What neither party wants you to know about healthcare

[CBB_Fan]

I apologize for the clickbait-style title, but this is one of the largest issues facing our country today and both Republican and Democratic parties refuse to see the truth of the issue, or address it. What is only difference our healthcare has from ALL the effective healthcare systems (and by that, I mean healthcare payment systems) of the world?

It isn't single-payer vs multipayer. It isn't government subsidies. If you look around, there are huge differences between the model used by the Swiss and that used by Canada, the UK, Germany, the Nordic countries, etc. But all of them lack a key element that defines US healthcare.

We know our government spends massive amounts of money on healthcare, even if we ignore Medicare/Medicaid (and for the purposes of this post, I am completely ignoring those programs). Where is that money going? Have you seen it? Has it helped you?

Alright, the answer. We spend a vast amount of money, around $600B on employer healthcare subsidies. The vast majority of Americans get their healthcare from their employer, something unique to our country.

This is a terrible, horrible, no-good, very bad idea. It is the equivalent of the government taking $600B out to a pasture and burning it. I'll explain why later, but first a history lesson.

It's WWII, and the government has implemented wage controls, price controls, is rationing goods. Factories are hiring, and they need to find a way to attract workers when they can't raise wages. Enter: benefits. Factories started offering healthcare packages and one-upping each other to provide the best plan and attract the best employees.

I'll note, this is one example of government control resulting in inadvertent outcomes. This was basically a state-controlled economy malfunctioning, something that should validate everyone with the libertarian mindset that government should keep its hands out of the economy.

In 1943, we doubled down and made healthcare benefits tax-free, and that is when we entered the event horizon. By the 60s it had completely pervaded the nation. Those with good jobs get healthcare through their jobs and everyone else relies on government.

This does not work, and the employer healthcare subsidy is the reason why it doesn't work.

There are two things that can reduce healthcare prices: free market principles, and large economies of scale. Employer subsidies guarantee neither can affect the market. When people do not shop for their own insurance (and cannot shop across state lines, and cannot really see the details of coverage for any particular plan or the cost of any particular operation until they buy it), the free market does not apply.

A free market reduces prices by competition. If Company A sells the same product as company B at a lower rate, and customers know this, they will gets more sales. But when the 3rd party is buying for the customer with a different set of interests (most notably, buying the large possible plan they can to get the largest tax savings) then competition doesn't work. Our employer might buy from Company B precisely because it is more expensive so that its plan looks better!

Likewise, around the world governments reduce prices by bargaining as the largest purchaser. But in America, the government is forbidden from negotiating prices. And we also lose vast amounts of taxable income by allowing companies to exchange $20,000 in wages for $20,000 in benefits, which often end up unused (and instead of $20,000 getting taxed and reinvested into the economy by the consumer, it sits and nothing).

Employer-subsidies also promote the use of healthcare services that provide little value, hiding the sticker shock from consumers while also promoting overly large plans for healthy people. It turns out, the majority of those that work are probably going to be people 20-65 years old healthy enough to work. Why do we subsidize our industry so that the healthier group of people gets the best/biggest healthcare plans?

Now for some real numbers. We spend $600B subsidizing businesses, and over the next 5 years we are projected to lose $320B a year in taxes from companies providing healthcare instead of wages. This is the largest tax break in America (and for those Democrats out there, note that this primarily goes to wealthy). Basically, this means that the tax break goes to people that can buy their own health insurance. And it means that instead of shopping around for the best plan for their needs, the majority of Americans get handed a plan by an employer with different interests.

Again, this is for non-Medicare/Medicaid. So we are looking at those under 65 that don't need Medicaid. If we look at that age range, we can see the the average yearly cost of healthcare for those under 65 come to $2500 for women and $2300 for men. How much healthcare could we purchase for $920B? If we simply gave out a check to each person under 65 (270M people) we get $3,407.

In other words we already spend more than enough to adequately insure each person under 65. And this is before we start reducing the price by actually implementing a free-market economy and letting people choose their insurance plan, before we let government negotiate drug prices, before we allow people to purchase plans from across the country.

For libertarians, this is an end to shitty practice started by the government's micromanagement of the economy which will end up in a much more free-market solution (heck, even eliminating the subsidy and getting that money back in wages would be better for the average worker).

For liberals, this is an end to a practice that fundamentally is just a tax break to corporations and upper-middle class workers, which ends up failing to provide insurance to those that actually need it while also stopping any attempt at a better solution.

This is the reason Obamacare was doomed to fail, and why any effort to maintain and correct the current system is doomed to fail. It is propped up on an unfortunate accident, and if your base isn't up to code you can't build a house, let alone a skyscraper. Though for those interested, Obamacare did try to fix this with a Cadillac tax that ultimately completely missed the mark for reasons I can't go into because of time constraints (like a lot of the "good" ideas in Obamacare that failed to incompetence or bureaucratic mismanagement).

[jdshock]

Employer-subsidies also promote the use of healthcare services that provide little value, hiding the sticker shock from consumers while also promoting overly large plans for healthy people. It turns out, the majority of those that work are probably going to be people 20-65 years old healthy enough to work. Why do we subsidize our industry so that the healthier group of people gets the best/biggest healthcare plans?

Isn't this related to the component of the ACA that would tax Cadillac health insurance plans? That provision was wildly unpopular and has been postponed until 2018, if I remember right.

The purpose of that tax was to help offset the incentive that exists to overspend on company provided health insurance.

Edit: I completely glossed over that point in your post. Still interested in hearing why you think it would've missed the point.

[CBB_Fan]

Isn't this related to the component of the ACA that would tax Cadillac health insurance plans? That provision was wildly unpopular and has been postponed until 2018, if I remember right.

The purpose of that tax was to help offset the incentive that exists to overspend on company provided health insurance.

Edit: I completely glossed over that point in your post. Still interested in hearing why you think it would've missed the point.

The Cadillac tax was intended to only hit top-end plans but was structured in a way to hit a much larger percentage. Day 1, 26%, which is way more than ever intended.

But worse, the thresholds are set to be adjusted annually for the Consumer Price Index, while the Medical Consumer Index rises far more quickly. So a "big" plan now will quickly just become a normal plan. In 10 years, up to 40% of plans will be hit with the tax.

Obamacare also promoted this as the primary solution to the problems we face from adopting employer subsidized healthcare as the primary solution (instead of as a temporary way to attract workers). It is a small problem, but larger issues remain.

Even companies aren't going out of there way to pad their benefits, they are still a 3rd party whose interests are not going to line up with that of the employee. In every other country people get health insurance either from a single source (the state) financed by high taxes, or by purchasing the plan that works best for them from the private market. We are the only country that relies on someone else buying us a plan.

Back to the point though, Obamacare's Cadillac Tax had three big issues. Number one, it still kept employer-subsidized healthcare in place and tried to treat only a symptom. Number two, it was structured to hit a much larger percentage of plans than originally designed. Number three, it was set to adjust based on the wrong index, which means it would hit more and more plans over time.

[wufan]

Great argument!

[wsushox1]

Great argument!

He's exactly right.

What is also killing Obamacare is the penalty for no health care is way too low. People can put off enrolling in health care until they get sick, and because of the change in denial of pre-existing conditions, only take advantage of health care when they are racking up incredibly high health bills.

[Aargh]

I believe everyone should have health insurance, and that the total cost should be the same, whether we have some or none uninsured. The reason the cost doesn't change is that hospitals have to take care of uninsured patients and absorb any costs they can't collect. In Kansas they can take your house, and that's just not right. The cost of medical service to those who are inusred has to be artificially raised to provide the funds to treat those who can't pay.

If everyone has health insurance,costs should go down, because it's cheaper to treat problems early rather than wait for them to become serious and require a trip to the emergency room. That savings won't be realized because there will be enough taking free or low-cost doctor's visits when there is no medical need. Then the health industry (which is profit-driven) will find imaginative and creative ways to increase the costs to the insurers.

I was the sole wage earner in my family. Then I got cancer. Nasty cancer. I couldn't possibly get health insurance. I even tried getting insurance that would exclude coverage for cancer and that was turned down. I was also unemployable. No one was going to hire an uninsurable cancer survivor and try to put them on their insurance plan. Insurance for my wife would have been about $700 a month, which would have required me to sell my house.

Those two factors made me a big fan of Obamacare. You'd be surprised how an attitude can change when a government policy means you get to keep your house. My wife and I went 4 years with no health insurance. She was in her upper 50's and I was in my early 60's. Two people at that age with no health insurance is incredibly uncomfortable, but I had no choice.

CBB's explanation of how insurance really works and how Obamacare doesn't address the root cause of the problem is giving me a different outlook on Obamacare. I am skeptical of Trump's promise to repeal it when all he's said is he'll "replace it with something better". I've learned to be skeptical of that term. Better for who?

One more thing. When I got my wife on Obamacare, her unsubsicized premium was $500/month. That was for better coverage than the $700/month plan I found (after shopping about five carriers). Even with the double-digit increases this year, her premiums under Obamacare are still lower than they were in the open market 6 years ago.

I worked for CCH (a software developer in Wichita) for about 4 years. They had outstanding coverage for their employees. For $400/month I had no deductible and no co-pays when I got cancer. About 1/3 of their workers are "temporary" or "seasonal". That can last for up to 4 years for workers (even 12-month, 40+ hour workers) in that status. The pre-Obamacare insurance (through a temp agency) for those employees cost $200/month. It was a low-deductible and low co-pay policy, but it had one really unusual term. They would STOP paying when their total payouts reached $2,000 in a 12-month insurance cycle. You had to read the policy pretty carefully to find that clause.

Prior to Obamacare, insurance companies were doing some things that could be viewed as profits taking precedence over providing health care, or establishing an acceptable number of deaths to protect profits. There is a long history of government intervention whenever there is "an acceptable number of deaths" to protect profits. That led to EPA, OSHA, and now Obamacare.

[im4wsu]

Aargh, not picking on you and certainly I understand your situation and empathize.

If everyone has health insurance,costs should go down, because it's cheaper to treat problems early rather than wait for them to become serious and require a trip to the emergency room. That savings won't be realized because there will be enough taking free or low-cost doctor's visits when there is no medical need. Then the health industry (which is profit-driven) will find imaginative and creative ways to increase the costs to the insurers..

While that sounds extremely logical and dictated by common sense, that may not be the case. First, many people will go to the doctor when they shouldn't if they believe it won't cost them anything. This will not only create additional costs, but plug up the flow of services (analagous to the court system being clogged with ridiculous lawsuits). Second, there are very few situations where data has shown that early detection actually reduces overall costs -- the advantage for early detection is making the patient more comfortable and extending life expectency, as opposed to saving money. Third, overuse of screenings and tests will create many false positives and unnecessary treatments and just the sheer increase in the number of tests provided will escalate the overall cost of healthcare.

Preventative dentistry has proven to be extremely effective, but not so medicine.

There is no simple solution. Insurance companies are not to be the blame for healthcare costs; hospitals and other providers are, because they are the ones that establish the high cost of providing care ($20 for a box of tissue, $4 per latex glove used, etc.). Insurance companies, the ethical ones, simply take those costs (usually negotiating deals to lower or limit payments) and pay them by collecting premiums from the pool of insureds. (20% of the insureds create 80% of the claims costs).

If the government controls, will it do like it has done with Medicare and limit the payment to the provider to 30% to 40% of what is billed? What effect will that have on the R&D costs, on the number of hospitals that are "teaching" or "research" hospitals?

Healthcare cost (not insurance cost, but the cost of medical services) is the single biggest, if not the only, personal or family expense that the consumer does not know in advance of receiving the service, let alone negotiate or shop for the best available deal. Most people who have received an x-ray will never even look to find the cost even after the service is complete. In this landscape, free-market principles really do not apply. Perhaps we need to get to the place where individuals shop for the price and level of service they desire, like they do with clothing or food or even car/homeowners insurance. For example, you fall and need an x-ray for your arm. You can choose provider A, your family doctor, and let him take an x-ray at his clinic and read it himself, cost $200, or Provider B, get sent outside for the x-ray and a radiologist to read it, cost $400, or Provider C, a orthopedic specialist, cost $800, or Provider D, the emergency room, cost $1,000. If you really don't believe it's broken, you choose A, if it is sticking through the skin, you choose D. The point is, you have the choice and you know the cost/benefit in advance. Sort of like free enterprise.

Part of the problem is that people expect health insurance to pay for all of their healthcare costs -- as opposed to homeowners or auto insurance where they understand the concept of self-funding the routine or minor costs. Look at dental, we know what the cost of routine services will be, but we pay insurance premiums to make it so there is no out-of-pocket for those routine services. That adds 10%-15% for administrative expenses to the cost to the individual, as opposed to just writing a check at the dentist's office.

If the government provides healthcare for everyone, what happens to the independent organizations, like Shriner's and so many others, that provide care to those in need?

People talk about buying across state lines. Small group insurers have sold coverage on a multi-state basis since the 1960s, at least. I know because I sold those products. The rates would differ and were higher in metropolitan areas than in rural areas. Benefits would differ depending on state laws that were applicable. But buying across state lines is not a new concept. Not if they mean by that that New Yorkers can buy a policy through Kansas at rates applicable to Kansas, then the entire system will collapse within three years. New York rates are probably 70%-125% higher than Kansas rates, but then so are wages.

There is no simple solution and I certainly do not pretend to know how to solve the problem(s). I just believe that the government is not the answer, at least at the Federal level.

[CBB_Fan]

I believe everyone should have health insurance, and that the total cost should be the same, whether we have some or none uninsured. The reason the cost doesn't change is that hospitals have to take care of uninsured patients and absorb any costs they can't collect. In Kansas they can take your house, and that's just not right. The cost of medical service to those who are inusred has to be artificially raised to provide the funds to treat those who can't pay.

If everyone has health insurance,costs should go down, because it's cheaper to treat problems early rather than wait for them to become serious and require a trip to the emergency room. That savings won't be realized because there will be enough taking free or low-cost doctor's visits when there is no medical need. Then the health industry (which is profit-driven) will find imaginative and creative ways to increase the costs to the insurers.

I was the sole wage earner in my family. Then I got cancer. Nasty cancer. I couldn't possibly get health insurance. I even tried getting insurance that would exclude coverage for cancer and that was turned down. I was also unemployable. No one was going to hire an uninsurable cancer survivor and try to put them on their insurance plan. Insurance for my wife would have been about $700 a month, which would have required me to sell my house.

Those two factors made me a big fan of Obamacare. You'd be surprised how an attitude can change when a government policy means you get to keep your house. My wife and I went 4 years with no health insurance. She was in her upper 50's and I was in my early 60's. Two people at that age with no health insurance is incredibly uncomfortable, but I had no choice.

CBB's explanation of how insurance really works and how Obamacare doesn't address the root cause of the problem is giving me a different outlook on Obamacare. I am skeptical of Trump's promise to repeal it when all he's said is he'll "replace it with something better". I've learned to be skeptical of that term. Better for who?

One more thing. When I got my wife on Obamacare, her unsubsicized premium was $500/month. That was for better coverage than the $700/month plan I found (after shopping about five carriers). Even with the double-digit increases this year, her premiums under Obamacare are still lower than they were in the open market 6 years ago.

I worked for CCH (a software developer in Wichita) for about 4 years. They had outstanding coverage for their employees. For $400/month I had no deductible and no co-pays when I got cancer. About 1/3 of their workers are "temporary" or "seasonal". That can last for up to 4 years for workers (even 12-month, 40+ hour workers) in that status. The pre-Obamacare insurance (through a temp agency) for those employees cost $200/month. It was a low-deductible and low co-pay policy, but it had one really unusual term. They would STOP paying when their total payouts reached $2,000 in a 12-month insurance cycle. You had to read the policy pretty carefully to find that clause.

Prior to Obamacare, insurance companies were doing some things that could be viewed as profits taking precedence over providing health care, or establishing an acceptable number of deaths to protect profits. There is a long history of government intervention whenever there is "an acceptable number of deaths" to protect profits. That led to EPA, OSHA, and now Obamacare.

Obamacare did some very important things, and I don't favor a flat repeal. Some ideas were simply necessary, such as the ban on coverage denials for pre-existing conditions. Others, like the Cadillac Tax started with the right thoughts but got the details wrong. One of things people don't even know about is Health Insurance Marketplaces, were marketplaces provide a set of government-regulated and standardized health care plans from which individuals may purchase health insurance policies eligible for federal subsidies. That's actually reasonably close to a good solution, but because many people didn't know about them and because of the massive technical problems early on the plans it can only be called a failure as is.

I'm absolutely not someone satisfied by the current state of healthcare, but I'm also not a flat out Obamacare detractor. I think civil discourse is incredibly important to the discussion, and both sides have arguments backed by facts. It is true that America has difficulties not faced in Europe, with an infrastructure that stretches over a much larger territory with much larger swings in cost of living . And we have a long and storied history of religious institutions aiding or founding hospitals. It is also true that in Europe state programs have been successful at reducing costs, but on the flip-side so have free markets.

I have pretty specific ideas on what I would do, and even more specific ideas on what we shouldn't do. Hospitals and insurance companies shouldn't hide costs. Insurance companies shouldn't deny coverage to pre-existing conditions. Etc.

I care about this pretty strongly for the same reason most people should. Everyone gets sick. Everyone knows someone with cancer, with heart disease. Everyone has accidents and injuries. Right now my aunt has a week, maybe two to live. Stage 4 pancreatic cancer, caught a week ago way beyond where anything could help (and she's from Europe and has European healthcare). My father has had a heart attack and skin cancer within the last year, my mother had a rare brain inflammation that about 20 years ago would have killed her within 2 months.

It should be priority #1 for both parties to solve this issue. Unfortunately the Democrats just think that a single-payer system would automatically solve everything and Republicans have mostly focused their efforts against an expansion of federal power, rather towards a free-market solution.

[jdshock]

It should be priority #1 for both parties to solve this issue. Unfortunately the Democrats just think that a single-payer system would automatically solve everything and Republicans have mostly focused their efforts against an expansion of federal power, rather towards a free-market solution.

Why would the employer problem still exist in a single-payer system?

[Aargh]

IIRC, Obamacare includes a mandate of 80% of premiums collected be spent on client services,leaving 20% for admin and proifit. Several insurers have been fined for exceeding the 20% limit.

An unintended consequence is that that cap creates a disincentive for insurance companies to reduce health care costs. Reducing costs means there is less money available for admin and profit. That concept is what led to an earlier thread I started about insurance carriers actually having an incentive to RAISE health care costs.

Right now is the perfect opportunity to do that exact thing. Negotiate a little softer, let the medical community bump up some prices, pass those costs on to consumers, and the entire nation will blame Obamacare for the increased premiums. Sometimes I think our political system, which is fueled by misinformation, misleading information, and out and out deception, is just an extension of how America does business any more.

[CBB_Fan]

Why would the employer problem still exist in a single-payer system?

This particular problem (employer subsidized healthcare) would likely be eliminated if each citizen received their healthcare from the government. But while employer subsidized healthcare is a problem, it is is a problem primarily because it requires a vast amount of money and isolates people from the root causes of high costs (no incentives for insurance companies to provide the best plans or healthcare providers to lower costs). Many issues could still remain in a single-payer system, as it still dumps a ton of "free" cash into the system and if badly set up it still wouldn't provide incentives for private businesses to lower costs.

Don't get me wrong, I am far from an opponent of single-payer. If everyone shared my views and accepted an increase in the government's role in this particular issue we probably would have gone to that type of system a long time ago. But single payer is not a one-size fits all panacea.

Single payer won't stop hospitals from overcharging by itself. Single payer doesn't stop ever escalating administrative costs. Single payer would likely come at the cost of increased taxes, and for MANY Americans would be more expensive (ie healthy, relatively well-off people with small plans will have to cover unhealthy, poorer people). Single payer won't fix the problem that doctors aren't paid according to the quality of their care (but instead, based mostly on their location and field of work). It won't stop our obesity issue, which drives many other illnesses.

There is a moral, and logical position that healthcare cannot be a right. Rights, in the American view, are rights to action without interference from government. Not rewards from other people. The right to life does not force your neighbors to clothe or feed you but prevents the government from enacting laws that stop you from clothing or feeding yourself. Regardless of your stance on this moral viewpoint, it is an argument that needs to happen in national view for the nation to come to grips with the possibility of socialized healthcare. You can't simply say it is immoral not to have it and force it through a populace where at a least a sizeable minority have this viewpoint, a dialogue needs to happen. This is the biggest downside to single-payer; we are a nation of laws with a history and culture that makes it less feasible than almost anywhere else on the planet.

Basically, what I'm saying is that employer-subsidized healthcare hides and masks these issues by separating health insurance from the free market. Eliminating the free market and employer subsidies may fix some of the problems but it isn't a total fix, and it comes at the cost of significant political capital. I think we'd be better served turning our current $600B in subsidies into a public option rather than going with a single payer model, but I could also see an argument for a minimal government plan with expanding free market access to plans.

Or, if we want to continue subsidizing private insurance we do it the right way.

[im4wsu]

An unintended consequence is that that cap creates a disincentive for insurance companies to reduce health care costs. Reducing costs means there is less money available for admin and profit. That concept is what led to an earlier thread I started about insurance carriers actually having an incentive to RAISE health care costs.

Insurance companies do not set health care costs. They set insurance premiums in order to pay the costs of healthcare plus admin and profit.

In fact, one of the major complaints about insurance companies is that they limit, or do not cover at all, certain procedures that policyholders avail themselves of. eamples are chiropractic care, cosmetic surgery, et cetera. These limitations certainly do not reflect insurance companies trying to raise premiums so they can have larger profits.

[Kung Wu]

What is only difference our healthcare has from ALL the effective healthcare systems (and by that, I mean healthcare payment systems) of the world?

I know, I know! We had massive government interference replete with price controls and regulations that started in 1965 that has begun it's very predictable death spiral of skyrocketing prices and shortages in medical supply, but unique to us is that we ALSO have a massive economy unlike the rest of the world coupled with a previously very affordable and efficient free market system that so far has been able to keep that ugly beast of an eminent train wreck launched in 1965 chugging down the track instead of derailing altogether.

We spend a vast amount of money, around $600B on employer healthcare subsidies.

I believe your premise and/or understanding of the CBO report is broken. (It's also possible you have access to a later report that I am not aware of, but I will assume your information is coming from an article that is pointing to the March 2016 CBO Report)

We "spend" $660B on ALL health insurance for people under 65, INCLUDING medicaid, and NOW OBAMACARE (we don't really "spend" it but I will explain that below).

Anyhow, here is how the $660B breaks down [source]:

1) $268B tax breaks for employers and employer based health insurance
2) $279B are subsidies for Medicaid and CHIP
3) $110B are Obamacare subsidies

Now let's compare how much coverage we get for our "spend":

1) Employers help cover 155 millions workers. That's $2,330 per person. Nice!
2) Medicaid helps covers 68 million low-income Americans. That's $4,102 per person. OUCH!!!
3) Obamacare helps covers 23 million people. That's $4,782 per person. WTF?!!?

Now note in number 1) the government isn't actually "spending" a damn thing. It costs the tax payers NOTHING. NADA. ZILCH. The government is just not getting its greedy hands on $268B of revenue they would like to collect.

But 2) and 3). That's where we take it in the shorts and are getting taxed and burned to prop up a price control and heavy-handed regulatory system that is crushing our health care in this country.

This problem isn't about employer based health insurance. It is clearly a price control and government interference problem. We have discussed ad nauseum that Obamacare was simply going to end up pouring gas on the raging fire of medicare/medicaid so nobody should be surprised why prices are continuing to skyrocket -- and skyrocketing even faster for that matter.

It is the equivalent of the government taking $600B out to a pasture and burning it.

I think I have made my point, but only the portion of the $660B spend that is spent on Medicare and Obamacare are economic entropy. The portion attributable to employer based health is not "spent" or even "lost" money in any way shape or form.

----

In 1943, we doubled down and made healthcare benefits tax-free, and that is when we entered the event horizon.

That is not when we entered the "event horizon".

By the 60s it had completely pervaded the nation.

Yes, by 1960 it surely had -- and _without a single acceleration in government spend on GDP!_. None ... at ... all. Here is my post from October of 2013:

Combined state + federal spending as a percent of GDP, demonstrating pre-government interference levels with a slope of about 1 percent/70 years versus a slope of about 6.75 percent/45 years!



The government's own chart clearly shows that health care spending by our governments is approaching other country's spend per GDP _by itself_ -- forget the private sector. It also clearly shows that slope began in the late 1960's/early 1970's. That's to cover 30% of the population! In other words 7% of our GDP, which is entirely under the government's regulation, is spent on health care to cover 30% of the population. And that coverage doesn't provide equal access to health care, by the way.

---

So we are looking at those under 65 that don't need Medicaid. If we look at that age range, we can see the the average yearly cost of healthcare for those under 65 come to $2500 for women and $2300 for men.

I am suspicious of your numbers, but I don't fully understand if you are talking about premiums or actual spend on healthcare. Regardless, from my table above the employer insured portion of subsidies is BELOW the "average yearly cost of healthcare", while the government packages are WAY above the average.

This is the reason Obamacare was doomed to fail, . . .

Obamacare was doomed to fail because it's a monstrosity of a law that simply poured gasoline on an already existing fire. It is propped up on a nasty set of government interference enacted in 1965.

[Aargh]

Insurance companies do not set health care costs. They set insurance premiums in order to pay the costs of healthcare plus admin and profit.

In fact, one of the major complaints about insurance companies is that they limit, or do not cover at all, certain procedures that policyholders avail themselves of. eamples are chiropractic care, cosmetic surgery, et cetera. These limitations certainly do not reflect insurance companies trying to raise premiums so they can have larger profits.

I believe insurance companies do set medical costs. That's the source of all the networks that are involved with the various insurers. Insurance providers work out what they will pay for the services the medical industry provides. If a facility/doctor agrees to those prices, then that facility/doctor is included in that insurers network.

Hospitals and doctors set their fees. That's the amount you always see on medical bills as the charge for the service. There's always another amount which is what they've agreed to charge through the insurance carrier. Then there is the amount the insurance company paid, which leads to what you still owe.

If a hospital is going to charge $3 for an aspirin, but your insurer is only going to pay $2 for that aspirin, then the $3 charge is meaningless. That's not the actual charge for the aspirin. The actual charge is the $2 negotiated amount. Of that $2, the insurer gets to keep $.40 and the $2 cost is calculated into your premiums.

If that same aspirin is charged at $2.50, then the insurance provider can keep $.50 and the $2.50 cost of the aspirin will be calculated into your insurance premium. Your premiums go up so the insurance provider can increase their profits, even though the actual manufactured cost of the aspirin and the cost of the aspirin to the hospital didn't change.

The price the medical industry sets is a little like going to Penney's and seeing a dress shirt that's normally $42 on sale for $36. It makes you think you're getting a good deal. In reality, no one ever paid $42 for that shirt. It wasn't selling at $32, so they raised the price to $42 and put it "on sale" for $36. And you pat yourself on the back for waiting until the shirt went "on sale".

[Kung Wu]

If a hospital is going to charge $3 for an aspirin, but your insurer is only going to pay $2 for that aspirin, then the $3 charge is meaningless. That's not the actual charge for the aspirin. The actual charge is the $2 negotiated amount. Of that $2, the insurer gets to keep $.40 and the $2 cost is calculated into your premiums.

The negotiated price in your example is a single event that does not affect future retail prices. The next time that same doctor bills that or any other insurance company, it will again be at the full retail price, which may or may not be negotiated down again. The doctors have been set the retail price, and the insurance companies are very clearly incentivized to negotiate down the price to reduce their expenses and maximumize profit. Therefore the notion that they want prices to increase is absurd.