Goodbye, Employer-Sponsored Insurance

[driveby]

Mass. health meltdown is your future

By SALLY PIPES

 

Last Updated: 12:54 AM, May 25, 2010

 

Posted: 12:26 AM, May 25, 2010

 

The future of US medicine under ObamaCare is already on display in Massachusetts. The top four health insurers there just posted first-quarter losses of more than $150 million. Most of them blamed the state's decision to keep premiums at last year's levels for individual and small-business policies, when they'd proposed double-digit hikes to match the soaring costs they've seen under the state's universal-coverage law.

 

The companies have gone to court to challenge the state's action -- it apparently had no basis for its ruling beyond the political needs of Gov. Deval Patrick. If they win, Bay State health premiums will continue their rapid rise; if they lose, they'll eventually have to stop doing business in Massachusetts -- and the state will be that much closer to a "single payer" system of socialized medicine.

 

The Massachusetts "health reform" disease means more than just bureaucrats setting prices. It also includes rising government spending and taxes; politicians demonizing doctors, hospitals and insurers -- and patients getting lectured that the restrictions of managed care are good medicine.

 

It's what's in store for all of America. The Bay State's structure provided the base for ObamaCare. "Basically, it's the same thing," says MIT economist Jonathan Gruber, who was a health adviser to GOP Gov. Mitt Romney and President Obama.

 

Like ObamaCare, RomneyCare includes a government-run exchange (the "Commonwealth Connector"), mandates and fines on individuals and fines on businesses. It expanded coverage mainly by expanding Medicaid. Of the 176,766 insured through the Connector, more than 152,000 are on subsidized plans, most paying nothing.

 

ObamaCare will follow suit. Richard Foster, chief actuary at the Centers for Medicare and Medicaid, reports that the law will add $310 billion over 10 years to federal spending and put 18 million more Americans on Medicaid.

 

Another similarity: RomneyCare offered no real means to control and ultimately reduce costs. Its backers made airy promises of redirecting monies from state-sponsored charity care to insurance premiums, claiming that an insured population would be healthier and save money. In fact, the state has begged Washington year after year for money to plug the system's gaps. In the program's first three years, the feds will have spent $21.2 billion -- $3,000 per Massachusetts resident.

 

Actually, ObamaCare's cost-control promises are even more fantastic -- from supposed slashing of Medicare payment rates to politically impossible "Cadillac" taxes. The only real cost control in either plan will be the brute force of government.

 

A Boston Globe story from earlier in the dispute over rate hikes says it all: "Two of the state's big health insurers face stiff fines after they submitted to the state revised premium rates for individuals and small businesses that differed from what regulators ordered."

 

There's no such thing as a market where bureaucrats set the price. Yet that's what health care has become in Massachusetts under its reform.

 

"I don't know how much clearer we could have been with them," complained Massachusetts Insurance Commissioner Jack Murphy. He told the Globe: "We communicated four times what rates we expected. We're considering all options. At minimum, both will face significant fines and potentially other penalties."

 

When insurers then complained that they'd post losses, the Patrick administration lambasted them as "outrageous," "uninterested in alleviating escalating health-care costs" and "in love with the status quo."

 

Government finally caring about the little guy? Hold your cheers -- because the inevitable next step is rationing at the point of consumption. Massachusetts state Senate President Therese Murray has proposed putting an end to "fee for service" medicine in the next five years and moving to a system of capitated managed care, where doctors receive a flat fee for each assigned patient.

 

This "HMOs for all" approach is designed to lead to soft rationing -- which, in medical terms, means people will have a hard time finding doctors or seeing the ones they have. It's already started. In Massachusetts, one doctor in two is not accepting new patients. Waits for treatment in Boston are the highest in the nation.

 

And Medicare's chief actuary predicts the same fate under ObamaCare. "It is reasonable to expect that a significant portion of the increased demand for Medicaid would be difficult to meet," Richard Foster wrote in a recent report.

 

Get ready, America: If nothing else, ObamaCare will put the patience back in being a patient.

 

 

But a glimmer of hope on the horizon.

 

63% Favor Repeal of National Health Care Plan

[Azazello1313]

I don't get why you think it's going to be more expensive to subsidize healthcare directly rather than subsiding healthcare through a middle man (employers).

 

well there are more people being subsidized at a higher cost. the tax break for employer provided insurance is maybe a couple thousand per employee in foregone tax revenue. the obamacare subsidy is going to amount to much more than that. a lot bigger subsidy to a lot more people, and the smaller subsidy still applies to anyone lucky enough to maintain private insurance through their employer. that's how it's going to be more expensive. something like a trillion dollars more expensive to the taxpayer over the first 10 years relative to current law.

[driveby]

We’ve seen this movie before. When the government creates a new entitlement, politicians lowball the costs to get the law passed, and then blame someone else when program costs soar. Witness Massachusetts. Most Americans are sensible enough to know already that’s what can be expected next with Obamacare.

[Azazello1313]

We seem to be arguing the same point. I do indeed wish companies would offer higher salaries in lieu of health plans, which would allow those employees to shop for their own insurance, or go with the vanilla government program.

 

Problem is, as many have reported, their employers don't allow them to take the cash instead, which I find ridiculous. If more employees did eactly what you describe, and I have preached here, they'd get great talent. But for some reason, they don't.

 

well I think most employers will take an either/or approach, rather than offering both. if they have, say, $70K allocated to hire a new employee, they'll either offer health insurance across the board and $40-50K in salary, or no insurance and $55-65K. I think it would be great if they offered both and let the employee choose, but I doubt many will take that approach. I hope they do.

[Yukon Cornelius]

We’ve seen this movie before. When the government creates a new entitlement, politicians lowball the costs to get the law passed, and then blame someone else when program costs soar. Witness Massachusetts. Most Americans are sensible enough to know already that’s what can be expected next with Obamacare.

do you really think Americans have gotten smarter over the last 15 years...... you must not be paying attention at your school.

[westvirginia]

WHAT about this post did anyone NOT know when they were debating and passing this atrocity?

 

You'd think the government would learn to write proposals/laws based on percentages....instead of actual numbers. They learned nothing from the debacle that IS the Alternative Minimum Tax. How about saying the penalty for not offering employee health benefits is 200% of what it WOULD have cost you, as an employer, the year you drop it, with a 20% increase year to year. Or....1% of your gross sales. (Just throwing out examples...don't do the math here.)

 

The penalty should hurt.....not help.

 

Instead, they make it some arbitrary figure like.....$100 per month per employee. Dumbasses.

 

I thought they DID the math as to how much it is costing to cover an individual currently. I guess they are bad with decimals or something.

Nothing tied into inflation or future value of money? Unbelievable.

 

This has been my contention all along - that the obamessiah and his band of merry fedgoons have no desire to improve cost, choice, coverage, quality or any other aspect of health care. This is entirely and completely about control. Control of 17 percent of the economy, and of 100% of the American people. Are there really people who don't see this???

[bpwallace49]

This has been my contention all along - that the obamessiah and his band of merry fedgoons have no desire to improve cost, choice, coverage, quality or any other aspect of health care. This is entirely and completely about control. Control of 17 percent of the economy, and of 100% of the American people. Are there really people who don't see this???

 

Shouldnt you be scanning the sky with binoculars for the scary black helicopters?

[westvirginia]

Shouldnt you be scanning the sky with binoculars for the scary black helicopters?

 

There's no conspiracy here, and I won't even challenge the obamessiah's motives - most socialists hearts are in the right place. But when socialism runs into the harsh light of reality and human nature, it falls apart like a Yugo hitting a Suburban. I think they truly believe everyone would be better off if fedgov controlled medicine start to finish. This is supremely arrogant and short-sighted, and their idea of "fair" is out of whack (to me fair is getting what you deserve, to them it's everybody having the same amount of stuff), but their hearts might really be in the right place.

 

The problem is, they have NO RIGHT to control me and abridge my rights. They're supposed to be protecting my rights, instead they take them away for some nebulous common good that's as ethereal as the morning fog.

[i_am_the_swammi]

For those that were arguing that individual plans were significantly more expensive that corporate plans....IBC is rolling out 5 new individual plans July 1st, all of which are about 40-60% cheaper than my company plan. Do some of these options require higher co-pays and/or deductibles? Of course.

 

But I'd take any of them in a heartbeat if I could pocked the $700-800 per month it would save my company if they allowed me to switch to one of these plans. I don't need a cadillac plan that my employer offers. Unfortunately, its my only choice.

 

New Independence Blue Cross Plans - Premiums Shown are Monthly

 

ETA: poor grammar

Edited June 3, 2010 by i_am_the_swammi

[Big Country]

For those that were arguing that individual plans were significantly more expensive that corporate plans....IBC is rolling out 5 new individual plans July 1st, all of which are about 40-60% cheaper than my company plan. Do some of these options require higher co-pays and/or deductibles? Of course.

 

But I'd take any of them in a heartbeat if I could pocked the $700-800 per month it would save my company if they allowed me to switch to one of these plans. I don't need a cadillac plan that my employer offers. Unfortunately, its my only choice.

 

New Independence Blue Cross Plans - Premiums Shown are Monthly

 

ETA: poor grammar

 

Are the plans cheaper than your current out of pocket expense (adjusted for pre vs. post tax dollars)? Ignoring your companies contribution, that is the primary amount that matters as it is what directly affects your pocketbook the most.

[i_am_the_swammi]

Are the plans cheaper than your current out of pocket expense (adjusted for pre vs. post tax dollars)? Ignoring your companies contribution, that is the primary amount that matters as it is what directly affects your pocketbook the most.

 

No, they are not, but that is irrelevant.

 

the point I made earlier is that my current, employer-sponsored health plan costs about $1800 per month My employer pays about $1350, I pay about $450. Why can't I go to them and say "Hey, I'd be more than happy with a $900 plan (see link I provided). You pay the whole thing (and save $450 per month), and I will pocket my co-pay and save $450 per month. We both win. "

 

Instead, I get "stuck" with either their cadillac plan, or a plan they won't contribute towards.

 

Like I said earlier, I'd be happier if they increased my paycheck by $1350 (the amount they currently pay towards my healthcare), so then I could buy myself a $900 plan, and net $900 into my pocket (the $450 I wouldn't need to contribute anymore, and the extra $450 from the company). Even if there were tax implications, i'd still be way ahead, with a coverage better suited for me.

 

Moreover, the real point of the link was to show that individual plans are in no way "100%" more expensive than group plans....its just a plain falacy.

[CaP'N GRuNGe]

My employer pays $30 a month if you go outside for your own health plan. As we both work for the same employer, I run the insurance through me and the wife takes the extra pay.

[Big Country]

No, they are not, but that is irrelevant.

 

the point I made earlier is that my current, employer-sponsored health plan costs about $1800 per month My employer pays about $1350, I pay about $450. Why can't I go to them and say "Hey, I'd be more than happy with a $900 plan (see link I provided). You pay the whole thing (and save $450 per month), and I will pocket my co-pay and save $450 per month. We both win. "

 

Instead, I get "stuck" with either their cadillac plan, or a plan they won't contribute towards.

 

Like I said earlier, I'd be happier if they increased my paycheck by $1350 (the amount they currently pay towards my healthcare), so then I could buy myself a $900 plan, and net $900 into my pocket (the $450 I wouldn't need to contribute anymore, and the extra $450 from the company). Even if there were tax implications, i'd still be way ahead, with a coverage better suited for me.

 

Moreover, the real point of the link was to show that individual plans are in no way "100%" more expensive than group plans....its just a plain falacy.

 

Quantity of employees in the group.

 

Pulling numbers out of the air, but let's say 25% of the people in the current plan opt to drop out and get their own coverage. This causes a 30% increase in the cost of the group plan due to a lower number of people using the group plan. That alone creates a greater financial burden on the company, much less what it would cost them if they were to provide a cash payout (which not only you, but they pay additional tax on) to those that opt out of the plan to seek their own coverage.

 

 

Like I said, pulling numbers out of the air, but theoretically speaking what may be of benefit to you individually hurts the group and the company overall a lot more.

[bpwallace49]

Quantity of employees in the group.

 

Pulling numbers out of the air, but let's say 25% of the people in the current plan opt to drop out and get their own coverage. This causes a 30% increase in the cost of the group plan due to a lower number of people using the group plan. That alone creates a greater financial burden on the company, much less what it would cost them if they were to provide a cash payout (which not only you, but they pay additional tax on) to those that opt out of the plan to seek their own coverage.

 

 

Like I said, pulling numbers out of the air, but theoretically speaking what may be of benefit to you individually hurts the group and the company overall a lot more.

 

Doesnt that depend on the relative claim activity of the 75% that remain? For instance, if the bottom 25% that dropped out had the most amount of claims, the company would realize a greater margin of the premiums, which would not necessarily reflect in higher prices for the healthy 75% . . . right? I fully understand the spreading out fo the risk, but isnt the claim % of thse that drop out relevant to the discussion?

[Perchoutofwater]

Doesnt that depend on the relative claim activity of the 75% that remain? For instance, if the bottom 25% that dropped out had the most amount of claims, the company would realize a greater margin of the premiums, which would not necessarily reflect in higher prices for the healthy 75% . . . right? I fully understand the spreading out fo the risk, but isnt the claim % of thse that drop out relevant to the discussion?

 

What is the likelihood that the 25% of higher risk (read cost) people drop out? If they are higher risk their cost if they were to get individual plans would more than likely be much higher. The more likely scenario would be the top 25% (those that are healthy and young) would opt out and get individual coverage, thus leaving the company with a higher cost group.

[bpwallace49]

What is the likelihood that the 25% of higher risk (read cost) people drop out? If they are higher risk their cost if they were to get individual plans would more than likely be much higher. The more likely scenario would be the top 25% (those that are healthy and young) would opt out and get individual coverage, thus leaving the company with a higher cost group.

 

Big Country asked a theoretical, and I asked for clarification on the example. Likelihood is another story, and is probably a lot closer to your example of lower risk people dropping. However I would also say that family situation also comes into play. if I was single I would have a much different plan than the extras I pay for for my wife and kids . . changes your perspective, and I pay a premium for it.

[Big Country]

Doesnt that depend on the relative claim activity of the 75% that remain? For instance, if the bottom 25% that dropped out had the most amount of claims, the company would realize a greater margin of the premiums, which would not necessarily reflect in higher prices for the healthy 75% . . . right? I fully understand the spreading out fo the risk, but isnt the claim % of thse that drop out relevant to the discussion?

 

I suppose that could be a consideration, but Perch's is a much more likely outcome. The company is acting for the betterment of not only itself, but, again in theory, for the betterment of the group of emploees as a whole.

 

For simplicity sake, assume it is an even distribution of high, medium and low claim people that opt out.

[i_am_the_swammi]

The company is acting for the betterment of not only itself, but, again in theory, for the betterment of the group of emploees as a whole.

 

And I guess this is where I disagree.

 

I think the company would be acting for the betterment of itself, AND its employees, by scrapping the much higher-cost, and more stringent, company-sponsored plan, and allowing the majority of its employees to pocket a greater amount in take home pay, and select an individual plan that is better suited to their individual needs.

[Perchoutofwater]

And I guess this is where I disagree.

 

I think the company would be acting for the betterment of itself, AND its employees, by scrapping the much higher-cost, and more stringent, company-sponsored plan, and allowing the majority of its employees to pocket a greater amount in take home pay, and select an individual plan that is better suited to their individual needs.

 

What you have now is in a sense socialized medicine provided by the employer. The young and healthy help to subsidize the old and sick at whatever company you work for.

 

What you are wanting to do will initially make it cheaper for the young and healthy, but much more expensive for the old and sick. Being the compassionate people that we are we will eventually decide that we need to take care of the old and sick, so they will eventually be on some government provided plan. Now as we know based on Medicare and Medicaid reimbursements the government tends to short change health care providers, so they make up the difference by charging those they can (those with private insurance) more. This of course increase the cost of the insurance. Eventually you will end up with complete socialized medicine. So what you are advocating is just a much lager version of what you have with employer provided insurance.

 

The difference between the two is at least right now you have some choice in your coverage. If you don't like the insurance your employer provides as additional form of compensation, you can look for additional supplemental insurance, or you can look for another employer that provides something more in line with what you want. Once the government controls it all you will lose that option.

[westvirginia]

What you have now is in a sense socialized medicine provided by the employer. The young and healthy help to subsidize the old and sick at whatever company you work for.

 

What you are wanting to do will initially make it cheaper for the young and healthy, but much more expensive for the old and sick. Being the compassionate people that we are we will eventually decide that we need to take care of the old and sick, so they will eventually be on some government provided plan. Now as we know based on Medicare and Medicaid reimbursements the government tends to short change health care providers, so they make up the difference by charging those they can (those with private insurance) more. This of course increase the cost of the insurance. Eventually you will end up with complete socialized medicine. So what you are advocating is just a much lager version of what you have with employer provided insurance.

 

The difference between the two is at least right now you have some choice in your coverage. If you don't like the insurance your employer provides as additional form of compensation, you can look for additional supplemental insurance, or you can look for another employer that provides something more in line with what you want. Once the government controls it all you will lose that option.

 

And there you have it.

 

Swammi, the plans offered are cheaper for a couple reasons - One, they will have a stringent risk pool where they pull only young, healthy individuals. Two, there will be a lot of stuff in your work plan that won't be in the cheaper plan.

[i_am_the_swammi]

Two, there will be a lot of stuff in your work plan that won't be in the cheaper plan.

 

Correct....stuff like pregnancy coverage, even though we are done having kids. Coverage for mental health issues, drug addiction, smoking cessation, fitness regimes, etc....all of which I pay a pretty penny for, and have no use for.

 

I'd much rather have 60% of the coverage I have now, but my employer doesn't want to save itself money, and save me money. I either have to take their plan, or lose a benefit worth about $15K a year.

[westvirginia]

Correct....stuff like pregnancy coverage, even though we are done having kids. Coverage for mental health issues, drug addiction, smoking cessation, fitness regimes, etc....all of which I pay a pretty penny for, and have no use for.

 

I'd much rather have 60% of the coverage I have now, but my employer doesn't want to save itself money, and save me money. I either have to take their plan, or lose a benefit worth about $15K a year.

 

Right, but tons of those people need those high-dollar items. In fact, I'll bet you a dollar that those coverages are state mandated for employer plans.

 

ETA - so you can't really compare the plans as apples to apples - it's like comparing a Mercedes to a Malibu. Sure, they both serve the same purpose but you get so much more with one than the other.

Edited June 4, 2010 by westvirginia

[Big Country]

Correct....stuff like pregnancy coverage, even though we are done having kids. Coverage for mental health issues, drug addiction, smoking cessation, fitness regimes, etc....all of which I pay a pretty penny for, and have no use for.

 

I'd much rather have 60% of the coverage I have now, but my employer doesn't want to save itself money, and save me money. I either have to take their plan, or lose a benefit worth about $15K a year.

 

You're still only looking at the individual case of yourself, not at the ramifications across the board if the company were to do what you are proposing. So yes, in a vacuum looking at only the benefit to you, the company could save money, but, as many others have already pointed out, in the grander scale overall, this may not be the case and it may cost the company.. and many individuals, a lot more.

[Perchoutofwater]

I'd much rather have 60% of the coverage I have now, but my employer doesn't want to save itself money, and save me money. I either have to take their plan, or lose a benefit worth about $15K a year.

 

I'd much rather have 60% of the government we now have, but liberals like Swammi don't want to save themselves money, and save me money. I either have to take their tax hikes, or go to jail.

[gbpfan1231]

Correct....stuff like pregnancy coverage, even though we are done having kids. Coverage for mental health issues, drug addiction, smoking cessation, fitness regimes, etc....all of which I pay a pretty penny for, and have no use for.

 

I'd much rather have 60% of the coverage I have now, but my employer doesn't want to save itself money, and save me money. I either have to take their plan, or lose a benefit worth about $15K a year.

There are some pretty smart business people out there who would have done what you are saying if it truly would save a company money on the grander scale.