Is continuity in healthcare insurance plans desireable and what is its value? That occurred to me when I read one of the many articles in which the author complained about having to shop for insurance because his or her old plan had been cancelled or had become unaffordable.
It seems to me that introducing price discovery presumes some level of volatility.
The standard prescription from both the right and left focus on increased insurance competition as putting downward pressure on price, while they go about it differently (increasing insurers versus reducing restrictions on competition), they both essentially think competition is needed. And that solution certainly needs market fluidity in which people change insurance.
But I don’t think insurance competition will make much difference given what appears to be strong status-quo preference by the consumer, medical service providers providing best discounts to established insurers, thin profit margins in the insurance industry, and little apparent role for innovation in insurance.
If its not clear, my issue is that the focus is on insurance, not health care. One could encourage more switching by eliminating employer-sponsorship (change one customer to multiples) and requiring health-providers to charge all-comers the same price.
As should be clear at this point I agree
Who the hell understands what their health insurance will cover until they get the bill?
We shop for insurance by the premiums we can afford.
A colleague of mine recently had a dependent suffer a torn A C L ligament in the knee. No insurance at all. But still he found a surgeon to preform the whole repair procedure for $ 400. cash.
Charity? No, his dependent was a canine and his surgeon a vet.
If it were possible to get a surgery available to you no other way, that you need, would you accept less than medical gold standard?
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@Gray Shambler
While my stepson was in grammar and high school, my wife and him were without health insurance. It was not offered through either of our employers, and we decided it was more important for him to go to Catholic schools. (In the New Orleans area, the public school system is worthless.)
I have added comments about how we made out. It is not the end of the world, but you have to adjust. You no longer run to the doctor for every little sniffle, but you do not wait until an ER trip is required. The ER is NOT free. You may be “means tested” out of having to pay, but if not, it ain’t cheap. Urgent Care is cheaper, but it is still more expensive than a regular doctor.
We were able to find a doctor that did not take insurance, worked with low income people (not us), and was certified in alternate medicine as well as a traditional MD. She would charge in 15 minute intervals if she could get you in and out. She worked off of the Walmart $4.00 drug list, other generics second, and brand name drugs last. She kept up on the pricing of the testing facilities, also, and she would take cost into consideration.
When my wife started working for a company that had health insurance, it was a whole new world. On the first visit to one doctor, he ordered blood tests at a specific lab. They had nothing to do with whatever was the problem, but it was part of the “routine”. It turned out to be a $3,000 “routine”, but since the insurance was covering it, I did not fight about it.
Had we been paying out of our pocket, she would probably have had to switch doctors because most of them insist on the “routine” being followed. The $3,000 out of your pocket for useless test is your problem not his. Frankly, the robot doctors cannot get here quick enough for me. (Except for my wife’s GP that still does not take insurance and helps the poor, and my VA people, except the bonus assholes.)
As to costs, the pricing without insurance is absolutely unf*cking believable. Some places will give a discount for cash up front. Other places will not, and some will charge more than the people with insurance.
Oh, and at the hospital, you learn to never say yes to anything. Instead, you say, “how much will it cost me?” Do you want me to turn down the lights? “How much will it cost me?” Do you want a blanket? “How much will it cost me?” Do you want ice cubes in your water? “How much will it cost me?” I may be exaggerating somewhat but not much.
Most people cannot fathom how it is possible, but I am sure that Paris Hilton could not fathom how it is possible to live in a house as small as ours. As a last resort, there is always the option to “pass the hat” among friends and relatives or or go bankrupt.
I have said before that when the choice becomes grandma’s hip operation or a family trip to Disney World, grandma had better get used to her motorized scooter.
Since we change plans almost every year to save money, I can tell you from first hand experience that there is value in being able to keep the same plan. It is a PITA relearning the rules every year. New cards. The networks change.
Of course, the insurance companies know this. Many people don’t want the hassle so they keep plans when they could save money by changing. The insurance companies also make all of this more difficult. If you have a plan and decide to change to save money, it is almost impossible to find a new plan with a different insurance company that is identical, sometimes not even very close, to our current one. You end up making apples to oranges comparisons. PD’s idea have merit, but it would also help if insurance companies had to offer the same product and compete on price.
Steve
@steve, the price differences our business was quoted for policies was never that great, although I can see businesses with more employees benefiting more for small changes in individual policies. The main reluctance to change was uncertainty about whether existing providers were in the network.
I don’t think the healthcare insurance policies are that different. The main difference is networks and that has to do with the agreements btw/ the insurance company and the healthcare providers. I don’t think there is anything wrong about providers offering bulk discounts or preferred customer rates; businesses do that. But it does not foster competition or new market entry.
… the same product and compete on price.
Mattress companies do or did something similar for the retailers. They would create different models of the same mattress for specific retailers. There was no way you would ever find it being sold for less, and any guarantees to pay twice the difference would never happen.
Competition works great until libertarians and conservatives run into hustlers and mobsters. The free market ain’t so free when it is “robbing you blind” or threatens to “break your legs”.
I think that “price discovery” might be good systemically but bad for individual consumers when what we discover is that we can’t afford the product.
It rally gets back to the lack of a real market situation in the industry, which was made worse by ACA. There’s very little a competing insurance company could do to offer a lower price with all of the mandates. And prices were set artificially low in order to get more people to sign up on the exchanges, so price discovery is now coming with severe sticker shock.
“but it would also help if insurance companies had to offer the same product and compete on price.”
You can wear any color shirt, as long as it’s white. And buy any car, as long as it’s a Chevy.
When do we get introduced to Chairman Mao?
Guarneri:
I guess I’m beginning to think my mother is right. Stay away from doctors, everyone she knew who visited one eventually died.
She is now 91 years of age and refuses to see a Dr.
I’m not being anything but honest when I say we all must die. Why make it so bad?
I hope when I become deathly ill I will be strong enough to die without dragging down my family.
Drew- You know they actually do studies on what happens when you offer lots of choices in insurance plans. Care to guess what happens?
PD- Since health insurance is state regulated I suppose it is possible your plans are very similar. I suspect it is more likely you don’t read the details, though you are a lawyer so who knows. In PA they alter the combinations of deductibles, co-pays, networks and how you cover radiology studies vs ordinance studies, etc. Not easy to compare costs. Not surprisingly, consumers rarely choose the cheapest plan even when they try to do so. Oops, answered that question for Drew.
Steve
@steve, I’ve never seen a health care insurance policy in my life, but I strongly suspect that 99% of policy language is the same, with the main differences that most consumers need to know reducible to a chart, identifying premiums, co-pays, deductibles, etc. That’s pretty much all we ever had.
They probably have some language in them only cover medical services that are necessary and are cost-effective. That’s sort of going to reduce to case-by-case judgment calls. The providers attitude and approach matters, but that is not something in the policy itself, its in how services are provided under the policy.
If I’m right, that is pretty much how home, auto and life policies are crafted and sold — mostly uniform language (or at least uniform in the most important parts), which was designed to make insurance a uniform good that competes on price and service. If the service is bad, then change providers. Also, need more government and private studies helping define medical necessity and cost-effective care, which issues that really don’t matter if we have a single-payer system or an entirely private one.
Most common contracts these days (insurance plans are contracts) are either boilerplate or written by non-lawyers. That’s something that lawyers of my dad’s age and older complained about (non-lawyers practicing law) but at this point the practice has surrendered.
As PD Shaw mentioned, health care is not health insurance. It is not the continuity of health insurance that matters, but the continuity of health care. Ironically, health insurance continuity contributes directly to discontinuity in health care.
If you travel for tourism to Africa, Europe, South America or Asia, your mandated continuity in Medicare or Obamacare will cost you a pretty penny while interfering with your ability to pay the cash required to cover medical expenses overseas, on account of the travesty that Medicare, Medicaid and Obamacare pay no medical bills outside the USSA.
It used to be that you could cancel your health insurance and save the funds to pay cash (or take out appropriate insurance) for medical expenses during a 90- or 180-day foreign trip. No longer, now that we have assured “continuity” in health insurance. Amerikans have sacrificed a lot of freedom with Medicare and Obamacare.
There’s only price discovery after the fact:
How much should it cost to hold your newborn? $39.35?