[timtim51251]

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.

[phil21]

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.

[digi59404]

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.

[CGMthrowaway]

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.

[bsjshshsb]

Why wasn't it set up so the government is the insurer. Rather than 3rd partying it. It is akin to federal reserve using wells fargo to store their money.

[lupire]

Because of regulatory capture and lobbying and campaigning to get people to vote against their self interest.

[actionfromafar]

That's communist talk I'm told. We must have lobbyists (remember, money is people, too) instead.

[Spooky23]

Because that is evil socialism

[tptacek]

Pharmaceuticals are a small component of overall US health spending. Upcoding is endemic across the entire system; it's endemic across the whole system. Ironically, the complaint you'd be making with upcoding under Advantage is that Medicare should be denying coverage to people; Advantage upcoding involves altering risk scores to authorize more care.

[phil21]

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.

[rexroad]

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.

[Retric]

> 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.

[phil21]

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.

[rexroad]

The MLR incentive question is one I'm digging into for a future issue. The short version: the ACA's 80/85% MLR floor was supposed to constrain overhead, but vertical integration changed the math. When UnitedHealth's Optum division provides services to UnitedHealthcare's members, those internal payments count as "medical expenses" for MLR purposes. The money stays in-house but reports as care delivery. On the denial rate point: 15-17% initial denial rate, 80%+ overturned on appeal, but less than 1% of patients actually appeal. That gap between the overturn rate and the appeal rate is where the profit lives. If you deny 100 claims and only 1 patient appeals, you've effectively reduced payouts on 99 claims at the cost of processing 1 appeal. I'll have the numbers on this in a later issue.

[lotsofpulp]

> That gap between the overturn rate and the appeal rate is where the profit lives.

Or doesn’t live.

https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g...

All the other managed care organizations have similar 2% profit margins.

It is funny seeing complaints of excess profit margins from businesses earning 2%, that compete against non profits, from people on a forum composed of employees of tech businesses earning 20%+ profit margins. I wonder how much Epics’s profit margin is?

And then there is also pharmaceuticals, also earning double digit profit margins. And then the law firms in medical malpractice suits, who I imagine are not working for 2% profit margins either.

[Retric]

Profit margins are difficult to compare across industries, game developers on average have great profit margins in part because all the studios that fail quickly stop counting.

Grocery stores on the other hand are a known as a low margin business, but as people constantly need more food every month it can be really stable. Further as most stock turns over multiple times a month your return on capital can be extremely high. Even better during a downturn when people buy 20% less food you also need to buy 20% less stock and employ fewer people to stock shelves etc, which makes your profits far more resilient.

Suddenly grocery stores are looking like a much better investment than making games.

[nradov]

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...

[Projectiboga]

Yes but the Medicare and Medicaid reimbursement rates are below breakeven so cash and insurance rates have to be above provider breakeven. The main cost frictions are administrative costs for billing on both the insurance and provider sides.

[nradov]

That's true to an extent, but some provider organizations manage to survive with patient populations that are almost entirely Medicare / Medicaid. Many provider organizations are just badly managed and haven't taken steps to optimize their finances through automation or participation in value-based care programs.

[lupire]

See the above comment about fraudulent billing for non-existent illnesses that don't need treatment.

[apical_dendrite]

I'm working on a project in an area of healthcare where there was massive Medicare fraud decades ago. Medicare now requires extensive documentation for each claim and the paperwork is so onerous that providers have exited the market and it's very, very difficult to access care.

[nradov]

Right, CMS plays whack-a-mole with Medicare claim fraud. When they catch on to a systemic pattern they clamp down in a way that creates extra burdens for everyone, and then the fraudsters move on to something else.

[da_chicken]

They waste billions on fraudulent claims because they don't fund the program well enough to have compliance enforcement or auditing.

Also, I'm not going to trust a podcast owned and operated by Stacey Richter, who also just so happens to be the co-president of Aventria Health Group and QC-Health.

[AnthonyMouse]

> They waste billions on fraudulent claims because they don't fund the program well enough to have compliance enforcement or auditing.

These are synonyms for having higher overhead, right? If you pay a billion dollars in claims with ten million dollars in administrative costs then your "administrative overhead" is 1%, even if half the claims are fraud. If you increase "administrative costs" to a hundred million to get rid of the fraud, in practice you just saved 410 million dollars but now your "administrative overhead" is up to 20%.

[apical_dendrite]

There's another reason. The harder you make it for a provider to get reimbursed for a service (in order to cut down on fraud), the more difficult it is for legitimate patients to access that service. Medicare patients are elderly. Many of them aren't able to chase after doctors to get the services they need.

[nradov]

Trust is irrelevant. You can verify all of the statements made by Brian Machut on that podcast with independent sources if you like.

[CWuestefeld]

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.

[Retric]

> nearly half of medical spending

> something like 2 FTEs focusing just on the reimbursements from Medicare and Medicaid

2FTE’s vs what?

The question isn’t is this free, the question is how large is the total staff including price negotiations, doctors, and IT time spent handling billing issues, and is Medicare more or less than 50% of the total.

I am ware of one hospital and 2 medical clinics where the difference is very much in favor of Medicare.

[gamblor956]

2 FTEs vs a department. Most hospitals have entire departments to handle insurer coding and some even have departments just to handle insurer disputes.

[CWuestefeld]

to handle insurer coding

Coding is a different layer. Everything needs coding, whether for gov't or commercial payers. So the folks doing this coding can't be separated out for commercial. In fact, it's kind of the opposite:

CPT codes (for procedures) - these are defined by AMA, but mandated by CMS (i.e., Medicare/caid). Because the gov't mandated them, the commercial payers adopted them too.

HCPCS codes (equipment and supplies) - defined by CMS.

ICD-10-PCS codes (hospital inpatient stuff) - defined by CMS.

[CWuestefeld]

2FTE’s vs what?

versus nothing. Hospitals don't have to maintain a whole team for UnitedHealth, or for Anthem, etc.

This is my point. Medicare cooks the books to look more efficient by offloading their administrative costs onto providers. Other payers can't do that because, even if huge, they don't operate at the same scale.

Think about it: we often hear on the news about disputes about contracts when a local hospital's agreement with some insurance company comes up for renewal. They play hardball, getting local news to run stories on how many people will be affected if they can't come to terms. But you'll never hear this in the context of Medicare/caid. Hospitals have leverage to negotiate with commercial payers, but not with the government.

[nradov]

Depending on the size of the health system it may not be a team of multiple FTEs but they absolutely do expend significant resources on managing differences between commercial payers. They all have different rules about covered services, step therapy, prior authorization, hospital admission, etc. Sometimes those differ significantly even between health plans offered by a single carrier.

[apical_dendrite]

This isn't really true anymore (if it was ever true). Providers are spending a huge amount of time dealing with prior authorizations and appeals for private insurance.

I work in this area and you're right that Medicare can require a huge amount of paperwork from providers. And a hospital will have far more than 2 FTEs for this (it's called Revenue Cycle Management).

[sixothree]

Many providers report that dealing with Medicare has clear rules they can follow while dealing with private payers causes a huge burden.

[mwwaters]

Medicare has overhead, but you’re not saying whether it is more than commercial insurance. The admin expense/profit portion of commercial insurers also don’t take into account provider admin costs (not to mention the huge amount of time patients can deal with denials, appeals, etc.)

[tptacek]

It's further the case, regarding Medicare expense ratios, that their admin costs are low relative to private insurance because the median private insurance customer incurs far lower medical costs, leaving admin as a higher fraction.

[tptacek]

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?

[Retric]

What do you mean elevators go up and down clearly someone only wants to go in one direction. If they are below 80% they want costs to increase, over 80% costs better decrease.

The ideal long term strategy is to drive everyone’s costs to go up slowly over time slightly faster than inflation. Adding administrative burden to medical institutions is a perfect way to achieve that, but clearly that never happens…

[Spooky23]

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.

[AnthonyMouse]

> 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.

[franktankbank]

More like kickbacks to the dipshit in HR who signs the dotted-line.

[cogman10]

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.

[phil21]

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.

[rayiner]

Trying to understand why healthcare in the U.S. is so expensive is like trying to understand why building subway in New York is so expensive: https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-.... The issues lend themselves to facile explanations ("insurance companies are greedy," "NYC's government is wasteful") but those are driven by ideology not analysis.

[autoexec]

What we can say for certain is that heath insurance companies in the US stuff their pockets with tens of billions in profits each year and that Americans are paying far more while getting less for their money than other developed nations. I don't think those two things are unrelated.

[gmoot]

What is the profit margin of a health insurance company? Google suggests 2-4%, with United at about 6%. This does not seem that extravagant.

[rayiner]

U.S. healthcare spending is over $5 trillion a year. That’s $5,000 billion. So the “tens of billions in profits” you’re pointing to accounts for very little of what people spend on healthcare.

That’s what I mean when I refer to facile ideological reactions. For many people, “profits” are the problem, and they don’t care that health insurers on average are less profitable than Subway franchises. It’s just the mirror image of people who say the New York MTA is a disaster because the government is running it, and don’t care that governments in other countries manage to run cost-efficient train systems.

[chickensong]

> 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

Big players like United just shuffle money around because they own the entire vertical market. Their insurance arm is regulated so they just move the money to to their service provider arms like Optum which are unregulated with uncapped profits.

[nradov]

Many of the largest health plans are non-profit, not publicly traded corporations. This includes most of the Blue Cross Blue Shield Association licensees as well as some other large payers such as EmblemHealth.

[chickensong]

Blue Shield/Cross is a federation, and Emblem is regional.

The real players are big corps like United and CVS, who control the whole vertical of provider and payer. They own the doctors, the pharmacies, and the insurance.

[Manuel_D]

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.

[glenstein]

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.

[pixl97]

So you have an excessively built out electrical system... sounds like a win to me.

[adgjlsfhk1]

Absolutely not. The way to spend as much money as possible is to do intentionally inefficient repairs (e.g. last minute/reactive). The providers gain from grid unreliability since by causing problems, they get to justify spending money to "fix" them.

[CGMthrowaway]

I'm sure it sounds good to you as long as it's OPM

https://en.wikipedia.org/wiki/Averch%E2%80%93Johnson_effect

[toomuchtodo]

They said excessively expensive, not excessively robust. There is a difference.

[glenstein]

There's not necessarily a difference because they overlap on the venn diagram. The returns to the shareholders go up the more you build out, the benefits and performance face diminishing returns. Different utilities around the country get different scores for reliability and infrastructure integrity, because a dollar spent by one utility on one grid doesn't necessarily have the same impact as a dollar spent by another.

[Manuel_D]

It's about threading the needle between a well funded grid, and an over engineered grid. There's a point where diminishing returns makes investment greater than that threshold wasteful relative to opportunity cost of spending that tax money on different public services.

[phil21]

Depends on if the investments were in the right stuff or not. Overbuilt sounds great, so long as it’s overbuilt in capacity and reliability.

If those were malinvestments instead it’s simply throwing money away for not even a theoretical “someday” return. Plenty of ways to look busy while spending massive amounts of capital.

Generally agreed in principle though. Investment in the grid is pathetic almost everywhere in the US and has been for generations.

[glenstein]

Except for the cost to the ratepayers.

[nradov]

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.)

[raw_anon_1111]

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

[nostrebored]

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.

[ipsento606]

> 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

[antisthenes]

> people have forgotten how bad things used to be

Not really, because whereas before things were bad for people with pre-existing conditions, now they are really bad for everyone.

People are paying exorbitant prices either for insurance, for routine health care stuff, or for both.

There was no free lunch, so we traded some health care for the chronically ill, for slightly less healthcare for everyone else. The insurance companies make sure it's an extractive zero-sum game in terms of actual healthcare provided.

[raw_anon_1111]

When I was looking for healthcare after my employer went tits up right before the ACA went into affect, I couldn’t buy insurance at any price because of a pre-existing condition. Mine you that I have had my ore-existing condition since birth in 1974, had one surgery my entire life - foot surgery in 1996 - and this was 2011 and now I’m 52 and still haven’t had any complications from it and don’t expect to.

I was also a part time fitness instructor, runner and could past any of the standardized fitness assessment standards for someone who was 5 years younger as far as push ups, sit ups, running etc.

I had a contract so I could have easily paid more based on risk.

Before anyone mentions COBRA, that’s only an option if your former group plan still exists and it didn’t when the company went out of business.

Just looking, even now the ACA Silver for my wife and I would be around $800 a month in my state. Even ignoring medical costs have gone up more than inflation, that would have been $550 a month in 2011 if the ACA had been available.

[CGMthrowaway]

We traded the cruelty of Exclusion for the cruelty of Extraction.

[tptacek]

What does that mean?

[CGMthrowaway]

Before ACA, insurance had a more traditional "insurancey" role by excluding pre-existing conditions (aka managing moral hazard) in order to make money via premiums. In the "guaranteed issue" world post-ACA, insurance companies have pivoted instead to extracting as much money as they can from an increasingly vertically integrated ecosystem (PBMs etc)

[twoodfin]

Why is that inherently bad? Should I be able to buy fire insurance on pre-existing embers?

[throw0101c]

> Why is that inherently bad? Should I be able to buy fire insurance on pre-existing embers?

What if someone gets Type 1 diabetes as a child so they can no longer get insurance because of that "pre-existing" condition: if they get cancer for unrelated reasons they should just be saddled with medical debt? Or because of your Type 1 you can't get coverage, and you get t-boned in your car by a drunk driver.

Certainly it sounds 'unfair' that someone who smokes (a personal choice) gets similar cancer coverage for someone who does not smoke. But it also means that if your ((great-)grand-)mother had cancer, and you get it through no fault/choice of your own (i.e. genetics), you can also get coverage. (This latter effects a cousin of mine: her aunt (mom's sister) died of cancer at 37, her mom at 63; so now she's wonder when here number will come up. We're in Canada, so have universal care, but it's still something in her DNA.)

There are many circumstances in which you suffer through no fault of your own, and universal health coverage is present in many societies because it was decided to protect those people—even if it allows some 'free-riding' by others making poor choices.

People make all sorts of crazy decisions to prevent the "wrong" people from getting what they "don't deserve":

* https://en.wikipedia.org/wiki/Dying_of_Whiteness

[ikr678]

Pre-existing conditions also continue to frame healthcare as 'insurance' against a bad thing happening to you, when it should just be a regular service like any other.

You don't need 'insurance' in order to get your vehicle serviced, but that is what the US does with healthcare.

[tptacek]

When one of my kids was 4, they had an unexplained seizure. Hospital workup, whole nine yards, never recurred; it was probably a medication reaction. Years later we were denied coverage from all the private insurers over it (more accurately: we were denied any coverage for that child).

Similarly, insurers would as a matter of course exclude from coverage any woman with one of several extremely common conditions, including endometriosis, PCOS, fibroids, and adenomyosis.

Prior to Obamacare, insurers were free to deny coverage wholesale for these conditions. It would have been fucked up to extend coverage but exclude any neurological conditions from my kid, but the actual outcome was worse: they were under the law entitled to withhold any coverage.

[raw_anon_1111]

If you live long enough, you will have a pre existing condition.

The way it was suppose to work with the original mandate is that everyone had to be insured either through their employee or the exchange. So you couldn’t just buy insurance when you were sick. The Supreme Court struck that down.

If you lost your job, before the ACA, you could not get health insurance outside of working for someone and having group insurance at any cost.

But you do realize that the entire idea of not being able to get insurance because of pre-existing conditions is completely unique to the US?

Costa Rica for instance (where I am right now for a month and half) allows anyone to become a resident as long as you have guaranteed income of around $2000 a month or you deposit $60K into a local bank account and they arrange monthly disbursements and you pay 15% of your stated income to CAJA. Healthcare is both better and more affordable here.

The same is true for Panama. Why can’t the US figure this out?

[LorenPechtel]

And if you had an expensive dependent better work for a big company. Saw it happen--wife lost her coverage through work because they had an employee with an expensive kid. Next year insurance wasn't offered.

[GenerWork]

>If you lost your job, before the ACA, you could not get health insurance outside of working for someone and having group insurance at any cost.

This is a flat out lie. You absolutely could buy health insurance without being at a company.

[ChadNauseam]

It interacts badly with insurance being offered as workplace benefit. If you quit or lose your job, you'd lose your health insurance. And any plan you signed up for after that would then treat you as "pre-existing embers" and expect you to pay accordingly. The bundling of health insurance with workplace seems like the healthcare original sin to me.

Obama couldn't change that, so the ACA redesigned the system to work with it. Despite being called insurance, health insurance is no longer really viewed or designed to be any kind of insurance. Instead, it's supposed to be Netflix for healthcare. You pay a flat rate, and then get unlimited healthcare. Obviously, the issue with this is that if you don't need healthcare you can just not sign up for the subscription. So the ACA tried to solve this by requiring everyone to sign up. Once everyone is required to sign up, it's not right to discriminate against preexisting conditions. It may not be an especially good system, but it is coherent.

[mjevans]

The US is allergic to taxes. Maybe it's a marketing thing. Benefits paid for by society.

Maybe a department of Return on Investment. See what those taxes pay for. Contrast to buying private versions of the services at the same SLA or better.

[ajkjk]

it's bad for the person, obviously. The point of society-wide policies is not to maximize economic efficiency; they're supposed to making society a good place to live. Of course if you only look at them under an economic lens they're going to seem bad. Economically the best policy would be to kill all the sick people.

[LorenPechtel]

Because my pre-existing condition happened either at conception or sometime before adulthood. I wasn't in a position to buy insurance before then.

[bspammer]

Because people aren’t objects.

[sixo]

We as a society accept the insurance system as an implementation of "funding healthcare" because market capitalism is supposed to lead to lower prices, fair allocation of scarce resources, and innovation, among other things. That is, the insurance industry is a market solution to a moral problem.

If insurance companies then can wiggle out of covering pre-existing conditions, they're no longer solving the moral problem they were brought into the world to solve, and now we need some other solution to solve the rest of it. Then, whatever that other solution is, it's solving the hard part, so why not extend it to solve the whole thing and cut the insurance middlemen out of the economy entirely? What are they even doing at that point besides extracting a rent?

(This is one answer among many good ones to what is really a bad-faith question—health-insurance is not a lot like fire-insurance at all)

[lotsofpulp]

> 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

[rybosworld]

Why would a 3-year stock chart be indicative of underperformance?

[lotsofpulp]

It is a 5 year chart, and the 10 year is not free on that website.

You can find out similar results for longer periods here:

https://dqydj.com/stock-return-calculator/

https://dqydj.com/sp-500-return-calculator/

[hibikir]

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.

[raw_anon_1111]

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.

[SV_BubbleTime]

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.

[raw_anon_1111]

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.

[nradov]

Please stop spreading lies and propaganda. China does not have "universal healthcare" in any meaningful sense. They may claim to have it, but it's not something that poor people can actually access for expensive treatments. Patients have to pay out of pocket for most services.

[raw_anon_1111]

So let’s talk about Canada, Great Britain, every country in the EU…

[SV_BubbleTime]

Is that Canada and Britain that the have an ever persisting complaint that the delays are absurd? Among the specific points that…

With Canada now ending the life of 100k citizens a year making their MAID program now the leading cause of death in the country out ranking cancer and heart disease? How strange that in Canada you can deduct health expenses on your taxes… what a strange thing for a place with free healthcare?

And in Britain you mean the scandal-free and extremely popular NHS? I guess you have a great point there because it’s not their elite would immediately come to the US for care.

The grass is not greener. This is a bad system made worse and worse by heavy handed government “helping”. Healthcare in the US only got worse after ACA.

[noelsusman]

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.

[thaumasiotes]

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.)

[SilverElfin]

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.

[djoldman]

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...

[jandrewrogers]

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.

[Rury]

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?

[apical_dendrite]

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.

[Aunche]

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...

[genthree]

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)

[0xbadcafebee]

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.

[bandofthehawk]

But prices already have skyrocketed, and insurance execs have already become significantly richer. Why didn't the feedback loops work?

[SV_BubbleTime]

> 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.

[omgJustTest]

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.

[cogman10]

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.

[laughing_man]

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.

[nradov]

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.

[mothballed]

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.

[nradov]

You don't need to waste time with though experiments, you can just look around at various national healthcare systems. Wherever there are price caps, certain treatments have long queues or are simply not available at all. That's why affluent Canadians often come to the USA as medical tourists and pay cash for MRI scans or joint replacement surgery. Every system rations care somehow and price caps aren't necessarily the worst way to do it so let's just be real about the consequences.

[mothballed]

Are those market price caps, or are those caps on what the 'single payer' in a 'national healthcare system[s]' is willing to pay? I was under the impression that in these systems, the 'shortage' was created by the fact the single payer was not willing to pay the free market rate that would clear for these services, therefore there is an undersupply of services provided to the 'single payer', not that there was usually an actual market cap.

Typically in these countries you actually can get health care as long as you pay privately yourself and don't go through the 'single payer.' A price cap would mean that no matter how much you're willing to pay, you can't pay over the cap, which is much rarer than the presence of 'national healthcare systems' that merely won't pay over the supposed soft 'cap'.

[twoodfin]

Indeed. The US has something around 4X the number of MRI scanners per capita compared to Canada. That’s an insane figure for what has become a baseline diagnostic tool.

[mwwaters]

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.

[nradov]

There are electricity shortages.

https://fortune.com/2025/11/10/nvidia-hometown-santa-clara-c...

[mwwaters]

Electricity price regulation, at least for transmission, has been a thing for states for 100+ years and federally since the 1930s. Pipelines and railroads also have price regulation of some sort.

Monopolies, in these cases natural monopolies, can in fact exist. Look at the Micro supply and demand curves. As a general rule over those 100 years, there has not been rationing of electricity. There are natural blackouts and today an unplanned surge in demand (as happens in every industry such as chips after Covid), but generally the price regulation did not cause some kind of gas lines.

[etchalon]

Several doctor friends told me your doctor friends aren't real.

[dominotw]

> Obamacare requiring 80% of the money they collect to be spent,

did they not write unit tests for this when it was proposed to catch obvious subversions like you mentioned.

[dmitrygr]

Ding Ding Ding. We have the correct answer. And this was a predicted consequence of that profit cap.

[lotsofpulp]

>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.

[rayiner]

> 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...

[onraglanroad]

You should take your own advice and widen your media sources.

Yes, you only get a continuous glucose monitor for free if you really need it on the NHS. If you want one otherwise you need to spend $100. It's not going to bankrupt you.

[rayiner]

That’s the price for one monitor You need to buy a new monitor every 10-15 days. And your point about my media sources doesn’t make sense. As stated, I researched the coverage of continuous glucose monitoring because my friend got prescribed one.

The point isn’t that the UK NHS should cover CGM. I think they shouldn’t; it’s a waste of money unless you really need one. My point was about why the media pays so much attention to denials of coverage while you don’t hear about the over-coverage. You can’t go by the anecdotes. Talking about insurance covering unnecessary procedures doesn’t generate clicks.

[nradov]

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.

[lotsofpulp]

> 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.

This is not my experience as a buyer of health plans on healthcare.gov, or as a buyer of health plans as an employer (where the employer is not self insuring). The prior authorizations and denials happen all the same.

Additionally, the premiums are the same between employers’ self insured plans and healthcare.gov plans, so the coverage must be similar.

https://www.kff.org/health-costs/how-aca-marketplace-costs-c...

>In 2024, individual market insurance premiums averaged $540 per member per month, slightly below the average $587 per member per month premium for fully-insured employer coverage.

The idea that health insurers can simply spend more to earn more is not passing the smell test.

[nradov]

Your experience is irrelevant. Insurance carriers have some standard default policies but they'll write whatever custom policy that a group buyer is willing to pay for.

[lotsofpulp]

Your claim was

> Commercial insurers would be happy to sell plans that pay every claim that comes in at 100% with zero denials.

And yet I have never seen one of these after buying insurance in 3 different states.

Again, the grandparent claim was that insurance companies can increase profits simply by increasing their expenses. Yet there is no evidence of this, and the fact that everyone has to deal with approval and denial of healthcare coverage means it cannot be true.

[skybrian]

I was under the impression that some companies that provide insurance also provide healthcare?

[airstrike]

This would only hold empirically if prior to the ACA, commercial insurers did not pay more.

[raincole]

> The people who design easily gameable systems belong in the lowest circle of hell.

-- Charlie Munger

[jmspring]

Managed risk pools should not be for profit.

[ropable]

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.

[shdudns]

This. It's hard to believe that the Obama team could have been this financially incompetent.

[bmcahren]

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.

[cogman10]

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.

[prirun]

Private insurance companies still do not cover pre-existing conditions. How? By not writing insurance to individuals except during ACA open enrollment. I know this because I tried to get private insurance before going to Mayo Clinic, because my ACA insurance with Ambetter was out of network. When I got through to an insurance company sales person for individual coverage, they told me they don't cover pre-existing conditions for 6 months. When I challenged them and said that's illegal, they hung up on me. Most companies I called had a phone menu that, when I pushed the buttons for individual coverage, would lead me into a loop, hang up on me, put me on hold forever, etc. They simply won't write individual coverage outside a couple of months at the end of the year. This effectively allows them to not cover pre-existing conditions, at least for individuals. For company employees, yes, the coverage of pre-existing conditions is a win.

I ended up paying $12K to Mayo for a week of appointments. Private insurance, if I could have gotten it, would have been at least $1000/mo for premiums (in 2020) plus $10K deductible, so I actually saved money just paying Mayo instead of getting private insurance.

IMO the only reason insurance companies allowed the ACA to pass was the stipulation that everyone in the US was required to get insurance coverage or face a penalty. When the Supreme Court ruled that provision illegal, I'm sure the insurance companies were furious that they were duped.

[gzread]

That's how it was supposed to work though? There's an open enrollment period where anyone can sign up, pre-existing conditions or not. To prevent the adverse selection problem, which is where you don't sign up for insurance until you have a condition and then cost the insurance company a lot of money, you can only sign up at that time.

The thing you're trying to do - sign up for insurance to cover a specific procedure - is quite literally what the system is designed to prevent. You're supposed to have insurance all the time or none of the time. Did you try asking the clinic how much it would cost if you are uninsured and paid cash?

[nradov]

Your story is missing some pieces. Why didn't you sign up during ACA open enrollment? Those policies absolutely do cover pre-existing conditions. But not every provider organization will be in network for every health plan.

[glenstein]

>Private insurance companies still do not cover pre-existing conditions. How? By not writing insurance to individuals except during ACA open enrollment.

Sorry I'm struggling to follow here. You think the open enrollment period effectively means that there's no prohibition on pre-existing conditions? Think you're kind of bending words outside of their normal usage because quite literally pre-existing condition policies are banned. The compensating counterbalance is a neutral open enrollment period so people don't just jump when they learn they have a health problem, it's a compromise to ensure financial sustainability.

You do understand that before this, it was worse right? One comment after another here is comparing the ACA to a magical fantasy, rather than the status quo that it improved upon.

[nostrebored]

It’s probably the single worst decision of the entire bill and one of the largest wealth transfers in history.

If you tell me you’re going to light your house on fire and then ask me for fire insurance, I should be able to say no.

Instead what we have is not insurance, but the world’s worst socialized health plan. Insurance is for managing tail risk, not for distributing the cost of healthcare. If we’re willing to pay a tax to subsidize the elderly, we should cut out the middleman and let the government fill that function.

[vjvjvjvjghv]

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.

[dboreham]

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.

[raw_anon_1111]

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.

[watersb]

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.)

[kshacker]

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.