King v. Burwell, U.S. Supreme Court. Legal Analysis from Hondo

[whatshouldicareabout]

Second, I think we're talking past each other to some extent. Costs have likely risen for people on the board because they're in higher income brackets; for any college kids or poorer people, costs have likely declined.

It varies, depending on their previous coverage, their new coverage and their new utilization. If people did not have health insurance before, they avoided services where they would pay (instead opting for free clinics and other inexpensive options). With coverage, people will be more likely to use the health care system. If they are on Medicaid and don't have to pay, costs will go down. If they went through the exchange and bought a silver plan, costs will go up unless they have to go to the ED, have surgery or be hospitalized.

Wasn't the main goal of the ACA to increase coverage at the expense of strict cost control?

The main goal of the ACA was to slow down the continuous growth of costs for the federal government. Medicare is always growing, and with the aging population transitioning from private to Medicare, there is a need to reduce healthcare costs while also improve health outcomes. Most of the policies and laws that @Tequilla mentioned that the healthcare industry were dreading were in reference to that.

The points of expanding coverage were to provide coverage to encourage appropriate healthcare utilization as a means to prevent ED and hospitalizations for poor people (which would come out of hospital's budgets, like Harborview, which is funded by tax dollars). So the cost control (Medicare) and expanded coverage (Medicaid) are two separate points, really.

In fact, the marketplace doesn't really have any limits on costs except for those inherent in the pressures of an open and free market. In fact, premiums are going down in the market place this year because more managed care organizations are entering the market place after waiting and watching for the first year (among other factors). As Southern mentioned, it's the free market enterprise that's helping control costs in the marketplace.

I respect the motives of the people working in healthcare that disagreed with the reforms, their interests and job security are generally tied to increased efficiency and lower costs. I just happen to believe that the old system privileged the healthy and wealthy, and that expanding coverage is essential. It seems apparent now though that you can't do coverage without cost controls.

If you're really interested in this stuff, you should read up on the Oregon Medicaid expansion or the RAND Health Insurance Experiment. Two fascinating studies on how expanding health insurance in the US works and what it really does.

 

[RaceBannon]

I don't recall saying anything about healthcare being a right. I support critical care for the destitute and hospital charities and such to get care to those who can't afford it. I don't think Obamacare did anything to make things better for those who struggled before and it is making things worse for those who had good insurance.

It was poorly thought out and a waste of the first two years of the Obama administration when the focus should have been on the economy. That's why I think Hilary would have been better.

Obamacare still isn't fully implemented and the worst is yet to come and it does effect full time employment and benefits in a negative way.

 

[Tequilla]

To be clear, when I was talking about costs with respect to healthcare, I was talking about costs for the system.

As a % of GDP, healthcare in the US is almost 18% and rising each year. Based on this table, looking at countries around the world, we have room for improvement: http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS/

Back in the days where I worked in the healthcare industry, the average annual increases in total healthcare costs throughout the total system was in the 5-7% per year range compared to general inflationary increases of 2-3% or less. When you put that together, that's why you are seeing such a growing increase of healthcare costs as a % of GDP.

I think Race makes a good point about the difference between providing care for those that can't afford it versus providing care for people that can afford it but choose not to.

One area where I think that we could make significant advances in finding better solutions is to lift the whole state line situation such that we can pool greater amounts of people together into plans, or similar plans, and go from there. I'll give two great examples that I think go a long way when it comes to the individual:

When I lived in Dallas and worked with a small consulting firm, most of the employees were long-standing partners, etc. that were 45+ in age and many entering their 60s. For those of us in our 20s and early 30s, our healthcare needs weren't high but we were being grouped into a situation where the risk profile of our collective insured class was far greater than what we had. Hence, our premiums were fairly high.

In my current position, we have in theory more people that are in our plans and more people of a comparable age. However, the actions of a single person doing something stupid can have the impact of driving the premiums up for the collective group because for example a $100k medical bill over the course of 150 people is far different than a $100k medical bill over the course of 1,500 people.

Because outside your largest employers, many employers are going to fall in the 500 to 1,000 or less employees. The actuarial risk in these numbers is far greater. As a result, particularly after any event that gives rise to an insurance company having exposure, the resulting action is to drive significantly higher rates the following year. Go look at most smaller companies and you'll find that most years they are facing 15-20% increases in their premiums. Which is flat out ridiculous.

 

[whatshouldicareabout]

To be clear, when I was talking about costs with respect to healthcare, I was talking about costs for the system.

As a % of GDP, healthcare in the US is almost 18% and rising each year. Based on this table, looking at countries around the world, we have room for improvement: http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS/

Back in the days where I worked in the healthcare industry, the average annual increases in total healthcare costs throughout the total system was in the 5-7% per year range compared to general inflationary increases of 2-3% or less. When you put that together, that's why you are seeing such a growing increase of healthcare costs as a % of GDP.

I think Race makes a good point about the difference between providing care for those that can't afford it versus providing care for people that can afford it but choose not to.

One area where I think that we could make significant advances in finding better solutions is to lift the whole state line situation such that we can pool greater amounts of people together into plans, or similar plans, and go from there. I'll give two great examples that I think go a long way when it comes to the individual:

When I lived in Dallas and worked with a small consulting firm, most of the employees were long-standing partners, etc. that were 45+ in age and many entering their 60s. For those of us in our 20s and early 30s, our healthcare needs weren't high but we were being grouped into a situation where the risk profile of our collective insured class was far greater than what we had. Hence, our premiums were fairly high.

In my current position, we have in theory more people that are in our plans and more people of a comparable age. However, the actions of a single person doing something stupid can have the impact of driving the premiums up for the collective group because for example a $100k medical bill over the course of 150 people is far different than a $100k medical bill over the course of 1,500 people.

Because outside your largest employers, many employers are going to fall in the 500 to 1,000 or less employees. The actuarial risk in these numbers is far greater. As a result, particularly after any event that gives rise to an insurance company having exposure, the resulting action is to drive significantly higher rates the following year. Go look at most smaller companies and you'll find that most years they are facing 15-20% increases in their premiums. Which is flat out ridiculous.

Correct, $100k being split among a group of 150 is a lot worse than $100k split among 1,500. But since we're comparing two different rates (1 bill per 150 people versus 0.1 bills per 150 people), what about the other 1350 people that weren't affected by the $100k bill in the first example?

With health care, there are so many variables and differences and things to consider, such as how much the plans reimburse, how much they negotiate with the hospital and how much they put on the patient.

 

[d2d]

To be clear, when I was talking about costs with respect to healthcare, I was talking about costs for the system.

As a % of GDP, healthcare in the US is almost 18% and rising each year. Based on this table, looking at countries around the world, we have room for improvement: http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS/

Back in the days where I worked in the healthcare industry, the average annual increases in total healthcare costs throughout the total system was in the 5-7% per year range compared to general inflationary increases of 2-3% or less. When you put that together, that's why you are seeing such a growing increase of healthcare costs as a % of GDP.

I think Race makes a good point about the difference between providing care for those that can't afford it versus providing care for people that can afford it but choose not to.

One area where I think that we could make significant advances in finding better solutions is to lift the whole state line situation such that we can pool greater amounts of people together into plans, or similar plans, and go from there. I'll give two great examples that I think go a long way when it comes to the individual:

When I lived in Dallas and worked with a small consulting firm, most of the employees were long-standing partners, etc. that were 45+ in age and many entering their 60s. For those of us in our 20s and early 30s, our healthcare needs weren't high but we were being grouped into a situation where the risk profile of our collective insured class was far greater than what we had. Hence, our premiums were fairly high.

In my current position, we have in theory more people that are in our plans and more people of a comparable age. However, the actions of a single person doing something stupid can have the impact of driving the premiums up for the collective group because for example a $100k medical bill over the course of 150 people is far different than a $100k medical bill over the course of 1,500 people.

Because outside your largest employers, many employers are going to fall in the 500 to 1,000 or less employees. The actuarial risk in these numbers is far greater. As a result, particularly after any event that gives rise to an insurance company having exposure, the resulting action is to drive significantly higher rates the following year. Go look at most smaller companies and you'll find that most years they are facing 15-20% increases in their premiums. Which is flat out ridiculous.

Correct, $100k being split among a group of 150 is a lot worse than $100k split among 1,500. But since we're comparing two different rates (1 bill per 150 people versus 0.1 bills per 150 people), what about the other 1350 people that weren't affected by the $100k bill in the first example?

With health care, there are so many variables and differences and things to consider, such as how much the plans reimburse, how much they negotiate with the hospital and how much they put on the patient.

Call this guy. He'll do the math for you...