get my medicine. I'm just not paying the premium sometimes, when I don't have to.

Is that what you want, for me to be able to reduce my "higher" premium payments this way by weaseling out of them? Again, how would you prevent me from doing this?

I'm not sure if this is how American health insurance works, but auto insurers here have come up with a way to deter that sort of behaviour: when you buy a policy, it's for a one-year term at a set rate. If you cancel before the year is up, your rate for the insurance you did get is calculated at a higher rate, and the shorter you kept the policy, the higher the rate.

If an insurer set the rates right, then with a system like this, someone who bought coverage for a few days every 3 months in order to refill his prescriptions (for instance) would end up paying more per year than if they just kept the policy for the whole year.

Also, you can have waiting periods for aspects of the coverage: maybe your emergency health coverage kicks in the day you buy your policy, but you don't get prescriptions, physiotherapy, and coverage for other more predictable expenses until 30 days later, for instance. That way (assuming a monthly billing cycle), the person who's buying insurance, refilling his expensive prescriptions, and then cancelling his coverage would still have to pay for at least 2 months.

 

[Mr Spinkles]

I'm not sure if this is how American health insurance works, but auto insurers here have come up with a way to deter that sort of behaviour: when you buy a policy, it's for a one-year term at a set rate. If you cancel before the year is up, your rate for the insurance you did get is calculated at a higher rate, and the shorter you kept the policy, the higher the rate.

If an insurer set the rates right, then with a system like this, someone who bought coverage for a few days every 3 months in order to refill his prescriptions (for instance) would end up paying more per year than if they just kept the policy for the whole year.

Also, you can have waiting periods for aspects of the coverage: maybe your emergency health coverage kicks in the day you buy your policy, but you don't get prescriptions, physiotherapy, and coverage for other more predictable expenses until 30 days later, for instance. That way (assuming a monthly billing cycle), the person who's buying insurance, refilling his expensive prescriptions, and then cancelling his coverage would still have to pay for at least 2 months.

Right, I'm aware of all that. There are still ways around it especially if treatment is on-demand / as-needed. For example, you could keep the policy the whole year, buy medicine, then not have the policy for the whole next year. While it's always possible to target one condition or another to prevent this kind of free-riding, few policies could cope with the myriad conditions and subsequent myriad ways to cheat the system, if people can't be refused coverage. This is especially true for the healthy. If you currently have no medical expenses why not wait to buy insurance until you do?

The other solution you proposed would mean, in fact, refusing to cover people with pre-existing conditions, which esmith already said should not be allowed (in general). Yes refusing to cover pre-existing conditions discourages free-riding -- it also punishes people who have legitimate medical conditions and are simply trying to get insurance.

That's the whole point of this thread. Most people agree it's wrong to refuse to cover the sick. (Although a shocking number, I've discovered, do not agree that it's wrong.) The problem is, refusing to cover the sick discourages free-riding -- if you remove that, you now have increased the incentive to be a free-rider. Hence the need to replace it with an incentive to not be a free-rider, e.g. a tax break. My point is not to argue this solution is optimal, but simply, that it's not the Armageddon-scenario the Right makes it out to be. It's a reasonable solution, if you disagree with it fine, but no need to demonize it.

 

[9-10ths_Penguin]

Right, I'm aware of all that. There are still ways around it especially if treatment is on-demand / as-needed. For example, you could keep the policy the whole year, buy medicine, then not have the policy for the whole next year. While it's always possible to target one condition or another to prevent this kind of free-riding, few policies could cope with the myriad conditions and subsequent myriad ways to cheat the system, if people can't be refused coverage. This is especially true for the healthy. If you currently have no medical expenses why not wait to buy insurance until you do?

Risk, just like any insurance. Nobody can predict whether they'll be in a motor vehicle collision tomorrow or have a stroke. Even if the insurer covers pre-existing conditions, they won't cover expenses incurred before you bought the policy.

The other solution you proposed would mean, in fact, refusing to cover people with pre-existing conditions, which esmith already said should not be allowed (in general). Yes refusing to cover pre-existing conditions discourages free-riding -- it also punishes people who have legitimate medical conditions and are simply trying to get insurance.

FYI: I wasn't actually proposing it. You asked about how an insurer could prevent someone from only getting a policy when they have expenses. I never said I actually agreed with the approaches I described.

That's the whole point of this thread. Most people agree it's wrong to refuse to cover the sick. (Although a shocking number, I've discovered, do not agree that it's wrong.) The problem is, refusing to cover the sick discourages free-riding -- if you remove that, you now have increased the incentive to be a free-rider. Hence the need to replace it with an incentive to not be a free-rider, e.g. a tax break. My point is not to argue this solution is optimal, but simply, that it's not the Armageddon-scenario the Right makes it out to be. It's a reasonable solution, if you disagree with it fine, but no need to demonize it.

Again, I think you're misinterpreting my position. Actually, I think that everyone should get their health insurance through a government-run single-payer system where all the questions you're asking are moot, since all pre-existing conditions would be covered and everyone would be required to pay.

That aside, I do question your reasoning on one point: why do you think that you need to have tax breaks if insurers have to cover pre-existing conditions? For them to have the desired effects, two things would need to be true:

- without them, the costs of health insurance would have to outweigh the benefits for people with pre-existing conditions.
- with them, the benefits would have to outweigh the costs.

My gut feeling is that to a rational person, even without any sort of "carrot" or "stick" involving tax penalties or incentives, the benefits of health insurance would outweigh the costs regardless of whether the person has a pre-existing condition or not. Your argument implies that you think differently; why?

 

[Mr Spinkles]

Risk, just like any insurance. Nobody can predict whether they'll be in a motor vehicle collision tomorrow or have a stroke. Even if the insurer covers pre-existing conditions, they won't cover expenses incurred before you bought the policy.

Before responding to this, let me say several things. First, let me dial-back what I said earlier, which was that "the financial incentive for most healthy people would be to forgo insurance until they get sick". Forget the word "most". "Some" is sufficient for our purposes. The point is that requiring insurers to cover those with pre-existing conditions removes a previously-existing incentive to get insurance. Ergo, it increases the incentive to forgo insurance. All I want to say is this has an effect, and it's not a positive one.

Yes there's risk going without insurance. Whether that possible risk outweighs the certain risk of paying $2,000 per year, will depend on the person and how much money they have available. Some people would rather risk going without health insurance than subsist on Raman noodles (especially if it's a young waiter or waitress, etc.)

Suffice it to say that before the ACA, even when insurers could deny pre-existing conditions, therefore maximizing the risk of forgoing insurance, there was still an overall incentive for millions of people to forgo insurance. Recall that 15% or about 30 million Americans did not have insurance even then. Now, they were mostly poor people who are ineligible for Medicaid and/or not offered employer-based coverage, and/or people with "pre-existing conditions" who were denied coverage. But they were also young healthy low-income people who could manage to afford insurance if they tightened their belts, but who preferred to take a 1% risk of being hit by a car someday, than a 100% risk of not being able to afford beer this weekend.

So that reality can only be exacerbated, if we reduce the risk of forgoing insurance even more, and increase the opportunities of people who do become sick or get accidents unexpectedly even more.

This conclusion is supported by experts, according to the Kaiser Family Foundation, which is widely acknowledged as the best unbiased source of information on American health care. Kaiser acknowledges there is a debate on this issue: while left-leaning groups say the tax incentive is enough to prevent people from forgoing insurance until they get sick, right-leaning groups say it's not enough.

Q. Why is there a mandate anyway?

A. The health law was designed to extend insurance to nearly all people, including those who have medical conditions that require expensive care and are often denied coverage today. But to pay for their care, insurance companies need to have a large enrollment of consumers, especially young and healthy people who use fewer services. The mandate was adopted to guarantee a broad base.

Topher Spiro, the vice president of health policy at the Center for American Progress, a left-leaning nonprofit that supports the law, says it will be more effective with the mandate than without it. "This individual mandate is to keep premiums low for everyone," he said, noting that "if you don’t have incentives for everyone to sign up for coverage then only the sick people will enroll which will drive up premiums."

But others suggest the mandate won't be effective because the penalties are set so much lower than the cost of coverage.

"The mandate was an attempt to get around the fact that insurance is going to become a lot more expensive for a lot of people even with the subsidies," said Joseph Antos, an economist with the conservative American Enterprise Institute. Antos believes the tax penalty for remaining uninsured is too low and questions the government’s ability to identify those who end up not filing taxes. "I would argue that the individual mandate is largely unenforceable and does not turn out to be this solution to the other problems that raise insurance costs for that particular group of people," he added.

Emphasis added.

So, in that context, let me respond to your specific point about risk:

The risk of being hit by a car tomorrow without insurance, in the U.S., is greatly mitigated by the fact that (1) the ER will treat you whether you are insured or not, (2) if you can't pay your ER bill the hospital will eat it, (3) if insurers can't deny "pre-existing conditions" then you can buy health insurance which will STILL have to cover medical expenses related to your accident, but which have not yet been incurred, e.g. the four-week hospital stay, or the physical therapy or reconstructive surgery several months later.

FYI: I wasn't actually proposing it. You asked about how an insurer could prevent someone from only getting a policy when they have expenses. I never said I actually agreed with the approaches I described.

Right, I understand that. My point here is to take my conservative friends through the logic, concerning how to reduce incentives for being a free-rider, AFTER we all agree that refusing coverage for pre-existing conditions isn't an option.

That aside, I do question your reasoning on one point: why do you think that you need to have tax breaks if insurers have to cover pre-existing conditions?

For them to have the desired effects, two things would need to be true:

- without them, the costs of health insurance would have to outweigh the benefits for people with pre-existing conditions.
- with them, the benefits would have to outweigh the costs.

My gut feeling is that to a rational person, even without any sort of "carrot" or "stick" involving tax penalties or incentives, the benefits of health insurance would outweigh the costs regardless of whether the person has a pre-existing condition or not. Your argument implies that you think differently; why?

I think I addressed this, if not please let me know. To be clear, I want to back-pedal from saying that we NEED these tax breaks as incentives. Do we NEED them? No, I'm sure life would go on either way. All I want to say is that they are REASONABLE, and we we need something SIMILAR to them, IF insurers can't deny pre-existing conditions and IF we want to mitigate the costs of free-riders. And I think it's important to emphasize that the serious experts on Right and Left agree on that point (not the political talking-heads).

 

[Dirty Penguin]

Originally Posted by Revoltingest
This question has 2 answers.
Philosophical: I don't see that anyone should be forced to subsidize anyone else.

Originally Posted by Dirty Penguin
You're a business owner...Do you keep your money in the bank? Have you ever gotten a SB loan?

Yes.
Yes.

Do you have any problems with your money being held in banks and backed by FDIC

 

[Revoltingest]

Do you have any problems with your money being held in banks and backed by FDIC

No.
We all know where this is leading. You could just start discussing
it, rather than asking a new personal but easy question each day.

But before you do, you might address some unfinished business.
http://www.religiousforums.com/forum/3524317-post17.html
Should I expect more mischievous opposite inferences & partial quoting,
or do you really want to explore the issues? I'm OK only with the latter.