There’s something I’ve been chewing on for a while which I’ve finally decided I just don’t understand. Why are individuals who self-insure “free riders” while companies that self-insure, which is most large companies, aren’t?
This is, by the way, one of the subsidies to large companies that I complain about here from time to time.
Are you sure you have that definition correct, Dave? Like in MA, ‘free riders’ were those who could afford insurance, didn’t have any, and simply took advantage of health care freebies by going into the ER, basically stiffing the HC system. Or, am I wrong on that?
Yeah, that’s my understanding of free-riders. They don’t pay for insurance, they have an accident or whatever and get some expensive care they can’t afford and the cost is socialized. I don’t think people who truly self-insure are free riders – since they are paying retail prices, they are probably subsidizing the free riders.
No one, whether individual or corporation, can know in advance with 100% certainty whether they’d actually be able to pay the healthcare liabilities they incur. The way I’ve heard the argument made is that people who self-insure are free riders because at some point they might not be able to pay their bills. Why isn’t the same the case for a self-insuring company?
I recall pretty vividly somebody (Joe Biden) making the argument that everybody uses the healthcare system some time and, consequently, not having healthcare insurance is being a free rider because you’re not supporting the system.
Is the only question how much money you have? I.e. if Bill Gates doesn’t purchase health insurance he’s not a free rider but if I don’t I am?
OK, Dave, so you mean by self-insure that a person has purchased no health insurance at all for themselves. I interpreted it to mean that a person bought insurance themselves, which is what we do, being self-employed — buying catastrophic health insurance with the highest deductable. Basically, we pay for our doctor bills and fundamental HC, unless we get hit by a cement truck, at which point the health insurance kicks in.
@jan, @jan, @jan
Apparently, you are not a silly fool, but you are a hateful idiot. You are a free rider. You are not paying your fair share. Hopefully, you can be re-educated.
People with full policies or on a government policy are paying for the medical infrastructure you are using. The hospitals, x-ray machines, bed pans, you did not pay for that. Somebody else built that. Somewhere along the way a doctor helped you, and that doctor’s income was sustained by those paying into the system. Without their hard work, you would never be able to obtain medical care.
I am guessing that you do not understand the dangers posed by bibles and firearms. “You will be assimilated. Resistance is futile.”
I define “self-insure” the same way for individuals and companies: they don’t buy policies with insurance companies.
So far I have identified quotes from President Obama, Vice President Biden, David Axelrod, and Mitt Romney which, in each case, equates self-insurance with free riding. Why isn’t it the same for individuals and companies? There are literally tens of thousands of companies and other organizations that are free riding by that definition and whose plans have been grandfathered into the new system.
@Dave Schuler
… Why isn’t it the same for individuals and companies? …
Do you expect intellectual honesty and consistency?
“Don’t Bogart That Joint!“
So far I have identified quotes from President Obama, Vice President Biden, David Axelrod, and Mitt Romney which, in each case, equates self-insurance with free riding
Technically you are right. But, how it’s being used derogatively, by all these men, is the fiscal impact deliberately not carrying insurance has, if these same uninsured people use medical facilities without paying for it from their own private funds. …because they are not only saving on insurance premiums but also from paying for the actual care, which gives them the name ‘free riders.’
TastyBits
I never looked at it that way — not paying my fair share. Oh oh….
Aren’t the comparisons more like this:
Employer with Self-Insurance Plan is like an individual with a Health Savings Account
Employer without Employe Health Care Benfifts is like an individual without pre-existing healthcare coverage
My understanding of company self-insurance is that they act like an insurance company as a de facto insurance company and use the tools and calculations that an insurance company would to determine how much they need to set aside to cover the costs. I’m not sure the same thing is possible for individuals since insurance, by definition, requires some sort of group. Can you have an insurance pool of one? Insurance is to hedge against risk and an individual on their own would have to be very rich in order to actually mitigate the risk. So yeah, I think the only people who can actually do that are the very rich.
I don’t believe that’s the case. I’ve never heard of a company that self-insures hiring actuaries, for example. I suspect they’re just pooling the risk and hoping for the best.
Hoping for the best is what an individual does, too.
Andy
We belong to a ‘group’ of self employed people — under the name of ‘Alliance,’ and underwritten by Mid West Life Insurance of TN. But, there are other ‘groups’ out there, many coordinated according to the line of work a person is in. We went though the whole 9 yards of being accepted, including the pre-existing gauntlet.
My husband, a few weeks ago, decided to take advantage of earlier being in the military, applying for his VA benefits to act as a back up plan, in lieu of the ACA passage. That has been a different experience for him — reminds me of what a single payer system might be like.
An individual with an HSA, pays for the first $2,500 to $12,000 in healthcare expenses from money saved in a tax exempt savings account and then relies upon a high-deductible insurance plan for catstrophic medical events.
I believe companies self-insuring usually also buys some sort of stop-loss insurance against the risk of expenses exceeding anticipated cash-flow needs.
Both want to avoid the costs associated with insurance, be more autonomous, and have the benefit of making and enjoying their own use and investment of the cash.
From the comments here, one can conclude that Amerikans generally haven’t a clue about the law or the economics of Obamacare.
Here, in the interest of educating y’all, I offer some points for debate:
In economics, a free rider is someone who enjoys the benefits of an activity, status, or policy without paying his share of it. Part of the free-rider problem is that those who don’t pay their full share have every incentive to over-utilize it, increasing the cost or the unavailability to others.
Many, if not most, single mothers are free riders. They get food stamps, medicaid, and tax-credits for themselves and their brood–a serious problem, reflected in the fact that a single mother offered a job would start work at an unacceptable effective tax bracket of between 80% to 100+%, effectively denying her the job and, eventually, denying her brood a “piece of the pie.”
White Amerikans, especially the retired, are free riders when it comes to enjoyment of our national parks and forests, as well as state parks and beaches of California, for example. Though these lands are the patrimony of all residents, taxpaying or otherwise, they are visited almost exclusively by White Amerikans. In my recent trip of 45 days through 20 the state and national parks of the West, I saw only 4 faces of Native, Black or Hispanic Amerikans, out of 4000.
Married folks and breeders are, in general, free riders when it comes to taxes and privileges. While single and childfree folks pay more in taxes, they are deprived of some 1000+ benefits accorded the married breeders in the USSA, in areas of education, tax benefits, hospital visitation, insurance premiums, immigration, Social Security, Medicare and Medicaid.
One commenter is on to something important: It is widely assumed that the uninsured, including illegal aliens and the sensibly uninsured young male, are free riders. This is NOT true–at least the evidence has not been presented. The free riders in health care are women, especially breeding women: utilizing 80% more health care than a man and twice as much as a non-breeding man, they take a free ride on his premiums, just as White Amerikans, who live longer, take a free ride on the Social Security and Medicare through FICA taxes paid into the system by Black Amerikan Men, whom we expect to die at age 69, leaving that pile of cash for the White Married Woman, indolent as she might have been for 45 years, who will live to age 79.
Consider this: it is alleged that all those folks who show up uninsured for guaranteed subsidized care at the local emergency room are free riders on the system. This assumption is WRONG. Given that over 50% of healthcare costs are presently borne by the federal, state and local gummints, any person who shows up for treatment at an emergency room has aready paid half the costs; indeed, it is likely that it is the INSURED who free-ride on the backs of the uninsured, taking advantage, as they do, of the same emergency-room care and, in addition, of tax-advantaged insurance premiums paid by their employer, not to mention the 50% of any covered care, like mammograms, that has been 50% subsidized by those who are uninsured!
In short, it is the White, siingle or married female breeder citizen who is enjoying a free ride on the back of the single, childfree Black or Hispanic citizen or illegal alien.
“I define “self-insure†the same way for individuals and companies: they don’t buy policies with insurance companies.”
1) Nearly all self -insured companies re-insure for very large bills.
2) Self -insured companies are generally providing the same kinds and levels of care that they would have if they bought it from an insurance company. By self-insuring, you dont pay the management fees and profits to an insurance company. A self-insured individual, OTOH, usually does not have the means to pay for very much, if any, health care. We pretty much assume we will collect about 5 cents on the dollar for self-insured patients.
On high-deductibles, it is unclear if they lead to savings. Once again, if you are going to remember anything about the health care discussion, remember who spends the money. Most health care dollars are spent by few people. Conversely 50% of people account for 3% of health care spending. So, when you get diagnosed with Cancer, need major surgery or have chronic disease, deductibles are pretty meaningless. There is also pretty good literature showing that when people have high deductibles they are more likely to skip on treatments that will lead to more expensive care in the long run. Anti-hypertensives are the classic example.
” It is widely assumed that the uninsured, including illegal aliens and the sensibly uninsured young male, are free riders. This is NOT true–at least the evidence has not been presented.”
Hospitals maintain large numbers of people on call for emergent and urgent care, largely based upon the population size they cover. That system is paid for and maintained by people who pay for their insurance and by the govt. , in some form or another. So, when that healthy young person shows up in the ER after an MVA, they will cost us all a fortune and they will have not contributed anything towards maintaining that system.
Steve
“In short, it is the White, siingle or married female breeder citizen who is enjoying a free ride on the back of the single, childfree Black or Hispanic citizen or illegal alien.”
Cutting to the chase —> in your opinion all white women are free riders, in your opinion.
“In short, it is the White, siingle or married female breeder citizen who is enjoying a free ride on the back of the single, childfree Black or Hispanic citizen or illegal alien.”
Cutting to the chase —> in your opinion all white women are free riders.
Jan,
There are breeding White women, like Cheryl Sandberg of Facebook, who more than pay their way. Most other breeding women are free riders, yes, whether married or single. Do you, by chance, have any evidence to the contrary?
Excuse me Steve,
but you are an idiot. What percentage of ER expenditure is spent on healthy young males who have suffered an accident? And how much of his tax dollar has been paid to support the breeding females even before he shows up at the ER?
Facts, Steve, Facts. I know that you healthcare providers are not used to dealing with such.
The five areas where we spend most of our money in the US are heart disease, cancer, trauma, mental disorders and pulmonary disease. OB does not make the list. (I will apologize if I mislead by implying it was just ER costs. The big bucks are in the ICU and repeat trips to the OR. Of course you have to staff for those also.)
http://www.ahrq.gov/research/ria19/expendria.htm
Since the data lags pretty severely in this area, if you have better I would love to see it, there is data suggesting that trauma has jumped ahead of cardiac, which was number one.
http://www.emsworld.com/news/10411763/nations-trauma-care-bill-doubles
The rate of uninsurance for trauma patients varies widely. For GSWs, it is typically about 75%.
http://scienceblog.com/31672/insurance-status-of-gunshot-trauma-patients-affects-mortality-outcomes/
For MVAs it is in the 50% neighborhood (private communication with the incoming president of the national ER doc assoc.)
Just for comparison, we have been running about 4 million births a year in thee 2000s, with an average birth in the mid 2000s costing about $10,000.
Steve
Whoops, I guess I submitted my last comment before an edit. Gist is the same, sorry about the lousy wording.
@Jimbino
… Amerikan …
Should be AmeriKKKan.
… Black Amerikan Men …
This is an oxymoron. Black Men in AmeriKKKa would be better. Many Black Men may think of themselves as an AmeriKKKan, but that is the result of self-loathing. They have been brainwashed by a racist society into hating their existence.
You should take every opportunity to teach white AmeriKKKans whenever you can.
TastyBits:
Ya got style.
Steve,
Thanks for presenting some evidence. You say that
“Hospitals maintain large numbers of people on call for emergent and urgent care, largely based upon the population size they cover. That system is paid for and maintained by people who pay for their insurance and by the govt. , in some form or another. So, when that healthy young person shows up in the ER after an MVA, they will cost us all a fortune and they will have not contributed anything towards maintaining that system.”
The problem I have with this statement is that it is self-contradictory. While I agree that it would be inhumane to deny emergency to anyone, including an illegal alien, a German tourist or an Amish, Christian Scientist, Muslim and others relieved of the Obamacare mandate, you have to admit as true that all of them, to the extent that they pay taxes in Amerika, have already contributed a part of the gummint share of ER costs that you mention, contradicting your statement that “they will cost us all a fortune and they will have not contributed anything towards maintaining that system.”
Furthermore, you contribute to the healthcare-debate confusion by confounding insurance and health care. I have paid taxes lifelong to support your ERs and have never visited one. If I did, I would pay my share. I just happen to be too smart to pay money for self-insurance, knowing that the average return on the premium dollar is way below 80% and that most health insurance goes to cover women, breeding women, and end-of-life expenditures, none of which I can or will participate in.
You may not be aware of this, but check it out: Automobile liability insurance is NOT compulsory in CA or TX, or (check it out) in any state in the union. What is compulsory is “financial responsibility,” which can be shown in other ways. And you do not have to show “financial responsibility” for losses to yourself–only to others.
The Obamacare mandate is sinful in that it requires persons to buy insurance that covers not only a medical accident causing injury to oneself without giving the other options that states offer for avoiding participating in auto liability insurance, but that covers totally non-medical problems like normal breeding, mutilation of babies’ peckers, avoidance of natural death, and all the hypochondria affected by women.