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Obamacare Is Faltering for One Simple Reason: Profit

phlatsphilphlatsphil Posts: 14,632 AG
Here ya go.... this should explain it.


THERE HAVE BEEN dozens if not hundreds of news articles about Aetna leaving the Affordable Health Care Act’s online marketplaces in 11 states, and whether this signals serious problems for Obamacare down the road.

But none of them have truly explained that what’s happening with Aetna is the consequence of a flaw built into Obamacare from the start: It permits insurance companies to make a profit on the basic health care package Americans are now legally required to purchase.

This makes Obamacare fundamentally different from essentially all systems of universal health care on earth. (There is one tiny exception, the Netherlands, but of the four insurance companies that cover 90 percent of Dutch citizens, just one is for profit.)

Why does this matter? The answer is complicated but extremely important if Obamacare is going to avoid collapsing.

Insurance companies like Aetna complain that fewer young people than anticipated are buying insurance on the exchanges. The Obama administration was aiming at over 38 percent of the exchange pool being between 18 and 35 years old, but right now that number is just 28 percent. That means insurers have to pay more in health costs for customers who are older and sicker than anticipated, making those insurers more likely to abandon the exchanges. So a big swath of the U.S. now has just one insurance company offering Obamacare plans, and one county in Arizona has none.

The failure of young people to sign up in expected numbers is connected to the weakness of the Obamacare mandate. The amount that people who don’t buy health insurance must pay in penalties started off very low, and while it’s increased, it’s still usually significantly less than the cost of even the cheapest plan on exchanges.

By contrast, in other countries with private health insurance, the government response is ferocious if you don’t buy the basic package. Switzerland will seize your wages to pay for the necessary insurance. If you get sick in Japan without buying insurance, you have to come up with all your back premiums before your insurer will pay your medical bills.

It is, of course, technically feasible to set up something similar in the U.S. But it will never be politically feasible. That’s because there would, rightfully, be an intense political backlash if the government started garnishing our paychecks and sending the money to Aetna, whose CEO made $28 million last year.

In The Healing of America, probably the best book ever written about how different countries provide universal health care, T.R. Reid explains that functioning systems have a huge variety of characteristics but several “standard building blocks” — and one is that “financing health care must be a nonprofit endeavor.”

As Reid writes, other countries have made it work with many different kinds of health care providers — doctors can work directly for the government, as in the U.K., or not, as in most other rich countries. Hospitals can be for-profit or not. But no one has been able to create a viable system of universal health care based on citizens being forced to help insurance companies make a profit.

Moreover, the political ramifications of nonprofit health-care financing go far beyond making it feasible to have a strong individual mandate to buy insurance. It is also a key reason why such systems have much lower costs: “When Aetna or WellPoint declines to pay for a drug or a procedure, the money saved goes to enhance the insurer’s profit, not to pay for another person’s treatment,” Reid points out. “So people are less willing to tolerate cost controls.”

So either Obamacare will include a universally available, nonprofit public option — which in turn would likely eventually become the only option — or it will eventually expire. There is no third way.

https://theintercept.com/2016/08/27/obamacares-faltering-for-one-simple-reason-profit/
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Replies

  • Big BatteryBig Battery Posts: 20,592 AG
    phlatsphil wrote: »
    Here ya go.... this should explain it.


    That is one scary perception of the role of government.
  • Gary SGary S Posts: 2,261 Captain
    Some of the problem comes with the clause the geniuses who wrote the bill included. You can stay on your parents policy until your 26 years of age. Kind of drops your paying base don't it?
  • dave44dave44 Posts: 11,549 AG
    How are you going to get any company to do anything without a profit?

    I couldn't read any further, it's a moronic article vilifying human nature.
  • silvergsilverg Posts: 1,456 Officer
    Ole Nancy and the rest of the demwits should have read it before they passed it.
  • FinfinderFinfinder Posts: 9,999 Admiral
    phlatsphil wrote: »
    Here ya go.... this should explain it.


    THERE HAVE BEEN dozens if not hundreds of news articles about Aetna leaving the Affordable Health Care Act’s online marketplaces in 11 states, and whether this signals serious problems for Obamacare down the road.

    But none of them have truly explained that what’s happening with Aetna is the consequence of a flaw built into Obamacare from the start: It permits insurance companies to make a profit on the basic health care package Americans are now legally required to purchase.

    This makes Obamacare fundamentally different from essentially all systems of universal health care on earth. (There is one tiny exception, the Netherlands, but of the four insurance companies that cover 90 percent of Dutch citizens, just one is for profit.)

    Why does this matter? The answer is complicated but extremely important if Obamacare is going to avoid collapsing.

    Insurance companies like Aetna complain that fewer young people than anticipated are buying insurance on the exchanges. The Obama administration was aiming at over 38 percent of the exchange pool being between 18 and 35 years old, but right now that number is just 28 percent. That means insurers have to pay more in health costs for customers who are older and sicker than anticipated, making those insurers more likely to abandon the exchanges. So a big swath of the U.S. now has just one insurance company offering Obamacare plans, and one county in Arizona has none.

    The failure of young people to sign up in expected numbers is connected to the weakness of the Obamacare mandate. The amount that people who don’t buy health insurance must pay in penalties started off very low, and while it’s increased, it’s still usually significantly less than the cost of even the cheapest plan on exchanges.

    By contrast, in other countries with private health insurance, the government response is ferocious if you don’t buy the basic package. Switzerland will seize your wages to pay for the necessary insurance. If you get sick in Japan without buying insurance, you have to come up with all your back premiums before your insurer will pay your medical bills.

    It is, of course, technically feasible to set up something similar in the U.S. But it will never be politically feasible. That’s because there would, rightfully, be an intense political backlash if the government started garnishing our paychecks and sending the money to Aetna, whose CEO made $28 million last year.

    In The Healing of America, probably the best book ever written about how different countries provide universal health care, T.R. Reid explains that functioning systems have a huge variety of characteristics but several “standard building blocks” — and one is that “financing health care must be a nonprofit endeavor.”

    As Reid writes, other countries have made it work with many different kinds of health care providers — doctors can work directly for the government, as in the U.K., or not, as in most other rich countries. Hospitals can be for-profit or not. But no one has been able to create a viable system of universal health care based on citizens being forced to help insurance companies make a profit.

    Moreover, the political ramifications of nonprofit health-care financing go far beyond making it feasible to have a strong individual mandate to buy insurance. It is also a key reason why such systems have much lower costs: “When Aetna or WellPoint declines to pay for a drug or a procedure, the money saved goes to enhance the insurer’s profit, not to pay for another person’s treatment,” Reid points out. “So people are less willing to tolerate cost controls.”

    So either Obamacare will include a universally available, nonprofit public option — which in turn would likely eventually become the only option — or it will eventually expire. There is no third way.

    https://theintercept.com/2016/08/27/obamacares-faltering-for-one-simple-reason-profit/


    We already have free healthcare for the poor its called Medicade and thats what Obamacare did as well, it will speed up the demise of Medicade.....................
  • Mister-JrMister-Jr Posts: 27,752 AG
    Clinton announced in a statement on July 9, 2016, a few changes to her healthcare platform, including offering a public-option insurance plan and allowing Americans to enroll in Medicare when they turn 55. According to the statement, Clinton affirmed “her commitment to give Americans in every state the choice of a public-option insurance plan, something she has supported during this campaign and going back to her 2008 presidential campaign.”[4]

    https://ballotpedia.org/Hillary_Clinton_presidential_campaign,_2016/Healthcare
    Vote for the other candidate
  • Big BatteryBig Battery Posts: 20,592 AG
    More failed big government promised... yea.
  • fins4mefins4me Posts: 14,487 AG
    I choose the option of let is expire.

    The sooner the better.
    ALLISON XB 21,, MERCURY 300 Opti Max Pro Series (Slightly Modified) You can't catch me!!!
    "Today is MINE"
  • Soda PopinskiSoda Popinski GrovelandPosts: 13,290 AG
    Everyone must purchase healthcare....but young people (who they were counting on to purchase healthcare) are on their parents plan until they are 26. See the problem there??

    You can't require a company to sell something at no profit. No one works for free. See the problem there? So the government wants to force people to spend money and it wants to force companies to not make money.... Can't see how that would be an issue at all

    This thing was poorly conceived and terribly executed. Lets do something for the sake of doing something to appeal to our base.
    Like is like a Helicopter.  I do not know how to operate a Helicopter  
  • NACl H2O LuvrNACl H2O Luvr Posts: 12,389 AG
    People who work for Profit are evil.
  • cadmancadman Home of the Gators Posts: 32,680 AG
    Here is another example of not understand the difference between the exchanges and the law. The law says the insurance companies get 20% for admin and profit, which is decent since most are under that before the law.

    The issue is the states and the requirements they put on companies to be on the exchange. It isn't the profit, it is the states refusing to let the companies raise rates to cover the extras required on the exchanges. Either get rid of the exchanges or remove the states fromt he rate approval process and use the 20% admin as the criteria.

    Mini Mart Magnate

    I am just here for my amusement. 

  • FinfinderFinfinder Posts: 9,999 Admiral
    Mister-Jr wrote: »
    Clinton announced in a statement on July 9, 2016, a few changes to her healthcare platform, including offering a public-option insurance plan and allowing Americans to enroll in Medicare when they turn 55. According to the statement, Clinton affirmed “her commitment to give Americans in every state the choice of a public-option insurance plan, something she has supported during this campaign and going back to her 2008 presidential campaign.”[4]

    https://ballotpedia.org/Hillary_Clinton_presidential_campaign,_2016/Healthcare

    So what its just another smoke and mirror job ? how are you going to pay for it ( tax the middle class) and Medicare doesn't cover all expenses you still have to purchase insurance to cover what Medicare does not. Not to mention most would stay on their employers healthcare which would be cheaper. Maybe Hillary promised the insurance companies this payback. it would be great for selling policies.
  • Mister-JrMister-Jr Posts: 27,752 AG
    Finfinder wrote: »
    So what its just another smoke and mirror job ? how are you going to pay for it ( tax the middle class) and Medicare doesn't cover all expenses you still have to purchase insurance to cover what Medicare does not. Not to mention most would stay on their employers healthcare which would be cheaper. Maybe Hillary promised the insurance companies this payback. it would be great for selling policies.

    When people in this country get sick, they get treated, insurance or not. Who pays?
    Vote for the other candidate
  • Big BatteryBig Battery Posts: 20,592 AG
    Mister-Jr wrote: »
    When people in this country get sick, they get treated, insurance or not. Who pays?

    Why is that more expensive now than it was 5 years ago?
  • gregglgreggl Posts: 21,594 Officer
    Why is that more expensive now than it was 5 years ago?

    increased rent seeking
  • Big BatteryBig Battery Posts: 20,592 AG
    greggl wrote: »
    increased rent seeking

    Tell that to Mister
  • FinfinderFinfinder Posts: 9,999 Admiral
    Mister-Jr wrote: »
    When people in this country get sick, they get treated, insurance or not. Who pays?

    Mister gets a real question and he responds with playtime. Its rude to answer a question with a question. Do you sell Medicare insurance ?
  • red owlred owl Posts: 671 Officer
    The insurance companies are losing their shirts on Obama Care. The idea was people would sign up AND STAY WITH THE PROGRAM. What is happening is an uninsured person is told they need a $50,000 operation. They go out an sign up for ObamaCare- there is no pre-existing clause. They pay one month's premium of say $1,000 of which their co-pay might be $300 and they have the operation and then discontinue the insurance. The insurance company loses $49,000.
  • Mister-JrMister-Jr Posts: 27,752 AG
    Someone has to pay. If the patient cannot pay or afford insurance, what's your solution?
    Vote for the other candidate
  • Mister-JrMister-Jr Posts: 27,752 AG
    red owl wrote: »
    The insurance companies are losing their shirts on Obama Care. The idea was people would sign up AND STAY WITH THE PROGRAM. What is happening is an uninsured person is told they need a $50,000 operation. They go out an sign up for ObamaCare- there is no pre-existing clause. They pay one month's premium of say $1,000 of which their co-pay might be $300 and they have the operation and then discontinue the insurance. The insurance company loses $49,000.

    I agree with your assessment.
    Vote for the other candidate
  • mplspugmplspug Palmetto FloridaPosts: 12,595 AG
    Obamacare Is Faltering for One Simple Reason: Profit

    How unamerican!

    Captain Todd Approves

  • gregglgreggl Posts: 21,594 Officer
    red owl wrote: »
    The insurance company loses $49,000.

    once the transaction is financialized, the $49,700 they made through their 'donation' will continue to increase
  • Mister-JrMister-Jr Posts: 27,752 AG
    Finfinder wrote: »
    Mister gets a real question and he responds with playtime. Its rude to answer a question with a question. Do you sell Medicare insurance ?

    You should be able to answer a playtime question.

    No.
    Vote for the other candidate
  • FinfinderFinfinder Posts: 9,999 Admiral
    Mister-Jr wrote: »
    You should be able to answer a playtime question.

    No.

    not very clever but typical you can't handle it, run along Mister
  • Mister-JrMister-Jr Posts: 27,752 AG
    Finfinder wrote: »
    not very clever but typical you can't handle it, run along Mister

    :grin
    Vote for the other candidate
  • Mister-JrMister-Jr Posts: 27,752 AG
    Finfinder wrote: »
    So what its just another smoke and mirror job ? how are you going to pay for it ( tax the middle class) and Medicare doesn't cover all expenses you still have to purchase insurance to cover what Medicare does not. Not to mention most would stay on their employers healthcare which would be cheaper. Maybe Hillary promised the insurance companies this payback. it would be great for selling policies.

    What is the GOP plan for uninsured individuals and/or families? Donald Trump's?
    Vote for the other candidate
  • Soda PopinskiSoda Popinski GrovelandPosts: 13,290 AG
    Mister-Jr wrote: »
    What is the GOP plan for uninsured individuals and/or families? Donald Trump's?

    At this point getting the **** out of the punchbowl is the best place to start
    Like is like a Helicopter.  I do not know how to operate a Helicopter  
  • grady30wagrady30wa Posts: 10,161 AG
    phlatsphil wrote: »
    what’s happening with Aetna is the consequence of a flaw built into Obamacare from the start: It permits insurance companies to make a profit on the basic health care package Americans are now legally required to purchase.


    Can't be making PROFITS! :nono
    Schadenfreude. November 8, 2016
  • cadmancadman Home of the Gators Posts: 32,680 AG
    red owl wrote: »
    The insurance companies are losing their shirts on Obama Care. The idea was people would sign up AND STAY WITH THE PROGRAM. What is happening is an uninsured person is told they need a $50,000 operation. They go out an sign up for ObamaCare- there is no pre-existing clause. They pay one month's premium of say $1,000 of which their co-pay might be $300 and they have the operation and then discontinue the insurance. The insurance company loses $49,000.

    They better hope the operation will wait until the open enrollment period,

    Mini Mart Magnate

    I am just here for my amusement. 

  • FinfinderFinfinder Posts: 9,999 Admiral
    Mister-Jr wrote: »
    What is the GOP plan for uninsured individuals and/or families? Donald Trump's?

    create jobs so they can take care of themselves tort reform but we already have Medicaid

    but your plan via Hillary is to tax the sheet out of the middle class through Medicare, but for sure whatever they eventually do, it won't be based on a complete lie
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