In 2006, the Commonwealth Fund, one of the country’s prominent health-care foundations, published an important study with the ominous title, “Squeezed: Why Rising Exposure to Health Care Costs Threatens the Health and Financial Well-Being of American Families.” It’s a headline as true today as it was 17 years ago.
The laws of profit from health services have changed over the years since Kaiser started when Nixon was in office, as have the laws of profit taking by insurance companies. Currently the prime mover of healthcare profit taking is investments by public and private equity, where the real profit lies. Private equity controls primary care, emergency room physicians, radiology, physical therapy, nursing homes, and management, as well as public equity and the free flow of capital around the world controls most of the major entities [insurance, pharmaceuticals, construction] as well as purchasing of conglomerates. All of this soaks up profit from what is simply a for-profit system without rules.
Is that a surprise? Ethics have left the building, hiding behind sparkling advertisements.
In part, the medical economists of the 90s were complicit in rising deductibles and copays - they promoted the concept of moral hazard (their version of “skin in the game”) as a way to limit overutilization. The insurers took that ball and ran with it - and they were more vicious in the application of these utilization taxes than any naive economist could have predicted. Now, the insurers continue to turn up the volume on these levies and consumers continue not to scream.
And yet...healthcare expenditures as a percentage of GDP continue to rise, healthcare providers income continue to decrease as compared to the 1970's. So who is getting rich?? Insurance conglomerates? Big Pharma? Where is the money going in the most expensive healthcare system in the world?
I have great respect for Trudy and all her writing over the years. However, I think she makes a mistake to effectively blame all the medical debt on insurers.
I was a broker for many years and I sold health plans to employers. We would generally show the employer a variety of plans with both high and low deductibles. In recent years, more and more employers chose a high deductible option -- because it kept a lid on premiums, at least temporarily.
This was not a conspiracy by insurers to reduce their obligations. Instead it was a desperate choice by employers to control rising premiums.
Trudy is not correct to say that it is common for families to incur medical costs over $15,000 before their insurance pays a dime. Virtually no deductibles are that high and normally there is an out of pocket maximum that comes into play. Also insurance claims are being denied more often and the liabilities are that high and more.
Respectfully, is COMPLETELY CORRECT that deductibles and OOP max can be well over $15,000. 2023 maximum out-of-pocket for ACA-compliant plans (HHS) from CMS.gov:
I agree that out of pocket costs CAN be higher than $15k and I know that's the point you were addressing, but is it as common as the author asserts here?
"It is now common for families to shoulder as much as $19,000 to $20,000 a year in medical expenses before their insurance pays a dime"
This is hyperbole. Most plans in most markets offer pre-deductible copays that do pay medical expenses and also, just because the out of pocket maximum can be $9100 per person or $18,200 for a family, does not mean the deductible is not lower than that. Most plans do offer deductibles of less than $9100/$18200 individual/family.
Furthermore, most households, if they reach their out of pocket maximum at all, are reaching their individual out of pocket maximum. Most individual market ACA/Marketplace plans and employer/group plans offer embedded deductibles which mean the only way they reach that family $18200 out of pocket maximum is if more than one person in their household reaches their individual $9100 or if they incur $18200 in out of pocket costs across the household. This, again, is not a common occurrence for most households.
Whenever I see language like this acting like it's common for families to reach the family out of pocket max it causes me to lose faith in the credibility of the author. The health insurance and healthcare system has plenty of issues in need of fixing without the need to exaggerate like this.
The laws of profit from health services have changed over the years since Kaiser started when Nixon was in office, as have the laws of profit taking by insurance companies. Currently the prime mover of healthcare profit taking is investments by public and private equity, where the real profit lies. Private equity controls primary care, emergency room physicians, radiology, physical therapy, nursing homes, and management, as well as public equity and the free flow of capital around the world controls most of the major entities [insurance, pharmaceuticals, construction] as well as purchasing of conglomerates. All of this soaks up profit from what is simply a for-profit system without rules.
Is that a surprise? Ethics have left the building, hiding behind sparkling advertisements.
In part, the medical economists of the 90s were complicit in rising deductibles and copays - they promoted the concept of moral hazard (their version of “skin in the game”) as a way to limit overutilization. The insurers took that ball and ran with it - and they were more vicious in the application of these utilization taxes than any naive economist could have predicted. Now, the insurers continue to turn up the volume on these levies and consumers continue not to scream.
And yet...healthcare expenditures as a percentage of GDP continue to rise, healthcare providers income continue to decrease as compared to the 1970's. So who is getting rich?? Insurance conglomerates? Big Pharma? Where is the money going in the most expensive healthcare system in the world?
Alliances could focus on churches which are buying medical debt in order to support a #JubileeJesusEconomy
https://pastebin.com/ZH2w0WH1
https://hartmannreport.com/p/is-scientific-racism-why-america-784
#theoeconomics
🏴☠️Private Equity🏴☠️
I have great respect for Trudy and all her writing over the years. However, I think she makes a mistake to effectively blame all the medical debt on insurers.
I was a broker for many years and I sold health plans to employers. We would generally show the employer a variety of plans with both high and low deductibles. In recent years, more and more employers chose a high deductible option -- because it kept a lid on premiums, at least temporarily.
This was not a conspiracy by insurers to reduce their obligations. Instead it was a desperate choice by employers to control rising premiums.
Trudy is not correct to say that it is common for families to incur medical costs over $15,000 before their insurance pays a dime. Virtually no deductibles are that high and normally there is an out of pocket maximum that comes into play. Also insurance claims are being denied more often and the liabilities are that high and more.
Respectfully, is COMPLETELY CORRECT that deductibles and OOP max can be well over $15,000. 2023 maximum out-of-pocket for ACA-compliant plans (HHS) from CMS.gov:
Self-only: $9,100
Family: $18,200
https://www.cms.gov/files/document/2023-papi-parameters-guidance-v4-final-12-27-21-508.pdf
I agree that out of pocket costs CAN be higher than $15k and I know that's the point you were addressing, but is it as common as the author asserts here?
"It is now common for families to shoulder as much as $19,000 to $20,000 a year in medical expenses before their insurance pays a dime"
This is hyperbole. Most plans in most markets offer pre-deductible copays that do pay medical expenses and also, just because the out of pocket maximum can be $9100 per person or $18,200 for a family, does not mean the deductible is not lower than that. Most plans do offer deductibles of less than $9100/$18200 individual/family.
Furthermore, most households, if they reach their out of pocket maximum at all, are reaching their individual out of pocket maximum. Most individual market ACA/Marketplace plans and employer/group plans offer embedded deductibles which mean the only way they reach that family $18200 out of pocket maximum is if more than one person in their household reaches their individual $9100 or if they incur $18200 in out of pocket costs across the household. This, again, is not a common occurrence for most households.
Whenever I see language like this acting like it's common for families to reach the family out of pocket max it causes me to lose faith in the credibility of the author. The health insurance and healthcare system has plenty of issues in need of fixing without the need to exaggerate like this.