What was that economist’s explanation for the massive increase in premiums in 2017-2018 then? Wasn’t it due to Trump’s decision to stop cost-sharing reduction payments to insurers? KFF explanation
Isn’t that argument just against progressive taxation rather than efficient government spending? Basically, via higher tax rate for high incomes, you “steal” from them to provide benefits for lower income households.
Not a fan of ARP Act but that seems to me to be a different argument from advocating being more judicious/efficient with the spending of tax dollars for healthcare.
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Sure you can steal my money and make the thief’s lifestyle more affordable, but my point was doing so at a national level is bound to fail. For the very poor, ala Medicaid, sure you can raise tax money and subsidize health care but that’s because it’s a small group so the total cost spread over the rest of the population is managable. But you can’t do this for the middle class, because there are just too many of them. The Evil Rich are just a rounding error and a progressive bogeyman, not a sufficient source of fund to actually bankroll Mamdani’s or AOC’s socialist dreams.
Remember when CA wanted to solve healthcare by doing single-payer for everyone? Only it turns out it would cost $400B/year and the whole state budget is $300B/year.
Every government solution to a “problem” for the average taxpayer is like this. The government can’t just spend their way to prosperity or we’d already be rich. But rich means more than most of everyone else, and some people still can’t grasp that everyone can’t be above average.
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Which is why I highlighted administration. The government pork and waste would be in the administration. Fraud could occur just as easily in a privately-run program.
Here is the podcast: Is Obamacare doomed without extended subsidies? : The Indicator from Planet Money : NPR. Relevant quotes:
From this I concluded that the risk pool did not increase when the tax penalty ended. I’m now thinking that’s not entirely true, perhaps the risk pool increased, just not enough to kill the program.
I’m not a huge fan of all of their dreams, only some maybe, but let’s be honest – the rich are the only possible source of funds. You can’t take money from people who do not have it. Some other countries that have a flat income tax also have much lower income inequality, so a flat tax works for them, but it couldn’t work for us.
But I get your point, there’s diminishing returns. Can’t take all of the rich people’s money either.
but a private program has much stronger incentives to stop fraud, as it will get in the way of shareholder returns and executive bonuses, perhaps even leading to layoffs and bankruptcy if the losses aren’t controlled. Surely it wouldn’t be that hard to stop a 10-20% fraud rate for a fraction of that cost if the people running the program were qualified and cared about efficient administration.
For a government program, qualified executives are not required and they can just say “costs rose, give us more money” and you end up with massive budget overruns and no accountability like the Boston Big Dig or the CA Train to Nowhere.
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At some point dont we need to stop and rethink the notion that everyone is entitled to all medical care? Does a 2 pack a day smoker truly have the right to expect someone else pay for their cancer treatments? Is it really our responsibility to figure out how to pay for it?
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Basically the floor on the risk pool that stopped the total death spiral of the ACA plans came from the taxpayer subsidies. If you were kinda poor, 1-2x poverty level, you would get very highly subsidized / very cheap health insurance via the ACA marketplace. Sure it wasn’t the best, but it was really cheap, net to you (but not net to the taxpayers), so many of those people signed up even if they were normal or healthy. The ACA expansion during covid did something similar but at higher income levels, although the subsidies were smaller.
But in the end, when you have many of your people in the risk pool there because they have expensive health conditions, the pricing of the “insurance” becomes more or less “charge what it costs” plus some extra for risk and profits, which is why a family’s insurance can run $30k/year and still have to pay the first $5-10k OOP before they get any actual coverage. Obviously a family with a median ($80k) or lower income is going to have a hard time spending nearly half their money on healthcare via ACA. Of course if they work for a normal full time employer (instead of being self employed or unemployed so they can’t get workplace coverage) they can get better group healthcare and at much lower costs because the positive selection bias involved in groups of people healthy enough to work full time makes a big difference.
I was just reading this today:
https://thehill.com/homenews/5608026-oz-trump-administration-aca-subsidies-extension/
Health insurance premiums for 2026 are projected to be $50 per month for the lowest-cost plan, an increase of $13 relative to this year, before accounting for the potential expiration of the subsidies,
and
4 in 5 HealthCare.gov customers were able to find health care coverage for $10 or less per month for plan year 2024 after subsidies.
The 10-20% fraud would be transferred toward the cost of private administration of the program, including shareholder returns and executie bonuses. More if profits are not capped via legislation. It won’t save any money at the end of the day and will very likely cost more.
I thought we figured out this one with federal and state excise taxes on tobacco products.
Only if that tax money is paying for the smoker’s medical costs.
But the same holds true for anyone. Are we obligated to figure out how to pay for Elderly Scripta’s expensive treatments because he wants to live a few more months? Or should the cost burden of desperate attempts to extend life fall on the person making that decision?
It probably should fall on the person making that decision.
These are great examples for your point, but it’s not true for everything. We should be obligated to pay for expensive treatments for treatable conditions. I suppose ideally it would be for things they didn’t knowingly cause themselves, I just don’t know if we could determine it so narrowly in every scenario.
Not sure if making a distinction between elderly and young makes sense either. If an organ transplant would extend an 80 year old’s life by 5 years, maybe it’s OK. If a doctor agrees to it. Doctors are apprehensive about these kinds of things too, they won’t recommend treating frail patients with expensive treatments that have a low chance of success and a high chance of causing harm.
It goes beyond that. My adoptive daughter’s grandmother recently passed away in her home. That’s where she chose to be as the end approached, many others in her condition are hospitalized. Being in a hospital that day could’ve likely delayed her death, but by a matter of days if not hours. Should society be responsible for that extra expense, that, frankly, are mostly bourne out of an individual’s fear and vanity?
My point is, at some point people need to start owning choices, include health decisions, rather than pass the buck claiming it’s a right. If we cannot mandate a person’s diet to promote better health, it doesnt seem right being stuck with the bill when that person eats themselves into a diabetic coma.
(And no, I’m not trying to be cold and heartless, but there’s no other way to discuss the topic without coming off as heartless.)
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That is absolutely not true. First, even if all of the fraud prevention savings were spent on private fraud surveillance and bonuses and dividends, I would claim that this is much better public policy to reward investors with dividends and good fraud investigators with salaries and good executives with bonuses than reward fraudsters for stealing money.
Second, efficiency is rarely fully as expensive as the costs it tries to prevent, which is why companies are always trying to improve efficiency! So I suspect there would be surplus gains from properly incentivized fraud prevention, and in a free market with competitive pressures, some of those gains might be used to reduce the healthcare premiums to gain market share for this more efficient insurance company vs others. With the government, there’s no accountability and no incentives for efficiency or waste prevention, which is why everything costs so much.
As much as I’d love to inject more personal accountability to the costs, I think it’s very difficult to implement. Taking the example of lung cancer treatment costs for a smoker - which is one of the more clear cut causation relationship between behavior and illness, who draws the line where on whether this was essentially a self-inflicted wound and thus the patient should bear more responsibility for or is it unforeseeable health issue and society bears more of the costs? Is the line at 1 pack/day, 2 packs/week, for how many years if patient quit smoking after smoking for 15 years? how do you account for vaping instead of smoking? And smoking-related diseases is one of these things you actually factor the healthcare costs by adding a tax on the product itself.
But if tackling this feels somewhat tricky, then consider the same line drawn for diabetes or heart disease and all related costs including dieting ones. Or mental health. Or anything linked to bad nutrition. Factoring personal financial responsibility vs. societal costs of healthcare seems insanely difficult to accomplish fairly.
Some of this - at a very modest level - is already implemented by Medicare advantage plans where the insurer has some say in whether to cover some procedures and when patient should pay for them, and which healthcare providers have reasonable costs the insurer is willing to cover. It’s cheaper than Medicare supplement but it’s also the #1 thing people hate about Medicare advantage plans. And it’s not remotely in the same galaxy as going into not paying for healthcare required as result of patients’ unhealthy behavior. So between complexity of fair implementation and general dislike of people to be held accountable for their actions, it’s hard to see this remedy being successfully implemented in this country.
The only way I could see this somewhat easily implemented would be to have medical exam underwriting for health insurance policies. These are common for life insurance policies and nobody complains about premiums being different based on health status. Same with Medicare supplement outside of guaranteed issue rights. Even if the underwriting was not as thorough and focused only on things people can control more like smoking, cholesterol, blood pressure, BMI etc … would be an improvement over our completely health-blind system.
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In general, I agree. But in which case we need to start accepting that insurance costs are going to be ‘excessively’ high no matter what we do, because a huge bulk of those costs are the consequences of individual person choices and not something we can just legislate our way out of. Shaving 10% off a $200k cancer treatment by eliminating the fraud/profits/waste/whatever isnt going to have a material effect on consumer-level insurance premiums, the only way to significantly lower premiums is to offload the cost of the treatment itself.
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Sounds reasonable. Mandating a healthy diet doesn’t sound workable, but making it acceptable (again) to criticize and make fun of people’s unhealthy habits might not be such a bad idea 
. Also banning unhealthy things / additives / chemicals at a much faster pace than we’ve been doing would be nice. I’m with RFK Jr on fake sugars in coke (and I think he mentioned food coloring?), it’s so stupid.
But my point is that there are also health issues that cannot be attributed to the individual’s choices. In that case people should be able to pass the buck and claim it as a right. I.e., people should not be dying of curable cancer just because they’re poor… or going broke even if they could afford it.