Response on Health Care Reform-BECKER

Many good comments, but I can only address a few of them. There is no reason why health savings accounts will reduce the interest in preventive medical care. I give people more credit than that, and believe that they will spend some of the money in these accounts on psa tests and other blood tests, etc. Indeed, these accounts are very likely to increase spending on prevention by encouraging some persons who now do not have medical insurance to set up accounts. People are interested in insuring against bad health because of uncertainty about the incidence of various diseases. Borrowing also offers insurance by redistributing spending over time, but borrowing is in most cases, and certainly in the health case, a very imperfect substitute for explicit insurance. HSAs are basically flex-spending accounts with carry over possibilities, and with tax advantages. In effect, health savings accounts combine the advantages of IRAs with the opportunity to withdraw money before age 65 if the withdrawals are spent on health care. This combination is quite attractive. "Medical tourism" provides global competition for American doctors and hospitals, and I am all for it. However, medical tourism is still small compared to the numbers who come to the US for advanced treatments. Some of you argued that individuals who take out health insurance are at a "power" disadvantage compared to insurance companies. This is not true for car insurance, and I see no evidence that it holds for health insurance. One of you asked why should companies offer portable HSAs if that would increase employee turnover? The reason is that they would then be able to hire employees more cheaply since potential employees would realize they would not be locked-in to the same employee. For the same reason, companies offer training that is useful in other companies as well. I was explicit that I would not discuss all aspects of health insurance because I wanted to concentrate on health savings accounts. Some of you mentioned issues that I did not discuss, such as adverse selection into insurance plans, mandated coverage by states of predictable expenses, like normal child delivery expenses, state restrictions on out of state insurance coverage, the weaknesses of Medicare and Medicaid, and still others. For the most part, extending HSAs would not make any of these problems worse, and would make some of them better. For example, some healthy young persons who now form a good part of the uninsured pool would be induced to take out a health savings account since they would be able to save unused balances for retirement. Some low -income families who now rely on Medicaid will also set up HSAs because of the tax credits and other advantages of having private insurance compared to the onerous restrictions imposed by Medicaid.

Comments

[Richard Mason]

Some of you argued that individuals who take out health insurance are at a "power" disadvantage compared to insurance companies. This is not true for car insurance, and I see no evidence that it holds for health insurance.

Perhaps I am misunderstanding the comparison, but individuals who self-insure their cars are indeed at a bargaining disadvantage relative to insurance companies. I can attest that auto body shops do not quote the same rates to an uninsured individual as those accepted by State Farm. This seems analogous to other commenters' anecdotes of paying higher medical prices with an HSA.

[Bill]

I restate my observation that HSA's do not provide a consumer any bargaining advantage for drugs, for example. The auto example is a good one--there is price discrimination. Moreover, since most individuals do not pre-negotiate their medical costs--they do not know when they are going to have an incident, unless it is a chronic condition--there is no way to pre-negotiate drug costs. Now, one of the respondents did mention that their Blue plan did have a program for drugs. It would be useful to look into that, because some of the Blue plans have spun off their drug procurement business into a for profit model--taking with them some very well compensated executives who now get stock options in the new business! Maybe this will all sort out over time, but, given that McCarran limits purchasers from creating national plans, don't hold your breath. What you are more likely to see is opportunistic price discrimination and the lack of any consumer countervailing power.

[Bill]

By the way, this is an opportunity to conduct an experiment: see what drug prices you get when you purchase individually, and what prices you get when you purchase as part of a health plan.

[Krzysztof]

I don't think that statesments about higher cost of medical services for high deductible plans vs traditional (HMO, PPO) are true. I had 2 different high deductible health insurances (with HSA accounts) and in both case I paid insurance company negotiated rates, just like with my previous PPOs and HMOs.
Both of my HSA/High deductible plans came from companies that put some money into HSA accounts and monthly cost of HSA/High deductible was much lower than PPO or HMO plans.

[phistphight]

www.runnydiarrhea.com

[Dude]

I think Becker & Posner fail to understand how incredibly short-sighted many ordinary people really are. For them insurance is a waste of money. Have they ever talked to ordinary people who lack insurance? Most of them can't even spell HSA!

[abigail]

That's very true...Its not possible for everyone to take benefit from this opportunity.

[Joe Merchant]

I don't know about "power disadvantage" of individuals vs insurance companies, but I certainly know that participation in group insurance can amount to 75% and greater savings as compared to individual insurance - that certainly seems to be a "power disadvantage" ot the individually insured.

Also, while I have never heard of a major group insurance premium tripling due to a single illness and hospitalization (that has no prediliction for recurrence), I have personally experienced this at the hands of Blue Cross while individually insured.

In a world where other industries compete based on price differentials of 25% or less, 2x, 3x, and even 5x disparities in cost seem to be more in the realm of power abuse than economic incentive.

[www.runnydiarrhea.com]

www.runnydiarrhea.com

[David Locke]

With automobile insurance, you have an accident, a random event, and you then get your car fixed, unless you are ensured with a company that thinks you give it money to do something other than cover your risk, so you get ripped off.

With health insurance, you get old, sick and die. It is going to happen. There is no risk. It is going to happen. You'd probably be better off not buying insurance, but getting annuities of some means. Then, you have the health insurance companies spending more time on denying claims than paying cliams. The employer gets away with this failure to honor the employment contract, because a third party is screwing you over, not them. And, of course, the insurance company isn't interested in paying claims at all. Doctors get paid well beyond any net-30 concept, and their cash flow cannot be factored or borrowed against.

If you do get old and sick, you will no longer be able to buy insurance. This just shows very clearly that medical can't be insured. You are really buying insurance, because you are well and healthy, and that doesn't carry any risk. How did medical insurance ever come to be?

[corwin]

Re'Not buying health insurance until you're old
1)The catastrophic coerage is a necessity,if you have any assets.
Re'the cost of medications.I can be minimized by buying larger sizes and splitting pills.For instance;Liptor 80 mg=$100/month;same price for a month of 20 mg.My patients are on 1/2 pill alternate days for a 75% saving.Blood pressure;beta blockers,Ace's are generic.Cost=$15/month.Baby asa$1/month.Oral diabetic meds=$12/month.
Certainly not everything can be downsized,but the vast majority can.But the patients have little inceentive to try to save and the doc has none.

[Anonymous]

مركز تحميل

[Anonymous]

بنت الزلفي

[Anonymous]

AnMzkk

[Anonymous]

fxt4wW

[Anonymous]

ÿ¥ÿßÿ™ ŸÖÿµÿ±
--
دردشة مصرية

[Anonymous]

ÿØÿ±ÿØÿ¥ÿ©
___
صور

[Anonymous]

Thank you, you always get to all new and used it
ÿ¥ÿßÿ™

دردشه

[Anonymous]

Incredible site!

[Anonymous]

It is the coolest site, keep so!

[Anonymous]

Great. Now i can say thank you!

[Anonymous]

If you have to do it, you might as well do it right.

[Anonymous]

If you have to do it, you might as well do it right.

[Anonymous]

دردشة برق

دردشة الخليج

[Anonymous]

Excellent site. It was pleasant to me.