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Confused About Insurance

It's no mystery why the insurance market isn't competitive from the standpoint of individuals: Most of us don't choose our insurer. Twelve percent of us are on Medicare. Thirteen percent are on Medicaid. Fifteen percent are uninsured. And 53.4 percent get our health-care coverage from our employers.

One of the big mysteries, though, is why employers aren't more conscientious consumers of health insurance. They might only give us one or two choices, but they themselves can choose to purchase from any insurer. But there's no real evidence that they've used that authority to create a particularly competitive health insurance market. The reason, as David Leonhardt explains, is pretty simple: They're not paying for it.

We also should not be surprised that employers are not very good consumers of insurance. Why? Because employers do not really bear the costs of health care. Employees do.

This may be somewhat counterintuitive, since employers write the checks. But the economic research that has been done on the question is quite persuasive. There was a good summary in the Journal of the American Medical Association recently. Jonathan Gruber of M.I.T. has also done some important work in the area, including this paper.

The bottom line: The cost of insurance comes mostly out of employees’ paychecks. If insurance costs more, employees are generally paid less. If insurance costs less, employees are paid more. The cost of insurance does not have a big effect on employers’ overall compensation costs.

Employees, in other words, don't worry too much about the cost of their health insurance because they think their employer is picking up the tab. Employers don't worry too much about the cost of health insurance because they know employees are picking up the tab. And so there's no real constituency for cost control. If either group were actually experiencing the full cost of health insurance, the constituency for reform would be a whole lot larger than it already is.

By Ezra Klein  |  August 26, 2009; 4:06 PM ET
Categories:  Health Coverage , Health Reform  
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Next: The Ted Kennedy Affordable Health Choices Act


This really should be segmented on market size (individual, small employer2-50 or 2-500), large employer 500+)

part of the reason the individual market is not as competitive is the transparent nature of it. Most states have individual rates posted online which is fine and good but insurers can also then see what they need to charge to maintain profitability (or loss ratios in states that have them).

In the small employer market the employer depending on the size absolutely has a stake because he or she is on the plan too but many times in very small companies a decision is made because the owner's doctor participates in a plan. As it gets larger that goes out the window and cost becomes more of an issue.

As you get into the larger companies (500+) costs are relatively similar and then you get down to more or less services offered to split hairs between one company or another.

That being said the small market has the largest turnover (ie changing insurance companies from year to year) then followed by individual (more a factor of less choices and in some states pre-ex) and large employers have the least changes because the costs to change are not worth the small margins you'd save if you'd changed.

Also, its easy to in a 5 person manufacturing shop ask everyone if you're OK with a change from Aetna to BCBS but you can't do that with 20 or more employees because you'll get half that want to and half that don't want to and many times you can't or don't want to have both. Even in states where its legal it becomes too cumbersome for an HR dept to adminster in a company that small.

I will say that many employers I know of who have been struggling with this for years are of the mindset that they are paying as much as they can right now (whether or not that's right is up for debate) and employees say they're paying as much as they can so the only place left to go in the debate is to cut benefits. That's what's been happening for several years now to try to keep costs in line. That's why something needs to be done and done this year.

Posted by: visionbrkr | August 26, 2009 4:49 PM | Report abuse

Consider that one reason that employers are not good consumers of health insurance since *no one started a company because they were interested in the mechanics of choosing and providing health insurance*. I don't expect my employer to provide good options for real estate agents, either. Nor would I expect them to intelligently design neighborhoods or provide a full-featured public transit system to get to their workplace.

Posted by: constans | August 26, 2009 4:49 PM | Report abuse


well i guess by that argument we should get rid of all business owner insurance and pray no one sues us while slipping on our property in a snowstorm. So basically a toy manufacturer shouldn't be worried about anything other than manufacturing toys. He or she shouldn't worry about local rent costs, utility rates, payroll fees, lawyers costs, workers compensation laws, employment practices liability anything but making toys. Feel free to come back to reality anytime you like.

Small business owners are forced to be jacks of all trades. They deal with it, why dont you? If they didn't want to they wouldn't be in business. Its that simple.

Posted by: visionbrkr | August 26, 2009 4:57 PM | Report abuse

"Employers don't worry too much about the cost of health insurance because they know employees are picking up the tab. And so there's no real constituency for cost control."

Never thought I'd hear something like that! Should that same logic be continued to say that if everyone was a part of some sort of government plan, there would be even less of a constituency for cost control?

Posted by: rmgregory | August 26, 2009 4:59 PM | Report abuse

visionbrkr, your inability to discern the difference between an employer insuring his own businesses and making decisions about health insurance for all his employees is, sadly, not surprising. I'd expect him to worry about the business's rent, I wouldn't expect him to know much about my rent. And I'd be suspicious of an employer building their office building for the same reason: their core competency is doing whatever it is they do, not commercial real estate and not acting as an employee health care clearinghouse.

All that aside, think Ezra has this sort of wrong-- there are plenty of employers who are cutting back on available health benefits specifically because it's too expensive, particularly for small businesses. Concerns for large businesses are probably quite different.

Posted by: constans | August 26, 2009 5:10 PM | Report abuse

Aren't most relatively large companies self-insured? That would mean their health care costs would be independent of the actual company they choose and the only difference would be on administrative costs.

BTW, I would be very interested in how you think employee self-insurance interacts with community rating, etc. Large companies would, in general, have a healthier demographic than average, so wouldn't they have a pretty large cost benefit over non-self-insured businesses and the individual market?

Posted by: missionpeak | August 26, 2009 5:19 PM | Report abuse

Just like the employee pays the employer's "contribution" to Social Security.

Of course, liberals can look at that one either way, depending on what point they'r trying to make. If you want to raise the tax, for example, then tell everyone their employer pays it. But if you want to complain about regressive payroll taxes, then its paid by the employee.

Which explanation is politically correct today?

Posted by: whoisjohngaltcom | August 26, 2009 5:23 PM | Report abuse

True dat, but I also think it's true that employers don't have as much choice as you think. I work at the U of Washington, obviously a huge employer, and I had to change my insurance every year the first five years because the insurance company wasn't making enough money, so they withdrew from their arrangement with the U.

Our choices are much more limited now, even though a few new insurers did move in to fill the gap. Bottom line, though, employers face rescission just like individuals do.

Posted by: roquelaure_79 | August 26, 2009 5:24 PM | Report abuse

Both your post and Leonhardt's are painting with not just too broad a brush, but with car tires.

First, while (abstractly) fringe benefits are part of wages, who cuts the premium checks to the insurance companies, and who, in a general way, tries to keep all employment costs down, rather than skyrocketing?

Second, other considerations intrude: as pointed out above, for a very small employer, having certain docs in the plan will probably be the controlling factor. For a medium-sized employer purchasing actual insurance, premium cost is doubtless controlling. (In the case with which I am most familiar), for multi-employer, self-insured plans, the administrative costs are a large consideration, but a reasonable degree of customer satisfaction (e.g. both employees and in-house adminstrative personnel interacting with the 'insurance company' (actually, Administrative Services Only provider) is nearly as important. We are reluctant to change vendors just for the sake of change (too much employee dissatisfaction) and prefer to have fewer providers in the tent rather than more (problems of complexity and clanking interactions).

Starting with the CEO's in our industry, we worry deeply about the costs. We just don't have any ready solution. (Are the Medicare customers in McAllen staging a revolt yet, refusing that extra doctor-ordered procedure compared to Laredo? I thought not...)

As a WaPo employee, I bet you were given a choice of plans. On what basis did you make that choice: preferred docs under whose care you already were, or plan cost, or ...?

This really wasn't up to par: your posts aren't usually this off-hand or superficial.

Posted by: wendellbell | August 26, 2009 5:57 PM | Report abuse

Relatedly, your 401k sucks because the human resources VP gets free baseball tickets from the mutual fund firm. And that costs you an extra 1% or 2% of your 401k savings every year.

Posted by: chrismealy | August 26, 2009 6:09 PM | Report abuse

What constans said: employers should be concerned about preventing on-the-job injuries (or transmissable illness). They shouldn't need to be concerned about whether those employees are playing soccer or riding bikes or walking on cracked sidewalks or navigating flights of stairs on the weekends.

visionbrkr's defense of his role in the existing non-system is more even-handed than most, but in this case, he's offering up entirely specious analogies. Just as doctors shouldn't be in the business of managing ever-expanding paper-pushing empires, employers shouldn't be in the business of playing Mother Hen.

Posted by: pseudonymousinnc | August 26, 2009 6:23 PM | Report abuse

> It's no mystery why the insurance market
> isn't competitive from the standpoint of
> individuals: Most of us don't choose our
> insurer.

I am utterly puzzled at what this is supposed to mean. I have worked for and consulted for midsized manufacturing companies ($20-$200 million/year, 50-500 employees) for the last 20 years and I can guarantee you that they are out there shopping their health insurance as hard as they can every contract period (2-3 years). And that the cost escalation over the last 8 years, even with such shopping, is killing many of them.

I won't disagree that "plan that meets the president's needs (or the owning family's needs)" is a factor, but cost is ever-present.


Posted by: sphealey | August 26, 2009 6:40 PM | Report abuse


thank you for the back-handed compliment!


well then its a good thing they have me as their broker so i can focus on their employee benefits and make sure their costs are as low as possible and their benefits as high as possible. Thanks for justifying my job. I didn't need it, but thanks!

i love those that assume (including the administration and most politicians from both sides of the aisle) that BIGGER is always better. I really don't mean to demean those that just don't know because its not their job to know but those who purport to know, like our legislators and don't know need to be called out on it. More on that in a bit.

Its not. If your risk pool is as murky as the Hudson river bigger is worse. I've got a client who has 200+ employees whose cost went from $400 per single to $600 per single because of their poor claims. The carrier took in $1.6 million in premium and paid out $2.2 million in claims and that's AFTER a negotiated discount of around 50%.

I also have another large employer client who has just over 1000 employees who just bought a small section (50 employees) of a company recently in the bailout news. The larger, bailed out company has about 40-50,000 employees in the US. Their costs are 50% HIGHER than the smaller company.

Its about the cleanliness of your risk pool when you get that size. that's why PEO's, MEWA's when they start out, start out good but when their risk pool gets muddied the rates go skyrocketing.

As far as calling out legislators, I went to a town hall last evening with Frank Pallone, a stalwart liberal. He's one of the writers of the Energy and Commerce bill that came out of committee at the end of August. He claimed at the town hall that an individual in NJ could be offered an individual rate of say $13,000 for a family per year (just plucked the number out of the air but i'm thinking he's not far off) but through the underwriting process (WHAT??) the rate could raise to say $20,000. HELLO? NJ is a guaranteed issue state with modified community rating. Sorry Congressman that is NOT POSSIBLE. Its nice that he makes these things up as he goes along but if he's the one writing the legislation shouldn't he at least know the legislation in his own home state who he's represented for some 30+ years??

oh and sphealy i'd love to know what carrier's writing 2-3 year rate guarantees on those size groups becuause they don't (at least none that I know of and I work in that market enough.) They may give rate caps on admin costs but not on claims. They're too volatile.

Posted by: visionbrkr | August 26, 2009 7:11 PM | Report abuse

Ezra, you and David Leonhardt have no idea what you are talking about.

In the 90's, I spent 6 years buying health insurance (and handling all budgets)for a 250 employee group. Currently, I am on the board of a 125 employee non-profit, and I have been deeply involved in the purchase of health insurance (and the budget) over the last two years

Employers of that size have little bargaining power. And they are terribly frustrated by the rapid, regular increases in their annual premiums. (My non-profit has experienced an 11% annual increase in health care costs with a stable employee base and is projecting 10% annual increases over the next 10 years, while we budget wage increases at a little over inflation.)

The premiums for such groups are based on the health experience/usage of their employee group, which they have no control over, and the deductibles and co-pays they include in their plans.

They can accept or reject the prices (premiums) offered by the insurance companies and can tinker with the % of employee contributions (especially for spouses and family coverage), deductibles, and co-pays. But beyond that, have little say in the premiums they and their employees pay. And if your group experiences a heart attack and a back surgery one year, the premiums will go through the roof the next year.

Saying that employers are not good consumers of health insurance, or that they don't worry too much about the cost simply, shows that neither you or Mr. Leonhardt have ever had to purchase group insurance or been in the shoes of an employer.

Posted by: dside | August 26, 2009 9:17 PM | Report abuse

As a 30 year health care consultant serving the Fortune 500 market, I think you are overstating your case here.

The employers I work with definitely look at total compensation as an expense. So what goes out the door in health care is just less that can be spent on direct or variable pay.

However, this does not make them poor purchasers of health care. Actually, they try extremely hard to minimize the rate of growth in health care expenses.

Posted by: scott1959 | August 26, 2009 9:27 PM | Report abuse

"Its about the cleanliness of your risk pool when you get that size"

Thanks for making the case for universal single-payer.

It's an interesting terminological quirk there, too: you're saying that to insurers (and insurance brokers, apparently) the sick are dirty. Metaphorically, of course, but metaphors have weight.

Posted by: pseudonymousinnc | August 26, 2009 9:41 PM | Report abuse


haha. actually i've said once or twice to Lensch when he wasn't berating me like you and constans do because of my profession that i believe single payer COULD work.

That is IF Americans got off their lazy arses and stopped being obese and lowered the obesity level from say 70% down to maybe 20%.

That is IF Americans had a clue at what healthcare NOT HEALTH INSURANCE, HEALTHCARE actually cost.

That is IF the government actually investigated and STOPPED fraud and abuse in the systems.

When that actually happens come wake me because I'll sign up for your campaign and retire.

Now back to reality. . .

If people want counsel on how to lose weight they talk to a nutritionist.

If people want to manage risk in healthcare they should ask insurers. The problem is that Obama demonized the risk managers at the beginning of this debate. Every large insurer now has HSA's as either their only plans or their major plans. They're also going to prescription cards that as strongly as possible push generics via cost incentives.

Insurers know what the costs are, what drives them and how to cut them. They have the data. They just now need to be able to use it.

Posted by: visionbrkr | August 26, 2009 10:03 PM | Report abuse

visionbrkr makes a consistently hilarious argument that we frequently hear from the "american exceptionalism" crowd: That America is exceptional awful, incompetent, and unhealthy for universal health coverage.

Seriously, visionbrkr, the problem is a lack of massive risk pools. One of the best ways to manage that is single payer. Anything else is cream-skimming. I think America can "do it." Why don't you?

Risk adjusters who are penalizing small firms because their "risk pool" is too "dirty" because they have employees who have the bad taste to get sick are the scum of the earth and a fine example of everything that is *wrong* with the american health care system.

Posted by: tyromania | August 26, 2009 11:10 PM | Report abuse


Personally I thought Ezra when he has his title "Confused about Insurance" should have gone with the premise that most American's in employer sponsored plans have no clue about how their insurance works. Americans don't understand healthcare whether it be health insurance or medicare. I've got people that call me every day not understanding why Medicare paid this or what they owe from that from a simple Medicare EOB. Same as regular insurance.

They have Part A that covers hospitalization and Part B that covers doctors but where are labs? radiology centers, ambulance services, outpatient surgery centers etc. Part D that covers drugs. What's the doughnut hole anyway??

And they have supplemental plans. Plans A,B,C,D,E,F,G,H,I and J. Wait I thought Plan A was hospitalization and Plan B was doctors? No that's PART A. PLAN A is a bare bones type of supplement plan.

And wait I have a deductible under medicare? I thought single payer paid everything? I have to pay $1000+ when I'm in the hospital?? What kind of crap is that?? Wait I've gotta pay for the first 3 pints of blood in Medicare if I don't get a supplement?? What a ripoff!

Oh and try explaining this to a 75 year old with early onset Alzheimers.

Heck I've tried to explain it to CEO's of major corporations and it doesn't register.

So please if you think EVERYONE will understand your single payer system if its set up like Medicare I've got oceanfront property in Kansas to sell you.

Medicare's not better they just lock down costs with set reimbursement rates. Well costs that aren't related to fraud, waste and abuse of the system. I said I'll gladly retire when Medicare fraud is gone and the other two conditions are met and pick up your HR 676 signs with you. Now i thought that would have garnered a little bit of praise, no?

An old life insurance agent first told me when i got into health insurance to not do it. Sell Life Insurance. They buy it once, never bother you again and when they die you don't hear from them just the beneficiary, bring a check and they love you.

Health's insurance's problem is that it is the most highly utilized form of insurance and when you have that you have much more incidence of problems, mistakes, errors whatever. I should have listened to my old friend.

Posted by: visionbrkr | August 26, 2009 11:40 PM | Report abuse

I honestly don't know how single payers think. Would you model it after medicare? Why would you model a system you purport as better after one that's going broke? Why would you model it after one that has massive fraud and abuse. $60 Billion per year's worth. And its not as if they handle the majority of Americans even and have staggering statistics like that. I'll bet fraudulent doctors are just salivating at the chance at HR 676. that's like modeling a campaign for fidelity after Bill Clinton, Spitzer, (oh and I'll be fair here) Ensign and Sanford.

Posted by: visionbrkr | August 26, 2009 11:48 PM | Report abuse

oh crap I just realized that Ezekiel Emanuel wrote that JAMA article. And this is the guy that's helping his brother run the point on reform?

He said:

However, this is incorrect. Employers do not bear the cost of employment-based insurance; workers and households pay for health insurance through lower wages and higher prices.

Does he really think that employer's if they were unburdened from their healthcare liabilities would all of a sudden hand every family an extra $15,000 per year in salary? Oh wait you're only single, you only get $5,000. Employers will pay salaries to the level to get either the best employees they can OR quality competent employees. The choice of the two depends on their management style.

Posted by: visionbrkr | August 27, 2009 12:13 AM | Report abuse


When your tradesman's argot betrays the fundamental problem of the American health non-system, I think the correct response is "touché".

Those dirty sick people have to go somewhere. Sure, they're going to cost a bit less because they're not muddying some insurer's risk pool, but they're not written off the nation's healthcare book or balance sheet. The state is usually there to clean up the stuff your boys sweep under the rug.

"I honestly don't know how single payers think. Would you model it after medicare?"

Copy France. Why not? Not lard-arses, but a nation of hypochondriacs all the same. Leaves supplementary insurers in the game, too, though you'd want to make sure that you can cover those copays and un-reimbursed expenses at about $125/mo, just as specialists would have to deal with the fact that Little Jenny can't have yet another pony for Christmas.

I wish I didn't have to repeat myself, but considering yourself the constant in this equation while blaming greedy doctors and dumb patients all the bloody time just isn't going to pass muster. Sorry about that. I'll grant you that Americans are especially good at accepting crappy outcomes at excessive cost, but I don't think that's your personal responsibility.

As someone said elseblog, there's a large constituency of people who'd be thanking their corporate masters for letting them live under bridges in rags, eating sparrows roasted over an open fire and topped with ketchup if they knew that some other guy wasn't getting the ketchup.

Posted by: pseudonymousinnc | August 27, 2009 1:12 AM | Report abuse

To go back to my first point, about employers having to play Mother Hen: why, exactly, is it a good thing that an otherwise smart business decision -- an acquisition or expansion -- might be affected by the number that comes out of the health insurance computer?

The consequences are obvious. Instead of hiring a janitor or a cleaner, you contract it out to firms and don't have to worry about healthcare. If the cleaner gets sick, they'll send another one. Instead of hiring data entry clerks, you outsource, not just because the hourly's better in Bangalore, but those workers ain't peeing in the pool.

Can you hand-on-heart argue that American business is better for having these factors included in every staffing decision? Sure, it keeps a lot of paper-pushing skimmers in work making it function, but does it make American Widgets Inc. a better company?

The language here is fascinating, because it reminds me of how 50 years ago, another group of people wasn't allowed to pollute nice, clean private pools. It really does make the point, backed up by what you see in every waiting room, that healthcare is one of the last bastions of segregation in America.

Posted by: pseudonymousinnc | August 27, 2009 1:32 AM | Report abuse


you know I'm "anti-pony" as it were anyway so I'm all for it. Like i said before no one abuses the system, circumvents it for personal greed like American's. I'm not just blaming doctors, i'm blaming me as an insurance rep too. For our clients when we change their plan at the 1st of the month but its not processed until the 10th if people get care and we've reduced benefits we never go back and fix it towards those reduced ones.

Again once we get all the greed out of the system then I'll gladly sign on and pick up the HR 676 signs with you. Until then as the corporate shill you call me I'm going to help my clients navigate the system and I've already started telling them no when they want to adversely select against it in certain ways. I may lose clients that way but its the right thing to do. I'm still for covering everyone and i always have been. I just believe that free markets could and should do that better than governemnt even though sometimes they need (and shouldn't have) to be forced to. As i've said before i'm fine with chopping insurers profits at the knees but saying their profits are as high as other industries is just someone not paying attention. I'm also for more regulation even though health insurance is the most regulated industry. Oh and while you're regulating, regulate doctors as well. Its funny how doctors can send us to collections but we can't send them anywhere but again you'll just call me Dr bashing. Its not bashing if I've got 15 years of experience. Its experience with the bad that a small segment of doctor's offices do. And most times I find out that the doctors don't even know what's going on. Its their ridiculous practice managers that do what they do. I've got stories that would make your head spin about patient abuse.

I'm sorry but $60 to $70 BILLION in a part of a system is wrong to entrust the entire system to. Clean it up and then I'll sign on. Otherwise we're just sending good money after bad.

Posted by: visionbrkr | August 27, 2009 7:25 AM | Report abuse

Ezra - Both you and Leonhardt are wrong on this one. To think that employers don't care about the cost of insurance is nonsense. Take 2 companies, A and B that operate in the same industry and produce the same products at the same price, yet co. A pays 10% less for health insurance. Co. A is now able to either 1) attract better employees by paying them more yet remaining just as profitable as Co. B, or 2) Able to offer its employees better health insurance coverage at the same price as co. B, and/or 3) able to reinvest more capital in R&D, marketing, etc.

To say that employers are poor purchasers of health insurance because "they're not paying for it" is also to say that employees don't care about their own wages. Employers care about total compensation. If they're paying mroe for insurance than they are paying their employees less. And over time a company that does this will fund it more difficult to attract employees than one that is a good purchaser of health insurance.

Also see the reubuttal to Leonhardt over at Marginal Revolution.

Posted by: mbp3 | August 27, 2009 7:53 AM | Report abuse

Leonhardt's article, while overstated, goes to the heart of why the Democrats' proposed health care reforms are a sham. The primary problem with health care in this country is the market structure: there is very little competition between insurers at a local level where people/companies actually shop, and the consumers of health care only pay indirectly for their insurance. The Democrats, though, have absolutely no intention of fixing the warped market structure.

And they know the market structure is a huge problem -- they just don't have the guts to fix it. So screw 'em.

Posted by: ostap666 | August 27, 2009 8:41 AM | Report abuse

Ezra is falling into the monomaniacal trap again here. It's not the insurance companies driving up costs directly, it's the providers charging more. It's really the insurance MODEL (public and private, Medicare and Aetna) that is driving up the provider costs by not penalizing people for choosing more expensive treatment. If I have a $20 copay for the most expensive specialist in town or $20 for some guy down the street that offers a better value for his service, I have no incentive to choose the better value for everyone, because the more expensive doctor is a better value for me. If I have no co-pay, it gets even worse.

Posted by: staticvars | August 27, 2009 8:41 AM | Report abuse


while you're right about the problem even where costs are managed like they are in every bill (at an 85% loss ratio, currently higher than anywhere in the country has) even a monolopy would work. Right now some states have loss ratios but others don't. Insurers can actuarily stay close to those levels in states that require it but grossly profit in states that don't. To that end a loss ratio to me would resolve the issue and the need for a public option is only a power grab towards single payer. Its taking it steps too far but I'd be fine with taking insurers out to the woodshed every year, overturn them and have profits drop out of their pockets and hand it back to consumers but as staticvars says until we control costs their profits are a drop in the bucket compared to the waste fraud and abuse in the system designed as it is now.

I miss the old indemnity plan days! That's when people accounted for their costs. Back in the 90's insurers managed costs well. I'm still waiting for medicare to do that 40+ years later. What do you expect when they have the full backing of the treasury at their disposal.

Posted by: visionbrkr | August 27, 2009 9:02 AM | Report abuse

staticvars, it is the job of the insurance company or single-payer entity to negotiate a good deal with the specialists for compensation... that's what insurance companies are there for, in part: to leverage their market power.

visionbrkr is simply here to place the blame on everyone except the insurance company for the problems with the system.

The problem with employers is not that they're insulated from the costs of providing insurance (Ezra is stunningly clueless or gullible for blindly accepting that idea) but rather than employers simply aren't capable of designing a package of insurance benefits for employees, and employees get shafted if they attempt to cover themselves on the individual market. One again, it's simply not part of an employer's core competency to understand which insurance packages are going to be best for the employees. The worst case scenario is not that the employer doesn't "control costs" in his choice of insurance plans but that the insurance plans are inadequate, scaled-down, HSA-based ones that are too confusing to use or plans that only have limited access to doctors and hospitals in the region.

Posted by: constans | August 27, 2009 9:58 AM | Report abuse


haha good morning. enjoying things from your narrow point of view?

When did I say insurers weren't to blame?? I think i've said ad nauseum that insurers should have stayed to the cost containment systems of the 90's when they held costs down but people hated them because they didn't approve every MRI or every catscan. Now they deny some stuff and the costs are skyrocketing. People will NEVER say, Wow my insurance paid hundreds of thousands of dollars for my cancer care, they'll say when they DON'T get something. Sorry its human nature. You can't change that. You can ignore it like you choose to but you can't change it.

So AGAIN you're arguing both sides of the fence. You complain that I think the average consumer is stupid (which they are when it comes to healthcare, sorry but its a fact) and then you try to say they're not. Well then if they're not stupid then why can't they understand an HSA. You obviously don't understand them because they don't have limited access to doctors and hospitals within a region they just shift the costs so employees are more aware of what the costs actually are and actually have more "skin in the game" than your average "cadillac plan" that are shown to not only cost more now but increase in cost more becuase of their high utilization.

So again you've proven me right and proven my worth to the system, but again I didn't need that but thanks anyways.

Posted by: visionbrkr | August 27, 2009 10:45 AM | Report abuse

in addition employers can set up HRA's that can limit or target the "skin in the game" so that employees aren't negatively hurt by high out of pocket costs (if structured properly) but yet the employer sponsored plan enjoys the benefits of on average lower renewal increases year by year.

Posted by: visionbrkr | August 27, 2009 10:52 AM | Report abuse

"once we get all the greed out of the system then I'll gladly sign on and pick up the HR 676 signs with you."

That's basically creating a nice moving target for your oh-so-important support that -- surprise!-- will never be reached to your satisfaction. Sorry, not playing those games: you've got the option to be part of the solution, or you're part of the problem.

You're still dodging my basic questions, too, which makes me think that you can't answer them, or know the answers but are afraid (or ashamed) to admit it.

Posted by: pseudonymousinnc | August 27, 2009 12:12 PM | Report abuse


i'm sorry which question was that?? Ask it again here and I'll specifically answer it. If i said I'm willing to forgo my entire career on a system that did work I don't see how you can say that I'm dodging anything? What do you do? Are you willing to go out of business and lose your career???

Posted by: visionbrkr | August 27, 2009 12:46 PM | Report abuse

i'm also not saying it needs to 100% go away because I know that's unrealistic. Just show an honest open attempt to get it down. Get it to where private insurers are, how's that? Trust me, I wouldn't say what I say if I knew you (ie Medicare) could do it relating to fraud and abuse.

Posted by: visionbrkr | August 27, 2009 12:48 PM | Report abuse

This question:

- is it a good thing for American businesses to play Mother Hen for their employees? Does it makes those companies more efficient? Does it mean that hiring and staffing decisions are smarter? Does it make mergers and acquisitions stronger?

- Is Amalgamated American Widgets, Inc better off because every hire, every capital investment involving personnel and every expansion made with health costs in mind? Or is the primary economic benefit to people like yourself who make money from advising Amalgamated American Widgets, Inc. how to keep their pools clean and premiums low?

It's not enough to say that you're just working with the system as it stands. Do you really, hand-on-heart, believe that dealing with health insurers and insurance brokers on a regular basis makes your clients better at what they do?

A supplementary:

- is it a good thing that Americans regularly hold bake-sales for medical bills? Does it provide vital moral fiber?

"What do you do? Are you willing to go out of business and lose your career???"

Well, I'm not a skimmer. But I do live in the constant knowledge that the non-system, as it stands in the US, makes it harder for me to do what I do than in pretty much every developed nation on the planet.

Posted by: pseudonymousinnc | August 27, 2009 2:27 PM | Report abuse


No its not a good thing that they play "mother hen" as you put it but you don't realize that they do it for other things as well. 401k's. I guess they should be outlawed too. Group Life Insurance. Dam those evil people. Disability coverage-- what a waste. You can marginalize everything you want but at some point you have to get to the core that as an employer you need to provide a reason for your employees to come into work, do a good job and be productive and successful. If we all are relegated to the same status in life with little or no ability to improve ourselves I believe at least we'll all gravitate to the bottom.

Do I believe the system as it is now benefits them, NO. That's why we need to reform it. Do i believe in a utopian world your single payer with little or no fraud and everyone working together for the common good is better, ABSOLUTELY IT IS. The problem is that its unattainable.

I do believe I provide a valuable service and my clients tell me so. I've saved my clients millions of dollars in 15+ years of what I do. Whether it be the business owner small or large that I recommend and they implement a change to their plan that better allocates limited funds where they need to be as far as healthcare goes or an employee who didn't realize they were going out of network and i speak to a doctor and a hospital to make sure they don't get abused by them. Or speaking to insurers to make sure they pay claims they should. I had a client whose daughter is autistic. We fought for about a year to get it covered under her plan and we did get it done. It wasn't covered because it wasn't mandated that it be covered and the treatment they were doing, ABA Therapy actually works but it was too new. Now we've fought (I'm a member of Autism Speaks) and now Autism is covered as of several weeks ago under group plans in NJ. Without me helping them where would they be???

In answer to your supplementary no its not good to have to hold bake sales. I've been a part of that and I've donated to friends, family, neighbors that have had either caps on their care or treated out of network where there are no caps so no its not good. We'll fix this if we get EVERY doctor out there to agree to a reasonable network fee. Not an undercut Medicare fee but a reasonable fee that they can live on, have their second house on etc. Think we can do that????


Posted by: visionbrkr | August 27, 2009 3:09 PM | Report abuse

PART 2 . . .


And part of my disdain for doctors is because I know how dumb some of them can be, not all but some. My daughter when she was one year old had a febrile seizure. She almost died but by the grace of God we were in the car and my wife happened upon an Ambulance driving down the road and literally ran them off the road and 10-15 minutes wouldn't have saved us. When we ration care and hospitals close how would my daughter be affected???

When that same daughter was 3 she wasn't speaking and we feared Autism. We took her to a specialist and it was confirmed she was autistic. We were devastated as any parent would be. Thank God we had insurance but we were still devastated. I can't imagine how those without deal with this (which is why i want reform to cover everyone). We happened upon an ENT because of a recommendation from her speech therapist of all people and he asked us how long she had an ear infection for. We said we didn't know she even had one at the time. She never complained of ear problems and we cleaned her ears fairly regularly. Long story short she had been hearing since birth practically as if she were underwater because our pediatrician never bothered to suggest to us to get tubes in her ears.

She wasn't autistic, she was just now unfortunately behind. We had speech therapy covered by our insurance to what levels they do and we paid for the rest. No complaints from us. She's now a bright, straight A, 9 year old.

If our pediatrician had just suggested tubes in her ears in any of a number of checkups all that mess and cost would have been avoided. Hence my personal affection towards some medical professionals.

Honestly it frustrates the heck out of me that some of you think those of us that don’t want the public option are against caring for the sick, poor etc. At least in my case and I can’t speak for all, nothing could be further from the truth.

Posted by: visionbrkr | August 27, 2009 3:09 PM | Report abuse

i also realize if you made me uninsured during the time frame that this happened to my daughter and what would i have paid? Its astronomical. That's why we need everyone in the system. We need everyone to care. But we do need to find a way to cut costs too because endless government programs are unsustainable, we need more doctors so we can't cut their reimbursements too low. We need to better utilize nurse practitioners because there aren't enough doctors now and if we throw 50 million more into the system then does anybody get good care? No. That's why we need to do more than just get rid of insurers. You can blame them all you want but they're not the only problem.

Posted by: visionbrkr | August 27, 2009 3:24 PM | Report abuse

visionbrkr's perspective is an interesting one. Apparently, he believes that to keep everyone's costs down, we need to keep all of the sick (ie "dirty") members out of the risk pool to keep it "clean." And, magically, this means that these people will never need any health care, and thus won't drive up costs which would happen if they had health insurance. The lack of a single-payer system or other universal coverage system does not automatically keep these people out of the health care system. They just get bankrupted by it or develop conditions that require much more expensive treatment when it hasn't been attended to earlier. The only person who wins in this scenario (in the short term) is the insurance company who didn't have that person's medical expenses show up directly on their balance sheet (and if they did, the insurance company would drop that patient or make a choice between driving the patient's employer's premiums through the roof and simply telling the employer to find another insurer).

Posted by: constans | August 27, 2009 3:36 PM | Report abuse


I'm serious about this question, "Do you have a job?" Do you have a budget? Do you balance a checking account? How much is too much? Do we give services out forever without managing that at all? Should we give a cancer patient daily catscans to ensure it hasn't come back? Once a week? Once a month? Once a year? When is it OK for you? Or should we just pay for everything everyone wants whenever they want without managing real expectations?

How many times do I have to say that everyone should be in the system?? Even in the most perfect of systems people fall through the cracks unfortunately whether it be due to inability to reach someone (some people out there still don't have phones, internet, etc) Even the best systems only cover 96-97%. Mass has that. I'm in favor of that. NO public option but choice all around. What is so bad about the Mass option? Becuase you'd lose your precious public option? You can hate, despise (whatever you want to call it) me what you want but I want everyone to be covered. What do you have to say to those that don't want to pay a penny into the system (i think pseudo was one of those if i'm not mistaken). When he gets sick he'll be outside of the system right? We can't FORCE healthcare on people if they're willing to pay a tax. Dodge the system or whatever.

I also love you blaming an INSURER for driving a patient's employer's premium. Its the CLAIMS DUMMY that drives that. How much SHOULD an insurer lose before its OK with you???

Oh and in the interest in getting it all out in the open I'd love to ask you what you do for a living so that we could marginalize that since you're good at doing that to me.

(awaiting deflected answer).

Posted by: visionbrkr | August 27, 2009 3:56 PM | Report abuse

so, visionbrkr, you're arguing here that people have *too much health care* and that this is ruining the system? You take a certain amount of demented glee in criticizing people for being treated for their illnesses and seem to feel that the biggest threat to the health care system is that people might get treatment and have the audacity to submit those awful, awful "claims." Your biggest fear seems to be that the sick -- the dirty, dirty sick making the risk pools unclean -- might see a doctor and bill the insurance company (while remaining happily ignorant of the patients clogging the emergency rooms).

Running a health insurance company that has community rating with large risk pools, cooperates well with doctors, has good standards of treatment, and has negotiated deals with almost all major hospitals and doctors is difficult. By contrast, insisting that clients of insurance companies never take on anyone who's sick and respond with threats, premium raises on small risk pools, recission, and bankrupting bills for typical expenses that magically turn out to be "not covered" is easy. It's no surprise that you support the easy route and get resentful that other sick people might sully the purity of the people you want to insure.

Posted by: constans | August 27, 2009 4:18 PM | Report abuse


some of those in the system have too much, some have too little (due to high out of pocket costs and the lack of savings) and some outside of the system have none. that's why we need reform.

Oh and pray tell what is a "good standard of treatment?". YOUR STANDARDS or the AMA? Should we give everyone Lipitor that wants it so they can pop them down like chicklets no matter the cost or should we ask them to take generic statins or maybe Zocor if we can get a better deal on it or should we ask them to stop eating all the crap food that increases their cholesterol??

Where is there a case for personal responsibility? Or should government just fix all the woes of the world??

oh and dont mind. I didn't expect either you or pseudo to answer my question. It must be nice to be perfect. Do clue me in sometime will you?

Posted by: visionbrkr | August 27, 2009 4:29 PM | Report abuse

Mr. Klein is absolutely correct. We are paying for our own health care costs blindly.

We need a Medicare-like Public Plan in which every insured is an individual, not a family.

All individuals with incomes pay a percentage of their incomes as income-based premiums to the Public Plan.

But we also need an age-based monthly premium to compensate for age being a major factor of health problems. For example, a one-year old pays $1 per month. All individuals stop paying this age-based premium when they turn 65.

We also need co-pays, a cap for malpractice law suits, free tuition for medical school loans for primary care doctors, drug/hospital/doctor fees monitoring, etc.

Most importantly, we need a single-payer system so we can double the time doctors have for patients, instead of dealing with many different insurance companies.

Posted by: dummy4peace | August 27, 2009 4:35 PM | Report abuse


ya i thought so. how high does that horse go???

Posted by: visionbrkr | August 27, 2009 5:01 PM | Report abuse

My comment's long, and it went into moderation, so I hope Ezra flicks the switch.

Sorry I didn't get back to you within seconds. I was working. (You not kept busy these days?)

Still, that response time's better than you get when you phone your health insurance company.

Posted by: pseudonymousinnc | August 27, 2009 5:15 PM | Report abuse


haha. well at least you bothered to return. Why not post in portions if its moderated? It won't come back.

I'm busy looking for a new job thanks?

Again, what do you do? Don't make it too long so its moderated please.

Posted by: visionbrkr | August 27, 2009 5:23 PM | Report abuse

dummy4peace, if you already have a sliding scale based on income for health care premiums, why do you also add a surcharge for age? And why does this surcharge magically disappear at 65?

visionbrkr: I'm actually a big fan of evidence-based medicine and health care experts. I'm not a big fan of insurance companies. But you're a shill for the insurance companies, and you like to lash out blaming "greedy doctors" and irresponsible patients for our problems, because that's where your interests lie.

Posted by: constans | August 27, 2009 5:41 PM | Report abuse

*how high does that horse go???*

not so high, but I found more meaningful work than wasting my life as an insurance broker.

Posted by: constans | August 27, 2009 5:43 PM | Report abuse


haha wasting my life? I'd say the same to you but you keep deflecting? why won't you say what you do??? you either pseudo!

Posted by: visionbrkr | August 27, 2009 7:55 PM | Report abuse

how well does PAID BLOGGING pay you guys? Do checks come directly from the DNC or somewhere else? I'm afraid to ask. I guess my shill job severely underpays what paid Bloggers make huh?

Posted by: visionbrkr | August 28, 2009 12:11 AM | Report abuse

"how well does PAID BLOGGING pay you guys?"

I have no idea. You, on the other hand, seem to be kept very busy here, which makes me wonder when you find the time to do all that pool-cleaning.

Ot'd be good if Ezra would free my earlier comment from moderation purgatory.

In summary: you're arguing that it's counterproductive for businesses to have to deal with their employer's healthcare, but that they can offer healthcare as a "benefit". So you're arguing both sides of the toss. Again.

It's only a benefit because the system is broken, and because you help to shuffle the dirty sick into their own pools.

You're defending the indefensible, and at times your "yes but no but yes" answers seem to admit it.

Posted by: pseudonymousinnc | August 28, 2009 10:53 AM | Report abuse

well i'm glad you came back to here.

You'd be busy trying to get the truth out if your profession (still don't know what it is, are you even employed???) as at risk of being destoyed by a government takeover too.

I'm not arguing that its counterproductive I'm arguing that while yes they'd rather not do it, its a cost of doing business, cost of having employees. Sure they could untie it slowly from employers which they're doing with the exchange but then why would employees stay with an employer? Salary? Ya i guess, but if someone offers 5k more then would you change employers? Work enviorment? i guess so but how do you know how good something really is until you get to the new job and experience it for yourself.

I'm not defending the indefensible because it if was indefensible then it wouldn't have worked in the 90's which it did. I've say many times we need to get back there.

Again, for about the 1000th time I'd LOVE for you to tell me what you do for a living if you're not a paid blogger and I have no choice but to believe you and that's fine. But if you came out and explained yourself then you'd be more trusted to not only me but everyone else as well. I've come out and been honest to my detriment and now everything I say anywhere around here is painted as a shill. (ya nice catching my typo, thanks!)

Exactly WHY are you shilling and who are you shilling for? If you're uninsured, unemployed, underinsured, underemployed that's fine just say that. But the truth would be nice, that's all.

Posted by: visionbrkr | August 28, 2009 12:20 PM | Report abuse

ya right pool cleaning.

I have time because I spent years building my business and now I don't go out looking for new clients just in keeping my existing clients happy which they are except for the ever expanding cost which I why i'm on here to keep costs down, GET IT???

Posted by: visionbrkr | August 28, 2009 1:28 PM | Report abuse

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