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October 30, 2008

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I've said it before, I'll say it again, health insurance is an idea whose time has passed. It was never more than a poor proxy for the single-payer system that we eventually learned how to implement.

In other words, insurance is a way to spread costs and risks, and so are taxes but on a much larger scale, in an area where economies of scale are real. The larger the pool, the more diluted the risk and the cost per capita, and the more bargaining power the entity has over providers. Paying dedicated-fund taxes for a government service might as well be paying premiums for a private service, especially when you consider how heavily we regulate and oversee these private entities. Except that with premiums you get less for your buck.

Not that governments don't waste money. But so does the private sector, it's a wash.

The problem is that people don't typically buy health 'insurance'. They want a prepay system that covers CERTAIN needs instead of SPECULATIVE needs. That isn't insurance.

I disagree. There will always be a place for private insurance companies and private health insurance companies are no exception. No matter how good a program the state puts together, I guarantee a private firm can find some subset of individuals with a risk level that lets them charge a more attractive rate.

Honestly, I don't have a problem with this. The US Postal System exists in the face of FedEx and UPS and without these two I doubt we'd see such an emphasis on speed of delivery. Amtrak exists in the face of dozens of airlines and private train companies. American Mercenaries exist despite the hundreds of billions of dollars we spend on the US Military. Private and charter schools exist despite a massive public education system.

Private firms and public institutions can co-exist benignly. I don't see the need for a true "single payer" system. That said, health insurance as a social service offers a guaranteed baseline below which private entities can't slip. The problem with current public insurance is that there doesn't exist much in the way of competition. The majority of Americans get their insurance from a single company and companies cut deals with insurance carriers for better rates on a case-by-case basis. You can't "shop around" for health insurance.

The US Government needs to step in because private enterprises refuse to offer affordable health care to those folks that need the coverage the most. It can care for these people if it offers rate plans that attract the less needy. And given the astronomical rates and heavily inflated overhead of private firm insurance, that isn't hard to do.

So I think a public health insurance company will quickly - and necessarily - become the biggest provider in the industry. But that doesn't rule out the existence of smaller firms by a long shot.

The problem is that people don't typically buy health 'insurance'. They want a prepay system that covers CERTAIN needs instead of SPECULATIVE needs.

What nonsense! Most people I've met are interested in both. They want routine checkups and vaccinations, but they also want a guarantee that they'll get treatment for catastrophic health problems like cancer.

If anything, the people I talk to are more worried about coverage for catastrophic problems than routine ones. They know that they can probably find and afford routine care when they need it even without a health plan. Facing a catastrophic problem without coverage is just to scary to contemplate. Even if they somehow manage to find treatment, they know that they'll probably bankrupt themselves paying for it.

I work in the health insurance industry (actuarial/underwriting).

I am currently with a large private company, but I have worked in the Medicaid system as well.

A few comments:

"The problem is that people don't typically buy health 'insurance'. They want a prepay system that covers CERTAIN needs instead of SPECULATIVE needs."

People wisely do purchase insurance for those catastrophic events for which they would not otherwise be able to afford.

They also purchase insurance to gain access to services for certain needs they would not otherwise be able to afford (which makes health care insurance unique in the insurance sector).


"What nonsense! Most people I've met are interested in both."

I think this last from Roger is sort of correct, but people shouldn't think this way. It is irrational. For most people it would be cheaper to pay out of pocket for basic needs like check ups, sore throats, broken legs, etc. than to purchase insurance. The individual's cost is far less because they don't have to pay admin. costs, risk premium or the costs of the 5% or so that would be in their risk pool - and hence be calculated into the premium everyone pays - who are really sick/expensive.

Which brings us back to McCain's plan. I just plain don't see how it's supposed to work.

The 5% to 10% (and that's what it almost always is in a typical HMO or PPO pool that drive up the premium and make it too expensive for either individuals or employers still have to have insurance; much more so than anyone in the other 90% to 95%.

If they are out of the pool and on their own they cannot afford the coverage they need. This is obvious.

Who will pay the difference between what they can afford and the actual cost? The government? Then the 90% to 95% get taxed more and they end up paying something around their current premium anyhow. I mean we are not going to let these really sick folks die in the streets. And if providers are getting stuck with uncompensated care there will be a ruckus in Washington from their lobbies to have the gov't pay for it before long.

Some of these 5% to 10% folks have chronic conditions and could be identified before a switch to the McCain plan. Many will not be identifiable until sudden onset. When will their premiums be re-assessed? Half way through a hospitalization? In the midst of the course of a critical - and expensive - treatment? But re-assessed it would be given the experience. Then what?

Nope. McCain's plan makes no sense at all. I don't see how anyone except the very wealthy and certain classes of employers could see it as beneficial in any way.

Wisconsin's version is called HIRSP. It gets its subsidies from other insurers and providers. Of course, McCain's silly, "buy your insurance anywhere, you don't need those meddling regulators protecting you" plan, would also destroy our program.

avedis - one of the problems of getting people to move out of insurance for routine programs is that major insurers in an area have discount programs with hospitals and clinics. Customers who walk in have no idea what the real price is. They don't know what they will be charged for the procedure and they have no idea what routine discount they can get for paying cash.

Sales commissions are a huge problem that McCain's program exacerbates. Real HMOs manage to spend nearly 90% of their revenue on medical care because most of their customers are group. Insurance company group products, whether called HMO, PPO or anything else, tend to have 80-85% of total revenue go to medical care. Group sales are relatively cheap for companies because most are sold by employees rather than independent agents. Individual policies tend to be closer to 75% going to health care costs because individual policies are sold by insurance salesmen who can be getting as much as 10-15% of the premium as commission.

If I were guessing who created McCain's program, I'd look for an insurance salesman.

Zifnab, you're lumping some very different things together.

For example, take schools. The problem with co-existing private and public health insurance is pretty similar to the problem with private and public schools: the private system skims off the cream or at least skims out the dregs, leaving the government as the educator of last resort for those whom the private system won't touch, or who can't afford it. Result is a resented, underfunded, overworked public system.

That's exactly why we fund public schools by taxes -- if we didn't, we couldn't offer the schools at all. That causes other problems, such as a lot of private-school parents quite reasonably wondering why they're paying full price for their own kids' school and taxes for everyone else's (and don't get me started on the perverse incentive to zone the poor out of your district so you don't have to pay for a school). But funding private-public insurance that way doesn't make any sense at all, because the incentives to pay double just don't exist for that product. Nobody would pay so much more for slightly-better private health insurance if they already got "free" health insurance for their taxes.

Instead, as you said, you're picturing a competitive consumer-supported system, like the Post Office. The problem with that comparison is, when FedEx takes some of the Post Office's business, it doesn't much increase the cost-per-unit of mail shipment for other Post Office users. A little, yes, because the physical plant and labor force are a pretty sticky cost, so the fewer users, the more each one has to pay. But that's a small effect because each person's contribution is approximately the same. The effect on an insurance pool when the informed market separates out customers is much larger. That's what you're envisoning here:

a private firm can find some subset of individuals with a risk level that lets them charge a more attractive rate.

When that happens, you lose much of the benefit of spreading risk and cost. In effect, you're back at McCain's high-risk pool concept, except that the "subsidy" is total and the administrator is the government itself. The young and healthy (who also tend to be the well-off) buy private catastrophic insurance cheap and don't pay into the risk pool for the poor and the sick. The government takes them (just like it does take them in emergency rooms now) because somebody has to. The end result is that the sick and poor get crowded into something very like Medicaid.

Medicaid stinks, not because the government runs it, but because it is income-capped so the government funds it grudgingly (because it's one of those redistributive welfare programs nobody loves). It is perennially underfunded, participants are forced to grovel and jump through hoops to prove their entitlement, and providers are treated as probable embezzlers. You'll get even worse results if the government tries to fund an insurer of last resort program on participant premiums. It will not be able to offer very much. Which, of course, will make it unattractive to consumers, driving more of them out to private insurance, decreasing the pool, raising expenses and lowering income, therefore services get worse, etc. It's basically our current system.

Zifnab, you're lumping some very different things together.

For example, take schools. The problem with co-existing private and public health insurance is pretty similar to the problem with private and public schools: the private system skims off the cream or at least skims out the dregs, leaving the government as the educator of last resort for those whom the private system won't touch, or who can't afford it. Result is a resented, underfunded, overworked public system.

That's exactly why we fund public schools by taxes -- if we didn't, we couldn't offer the schools at all. That causes other problems, such as a lot of private-school parents quite reasonably wondering why they're paying full price for their own kids' school and taxes for everyone else's (and don't get me started on the perverse incentive to zone the poor out of your district so you don't have to pay for a school). But funding private-public insurance that way doesn't make any sense at all, because the incentives to pay double just don't exist for that product. Nobody would pay so much more for slightly-better private health insurance if they already got "free" health insurance for their taxes.

Instead, as you said, you're picturing a competitive consumer-supported system, like the Post Office. The problem with that comparison is, when FedEx takes some of the Post Office's business, it doesn't much increase the cost-per-unit of mail shipment for other Post Office users. A little, yes, because the physical plant and labor force are a pretty sticky cost, so the fewer users, the more each one has to pay. But that's a small effect because each person's contribution is approximately the same. The effect on an insurance pool when the informed market separates out customers is much larger. That's what you're envisoning here:

a private firm can find some subset of individuals with a risk level that lets them charge a more attractive rate.

When that happens, you lose much of the benefit of spreading risk and cost. In effect, you're back at McCain's high-risk pool concept, except that the "subsidy" is total and the administrator is the government itself. The young and healthy (who also tend to be the well-off) buy private catastrophic insurance cheap and don't pay into the risk pool for the poor and the sick. The government takes them (just like it does take them in emergency rooms now) because somebody has to. The end result is that the sick and poor get crowded into something very like Medicaid.

Medicaid stinks, not because the government runs it, but because it is income-capped so the government funds it grudgingly (because it's one of those redistributive welfare programs nobody loves). It is perennially underfunded, participants are forced to grovel and jump through hoops to prove their entitlement, and providers are treated as probable embezzlers. You'll get even worse results if the government tries to fund an insurer of last resort program on participant premiums. It will not be able to offer very much. Which, of course, will make it unattractive to consumers, driving more of them out to private insurance, decreasing the pool, raising expenses and lowering income, therefore services get worse, etc.

This doesn't seem to have posted. I'll try one more time, then give up. If it double-posts, sorry 'bout that.

I think a big part of the health insurance problem is simply the fact that private policies, just like those for car or homeowners' insurance, are written for a limited period like a year.

But unlike other types of insurance the expected claims predictably rise over time, as policyholders age. This means that the "actuarially fair" premium must also rise. And for someone in known poor health, or with a dubious history, the actuarially fair premium can be very high indeed. As that premium rises over time more and more individuals find it difficult or impossible to pay.

One solution to this is to make health insurance policies very long-term propositions, so that your lifetime premium can be met with more nearly level payments. You pay "too much" when young, and then "too little" when older. (I use quotes because it's not really too much or too little, it's just a time shift).

In the fine old golden era, if it ever existed, when everyone just automatically got insurance from employers, this is what happened. Your company paid a premium for each worker which did not, in general, vary by age. But that era is over. Employer-based insurance has tons of widely understood defects, and is slowly breaking down. McCain would accelerate that breakdown.

So we need some other way to have a lifetime insurance contract, and the only entity that can reliably guarantee such a contract is the government. Private companies could offer them, I suppose, but they would need government backup, because we're talking about a 50-year or longer deal, and who knows if the insurer will be around that long? Government backup implies lots of restrictions on policies and premiums, otherwise you have a real moral hazard problem, with the insurers, not the insureds.

In fact, I suspect it just becomes impractical. Who wants to sit down at age 21 and decide what the best multi-decade deal is? Is it even possible to make a rational decision? In addition, how can anyone write a sensible policy covering decades? We have no idea what costs will be, how medical technologies and treatments will change, what new drugs will appear, etc. To expect that a policy written today will make sense 20 years from now is just foolish.

It seems to me that this consideration alone is a strong argument for single-payer insurance.

Even before the 'golden era' of employer coverage, there were the Blues who initially were selling to individuals and doing community rating -- pricing based on where you live and nothing else. We don't need to allow insurance companies to do risk underwriting for individuals or small groups. We don't need to allow employers to self-insure.

"They also purchase insurance to gain access to services for certain needs they would not otherwise be able to afford (which makes health care insurance unique in the insurance sector)."

This isn't insurance. You can't contract for a need known to be say $600-700 a year for any less than $600-700 a year. If you can't afford a treatment and you have a known treatment need, you can't 'insure' against that. Insurance is paying a portion of the outlay cost because of uncertainty in the need for it. If you have a need for it, the best you can hope for is a payment plan.

And if you want to use that as an argument for government provided access to some or many aspects of health care, great. But putting it in the hands of the government doesn't mean that you can get $600 of health care for less than $600.

"One solution to this is to make health insurance policies very long-term propositions, so that your lifetime premium can be met with more nearly level payments. You pay "too much" when young, and then "too little" when older. (I use quotes because it's not really too much or too little, it's just a time shift)."

The old cost so much more they would not be able to afford coverage without being "subsidized" by having the young in the same pool.

Furthermore, the primary driver of healthcare cost increase is technological advancements that are very expensive. If we were to lock in a given premium for an extended period of time we would have to deny access to new expensive technologies or go bankrupt; that or set the fixed rate premium at some higher than current cost rate so as to establish reserves for future medical services cost increases. But very hard to predict what the advances will be, consumption volume, etc, etc. Way too much risk to insurers to be viable.

"avedis - one of the problems of getting people to move out of insurance for routine programs is that major insurers in an area have discount programs with hospitals and clinics."

Some truth to that, to be sure. However, the discount to economies of scale and bargaining power is not as great as you think; not enough to offset the savings due to being removed from a pool with high experience members.

Also, much medical cost is due to unnecessary procuders that providers perform - and insured patients accept - because a third party is paying (e.g. "I bumbed my head. I feel fine, but if want to give me an MRI what the heck, go ahead."). Out of pocket payers can decide whether or not they really want to pay for services where the marginal benefit is less than the marginal cost. Again, this sort of situation is where ample economic waste and premium inflation occurs.

"One solution to this is to make health insurance policies very long-term propositions, so that your lifetime premium can be met with more nearly level payments. You pay "too much" when young, and then "too little" when older. (I use quotes because it's not really too much or too little, it's just a time shift)."

The old cost so much more they would not be able to afford coverage without being "subsidized" by having the young in the same pool.

Furthermore, the primary driver of healthcare cost increase is technological advancements that are very expensive. If we were to lock in a given premium for an extended period of time we would have to deny access to new expensive technologies or go bankrupt; that or set the fixed rate premium at some higher than current cost rate so as to establish reserves for future medical services cost increases. But very hard to predict what the advances will be, consumption volume, etc, etc. Way too much risk to insurers to be viable.

"avedis - one of the problems of getting people to move out of insurance for routine programs is that major insurers in an area have discount programs with hospitals and clinics."

Some truth to that, to be sure. However, the discount to economies of scale and bargaining power is not as great as you think; not enough to offset the savings due to being removed from a pool with high experience members.

Also, much medical cost is due to unnecessary procuders that providers perform - and insured patients accept - because a third party is paying (e.g. "I bumbed my head. I feel fine, but if want to give me an MRI what the heck, go ahead."). Out of pocket payers can decide whether or not they really want to pay for services where the marginal benefit is less than the marginal cost. Again, this sort of situation is where ample economic waste and premium inflation occurs.

"One solution to this is to make health insurance policies very long-term propositions, so that your lifetime premium can be met with more nearly level payments. You pay "too much" when young, and then "too little" when older. (I use quotes because it's not really too much or too little, it's just a time shift)."

The old cost so much more they would not be able to afford coverage without being "subsidized" by having the young in the same pool.

Furthermore, the primary driver of healthcare cost increase is technological advancements that are very expensive. If we were to lock in a given premium for an extended period of time we would have to deny access to new expensive technologies or go bankrupt; that or set the fixed rate premium at some higher than current cost rate so as to establish reserves for future medical services cost increases. But very hard to predict what the advances will be, consumption volume, etc, etc. Way too much risk to insurers to be viable.

"avedis - one of the problems of getting people to move out of insurance for routine programs is that major insurers in an area have discount programs with hospitals and clinics."

Some truth to that, to be sure. However, the discount to economies of scale and bargaining power is not as great as you think; not enough to offset the savings due to being removed from a pool with high experience members.

Also, much medical cost is due to unnecessary procuders that providers perform - and insured patients accept - because a third party is paying (e.g. "I bumbed my head. I feel fine, but if want to give me an MRI what the heck, go ahead."). Out of pocket payers can decide whether or not they really want to pay for services where the marginal benefit is less than the marginal cost. Again, this sort of situation is where ample economic waste and premium inflation occurs.

Well, at least Minnesota's the best program of its type in the country, because, in about six months, it looks like I'm going to be signing up for it. The COBRA I have with my ex-wife's employer runs out in May. Unless I can find a job with health insurance before then, that's going to be my only choice. I figure the odds of a private insurer covering someone with a history of clinical depression, anxiety problems, fibromyalgia, and chronic sinusitis is near zero.

"They also purchase insurance to gain access to services for certain needs they would not otherwise be able to afford (which makes health care insurance unique in the insurance sector)."

This isn't insurance. You can't contract for a need known to be say $600-700 a year for any less than $600-700 a year. If you can't afford a treatment and you have a known treatment need, you can't 'insure' against that. Insurance is paying a portion of the outlay cost because of uncertainty in the need for it. If you have a need for it, the best you can hope for is a payment plan.

And if you want to use that as an argument for government provided access to some or many aspects of health care, great. But putting it in the hands of the government doesn't mean that you can get $600 of health care for less than $600.

I don't get the argument here, Sebastian.

On one level, it looks like a pointless semantic quibble. "It's not really 'insurance' if everyone needs $X of routine checkups and tests every year." Fine. If you don't mind, I think the rest of us will probably keep using the accepted terminology, but you're free to translate that in your head to whatever you want. Call it $Y of "true insurance" + $X of "Sebastian's checkup service plan". Or call it foozleboozle. I don't care.

On a slightly less inane level, I guess you could argue that routine costs should be separated from "true insurance" for some reason. But that doesn't make much more sense. Why should I have to put the Visa on the counter for one thing, and the Cigna card down for another? If the $X is really that routine and predictable, it's also really easy to insure, and I might as well let Cigna worry about it for me.

Besides, it's in the interests of the insurer to make routine checkups and tests as easy as possible (or at least it ought to be - many current insurers do seem to just bank on the likelihood that you'll switch jobs and become somebody else's problem before you develop anything too serious).

On every other level, it's just wrong.

The fact is that by brokering medical care through an employer and a large insurance company, most people ARE saving large amounts. As I'm sure you know, insurance companies negotiate large discounts with doctors and hospitals. Sometimes on the order of 5:1 or more.

I suppose you could probably negotiate a few deals on routine procedures yourself. But again, that's a pain, and it seems perfectly reasonable to pay the insurance company for the service instead.

Alternatively, a well managed government plan would be able to negotiate even larger discounts (and that that's not getting something for nothing, it's just shifting around the surplus in the transaction, from insurers and doctors back to consumers). And a large well managed plan with the long-term interests of its clients in mind (think: VA) can find all sorts of ways to maximize the benefit of preventative care, testing and so forth, reducing both routine AND catastrophic costs.

Finally, I guess you might argue that a hypothetical healthcare market in which all individuals self-paid for service might have a bit more price transparency, but that would have problems of its own. And short of outlawing insurance, I don't see how you get there in the first place.

Furthermore, the primary driver of healthcare cost increase is technological advancements that are very expensive.

In 2007, US "health care spending" was $7600 per capita -- roughly 16% of GDP. That means Americans spent 1/6th of their income buying "health care". But it also means that Americans received 1/6th of their income for providing "health care".

There are many things to buy in the world, but few of them are as prized as health. "Health care" is not health, of course, any more than "financial services" are financing. It is entirely possible that Americans could enjoy the same health for half the money. Then, instead of employing about 1/6th of the population in "health care", we would only be employing about 1/12th. The other 1/12th would then be freed up to provide, say, "financial services". Why that would be much better is a bit puzzling to me.

--TP

Sebastian: putting it in the hands of the government doesn't mean that you can get $600 of health care for less than $600.

True. Putting it in the hands of the private sector, however, means that when you spend $600 you don't get $600 worth of health care.

Which is why the US pays more than any other country in the world for health care... yet ranks 37th in the world for what Americans actually receive.

Seabastian has a point, actually. Like I said before, health care insurance is unique in the insurance world in that people purchase it to gain access to services they would not otherwise be able to afford; ever. Maybe this uniqueness takes it out of the realm of "insurance" and makes it something else.

If I own (and thus can afford) a $250k house, I insure it for $250K. I cannot insure it for $500k. I know - and the insurer knows - that if the house burns to the ground I can get a comparable new house. The replacement costs about $250K. Yes, there is some risk in that the housing market or construction market might be up and the cost of replacement may excede $250K, but not by much and this can be built into the premium. Still, I cannot be insured to replace my $250K house a more expensive upgrade. By incurring a loss I cannot obtain that which I could not afford in the first place.

The insurer knows the maximum downside risk and I know the maximum benefit. My premium can be fairly based on these known limitations. Both parties can make an informed and rational decision to transact based on simple microeconomic priciples.

Furthermore, risk pools can be segmented. I may be placed into a pool with low actuarial risk of loss due to certain characteristics (e.g. demographics, construction material, etc). My premium will be lower than those placed in higher risk pools. Insurance cost is part of home ownership and you only buy the home/tax/insurance package you can afford.

Health care insurance is not like this. I can afford the basic doctor visits, but I cannot afford access to the important critical interventions. There is no ceiling on what these may cost and the cost goes up each year. The risk (uncertainty) to both insured and insurer is huge. Also, you cannot segregate risk pools because some risky people - those who need health care the most - would have premiums such that they would be priced out of the market. By incurring a loss (disease or injury) I can gain access to goods and services that I could not afford in the first place.

So HC insurance more resembles a ponzi scheme that it does traditional insurance.

TP, ".....But it also means that Americans received 1/6th of their income for providing "health care"."

Not really. There is - like in much that goes on in the US economy - a tendency for income (into the health provider industry) to concentrate into the hands of a few; think pharmaceutical companies.

And there is another problem with the economics. Is a new pill that is 10% more effective than the old pill, but at 200% of the old pill's cost really worth it? Hence the higher US per capita expenditures with equal to lower measurable outcomes than other industrialized nations.

Avedis: No, the US's higher per capita expenditures are not caused by "a new pill that is 10% more effective than the old pill, but at 200% of the old pill's cost", though it's true (and a discussion Sebastian and I have had in the past) that pharmaceutical companies are part of the problem. Americans spend so much on health care and get so little back because the health care system in the US is set up primarily to deliver profits to the health insurance companies - and of course because Americans health care costs include the massive administration costs of having this inefficient privatised system.

Jesurgislac,

You are just plain wrong, "Americans spend so much on health care and get so little back because the health care system in the US is set up primarily to deliver profits to the health insurance companies - and of course because Americans health care costs include the massive administration costs of having this inefficient privatised system."

Though surveys show there are many misguided - usually very liberal leaning -people that think this way.

BTW - I have no horse in this race re; private versus socialized health care. I'll have a job either way. I just know the facts from having worked in the industry data a long time. At the end of the day I come down in favor of something like the Canadian or Australian system (but maybe not for the reasons you might think).

As noted by someone above, medical loss ratios for HMO/PPO type products (the amount of premium spent on paying health care claims) typically runs at 85% to 90%. That means only 15%, max, is left over for admin and profit. Admin. typically - despite what Michael Moore might want you to believe - runs at around 8% to 9%.

These medical loss ratios have been pretty much constant for years - yet HC costs keep rising. Why? If the MLs remain constant it can't be due to increasing profits/admin.; can it?

The Blues get by on something like 1% to 1.5% residuals (not for profit speak for profits).

No. cost increases are due normal inflation, some other variables like defensive medicine, supply induced demand and, mostly to technology advancement. Yes, like the drug example I made, but certainly not limited to the pharma.s.

These are the facts and they are pretty much undisputed among those who know the data.

Avedis,

The old cost so much more they would not be able to afford coverage without being "subsidized" by having the young in the same pool.

This is more or less my point. Since the cost of health care for older people is so high, there has to be a mechanism for them to start paying for it when they are young. It's similar to a retirement plan. (I refuse to get involved in a Social Security discussion now).

Furthermore, the primary driver of healthcare cost increase is technological advancements that are very expensive. If we were to lock in a given premium for an extended period of time we would have to deny access to new expensive technologies or go bankrupt; that or set the fixed rate premium at some higher than current cost rate so as to establish reserves for future medical services cost increases. But very hard to predict what the advances will be, consumption volume, etc, etc. Way too much risk to insurers to be viable.

Also to my point. Note that I wrote that a lifetime policy from a private insurer is impractical. This is one of the big reasons.

NFL,

You have a point about rating, but that still misses the problem of participation. Under the system you describe, rates will be high because many young healthy people will go uninsured.

Bernard -

Opting out is economically rational for the young, particularly single males under 35, especially if they have few assets. Given that, mandatory pools are a reasonable solution since Americans have shown that they cannot all be relied upon to save money for themselves for such future costs.

Frankly, I cannot think of a better pool than universal single payer. We already have enough experience with Medicare, the lowest cost program available that allows patients a great deal of choice, to know that we can save a substantial amount of money initially by having such a nationwide pool.

The only lower cost way to do it is assigned treatment and government-provided health-care similar to the VA at its best, after it had been fixed and before Bush began to mess it up, but I see no value in fighting for this as a mandatory program.

avedis: These are the facts and they are pretty much undisputed among those who know the data.

That's interesting. Can you link to a website that actually shows this data?

At the end of the day I come down in favor of something like the Canadian or Australian system (but maybe not for the reasons you might think).

Well, the obvious reason is: because they both have far better health care systems than the US. Not the best in the world, but it would be a bit over-ambitious for the US to aim for having the best health care system in the world. Better to aim at being a good second-rate, I agree.

NFL,

Given that, mandatory pools are a reasonable solution since Americans have shown that they cannot all be relied upon to save money for themselves for such future costs.

Frankly, I cannot think of a better pool than universal single payer.

We agree. You just made the case in a much more succinct fashion than I did.

Universal health care in a nutshell:

1) We, the American people, find it unacceptable to allow people to die because they cannot afford the medicine, procedure, emergency service, illness management or whatever health care service would prevent the problem.

Given that, universal single-payer is simply inevietable.

Our current system -- in which the government picks up all the slack and the most expensive demographics -- just guaruntees amazing profits for the private insurance companies.

Fact of the matter is -- we pay for universal coverage already. We just pay for the least efficient and most expensive form of it possible, with the maximum of hassle and suffering.

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