rickyp wrote:

No, premiums are not taxes. If you want that system, establish it. You go on to disprove your point by pointing to other countries where such a system does exist.

As long as hospital emergency wards do not turn away people who are uninsured or can't prove they are capable of paying for service - as long as they are forced to treat people who they know will leave an unpaid tab then the United States has socialized the risk of health care without collecting the taxes to pay for that risk.

Non-responsive.

That does not establish "premiums are taxes."

Insurance companies have been a protected industry.

False.

They are heavily regulated. For example, they cannot sell across State lines.

And in effect all they offer is health care payment administration.

False. Like all insurance companies, they pool risk and so spread the cost.

They have a market that is forced to have their products. The option of no insurance is really only open to the very wealthy, or the very poor who have no means to pay anyway.

Contradictory. You can't be forced to buy a product and simultaneously have the option, for whatever reason, of not having it.

The fact that private, so called free enterprise insurance companies have done nothing to affect medical costs over the last 30 years is indicative of the fact that they produce nothing.

It's not a "free enterprise" system when government heavily regulates it. Competition has not even been tried.

They merely administer. And they maintain their profit margin simply passing along the costs to the end users rather than by finding ways to significantly lower supplier costs.

And now, the government is going to help administer. Will there be no cost for additional government employees? Can the government maintain the same quality, or even improve it and extend its reach, by simply establishing high minimum standards for insurance and dictating compensation? In other words, can central planning raise efficiency?

You say "yes" and point to other countries. I say "no" and point out that no other country will have a system that rivals ours for its convolution.

In countries that have eliminated this private role for the majority of he
health care, the cost of the bureaucracy of managing health care payments is marginal compared to the cost of insurance administration in the US....

Great point, except for two things:

1. You've made it 1,238 times.
2. For the 1,238th time in response: no other country has Obamacare so you have no evidence whatsoever that this will work.

In effect, health insurance administration is an example where the myth of competition has contributed to far greater costs than are required to move money from the beneficiaries pockets to the suppliers pockets.

The only "myth" is the idea that competition has been tried.

And, I would note that your paragraph there is worthy of pure socialist thought.

(Drug companies) also have been a protected industry in the US . Moreover, the notion that the US citizen should continue to pay enormous prices for drugs that no one else in the world pays, simply demonstrates that this protection is acceptable to those who drink the Kool Aid about R&D. Protection that would not be acceptable for electronics, clothing etc.

If you can establish the fact that R & D is free, you've got a perfectly valid point.

If you can establish the similarities between electronics, clothing, and experimental drugs, you've got a valid point.

I'll wait.

Oh wait. You don't actually want to prove anything, but you've been waiting for your big opportunity to work "Kool-Aid" into a post.

Well, do us a favor and try not to precede it with a series of logical fallacies, like self-contradiction, before you start bellowing about who is drinking Kool-Aid.

The problem with pharmaceuticals is that the risk reward system has been distorted by the industry who have lobbied for increasing protections of their extreme margins in the US. And really only the US.
American consumers have been suckers.

Oh, we've been suckers all right. We're paying for drugs that save lives around the world. Shame on us.

We should ban exporting life-saving drugs that are sold domestically for more than they are in abroad. That will help Americans. Good point, rickyp! The US should tell the rest of the world to pony up! If that means people in the Third World can't afford it and die, well, they should get better jobs!

Who are you . . . Archie Bunker?

Doctor Fate wrote:
No, premiums are not taxes. If you want that system, establish it.

My point is, and remains, that from a business perspective, insurance premiums are virtually identical to taxes and some, like unemployment insurance blur the line so much that you really can't tell the difference (unemployment insurance is a tax paid by employers, but which is variable dependent on your risk.)

The only material difference between taxes and insurance that employers are required by government to carry is that you can choose a carrier, but the market is incredibly opaque. It's not like it's easy to shop your workman's comp insurance. It's so confusing and difficult that we trust a broker's recommendation, in an industry where kickbacks are how the brokers get paid. It's absurd.

When a business spends money, you want to get something in return. Insurance, like taxes, gives your business nothing. The industry to which it is most like is gambling, except when you gamble you, in theory, have a good time. Anything we can do to limit the amount of money insurance companies suck from the productive parts of society the better.

I lump health insurance in with the other insurance because while you're not required by the government to carry it (yet) if you're in a business that works with professionals, you have to have it. It's not like you're going to hire a professional who will accept that he's got to go out and get his own insurance.

geojanes wrote:
When a business spends money, you want to get something in return. Insurance, like taxes, gives your business nothing. The industry to which it is most like is gambling, except when you gamble you, in theory, have a good time. Anything we can do to limit the amount of money insurance companies suck from the productive parts of society the better.

So, you, a friend of big government, believe you get nothing in return for taxes? Even from a business perspective?

You sound like a Tea Party guy.

If the market is opaque, the solution is bringing more clarity. Obamacare raises all insurance to (in some cases) an indefensible standard. It is going to bloat the IRS with new hires, cause State and local governments to hire "guides" to help navigate the morass of regulations, etc.

There is no way anyone can show me this is going to be an economic boon or a benefit to the overall health of Americans.

I think it is more that from a business perspective, taxes do not pay for a direct tangible benefit. Sure, businesses benefit overall from defence and justice and policing and regulation etc etc. And with health insurance they benefit from knowing that if employees fall ill they are covered, but ultimately taxes and mandatory insurances etc become part of the 'price' of doing business.

That is not an anti-tax position, it's a perspective on how taxes related to company finances and objectives.

danivon wrote:I think it is more that from a business perspective, taxes do not pay for a direct tangible benefit. Sure, businesses benefit overall from defence and justice and policing and regulation etc etc. And with health insurance they benefit from knowing that if employees fall ill they are covered, but ultimately taxes and mandatory insurances etc become part of the 'price' of doing business.

That is not an anti-tax position, it's a perspective on how taxes related to company finances and objectives.

Exactly. And it's my hope that exchanges will bring some light to an opaque market. That might be foolish, but I can't see how it gets worse.

When a business spends money, you want to get something in return. Insurance, like taxes, gives your business nothing.

Actually insurance provides risk avoidance. And thats a spectacularly important facet of many businesses. By pooling risk businesses can take chances. If a business had to accept 100% of the risk many ventures would go untried. (shipping, construction etc.) The service insurance companies provide is important, but they also often become involved in improving standards as they work to decrease risk in industries in which they participate. Because decreasing risk increases their margins...
In industry, insurers can turn away business from bad risks. If a shipping company has such a bad record that Lloyd's won't touch them, they assume all the risk. And the consequences.

In health insurance, this isn't true because, in the US, if insurance companies haven't wanted a customer, society, through taxation, ends up footing the bill for the uninsured. And the business model for health insurers, doesn't generally include effective ways to reduce risk and therefore payments. They don't have the same levers to reduce risk that they might have through the ConstructionSafety Associations or the International Marine Organization... Risk in an industrial or business setting isn't complicated by the need for managing patient risk or out comes...

Health insurance is dissimilar from the rest of the insurance because the element of risk isn't something they can contribute to managing.


Republican governors who have turned down Obama care are going to see their states pay a huge cost for their ideological opposition. As the dollars and sense and the comparisons with Vermont and California become better known ... a political cost is likely.
Even Jan Brewer has embraced Obama Care in order to avoid the politcal cost.

rickyp wrote:Actually insurance provides risk avoidance. And thats a spectacularly important facet of many businesses. By pooling risk businesses can take chances. If a business had to accept 100% of the risk many ventures would go untried.

While my statement is slightly hyperbolic, and what you're saying is true for many capital intensive businesses, for service oriented businesses or other non-capital intensive businesses, most of their insurance is a form of gambling and you'll spend much more than you'll ever get back, especially the ones you're required by law to carry.

Yes indeed, the joys and benefits of Obamacare.

In other words, California wasn't comparing apples to apples. It wasn't even comparing apples to oranges. It was comparing apples to ostriches. The conservative analyst Avik Roy consulted current rates on the eHealthInsurance website and discovered that the cheapest ObamaCare plan for a typical 25-year-old man is roughly 64% to 117% more expensive than the five cheapest policies sold today. For a 40 year old, it's 73% to 146%. Stanford economist Dan Kessler adds his observations nearby.

We wouldn't be shocked if California deliberately abused statistics in the hopes that no one would notice that in some cases premiums would more than double. In any case, the turn among the liberals who touted the fake results has been educational.

They now concede that individual costs will rise but claim that it is unfair to compare today's market to ObamaCare because ObamaCare mandates much richer benefits. Another liberal rationalization is that the cost-increasing regulations are meant to help people with pre-existing conditions, so they're worth it.

So they're finally admitting what some of us predicted from the start, but that's also the policy point. Americans are being forced to buy more expensive coverage than what they willingly buy today. Liberals also argue that some of the new costs will be offset by subsidies, which is great news unless you happen to be a taxpayer or aren't eligible for ObamaCare dollars and wake up to find your current coverage is illegal.

The Affordable Care Act was sold as a tool to lower health costs. In case you missed it, the claim is right there in the law's title. The new Democratic position is that the entitlement will do the opposite but never mind, which is at least more honest.

But we wonder how long this new candor will last. If the public reacts badly to these higher premiums, the authors of ObamaCare will soon be back to blaming insurance companies and Republicans.

Costs will go up. The President promised they would go down.

People will lose their current policies. The President promised they could keep them.

People will lose their doctors. The President promised that would not happen.

But, don't pay any attention to the broken promises of the One. Nope. Go after the insurance companies! It's their fault!

Wait. Who wrote the bill?

rickyp wrote:Republican governors who have turned down Obama care are going to see their states pay a huge cost for their ideological opposition. As the dollars and sense and the comparisons with Vermont and California become better known ... a political cost is likely.

Actually, as reported in WSJ (linked above), the California study was manipulated.

And, actually, what governors who say "Nein, danke" are doing is looking down the road. When the Federal funding ends, the State responsibilities don't. It's a tax increase on the States, following geojanes' logic.

Even Jan Brewer has embraced Obama Care in order to avoid the politcal cost.

Jan Brewer is a dim bulb who succeeded a dimmer bulb.

We'll see if Obamacare is ever fully implemented. If it is, the "unexpected" costs are going to be mind-blowing.

geo

While my statement is slightly hyperbolic, and what you're saying is true for many capital intensive businesses, for service oriented businesses or other non-capital intensive businesses, most of their insurance is a form of gambling and you'll spend much more than you'll ever get back, especially the ones you're required by law to carry.

Actually, I think its easier to perceive that going without the insurance is gambling.
Because usually the loss if uninsured would be catastrophic.

Where a business might never actually make a claim for a sunk ship or a building collapse ..... Insurance for health care is different because most people have some health care costs every year. And where a company can avoid risk by improving safety precautions, actually using health care is usually essential to maintaining one's health.
In fact Geo, I think, there are too many differences that make health care insurance a unique problem.
And, as much as Fate keeps crowing about the US being unique, he's also right in that today, and for the last 40 years, there is less management of the cost of medical care in the US than in other countries. Part of the reason is that health insurance providers are disassociated from the supplier recipient relationship. All that a health insurance company needs to do to maintain its margins is increase its premiums every year at the rate of medical inflation.
In effect, they administer the collection and payment process as you've pointed out. Which has no value to the fundamental transaction between suppliers and recipient. .
When a national insurance program replaces a private system, the "premiums" become viewed as "taxes". (Although a bucks a buck right). Public administrators of tax dollars, are motivated more than the US health insurance industry to attack waste or inflation of costs... They can't simply raise premiums, they have to raise taxes. and there is a political cost to that which doesn't apply to a private company raising a premium...
Its a reason why health care inflation in the US has out stripped the world

rickyp wrote:Actually, I think its easier to perceive that going without the insurance is gambling.
Because usually the loss if uninsured would be catastrophic.

I've lumped all insurance together because the business model is just like a casino: take premiums (bets), pay out claims (winnings), keep the excess as profit. So if you have a very large bankroll, you don't carry any catastrophic loss insurance. WalMart, for instance, self-insures for losses, because why pay the house its share? Besides, the vast majority of insurance polices cap the liability of the insurance company so if you really have a catastrophic loss, you're still on the hook for the amount beyond what the insurance company will pay.

I know, health insurance is different, because you actually get something from health insurance: you get the rate the insurance company has pre-negotiated with the provider, without which you'd have to pay retail, which is absurdly expensive. But I know this thread is about ObamaCare's economic impact, and I started this off-topic jaunt in response to Fate's request for one thing good that comes out of Obamacare, and I repeat, refunding premiums employers pay equal to the excess profit made by insurance companies is a GREAT thing. Lowers the cost of doing business, employing people and giving them benefits and increases the bottom line for millions of businesses across the country. I don't know why Fate's arguing with that. Ideology has blinded him to the obvious perhaps?

geojanes wrote:I know, health insurance is different, because you actually get something from health insurance: you get the rate the insurance company has pre-negotiated with the provider, without which you'd have to pay retail, which is absurdly expensive. But I know this thread is about ObamaCare's economic impact, and I started this off-topic jaunt in response to Fate's request for one thing good that comes out of Obamacare, and I repeat, refunding premiums employers pay equal to the excess profit made by insurance companies is a GREAT thing. Lowers the cost of doing business, employing people and giving them benefits and increases the bottom line for millions of businesses across the country. I don't know why Fate's arguing with that. Ideology has blinded him to the obvious perhaps?

I objected to you equating premiums with taxes. I can't decide to go without taxes. I can't be late. I can't argue with the IRS. Well, I can, but they'll simply ruin my life.

Meanwhile, rickyp posted a number of logical fallacies, I called him on them, so what's the problem?

I did not ask for "one thing good that comes out of Obamacare." I have repeatedly asked for evidence that it's going to be "good for the economy," which was rickyp's original and still not established point.

You say it lowers the cost of doing business. Not for small businesses. Suddenly, they are going to be required to offer insurance if they go over a specified (arbitrary) threshold number of employees.

It comes with a myriad of taxes--including taxes on medical equipment. I think there was a move to repeal this--a bipartisan one at that.

If you think it's GREAT that insurance companies are heading to the historical wastebasket--as they will be under Obamacare--and you believe the government is a better arbiter, then bully for you. If Americans understood that objective--to eliminate insurance companies, I wonder if they'd be so thrilled. That will be the longterm result of reducing profits. Eventually, insurance companies will go under and the government will fill in. How great will that be for Lois Lerner? She should be off parole by then.

Again, when is Obamacare going to ignite the economy? I remember Pelosi saying this was going to create hundreds of thousands of jobs.

When?

Is Obamacare going to be like the Stimulus?

You remember: "It would have been worse without . . . "

Doctor Fate wrote:I objected to you equating premiums with taxes. I can't decide to go without taxes. I can't be late. I can't argue with the IRS. Well, I can, but they'll simply ruin my life.

Well I know I expanded the insurance discussion to other forms of insurance, but you risk a felony conviction if you do business in NY without workman's compensation insurance purchased from a private company. Not sure about the other required insurances, but I'm pretty sure penalties are high.

Doctor Fate wrote:I did not ask for "one thing good that comes out of Obamacare."

You said: "Where are the major "good" sides to this program? Not theoretically down the road, but now?" And I told you what I saw as a good thing happening now. Not the exact same as I summarized, but pretty close.

Doctor Fate wrote:You say it lowers the cost of doing business. Not for small businesses. Suddenly, they are going to be required to offer insurance if they go over a specified (arbitrary) threshold number of employees.

Two points: I don't know that the entirety of obamacare will lower insurance premiums, but insurance companies are having to refund their excess profits to their customers now instead of their shareholders. Second, again, if you hired skilled workers, you're not going to get skilled workers without a health care plan. Period. So for many small professional businesses, this argument means nothing.

Doctor Fate wrote:If you think it's GREAT that insurance companies are heading to the historical wastebasket--as they will be under Obamacare

This makes no sense at all. As I've said many times in these forums putting insurance companies at the center of Obamacare is like putting the fox in charge of the hen house. Obamacare is also like a full employment act for insurance companies. Think about all the new customers they'll have! While their margin is limited, their total profit is not. I'm really, really bullish on all sorts of insurance because their business model mints money and gov't policy promotes inserting them into the lives of all people, and once you're a consumer of one insurance, you're likely to become a consumer of more. It's the exact opposite of what you think.

Of course, as a citizen, I consider that Obamacare's huge flaw.

Doctor Fate wrote:Again, when is Obamacare going to ignite the economy? I remember Pelosi saying this was going to create hundreds of thousands of jobs.

When?

Is Obamacare going to be like the Stimulus?

You remember: "It would have been worse without . . . "

I have no idea if its net effect on the overall economy will be positive or negative, and I expect no one else does either.

geo

I have no idea if its net effect on the overall economy will be positive or negative, and I expect no one else does either

But Fate, and all his sources are certain that their estimates are correct ...

I prefer to pass final judgement when there is actual evidence. So far the only evidence is the return of excess insurance premiums to consumers and the lower than expected premiums in the Vermont and California exchanges (which although it currently affects less than 5% of the populace is a positive in that coverage can be bought for less than previouslt estimated by critics.) and the following. Perhaps also the lower than expected health care cost inflation, but the causes of that can't really be isolated. Oh and this ....

As early as 2011, it appeared the Affordable Care Act was working. As of May, more than 600,000 new young people became insured, taking advantage of the Act's provision that children up to age 26 could be covered by their parents' insurance. This increases profits for the insurance companies, which should translate to lower premiums, since the new insurees pay into the system but require fewer health services. In fact, health insurance companies reported record profits for the first quarter of 2011.
Second, 46% more small businesses than in 2010 offered health care benefits, according to a Kaiser survey. More insured small business employees fewer bankruptcies, better credit scores and higher consumer demand. This allows them to spend more, boosting economic growth. In fact, there were fewer bankruptcies in August 2011 than the prior year.

http://useconomy.about.com/od/fiscalpol ... reform.htm

The author of the article I'm quoting also claims (with lots of sources) the following and though I think this makes all the sense, until full implementation takes affect her claims can't be fully supported... However:

Third, health care reform is needed because 25% of Americans have little or no health insurance to cover their costs. Over 101,000 Americans die each year simply because they didn't have insurance. Not only is this bad for them, it's also bad for the economy. For example, half of all bankruptcies result from medical costs.
Fourth, health care reform is needed to stem the economic costs of health care fraud. Between 3-10% ($60-$200 billion) is lost to fraud each year. If those same percentages are applied to the $436 billion Medicare program, the cost of Medicare fraud is $14-$30 billion.

The US economy is actually doing quite well right now. If the prognosticators Fate is sourcing were right, the economy would be stalled because of the implementation of the ACA....

Its beginning to feel like the ACA is one of those things that is here to stay, like Gay Marriage. As people get used to it, there will be increasing reforms as evidence mounts that tackling the Health Care mess actually means that personal capital and financial resources are freed for other purposes.

Okay I'll play your game...
Fate

Non-responsive.

That does not establish "premiums are taxes."

A bucks a buck.
For those few Americans who can afford health insurance but risk going without it .... there is a difference. However, even for those few, if they can't pay their bills tax payers ultimately pay them ...
This is like trying to make "payroll taxes" somehow different then taxes paid on income. a bucks a buck.

Ricky

Insurance companies have been a protected industry.

Fate.

They are heavily regulated. For example, they cannot sell across State lines.

You understand that that protects the companies in the States with limited competition right? A regulation can work to protect an industry.


Ricky

And in effect all they offer is health care payment administration.

False.

Like all insurance companies, they pool risk and so spread the cost

.
Unlike ALL insurance companies, they are not motivated to limit claims as much, as rising insurance costs in other areas affects profitability. . Unlike ALL insurance companies, Health insurance is used by almost every subscriber every year for preventative care....if nothing else. And health insurance companies pass along all medical supplier costs no matter what the inflationary pressures.
In all other industries the insurers are involved in reducing claims through improvement of standards. (i.e. shipping and construction materials and etc.)And, because the insured market is elastic, they understand that if the cost of their service increases the market size will diminish. With health insurance, its been more about excluding some to maintain margins. Those excluded are insured by tax payers...


ricky

They have a market that is forced to have their products. The option of no insurance is really only open to the very wealthy, or the very poor who have no means to pay anyway.

Fate

Contradictory. You can't be forced to buy a product and simultaneously have the option, for whatever reason, of not having it.

Not what I said. I said the option to not have insurance was open to only a few. The vrey wealthy primarily. The numbers who could afford insurance but don't are pretty small. And their possible inability to pay if they are struck by an expensive calamity, is back stopped by tax payers, like any other indigent seeking medical care in the States.

Ricky

The fact that private, so called free enterprise insurance companies have done nothing to affect medical costs over the last 30 years is indicative of the fact that they produce nothing.

Fate

It's not a "free enterprise" system when government heavily regulates it. Competition has not even been tried.

What the industry doesn't promote is the extent to which many of the restrictions and regulations were lobbied for by the insurance companies in order to protect their businesses from competition.
You also ignore the period before the modernization of health care in the modern world. Before the development of health insurance, use of health care was limited to those who could afford or to those who could find charity. It wasn't very efficient or effective. Which is why changes occurred. That was your period of "free enterprise".
Like other areas where unfettered industry created problems for society, the same occurred with health care.


Ricky

They merely administer. And they maintain their profit margin simply passing along the costs to the end users rather than by finding ways to significantly lower supplier costs.

Fate

And now, the government is going to help administer. Will there be no cost for additional government employees? Can the government maintain the same quality, or even improve it and extend its reach, by simply establishing high minimum standards for insurance and dictating compensation? In other words, can central planning raise efficiency?

In Canada with a single payer system a hospital can do its billing with 3 people. In a similar sized hospital in the US, 30 staff are required because they are dealing with dozens of different companies.
Fraud and extra billing in Canada is almost non-existent .
Its not "central planning" its the elimination of complexity. (Complexity that has been a weapon for insurance companies in the past, who use that complexity to deny payments. In Canada 97% of public health claims are paid as presented, promptly. Because the complexity has been removed.)

Fate

You say "yes" and point to other countries. I say "no" and point out that no other country will have a system that rivals ours for its convolution.

Is this something that is in the DNA of Americans? Or is it possible that American businesses are capable of applying best practices?
I admit that your political system is rife with the effects of excessive lobbying that rigs the system in favour of industries doing the lobbying. Like Health Insurance companies and Big Pharma.

rickyp

In countries that have eliminated this private role for the majority of he
health care, the cost of the bureaucracy of managing health care payments is marginal compared to the cost of insurance administration in the US....

Fate

Great point, except for two things:
1. You've made it 1,238 times.
2. For the 1,238th time in response: no other country has Obamacare so you have no evidence whatsoever that this will work.

Repetition doesn't make it wrong.
And I get it that ACA isn't a single payer system.... But it is a step towards universality and towards improving health care costs... And frankly there hasn't been anything else on offer that provides universality and the means to pay for universality.

ricky

In effect, health insurance administration is an example where the myth of competition has contributed to far greater costs than are required to move money from the beneficiaries pockets to the suppliers pockets.

Fate

The only "myth" is the idea that competition has been tried.

So you agree that health insurers over the last 30 or 40 years have not in any way been responding to competitive pressures that would affect costs....
To their benefit. They have he largest financial returns of any segment of industry and their executives are the best paid outside wall street,

rickyp

The problem with pharmaceuticals is that the risk reward system has been distorted by the industry who have lobbied for increasing protections of their extreme margins in the US. And really only the US.
American consumers have been suckers.

Fate

Oh, we've been suckers all right. We're paying for drugs that save lives around the world. Shame on us.

Well, you're paying for enormous profits and executive compensations at pharmaceutical companies.
If GM sold cars made in the US for half the price they sold them for in France ....
And GM was happy about continuing to do business in France wouldn't consumers get upset?
Moreover, if GM had a deal with the US government to sell them all their cars at full list price, a list price 3 times higher than the cars were sold for in France ... And if there were limitations in the car market that kept low cost competition out of the US .....
Thats kind of what goes on with drugs.
- Now, you're right that the government have colluded with Big Pharma to make something like this happen.
But that still makes you suckers.