Comment by timtim51251
10 hours ago
Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits.
Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money.
Several doctor friends have told me this as well.
In a vacuum sure. But insurance companies operate the only part of the healthcare system that is moderately competitive. In the end employers are the ones largely paying and they are professional negotiators enough to put price pressure on insurance plans. 20% of $0 is $0.
As such, as light of an incentive it is - it’s the only party in the entire system that is incentivized in any way whatsoever to keep costs down.
Insurance providers also rarely operate at the full freight 20% either way though. So they are at least at this time incentivized to control costs at some level since every dollar saved is a dollar added to the profit line. Otherwise they would not be known for denying claims so often.
This is ignoring a whole lot of very important complexities as well - such as self funded insurance plans that most major companies utilize. There the insurance company is simply a plan administrator getting paid the same either way.
It’s one of those tropes that has a source of truth behind it but the actual reality is far less satisfying of an answer. Makes for great sound bites and ability to shut down further thought on the subject though. The uncomfortable truth is that there is no simple fix and no one bad actor that is the cause of all the insanity.
What OP said is true. You’re forgetting that health insurers are just one organization in the corporate chart. They often work to own the providers as well to funnel money to parent corporations.
So if United is the insurer they’re owned by an umbrella, that umbrella takes 20% or less. However United makes special deals and steers people to providers owned by the Umbrella. So that the Umbrella makes more money as well. This is true for medicine as well. For example Cigna requires all maintenance medication be purchased through express scripts as a means to retain or increase profit.
United has a history of also squeezing organizations by forcing them into pre-payment review when they’re high volume. This causes the providers to basically not have no revenue for months on end until it gets sorted. Then they might get a chunk or settle out of court. Often they go bankrupt and are purchased by the umbrella.
In terms of Medicare/Medicaid another catch-22 is that insurance handles the claims for providers. The insurance can recode claims and pocket the difference without telling the provider. It’s on the provider to catch it.
There is a tremendous amount of dark money, shadow games, hidden corporate structures, Wyoming and NM LLCs with Anonymous owners, etc.
Insurance as a whole tries to own the entire feedback loop for healthcare. They don’t like you going out of their feedback loop.
Digi is correct here.
>For example Cigna requires all maintenance medication be purchased through express scripts
Important note: Cigna owns Express Scripts. Today the biggest "insurance" companies are actually massive conglomerates that own the clinics, the doctors and the pharmacies. United = Optum. Aetna = CVS + Caremark. Humana = CenterWell. Elevance/Blue Cross/Anthem/Carelon. Centene = Envolve
Once a giant like United gets big enough in a city, say ~40% of the population, they lower the reimbursement rates for independent doctors and if the doctor refuses the contract, they are kicked out of network and lose 40% of their patients. Go bankrupt or sell to Optum.
Digi is also right about Medicare upcoding. It is a well-documented $$billions scam where Medicare Advantage insurers comb through patient records to add diagnostic codes making the patient look sicker on paper than they actually are so the government pays the insurer a higher flat rate for that patient.
5 replies →
I’m well aware of the vertically integrated systems. But that’s not the entire market - just getting to slowly be more and more common.
Insurance as standalone entities are not much better or worse for total cost than these giant vertical monopolies. At least yet, thy are only recently becoming large enough to truly put the screws to people. Because insurance was not all that profitable made it prime targets for these sorts of shell game shenanigans.
It’s basically the point I was making. Fixing “insurance” isn’t a fix at all because the problem is far greater than just that layer of the onion. Costs are hidden and embedded and cross-subsidied to the point no one can unwind it without burning the entire thing to the ground. It’s grift from bottom to top. Aside from a few poor souls actually at the ground level who are still true believers trying to provide service to patients. And a lot of those are burning out. I think out of the 5 or 6 medical doctors I met while they were in medical school, only one is still practicing. They would now be late 30s to early 40s and in theory at the prime of their careers. Instead they got out as soon as medical school debt was paid off and moved onto other less stressful things. Another hidden cost in the shit-tier system rarely talked about.
I’m simply pushing back on the idea that the 20% medical loss ratio is the source of all (or even most) issues for the cost of healthcare or why insurance sucks so much to deal with. It’s nearly irrelevant.
You're right that there's no single bad actor, and that's exactly the framing of this series. Each issue isolates one mechanism with one savings estimate. The 254% figure is RAND's. What I added is the HCRIS cost-to-charge analysis across 3,193 hospitals showing the variance by ownership type.
The surprise was nonprofit hospitals: median markup of 3.96x actual operating costs, versus 2.39x for for-profit and 1.87x for government hospitals. That's hard to square with the narrative that nonprofits deserve their tax exemptions ($28-37B/year) because they serve charitable purposes.
On the self-funded employer point — you're correct that self-funded plans have more negotiating latitude, and thousands of them already use reference pricing (capping hospital payments at a percentage of Medicare). That's actually the policy fix this analysis proposes. Montana Medicaid implemented it and saved $47.8M. The question is why it isn't the default.
> part of the healthcare system that is moderately competitive.
That’s only half the story though insurance companies also try and reject way more claims, cover fewer people, and are just harder to get money from than Medicare.
This means hospitals can’t afford to give them cheaper rates as they just require vastly more work from staff for the same procedure.
The industry isn’t blind to this effect, but has little reason to change.
Hospitals and clinics can only take so many Medicare patients as a ratio to private pay because it’s very well known that Medicare and Medicaid is often provided at below cost. It’s of course area and demographic dependent but as a rule any private clinic has a cap on these patients they will accept overall. Hospitals cannot cap it realistically speaking, so looking at clinics is a good proxy.
Private insurance subsidizes Medicare and Medicaid even after you add in admin overhead.
1 reply →
That's true to an extent, and those minimal controls are why Medicare also wastes billions on paying fraudulent claims.
https://relentlesshealthvalue.com/episode/ep502-how-some-pre...
9 replies →
This isn't even close to true. Keep in mind that Medicare, together with Medicaid (which operates under much of the same administrative rules), account for nearly half of medical spending. So basically, if a provider doesn't want to play by their rules, they MUST deal with Medicare. That is, the government is nearly a monopsony in this industry.
There's a common, misleading, claim that Medicare is more efficient because they spend far less than commercial insurance on overhead like claims processing. This claim is true. But the impression that it gives is absolutely the opposite of reality. The reason that Medicare doesn't spend as much on admin is that they offload all of this work onto the providers. Every hospital in America has a "Medicare Reimbursement" team. A moderate-sized hospital is going to have something like 2 FTEs focusing just on the reimbursements from Medicare and Medicaid. And that's a lot more work than just filing the right forms for each case. There's a ton of additional work. Each spring they have to file a HUGE "Medicare Cost Report", requiring a couple of months of work to get all the data in place for it. (Source: my wife was "Director of Reimbursement" at various hospitals for quite a few years, before going into consulting.)
That Medicare Cost Report that I mentioned is, beyond a huge effort sink, the source of many other evils. Because of the amount of work that's needed to gather and collate all this data, hospitals naturally structure their Accounting around the way Medicare wants them to report. The thing is, that's largely orthogonal to the way a rational person would do cost accounting. The result is the common criticism about how widely varying the cost of a given specific line-item is between hospitals: they don't really know how much a given procedure costs because that's not how they track their expenses, so they apply some allocation heuristics, and every hospital does that a bit differently.
There are also various perverse incentives in the system. For example, Medicare is smart enough to know that it costs more to deliver care in NYC or SF and so forth. Every locale has a Cost Index that scales how much they expect to need to pay. This leads to hospitals needing to show that their expenses are higher so they should be classified into locale X rather than neighboring locale Y.
Another one my wife told me about her hospital: Medicare realized that a lot of UTIs were hospital-acquired, and they rationally said that they would no longer pay for UTI treatments unless the hospital could prove that they were not hospital acquired. Well, maybe that wasn't rational, because with Medicare/caid being such a huge portion of their business, they changed their policy to test for UTI for everyone at admission, so that they could furnish the proof demanded. Think of all that wasted lab work...
So no, Medicare is NOT more streamlined and efficient. It's absolutely, 180-degrees, the opposite of that.
7 replies →
It can't be both: either insurers are incentivized to authorize as much care as possible so as to fit more money through the 20% opening, or they're incentivized to deny care to minimize their expenses. Which is it?
1 reply →
They really aren’t. They package benefits to try to hit different price points. Obamacare accelerated consolidation of providers and most regions have a cartel of 2-4 health networks.
> In the end employers are the ones largely paying and they are professional negotiators enough to put price pressure on insurance plans. 20% of $0 is $0.
That's assuming price is the only variable.
Suppose one insurance company is accepted by more providers, including ones that might be closer (but pay higher real estate costs) or have nicer rooms etc. Meanwhile employers are looking for cost/benefit rather than just cost. If they give employees a better insurance plan they could pay them less or provide less of some other benefit and still get people to work there.
So before the insurance company didn't really care if you got a $10,000 plan or a $20,000 plan if they both had a $2200 margin, or if anything would prefer the former because they make the same money with lower costs. The employer is likewise fairly ambivalent as long as the more expensive plan seems like it's buying something (even if the something is convenience/luxury). But now the insurance company isn't allowed to have a $2200 margin on the first plan and still is on the second, so that's what they market, and then what more employers choose, resulting in higher average costs.
> Insurance providers also rarely operate at the full freight 20% either way though.
There are only really two options, right? Either the market is actually competitive and then a margin cap has no effect because competition would prevent margins higher than that regardless and the rule should be gotten rid of as totally redundant, or the market is less than perfectly competitive and then it does something but the something is a bad perverse incentive to raise costs to cheat the rule and it should be gotten rid of as actively harmful.
More like kickbacks to the dipshit in HR who signs the dotted-line.
It's such a small market that it's really not competitive. Further, because medicine is so expensive, it means there aren't going to be newcomers to the market who can shake thing up. It requires way too much startup capital to start a new insurance company. The agencies with the most negotiation power don't because it negatively affects their bottom line.
This is why there needs to be a real second option. A public option like medicare for all would be the way to go. Let everyone choose between either private insurance or public insurance. Then you'd actually see some real competition.
Insurance is really not the issue, it’s provider cost. And just the total cost entirely of the system of insanity. If you look closely into it there is no single (or few even) knobs you can tweak to fix the system. Not even Medicaid for all, at least as it’s currently designed.
No argument from me that insurance is not competitive enough. But they are almost all public corporations that are highly regulated so the numbers on profit and expense ratios are easy to get for yourself to prove the point. No need to take my, or anyone with an agenda word for it. Almost everyone wants a simple answer to a complex interdependent problem that does not have one.
If there was a single solitary answer of “what is the problem with US healthcare” I’d have to go with it being a principle agent problem. If everyone who consumed healthcare had to pay up front very few services would cost what they do. Even changing it so people were billed directly and then had to submit insurance claims later like how pet insurance or car insurance works would go a long ways. But even that doesn’t solve the problem entirely, as it leaves massive gaps. Second answer would be “administrative class bloat” like in all areas of the US today.
Single payer is certainly a major part of the answer, but in isolation it’d solve almost nothing and potentially make things even worse as all the inane cross-subsidy comes crashing down overnight.
Edit: the point is medical loss ratios, admin overhead, etc. is public information not hidden behind some private company firewall. The fact non profits haven’t captured 100% of the market by being crazily cheaper should be telling on its own.
5 replies →
This is the same problem with cost-plus contracts in the military. In theory, capping profit is meant to reduce profiteering. But in practice, if your profit is fixed at 6% of the cost to built a jet fighter then you're incentivized to make that jet fighter as expensive as possible. The way to maximize profit under a cost-plus regime is to maximize the cost.
I will piggy back off of your comment because I was going to say a very similar thing. In my state, electric utilities are guaranteed a rate of return on investment of approximately 12%, if I remember correctly. And so there's a lot of incentive for build out and maintenance that's high in total dollar amount and high in volume of work done. In some ways it's the system working as designed but the "cap" can incentivize erroneous build out, as you noted in the jet fighter example.
So you have an excessively built out electrical system... sounds like a win to me.
7 replies →
It's a bit more complicated than that. First, most large health plans regulated under the Affordable Care Act are actually subject to an 85% minimum medical loss ratio. Some of the larger payers which also have their own providers as employees within the same parent corporation are able to shift money around with internal pricing agreements so that they make larger profits on the care delivery side.
But at the same time, the business is still pretty competitive with the employers and consumers who purchase policies or rent networks being price sensitive. Employers will switch carriers to get a significant cost savings so that holds down prices (and carrier profits) to an extent. Most large employers (and unions) are now self-funded so the "insurance" company isn't actually bearing much risk, they just set up a provider network and process the claims.
Most doctors are almost completely ignorant about the broader issues of healthcare financing and medical economics so take anything you hear from your friends with a grain of salt. (And to be fair, it's not something we should expect them to be experts in.)
You can really just say anything and get upvoted on this website.
If this were true then private insurers would have paid comparable rates to Medicare prior to the ACA passing, and that's just not the case. This fact has been a fixture of the US healthcare system since the creation of Medicare.
So I happen to be in Costa Rica for the month. Just like every other 1st world country, it has managed to have universal health care that is better and cheaper without private insurance.
Even if you do get private insurance for quicker access, it’s still much cheaper than the US.
I just spoke to someone who flew down here to save $30K on dental work.
The problem isn’t the ACA, it’s the ass backwards American health care system. I was at a meetup of American ex-pats here and half of them said they established residency here to join CAJA - the health care system
It's a difficult fix, because the real issue here isn't who pays, but how much it's paid, total. If the cost of care in the US was the same as the cost in, say, Spain, the vast majority of people would have little problem paying out of pocket, and having just high deductible insurance for really big ticket items. At the same time, it'd be easy to have the government pay for it all. The US system is just very expensive in general, so it's a problem regardless of who pays for it.
Most of the costs are ultimately salaries to Americans, and money handed to American companies, so most savings would come from someone's livelihood. That's why we cannot reform: The party that actually cuts costs will build resentment for decades, and create a blip of unemployment. Nobody wants to do that, and therefore you aren't going to be a serious, relentless attempt at cutting costs. We've seen how the attempts that the ACA made were counteracted by consolidation at all levels.
Serious cuts have to have no mother. Say, if we ever did have an AI that worked well enough at this, and outcompeted primary care physicians. Foreign pharmacies bypassing all controls and being able to hand you much discounted drugs the day after. Telemedicine and cheap travel put together to make surgery that didn't involve an ER visit just as easy and much cheaper than using the US system. Straight out disruption, because the incentives are such we sure aren't getting improvements in regulation.
Would doctors need to make as much money if the cost of education wasn’t so high? Would they need to charge as much if they didn’t have go have a staff to chase down payments from patients and deal with insurance companies?
Not to mention that because of Bush, the government is not allowed to negotiate drug prices.
ACA enshrined the worst parts of the American healthcare system for years to come. It is a politicized victory that is the best solution for no American citizens. Places I’ve been with fully privatized healthcare or single payer are both significantly better for consumers.
Insurance companies have raised prices to restore profit, were briefly a mandatory expense, and will exist for years to come.
> ACA enshrined the worst parts of the American healthcare system for years to come
before the ACA, insurers could deny coverage for pre-existing conditions
people have forgotten how bad things used to be
18 replies →
> Insurance companies have raised prices to restore profit, were briefly a mandatory expense, and will exist for years to come.
Why do their stocks underperform so badly?
https://imgur.com/S8bNSM2
2 replies →
Costa Rica is a beautiful country. But it is in no way “first world”.
It has no military, and is effectively dependent of the US and in best cases neighboring countries. It has excellent weather and soil which account for its fruits exports… and outside of some niche industry, is mostly reliant on tourism which means importing money.
I love that country and have been many times. But if it were god forbid wiped off the face of the earth, it would be sad and annoying at best.
Costa Rica has “free healthcare” / healcare from taxes because it has 5 million people, about 1/2 of New Jersey.
This isn’t some mechanism that the US just refuses to use. It’s a matter of scale. You either don’t know and should remain silent on the topic, or do know it and lack the honor to not state it.
Costa Rica purposefully got rid of its military so it could provide services. It didn’t feel a need to fund three unnecessary wars in two years.
Guess which other country has universal healthcare - China. They are just slightly more populous than the US.
> This isn’t some mechanism that the US just refuses to use. It’s a matter of scale. You either don’t know and should remain silent on the topic, or do know it and lack the honor to not state it.
China does have a military…
Maybe you should take your own advice. Every other country in the world seems to have figured this out.
2 replies →
This isn't the whole story. There's a lot of "legal" self-dealing going on where insurance companies essentially own providers and then pay the providers which allows the insurance companies to circumvent the medical loss ratios.
More here:
https://healthcareuncovered.substack.com/p/self-dealing-ille...
There are other structural issues at work that you see across US government procurement generally, Medicare just being one example.
The unit costs of doing business with the US government are higher than with private companies even after accounting for economies of scale. The US government also requires that they pay the lowest price. Consequently, unit economics are usually worse when dealing with the government than when dealing with private companies.
The maths often don't math but the law doesn't care. Most inexplicable and bizarre pricing you see related to government procurement are structural tricks vendors use to indirectly fix the unit economics across their customers while technically staying compliant with bad regulations. Everyone else who is not the government is collateral damage of that byzantine theater.
Ideally, we would all drop the pretense that the US government deserves the lowest price just because they are very large, instead letting it reflect the true overhead cost.
I'd argue it's a subsidy/incentive problem. Since every subsidy works by raising a cost somewhere which is used to subsidize a cost elsewhere, I'm inclined to believe in the Bennett hypothesis. Our government mostly subsidizes demand, and does little to incentivize productivity/outcomes. You see high prices everywhere the government funnels money: in education, healthcare, even the military - as where's the incentive to lower costs if the government is on the hook and will fund it no matter the cost?
Most insurance is funded by employers who would switch insurers if they feel they're getting screwed by them.
> So insurance companies spend more so they can collect higher premiums.
This part is still true though. Insurers want you to consume more healthcare, so they'll happily pay for your chiropractor, acupuncturist, acne treatment, and Chanel gift bag [1]. Patients are happy with their benefits. Employers are happy with increasing employee retention in a tax advantaged way. Insurers are happy with the profit. Of course, you aren't going to see much health improvement from this though.
[1] https://nypost.com/2024/07/25/lifestyle/nyc-hospital-bills-3...
These limits don’t apply to self-funded programs that are administered by big insurance companies (most large employers’ plans, then) or plans less than two years old (whether there are measures in place to prevent simply rotating plans often to exploit this, I do not know)
That's not why prices continue to increase. They can't just let prices skyrocket to pad their pockets. If they try, government regulators will block premium hikes, regular people will ditch them for cheaper competitors, and big businesses that pay premiums from cash will fire them for not keeping medical bills lower.
But prices already have skyrocketed, and insurance execs have already become significantly richer. Why didn't the feedback loops work?
> regular people will ditch them for cheaper competitors
I love the particular irony of people who advocate for regulations then attempt refutation of free market theory for what is already unquestionably and objectively not a free market.
This is correct, but neglects the compounding effect.
Insurers are also adding some %+ increase on premiums every year, which is taken as a % of their yearly spend, ie 2-3%.
ie (1+inflation)^N*(base_prem+overpay_prem_increase) = new_premium. The compounding of $ returned is pretty big on this.
That being said underwriting risk, under the law and avoiding correlated risks, is tough.
This seems like we need similar price caps for healthcare providers, medical equipment providers, pharmaceuticals, etc. Done just in isolation for 1 part of the healthcare industry results in this obvious bad effect.
Removing the rule wouldn't help things.
That would break the system completely. The only reason any of this holds together at all is medical providers shift costs from one patient to another. Medicare doesn't pay enough for the care patients are provided, so hospitals charge private patients extra. If you introduced price caps either hospitals would start to go out of business or they'd stop accepting Medicare entirely.
Price caps always and everywhere cause shortages, including long queues for certain types of care. This may be acceptable but we need to understand the trade-offs when making any changes.
Electric utilities face price caps and there are not electricity shortages.
It depends on the level of market failure, but there are not a ton of hospitals to choose from regardless.
2 replies →
Price caps create shortages when they are the rate limiting factor, which is always the case when imposed on a free market whenever the cap is below the market price, so this is an extremely accurate statement when dealing with things like lightly regulated commodities.
Whether they would be the rate limiting factor in health care remain to be seen, since health care is highly regulated with regulatory capture, licensing, and violence enforced market manipulations. As a thought experiment, in the extreme that health care were a pure monopoly, then I could envision some price caps somewhere between cost and price where the supply curve is relatively flat on either side thus creating minimal effects to supply.
3 replies →
You've identified a real issue with cost-plus pricing. But there's more to it than that. Commercial insurers have to pay more than Medicare, for the very simple reason that Medicare's pricing terms are that they get a discount beyond whatever the lowest price is that you charge anyone for the same thing.
(Is it a 60% discount? No; a 150% margin has to be explained in other ways. But the phenomenon is real and important.)
> The people who design easily gameable systems belong in the lowest circle of hell.
-- Charlie Munger
This would only hold empirically if prior to the ACA, commercial insurers did not pay more.
I was under the impression that some companies that provide insurance also provide healthcare?
The problem is the market isn’t competitive due to hidden pricing and also anti competitive aspects like insurance. The supply of doctors is itself artificially low. There is a lot more regulation needed than something as simple as Obamacare.
Managed risk pools should not be for profit.
Several doctor friends told me your doctor friends aren't real.
Ding Ding Ding. We have the correct answer. And this was a predicted consequence of that profit cap.
>So insurance companies spend more so they can collect higher premiums. That's how they make more money. >
If this is correct, then how come there are so many complaints about insurance denying payment for healthcare or the hoops they make patients and doctors jump through for pre authorizations?
If the path to more profit was spend more money, then there would be no reason to question a doctors’ orders? Nor threaten doctors and hospitals with leaving the network if they don’t agree to lower prices?
Yet, one often hears about so and so plan will not have so and so hospital system in network unless they come to an agreement.
> If this is correct, then how come there are so many complaints about insurance denying payment for healthcare or the hoops they make patients and doctors jump through for pre authorizations?
Because those anecdotes get reader and viewer engagement. Charts comparing how much U.S. insurers pay on average for common procedures compared to, say, the UK NHS, don’t drive forward the narrative.
You should interrogate the media sources you consume and ask why you’re fed so many stories like that, and investigate what the real data is. A few years ago my friend got a continuous glucose monitor for Type 2 diabetes. I looked at the coverage polices for continuous glucose monitoring (for Type 2) for my insurer and some of the other big ones. Turns out that most US insurers, Medicare, and Medicaid in 45 states+DC cover continuous glucose monitors for people who have type 2 even those that don’t use insulin. At the time, most Canadian provincial systems didn’t cover the technology except for Type 1 or people who take insulin. UK NHS was worse, covering it only for Type 1, or Type 2 with certain conditions (such as you’d otherwise need to do 8 or more pin prick tests a day). https://www.diabetes.org.uk/about-diabetes/looking-after-dia...
3 replies →
Complaints about denied claims or prior authorization requirements should generally be directed at employer HR departments. Most HN users in the USA probably have employer-sponsored group health plans, and often those are self-funded where the insurance company doesn't actually bear any risk but just administers the plan. Commercial insurers would be happy to sell plans that pay every claim that comes in at 100% with zero denials. It would be less work for them. But naturally employers don't want to pay for that, so the HR departments have the insurance carriers impose more restrictive coverage rules to hold down medical expenses.
4 replies →
My understanding is that there are a number of reasons why commercial insurance companies pay more. A big one is that Medicare has enormous pricing power because people on Medicare are a huge segment of the population and also the segment that consumes the most healthcare services. Your local healthcare system can't NOT take Medicare. They're effectively stuck with the reimbursement rates that Medicare sets. On the other hand, healthcare systems have a ton of power in their local markets. A healthcare system can afford to not be in network for a particular insurer, but if that insurer loses access to the biggest healthcare system in a particular market, it can be devastating for them. A major employer is not going to be happy if their executives have to all change doctors because the big local hospital system is no longer in network.
You mean that there is a rule which prevents for-profit companies offering personal health insurance from pocketing more than 20% of revenue?
Those poor, benighted shareholders. What a socialist hellscape.
[dead]
This. It's hard to believe that the Obama team could have been this financially incompetent.
It's easy with hindsight to believe you could have capped expense at 200% medicare but getting what we got passed was nearly impossible at the time. Before Affordable Care Act, insurers had every tool available to deny care, maximize profits, and skim more than 20% off the top. It's great we're getting closer to the point that it feels to you like incompetence that these things aren't fixed today but your anger with the medical lobby is clearly misplaced here.
Every major piece of legislation needs revisions to chase circumvention and we're well past due on updates but no legitimate bills have been presented that cover these topics and that's not a one-party issue.
Yup, pre-existing conditions, in particular, was a beast. The patient protection portion of the ACA is one of the better parts of the whole bill.
5 replies →
Obamacare was totally subverted by the medical lobby during its creation. They had a lot of great ideas but there were way too many politicians in Congress who had sold out to the lobby (Lieberman, Baucus on the democrat side) and would block anything that would reduce cost.
And since then it has been a fight for survival without much chance for improvement. The republican refuse anything that could improve it but want to “repeal and replace” but are struggling a little with the “replace” part. And the democrats are too timid to make another push.
So we end up with the worst of all worlds. Super expensive, overall results not very good and super complex.
[dead]
It was the best they could do to get 60 votes because universal health care was too radical even though every industrialized country in the world does it.
Obama had nothing to do with what's in the ACA. It was ideas from moderate Republicans (previously prototyped in Massachusetts under governor Mitt Romney), advanced on the basis that it would receive bipartisan support as a result. But it didn't, so it was heavily amended until John McCain provided the last vote to get it through.
It's almost as if no healthcare legislation gets passed before private insurers have figured out how to extract shareholder value.
(Which makes the system worse. The fiction of a fiduciary responsibility to extract top dollar from a business regardless of consequences is the opposite of "capitalism". Which derives its name from the practice of sound investment to build something of lasting value.
To say nothing of the social deviance of for-profit healthcare.)
I remember consulting for a healthcare company in .... 2003. Very short assignment so I never got deep into it, but anyways my consulting company made me read up an in house guide about ALR and MLR (Administrative or Medical Loss Ratios). Obamacare or not, such constraints already exists. Maybe they varied by state, maybe there were other loopholes such as not supporting pre-existing conditions, but IIRC there were restraints on pure profits, so even then the same perverse incentives existed. More revenue you can get more profits.
I am going by very old memory of a few days/weeks of work, but it will be good for a medical system historian to chime in.