U.S. health insurance is a complex nightmare



It is designed to screw and bankrupt the uninsured. That is it. If a treatment costs $30,000, is billed for $100,000, and the uninsured person has $40,000 in assets that can be seized, then the hospital wins. And even if they only have $20,000 to seize, you still have set an example for others to fear. The US has a punitive healthcare system (just like it has a punitive educational system).


Having only lived in countries with socialized medicine (of slightly different flavours - New Zealand, Australia, UK and Canada), I am often bewildered by the fear that many 'murkans seem to have of these systems. None of them perfect, but they seem to work well enough. And demonstrably much cheaper than the US system.


That is because you don’t have insurance companies colluding with hospitals. Once that happens, you create a perfect storm. It would be like oil companies colluding with car companies to keep gas mileage down or to stop electric cars. Oh wait! You can always put your ‘trust’ in capitalism–the most efficient economic system.


When they were debating the health care bill,someone posted a wonderful blog post explaining all the intricacies of the hospital billing system and how, really, those of us who are insured are ALREADY paying for those who are not, because the rate if you have insurance is very different than if you do not have it. I wish I had bookmarked the post because it was the only thing that ever made any sense of all the billing terms they use. BUT - the uninsured person will not pay $100,000; they will pay less than the insured person will although on the billing it looks like the insured person is getting some kind of “discount.”

I am getting really angry about how insurance works. I have a niece whose parents both have jobs and yet, because she is autistic she cannot get a lot of the services she absolutely needs, or her parents have to drive long distances to get to the preferred providers that charge to the insurance instead of to people who are reasonably close by. My sister in law spends so much of her time calling the insurance company and begging and pleading for help, which she often doesn’t get. AND she is very savvy about how to work system because it’s sort of what she does for a living but they are still having to beg for funds from their friends and family to get care provided for their daughter. The last time I saw my brother and his family, his wife was having positive FANTASIES about having a job with a particular brand of insurance that she had determined to be the best one. Really sad to me that we as a country cannot provide proper care for people needing a lot of ongoing services. No one should be bankrupted because they needed a heart surgery, or many therapy sessions, in order to stay healthy.


It’s designed to extract maximum revenue from each customer. Negotiating with an uninsured individual on a serious problem is the best case for the healthcare provider. The individual typically has virtually no information about the cost, typical price, or relative quality for a procedure in general or from a specific provider, they or their loved one will suffer or die without it, and there is usually an element of time pressure.

These are some of the reasons why the “free market” will not provide a morally acceptable healthcare system.


Not necessarily.

They may pay less, or more. Its impossible to say in general. Depends on the procedure. Depends on how much money the provider thinks they can get from the patient. Depends on if the provider opts to do the procedure at a loss for humanitarian or PR reasons.

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I was disappointed and bewildered when “Obamacare” (don’t mean to denigrate anything by namecalling - but don’t know what else to call it) required contracts with private insurance companies. I really don’t understand how that helps control costs. It’s worse than the fox being in the henhouse, it’s throwing tied up chickens down the foxhole.

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This sort-of reminds me of getting my first job in America and having HR talk me through my insurance options:
“So the Premium is what I pay, of course.”
“Yes, that’s right.”
“So what’s the co-payment?”
“Oh that’s what you actually pay, before the insurance company pays out.”
“Oh ok, so what’s the deductible?”
“Oh that’s the part you pay.”
“So wait - I pay the Premium, the Deductible, and the Co-Payment? Does the insurance company actually pay anything?”


Strictly speaking, those are reasons why a ‘free market’ (as conventionally defined) isn’t even likely to exist in healthcare (beyond aspirin and bandages and other petty retail items). A hypothetical ‘free market’ healthcare system would certainly let poor people suck it up and die; but it would have crazy things like ‘actual prices you can see’ and ‘low barriers to entry’. What we presently have manages to combine some of the vices of a hypothetical free market structure with a dose of pure insanity.


As an American living in the UK all I will say is MAN, I LOVE THE NHS!!


I don’t think it does entirely require private insurers, but the federal government isn’t going to create a public insurance plan (beyond medicare and the VA). The rightmost 75% or so of our elected representatives don’t want such an option to exist.

That decision has nothing to do with costs, of course. Its about ideology and campaign contributions.


Obamacare isn’t the solution, it is a compromise. Sadly, it doesn’t bring US healthcare up to the level of the rest of the developed world, but it does still have a lot of improvements, including the pre-existing condition coverage, limits to expenses, and the required insurance company investment in healthcare vs. profits. With Obamacare, at least we shouldn’t be seeing entire divisions of insurance companies devoted to attempting to deny payments to people covered by insurance and using legal tricks to push them into bankruptcy. And we shouldn’t be seeing people who can afford insurance being denied due to previous conditions. There will still be massive collusion, but I hope never to hear a doctor say again “this is the recommended treatment, but let me check first with your insurance to see if they will cover it”.


Insurance in general, where you are betting against companies that know the odds and set the price accordingly is a no-win (on average). But you are right that health insurance is particularly egregious in this regard. Individuals have no way of correctly estimating risk in terms of either likelihood or consequence (cost), so are forced to make even more uninformed decisions. The two exacerbating factors with healthcare are that the maximum costs are massive (life-ruining) and there is always an emotional aspect to it.

“If you can’t identify the sucker at the table, then it is you.”

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The idea as stated was to make it like a union. If enough people opt-into it, they have a much higher negotiation power.

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There’s several factors I can see involved.
The US healthcare system is the product of government intervention and not (as many on the left and right like to claim) free markets.
Historically there were many mutual organisations which provided healthcare (and other services) to their members. These were grassroots organisations, but under pressure from the AMA (and undoubtedly big insurance and pharma) they were largely driven out of existence to protect the income of Doctors.
Then, during WWII there were wage caps, so employers started offering health insurance in lieu of pay. The government encouraged this, it creates a more servile workforce - you don’t dare make a fuss because you’d lose that important health insurance.

High prices are due toat least two factors - patents which massively inflate costs and encourages expensive research into areas of high profit and the lack of a monopsony, which in countries which have a single health service provider drives down costs in many drugs. That means the US consumer pays more to maintain pharmaceutical profit.
What the natural price of health care might be is unclear - the market is so severely distorted on a global scale we have no way to find out.

Quite frankly, whilst I think the NHS sucks in many cases (getting good treatment is a lottery, many hospitals are sub standard, there’s a surpless of managers etc), I wouldn’t want the US system either, because that is a massive basket case as well…

Surely there must be a better way than both of these?

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Better still is to have the insurance offered at a fair price with no negotiation needed. This is what socialised systems attempt to do.

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When I think about the fundamental functions of government, I think of the provision of services focused on security, education, basic infrastructure and health. Exclusion of health from this list makes no sense to me. Arguably, the other three are also slowly but surely being removed from the remit of government as well.


Death Panels!

Didn’t you get the memo?

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For several conditions, I believe they can still deny treatment for any treatment they feel is “experimental”. Given the difficulty for proving what is evidence based and what isn’t, they can deny a lot of treatments.

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