The Health Care Nightmare
EDUARDO PORTER writes in today's NY Times online about the rising cost of health benefits being a contributing (if not primary)factor in the non-existent rebound of jobs today. He points out that some small businesses are hiring only younger workers in order to minimize premiums. He goes on to point out that this is illegal.
While there are many examples of this type out there, this is a particularly good one in the sense that it points out how one mechanism can heavily impact another. And that good legislation is a lot like chess. The more moves ahead you can think, the better your current move will be.
Currently, health insurers base premiums on the average age of the work force in a given enterprise. This works to the benefit of most very large businesses because their average ages tend to be around 40. Add that with a stronger negotiating position and you have lower premiums. I'm not however, denying that big business are not also getting hit hard by rising health care costs. Small businesses have a different problem. Extremely small businesses (I use them to highlight the other end of the spectrum), say 10 employees or so,of which there are thousands across the US, usually employ very young workers and often only those that can do without the benefit-no wonder. Since their populations are small, their average age calculation is very sensitive to the addition of a single older worker. So, for a retired person looking for a job in a small business of this type- good luck. If they pay benefits, I can assure you the owners will think twice about hiring you because you'll raise the average age of the population which will make you a very expensive addition to the club.
Hopefully you've figured out the problem already but I'll state it here for good measure. Allowing health insurance premiums to be determined by age in small pools directly contradicts the legal constraint of age discrimination. And this is one that could be easily fixed by legislating the way premiums are determined by the insurance industry. Yeah, yeah, I know...more regulation. This is pretty serious stuff though and it affects all of us, republicans, democrats and communists alike (ok well maybe not communists...I think they all get healthcare right?).
The current administration cites that low cost insurance, with high deductibles, is available to cover catastrophic illness. Well, I have some experience here since I had to go looking for health insurance after I was laid off. Believe me, these plans are not much of a savings. A plan with a $10,000 deductible, still costs over $450 a month for you and your spouse. While that's not quite half of what a plan that includes maintenance will set you back, when you have no income or are just managing, $400 is not chump change. If you make a million a year, I guess it looks like a bargain.
Another anecdote on the high deductible plan issue is appropriate. My father, who is on a fixed income, has catastrophic coverage but has to pay for regular checkups etc. You know what, he just doesn't do them. He can't justify spending the money for the tests etc. I have a similar plan and, while I hate to admit it, I've been doing the same thing. So, if you project ahead and assume that most folks won't do maintenance on their own nickel only two outcomes can occur: A.)maladies will be caught too late to be treated and a lot of us will die prematurely or B.)the medical industry will go into catastrophic treatment mode and the system will bankrupt itself. On the bright side for the insurance company, "A" will save them gobs of money in treatment costs but they'll lose the ongoing premiums and "B", well, I think we're seeing this already.
God bless the insurance industry. Its one of the few big businesses that makes a ton of money producing absolutely nothing. There is something to be said for security. Stay healthy America.
While there are many examples of this type out there, this is a particularly good one in the sense that it points out how one mechanism can heavily impact another. And that good legislation is a lot like chess. The more moves ahead you can think, the better your current move will be.
Currently, health insurers base premiums on the average age of the work force in a given enterprise. This works to the benefit of most very large businesses because their average ages tend to be around 40. Add that with a stronger negotiating position and you have lower premiums. I'm not however, denying that big business are not also getting hit hard by rising health care costs. Small businesses have a different problem. Extremely small businesses (I use them to highlight the other end of the spectrum), say 10 employees or so,of which there are thousands across the US, usually employ very young workers and often only those that can do without the benefit-no wonder. Since their populations are small, their average age calculation is very sensitive to the addition of a single older worker. So, for a retired person looking for a job in a small business of this type- good luck. If they pay benefits, I can assure you the owners will think twice about hiring you because you'll raise the average age of the population which will make you a very expensive addition to the club.
Hopefully you've figured out the problem already but I'll state it here for good measure. Allowing health insurance premiums to be determined by age in small pools directly contradicts the legal constraint of age discrimination. And this is one that could be easily fixed by legislating the way premiums are determined by the insurance industry. Yeah, yeah, I know...more regulation. This is pretty serious stuff though and it affects all of us, republicans, democrats and communists alike (ok well maybe not communists...I think they all get healthcare right?).
The current administration cites that low cost insurance, with high deductibles, is available to cover catastrophic illness. Well, I have some experience here since I had to go looking for health insurance after I was laid off. Believe me, these plans are not much of a savings. A plan with a $10,000 deductible, still costs over $450 a month for you and your spouse. While that's not quite half of what a plan that includes maintenance will set you back, when you have no income or are just managing, $400 is not chump change. If you make a million a year, I guess it looks like a bargain.
Another anecdote on the high deductible plan issue is appropriate. My father, who is on a fixed income, has catastrophic coverage but has to pay for regular checkups etc. You know what, he just doesn't do them. He can't justify spending the money for the tests etc. I have a similar plan and, while I hate to admit it, I've been doing the same thing. So, if you project ahead and assume that most folks won't do maintenance on their own nickel only two outcomes can occur: A.)maladies will be caught too late to be treated and a lot of us will die prematurely or B.)the medical industry will go into catastrophic treatment mode and the system will bankrupt itself. On the bright side for the insurance company, "A" will save them gobs of money in treatment costs but they'll lose the ongoing premiums and "B", well, I think we're seeing this already.
God bless the insurance industry. Its one of the few big businesses that makes a ton of money producing absolutely nothing. There is something to be said for security. Stay healthy America.
posted by Politico at 10:53 AM
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