[lotsofpulp]

If an insurer is able to reduce (or recoup) costs from likelier risks, then the remaining insureds benefit from lower premiums.

If the goal is providing subsidies (i.e. wealth transfers), then insurance is not the way to do it. That is the government’s role.

[alpinisme]

Insurance that is maximally responsive to patient health changes in terms of cost (ie making healthier people pay less) ends up being an inefficient way of just having people pay for their healthcare directly.

And it naturally means the people with highest premiums are the least likely to be able to afford it (the elderly, the disabled, those with chronic conditions that make them less likely to maintain high earning jobs steadily, etc)

[Workaccount2]

The obvious retort to this is:

"If I focused on my health, ate clean and exercised daily, why should I also be subsidizing Billy "video-games-are-my-exercise" fatass's chronic health conditions?"

This is why there is a hyperfixation on shifting blame away from (failing) individuals. The logic breaks when Billy has to admit he just hates exercising.

And yes, before you comment, I know "maybe Billy has (condition outside all control) so it's not on him". Please, see what I just said in the previous statement.

[ImPostingOnHN]

The entire purpose of health insurance is spreading risk across a wide and diverse risk pool.

> why should I also be subsidizing Billy "video-games-are-my-exercise" fatass's chronic health conditions?"

Nobody is asking you to: enrolling in insurance is a choice in the USA.

Also, replace "chronic health conditions" with "unavoidable inherited genetic risk factors". We don't want Billy to be screwed for life just because he was born to a suboptimal combination of parents.

[Workaccount2]

The most cataclysmic thing that could happen to healthcare would be chronically healthy individuals creating their own health insurance.

[ImPostingOnHN]

Not really (in fact that doesn't even make sense), but in any case, I think you replied to the wrong post. Your reply doesn't seem to have anything to do with the post it replied to

[Workaccount2]

You said enrolling in insurance was a choice. If everyone with a BMI under 22 who did at least an hour of cardio a week had their own health insurance club, they would be doing excellent with cheap premiums and great care, while everyone else drowned in medical debt as their plans collapsed.

The choice right now is all or nothing. There is no choice for healthy people to only share a plan with other healthy people. If there was, everyone else, especially the least healthy, would be totally screwed.

[alpinisme]

In some respects, the ideal world is one in which everyone’s premiums are tied to a free and easy Apple Watch-like device that silently tracks exercise, blood sugar at a frequency that can tell when you ate a big dessert, air quality (and the presence of smoke or pollution), blood alcohol content, whether you are in speeding cars, whether you are participating in dangerous sports, etc. Such a system would directly confront individuals with the cost of their behaviors in an economic way, probably leading many or even most people to improve their habits in the aggregate.

But such a system comes at other costs that most people intuitively feel infringes on core values they have.

Edit to add: this system would actually have some great advantages over an “existing conditions” tax in that now you pay low rates until you have diabetes, all during the time you are leading the unhealthy lifestyle. But once you have it you are not rewarded for starting to exercise and eat healthy and get it under control. In the hypothetical scenario above, you’d be punished economically during the period you were building bad habits and you would be able to restore sane costs after course correction

[Terr_]

There's a similar phenomenon when people grouse about paying taxes for "roads I don't even use." Even if we assume zero indirect benefits, the billing infrastructure necessary to truly achieve that goal would create a creepy panopticon of constant surveillance.

This is difficult to convey to certain brands of self-styled libertarians.

[tonyedgecombe]

> creepy panopticon of constant surveillance

Which we have anyway. We might as well get some benefits from it.

[xigoi]

The government already knows whether you have a car. What more information would they need?

[duskdozer]

It also fails to take into account the fact that eating clean and exercising daily doesn't eliminate your risk of getting cancer at age 40 or having your car's brakes fail randomly.

[Workaccount2]

Its dumb to create an insurance program using anecdotes.

The system can accommodate (and frankly is the ideal many people strive for) some health nut getting long drawn out cancer battle at 41. Its rare enough to be noise in the giant money payout pool.

Obesity and it's litany of health effects are not rare, and next to age, are a dominating signal drawing money from the pool.

[OverTheTetons]

Is the obvious retort to this:

I don't think we should play arbiter for who has and hasn't lived a healthy enough life to still believe they should get healthcare?

[Analemma_]

Yeah, I think what Workaccount2 is not realizing is that there's no bottom to "you have higher risk factors, why should I pay for you?", and so once you start down that way you may not like where it ends up. Some hobbies have higher injury rates, why should I pay for your health care if you choose to play those? Some parts of the country have lower life expectancies, why should I pay for your health care if you choose to live there?

[Workaccount2]

The actual realization, which usually comes years after the realization that there is no bottom, is that there is no top either.

The battle along the spectrum of privatizing gains (lower healthcare premiums for a healthy lifestyle - high premiums for unhealthy lifestyle) vs socializing losses (paying $20/mo to get $1200/mo of care - paying $1200/mo for $0/mo of care) is constant and boundless in either direction.

[ben_w]

But there is a bound in both directions?

On end, it's "national insurance", functionally equivalent to fully-tax-funded healthcare like the NHS or the German system with several providers competing but regulated to near identical results, but moreso as the UK and Germany also has private care; on the other, it's the absence of insurance.

[FireBeyond]

> "If I focused on my health, ate clean and exercised daily, why should I also be subsidizing Billy "video-games-are-my-exercise" fatass's chronic health conditions?"

Then why are you not asking your insurer why they cover a lot less preventative health or other options. For example, Kaiser flat out refuses to prescribe GLP-1s for weight loss, others insurers are the same with gym subsidies or not covering nutritionists.

But they'll happily pay for your gastric bypass.

[IanCal]

> Insurance that is maximally responsive to patient health changes in terms of cost (ie making healthier people pay less) ends up being an inefficient way of just having people pay for their healthcare directly.

That's true for predictable costs, but not true for unpredictable ones - which is the point of most insurance (housing, car, etc). The point and use of insurance is to move risk to entities that can bear it.

Utility is non-linear with money, and so you easily have situations where spending X times more on something "costs" you more than X times if measured in how useful the money is to you.

Typically, as you have more money, each further dollar doesn't provide as much benefit as the last (sometimes things are lumpy, the difference between "not quite enough to pay rent" and "just enough to pay rent" is huge, but broadly this is true). Going from $1000 to $10000 is more impactful than $1001000 to $1010000.

That means that moving the other way, each additional dollar spent has a greater personal cost to you.

Therefore, sharing unlikely but high expenses can mean that your expected cost is the same (if there's no profit/middleman) or a bit higher, but your expected personal cost is lower.

[monooso]

Not a US citizen, so a genuine question: do US health insurance companies have a track record of passing on such savings to consumers?

That has not been my impression as an outside observer.

[vjvjvjvjghv]

"passing on such savings to consumers"

Absolutely not. They inflate prices by 200% and then give you 20% "savings" back. The whole idea of a health insurance company as publicly traded corporation is totally insane. They are designed to extract maximum profit from wherever they can get. The is no incentive to save money for patients. Any savings go to shareholders.

[lotsofpulp]

There are plenty of health insurers that are not publicly traded, and in fact are non profit, and yet they have the same premiums as the publicly traded ones. See Kaiser, Providence, Cambia, Regence, and the dozens of other BCBS affiliated plans.

If your claims were true, then the publicly traded businesses would have no customers.

[Buttons840]

> There are plenty of health insurers

Yeah. And they all ultimately have to be paid by my health premiums.

When I visit my parents, and they have the TV on, and I see 3 90-second advertisments for prescription drugs every single commercial break, I remind myself that, no matter what, we have to keep funding these commercials. Whatever the US decides to do for healthcare, I guarantee these commercials will continue to be paid for.

I also guarantee that pharmacy company executives, and insurance company executives will continue to make millions of dollars a year. We have to keep paying them as well.

The huge bureaucracy of insurance workers who decide what is and isn't approved, that all will have to be paid for as well.

I used to work for a company that did background checks on doctors, we had different customers in every state, every state had their own companies and their own system for maintaining and verifying doctors licenses. These different companies in each state have to be paid. I made good money as a programmer doing background checks for these various companies and my paycheck also ultimately came from your medical premiums.

I think we need to stop and appreciate the patriotic duty we all have to pay high premiums and medical costs, because every time we do we're propping up a huge portion of US workers. -- Just kidding. The truth is a lot of companies need to go out of business before things get cheaper.

[vjvjvjvjghv]

I would argue the non profit insurers are as profit oriented as the publicly traded ones.

[zdragnar]

Ostensibly, the Affordable Care Act was supposed to reduce the average family's premiums by $2,500 a year.

When that didn't happen, the story changed to that number being how much more premiums would have risen.

Insurance premiums have only gone up as far as I can remember, though there's a ton of variables at play here. Inflation is an obvious one, plus continual introduction of more and more costly treatments- biologic injections, cancer therapies and so forth. The unfortunate increase in obesity rates in my lifetime (along with all the health complications) has been a significant contributor as well.

It all adds up.

[tzs]

> Insurance premiums have only gone up as far as I can remember, though there's a ton of variables at play here.

An interesting thing about rising health costs is that it has happened at roughly similar rates in most first world countries for the last 50+ years.

For example in 1990 the UK, FR, and US were paying 2.0, 2.2, and 2.6 times their 1980 costs per capita. By 2000 that was 4.1, 4.1, and 4.2. By 2018 (the last year I had data for when I calculated this a few years ago) it was 10.6, 7.5, and 10.2.

Here's the 2000 to 2018 increase for those and some others: DE, FR, CA, IT, JP, UK, US were 2.1, 1.8, 2.0, 1.7, 2.6, 2.6, 2.3.

When politicians in the US talk about rising health care costs they usually put the blame on recent policies from opposing politicians. That so many first world countries with so many different health care systems all have seen similar increases for the last 50+ years suggests that it is due to something they all have in common and that government policy doesn't affect it much.

[alright2565]

The individual mandate part of the ACA was the part designed to reduce premiums. You need healthy participants in any health insurance scheme to subsidize unhealthy people.

That was eliminated by a Republican bill, the Tax Cuts and Jobs Act of 2017.

[zdragnar]

Yes, and that was years after the ACA took full effect and the rates did not decrease.

Most people get insurance through their employer, and most employer plans (at medium to large companies) are self funded by the company and merely administered by insurance companies.

That means the healthy participants had no effect on those plans whatsoever. Even at peak, the individual mandate had only cut the number of uninsured by half, and the effect on rates was negligible.

[kjkjadksj]

FWIW the state of california has its own individual mandate.

[lotsofpulp]

In 2010, it was already known the proportion of old to young was increasing, and the proportion of doctors was decreasing.

Prices were always going to increase.

[butvacuum]

you're correct. UHC is so hated because they're a "pharmacy benefits manager." - an organization that exists soley to make your life so miserable you give up on getting your medication.

[FireBeyond]

Aetna has their own scumminess. Want the convenience of 90 day refills? Have to use their mail order service. They'll refuse to authorize >30 day supplies of medication through any other pharmacy.

[DANmode]

These comments (on UHC, Aetna) always strike me the same way as complaining about the lack of inflight meal,

baggage fees,

or lack of WiFi,

on, say, Spirit Airlines.

You looked at the list of insurers/jobs offering health insurance carriers,

selected the cheapest, or second-cheapest option,

and you’re surprised they’re harder to work with?

How?

[FireBeyond]

Oh yes, because the vast majority of employers in the US say "pick whatever healthcare plan you want from whatever carrier you want, we'll make it work" and not "You'll get what you're given and be glad for it".

Even in tech spaces with money to throw around, that just means that maybe your partner and dependent's premiums will be covered/negligible, or that your deductible will be low.

You're still going to be fucked by their policies, though.

[DANmode]

You’ve highlighted why I do not work for the vast majority of employers in the US.

Pay me enough in cash to secure my own wellness with whatever organizations I choose, or: next, please.

[butvacuum]

aetna uses UHC for this.

[lotsofpulp]

Health insurance companies in the US are not allowed to deny coverage, and can only price premiums based on age (highest premium capped at 3x lowest premium, location, and tobacco use.

https://www.healthcare.gov/coverage/pre-existing-conditions/

https://www.healthcare.gov/how-plans-set-your-premiums/

Health insurance premiums in the US are more tax than insurance. They also have low single digit profit margins with less than desirable shareholder returns (many are non profit in the first place), so they don’t have much room to lower premiums without also reducing healthcare expenses.

The insurance business in general is very competitive and not very profitable, so an insurer that tries to collect outsized premiums will usually suffer a loss of business.

[monooso]

> The insurance business in general is very competitive and not very profitable...

Knowing several Americans, and how much they pay for health insurance (and are still required to pay for some things "out of pocket"), this is incredible to me. And that's before you even get to the process of making a claim.

Such a broken system.

[SpicyLemonZest]

We agree that insurance is not the right way to handle health as a product, since some people predictably need much more medical treatment than others. But it’s how the US has chosen to do it, so we have to do it in a way that works. Correctly identifying a systemic issue won’t pay your medical bills.

[lotsofpulp]

That is not how the US has chosen to do it. The ACA prohibits using anything other than age, location, and tobacco use for premium pricing, and the ACA prohibits denying coverage (resulting in a wealth transfer from healthy to sick).

Even the age rating factor is capped at 3, so there are also massive wealth transfers from young to old.

Mathematically, health insurance premiums in the US are more tax than insurance premium.

[trollbridge]

The ACA doesn't prevent some magical fairy-dust AI from pricing premiums, though, which is currently all the rage amongst insurers. (Not because AI will be accurate or anything, but because it offers a completely opaque pricing process.)

[avalys]

Why not? If the only factors allowed to be used in settings premiums are age, location and smoking status, then those are the only parameters that could be input to an AI model, no?

[kyboren]

Warning: I am not in this industry and the below is speculation:

AIUI the idea is to predict the "correct" price for an individual premium, Y, which is restricted to being the result of some insurance model function, f(), that is itself restricted to the domain of age (A), location (L), and smoking status (S):

  Y = f(A, L, S)

My impression was that the idea was that this would handicap insurers' natural desire to price premiums individually and have a smoothing effect on prices over the population.

But why is location useful for insurers to price premiums? I assume because healthcare has different costs in different locations, and different utilization rates: People living in coal mining towns or near oil refineries may be expected to use more healthcare and thus cost more to insure.

Thus, you can imagine insurers building a price map (like a heat map) overlay for the state/country, plotting each applicant on it, and checking the "color" there as part of their model function. So they are effectively embedding out-of-band information (prices and utilization rates for locations) into the model function f() itself.

What "AI", or large-parameter Deep Neural Networks, fundamentally change here is:

   - They can approximate any effectively computable function, the same class of functions that a programmer can write and execute on a computer[0].

   - They can be scaled up to an arbitrarily large number of parameters, i.e. an arbitrarily precise approximation limited only by the number of parameters and the amount and quality of model training data.

   - Absolutely critically: They are programmed implicitly, through brute-force training on input-output pairs, rather than explicitly, with some programmer writing an explicit series of instructions to compute the function.

This last point is probably the most important.

Large insurers previously had sophisticated models for f() hand-built by math whizzes, but they were limited in the amount of out-of-band information they could encode into that function by the limited cognitive and programmatic capacity of a human team.

But now with DNNs you can scalably encode unlimited out-of-band information into the function f(), while also totally obscuring how you're computing that location-based price adjustment.

The result, in extremis, is that f() is not some fancy algorithm cooked up by a few dozen math whizzes. Instead f() becomes a fancy database, allowing the tuple (A, L, S) to act merely as an index to an individualized premium Y, which defeats the entire purpose of restricting the domain of their model function.

[0]: https://en.wikipedia.org/wiki/Universal_approximation_theore...

[avalys]

That’s not how courts and laws work. If you cheat and use other illegal factors to compute a premium for each person, and then create an AI model that effectively looks up your illegally calculated premium of each person by their location, they’re going to reach the obvious conclusion - you are calculating a premium using illegal factors.