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What kind of market is health care?

Toward the end of their panel, Jon Kingsdale asked a pretty good question of Kaiser Permanente Chief Executive George Halvorson. "Why," he asked, "haven't you guys taken over the market?" After all, Kaiser's model is more efficient than most insurers, with lower prices and better outcomes. Kaiser has built one of the most advanced health information technology architectures in the country, and by employing its own doctors and nurses, it has erased the traditional misalignment of incentives that bedevil insurers. All this has let Kaiser do very well in California, but it hasn't made them into a national juggernaut.

The answer, essentially, was that there is no market. If Kaiser pushes prices down by $30, who notices? Maybe the HR department. But the workers don't see the difference. And other employers don't rush to change their insurance options and sign up with Kaiser. This, Kingsdale explained, is the real problem. The market doesn't need to transform every day, but you do need 10 or 15 percent of the customers willing to pursue better options for the signals to be received and the other competitors to reorient in the direction they think the market is going. But it doesn't work like that in health care. Employers are very reluctant to change insurers, and so good behavior is not rapidly rewarded.

"The price differences are not translated to the consumer," Kingsdale explained. "They go to the company. What is the typical HR officer's decision hierarchy? They have benefits that make most workers happy. The worst thing they could do is introduce a change that make 2 to 5 percent of the workers unhappy. The worst thing you can do in this market is bring change. But what kind of market is that?"

And then, of course, there's the fact that workers don't understand the connection between wages and health-care premiums, which is a big part of why they resist changes to their insurance. And that might be the biggest problem of all.

By Ezra Klein  |  October 27, 2009; 12:27 PM ET
 
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Comments

I think its more simple- HMO's are great on paper but people hate the idea of them. But most ideas that would involve smart cost control are pretty much exactly what you would want to do as an HMO. If the HMO saves enough money then maybe people will finally be OK with that- but in order for that to happen they have to care how much they spend on healthcare. In the current system why do you care if you pay twice as much for a drug thats 5% more effective if your co-pay is exactly the same? Someone somewhere has to care about being cost effective.

Posted by: spotatl | October 27, 2009 12:31 PM | Report abuse

why, it's almost as if we should have a consumer-driven health care system! if only the progressives had realized this before all lining up behind the idea that the mean insurance companies were behind the cost explosion in the health care business.

Posted by: jfcarro | October 27, 2009 12:40 PM | Report abuse

Ezra - I simply don't believe his explanation. Employers do shop around for insurance and they are price sensitive. A reduction in health insurance premiums from 10% of payroll to 8% is just as meaningful to companies as lowering their cost of inputs or increasing sales. To think that companies don't realize this is not giving them enough credit. I think there are many other reasons why Kaiser hasn't taken over the market.

1) Not all doctors want to work in their type of arrangement. It certainly caps the compensation for some specialists at a lower level than they could make elsewhere or by setting up their own practice. This makes it harder for them to expand their market share.

2) Not all consumers want to be restricted to going only to Doctors who work for Kaiser. If your PCP or ObGyn doesnt work for Kaiser than this arrangement won't be appealing. At the individual level some people make insurance choices based solely on whether their favored doctor is in the network.

3) For a large multi-state employer, Kaiser can't compete as well as UnitedHealth and Aetna, both of which have national networks. Kaiser does not.

Posted by: MBP2 | October 27, 2009 12:42 PM | Report abuse

Can you point me to the spot in the legislation where Congress actually plans to fix this problem?

Posted by: ostap666 | October 27, 2009 12:42 PM | Report abuse

Actually, that explanation jives perfectly with my personal experience.

I had to convince a reluctant HR person to offer Kaiser, which was very popular with a group of us who had used them before. HR was reluctant because the HR person didn't like it. No idea why.

That said, Kaiser has geographic limitations in their policies. If you have employees who live more than X miles from the Kaiser facility, then kaiser can not be the sole offering to the employees. In this region, with long commutes, that's more common than you might think.

Posted by: JkR- | October 27, 2009 12:48 PM | Report abuse

also you forget that minimal changes when an HR manager is overworked as it is means, "Do we fill out all this new paperwork, go through this hassle, potentially change everyone's doctor just to save a couple bucks?"


MbP2,

Kaiser actually could compete nationally by purchasing into a national network like Beech Street, Multiplan or PHCS. So it could be done, its just a matter of its worth it to them to go outside their normal models. Sometimes bigger isn't always better.

Posted by: visionbrkr | October 27, 2009 1:02 PM | Report abuse

This whole thing is going to be a failure. They're not going to do the sensible thing with the public option. Working people aren't going to have choice other than their employer. We'd be better off outlawing employer paid benefits and making the employer put the benefit money into our pay. This include government employees as well. Congress would have to deal with the market just like the rest of us. Insurance companies would at least have an incentive to serve the consumer otherwise they wouldn't have a market.

Posted by: just_watching | October 27, 2009 1:06 PM | Report abuse

If Kaiser's changes do only save like $30, then they're not so great at all. That's like a fraction of 1% of the annual cost of a policy (Are you sure you have that number right?).

Big changes like in European and Japanese systems, which really address the severe free market problems of health care that have been well established in economics, which have costs approximately half ours, or less than half, those are serious cost savings

Posted by: RichardHSerlin | October 27, 2009 1:10 PM | Report abuse

Another big issue is economies of scale. These are enormous in health care.

A single health insurer covering everyone would have enormous economies of scale and economies of simplicity throughout the economy, for end users, employers, and healthcare providers. But then it would be a monopoly, so we would have all of the well established in economics inefficiencies and problems with monopolies.

This is called a natural monopoly situation (or it's at least something a lot in that direction). What do economists recommend you do in such a situation? Either you have the government provide the monopoly (because it won't jack up prices and therefore restrict supply way beyond the efficient level), or you allow a business the monopoly, but you highly regulate it.

This second option is often too difficult and costly to do well, so the most efficient thing is to have the government provide the natural monopoly service. And in fact, that's what single payer insurance is. Socialism, some say? Well that's what we've had for decades with Medicare for our seniors, and they love it, and it's costs are far lower than private insurance.

Posted by: RichardHSerlin | October 27, 2009 1:20 PM | Report abuse

I have the experience of Kaiser HMO monthly premium higher than Blue Shield for couple years in a Silicon Valley based company with at least around 700 employees in Valley Campus. Whether other insurance companies were profitable than Kaiser or my then employer was trying to discourage Kaiser, I have no idea.

In my current employment, the employer actively encourages HSA at the expense of all other insurances. It is a large employer with Head Quarters in Texas, so I guess that might have little to do that.

Coming back to the original question - why the price is high when Kaiser CEO talked that CAT scan in USA costs $15K whereas in Europe it will be less than $1K. Is it because end users are not paying from their pocket? Or providers can charge high in a distorted market? What is it?

And finally, this is all exciting and good information. It may be me, but it really makes me cry - after all these 5 bills in Congress when the time is approaching to make the final bill; we are still marveling ourselves on the fundamental issues of this problem. It kind of gives the impression we are probably not near to the core issue - cost control and may be prematurely jubilant about PO. PO is fine, and may be an important political victory of Liberals; but do these current bills solve our core problems we have? Coverage - seems so, cost - difficult to gauge.

Posted by: umesh409 | October 27, 2009 1:24 PM | Report abuse

"why, it's almost as if we should have a consumer-driven health care system!"

And the canard keeps quacking.

In places where you have a regulatory sandbox for supplementary insurance, you can actually attempt elements of consumer-directed healthcare for those elements priced for retail. The "make the consumer pay" brigade never do explain just how a course of chemotherapy fits that model.

Posted by: pseudonymousinnc | October 27, 2009 1:42 PM | Report abuse

Why, it's almost as if Ezra is on the point of recognizing that the for-profit health-care market isn't good at driving down costs and will instead pocket any savings for itself, screwing the consumer. It sure is great that we've carried this insight forward by steadfastly advocating for a single-payer system that would administer health care as a social good and at considerably less cost than the for-profit system (or a robust public option with 100 million or so eligible enrollees). Oh wait, we didn't. Wevs.

Posted by: redscott | October 27, 2009 2:02 PM | Report abuse

An important point a couple people made above is the geographic problem. Since Kaiser are a fairly closed system it won't work if there aren't Kaiser docs in your area. This situation is improving however.

The main reason they don't expand nationally is because it's *expensive* to do so. They are non-profit on the insurance side and a partnership on the medical group side. Barriers to entry are a huge problem in this business.

Someone also asked why Kaiser isn't cheaper. It isn't cheaper because it doesn't face any competitive pressure on its primary HMO products. It could easily cut premiums 20% if it had to.

The main threat Kaiser faces is high-deductible plans. They are popular with young healthy people which causes adverse selection problems for HMOs. By necessity Kaiser offers high-deductible plans of its own but it's not in a great position to do so because you get a lot of fringe benefits as a Kaiser member(everything from free flu shots to email access to your doctor), which the high deductible people use and don't pay for.

Posted by: bmull | October 27, 2009 2:02 PM | Report abuse

"The price differences are not translated to the consumer," Kingsdale explained. "They go to the company."

Ezra,

You do realize this directly contradicts Gruber and the exact post from last week you end up linking to in this post.

So which is it?

(Answer: both. Some price differential gets through to employees, but not all, regardless of how much Gruber believes it in his soul.)

PS I agree with Kingsdale, Wyden agrees with Kingsdale, but Democrats thought the public option was a better idea than actually fixing the market.

Posted by: wisewon | October 27, 2009 2:07 PM | Report abuse

"All this has let Kaiser do very well in California, but it hasn't made them into a national juggernaut."

It's very difficult under the current rules to do business in other states, almost impossible.

What if you could only buy a car that was made in your state?

Posted by: WrongfulDeath | October 27, 2009 2:22 PM | Report abuse

I want to second MBP2's comments - it can't be the whole answer that HR dept.s at large corporations are afraid of making 2-5% of the employees unhappy.

If you have an HMO that has a good reputation with employees, and that can offer a significant discount - say 10-20% - it will be able to get 10-15% of a competitive market. The appeal to CEOs and CFOs - to say nothing of small to medium sized businesses - will be too great.

An important piece of this puzzle is missing.

Posted by: Sophomore | October 27, 2009 2:23 PM | Report abuse

Overall Kaiser is great. It is especially good for families because everything is in one facility and kids don't have to be hauled from place to place to get X-rays etc. Emergency care is a nightmare on weekends, but that is true everywhere. Many Drs DO like to work for Kaiser because they can concentrate on medicine and don't have to worry about billing or ins co interference. And because of their huge in-house database, there are opportunities for research. The e-mail system is great. The one thing I don't like is occasional Dr turnover, but I imagine that happens elsewhere too.

How can Kaiser not face competition? In much of CA there are many, many competing health plans. The people I know who don't like it had a bad experience 20 years ago (or know someone who did) or just like their individual Dr. They are much better now than when they started. My father signed us all up in the early 1950s and I have had them ever since. They are especially good on end-of-life care. Very helpful and compassionate and understanding of a minimalist approach. This is when a capitation system as opposed to fee for service makes a real difference. I might have felt differently if my parents hadn't made their wishes clear or if their wish had bneen to stave off death at all costs, but I really liked their approach.

Posted by: Mimikatz | October 27, 2009 2:33 PM | Report abuse

And then, of course, there's the fact that workers don't understand the connection between wages and health-care premiums. Because there isn't one. Employers are going to pocket that money. We're better off getting our healthcare tax free!

Posted by: obrier2 | October 27, 2009 2:34 PM | Report abuse

Also, it really doesn't matter when everyone's favotire Sen says this.
LIEberman (I-insurance land Conn)

“I told Senator Reid that I’m strongly inclined — I haven’t totally decided, but I’m strongly inclined — to vote to proceed to the health care debate, even though I don’t support the bill that he’s bringing together because it’s important that we start the debate on health care reform because I want to vote for health care reform this year. But I also told him that if the bill remains what it is now, I will not be able to support a cloture motion before final passage. Therefore I will try to stop the passage of the bill.”

Posted by: obrier2 | October 27, 2009 2:36 PM | Report abuse

If you have an HMO that has a good reputation with employees, and that can offer a significant discount - say 10-20% - it will be able to get 10-15% of a competitive market. The appeal to CEOs and CFOs - to say nothing of small to medium sized businesses - will be too great.


I'm sorry but larger size companies have a much small variance in provider cost than this. Its more like 2-5% at most. So switching from Aetna to BCBS would only mean a potential change in network doctors (employees upset) so the extra work isn't worth it to most HR people that you speak to.

And does any HMO have a "good reputation" anymore? I'd say the liberal media and the Democrats have basically made them out to be the demon's of healthcare.


Also some models (maybe Kaiser does too i'm not sure) build their models of internal cost containment but also allow options outside of their providers that they control so while that increases the price, it also increases the choice in the hope of drawing more consumers. The Geisinger model does that.

Posted by: visionbrkr | October 27, 2009 2:36 PM | Report abuse

It's a wonk notion that "workers don't understand the connection between wages and health-care premiums." Workers understand that employers and insurers and government will squeeze them every way they can. Workers wll take anything they can get from any source and not worry too much about which pot it comes out of because ALL the pots are rip-offs of their labor, one way or another.

This is actually pretty rational, but invisible to policy analysts.

Posted by: janinsanfran | October 27, 2009 2:49 PM | Report abuse

@pseudonymousinnc: "And the canard keeps quacking. The "make the consumer pay" brigade never do explain just how a course of chemotherapy fits that model."

Well, no one who is advocating for a more consumer-centric health care market thinks anyone should pay out of pocket for a course of chemotherapy, but if burning that strawman helps you maintain your delusion that people to the right of you on health reform want poor people to die in the street, by all means keep at it.

Posted by: ab13 | October 27, 2009 3:12 PM | Report abuse

Spoken like somebody who hasn't heard any Kaiser horror stories. They're ubiquitous in California. Kaiser is a great, great place to be if you need normal day-to-day care. Once you have a chronic condition, and especially an expensive chronic condition, Kaiser treatment can go downhill.

The most cost-effective place to limit costs is on the high-cost patients, the ones who need transplants, medications that cost thousands a month, psychiatry, and so on.

A notorious case came in 2006, when Kaiser was forced to close their in-house kidney transplant clinic, which was the only place Kaiser patients were allowed to use, after an LA Times expose on their waiting lists and the quality of treatment.

http://www.latimes.com/news/local/la-me-kaiser10may10,0,6587085,full.story

Posted by: JonquilSerpyllum | October 27, 2009 3:51 PM | Report abuse

* Like the "public option", the term "HMO" covers a lot of variation. The network management plans of major insurers are simply not comparable; there are relatively few Kaiser-like organizations in the country. The media has tended to conflate the different types ... and heap distain them.

* It is true that not all physicians want to work in a Kaiser environment but many over estimate the attractions of sole practitionership. These days, Kaiser is the employer of choice for many new graduates. It can take its pick in every specialty -- doctors want to practice medicine, not billing management.

* I don't understand the statement that Kaiser can't compete for the business of large multi-state employers comes. Does any Fortune 100 company doing business in California not offer Kaiser as an option? The problem isn't large companies, it's medium sized companies where HR is unaware of the model (or has a personal bias against it).

For many years, Kaiser had a blue-collar kind of reputation -- it was the plan of choice for government and union workers but not for people who could afford a "private" doctor. The children of all those public workers have children of their own now and, having grown up with comprehensive care from the cradle, they want the same thing for their families. Many have had the same primary care physician for 10 - 15 years and the same obstetrician for all their children. Those people don't understand why everyone wouldn't want the same level of secure health coverage.

Posted by: Athena_news | October 27, 2009 4:07 PM | Report abuse

The missing piece of the puzzle is this: Kaiser has no solution to offer self-insuring employers that want to work under the lesser regulatory burden of ERISA, instead of the state regulatory regimes. I'm not saying one is better than the other -- each has its own merits, and fans and detractors. It's just that Kaiser, owing to its reliance on the HMO model, chooses not to play ball in self-insuring situations. And why would it? Once you're not doing any risk management or medical management, all you're really doing is processing claims. And that costs about the same for one carrier as it does for another. It's commoditized.

Most large, multi-state employers are self-insuring, so Kaiser effectively shuts itself off from big purchasers of insurance like GE, GM, UPS and the like. Most of Kaiser's groups are state, county and municipal governments, the Federal Employees Health Benefit Program and local, single-state employers.

HMOs also have very strict limits on the amount of cost-sharing they can impose on members. Copays can't get too big, and deductibles, where they are even allowed, are generally modest. Some states have kept HMOs alive by allowing more flexibility in cost-sharing, to the point where some can even qualify to be paired with health savings accounts thanks to higher deductibles. But in general, the HMO is the low-out-of-pocket option, offset by higher premiums.

The other problem with the HMO model is that its risk-management requires telling people "no." When you're offering a plan with only certain doctors and certain hospitals, and you have to get a referral from your family doctor to see a specialist, alongside a PPO where the member can self-refer to practically any guy in a white coat who can fog a mirror, that's seen as a negative to the less-sophisticated consumer (and few of us would care to admit we're probably in that bucket).

"No" you can't see that doctor.
"No" you can't go to that hospital.
"No" you can't self-refer without seeing your family doctor first.
"No" you can't have that drug.
"No" you can't have that procedure.

This is life in an HMO. Cost-wise, it's smart healthcare delivery and does wonders for finances. But the consumer hates it.

The culture that gave us quick-casual restaurants where an $8 entree has enough food to feed three people is not one where hearing "no" is rewarded.

Posted by: Rick00 | October 27, 2009 4:21 PM | Report abuse

"no one who is advocating for a more consumer-centric health care market thinks anyone should pay out of pocket for a course of chemotherapy"

Really? In that case, would the quackers please stipulate -- broadly or precisely, I'm easy on this -- which medical costs the "consumer" ought to be feeling in his/her wallet?

Posted by: pseudonymousinnc | October 27, 2009 4:57 PM | Report abuse

Visionbrkr - if Kaiser can offer only 2-5% in cost savings over a long period, then you're right to say it doesn't have a big enough cost advantage to easily grab market share. But the claim is that it *does* have a cost advantage.

On the big, bad liberal media, I guess I'd say that most employees' satisfaction with a health plan is most powerfully impacted by their experiences with the plan. Our family business switched to a local HMO because it was the only way we could continue to afford to provide coverage - they offered a big cost advantage.

And while I'd agree that many people expect miracles from health care - more than they can reasonably hope for from real medicine - I'd submit that health care marketers and providers have a lot to do with that. What drives demand for medicine in large part is the belief that the next pill, test or procedure will make sickness or even death optional. If only.

If you want to know what's really going on, I think Rick00 is closer to the truth.

Posted by: Sophomore | October 27, 2009 5:32 PM | Report abuse

@pseudonymousinnc: "Really? In that case, would the quackers please stipulate -- broadly or precisely, I'm easy on this -- which medical costs the "consumer" ought to be feeling in his/her wallet?"

I can't speak for the quackers. The "consumer" ought to bear more upfront cost. High deductibles, i.e. ~5000 individual, 10,000 family, higher for higher income brackets, lower or with subsidies/vouchers for lower income brackets. Tax-free savings (preferably automatic) in an HSA to pay for medical expenses.

No one has suggested a consumer-centric approach where catastrophic things like chemotherapy are paid for out-of-pocket, that you would suggest they had is either a straw man or just willful ignorance of actual policy proposals. You apparently would rather just caricature (or namecall, see: "quackers" comment) anyone who disagrees with you rather than actually listen to their ideas.

Posted by: ab13 | October 27, 2009 5:36 PM | Report abuse

Basically pseudonymousinnc, you need to stop acting as if everyone who disagrees with the left on health reform is from the Palin/Beck/Bachmann contingent.

Posted by: ab13 | October 27, 2009 5:40 PM | Report abuse

"High deductibles, i.e. ~5000 individual, 10,000 family, higher for higher income brackets, lower or with subsidies/vouchers for lower income brackets. "

So, you'd like more people to defer healthcare when it's at its cheapest and incur those costs when it's more expensive? Nice one. I'll point to Maggie Mahar:

http://www.healthbeatblog.org/2008/05/the-clock-is-ti.html

And really, you're selectively listening to the "feel it in your wallet" brigade. The HDHP/HSA model is a boondoggle for the wealthy, a fraud on the poor, and an indication of how decrepit and threadbare the right-wing approach to healthcare reform is, if that's its acceptable face.

Posted by: pseudonymousinnc | October 27, 2009 6:49 PM | Report abuse

"So, you'd like more people to defer healthcare when it's at its cheapest and incur those costs when it's more expensive? Nice one. I'll point to Maggie Mahar:

http://www.healthbeatblog.org/2008/05/the-clock-is-ti.html"

No, I'd like to them to be better consumers of care, since the plans with little or no cost sharing encourage both overuse of care and poor decisions on what care to consume since they are unaware of cost. Your claim as well as Maggie's post are both just inaccurate speculation, speculation that is not at all supported by the data which shows that in the few years we've had HSAs they have shown a substantial reduction in cost trend without a reduction in quality of care or preventive care, either maintained or increased the level of care received for chronic conditions, and increased the use of generic medications.

http://www.actuary.org/pdf/health/cdhp_may09.pdf

So you can point to Maggie Mahar and her incorrect and completely speculative bashing of HSAs, or you can go to the actuaries who are actually analyzing the data on them and showing they have been beneficial.

There are a number of other problems with Maggie's post as well, I could write pages about how off she is on this one.

"And really, you're selectively listening to the "feel it in your wallet" brigade. The HDHP/HSA model is a boondoggle for the wealthy, a fraud on the poor, and an indication of how decrepit and threadbare the right-wing approach to healthcare reform is, if that's its acceptable face."

This is a lot of noise but no substance. How exactly is it a "boondoggle"? The only difference between these plans and traditional ones is that you pay a lower premium in exchange for a higher deductible, and by spending your own (tax-free) money on the first few thousand dollars in care you are more price conscious and less apt to overconsume. We need more price transparency to make this a more seamless transition, but even absent that the first few years of experience with HDHP/HSAs have given promising results. Maybe you missed the part where I advocated subsidies/vouchers for the poor. It's ridiculous to call it a fraud on them when the premium reduction they receive is equal to the value of the lower deductible. Just how much do you think anyone ought to pay for any of their health care? Should we just tax the rich and give everyone else care for free? Everyone needs to have some skin in the game. Nothing the left is proposing has shown any ability to lower costs (other than by strong-arming providers, and they conveniently avoid the negative consequences of doing that on a larger scale). HSAs have. They are not the panacea but it is a step in the right direction.

If you're going to criticize that approach you're going to need more than the weak sauce of a really bad Maggie Mahar blog post and a couple ominous "boondoggle" accusations.

Posted by: ab13 | October 27, 2009 8:12 PM | Report abuse

I was in Kaiser last year for one year, and I hope I never have to go back into it. I liked many things about it, but I was denied necessary care - and yes, it was really necessary - and had to go outside and cover 100% of it. I think it's generally a good option relative to what's out there currently, but I wouldn't want to model everything after it.

Fee-for-service definitely has perverse incentives to provide too much care, but HMOs have the equally perverse incentive to withhold care. I do not want my doctor's interests to conflict with mine.

Posted by: debb1 | October 27, 2009 8:25 PM | Report abuse

Since the moderation fairy took my last comment, I'll be brief:

"by spending your own (tax-free) money on the first few thousand dollars in care you are more price conscious"

Oh, just a few thousand dollars. I'll check the back of my couch.

"Just how much do you think anyone ought to pay for any of their health care?"

As much as they do in France, with the same combination of payroll tax and optional supplementary insurance. Thanks for playing.

Posted by: pseudonymousinnc | October 27, 2009 11:39 PM | Report abuse

More defenses of Kaiser:

-There are always going to be people have a bad experience with their doctor. It happens at Kaiser. It happens in private practice. When it happens at Kaiser people tend to hold the hole organization responsible. By any objective measure Kaiser docs are better than the community average.

-You can go outside of Kaiser of you get two Kaiser docs to agree your request is reasonable. When you can't get an outside referral is when you're convinced you have a microchip in your head and no one will take it out. It is unethical to enable a patient's delusion. This is an extreme example, but most of the denials fall under this general category.

-What I said earlier that Kaiser's prices are high because their competitors' prices are high on products with similar actuarial value. You always have to look at the AV when comparing prices.

Posted by: bmull | October 28, 2009 5:36 AM | Report abuse

"Oh, just a few thousand dollars. I'll check the back of my couch."

Yes, a few thousand dollars. Is that too much too ask of the average American, to actually budget for their own routine health problems? To actually spend some of their own money on health care before taking money from others? Other than the very poor, people can afford it. This is the country where the middle class has satellite TV, multiple cars, multiple cellphones, and more square footage of living space per person than just about every other Western nation, yet me expecting them to include some health care expenses in their budgeting is somehow "decrepit"? If they are going to spend the money through taxes anyways, why not do it more efficiently and have them keep more of their own money, with only the catastrophic things being paid for by a third party (whether that third party is insurance or the gov't)? Your snarky answer is just proof that you'd rather point fingers and fling insults at those who disagree with you rather than address these issues.

"As much as they do in France, with the same combination of payroll tax and optional supplementary insurance. Thanks for playing."

So you want to copy the French system, which is also bankrupt? Trading one set of unfunded liabilities for another smaller yet still unfunded set of liabilities is a good idea how? And how exactly do you plan to make up for the difference in doctors' salaries and drug prices between France and the US? Are the doctors just going to roll over and take the 67% paycut?

The "just do it like France" answer is a cheap cop out, not to mention a bad idea with absolutely no chance of working in the US.

Posted by: ab13 | October 28, 2009 9:13 AM | Report abuse

ab13,

the problem is pseudo isn't listening to you (nothing new there). He's thinking you're saying someone at 100-200% of the FPL should be paying thousands. He forgot you said at the original of your point that it should apply to those that can afford it. He's good at twisting people's words around. I've learned that. It helps him make his incorrect points.

To each according to his ability to pay should be the mantra. That's why many of largest employers base an employee's out of pocket expense on their salary level. Its the fair way to do it but I guess with pseudo fair is only if the government pays for everything so they can mismanage it.

Posted by: visionbrkr | October 28, 2009 9:52 AM | Report abuse

If you want a good example of employee resistance to the realities of the marketplace, witness look at what happened to the Los Angeles Unified School District this year.

For many years, LAUSD has paid 100% of health insurance premiums for employees *and their dependents* and it offers a selection of plans. In the most recent cycle of contract negotiations with the teacher's unions, the district proposed paying 100% of the Kaiser amount and making employees who opt for more expensive plans pay the excess. The union rallied its membership and the district backed down.

The result of course, will be that every teacher in the system will get a smaller raise or forego some other benefit. If employer paid insurance were treated as gross income accompanied by some level of personal tax exemption (exemption not deduction), individual employees would bear more of the costs of their preferred plan and those who voluntarily opt for the less expensive plan would see the difference in their own paycheck.

Posted by: Athena_news | October 28, 2009 11:52 AM | Report abuse

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