Dear Congress: How to Repeal & Replace Obamacare

Dear Congress,

I looked at the present proposal of Obamacare Lite and found it sadly wanting. The basic problem is that it attempts to continue the practice of mixing “health insurance” with “medical welfare”. Those two must be kept separate, even in your thinking about them, or the result will fail.

Since you seem to be having some difficulty crafting such a plan, I thought I might do it for you. Here is a simple, clean, and very functional Health Care Act of 2017:

1) The Affordable Healthcare Act (Obamacare) is repealed in total.

2) Each medical facility shall charge all their clients the same rate for the same service or product in any given year. Rates will be published at the start of each year on January 1.

3) Any people who file on a common tax return may choose to be on the same medical insurance policy, including dependents of any age.

4) Any pre-existing condition must be covered under medical insurance if there has been coverage in existence prior to any new policy, or commencing 1 year after the new policy is in force if the applicant is uninsured.

5) Health insurance may be sold in any State by any Health Insurance Company provided it conforms with the State laws of the respective States.

6) Any family unit (filing on the same tax return) who has medical expenses (exclusive of expenses paid by insurance providers) exceeding 1/3 of their Gross Income shall have those excess expenses paid from the General Revenue Fund. Implementation via Medicaid, Medicare, or other similar agency as the Executive Branch shall establish. 100% of all medical expenses paid shall be a tax deduction.

7) All provisions of this act shall take effect starting on Jan 1, 2018.

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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78 Responses to Dear Congress: How to Repeal & Replace Obamacare

  1. Rhoda Klapp says:

    If you don’t have a requirement to be covered, how does point 6 work? No insurance means 100% of expense is covered by the general fund? Or have I misunderstood?

    Sidebar: As a US resident diabetic UK citizen planning to return soon, I could fly home for my insulin for less than it costs here, four times a year. Drug prices are a ripoff here.

  2. Jeff says:

    (no) Thanks to the RINOs and Demorats, there apparently aren’t enough votes to completely dump and redo Obozo”care” from scratch. Over that CTH Sundance did an analysis of it which went through the maddening “swamp things” that are in the way. I think Trump will dismantle it in chunks, sort of a series of plan “B”s. Hopefully 2018 will bring a complete majority of non-RINOs in both houses.

    I thought healthcare was expensive here in Germany, but gosh, 0bamacare is stunningly expensive.
    Maybe they’re trying to “thin the herd” by getting rid of the old and infirm. Sort of like the LCP.

    https://theconservativetreehouse.com/2017/03/07/why-obamacare-cannot-simply-be-repealed/
    is the article I was thinking of…. (I’m thinking Gail will have some more infos from over there).

  3. Steven Fraser says:

    A very good start. I especially like the first item, the ‘undo’ button. This means, by inference, That insureds and insurance companies have freedom of association to group in whatever ways they would like, to spread risk and cost, and no company or person would be forced into any disadvantageous contract.

  4. philjourdan says:

    Putting on my lawyer hat:

    provided it conforms with the State laws of the respective States.

    Moonbeam signs state law that requires any insurance company doing business within CA’s border be incorporated within its borders.

    #2 – I would not require once a year pricing. Things change too rapidly. But standardized pricing is a must.

    #6 – Remove the 1/3 portion and leave the tax exemption on Medical expenses.

    #8 – Limit tort liability. There is a reason it is called a “Practice”. Medicine is not an exact science. In conjunction with the limitation of tort liability, limit Lawyer fees to a set amount per hour, with hours expended documented and subject to audit. That gets rid of the ambulance chasers trying to make “talcum” a class action suit.

  5. E.M.Smith says:

    Just saw Ryan giving the same “We can’t just repeal it” whine. Also said ~”It is ONLY Obamacare or Our Plan, there is no other choice” (several times).

    Well, yes, you CAN “just repeal it”. There will be consequences and side effects, so you plan to clean up the damage afterward. Someone builds an death trap skyscraper on top of an old charming neighborhood, sure, you can not get the old charming neighborhood back again, BUT, you can sure dynamite the death trap, scrape the ground clean, and start building a nice village again.

    Is it hard to get the vote? Yes. So you tell the Dims that they have a choice: Repeal it, OR, you will let it die a natural death, all the while pointing directly at them. Every day, every Republican, tweets out that their Democratic opposition who voted for Obamacare have refused to let it be repealed and fixed. Take out ads on TV. Be interviewed on the steps of the capital. Hold marches in the streets. In otherwords, read The Democrats Playbook on Community Organizing and Aikido them with it. Submit a new bill to repeal it in full, or to repeal parts of it, every single day. Vote on them and publish the votes widely.

    As to “Only 2 Choices!” – Flat Out Lying.

    The reality is “Only 2 Choices he wants to think about”.

  6. E.M.Smith says:

    @Phil:

    The #6 is where you cleanly separate the Welfare from the Insurance. It basically says “Over this much becomes social welfare program FOO”. Exact limit and nature of program subject to whim of congress, but it needs separation.

    And I deliberately left out Tort Liability as it drags in way too many complications and adversaries for a simple “Kill ACA and start over” step. I’d do it as a second stage.

    Prices must be held stable long enough for folks to discover them and to prevent gaming the “one price” requirement. With monthly prices you can have the “special of the month” problems. So you only bill Medicare in odd months and private insurance in even… I could maybe see every 6 months. BUT, as it stands, most offices do not change their prices very fast over time, they change them dramatically over payer… That must stop.

    Nothing would prevent a major insurer from incorporating a subsidiary for Moonbeam. I had a Delaware corp foreign corp registered in California and Nevada. This is all standard stuff. I have no problem (and don’t see any problem either) with Aetna Corp having Aetna Of California subsidiary wholly owned corp for California.

  7. cdquarles says:

    Number 2 has been policy now for some 20 years, with respect to ‘insurance’, in case you didn’t know it, within local areas. I would not expect to be charged, where I am, the same prices as one who lives in DC/San Fran/LA/Chicago/NYC.

  8. cdquarles says:

    Number 4 was also policy for group insurance as long as I can remember. When I bought my first plans back in the 80s, they all had a waiting period of 12 or 13 months for ‘pre-existing conditions’. Given the handicaps that individual plans had, the waiting periods likely would have had different terms.

    Oh, another fly in the ointment that really makes sound pricing, from the actuary point of view impossible; is the extension of the ‘tail’, by removing life time coverage caps. In the old days, if you bought your own insurance, the contract had a maximum expenditure cap, as I recall it, of $3 million. Those could be increased, if you wanted to pay more for it.

  9. Gail Combs says:

    I think you are correct E.M.
    Do two steps. Send in a simple one liner – ‘Repeal Obummer care.’ Heck you could even attach it to a MUST pass bill hidden some where in the 10,000 pages. 😁

    IFF that does not pass then do the pointy fingers screaming loudly as prices sky rocket and people scream. Bye-bye rinos and demonRats in 2018.

    Meanwhile pass the Tort reform law limiting lawsuits against doctors.

    We have suffered with the darn thing for this long we can deal with it for another few years. Meanwhile the STAFF gets cut to the bone and there are no tax liabilities enforced for not buying it. No enforcement against small business. Act as if the darn law DOES NOT EXIST.

    Obummer never enforced immigration laws so Trump doesn’t have to enforce Obummercare.

  10. cdquarles says:

    EM, the law prior to No-cate made it a felony to charge different prices to different ‘insurance’ plans.

  11. cdquarles says:

    Oh, with respect to the law prior to No-care, which caught up a former governor and a medical facility CEO, involved Medicare. If Medicare retroactively denies a claim, after they’ve paid it, you could be charged for filing false claims and be fined, imprisoned, or both.

  12. philjourdan says:

    I do see a problem with “Aetna” having an “Aetna” California. Excess cost and excess overhead. The Fed has 2 jobs.

    #1 – Provide for the common defense
    #2 – Rule over INTERstate commerce.

    #2 clearly is this case. It is time to get back to basics.

    As far as the objection of the pricing, the pricing is in effect as of the DATE of service, regardless of bill date. So that eliminates the gaming of the system.

    But I will agree that Torte reform can be phase 2. It will require some thought to be both effective and good. And the rest should not be held up while those rules are ironed out.

  13. E.M.Smith says:

    @Phil:

    Excess costs? It costs about $150 to incorporate a subsidiary. More if you want to get fancy. All up under $1000 even with bank account set-up and in States with horrid laws.

    @CDQuarles:

    Per the “everyone pays the same”: Um, I’m pretty sure it was “Medicare pays no MORE than anyone else”. You could stick private insurance with as much as you wanted… I’m saying “that ends”. (Though I’m sure in some places the private insurance guys tried to worm in “no more than” clauses too, I’m not sure how far it got).

    When I worked in Patient Accounting, there were wildly different prices for the same service to different providers, but things may have changed. IMHO assuring it doesn’t hurt…

    @All:

    Oh, and part of the idea of a long price stability window is that I’m not going to start price shopping when I’m having a heart attack, but if I know each January (or Jan and June) to do a quick check, and find that Merciless General costs $50,000 for a bypass and Bob’s OK Hospital and Car Repair is $1000, but Good Samaritan Of Our Lord is $12,000 and has Very Good Marks, I can have in place a note that says “In emergency, take me to Good Sam if at all possible”. Rather like Kaiser has “Take me to Kaiser unless there really is a medical reason you can’t make it”. Folks will not want to go through that exercise more than once or twice a year. (Maybe after it stabilizes in a year or two it would not matter as much, but as of right now, the same thing can in fact have that kind of range of prices. Price has no relationship to reality, only to desired revenues.)

    Per drug prices: IMHO that’s a whole ‘nother discussion… But starting with “everyone pays what Medicare pays” might be a good place to start…

  14. E.M.Smith says:

    @ Rhoda Klapp:

    If you don’t have a requirement to be covered, how does point 6 work? No insurance means 100% of expense is covered by the general fund? Or have I misunderstood?

    #6 just says that for everyone all medical expenses are a tax deduction. That include insurance payments. So folks will be encouraged to pay their bills, buy insurance, and deduct it. It also says “Welfare starts for everyone at 1/3 of their gross pay being spent on medical costs”. So your uninsured, IFF they have any income, pay 1/3 of their income for their medical bills (or at least are stuck with that bill like everyone else is stuck with car payments, house payments, etc. If they want bad credit by not paying, not my problem).

    However, notice that a true indigent with zero income would pay 0/3 of their medical costs, or zero. A college kid with $6000 of summer earnings who skips the (what would then be very low cost medical insurance for a healthy kid not encumbered with welfare transfer costs to cover old folks) cost of medical insurance, would need to find a way to scrape up $2000 for medical costs or get tossed into the scumbag bad debt sleazeball small claims court hopper… even if that means doing a shakedown of Mom & Dad and getting the “You Idiot!” talk. While a person making $120,000 would have to pay $40,000 of their own costs before they got any welfare coverage (so would be much more inclined to get a really good policy instead… and have it pay.)

    This just means that real indigents get the welfare coverage, while folks with a job “pay up” if they get sick without insurance until it hurts; but that we don’t bankrupt folks just because they lost the Medical Lotto on a catastrophic illness or accident. You can think of it as “Socialized Catastrophic Health Insurance” if you like. Everyone is on their own until 1/3 of their income is consumed. After that, they are a welfare case and everyone pays into the tax kitty general fund so everyone gets welfare out of it. You could make that 1/6 just like the percent of the economy that is medical care, then everyone would be on the hook for the average, but those folks who lost the medical lotto don’t have to pay extra, it just gets “socialized” to everyone (and those folks not sick at all pay it via taxes). I set it to 1/3 since that looked like a “folks can handle it and it hurts enough to motivate” number, but I could see 1/4 or any of several other “Welfare Starts Here” levels.

    The only “game” I see out of it, is that a family with a child or spouse who is horridly sick might be tempted to put them “on their own” so they get 100% coverage, but then you have the question of who is paying for their housing and food and why doesn’t that make them a dependent… I’m sure folks can figure a way to patch over that risk, though. The 100% deduction is meant to some extent to reduce that risk anyway. Folks making a lot of money will be willing to keep it “in the family” for the deductions while those making no money already get the Welfare angle pretty quickly. If making minimum wage of about $15,000 / year, are you really going to file for divorce over the $5000 of medical costs you would be required to cover? (Of which $1000 to $2000 is likely already spent for insurance anyway…)

  15. Gail Combs says:

    More from Sundance on Obummercare… And the R.A.T. tennis game
    “Eyes left – thwack. Eyes right – thwack. Heads left – thwack. Heads right – thwack. Oooo…. Aaaah… Hot dogs, get your hot dogs here. THWACK wow… TWACK back ohhh… Left, thwack – Right, thwack… the game continues.”

    ObamaCare and The GOP: Two R.A.T Groups Fighting for Control – Both Filled With False Information and Many Lying…

    It’s obvious the financial interests are pouring in money to the R.A.T groups right now in the fight over ObamaCare Repeal and/or Replace. Boy howdy are they all fibbing as they fling their poo at each other. Forget the Democrats in this discussion….

    It is an amusing discussion of the politics.

  16. jim2 says:

    OT, but this Obama birth cert has a foot print. And this one ain’t green.

    http://www.theamericanmirror.com/malik-obama-shares-photo-brother-baracks-kenya-certificate-birth/

  17. jim2 says:

    The Kenyan BC could be a fake. Just sayin’ …

  18. Eric Barnes says:

    * Allow unlimited individual/employer contributions to tax free HSA’s.
    * Allow workers the option of contribution to their HSA rather than insurance.
    * Allow donation of HSA dollars to individuals (encourage the fortunate to share their good fortune or for HSA dollars to be inherited).

    My wife and I have 2 kids ages 6 and 7, and have been paying (or had our employers pay) around 20k per year for our insurance the last 10 years. If we had the option of an HSA as above we’d be nearly bullet proof for medical costs now. As is though, we’ll likely be leaving the work force within the next 15 years and will have to rely on savings to pay for care while we’ve paid a horrendous amount of cash for coverage when we likely won’t need it. Insurance is a *horrible* way to pay for health care. The only people who make out are the Insurance people and Administrators. I don’t begrudge the healthcare workers their cut of the pie.

  19. gallopingcamel says:

    The idea that this rotten piece of legislation should be supported in the belief that the problems will be eliminated by two subsequent bills is the same old nonsense of “kicking the can down the road”.

    The GOP is bought and paid for by the “Donor Class” including the health care mafia. That is why the subsidies to medical insurers are included in Ryancare.

    We need a better bill and if it gets defeated wait two years until Obamacare collapses under its own weight. The GOP is crazy to create another monstrosity that will fail just like Obamacare because it does not control costs. This time the GOP will own the disaster.

  20. Larry Ledwick says:

    Insurance is a *horrible* way to pay for health care.

    People need to realize insurance is just legalized gambling. Unless you are smart (which is illegal) they- the house (insurance companies) always win.
    (under the ACA it is government mandated gambling with a crooked deck and loaded dice)

    Insurance only makes sense in cases where you have sound actuarial data and want to hedge a known risk – like when Lloyds of London was set up, the ship owners made a reasoned decision that over time they would lose a ship at sea and it was a sound investment to amortize the loss over a period of time in the form of insurance premiums. Consumers now have no control over the risks and also no control over the costs which makes it guarantied losing gamble.

  21. Larry Ledwick says:

    The only way I would trust them to fix and repeal is if they passed the fix bills first with a provision that said when the ACA was repealed, that the new fix bills would become effective immediately.

  22. Glenn999 says:

    I thought this was interesting comment (a little long tho):

    Ok finally a topic I understand and have an interest in!!! The explanation SD has given above is correct regarding passing legislation. The purpose of my post is to give my opinions on some specific parts of the proposed legislation. Before getting to that a bit about my background. I have 25+ years in the healthcare industry and another 5+ years in the Pharma industry. My perspectives come from my work experience and dealing with my own health issues and having recently lost both of my parents (father 9.17 and mother 1.24) to cancer. My experience in the healthcare industry started many moons ago (haha) building the systems that actually process the medical claims. For those of you that have healthcare coverage pull out an EOB. I helped design and implement the main system that processes the claims, generates the EOBs and pays the physicians and hospitals. I got my start working at the largest healthcare payer in the US. My experience led me to working within about 75% of the operations and IT departments and at one point I was responsible for all legal/regulatory implementations across multiple states in which we did business. I then moved on to working in the largest healthcare IT firm in the country. Over 80% of the healthplans use the systems I helped to build and implement in US payers you have all heard of (UHC, Cigna, Humana, numerous Blues plans etc…). I was also responsible for overseeing onshore and offshore code development done in India (H1-B’s anyone—oh the stories I have). Project budgets exceeded 500 million dollars so these were large scale high risk projects. I also have experience working within medical physician groups and hospitals. I was also responsible for monitoring and determining how to implement the ACA from our software perspective before I left that job and made a move into the Pharma industry working with major companies such as Eli Lilly, GSK etc……Thankfully I am no longer in the healthcare industry (and that is another story). So my opinions and ideas come from my background and experience.

    One thing I will say and I think President Trump is just now starting to realize this after meeting with some of the payer CEO’s (a couple of which I know) is that healthcare is VERY complex. And that my friends is a big part of the problem. The next part of the problem is our elected officials truly don’t understand all of the issues and how we can (or cannot in some cases) fix them. Each person has a different perspective and knowledge and personal interests and often competing interests (Mr. Price would be a good example–his interests are the physicians).

    With that said this will be my first posting on this whole healthcare debacle (sad, but that is what it is). Sadly due to my moms death 3K miles away I am short on time this evening so I will pick a single topic to write about. This topic is selling insurance across state lines.

    Before getting into this something each person trying to wade through all of this insurance mumbo jumbo should understand is healthcare companies divide their business into what is called LOB (lines of business). Not all healthplans sell all these types of lines. In short these are as follows:
    1. Individual (prior to ACA this required underwriting and medical information and many pre-existing conditions were excluded)
    2. Small Groups (employers with 3 to 49 employees)
    3. Mid-size Groups (employers with 50-499 employees)
    4. Large Groups (employers with 500+ employees)
    5. National Accounts (employers with 500+ employees across multiple states)
    6. Employer-Sponsored (administrative services only-these employers self insure–this is a very interesting topic and I may just write about this later). These employers cover an estimated 60% of Americans insurance. Typically, these plans are self-insured, with the employer shouldering the risk and the insurance company providing mostly administrative services. These types of plans/groups are subject to federal law and exempt from state regulation.
    7. Retiree plans
    8. OPM (this is our gov’t employees)
    9. Medicaid
    10. Medicare

    In today’s market companies already sell across state lines. Meaning the company CHOOSES to sell certain LOB’s in specific states because the actuaries have determined it is a profitable area. The key thing to understand here is the health plan CHOOSES to sell in certain states and markets and they do so for PROFIT! Even if all state healthcare related regulations were wiped off the face of the planet a company may still refuse to sell across state lines because it is not profitable (provider costs are high, population is not health etc…..)

    In order to sell health plans in a state the health insurance company has to do the following:

    1. First they must have established provider and hospital networks where they want to do business. Establishing networks is very costly and time consuming and is an annual ongoing process for a healthplan and it requires appropriate staffing. Also note the laws of each state in which a plan wants to do business are different. It would take considerable time, monies and staffing for a health insurance company to enter a new state. The workaround is to rent provider networks from other healthcare plans but there are no cost savings in this so this is a low probability (it has been done before, but for other reasons).

    2. They must have a product(s) to sell that is approved by the state. Just because a PPO plan with say a 5K deductible was approved in Kansas does not mean it is or will be legal and approved to sell in say California. So the health insurance company has to have regulatory and product staff that knows the laws of the state in which they want to do business and how to file the plans (again this is an annual ongoing process). Something to note that for California there are 2 different state entities that regulate plans so filings for this state as well as ongoing handling of consumer issues is cumbersome (no surprise).

    3. They have to change/modify their systems to handle processing of the medical information (in general terms this is operations). This cost $$$$ and the people that do this (as I used to do) all make over 6 figures. It can be very complex and mistakes can result in high dollar losses as well as members being denied benefits. This is an expertise that takes years to learn (I have former coworkers that now do this as independent consultants and their rates are 175.00 per hour if not more in some cases). So what I am saying here is there is an operational cost to doing business in a new state as well as costs when laws are changed.

    So in summary health plans today can (and do) sell business across state lines. What new legislation would need to do is to eliminate individual states’ abilities to regulate their own health insurance markets. This would directly contradict another goal appearing in Trump’s policy statement (paragraph one), which advocates returning “the historic role in regulating health insurance to the States.” See the challenge here?

    So let us pretend that tomorrow all state healthcare regulations were gone. Poof! There would remain other barriers/issues for health insurance companies such as the difficulty of building a network, attracting enough customers (providers look at a health plans customer base as part of the contract negotiations process) to create a large enough risk pool. Costs of additional staffing etc…. these factors may make it unappealing to insurers to pursue new business in other states. Managing the insured risk pool and maintaining plans and networks is how health insurance companies control their costs.

    And last but not least…………………blue cross and blue shield plans. Without getting into great detail……….they have territory and licensing agreements. Legislation to sell across state lines would also have to have a way to dissolve these agreements.

    I hope this helps clarify selling across state lines……it is already done (when an insurer chooses to do so). To completely open this up and make it easier for plans only solves part of the problem.

  23. Eric Barnes says:

    Lots of interesting details Glenn999.
    I would like to state that I’m not opposed to Insurance and am definitely opposed to insurance over-regulation. Long term payment for health care (IMO) is best handled through savings. The problem with health insurance is it being forced on workers as a way to pay for health care through subsidizing company health plans. If that money was able to be used by the consumer directly for health care it would take away a lot of complexity that is unnecessary for the average Joe/Jane. I realize that would be bad for the Health Insurance industry, but my main concern is effective health care payment and cost abatement for me and others. Actually lessening regulation would make catastrophic high deductible plans make much more sense.

  24. philjourdan says:

    @jim2 – It either is or is not a fake.

  25. cdquarles says:

    EM, when did you work in patient accounting last? I know that much has changed since DRGs in 1982/3 then various OBRA/COBRA stuff since 1987. Since 1997, it has been illegal to charge anyone’s insurance at different rates, especially the big Ms. Thus all producers of medical care price their stuff where they are assured of getting enough cash flow to remain a going concern. Only when you don’t take *any* insurance at all, would one be free to charge something at a different rate, and even that would depend on the package offered. Now, the only such differentials are regional in nature, where high cost urban area people get paid more than those who don’t.

  26. jim2 says:

    Why should healthcare providers be allowed to charge one rate for insured patients and another for uninsured? I realize this is a free market, but would a mandate to charge x for y service no matter what be helpful to the consumer?

  27. E.M.Smith says:

    @CDQuarles:

    Far far too long ago… ’70s as admissions clerk and patient accounting. Early ’80s as a medical accounts receivables computer programmer writing code to automate it… Nothing in the field since about ’82 (so I think I never had to deal with DRGs). In the ’00s did a data center colocation facility for a medical malpractice insurer, but other than interviewing the staff for what they each needed it was mostly just build of computer space and install duplicate equipment (their staff set up the software for the applications).

    Certainly not done anything involving pricing from the ’90s on. Do you have a citation for the law on uniform prices? I’d like to read up on it. If it is as presented, that’s a great step forward. (Though oddly I don’t remember my private insurance rates going down post ’97 so something isn’t acting as I’d expect).

    FWIW, in the mid 80s to 90s I’d moved over into more technical areas and was running a supercomputer area and doing Unix immersion… Getting away from all that business and accounting stuff. See, I’d been told “You are not technical enough” when trying to move up the ladder as I’d only done business and accounting things. So off to Tech Land. A decade later, I’m as technical as can be… Then I got told “You are not business oriented enough, you are too technical”… Sigh. (Eventually landed a gig as Director of I.T. at a technical startup… and achieved “balance”… but now I’m told “All your experience is too old”… or “You have too much experience for what we want”… I think the problem is that I don’t have a Hindi accent…)

  28. E.M.Smith says:

    @Jim2:

    That’s what CDQuarles and I are batting back and forth. It would seem that in about 1997 some law was passed to quash the practice. I’m interested in seeing the loopholes in it… Like, is it OK to charge everyone $2000 for a broken leg, but then when Medical only pays $1000 to just “write off” the difference? After all, you “charged” them both the same… I know that as late as the late ’80s I was in a hospital billing area for some questions and the person ahead of me bleated about their bill being very high and them not having the money, so the clerk said something along the lines of “Oh, not insurance? You are paying this? Well then, we can cut that about in (1/2 or 1/3 or something)”

  29. jim2 says:

    I’m not saying every medical provider would have to charge the same for a broken leg, just that it would have to charge everyone they treat that price. That way there would still be price competition.

  30. Eric Barnes says:

    I’m not a great fan of restricting doctors on prices or display of prices. IMO, the health care that we get in the US is fantastic. I think dealing directly person to person with your medical provider will let you know whether it’s “time to move on”. Almost all my experiences have been good. Getting back to paying cash and having the docs/nurses recognize you as the customer who actually has a choice should be more than enough to fix problems IMO.

  31. Serioso says:

    I think y’all are missing a critical point, made by Atul Gawande in the New Yorker nearly a decade ago: Medical costs across the nation vary widely, with a factor of FOUR difference between (say) Minnesota and Texas. The difference would appear to be that Minnesota doctors are generally on salary, paid by Kaiser, while Texan doctors (over) prescribe diagnostic tests using equipment they own. Until the law (and the insurance companies) crack down on self-dealing physicians, costs will continue to run out of control.

    I know the Chief has misunderestimated the New Yorker in the past, but this is a must read.

    http://www.newyorker.com/magazine/2009/06/01/the-cost-conundrum

  32. Power Grab says:

    I try real hard to stay away from doctors. All this discussion about insurance and fixing O’care has made me realize that one of the biggest reasons is that I feel like i have no control over how much I will be billed. I have never been given a dollar figure when I have asked about cost. They just say they will submit it to my insurance, and that’s the end of the discussion.

    After running up megabucks of bills last year on an operation (only the second in my life, and the most expensive), I had to wait something like 4 months to finally get a bill that said I was expected to pay it. So, even after shelling out megabucks through the procedures, I was still left with megabucks to pay. It will take me 2 years to pay that. It amounts to roughly 3% of the highest figure I saw. There were discounts and write-downs, but even so I am not in a position to write them one check to pay what’s left. Two years is the longest they will let you go on a payment plan, so that’s what they’re getting from me.

    So when they invited me to return for a follow-up, I declined, saying that since it will take me 2 years to pay off what was left last year (and this is a new plan year with a new deductible), and I can’t afford to keep piling up medical debt, I refused their invitation.

    I had been putting off seeing a dentist after a hugely unsatisfactory experience with the last one I saw a few years ago. (Longish story, but I won’t go into that now.) I had told myself that if I felt like I could afford it, I try to find a decent dentist to get some things done that I’ve been putting off.

    I finally got in and had the checkup and xrays done. Nothing surprising was found. They said that my teeth are actually in pretty decent shape. The last crown (done by the unsatisfactory dentist) really needs to be re-done. And since the cleaning a few days ago, a slight problem with face pain after eating mushroomed into 45 minutes of agony after eating. Aleve won’t even touch it. I was concerned that the tooth with the bad crown was the source of the problem. After a quick emergency check today by the junior partner in the practice, he declared that he could not attribute the pain to that tooth (or any others).

    They were pretty quick to suggest going to a neurologist next, but I felt that should be a last resort.

    So when they offered me the suggestion of looking into trigeminal neuralgia myself, I said I would do that. I finally got around to it tonight. In the first 10 minutes, I found a huge clue. The diagram on Wikipedia of that nerve was the clue. I got some new glasses at the end of last year. They press in on my temples. I had noticed that they leave depressions across my temples. I wondered if it was going to be a problem. The nerve diagram made it clear that the biggest part of the nerve was right where the glasses press. Eureka! I switched out the glasses I was wearing for the previous pair (which don’t press on my temples) and appear to have found the quickest single thing I could do to fix the problem. I am sure it will take some weeks for the compressed nerves to completely normalize, but I’m pretty sure I can avoid enriching a neurologist for the foreseeable future!

    I’ve been afraid to eat, but after spending about 5 hours working late with glasses that don’t press on my temples, I decided to do a test. When I got home, I ate about a half serving of baked beans and a half glass of milk. Within about 5-10 minutes, I did get a bit of pain. But instead of hitting level 8 or 9 on a scale of 1 to 10, it went only to 5 or 6. I went ahead and took some Ibuprofen (the dentist recommended it over Aleve). Within 5-10 minutes, the pain is down to less than 1. That’s a lot better than 45 minutes of steady level 8 or 9 pain! So I’m looking forward to getting rid of this problem fairly quickly. I guess I really ought to go back to the eye doctor and see what can be done about my glasses, but that’s going to wait. Or I may just drop in and explain the problem the new styles were giving me.

    I said all that to say this: I would much rather get advice like reading up on trigeminal neuralgia before running off to some specialist who may or may not be able to actually find out what the problem is. I’m pretty sure I can’t afford to be run through a battery of tests and eventually find out the only solutions they can offer me have side effects much worse than my present symptoms, and much more expensive than I can justify.

    It never seems to phase the people in medical offices that their services frequently take HUGE BITES out of an individual’s or family’s budget. When I’ve mentioned in all seriousness that certain lines of treatment could leave me dead before I could pay the bill, that doesn’t seem to phase them. I wish there were a way to make it so they only get paid if they cure you. But if you die, then all payments are forfeit and they have to mount a plaque on the outside of their office to serve as a memorial to you. The more plaques, the more doubts it raises about their abilities…see? Or they should at least send flowers to your grave every year.

  33. Eric Barnes says:

    I’m starting to warm to item 6, although I wonder how that would be implemented in terms of payment? It seems like a new entitlement, but is effectively status quo for low/no wage earners. For high wage earners should it be capped somewhere? If you’ve earned a ton of money and haven’t saved do you need that sort of assistance just after you retire?

    Daniel Horowtz has an interesting article here…
    https://www.conservativereview.com/commentary/2017/03/20-ideas-to-crush-obamacare-and-cure-americas-health-care-crisis

    https://www.conservativereview.com/commentary/2017/03/20-ideas-to-crush-obamacare-and-cure-americas-health-care-crisis

  34. Larry Ledwick says:

    Related – in one image why average folks want the government to please stop helping us.

  35. jim2 says:

    I think it’s safe to say conservatives consider any payments from the government for medical care wrong. They want people to pay for medical care themselves. (Yes, I’m making a blanket statement – noted.)

    But lefties and some righties consider it cruel to allow people to suffer without medical care. I think that’s the crux of the issue. That’s how welfare gets mixed in with medical care.

    So, in order to have a rational conversation, one must first lay out the objectives: medical care only or medical care and welfare.

    I find it difficult to say anyone who can’t afford it should suffer and/or die. It’s also unacceptable to force doctors and other medical professionals to work for less than we know they are worth.

    If one desires to help those in need, maybe the best way is to just go full government solution and roll Medicaid in with the Veteran’s hospital system, expand it, then treat those who need it there. For the rest, it’s a free market system?

  36. jim2 says:

    Unintended consequences strikes again:

    “The House GOP is pushing a bill that would let employers demand workers’ genetic test results”

    http://www.businessinsider.com/house-gop-employers-demand-workers-genetic-test-results-2017-3?r=UK&IR=T

  37. Gail Combs says:

    Actually before Johnson’s Great Society that created the current welfare system, the problems were handled on a local level mainly by churches and counties.

    As a kid, my doctor and dentist provided free health care for the families in town that were KNOWN to be poor. (That is now ILLEGAL BTW) There was a ‘Poor Farm’ where locals donated money and time (Mom taught art) where people with alcohol or other problems could go. They did what work they could to grow their own food, care for the building and grounds and produce crafts for sale. The local churches and the county funded the rest. That place was MUCH nicer than some of the old folks homes I have been to over the last twenty years.

    We did not HAVE veterans sleeping and dying on the street or a major ‘street people’ problem. On the other hand we were a Christian nation back then and helped the poor. Now it is often ILLEGAL to do so. For example the churches in Fitchburg, MA got together with a guy who had an empty warehouse. We had a really bad winter and they wanted to get the street people inside. They set the place up with beds and food and such. The City shut them down because of ‘building code violations’ kicked the street people out who promptly died in the blizzard of 1993.

    The LEFT NEEDS the poor so they have a VISIBLE ‘underclass’ they can point to. They really did not have one back in the 1950s so they created one by shutting down county homes and mental hospitals and regulating small business to death.

  38. jim2 says:

    Gail – keeping people in mental hospitals against their will is considered by some to be a beech of their Constitutional rights. From the article:

    1967 Reagan signs the Lanterman-Petris-Short Act and ends the practice of institutionalizing patients against their will, or for indefinite amounts of time. This law is regarded by some as a “patient’s bill of rights”. Sadly, the care outside state hospitals was inadequate. The year after the law goes into effect, a study shows the number of mentally ill people entering San Mateo’s criminal justice system doubles.

    https://ww2.kqed.org/news/2016/12/08/did-the-emptying-of-mental-hospitals-contribute-to-homelessness-here/

  39. E.M.Smith says:

    @Power Grab:

    I hope your “fix” really fixes things for you.

    I’ve adopted the habit of doing my own R&D both before and after doctor visits. I’ve found I’m often “more right” than they are… It also seems to put them on their toes when I have pointed accurate questions…

    Having worked as a Medical Records Tech. for a year or two, I also am familiar with the jargon and having read a few thousands of medical records, know the patter. For a while I’d show up with my own medical record write up and just hand it to them “The patient presents with persistent cough of 4 days duration and…” At first there was a bit of puzzlement, then the light bulb lit and subsequent visits were fast and efficient. Once saw my medical record folder as it was placed in the bin on the door… with my typed pages neatly incorporated ;-)

    A similar thing to your experience (though less painful): I was having foot pains. Regularly, though unpredictable from day to day. From the base of the little toe on up to the ankle. It was maddening. There was NOTHING wrong. After a lot of self awareness practice, I finally worked it out. I would sit for long times and eventually my feet would end up under my chair crossed at the ankle. This focused pressure on that part of the lower foot, and kept it there for as long as I was static. Depending on how long that was, it could cause pain, or not. BUT, the pain was not present while sitting, it was prone to a bit of numbness then. The pain would show up when I’d moved on from that posture and was walking around.

    After a lot of self training, I don’t do that any more and have no foot pains. Persistent pressure can be an issue for pains.

  40. E.M.Smith says:

    @Serioso:

    I’ve not “misunderestimated” the NYT, but note in passing your slightly improved “insult to the person” attempt. I just find the NYT an overly self important purveyor of a small amount of news wrapped in a lot of political indoctrination and fluff. Certainly not worth the money to buy it or the time to read it.

    Per “self-dealing”: I doubt that is a big part of the costs. Generally I found that, for example, Xrays done in house at my doctor’s office were cheaper than the ones at the hospital. The big part, as an opinion without references, looks like the way doctors will own the hospital. More common in rural areas than urban, where big corporations get into it, and maybe less now (as a few years back some companies started doing “rollups”). It just seems a bit self-dealing to have the guy deciding to check you into the hospital (and when to let you out) getting a piece of the action.

    Per 4:1 ratio of costs: So? Houses have a 10:1 ratio between NYC and the suburbs in the next State over. Gasoline is about double in California compared to Texas. Non-tropical fruit was about twice as expensive in Florida than in California. I’d be astounded if there were flat prices nationwide.as the costs of everything else vary so much. I’d be happy to live in Rural Texas or Florida on a salary of $50,000 / year. Make me an offer of a job in NYC, it will need to be at least $150,000 / year and preferably $200,000. Why? To live substantially the same life style… Now I have to think Doctors are smart enough to figure that out too…

    BTW, I’ve had both Kaiser and non-HMO providers over the years. Yeah, Kaiser is cheaper… and do “good enough” I guess. I’d rather have an experienced private doctor. BTW, most of my Kaiser doctors were either fresh from med school (last one was a new Resident) or have accents from foreign lands. So yes, you can lower wage rates by hiring new graduates and working the H1b visa racket… That can’t be done nationally for all providers, though. What would you do with all the experienced US born doctors…

    Beware of journalists bearing statistics…

    @Eric Barnes:

    Without published prices, you can not have price discovery or an efficient market. Lack of price discovery is why things are so messed up now.

    Per #6: yes, it is a new entitlement. It has the virtues of a clear definition, everyone gets something ( so not a pure ‘fleece the rich’ plan) and it has a built in ramp down of use with increasing wealth. Someone making $600,000 / year is NOT going to put $200,000 of it (that would likely be 1/2 of ‘take home’ after taxes…) at risk to avoid buying a $10,000 super deluxe medical plan. Only in really bizarre cases would you have a very rich person not insured, and having high enough medical expenses to hit 1/3 of income. True indigents get 100% coverage, but they would anyway, one way or another. Middle-class folks can sleep at night with affordable medical insurance.

    Yes, there would be a need for some kind of process. IRS has your last year income statement, you would apply to (some government agency) who would look it up, and compare to your medical bills (sent by provider) and pay the excess (direct to those who billed, not to you).

    @jim2:

    I’ve proposed something similar for welfare… just leverage the military hospitals. The military is supposed to be ready to do massive medical / dental care on short notice, so in times of peace (do we do that anymore?…) ought to have underused facilities. So want a ‘free ride’ on welfare? Check in to barracks #13 and after shower and trim, put on issued clothes and report to the medical tent. Dinner at 1600 hours in the mess hall. Folks generally didn’t like it…

    In general, I’ve found “single payor” systems oppressively bureaucratic and inefficient. In the UK I tried to get a ‘sty’ treated. A pimple in the eyelid, basically. Two doctors and a clinic later, I had zero done. At about 8 years old, my Dad lanced one and I was done in 2 minutes. Back in the USA I had one treated with antibiotics and a week duration (they being afraid of malpractice from bacteria in the eye so unwilling to lance). In the UK, after the Health Service failed, they told me about a private doctor I could try. Semi-retired German lady who had undoubtedly worked in W.W.II as a doctor. She explained how it ought to be fixed (“Open it up, then you scrape scrape scrape so it will not return”) but said her hands were no longer steady enough for that delicate work. She did say to put hot compresses on it every hour or two. That worked well and it resolved in about 2 days.

    In that, you have the metaphor of the different systems.

    National Health Care: where the young doctor doesn’t even know what the Lancet is named for and where they can’t do anything very well ( I have other stories of them killing my Uncle during ‘routine surgery’ and wanting to do a knee replacement on my Aunt BUT arguing of wether to do the bad knee, or the good one as it was being stressed more by the bat one!) but it takes a very long time in all cases.

    Traditional Old School American: Just lance the sucker.

    Traditional Old School European: Scrape scrape scrape… after opening the abscess.

    Folk Medicine: Poultice and hot compress.

    Modern American: Don’t do anything that might get you sued even if it takes a week and costs more and the patient isn’t as comfortable during that week.

    Oddly, the Folk Medicine and Traditional seem to work best, cost the least, and make me the most comfortable the quickest. Thanks to this (and several similar experiences) I’ve bought a library of herbal medicine books and some DIY field medical manuals… I now do as much as I can myself and avoid the medical system unless no other option is available.

  41. Serioso says:

    Chief, you misread my post. I was referring to the New Yorker Magazine, which you had in the past dismissed as some sort of old ladies magazine, not the New York Times. Furthermore, you didn’t click on the link I provided and examine the evidence that Gawande provided. Instead you assumed I was trying to insult you. I wasn’t.

  42. jim2 says:

    For (non-eyeball) stys, my first shot is to soak a folded Kleenex in isopropyl alcohol and apply it to the sty/zit/boil. It absorbs through the skin effecting a locally high concentration, but not enough relative to body mass to do any harm.

  43. E.M.Smith says:

    @Serioso:

    Sorry, you are right, I stopped parsing at New Yor… and scanned on. Yes, the New Yorker is the old ladies rag for people who want to feel trendy and informed without all the work of thinking…

    Cartoons are fun though. At one time I used to read bits of it at the Doctors and Dentists offices, but never found enough real substance to continue.

    Um “misunderestimate” is an insult. Get over it.

    No, I didn’t click the link. I have things of importance to do and reading some preprocessed junk isn’t on the list. I prefer things with lists of references and some vetting… it helps if calculus is involved or chemical formulas / models, or at least 3 languages (2 of which may be computer languages). I just don’t care at all for things that barely keep the eyeballs busy and ignore 90% of the brain’s abilities. (Thus my tendency to be running a TV on information shows WHILE I type in one window WHILE I’m reading something on the tablet WHILE… eventually it loads things up enough to feel comfortable.)

    I might get around to reading it, but doubt it. Larry has a much more interesting set of things in links he’s posted and I’m not even through 1/2 of them. Then there’s the “Honey Do” list this weekend, and I really need to get MODEL II going with an input file and I’ve got a fence being replaced next week so need to clear the work area (temporary BBQ Patio area set up yesterday ;-) Yes, beer was involved ;-) and at some point, I’ve got about 6 postings backed up that need writing… So do you really think reading a New Yorker article is more important?

    @Jim2:

    My “first shot” is usually Scotch, though vodka will do in a pinch, then I address the abscess ;-)

  44. E.M.Smith says:

    @Serioso:

    OK, I read it. About what I expected. Argues from anecdote, tells an emotive story full of “human interest” details -hair color of clerks, gruff administrator looking like Bill Clinton. WAY too many pages, all to say a well worn thing (that doctors control the demand for medical services – taught to me in some long ago Econ class in the ’70s) and maybe too much treatment is handed out too quickly (also around as an idea since the ’70s).

    So one town, THE most expensive has developed a get rich quick culture. That’s by definition an abberation, not the norm, or it would not be THE most expensive. So of little import to the national cost questions.

    This, then, is used as a vehicle to push his idea of what is best for all of us at the national level…

    When all that is really needed is price discovery and patient education about treatment norms. IF I know a broken arm costs $2000 less one town over, pretty quick lots of folks will be going there. You see this on a macro scale with medical tourism. IF a handout is given with each gallbladder diagnosis saying surgery is contraindicated for first timers, and adds $4000 to my visit, I’m avoiding it.

    So he finds a town dominated by govt payors who don’t push back on overtreatment like private insurers do, or folks with % to pay so ask about treatment norms and minimalism, and is surprised more proceedures are done…

    Can I have my coffee break time back now?

  45. Steven Fraser says:

    2 thoughts come to mind…
    1) for companies that offer insurance benefits, an insurance option which is a contributory HSA only. The employer part goes to the HSA, and the employee has pre-tax input as well. Payments from the HSA and direct to provider count to the 1/3.
    2) a deductable applied to a course of treatment that spans a year boundary should not automatically split. IOW, complications from a December child delivery fall under the same insured event, or surgical recovery with similar timing.

  46. Gail Combs says:

    Jim2,
    What happened was drugs. A lot of the mental problems could be treated and the patient could be ‘mainstreamed’ IF there was a 1/2 way house. Then the 1/2 way houses got cut.= and so did the medicine.

    You also end up with problems like a co-worker’s wife. She LIKED the manic state so would not take the medicine. Then she would do weird things like get on a plane and end up flying from New York to California with no place to go on the other end and no real money. My Co-worker would then have to fly out and get her and bring her home after the cops rounded her up and called him.. He finally gave up and divorced her because he had two young boys to care for too. She ended on the streets because he could not get her into a hospital and get her stabilized and the courts kept turning her loose.

    A friend worked with the street people in Boston and this is a very very typical story. Unfortunately that leaves you with a real nasty catch-22 doesn’t it? Do we ignore the problem and leave them on the streets to die? Or do we round them up and put them in a shelter and with training or mental health care as needed?

  47. Serioso says:

    Chief: Thank you for reading the article by Atul Gawande. I appreciate your effort, even though I can’t give you back the time you think you wasted. But his evidence on health care spending was far from merely anecdotal. Here’s a (short) section worth re-reading:

    “Two economists working at Dartmouth, Katherine Baicker and Amitabh Chandra, found that the more money Medicare spent per person in a given state the lower that state’s quality ranking tended to be. In fact, the four states with the highest levels of spending—Louisiana, Texas, California, and Florida—were near the bottom of the national rankings on the quality of patient care.

    In a 2003 study, another Dartmouth team, led by the internist Elliott Fisher, examined the treatment received by a million elderly Americans diagnosed with colon or rectal cancer, a hip fracture, or a heart attack. They found that patients in higher-spending regions received sixty per cent more care than elsewhere. They got more frequent tests and procedures, more visits with specialists, and more frequent admission to hospitals. Yet they did no better than other patients, whether this was measured in terms of survival, their ability to function, or satisfaction with the care they received. If anything, they seemed to do worse.

    That’s because nothing in medicine is without risks. Complications can arise from hospital stays, medications, procedures, and tests, and when these things are of marginal value the harm can be greater than the benefits. In recent years, we doctors have markedly increased the number of operations we do, for instance. In 2006, doctors performed at least sixty million surgical procedures, one for every five Americans. No other country does anything like as many operations on its citizens. Are we better off for it? No one knows for sure, but it seems highly unlikely. After all, some hundred thousand people die each year from complications of surgery—far more than die in car crashes.

    To make matters worse, Fisher found that patients in high-cost areas were actually less likely to receive low-cost preventive services, such as flu and pneumonia vaccines, faced longer waits at doctor and emergency-room visits, and were less likely to have a primary-care physician. They got more of the stuff that cost more, but not more of what they needed.

    In an odd way, this news is reassuring. Universal coverage won’t be feasible unless we can control costs. Policymakers have worried that doing so would require rationing, which the public would never go along with. So the idea that there’s plenty of fat in the system is proving deeply attractive. “Nearly thirty per cent of Medicare’s costs could be saved without negatively affecting health outcomes if spending in high- and medium-cost areas could be reduced to the level in low-cost areas,” Peter Orszag, the President’s budget director, has stated.

    Most Americans would be delighted to have the quality of care found in places like Rochester, Minnesota, or Seattle, Washington, or Durham, North Carolina—all of which have world-class hospitals and costs that fall below the national average. If we brought the cost curve in the expensive places down to their level, Medicare’s problems (indeed, almost all the federal government’s budget problems for the next fifty years) would be solved. The difficulty is how to go about it. Physicians in places like McAllen behave differently from others. The $2.4-trillion question is why. Unless we figure it out, health reform will fail.”

  48. E.M.Smith says:

    @Steven Fraser:

    I generally have aversion to “special” accounts, like HSAs. Why? They are a PITA for those of us who don’t have 2 accountants and a lawyer on retainer, and they are usually loaded up with yet more rules and limits. I have enough complexity in my life already.

    With that said, if you have a HSA it ought to count as your medical expense.

    But what I don’t get: Since I would have 100% deduction for medical expenses, isn’t that the same benefit as washing the money through an HSA, but without the complexity? I spend $10, 000 and my adjusted income drops by $10, 000 or I put $10, 000 in an HSA and my adjusted is $10, 000 less? Or is the HSA a 100% tax bypass so your tax rate need not apply?

    A lot of folks seem to love complicating their taxes, so clearly I’m missing something. Personally, I’d like to nuke the entire income tax code.

    I’d be OK with #2, but keeping track becomes a pain. If I’m diagnosed with diabetes, is my deductable for diabetic stuff zero forever? Does arthritis in the arm you broke 5 years ago dodge a deductible? Is your recurrance of pneumonia after a year remission new? 6 mos.? 2 weeks? Just looks like asking for trouble.

  49. jim2 says:

    A couple of things that would have a real impact:

    1. Control prices charged by drug companies for drugs sold in the US. Currently, US citizens pay for R&D because many countries regulate drug prices. If this stifles drug R&D, so be it.

    2. Legalize suicide. This should be administered with ample checks and balances. But there should be provisions for family members to make the decision for someone who has a mentally debilitating condition such as Alzheimers, again with proper controls.

  50. cdquarles says:

    I’m trying to find it now. What I recall is that Newt’s Congresses in the late 90s got Bill Clinton’s signature. It was part of one of the continuing resolution ‘budgets’.

    @ Jim2, price controls never work. Stifling the R&D is just one of the bad effects. No. Go the other way. Remove the controls and regulations that are not needed. Let price transparency do its work.

  51. cdquarles says:

    I’ve been out of the business over a decade now, but when I was in it, trying to keep up with all of the laws and regulations and taxes (redundant) was part of my job. It figuratively drove me nuts and yes, the HillaryCare thing previously attempted made me politically active. I paid a high personal price for ‘fighting the system’, so to speak.

    Re the ‘write off’, well, yes. That’s what was done. Then they changed the law to require medicos to attempt to collect the debts and have documentation showing the attempts. Then medical bills were rolled into general debt collections which hurt many people’s credit ratings. I believe, but may be mistaken, those rules were relaxed some recently.

  52. Eric Barnes says:

    Have to agree with EM Serioso …

    “This, then, is used as a vehicle to push his idea of what is best for all of us at the national level…”

    The solution is should be made by individuals and shouldn’t be top down. Less really is more.

  53. cdquarles says:

    Oh, that reminds me. Many of the changes were made to ‘stop self-dealing’, some of which had the effect of increasing everyone’s costs. Well done in-house labs were often much cheaper than using LabCorp or other similar settings. About the only regulation that was kind of common sense was CLIA, but even it had the effect of raising prices through the added costs of certification and compliance.

  54. Eric Barnes says:

    @Cheifio,

    RE HSA’s. I don’t believe they would be that complicated.

    https://www.1040.com/tax-guide/health-and-life-insurance/hsas-and-your-tax-return/

    Sounds like you file contributions to your account and I’m assuming the IRS knows what’s in that account and could quickly find out if you’re potentially abusing the system. Most people wouldn’t be deducting from it in large amounts and I assume the IRS wouldn’t be interested until there were large expenditures. Even if you were HSA audited, it would be pretty easy to put yourself in the clear and I assume the IRS wouldn’t be pedantic about the small stuff.

    Anyone have experience with an HSA?

  55. cdquarles says:

    Bingo, HIPAA was the law.

  56. E.M.Smith says:

    The best doctor I had was part of a small group of about 6? Doctors. They had a small lab for the usual stuff you want quick and a modest xray lab for the usual stuff. Answers often in minutes not days. Lab and xray sent out was more expensive and took longer (that in part might be just that it was the less usual stuff).

    Abuse and corruption are moral problems that cannot be fixed by regulations.

    Oddly, thinking about it, that group ran rather like the Dr. Jeff veterinarian on TV. In that show they regularly stick a critter on their X-ray machine or put a slide under a microscope and just look at it themselves. Somehow “self dealing” seems to not be an issue in vetrinary care… perhaps because folks pay out of pocket and can price shop… and the mountains of paperwork, liability suits, and govt on your shoulder are a lot less…

  57. cdquarles says:

    HIPAA brought about standardization of insurance claim forms, electronic medical records and billing systems, and, supposedly, privacy rules that were transparent. So that $2000 surgery that used to be less can’t be, since everyone has to be charged the same price and doctors who charge more than ‘prevailing’ prices get clipped (so all the doctors know what the others are charging, more or less). The insurance companies, including the 2 big M’s (who, by the way, only pay to certified contractors, who in turn do the actual billing and collecting and payments) all ‘negotiate’ discounts. Thus the cash price has to be high enough such that after contractual obligations are met, the resulting cash flow keeps the business a going concern. You will be hard pressed these days to find a solo doctors office. It is too expensive. Most doctors offices these days are strictly salary. The doctors still pay out of their pockets for general liability and medical malpractice insurance (and these premiums are risk-based, so some doctors pay less than others).

  58. Fifteen years ago I compared the medical colossus to the Mafia. I think most of you will agree that not much has changed since in spite of Obamacare:

    THE NEW MAFIA
    In the fall of 1970 I visited the USA to exhibit electro-optic equipment at a trade show held in the New York Coliseum. On this, my first trip to the USA, I experienced more than just culture shock owing to arriving just in time to experience a hurricane; the Attica prison riots; plumes of smoke rising every day as apartment buildings were torched; dreadful roads; Carnegie Hall and other famous buildings falling apart. American gangster movies were quite popular in the United Kingdom back then but that did not prepare me for the reality of organized crime.
    Two large crates containing the equipment and literature needed for the show were sent over 3,000 miles by air from the United Kingdom to New York. My first task on arrival was to arrange transport for the crates from JFK to the New York Coliseum, a distance of 35 miles. The first trucking company quoted a price that was close to what I had paid for air freight across the Atlantic. The cost was so outrageous that I spent an entire day trying to get a reasonable quote from a dozen trucking companies until someone took pity on me and explained that there was only one price and it was set by La Cosa Nostra (LCN).
    In 1982 I emigrated to the USA to work in Manhattan. The freight rates out of JFK were still unreasonably high, a clear indication that the LCN had managed to retain control throughout the 12 years since my first visit. How was such a thing possible when it was common knowledge to everyone who did business via the New York airports? Over time I was to learn that the freight out of JFK was just a minor part of LCN operations involving 250 trucking companies supported by labor unions that controlled garbage collection, concrete, the garment business and much more.
    Although the services controlled by the LCN appeared to be run by independent companies there was no effective competition so from a customer’s standpoint it was like dealing with a monopoly. Consumers could complain though nothing would be done as long as the LCN was intimidating competitors while greasing its connections in government and law enforcement. The situation could have continued indefinitely if the FBI had not decided to mount a series of high profile operations targeting the Luchese crime family in the 1980s.
    While organized crime is still flourishing it is under increasing pressure from a variety of law enforcement agencies that use the publicity from prosecutions of major crime figures very effectively. Sadly, a new Mafia has risen up that poses a much greater threat to the people of this country than the old one ever could owing to its immense scale and the fact that it is not regarded as a criminal conspiracy. Nevertheless it involves the corruption of government at all levels and the exploitation of the general public, especially the most vulnerable of our citizens.
    If goods and services cost far more than is reasonable it is usually a sign that corruption is present. Corruption costs money and the cost is passed on to consumers. According to the National Coalition on Health Care medical expenditures in the USA amounted to $1.7 trillion in 2003 rising to an estimated $1.8 trillion in 2004. Our expenditures per capita are typically double those of our major trading competitors and comparisons are far less favorable with low cost providers of health care such as many Latin American countries. The rate of growth is even more alarming. In 1950 medical expenditures accounted for 5.2% of the GDP rising to 9.4% in 1975. By the year 2000 expenditures had risen to 15.4% of the GDP or roughly four times what is spent on national defense. In 2007, 62.1% of filers for bankruptcies claimed high medical expenses.[4] If the country is not capable of radically reforming the health sector the spending could well exceed 20% of GDP by 2025.
    To reduce this to things that matter to individual consumers I made comparisons of medical procedures for an uninsured person in Sarasota, Florida with comparable procedures in Mexico, Costa Rica and Colombia. Knee replacement surgery costing $46,000 in the USA can be had for under $10,000 in Costa Rica. A cranial MRI scan costing $700 in Sarasota not only cost much less in Bogota ($102) but involved much less hassle than one gets in the USA.
    How did things get so bad? According to several experts we are suffering from a perfect storm caused by the alignment of many powerful forces capable of manipulating the health care market to benefit themselves.
    The American Medical Association ensures high salaries for doctors by limiting the number of people trained in this country and placing barriers for foreign doctors who wish to practice here.
    The drug companies prefer developing products that will make money (e.g. Viagra) to working on ones that reduce human suffering.
    The Federal Drug Administration is a wholly owned subsidiary of the drug industry, working hard to prevent people from obtaining cheaper drugs.
    Health Management Organizations exist to make money while dragging down the quality of service experienced by the general public.
    Trial lawyers drive up the costs of malpractice litigation, getting rich while smugly pretending to be standing up for the victims of the medical colossus.
    The legislators produce laws that drive costs up while achieving little of value for anyone other than the lawyers and HMOs (remember HIPAA?).

    What can be done? The present system appears to be beyond hope of reform. The conspiracy is so huge and its members so powerful that there is no hope of it being declared a criminal enterprise. The medical industry will continue to increase its share of our GDP, pauperizing pensioners and destroying once mighty companies such as General Motors. At some point there will be a revolt; let it be soon.

  59. jim2 says:

    @cdquarles Free markets for drugs won’t work unless all countries have free markets. That would spread the price of R&D around. But under the circumstances, the US bears the brunt of medical R&D. Not good. Regulate prices. If other countries begin to miss the new drugs, then we’ll have a negotiating position. But as long as we pony up, other countries have no reason to change.

  60. cdquarles says:

    So we should follow bad advice because others do it? No. Go the other way. Price controls don’t work.

  61. Larry Ledwick says:

    This might explain part of why the GOP replacement for Obama care is not what folks were hoping for, they are trying to dodge a rules bullet about reconciliation to make it filibuster proof.

    Ted Cruz might have found a back door around that limitation.

    http://ijr.com/2017/03/822444-senator-cruz-found-an-overlooked-1974-rule-that-could-be-a-real-game-changer-for-repealing-obamacare/

  62. omanuel says:

    It will not be easy to eliminate Obamacare, free phones, welfare, food stamps, or other “gifts” from politicians who stayed in office by giving away government funds.

    To help end seven decades of deceit from the US NAS (National Academy of Sciences) this outline of a paper in progress was drafted and posted for corrections, criticisms, suggestions:

    https://dl.dropboxusercontent.com/u/10640850/Nuclear_Energy_Error.pdf

  63. Gail Combs says:

    Snicker, so true.

  64. philjourdan says:

    E.M. (CD and Jim2):

    Like, is it OK to charge everyone $2000 for a broken leg, but then when Medical only pays $1000 to just “write off” the difference? After all, you “charged” them both the same

    I have not had contact with Medical insurance (other than being a participant) since the 1980s (so longer than EM). So I was following the discussion with interest (non financial kind). As a participant, I regularly review my EOB and see that indeed, the doctors (hospitals, dentists, whatever) regularly charge a large amount, and do indeed then bill the insurance company X, and after insurance company pays Y, they then ask you to pay the difference between X and Y. Which does not add up to the original charge amount. They call it “In Network” savings. And we are told that if we go to a “non-network” provider, we will be charged the difference.

    Does that mean they merely “write off” the difference between X and the original amount? Or that they have formed a “club” where members get discounts? Like EM, I was unaware of a law that required all services be billed at the same amount.

    But, I am also aware of the 70s tricks that were used to get around Nixon’s wage/price freeze. Rebates being a big one (did anyone remember a rebate before 1974?). So I suspect while they conform to the letter of CD’s law, they have already figured out how to get around the spirit. Member’s get discounts. Non-members pay full price.

  65. philjourdan says:

    E.M.

    I’d be astounded if there were flat prices nationwide.as the costs of everything else vary so much.

    As you know, I was out in California last month, and as is usual for the time of year, the Girl Scouts were selling their cookies (in years past, I would buy from a niece, but she is out of the gang now). I bought a bunch for the kids at the fund raiser (they are the “runners” who take the plates from where it is prepared to the drive by customers). They were $5/box.

    Since the cookies were not for me, my wife was not happy about losing out on some of them. So just this past weekend, I had the opportunity to see more for sale back east (Virginia). And I bought some for her. But they were only $4/box!

    I did not ask why the difference, but I suspect it has to do with taxes. Same cookies, different states

  66. philjourdan says:

    @Eric Barnes

    Anyone have experience with an HSA?

    Yes, and as EM says, they are a PITA. If you forget to dot an eye or cross a T, some mindless bureaucrat denies your reimbursement. So just a lot of work and headache. BUT, it is not subject to the % of income that the the Schedule A has, so if you have a lot of expenses, it is worth it (if I was a young 20 something, I would not bother with it).

  67. Larry Geiger says:

    “Or do we round them up and put them in a shelter and with training or mental health care as needed?” Yes. Sometimes. But at the state level. NOT the federal level.

  68. Glenn999 says:

    I thought the point of the HSA was mainly for the payment of the deductible in the event of an serious/expensive condition. But I guess it could be set up like a credit card, perhaps pull out your Health Card when you go to the doctor office. Run the health card through your local bank with the HSA as the funding agent. Would help local banks, maybe?

  69. Gail Combs says:

    Larry Geiger says: 13 March 2017 at 7:49 pm

    I was talking COUNTY/TOWN level where the locals KNOW the people well and have known them since childhood. It shouldn’t even get up to the state level. Unfortunately the Elite decided to make us all itinerant workers with zero support/connection to our towns way back in the 1940s. Makes us so much more dependent on the State.

  70. Gail Combs says:

    Sundance has another article on the R.A.T.s, the D.C. Swamp and Obummercare that is interesting.

    No, Waiting for ObamaCare to Implode is Not an Option Either…

    It is not just about Obummercare but about the interconnections with the Federal Budget too.

    The meat of it:

    ….Setting aside the probable chaos being attributed to, well, you know – blamed on, the people who are in charge while the chaos rains down upon the electorate….

    Setting that aside, how is President Trump going to present a priority budget when the massive ongoing costs of ObamaCare are now unresolved. The budget, while unfamiliar to 2/3rds of congress who have never been a representative when a budget actually existed, is necessarily dependent on solving the financial issues inherent within ObamaCare.

    The Budget is intertwined with ObamaCare. Letting ObamaCare spiral until it self-detonates on the country (and the budget) isn’t, or at least shouldn’t be, an option.

    Budgetary priorities like rebuilding the military, or building a Southern Border Wall, are dependent on actually having a budget. But there’s also something more, something 99.99% of the voting population have no idea about…

    Remember, two really important points:

    ♦ #1 Over two-thirds of current Republican representatives in the house and senate have never been in office a single year with a federal budget.

    ♦ #2 And, most importantly, thanks to the absence of a federal budget, ObamaCare has used extra-budgetary fraudulent financing to existSEE HERE– It’s too complex to explain in a single outline, but follow THIS LINK and you’ll understand…

    In a word Obummer stole the Fannie Mae and Freddie Mac’s profits to pay for provisions of the Obummercare Act that Congress chose not to fund. This is shades of Romney and Senator [glad he is dead] Kennedy using Federal funds to prop up Romneycare so it should not surprise anyone.

    “We had a pretty powerful senator you may have heard of named Ted Kennedy,” Gruber said during an event at Simmons College in February. ”Ted Kennedy had managed to figure out a way to rip off the federal Medicaid program to the tune of about $500 million a year through a series of strange manipulations.

    “Here was Mitt Romney’s dirty little secret that we don’t like to talk about in Massachusetts, which is the way we passed our law is the federal government paid for it.

    “George Bush said why am I sending this Democrat $500 million a year, I’m taking it back,” Gruber explained, adding “Mitt Romney to his credit went to George Bush and said, look, can we keep the money if we use it for universal coverage. And Bush to his credit said yes.”
    http://dailycaller.com/2014/11/13/obamacare-architect-ted-kennedy-ripped-off-medicaid-video/

    Also video HERE: http://hotair.com/archives/2014/11/17/gruber-romneycare-just-a-way-to-rip-off-the-feds-for-400-million-a-year/

  71. cdquarles says:

    Phil, I’ve been out of the business over a decade, so I don’t know how the No-care stuff changed things in reality (versus the no-such-place Utopia that one can dream of). For Medicare (my mom), for instance, there is (or was) a Maximum Allowable Charge (so high price billers get clipped) and a Minimum payment (so low price billers get clipped). There were slight differences if the doctor was a Participating Physician or not. Those that Participated got a regionally based fixed payment for a covered service deemed allowable. So, if billed $1000 and allowed $500, Medicare paid $300, the patient paid 20% of $500, or the deductible or both, if part of the deductible hadn’t been met in the calendar year, with the rest ‘written off’ after attempting to collect the difference between the $300 and the $500. One could apply to Medicare for ‘Hardship/Charity’ subsidies if: 1. all of the other hoops were met and 2. the percentage of ‘charity’ care exceeded a threshold. I’m not sure these last still apply. Those payments were quarterly. Hospitals and other facilities had different rules.

  72. cdquarles says:

    Oh, lest we forget, this whole system of employer based medical insurance was created to buy-off large employers and their unions, by allowing these payments of ‘benefits’ to be tax excluded for the employee and tax ‘deductible’ for the employer, since the income tax had been implemented and the Great Depression followed by WW2’s wage and price controls complicated by the expansion of brackets and high rate ‘wartime surtaxes’.

  73. cdquarles says:

    Oh, one other thing. I note that the supporters of ‘single-payer, that is government controlled’ medical ‘insurance’ or care never call what they want by the appropriate name, which is, a government controlled oligopoly or monopoly, depending on the implementation details.

  74. Eric Barnes says:

    @philjourdan

    Are you sure you’re not talking about an HRA (Health Reimbursment Account?) You don’t get reimbursed with an HSA (Health Savings Account).

    https://www.1040.com/tax-guide/health-and-life-insurance/hsas-and-your-tax-return/

    Tax Benefits for HSAs

    Besides being able to set aside money tax-free, HSAs have other tax benefits:
    Any interest they earn is not taxable.

    There’s no “use-it-or-lose-it” rule, like with an FSA. If you don’t use all the money up in the year, it rolls over from year to year and continues earning interest.

    If you’re healthy and don’t use much from your HSA, you can withdraw from your HSA penalty-free after you turn 65 – even for non-qualifying medical expenses. But if you use the HSA for non-qualifying expenses before you turn 65, you will be subject to a penalty.

    Contributing to an HSA

    You, your employer, or both can contribute to an HSA. All contributions tax-free – no income taxes or FICA (Social Security and Medicare) taxes.

    There are maximums for allowable contributions. If you’re the only person your insurance covers, you and/or your employer may contribute up to $3,350 annually. If your insurance plan covers you and your family, you or your employer may contribute up to $6,650. If you’re 55 years or older, you may contribute up to another $1,000 as a catch-up contribution, whether you have single or family coverage. Careful: Whatever your maximum is, if you exceed it, a 6% penalty will be assessed.

    But: If you owe any money to the IRS, the IRS can levy your HSA. And if you’re under 65, there’s a 20% penalty for involuntary distributions.

    Using an HSA for Medical Expenses

    You can use an HSA for qualifying medical expenses. Most HSAs provide a debit card to use for paying your expenses.

    Keep any receipts from purchases you make using your HSA, as well as any statements you receive about your HSA. These documents are important if the IRS has questions about a specific expense paid for by the HSA.

    Important: If you pay for a qualifying medical expense from an HSA, you can’t also claim the expense as a medical deduction on your return.

    If you use your HSA to purchase a non-qualifying medical expense, you’ll be subject to a 20% penalty unless you become disabled, are 65 years or older, or die.

  75. Steven Fraser says:

    Have an HSA, and it works just as you have described, with the addition of inheritability. In Rand Paul’s S222 bill, HSA gets enhanced so that it can be transferred to other family members.

    I read through S222 today. It is complex, but it extracts the tendrils of Obamacere from the U.S. Code very well, paragraph by paragraph, and does many of the things that I have hoped for this process. The whole of it is much, much shorter than Obamacare was.

  76. Eric Barnes says:

    Yeah. The length of the bill. Yeesh. Even though Paul is a professed libertarian, there are still give-aways to entire industries. What person would say that Section 221 and 222 are critical for health care across the entire nation? Reading it makes your shoulders slump. If a bill can’t be made with clarity in 10 or 20 pages it should be thrown out. The government is simply a way for elites to shakedown people and businesses.

    And that’s the best that’s out there as of now.

    Subtitle B—Health Savings Accounts
    Sec. 211. Repeal of contribution limitations.
    Sec. 212. Freedom from mandate.
    Sec. 213. Allowance of distributions for prescription and over-the-counter medi-
    cines and drugs.
    Sec. 214. Purchase of health insurance from HSA.
    Sec. 215. Special rule for certain medical expenses incurred before establish-
    ment of account.
    Sec. 216. Administrative error correction before due date of return.
    Sec. 217. Allowing HSA rollover to child or parent of account holder.
    Sec. 218. Credit for contributions to an HSA.
    Sec. 219. Equivalent bankruptcy protections for health savings accounts as re-
    tirement funds.
    Subtitle C—Medical Expenses
    Sec. 221. Certain exercise equipment and physical fitness programs treated as
    medical care.
    Sec. 222. Certain nutritional and dietary supplements to be treated as medical
    care.
    Sec. 223. Certain provider fees to be treated as medical care.
    Sec. 224. Clarification of treatment of capitated primary care payments as
    amounts paid for medical care.

  77. bruce says:

    wow, too many responses to read, sorry if this has been suggested already,
    Allow doctors and hospitals a 200% tax deduction for non paying consumers. A hospital might find it beneficial to open a clinic and provide free healthcare to offset the income in a successful, consumer based care business.
    Impossible for me to guess to what extent, but it might reduce the necessity for the government to provide so much healthcare.
    The cost for non paying clients being “covered” should reduce the general paying population’s bill too.
    Your suggestion for the killing of malpractice suits is the biggest, best acknowledgement of cost and that doctors are just people too.

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