6173

Medicare does in fact pay less, so that should in fact be a cost reducer.

That being said, what you pay in medicare tax is immaterial, as that tax is intended to cover the current population of medicare.

6174

You mean old people, who use the most health insurance? So expanding it to young people is going to cost more than private insurance does right now?

6175

Medicare Part A (about half of Medicare spending) is funded almost entirely by the payroll tax and tax on high earners’ social security income. Parts B&D (the other half) are mostly paid for by transfers from the general tax fund (about 2/3) and premiums (most of the remaining 1/3.) You could make an argument that Medicare taxes only pay about 2/3 of what they should, but 1/10 is a stretch.

6176

Keep in mind though, you are paying it for several years that you aren’t using it. So, you might pay into it for 4 decades and use it only 2 decades. So, that along would double cost, if you use it every year you have it. And probable triple it, if you need to continue to use it after you retire, since you need to pay for 4 decades and use it for 6 decades.

And that doesn’t take into kids, so, now you have for it 4 decades, but it needs to stretch your whole life time.

So, if a person needs to be cover for 80 years, and they work from 25 to 65 (to keep it simple), then need pay enough in those 40 years to cover the full 80.
Now, you obviously aren’t paying for yourself, when you pay the 2 dollars, 1 goes to you and 1 goes to either a young person or to an old person. And when you are old, the math is that some working person is paying one of those dollars to you.

And of course, the US government, to save on costs, is hoping we all drop dead before retirement, so that it can save some money. But doesn’t everyone?

6177

A partial list of things that should help reduce costs:

Everyone is paying into the system, with the richer people paying more (may go up overall for them)

Single payor is the only game in town - you want to get paid to provide medical care, you will take what they pay, whether hospital, doctor, physical therapist, etc. huge potential savings here, maybe not as good for the hospitals, nurses, doctors, etc. All depends on the details

single payor has the leverage to knock down drug prices, if they dare to take on big pharma

It isnt for profit, so current insurance profits are 100% savings

The current salaries for insurance workers are not included in the cost of care, but new government workers will need to be hired to expand medicare. likely a decent overall savings

6178

I think the end result would be net savings, I just don’t expect miracles.

Personally, I just want 30 hour work weeks, with anything over 30 hours designated overtime.

6179

No, that isn’t how it works. Eliminating the middlemen does drive costs down a bit, but the reason that MFA is essential and MFAWWI is dumb is because the prices are driven by the market. Medicare as it currently stands is able to negotiate a good deal, but it has to compete with the prices offered by private insurance that covers healthier people with more money to spend and more ways to screw them over. Those private firms have to compete with each other and with medicare to sign up providers, and they have to compete for the dollars of the patients. So they each find creative ways to shift risk onto the individual buyers or small providers (or less-savvy small businesses) without them realizing it, and pay extra for the services they have to pay extra for to get a large enough network to compete. The big providers are also able to work the system to charge extra for their services and to work with the insurance companies to craft plans that maximize the payments without people changing their insurance. Compared against that, even relatively large businesses who want to give their employees great coverage at low cost have virtually no negotiating power.

Instead of thinking of Medicare as the government replacing insurance companies, it’s more appropriate to think of it as replacing the business-supplied insurance. A business that was large enough could make deals with the local doctors and hospitals directly and would work on behalf of its employees to get them a good deal. Many of the providers have stakeholders who also care about quality of care, but their business negotiators have to account for risk of malpractice, sustainability of costs (to pay the humans), the costs of materials, and (often) profit as well. From the business standpoint, the providers don’t have a reason to reduce the amount of care needed by an individual, while the employer (or the government) does. The insurance companies have an incentive to reduce the care they are forced to pay for, but they do this both by creating incentives for preventative care and general health and by finding ways to not pay for the expensive stuff.

No one in this equation is evil except the requisite few bad actors you get in any sector. The problem isn’t “evil insurance companies”, it is that the incentives for the insurance companies are not aligned with needs of the insured. They are not completely opposed, but they are skewed. The company wants to have a plan that the market sees as the cheapest, best, and easiest to use, and which minimizes the amount of care used by its subscribers. To do this, they do some good things (preventive care incentives, health incentives, low premiums), some not good things (co-insurance, limited networks), some shady things (high deductibles, coverage maximums, uncovered care, age-based premiums), and some outright terrible things (frequent rejected claims, pre-existing conditions if they could). Medicare has it’s own constraints: they have to pay the providers based on the going rate, they have get providers to sign up, they have to justify their costs to often-hostile members of Congress, their forms and procedures are determined by laws or regulations that have to go through a legal process to change, and they are not allowed to choose who they cover. They also have the private industry setting the standards for what’s reasonable, which means that many of the shady practices carry over.

MFA won’t be perfect, and it will need mechanisms to be adaptive and to maintain care quality. With the incentives properly aligned, though, the cost of care will gradually decrease and the quality of coverage will increase over time. MFAWWI is the pipe dream that says we can have the cake of MFA for free. It’s certainly a better option than having no public option, but it will not produce the same results and the idea that it can out-compete private insurance naturally is silly.

I think Warren should lay out a bridge to MFA where we start with a package that provides public option to begin working out the kinks, provides a service to businesses to help them negotiate based off the Medicare rates, requires that any provider who accepts private insurance for a service also accept the public option insurance, and taxes rejected insurance claims as income. Then after some time period, with a lead in to ease the shift (say, 5 years), we shift everyone onto the public option for a class of basic coverage that includes preventive care, emergency care, and other routine care such as pre-/post-natal, but still allow private insurance to cover long-term care and less-routine circumstances. Then we gradually expand the public option, which everyone is already on by default, to all non-elective care (including abortions!), and we have our MFA with a gradual shift that keeps employer-provided care in the loop.

6180

I think that is quite reasonable, though I would add to it the expansion of full Medicare gradually at lower threshold age groups. Start dropping the eligibility age by two or three years every year, so that more people can enroll and the program expands naturally. Pair that with a law that requires employers to convert unused company contribution to health insurance into direct compensation, adjusted for any minor tax benefits lost in that process. Older working people can opt out of company health insurance, get more pay as a result, and use it to pay their Medicare premiums. In ten years the Medicare eligibility age is 45 or younger, depending on the pace. In 20 everyone is on it. Twenty years seems long enough for the health insurance industry to adjust to the new normal.

6181

This is an important part of the argument. Employers pay a significant amount of money for health care, both directly and indirectly through paying for compliance officers, etc. Unless otherwise mandated, they will just pocket that cash the second MFA becomes a thing, which means workers are just paying more.

Not sure how you police this, though. The amount they’re paying for healthcare varies wildly and it’s not transparent. In addition, they could raise salaries by $5k or whatever that first year, but then either forgo raises for years, or even reduce pay to claw it back the next or in subsequent years.

Maybe this becomes something more like unemployment insurance where employers pay a tax of a certain amount per employee and that goes into the Medicare fund.

6182

Theoretically, labor market competition should either force wages back up or prices down.

6183

Except recent history shows this to be, at best, naïve.

Really we should start by having employer contributions to healthcare be visible for employees. I have no idea how much my company contributes towards healthcare. And have that in place before MFA, so employees know if, and how bad, employers are trying to screw them.

Right now they could simply lie about how much they paid, if they even compensated employees at all.

6184

Yes, in theory, but the market isn’t as competitive as it should be. Besides all the both spoken and unspoken no-hire agreements between companies in similar industries, the entire system is dedicated to making workers as fearful as possible to make sure wages stay low. There’s always some reason why you might get fired tomorrow if you don’t go along with whatever companies are doing.

I mean all you have to do is look at an efficiency vs. wages chart to see that companies aren’t passing along their savings AT ALL to workers. It’s all going to shareholders and execs.

Basically this:

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6185

Agreed…profit incentives are the problem, as I’ve said for years. The incentive needs to be the best care for the patients, not the best financials for the provider/insurer.

I don’t actually think that this is impossible with a public option, though. The trick is to design the public option to actually provide good care, not just give people the same stuff that the public sector provides at a subsidized cost. Then the public sector has to follow suit - they can’t compete on cost against public subsidies, so they have to compete on better care. If they manage that, more power to 'em. If not, we end up with single payer eventually as they go out of business.

6186

Yeah that ACA’s have giant deductibles, some of the largest I’ve seen except, well they had that before in the private market too, except for on the garbage plans people complain they lost but those plans actually covered… a lot less than they realized.

The pools aren’t right. They’re too small. The insurers needed to be in a state or not in the state, not these small county or city things.

Expanding Medicare is not just to the young, not unless you think 55 or 60 is young. Expanding insurance plans to the young typically cost very little because they’re young and generally healthy.

I will stand by my original position when this came up years ago… first step, take it away from the employers. There is no need to tie that to employers just to give them tax breaks. Insurances used to be a way to compete for employees, and the employers are only quasi competing now anyway. Also, you shouldn’t be chained to a job just for insurance. If you make it affordable people can leave their jobs and start new ones without worrying access to insurance.

Make the insurers compete at the state level and choose at the state level. Don’t let them pick and choose rich cities or rich counties only. If they want to be in the state, cover the whole state. I only say state instead of region mostly because of state level regulation bodies and laws. Otherwise, do it by the region that way they can’t cherry pick states either, you get the whole region or you’re out of the entire market. And that’s just how you clean up insurance selection.

To address provider level salaries, start with education, and I don’t just mean the cost of education, but also what they’re trying for. Americans are too sold on the idea of specialist, specialists for like everything when the primary physicians are more than capable of handling a lot of these cases, at more affordable rates.

And of course the elephant in the room patients often conveniently leave out of the equation because they love to talk about other countries but other countries… do not have our malpractice issues. The suing in other countries is just not at the same level. It’s just to convenient to compare our health system to others and then leave out the massive malpractice insurance and payout issues.

And of course, fee for service, pay per visit… it’s already slowly exiting naturally. It’s not impossible to hasten that shift.

6187

Is this actually secret? I don’t remember it being secret at all back when I was doing company budgets.

6188

Not secret, just not often shown to employees. With my current employer you can see what the costs are, but not my previous.

For myself, my employer’s contribution is 500% of what I pay. It’s a significant amount of money and I wish more people realized it because it’s important when discussing taxes/costs of reforming our healthcare system. Many people are unaware of the huge costs companies are already paying on top of what the employee does.

6189

It’s not a secret, it’s just that companies don’t make it obvious. You could probably ask, though.

6190

It just seems to me that if it is really something like 20% of comp, companies would want to shout it out. I know we didn’t hide it.

6191

I can’t speak for all companies or what exactly our costs are, but 20% sounds in the right ballpark from what I recall. I had a discussion about what providing healthcare costs us with our CEO a few years ago, I just don’t remember the exact numbers.

6192

Yeah, mine puts it right on our payroll info every other week. Health insurance costs are insane (because health care costs are insane, thanks in part to those same insurance companies).