Comments on: Health Care Financing Reform: (73) The Senate Bill Will Reduce the Cost of Non-Group Health Insurance http://www.ohioverticals.com/blogs/akron_law_cafe/2009/11/health-care-financing-reform-73-the-cost-of-non-group-health-insurance-will-be-reduced-for-the-middle-class-if-the-senate-bill-is-enacted/ University of Akron School of Law Blog Thu, 18 Mar 2010 20:05:07 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Dave http://www.ohioverticals.com/blogs/akron_law_cafe/2009/11/health-care-financing-reform-73-the-cost-of-non-group-health-insurance-will-be-reduced-for-the-middle-class-if-the-senate-bill-is-enacted/comment-page-1/#comment-2783 Dave Wed, 02 Dec 2009 00:41:32 +0000 http://www.ohioverticals.com/blogs/akron_law_cafe/?p=4023#comment-2783 By now, you probably know that I view all these rosy predictions as pie in the sky. They are counter intuitive, the government that can't do anything right will suddenly get smart and efficient. The parent of a 16-year old will tell you that you don't hand the keys over before some responsibility is shown. I am however really pleased to see that you were on the Politico website. I hope it is not because the cat jumped on your keyboard. ;-) What about the 24 year old who chooses not to have insurance? His costs are going up infinitely. One of the bills says the bills says his insurance can't be less that 1/2 of the cost of an elderly persons plan. The other bill says it can't be less than 1/3 the cost. This person is subsidizing others and at rates that are not even actuarialy sound. By now, you probably know that I view all these rosy predictions as pie in the sky. They are counter intuitive, the government that can't do anything right will suddenly get smart and efficient. The parent of a 16-year old will tell you that you don't hand the keys over before some responsibility is shown.

I am however really pleased to see that you were on the Politico website. I hope it is not because the cat jumped on your keyboard. ;-)

What about the 24 year old who chooses not to have insurance? His costs are going up infinitely. One of the bills says the bills says his insurance can't be less that 1/2 of the cost of an elderly persons plan. The other bill says it can't be less than 1/3 the cost. This person is subsidizing others and at rates that are not even actuarialy sound.

]]> By: Professor Will Huhn http://www.ohioverticals.com/blogs/akron_law_cafe/2009/11/health-care-financing-reform-73-the-cost-of-non-group-health-insurance-will-be-reduced-for-the-middle-class-if-the-senate-bill-is-enacted/comment-page-1/#comment-2776 Professor Will Huhn Tue, 01 Dec 2009 14:06:07 +0000 http://www.ohioverticals.com/blogs/akron_law_cafe/?p=4023#comment-2776 The CBO report out today contains more specifics - basically, the cost of health care is reduced 7-10% by pooling the purchasing power of people in the non-group market. 83% of people are unaffected by the change - but most of the rest get better health care at a lower overall cost. See my entry for today, number 76 in the series. Basically, under our current system it wouldn't be cost effective to purchase health care insurance for the tens of millions of people who are uninsured or underinsured - it's necessary to combine their purchasing power through an exchange. Even with that 7-10% reduction individuals earning less than $50,000 per year and families of four earning less than $100,000 would find it difficult to purchase insurance through the non-group market, so there are federal subsidies for that. About half of money for the subsidies comes from eliminating the 14% premium paid to Medicare Advantage plans enacted during the last administration and other savings in Medicare, and about half comes from taxes on very high income individuals. The Medicare savings should be enacted anyway - they constitute a boondoggle. Of course, you don't have to spend that money purchasing health insurance for the poor. You could use that money shore up the rest of Medicare. Similarly, people can reasonably disagree about whether we should tax individuals earning over $500,000 and families earning over $1,000,000 annually to help pay these subsidies. I'm all for it for a couple of reasons. I see other societies racing ahead of us because our population is not healthy enough. The statistics are pretty clear - yes, we can cure certain forms of cancer that other countries can't, but we have tens of millions of people going without basic health care because they can't afford it. If we leave 10% of our country behind (the uninsured) or 30% (uninsured plus underinsured) we simply aren't going to have enough healthy people to compete with other advanced countries - and even some developing countries. Imagine if we closed all the public schools and said, all right, people, it is up to each family to fund education for its own children. That might appeal to certain individualistic ideologies, but as a society we would quickly drop out of the global economic competition. In fact, we have to improve public education markedly if we are going to have an educated populace. The same thing is happening with health care. Right now, we are General Motors and the rest of the world is Toyota. Who do you think is going to win that competition? The CBO report out today contains more specifics – basically, the cost of health care is reduced 7-10% by pooling the purchasing power of people in the non-group market. 83% of people are unaffected by the change – but most of the rest get better health care at a lower overall cost. See my entry for today, number 76 in the series.
Basically, under our current system it wouldn't be cost effective to purchase health care insurance for the tens of millions of people who are uninsured or underinsured – it's necessary to combine their purchasing power through an exchange. Even with that 7-10% reduction individuals earning less than $50,000 per year and families of four earning less than $100,000 would find it difficult to purchase insurance through the non-group market, so there are federal subsidies for that. About half of money for the subsidies comes from eliminating the 14% premium paid to Medicare Advantage plans enacted during the last administration and other savings in Medicare, and about half comes from taxes on very high income individuals.
The Medicare savings should be enacted anyway – they constitute a boondoggle. Of course, you don't have to spend that money purchasing health insurance for the poor. You could use that money shore up the rest of Medicare. Similarly, people can reasonably disagree about whether we should tax individuals earning over $500,000 and families earning over $1,000,000 annually to help pay these subsidies.
I'm all for it for a couple of reasons. I see other societies racing ahead of us because our population is not healthy enough. The statistics are pretty clear – yes, we can cure certain forms of cancer that other countries can't, but we have tens of millions of people going without basic health care because they can't afford it. If we leave 10% of our country behind (the uninsured) or 30% (uninsured plus underinsured) we simply aren't going to have enough healthy people to compete with other advanced countries – and even some developing countries.
Imagine if we closed all the public schools and said, all right, people, it is up to each family to fund education for its own children. That might appeal to certain individualistic ideologies, but as a society we would quickly drop out of the global economic competition. In fact, we have to improve public education markedly if we are going to have an educated populace.
The same thing is happening with health care. Right now, we are General Motors and the rest of the world is Toyota. Who do you think is going to win that competition?

]]> By: larry d. http://www.ohioverticals.com/blogs/akron_law_cafe/2009/11/health-care-financing-reform-73-the-cost-of-non-group-health-insurance-will-be-reduced-for-the-middle-class-if-the-senate-bill-is-enacted/comment-page-1/#comment-2761 larry d. Sun, 29 Nov 2009 13:05:37 +0000 http://www.ohioverticals.com/blogs/akron_law_cafe/?p=4023#comment-2761 I don't see much if any savings or reduction in cost here, just that someone else is paying. I don't see much if any savings or reduction in cost here, just that someone else is paying.

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