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View Diary: The GOP shrugged: pitting Obamacare "makers" vs. Obamacare "takers" (33 comments)

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  •  It's the nature of insurance (4+ / 0-)

    My father died at not quite 66, so he only collected Social Security for less than a year. He was only on Medicare for that year too, but it was undoubtedly a horrendously expensive year (end stage kidney cancer). So he was a "taker."

    On the other hand, my mother has paid the upper-income high Medicare premiums for almost 25 years, and most years does not need anything other than a flu shot and a generic prescription. So she's a net contributor.

    Is that "unfair"? No, it's the nature of insurance.

    I've paid for homeowners' insurance for decades -- and never had my house burn down or the roof blow off, thank goodness. Is it "unfair" that I'm "subsidizing" all the people out in Illinois, or the neighbor down the street with the fire? No, it's the nature of insurance to spread the risks among all of us.

    Sometimes I think the GOP just wants to abolish insurance altogether, and go back to the 1700s when everyone was on their own.

    •  Come, the Democrats abolished health insurance.... (2+ / 0-)
      Recommended by:
      valion, SinglePayer1

      ..in everything but name when they required insurers to take people with pre-existing conditions.  Paying for known, prior issues is the exact opposite of insurance.

      Bare-bones catastrophic plans (now banned under the PPACA) are traditional insurance plans; including preventative care (another predictable, expected cost) is the exact opposite of insurance.

      There's nothing necessarily wrong with doing so, it's just blaming the Republicans for killing insurance is absurd.

      •  Economically, ACA implements national healthcare (1+ / 0-)
        Recommended by:
        MGross

        through what were formerly known as Insurance Companies and Medicaid, subsidies from the Federal government and new taxes, and insurance rates set so that one group subsidizes (implicit taxes) another group.

        Democrats should discuss policy decisions on ACA based on the above and drop all reference to how "insurance" works.  

        Essentially, what we have is a contrived version of single payer and a tax policy through insurance companies and some tax changes.  Most of the major problems with ACA are best fixed with a proper implementation of single payer.

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Wed Nov 20, 2013 at 11:55:06 AM PST

        [ Parent ]

        •  This is patently false. (0+ / 0-)

          I would love it if we adopted single payer.  But, the ACA is no way, shape or form single payer.  Do you really think a model that was originally based off of a conservative think tank would be single payer?

          I do agree with your last point, though, that a lot of the problems with the ACA would fixed with an appropriately structured single payer system.    

      •  There is certainly some merit to this. (0+ / 0-)

        This is a much more accurate description of what the ACA does, than describing it as "messed up" single payer.  

    •  I don't think you understand (0+ / 0-)

      what is meant by "subsidize" in the insurance context.  Subsidize doesn't just mean that you pay more into the system than you pay out (by definition, there need to be more people paying more than they get back than vice versa).  That is what is meant by "spreading risk," which, you are right, is one of the two essential components of insurance (the other essential component is transfer of risk).  

      Instead, subsidize means that, when calculating your expected needs over the term, you are asked to pay more in relation to your expected costs than others are.  

      For example, if the actuaries determine that a 25 year old male has an "expected" health cost for the year of $800, ans a 64 year old male has an expected health cost for the year of $8000, "non-subsidized insurance" would ask 25 year old healthy males to pay one-tenth of what a 64 year old pays.  It could be that for a particular 25 year old, his total health care cost in that year is $5000, while a 64 year old's cost is $200.  But, whether an individual (or group of individuals) is receiving a subsidy or paying a subsidy is not based on an after-the fact analysis of how much care was used (and then comparing it with how much in premiums were paid in).  Instead, the term is based on a comparison of an actuarial calculation of how much benefits would be need with the cost of premiums.

      So, prior to the ACA, health insurance companies on the private market generally (but not entirely) operated in a  non-subsidy approach.  That is to say, when you applied for insurance, their actuaries figured out what your estimated cost would be for a year, and charged your a premium in proportion to that expectancy.  This is why health insurers would deny people with pre-existing conditions, because their "expected cost" was so high, that people could not afford the "un-subsidized premiums."

      Conversely, group insurance plans obtained through work generally are subsidized.  Both a 25 year old healthy male and a 64 year old male, pay the same right (or at least much closer to each other than a proportionate burden would dictate).

      In order for the ACA to work, young healthy people do need to subsidize older sicker people.  This is not the definition of insurance, but is an essential component of how the ACA operates, specifically the provision preventing insurers from someone because of a pre-existing condition (technically, insurers didn't deny coverage, their actuaries just spit out a premium that would be too expensive.  So, the ACA puts caps on how high of a premium insurance companies can charge, which then requires companies to force lower payers to payer higher rates, which is in effect a "subsidy").

      When we are fighting the Republican smears, let's get our facts and economics right.  
               

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