mheslep said:
But, even the ACA version of "catastrophic" plans include "Well Baby Care" and other things you don't need - also mandated by the law and forcing the cancellation of plans people already had in pocket which did not include what the ACA says it should include...
The US has traditionally made goods and services available to the middle class by making these things highly affordable, from transportation to housing and even to medical care before the WWII laws. Hopefully another round of reforms can place the focus where it should be.
The higher price and lower affordability of the ACA-approved policies is not primarily because they include things you don't need. Accurately estimating what a given population will need is the lifeblood of the insurance industry and they're amazingly good at it; if they weren't they'd go out of business rather quickly. It's a much longer and sadder story... here we go...
What's going on is that for many years the American individual health insurance business worked by selling to people like Greg, the people who can say "We are both super healthy, rarely visit the doctor and were happy with our old catastrophe plans which were about $100/mo each". Cover 1000 people in that category and you'll take in 1.2M$/yr, and pay out maybe a dozen or so five-digit claims. However, if you didn't fall in that category,
they wouldn't sell you insurance at all . That's a recipe for very affordable coverage for the low-risk population but no coverage at all for the high-risk population, with the unspoken assumption that one way or another the doctors and hospitals would eat the cost of treating the uninsured. (Medical expenses are the leading cause of bankruptcy in America, ad of course it's the providers who end up holding the bag when the unpaid bills are discharged in a bankruptcy proceeding).
Meanwhile, a completely different dynamic was at work in the group health market where (for example) employers purchased the coverage that they made available to their employees as a benefit. There the insurers were required to accept all comers (it wouldn't be much of an employment benefit otherwise), and the actuarial risks were distributed across the entire employee pool. This meant that the premiums for the super-healty were higher than would be in the individual market, but because the cost was paid by the employer not the individual staying in the pool was still a good deal; and the less healthy could also find coverage This approach has worked well for many years, l - there's nothing in the ACA that changes this part, a substantial fraction of Americans are covered this way, and a fair case can be made that it's the part of the American health system that works best, at least for the people whose jobs give them access to such coverage.
What the ACA has done is bring the economics of group coverage to the individual market. The insurance companies are required to cover everyone, and the stick of the individual mandate replaces the carrot of the employer contribution to keep the healthy as well as the unhealthy in the pool. Costs do go up for the super-healthy (at least during their youth - hit your fifties and the pre-ACA individual market isn't such an attractive place)... and as I said at the beginning of this long story, that's likely what you and Greg are seeing.
I expect several things to happen over time (if the supreme court and/or a republican legislature doesn't gut the whole thing first):
- Employers will less often buy health coverage as a benefit for their employees, as most employees will find if they look at the costs that they'd rather take the dollars and buy their own insurance. This will be a good thing, as it removes a number of serious economic distortions and makes it easier for people to switch jobs without worrying about losing their coverage.
- The group insurers have proven themselves to be very effective at controlling costs while maintaining a decent level of coverage. That's to be expected; competition limits what they can charge to cover a given group so their profitably depends on the cost of servicing that group. The experience of other countries that have chosen to provide mandated coverage through private insurers suggests that the total costs will come down and efficiency will climb.
And the $5000 a month average is before taxes.
