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Does anyone out there understand that insurance companies, whether it be health, auto, life, home owners, operate based on risk pools? The larger the risk pool, the less risk, and costs are spread among the participants in the pool. The smaller the risk pool, more risk, and higher costs.
The fact that smaller businesses are placed in a smaller risk pool increases costs to them.
Traditionally....yes, that's true but, what changes that all around for the health insurance is the mandates. The mandates that have placed on group is different than individual and that will vary from state to state. Then there's the federal mandates that overide the state laws. Technically COBRA was the first but, that's relatively simple and it fit over all the state laws easily....then came HIPAA...a disaster. The first section was placed into law by Clinton and it's so far back, when I say HIPAA people patient privacy/rights. That all came later....they've been adding to it all along...that's not what made premiums rise steadily ever since it went into effect. It's the mandates in the first section that forced insurers to take on more risk. It's different from group to individual and it put a lot of the small but, individual carriers out of business...they made the market competitve.
All you need to do is look at how the rates started increasing shortly after HIPAA went into effect and it shows you what's going to happen with Obamacare....which has mandates that are more severe.
The larger the block of business, the more diverse and "typical" the risk becomes but, if you can underwrite and even decline applicants (like with individual in most states), that changes everything. There are other factors, like some of the very large companies (GM...Ford...etc.)...they provide benefits for all their retirees. It's secondary to Medicare but, it still pays out plenty...everyones old....prescription coverage...etc.
Obama & his cronies are gutting HSAs with a vengeance, since they still believe that we the people are rampaging illiterates and need to be coddled from birth until death.
But then you look at the Illinois balance sheet, read that union intransigence cost Chicago yet ANOTHER convention earlier this week, realize that the ongoing 'war against WalMart' has no end in sight, and have come to the realization that Democrats don't care about the 'little guy', thanks to the 'cash for clunkers' failure/disaster/fiasco and numerous stimuli from the Keynesian playbook that have all been abject failures.
I don't see why you think the government needs to get into the re-insurance business. The companies that do it now, are not where the problem is...they're rates are fine. If the government were to get into it re-insurance, it would be based on Medicare rates...period. Any stop-loss that was reached, would need to have been met by paying all claims prior to that at Medicare rates. Obamacare will be based at Medicare rates too...that's a big problem.
Federal law (HIPAA) has not allowed insurers to decline companies applying for group coverage or new hires (and their family) adding on to existing group coverage since it went into effect (in the late 90's).
Where Obamacare forces carriers to cover unhealthy patients, is on individual coverage...that's the problem.....that will make rates sky-rocket even worse than they already have since HIPAA. Who will be making sure the risk gets distributed evenly from one individual carrier to the next....no one...and they think that's not going be a problem. How can it not be?
Say you had only two carriers and only 10 unhealthy people. The cost to cover claims for those 10 unhealthy people would need to be split 50/50 between those two carriers so, that they can be competitive with each other as far as the rest of the business they do.
Another example, let's say the cost to cover the claims from all 10 of those unhealthy people were exactly the same. When those people apply for individual coverage, who's going to make sure that each carrier gets 5 (instead 2 to one and 8 to the other or 9 and 1.....)....no one.
Another example, let's say it ends up getting split 8 with one and 2 for the other. The 8 people have claims totaling $400,000 but, the 2 people have claims totaling $1,000,000.
None of that can be predicted like all the other claims are calculated (off of the rate of illness from historical data per 100,000 people). It's pot luck......it will drive carriers out of business. They be handing out rate increases faster than they can print the letters...then they'll lose business. They'll go crazy trying to keep up with their claims ratios.
This is all what risk pools are for but, the government must step in and distribute that risk evenly among the participating. It's handled extremely well with auto insurance...on a state level...the way it should be done. This is why the federal government has no business getting involved in regulating it through mandates. You want to see what mandates do, go look up the rates for individual coverage in NY state (where individual carriers are already forced to accept any one applying). It's insane...you'll see rates like $1,500-2,000/month for an individual and $5,000-6,000/month for a family.
You want to see rates come down (and underwriting more lenient), then get rid of all these mandates and let the market compete by itself. Then for the unhealthy/uninsurable that everyone wants to see covered, get rid of all the smoke and mirrors (that are just BS) and bite the bullet....the government needs to cover them and it has for with taxes. It going to come out of everyone's pocket one way or another so, let's just call it what it is....a tax increase to pay for it. Whether or not the country can afford that now, is another issue.
In effect, Mediaid is a government reinsurance policy. The 'market competing by itself' produces billion dollar profits for healthcare companies, and CEOs giving themselves billion dollar bonuses. Allowing private industry to reduce their employee healthcare costs would be a shot in the arm for the employee and the entire economy.
You are 100% right.
The ONLY way to solve America's failed health system is to scrap it and build a National Health Service that is here for every single American and legal resident.
This "tweaking" of the current health system is expensive and does not solve ANYTHING.
Building a completely new American health system is long overdue and must be done.
A new National health system in the USA would probably cut unemployment here by at least 50%. Would be less expensive to run than the current system. Save around 46,000 American lives each year. Stop the need for Medicare, Medicaid or a VA system and would remove the need for work related health care.
A American health system would be a win win for America and it's people.... oops i forgot, it wouldn't make the ceo's of the insurance companies or the greedy Doctors or Pharmaceutical companies MEGA RICH.
If anyone thinks that the millions of people being bankrupted or dying in the USA because of the extremely expensive and innufficiant health system here today is worth clinging on to then i can only say that this is proof that education here needs sorting out too.
There is not ONE reason why a UHC should not now be implemented in the USA and made into the finest health system in the World instead of the extremely expensive system that is here now and has been for quite a few years now.
National single payer would be nice, but it's about as attainable as abolishing the Fed. The best we can hope for is to let the employer pay what the employee copay and deductible don't cover, which usually isn't all that much, and pay an affordable reinsurance fee to the government. If a reasonable stop-loss is established for each company based on number of employees covered, then they and the employees pay much less. The government pays the occasional high end bill, which they do anyway when the patient who becomes bankrupted by the bills goes on Mediaid, but now they are at least paid a reinsurance fee, which risk adjusted might even be profitable for them, depending on how generous they want to be to private industry.
In effect, Mediaid is a government reinsurance policy. The 'market competing by itself' produces billion dollar profits for healthcare companies, and CEOs giving themselves billion dollar bonuses. Allowing private industry to reduce their employee healthcare costs would be a shot in the arm for the employee and the entire economy.
In effect, Medicaid is re-insurance???? How do you figure that? Re-insurers share risk with other insurers....Medicaid is about low income and not being able to afford coverage. The state & federal government pay premiums to insurers that those on Medicaid can't afford on their own. That doesn't necessarily mean, it's high risk.
The "market"????....which market are you talking about? I'm talking about health insures, not the healthcare industry. The healthcare industry is the problem....the hospitals....drug companies...what they're charging is the whole problem, it goes unchecked. No one shops for a hospital or what they're going. to pay for drugs when they have a co-pay card.
In effect, Medicaid is re-insurance???? How do you figure that? Re-insurers share risk with other insurers....Medicaid is about low income and not being able to afford coverage. The state & federal government pay premiums to insurers that those on Medicaid can't afford on their own. That doesn't necessarily mean, it's high risk.
The "market"????....which market are you talking about? I'm talking about health insures, not the healthcare industry. The healthcare industry is the problem....the hospitals....drug companies...what they're charging is the whole problem, it goes unchecked. No one shops for a hospital or what they're going. to pay for drugs when they have a co-pay card.
Reinsurance picks up where the other insurance drops off, so when the consumer is maxed out of his health plan and goes on Medicaid to sustain his life, he is in effect utilizing the default government form of 'reinsurance'.
Does anyone out there understand that insurance companies, whether it be health, auto, life, home owners, operate based on risk pools? The larger the risk pool, the less risk, and costs are spread among the participants in the pool. The smaller the risk pool, more risk, and higher costs.
The fact that smaller businesses are placed in a smaller risk pool increases costs to them.
Which is why they would benefit greatly with the government giving them low cost reinsurance. There are plenty of smaller healthcare companies competing for the right to administer the employer's self insured health plan. With a low stop-loss and low reinsurance rate, small companies would greatly reduce their healthcare costs. It is a back end tax break mostly paid for from the profits of the larger healthcare companies.
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