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New subject - moral hazard and pre existing conditions


eisely

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It all depends on how it is done. Some employers use the "independent contractor" loop hole to employ people full time without actually having to treat them as full time employees. Some break up the work into different types/categories, and define "full time" to include only people who have x hours in a particular category. Some (Walmart, but plenty of others too) just stop one hour short of whatever full time is.

 

I don't see how we can maintain such a system, and still compete with other countries. This system does nothing to encourage employee loyalty and dedication. It also strongly encourages uninsured people to put off treatment. That, too, is a moral hazard.

 

 

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Right now we have a way that gives medical treatment to the people who cant pay for and the people who pay for it are taxpayers, people under insurance plan and those with out insurance but who can pay their hospital bills. Hospitals are required to take patients even if the can pay for their care, so what happens the costs they charged to others who have insurance or can pay go up. The ones that really get screwed is the person who pays out of his pocket, the hospitals and doctors make deals with the insurance companies to charge them less than what is charged as the standard rates or else youre not on the companies approved list. The uninsured because it cost so much does not get preventive care and then shows up when something big happens or uses the ER as his Primary Care Doc.

Also medical costs are a leading cause of bankruptcy and again the rates must go up for the rest to cover the lost income.

 

BTW you always hear of high jury awards but most of them get reduced in the appeal process.

 

Medicare/Medicaid fraud is not the fault of the government but providers working and defrauding the government. And it is not only government plans, check how much work the insurance companies fraud departments have and the state insurance commissioners have to do to protect the public from insurance companies misconduct

 

 

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There are a lot of complicated incentives in play throughout the health care system. When you start to adjust them, you need to be ready for all kinds of unintended consequences.

 

Right now doctors have incentives to have lots of office visits. (so Beavah says, and it sounds right). If we switched to a government run system with doctors on salary, would they have any incentive to do more than the minimum? Doctors have an incentive not to get sued, so they run too many tests. If the program is govt-run, do they get more immunity? Do they then have incentive to run too few tests? Patients right now have little incentive to choose the "cheaper" option since they pay the same for lots of different options. How do we get them to care?

 

Hospitals do care about waste, fraud, etc. That comes out of their income, which is based on whatever rates they can negotiate with insurance companies and medicare.

 

I'm generally libertarian on most issues...I think that maximizing freedom is a pretty moral and pretty effective approach. But I'm not really sure what to do about health care - there does need to be some system for covering everyone and the current system of having them visit the emergency room seems way less than ideal.

 

In order for a system to work, there would have to be mandatory participation. Today's big companies have health care plans like this now...you could imagine that the company is giving each employee $10K or whatever and having them use it to pay for the insurance. If you work for the company and you don't want their health plan, you don't have to use it, but you don't get your $10K back. But regardless of your health, you do get insurance (and Lisabob, this aspect, at least does seem to encourage employee loyalty).

 

So what to do? Maybe we give everyone in the country a $10K health insurance voucher and tell them that they have to buy one of six different health plans (maybe the plans range from $10K to $15K, so some extra contribution from the individual might be needed.) And insurance companies have to sell those plans to everyone, so that no one is excluded. That way each insurance company ends up with a large diverse population.

 

And you say, where do we get all the money to give away these vouchers? Well, where do we get all the money right now to treat all the uninsured in emergency rooms? How can it really cost much more to give them preventative care?

 

Just a few rambling thoughts...

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Not to mention that in some states it is still legal for auto insurance companies to use your credit rating to determine what they charge you - result being that people who struggle financially to begin with, also have to pay more for insurance. Huh.

 

 

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Eamonn,

Has OJ priced individual insurance? I wonder what a high deductible plan would cost him. If his goal is to prevent a financial catastrophe due to a costly hospital bill, I would think he could afford a plan like that.

 

The Democrats keep saying we need a government plan, to provide competition. Is there really not enough competition out there now? If insurance businesses are making so many executives filthy rich (as the liberals claim), then why aren't there more people starting insurance companies?

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Thanks for that Brent. Its about what I was expecting.

So lets do a little financial analysis on OJ options.

He can fork out $1200/year for a policy that no doubt does not cover pre-existing conditions and more than likely also requires a co-pay for visits. It also probably is an 80/20 after the deductible is met. The first $5000/year comes out of OJ's pocket even after he's paid the premium.

 

For someone in his situation, a $5000 medical bill will likely wipe him out. The policy doesn't kick in until after that. And the bills will still keep coming. So what would be the benefit of this plan for someone like OJ? With or without this policy, he's in deep yogurt financially.

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That's what insurance actuaries do. If blue-eyed people have more accidents, they're gonna pay more too. It's just business. That's why the under-25 set pays more, and that's why boys pay more than girls and single guys pay more than married guys. Because, statistically, they are a poorer risk. Population-based risk analysis. If you don't like the price you're quoted, shop around.

 

Back to health care, while some may argue that we all have a "right" to health care, it is wrong, IMHO to say that we have a "right" to health insurance and that the private sector must sell it to us at rates that we can afford, even if it means they will not be profitable.

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"Could it be that people with bad credit ratings statistically have more auto insurance claims? Just sayin...."

 

I don't think so. I think the reason is people with lower credit ratings are considered a higher risk maybe not for claims but just for payment.

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Gern,

A $5,000 medical bill will set OJ back, but it won't wipe him out. A $50,000 medical expense without insurance will wipe him out, cause him to go bankrupt and ruin his credit, and put the financial burden on the hospital, and eventually on us all. He could pay off the $5,000 over time, that isn't an insurmountable amount of debt, whereas $50,000 would be.

 

If I were counseling OJ, I would recommend purchasing the insurance. If he is healthy, he won't pay much more than the $1,200/year and he is covered for any major medical emergencies. Without insurance, he could get wiped out with a simple appendectomy.

 

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