Nukedog wrote:C-Mag wrote:POTUS just brought the free market to health care by erasing state lines in an Executive Order.
I don't see any downside to this. Is the a downside ?
NPR has been spinning that this will somehow cause young healthy people to remove themselves from insurance and drive the price up for those that actually use it. I'm not quite clear how this does that. They also state that there is no proof that allowing smaller insurance companies to conglomerate will work.
When I took classes on this before "ObamaCare" was passed, the long and short of it is this:
A pool of people, let's say 100 people to make it easy, pay $50 a month for health insurance. Now out of this pool 40 of them are young and healthy, this means they use it sparingly. General checkups and perhaps a random cold here or there, so about three times a year. Overall though, 99% of the time they just pay $50 a month into health insurance. So when it comes down to it they get 24,000 a year out of the healthy people. Let's say that it costs $100/person a year to keep them healthy. So that would equal $4K/yr.
Now, we get to the average person part of the pool lets call them another 50 since this is "Average America" we are talking about. These people go for their regular checkups, but they also are normally sicker than the younger group. They use the doctor probably once a month, and perhaps a hospital visit because of a broken bone, a bad back, kidney stones, etc...
These people also pay $50/mo. They also pay $24k/yr. But because of their age or higher risk of living, or just bad luck, it costs about $300/year per person to keep these people healthy. So that would be $15k/yr.
Now we get to the high-risk pool, they make up 10 people. They are in the hospital monthly, a good portion of these people are sick all the time, end of life, cancer patients, organ donor recipients, people who need expensive medications to survive, or blood transfusions, etc... They also pay $50 a month. So the health insurance sees $24K a year from them. Except that these people are in the hospital or a satellite building once or twice a week for blood transfusions, or radiation treatments, blood tests, or just end of life treatments to make them comfortable.
These people cost $2000/yr so that would be $20K/yr for these people.
So in total, they would see a $29,000/yr profit.
Now, let's move this so that the pool of 40 healthy get to leave, that's $24K the insurance companies no longer see. What they are going to do is fill it with medium and high-risk patients in where so that they still see a profit, but in turn increase the cost of the health insurance so that they see a little change to their revenue.
So to do that, they would put 20 High-Risk and 80 Med-Risk into a pool and raise the rates to compensate for the loss of nearly a third of the income. The high-risk would see a small increase, but the med-risk would see the largest, probably between 15% to 30% depending on how much the increase in the high risk goes...
This is not to say they would get less healthcare, it would be so that the health insurance companies get the same amount or a slight boost in their profits from year to year even though they lost 1/3 of their clientel.
Of course this is a worst case senario...
