Your story of spending $1200 on health care in three years could very well have been one of being completely bankrupted because you suffered a serious but not life-threatening injury. Unless you're a millionaire, you cannot self-insure when it comes to health care. It's not hard at all to rack up a couple of million dollars in hospital bills if you get unlucky, and you'd probably never be able to pay that back.
Of course, the hospital would still treat you, and the rest of us end up paying for your care through slightly higher insurance premiums.
In short, you're implicitly mooching off society, and apparently proud of it. You managed to get away without actually triggering it, so far, but you were pushing a lot of financial risk onto other people. (Ignore this if you are, in fact, a millionaire.)
You wonder why individual plans are so much more expensive than group plans. It's because of people like you! Group plans include every employee, healthy or not, while millions of healthy individuals forego buying individual coverage because they think they don't need it. This gives the individual market a much riskier pool of customers.
I agree with the basic idea that the US health insurance market is completely messed up, but you're really doing it wrong, here.
" It's not hard at all to rack up a couple of million dollars in hospital bills if you get unlucky,"
That's at least in part due to the fucked up nature of the medical industries strange relationships with the medical insurance industry in the US. In many other countries that "couple of million dollar" hospital bill would probably not cost as much as a couple of hundred grand for exactly the same time/care/procedures/drugs/expertise.
The hospital has not actually incurred a couple of million in costs – did you see yesterday's NYTimes (I think) article about the ~$1 saline solution getting marked up to $500+, while the patient was also invoiced a couple of hundred dollars for using the emergency room and another several hundred for the staff who administered the IV drip? Saying that someone is "mooching off society" for risking defaulting on payments for things artificially marked up over 50,000% seems a little harsh.
(Having said that, I'm fully aware that those of us in "the rest of the world" piggyback freely on a lot of medical/health research that the "unusual" US health system funds…)
In any risk assessment, you have to balance impact with likelihood. Yes, it could have happened, but the likelihood is so rare that it's not worth the premium.
Once again, that's the entire point of the insurance company. They balance impact and likelihood.
Even if I had the insurance to cover me, you're still going to get slightly higher insurance premiums. You're actually more likely to receive a higher delta because I was covered than I wasn't, as the hospital will recoup its losses across all insurance providers, while the insurance company will recoup across only their own constituents.
The health insurance system is an oligopoly that allows insurance companies and health care providers to collude to set artificially high prices. Drug companies, hospitals, surgeons, medical schools--they all get their payday and the insurance company gets to make a "small" percentage margin on top of it. Which just so conveniently means that they're some of the most profitable companies in the world. Just look at the bottom dollar. If they weren't making out like bandits, they wouldn't be making out like bandits.
It's specifically because of ubiquitous health insurance that health services prices are so high. If more people covered themselves, the price of services wouldn't be high, insurance payouts wouldn't be so high, and thus insurance premiums wouldn't be so high. I'm actually doing you a favor by sticking to my principles.
EDIT: and regardless of all of that, nobody has the right to mandate what others do with their lives. I could have chosen to be a burger flipper for the rest of my life and your argument would of social impact would still hold, even be worse because society would be out my higher tax revenue.
Yes, I'd be paying for your care either way. The difference is, the way you're doing it now, you contribute nothing while I still pay for your care. If I get a million-dollar hospital bill, you don't pay more, but the reverse is true.
If insurance weren't ubiquitous, service would be cheaper, sure. And people would die or be bankrupted by treatable medical conditions like crazy. This is why insurance is so common. People don't like that kind of thing.
Given the system that we're in, you're doing me no favors at all by refraining from obtaining health insurance as a healthy person. You've decided that the risk of bankruptcy is acceptable while externalizing a lot of that risk.
> If insurance weren't ubiquitous, service would be cheaper, sure.
It would also be cheaper if it were truly ubiquitous and single-payer. The prices European hospitals (even the private ones) charge to the various national health systems are a fraction of the list price for the same procedure at the average American hospital. It's only the current insurance system in America that creates perverse incentives to inflate list prices to the ridiculous levels we're accustomed with.
Your notions of my responsibilities for how and when to protect your financial security are of no concern to me. I will make my own contributions to society as I see fit.
> I will make my own contributions to society as I see fit.
Which is why you will now pay a tax penalty if you don't pay for health insurance coverage. What contributions you make to society is part of a contract, not a unilateral choice.
Your demands to be left alone would be much more convincing if you would sign a forfeiture of your right to participate in the US medical care system above a certain price point, per year. (Assuming we could enforce it)
If, when the care required to save your life cost above, say, $10k in one year, you agreed to die -- then I would consider you to be taking the notion of individual responsibility seriously. As it stands, you are proudly forcing the rest of us to bear your risks.
I'm pretty right-wing generally, but I don't see any alternative between forcing everyone to pay for healthcare somehow, or having hospitals literally throw people out as soon as they are unable to pay. Nobody is willing to vote for throwing injured broke people onto the streets, so we're all going to be paying for it somehow, whether it's through mandatory insurance or taxes.
Hey, none of us like the fact that insurance is so profitable for Aetna et al. We just recognize the cost-benefit tradeoff of paying premiums, and the merit of making urgent medical care undeniable -- i.e. we can't force a hospital not to treat you if you are in dire medical need. So the hypothetical I mentioned above is not, in fact, possible.
That's fine, a highly common and very human attitude. Just don't pretend like you're being somehow noble, or that the rest of us are somehow screwing you over when we try to make you stop pushing risks onto us without contributing.
If I had never gone to college and decided to just work as a burger flipper the rest of my life and spend all my money on cigarettes and sky-diving (see, I can make up low-likelihood hypotheticals, too), then I'd be contributing even less. Are we going to start mandating that people actualize their full economic potential, as well?
The problem is that you (and the otherwise healthy (under|un)insured) probably wouldn't think twice about getting that cancer treatment, or heart transplant, even if it meant that others in your community would have to pay for you. Therein lies the reasoning why we need something other than optional health insurance.
Except you are implicitly assuming that if you get into a severe car accident and are unconscious and can't prove you can afford surgery, you will still get treatment. This only happens because we mandate treatment and the rest of us bear the costs of it. Congrats on 'contributing "
Disclaimer: Am Indian, and have no detailed knowledge of US policies.
From a summary of the replies to this one:
I personally, would be willing to sign a forfeiture to the effect, if i am medically in a bad state and can't afford treatment, would be allowed to die. So it seems, there might be room for allowing people who don't want insurance, and neither penalty to sign a forfeiture.
Personally, my choice is dictated by an attempt to understand my body and live a fuller life and some of those attempts suggest to me that insurance is overrated in light of Bayesian reasoning.
-- not to suggest i actually sat down and calculated, just a guess.
For example, consider what happens if, as is very likely, you change your mind. The doctor says, "It's cancer, but it's treatable." You say, "Oh, I didn't think this through, please save me."
Very few doctors could say, "Tough, here's some aspirin, GTFO." If they could, they wouldn't have chosen to become doctors.
Or consider the case where you're unconscious and dying. Do they save you, or not? They can't really know what it will ultimately cost, and the certainly can't know how much money you could raise.
I don't think "opt-out" is a good (or sound) idea -- but even if it was -- it'd be pretty hard to enforce: take an auto-accident. You shouldn't be delaying emergency help, just on the off-chance than one of the many victims might be an "opt-out". It would complicate triage for no really good reason.
Then there are things like contagious diseases; you would have to spend money enforcing some kind of quarantine in order to cater to the "opt-outs".
For all other cases, like most types of cancer -- you can opt out -- only you'll have to commit suicide (I don't advocate this either).
The issue with insurance is simple. It is better to have a small, but guaranteed loss that you can survive than a huge, but unlikely loss that you cannot, even if the total cost of the smaller losses are more than the relative cost of the large loss.
That said the insurance system in the US is too broken and needs to be scraped.
>>In any risk assessment, you have to balance impact with likelihood. Yes, it could have happened, but the likelihood is so rare that it's not worth the premium.
What makes healthcare dramatically different is that, as a layperson, you cannot accurately assess the likelihood variable. You may have some very rough ideas - for example, a professional snowboarder is more likely to get a sports-related injury - but stuff that tends to be extremely expensive is also stuff that can happen to anyone at any time.
This differs from, say, car insurance, where a lot of the factors such as the value of your car, the frequency of driving, your driving habits, etc. are known. As such, you can optimize it much more effectively.
I'm not really sure what you're getting at, as this is just one company. Companies are also pretty good at cooking their books, too, and I haven't seen too much in the last 5 years to make me trust that the SEC is doing their job.
I like how you downvoted me for factual information. Please look up their competitors, as well as their tinier ones. The margins in the sector are similar across the board. The financial statements are audited by third party accountants. Studies from healthcare researchers use those margins. I didn't know I was responding to a conspiracy theorist, which I hope you're not.
I am not trying to support your parent comment. However, the current trend in healthcare cost is unsustainable. My roommate (stupidly, in hindsight) went to get an ER after being scratched by a small cat in our parking lot. The total bill was over $8k for about an hour of care and two shots.
This is unacceptable. There must be some sort of accountability in the system. Unless, there is a secret pact between the hospital and the insurance company to show a larger bill to make the patient think he is getting his money's worth in which case I have nothing to say.
If we can't control the price, can I write a will saying my estate will actively refuse care for anything that costs more than 5k out of pocket per day and 15k annually? In the event I do need care that costs beyond that point, please give me a quick and (hopefully) painless death instead.
There essentially is such a secret pact. The official hospital bill is a worst case that roughly nobody actually pays. It exists for leverage, both with insurance companies and with people paying out of pocket. It also exists because some people will actually pay it, and that's profit for the hospital.
Because hospitals are mandated to perform life-saving treatment regardless of willingness to pay, they have to foist the cost of that treatment onto their other customers. However, insurance companies hate paying much above cost, and they have a huge stick in the form of "we will remove your hospital from our network of approved providers" to get the hospital not to charge too much. Hospitals can't recoup those extra costs from insured people too well, so it tends to fall mostly on uninsured people with money. But the way it works is everyone gets the same bill, and then when the insurance company steps in to pay it, they activate their secret pact with the hospital to pay a small amount above cost instead of the nominal $8k figure.
Wow, this is insane. I for one believe that prices should be transparent and secret pacts like these should be broken with (I am not normally fond of this phrase but I will use it here) zero tolerance. If there is a pact, the hospital and the insurance company both get shut down and both management teams get a speedy trial and get sentenced for life without parole.
This is absolutely nonnegotiable. Here I am, broken, talking about end-of-life to avoid my family from getting a big fat debt and we don't even know how much a hospital actually charges for a procedure?
Require all hospitals to publish their rates and shut down anyone who negotiates any kind of discount. We have to contain health care costs and these shenanigans have got to go.
I'd really like to know how the system works in single-payer systems. How does Canada government pay for health care?
I am sorry for the over the top comments but these secret pacts, if they are real, make me livid. OK, what can we practically do so we see the real cost of healthcare in our invoice regardless of insurance company we select? Is it even practical to expect to see costs up front?
It's not illegal price fixing or anything like that. The hospital charges $10K for simple procedure, and then the insurance company reduces it (per contract between them and the hospital) to the "reasonable and customary" $200. Presumably Canada does the same thing, and presumably in Canada there's no point to the hospital charging $10K when they know there's only one payer possible at $200.
It's all but impossible to see costs up front in the US. Hospitals insist on determining the charge at the point of billing.
>Hospitals insist on determining the charge at the point of billing.
Can I start a restaurant and make people pay at the point of billing? Like an upscale restaurant with no prices on the menu and then charge people differently based on what they clothes are wearing...
"Surprise! Your burger was $800 but we will work with you on a payment plan."
Someone behind you in the billing line says, "Oh, you should have signed up for Acme's Burger Protection Racket and paid $150 a month and that way you would only have to pay $1k deductible and then you'd only have to pay 20% co-insurance for most means at this Fatso's joint there after."
I don't know how I feel about this whole thing. I certainly don't have all the answers and things we do to make healthcare better could actually end up making it worse. :(
That's largely the problem. Hospitals can't charge (or even quote prices) until after providing the care in most cases - because it is time sensitive (and the "customer" may not even be conscious). I agree that it's a crazy situation, but the burger joint model is not a valid alternative.
You could have a restaurant like that if you could get the customers to agree up front to pay whatever you decide to charge after service is rendered, as hospitals do. It would probably work if there were only a few other food sources in the area, all doing the same shakedown of their customers.
The other critical element is you'd need to have a situation where a burger was something that really isn't optional, and going without it means you or your children are in pain. This definitely affects the calculus of the decision.
The hospital is required to take Medicare, and Medicare tends to be unwilling to pay the true cost, which has to be made up elsewhere. After that you're stuck with different people paying different amounts for the same operation.
> The hospital is required to take Medicare, and Medicare tends to be unwilling to pay the true cost
This is actually the reverse: the reason why Medicare is so much more cost-effective is that they're more consistent about paying only the true cost and have the marketshare to negotiate that up front rather than haggling over every claim. The hospitals favor private insurance because the margins are higher and they don't face the penalties for over-charging the US government if they get caught inflating prices.
How do you know that it is true cost? Given the number of inner city hospitals with serious financial trouble, I strongly suspect that they've gone below true cost!
> The official hospital bill is a worst case that roughly nobody actually pays.
If someone has no insurance but does have enough assets to cover the lofty bill, I'd expect the hospital to seek to seize assets for the full amount. It's a safe bet there's a fair number of people who've ended up losing their house to pay for a few hours of tests, after the hospital refused to negotiate. Lesson: If you have assets, have health insurance to lower the risk of losing it all when you get scratched by a cat.
That's exactly what's happening. The insurance company doesn't pay anywhere close to that price. Neither do uninsured people, typically - they just go bankrupt. There's a collusion between hospitals and insurers to help cook each other's books, and to inflate the customer's perception of value.
BTW, if you are uninsured you should negotiate before receiving service, apparently you can get a big discount simply by agreeing to pay ahead of time. Of course that's not really feasible in true emergencies, but you can still negotiate a payment plan.
> It's not hard at all to rack up a couple of million dollars in hospital bills if you get unlucky, and you'd probably never be able to pay that back.
Just go to another country, if you need quality no-hassle healthcare.
pg says in one his essays, that he found after cashing in on Viaweb that he couldn't just walk into a hospital and swipe his card. It just doesn't work like that in America. You need insurance, even if you have 50 mil in your bank.
To top it off, individual health care is very expensive and designed to screw you (and since you're not a big company with hundreds of people signed up, you can't threaten to switch or do any other such sort of thing if they deny you care.) I know someone who needed a very expensive procedure, and his boss basically told the insurance company that if they didn't assent to the procedure, his company would switch to some other provider. As a lone individual, you have less of this kind of leverage.
Now, most other countries (I said most) don't work like that. You can go to any hospital, not have to worry about denials and pay in proportion to the service they render to you. And their fees come nowhere close to what the most U.S. hospitals charge.
As for options, based on my personal experience:
- If you want to go really cheap, choose India. India has a great medical system, but the generally unsanitary state of the country gives me doubts about the hygiene even in hospitals.
- If you are not seriously cash-strapped, try the UAE. They have a lot of really good hospitals, latest technology, and everything just gleams and shines there. For an example of pricing: laparoscopic surgery at premier specialty hospital in the UAE costs about $10k. I assume it'd be in the $50k (or more) in the US. (Au contraire, in India it's probably $1-$2k range.)
> Just go to another country, if you need quality no-hassle healthcare.
This is the part which scares me in these discussions: I can do that if I have time to plan in advance. If some accident occurs, I have no choice but to deal with the US system – and even if with good insurance coverage I'd have to deal with the kind of routine over-billing and obstructionism you mentioned. It's like we're trying to encourage all but the most risk-averse to emigrate to a country with a more humane system.
It's not clear if that $1200 was spent on care, or on premiums.
But in any case, a high-deductible policy with an HSA is a great option for people who don't have ongoing medical costs (diabetes, young children, etc). Not only are the premiums lower, but unlike a FSA, you can roll the money over at the end of the year and build up a balance.
If you do have ongoing medical costs, then yeah, traditional insurance (and maybe an FSA) would be the best choice.
While I do agree with you, we need to back away from taling about the million dollar hospital bill. We used to have a $1M lifetime cap on our life insurance. I asked HR how often that happened. Apparently not once, by anyone in the entire history of the University System of Georgia. Sure, it MIGHT happen, but it seems it is exceedingly rare. Am hoping others with more facts than I could comment.
I assume you meant health insurance, not life insurance.
It doesn't make much sense to me that hitting the limits would be so rare. Why have the limits in the first place if that's the case? If they didn't make a difference, then they'd just be bad propaganda for the insurer.
This random web page I looked up indicates that about 20,000 people are impacted by lifetime limits:
This is not a huge number, but it's not completely irrelevant either. The pool it draws from will exclude the elderly, the study only looks at the people with employer-provided health insurance, and the 20,000 is from the 55% of those who have lifetime limits.
So we get about 93.5 million with employer-provided insurance with lifetime caps, and that in turn gives about a 0.02% chance of hitting a cap.
Whether that qualifies as "exceedingly rare", I'm not sure.
In any case, "$100,000 hospital bill" is probably a decent substitute for most people, although the odds of being bankrupted by that are probably considerably lower among the HN readership, at least.
>In short, you're implicitly mooching off society, and apparently proud of it. You managed to get away without actually triggering it, so far, but you were pushing a lot of financial risk onto other people. (Ignore this if you are, in fact, a millionaire.)
Smooching off society is a good thing. In fact, everyone should do it. It's called universal health care.
UHC is not the same as 'mooching off society'. The money required to keep UHC working doesn't appear by magic - it's done through the contributions of everyone via taxes. In short, everyone contributes towards it, and everyone gets to use it when needed. That isn't mooching - it's spreading costs across society.
Of course, the hospital would still treat you, and the rest of us end up paying for your care through slightly higher insurance premiums.
In short, you're implicitly mooching off society, and apparently proud of it. You managed to get away without actually triggering it, so far, but you were pushing a lot of financial risk onto other people. (Ignore this if you are, in fact, a millionaire.)
You wonder why individual plans are so much more expensive than group plans. It's because of people like you! Group plans include every employee, healthy or not, while millions of healthy individuals forego buying individual coverage because they think they don't need it. This gives the individual market a much riskier pool of customers.
I agree with the basic idea that the US health insurance market is completely messed up, but you're really doing it wrong, here.