The tax cut created in the new health care reform law providing small businesses with an incentive to give health benefits to employees is working.

January 11, 2011 6:48 AM

Major health insurance companies around the country are reporting a significant increase in small businesses offering health care benefits to their employees. (via Forbes)
posted by bricksNmortar (76 comments total)

You left off the three most important words at the end:

"...thanks to Obamacare."
posted by EmpressCallipygos at 7:00 AM on January 11, 2011 [17 favorites]

Nice to see. I've never understood why the business world hasn't been fighting for national heath for years. Anyone who's worked in a small to medium sized company knows how tough it is to afford a decent health care package for employees.
posted by octothorpe at 7:04 AM on January 11, 2011 [5 favorites]

Hold on hold on. This is a "job killing health bill". Let's get our talking points straight folks.
posted by PenDevil at 7:10 AM on January 11, 2011 [3 favorites]

Wasn't that the whole point of not having a public option? Also, the much-maligned "mandate to buy insurance" is important because it helps pay for the mandate on insurers to cover pre-existing conditions on all these new customers (I wonder why that mandate isn't being challenged in court?) All this was completely expected, even the intended result of the legislation, which is why it is a potential boon for health insurers.
posted by TedW at 7:14 AM on January 11, 2011 [1 favorite]

And didn't Forbes have a total revolutionary hate-on for Obamacare? If this is coming from Forbes, I'd imagine the situation is even better than being reported by them.
posted by Theta States at 7:17 AM on January 11, 2011

I've never understood why the business world hasn't been fighting for national heath for years.

Because the business world is run by rich people, who are enjoying some of the most criminally low tax rates in the developed world.
posted by DU at 7:18 AM on January 11, 2011 [1 favorite]

My personal experience, being currently unemployed and talking to several small businesses about jobs, is that this is not exactly true. The tax credit for small businesses only applies if the average salary is fairly low, about $40K. So any kind of small tech or professional services company is probably not going to qualify, thus isn't going to have any fiscal incentive to offer benefits if they haven't in the past. Also, rates are going up fast. One small business I am talking to is seeing a 16% premium increase this year, plus increased deductibles this year. And that is after a 30+% increase in 2009. I talked to an independent agent about options for individual insurance for my family. Because my wife is diabetic, I'd have to choose between food and shelter, or health insurance. There is no way I can afford both.

This is a puff piece, and I say that as somebody that absolutely supports heath care reform.
posted by COD at 7:23 AM on January 11, 2011 [9 favorites]

Wait those of us who said give the bill some time to take effect were correct. House Republicans are going to be on the record as voting against and then voting to repeal a law that will be wildly popular in about a years time. Not only that every one of their presidential candidates, including poor Mitt Romney who had the original idea behind this bill will be on record as demanding its repeal. The thing is attacking Obamacare was good for about one election, then as it slowly transforms the healthcare industry it becomes impossible to repeal. Because there are so many things that have expanded coverage already (pre-existing condition subsidies, small business credits, doughnut hole coverage, and letting kids stay on their parents policy until 26); they will find it difficult to simply roll it back with out an alternative. Not to mention that the CBO jacked up the cost of repealing it in terms of the deficit by another hundred billion or so.

The delay in the vote that happened this week could actually give time for a coalition of moderates to come in and propose some kind of populist "fix don't repeal mesuare". This might include:
-Repeal the tax on premium plans -- (no one likes taxes)
-Liability limits (not really affecting premiums, but good for the base)
-Stronger language on abortion (also appealing to the base)
-Let people purchase out of state insurance plans (relocates most plans to a single state, rather than 50 state plans, but also creates the "Delaware" corporation effect where one state holds sway over a broad set of federal law). This would drive insurers to provide their plans in the state with the lowest required benefits (e.g. some states say a newborn is covered within 30 days of being born, others it is covered immediately). -- This could be done in place of cooperatives.
-Repeal all DC gun laws -- totally unrelated, but the price you pay to put the NRA's machine behind it.
posted by humanfont at 7:25 AM on January 11, 2011 [1 favorite]

Wait those of us who said give the bill some time to take effect were correct.

This was the Canadian experience too, as our healthcare system rolled out in the fifties and sixties. A lot of people hated it at the time (other people would benefit more, doctors would fee the country, taxes would skyrocket). Now it's by far the most popular social program (as we call "entitlements") on the books, but it took a decade or more to get there.
posted by bonehead at 7:35 AM on January 11, 2011 [5 favorites]

Why would they do all that, humanfront? The repeal isn't going anywhere. Better to make the republicans squirm under the weight of their extreme positions.

The real test will come if and when the insurance companies, flush with new customers (thanks Obama!), decide to lower prices as a result. I'm thinking they probably won't.
posted by fungible at 7:36 AM on January 11, 2011 [2 favorites]

(fee->flee).
posted by bonehead at 7:36 AM on January 11, 2011

in other, related news the SCOTUS seems to be sending signals it supports a broad interpretation of the commerce clause (or at least broader than many conservatives had hoped), which is good news for legal challenges to the Health Care bill.


(you know over time there are those who might just come to regret branding it Obamacare, if it takes off and does well it will be a ingrained piece of culture)
posted by edgeways at 7:37 AM on January 11, 2011 [1 favorite]

Corporations lower prices all the time. It happens after they lower the value of the product even more.
posted by DU at 7:38 AM on January 11, 2011

The threat of repeal died last week when the CBO stated that repealing the bill would add $230 billion to the deficit over ten years.
posted by (Arsenio) Hall and (Warren) Oates at 7:42 AM on January 11, 2011

(you know over time there are those who might just come to regret branding it Obamacare, if it takes off and does well it will be a ingrained piece of culture)

Politicians (particularly conservative ones, it seems to me, though that could just be bias) tend to be very short-sighted. Witness the opposition to gay marriage. Most elected officials aren't so stupid that they can't see the writing on the wall, but they decided they could squeeze at least a couple of terms in office out of it. That's a well-paying, powerful job with fantastic benefits and an almost guaranteed follow-on job in the private sector afterward.

The same is true here: calling it Obamacare helps get a raft of Republicans elected in the midterms, and that's good enough for the politicians involved even if it might come back to haunt them in a few years. Either they'll ride it out and stay in office or they'll move on to a cushy lobbying gig (and have access to that sweet, sweet congressional pension). Politicians in the US never pay any real price for their voting records (e.g. Strom Thurmond).
posted by jedicus at 7:46 AM on January 11, 2011

The real test will come if and when the insurance companies, flush with new customers (thanks Obama!), decide to lower prices as a result. I'm thinking they probably won't.

Well, they're not allowed to rake in huge profits under the new law (at least 80% of their income has to be spent toward paying for actual care under the new law--any new revenue can't be horded or spent on padded administrative costs), so I really don't see how, over the long term, they'll have a choice but to lower prices as much as they can. It may take a while, but they can't just keep soaking people and remain in compliance, as I understand it.
posted by saulgoodman at 7:46 AM on January 11, 2011

The threat of repeal died last week when the CBO stated that repealing the bill would add $230 billion to the deficit over ten years.

The threat of repeal died in 1787 when the Constitution said the president serves for two more years and both houses need a two-thirds majority to override a veto.
posted by XQUZYPHYR at 7:48 AM on January 11, 2011 [23 favorites]

The real test will come if and when the insurance companies, flush with new customers (thanks Obama!), decide to lower prices as a result. I'm thinking they probably won't

They aren't going to have any choice, at least when it comes to profit margins. The law requires that 80 to 85% of premiums be spent on non-administrative care. That's not boing to help with skyrocketing provider costs but insurance companies will have to work with a regulated profit margin.
posted by phearlez at 7:49 AM on January 11, 2011 [3 favorites]

AHaWO, fwiw after the CBO came out with that Boner Boehner immediately rushed forward to say The CBO is entitled to their opinion. I don't think objective analysis is any part of the legislative push for repeal. Nor, does the CBOs report have much to do with judicial challenges. The SCOTUS could rule it unconstitutional even if the CBO and 9/10ths of congress said it was better than sex and would save the entire world from scurvy.

I _think_ what we seeing though is the SCOTUS is at least a little hesitant to get involved in the matter, and legislative repeal isn't going anywhere beyond the wacky house, which is exactly why they can act as loony as they want, they have little to no impact on anything substantive for at least two years.
posted by edgeways at 7:50 AM on January 11, 2011

The tax credit for small businesses only applies if the average salary is fairly low, about $40K. So any kind of small tech or professional services company is probably not going to qualify, thus isn't going to have any fiscal incentive to offer benefits if they haven't in the past.

That may be "fairly low" to you but it's right around the median personal income in the US, so there are a lot of people who qualify.

I wonder how many companies have average salaries that are higher than that and weren't already providing insurance. My intuition is that most places that have no benefits pay the rank-and-file less than that, but I don't really know.
posted by enn at 7:57 AM on January 11, 2011 [1 favorite]

Why would they do all that, humanfront? The repeal isn't going anywhere. Better to make the republicans squirm under the weight of their extreme positions.

Because Bohner abd Cantor arn't stupid. They control the agenda I'm the house and the voting pattern. They can delay the repeal vote using excuses, let a moderate majority position take hold and then run for re-election having "fixed" healthcare and destroyed the evil Obamacare and replaced it with Republicare &tm; 2011 humanfont political consulting all rights reserved.
posted by humanfont at 7:58 AM on January 11, 2011

(at least 80% of their income has to be spent toward paying for actual care under the new law--any new revenue can't be horded or spent on padded administrative costs)

Seems like anyone clever enough to run an insurance company is clever enough to set up a kickback scheme to circumvent this. I'm in the "wait and see" camp as far as the effects of the bill, but I've gotta say, I'm not optimistic about the idea that insurers and manufacturers of medical devices will just turn into model citizens overnight.
posted by nebulawindphone at 8:06 AM on January 11, 2011 [1 favorite]

Politicians (particularly conservative ones, it seems to me, though that could just be bias) tend to be very short-sighted. gutless craven swine.

FTFY
posted by thsmchnekllsfascists at 8:14 AM on January 11, 2011 [1 favorite]

The article identifies about 200,000 additional workers, in 2010, benefiting from their small businesses anteing up for new healthcare, and sort of assumes it's all due to cost/benefit analysis under the new law's tax break provisions. I'm not sure the data quoted supports the cost/benefit motive conclusions being drawn in the article, and in a nation of 308 million+, 200,000 newly enrolled workers is a small, very early (if nicely positive, considering continuing high unemployment) drop in the bucket. And the data provided is pretty anecdotal; as the article author points out, we really won't know how many small businesses are getting into providing health care benefits for the first time, until well after the 2010 tax filing cycle is complete.

"Waiting to see" is probably what the vast majority of small business owners are still doing, with regards to PPACA.
posted by paulsc at 8:15 AM on January 11, 2011

It's worth reading a couple of recent Ezra Klein posts. The risks to the legislation are perhaps going to be less direct and more from undermining: de-funding; refusal to improve elements at the margin &c.

Repealing health-care reform would cost hundreds of billions of dollars -- and Eric Cantor knows it

A few more notes on health-care reform

The biggest threat to health-care reform
posted by peacay at 8:16 AM on January 11, 2011

gutless craven swine

Perhaps, in the wake of "out of control rhetoric is out of control", could we not do this, please?
posted by EmpressCallipygos at 8:32 AM on January 11, 2011 [8 favorites]

If I get 20% of any healthcare costs, what is my incentive to try to keep healthcare costs low? 20% of $1,000 is more than 20% of $500.
posted by willnot at 8:33 AM on January 11, 2011 [5 favorites]

The same is true here: calling it Obamacare helps get a raft of Republicans elected in the midterms, and that's good enough for the politicians involved even if it might come back to haunt them in a few years.

This might-- might!-- be true if we had a newsmedia that even pretended to be interested in basic research and finding out what someone said three days ago about the very issue you're discussing with them today. As it is, the GOP can rail against Obamacare and Death Panels and Socialism today and in two years, if/when it proves incredibly popular, claim that the Democrats want to take away your health insurance, and the only people who will call them out on it will be a couple of guys on Comedy Central, which will get us to laugh and be angry on the internet for a bit.
posted by shakespeherian at 8:34 AM on January 11, 2011 [2 favorites]

Perhaps, in the wake of "out of control rhetoric is out of control", could we not do this, please?

Oh jesus sorry. My grar-bone was triggered by talk of the HCR bill being repealed and I snarked before thinking. My bad.
posted by thsmchnekllsfascists at 8:41 AM on January 11, 2011

Eh, we may all be facing a learning curve when it comes to curtailing some snark in the next few weeks. No worries.
posted by EmpressCallipygos at 8:54 AM on January 11, 2011

We now have to police our words on metafilter because some public figures like to use gun metaphors?
posted by Ad hominem at 9:03 AM on January 11, 2011

BTW If you tell me yes I will accept that.
posted by Ad hominem at 9:04 AM on January 11, 2011

I don't think we have to police our words; it is, however, useful to take these recent events and public conversations as a reminder that sometimes our words carry an unhealthy subtext.
posted by shakespeherian at 9:06 AM on January 11, 2011 [2 favorites]

Because the business world is run by rich people, who are enjoying some of the most criminally low tax rates in the developed world.

Exactly. What good is it if your bottom line improves by 5% if your taxes go up by 10%? The lobbyists work for the boards of directors and CEOs, not the "Shareholders"
posted by delmoi at 9:07 AM on January 11, 2011

Perhaps, in the wake of "out of control rhetoric is out of control", could we not do this, please?

In the era of politeness, what is a fascist-killing machine to do?
posted by delmoi at 9:10 AM on January 11, 2011 [1 favorite]

How about "don't be an asshole"?

NOTE: "They were assholes first!" is not justification for being an asshole.
posted by Eideteker at 9:10 AM on January 11, 2011 [1 favorite]

In the era of politeness, what is a fascist-killing machine to do?

*sniff*
posted by thsmchnekllsfascists at 9:10 AM on January 11, 2011 [5 favorites]

If I get 20% of any healthcare costs, what is my incentive to try to keep healthcare costs low? 20% of $1,000 is more than 20% of $500.

If you, as an insurer, double costs, then a competitor's premiums will be half of yours, and presumably most of your customers would switch to a competitor and leave you with far less money. That's assuming that there's an actual insurance market.
posted by Llama-Lime at 9:12 AM on January 11, 2011

"In the era of politeness, what is a fascist-killing machine to do?"

*sniff*

Put on your Roberta Flak jacket and kill 'em softly, boss.
posted by Eideteker at 9:28 AM on January 11, 2011 [1 favorite]

That's assuming that there's an actual insurance market.

Did the ACA do anything to create an actual insurance market? Or is it still all going to be basically workplace-based limited choice coverage like it has been for those fortunate to have insurance up until now?
posted by hippybear at 9:30 AM on January 11, 2011

If you, as an insurer, double costs, then a competitor's premiums will be half of yours, and presumably most of your customers would switch to a competitor and leave you with far less money. That's assuming that there's an actual insurance market.

Yeah, that a huuuuuuge assumption. As someone who has been in the private insurance market for over 5 years, I've found it pretty amazing just how little meaningful competition there actually is between insurers. It's almost as if there was a gentleman's agreement at work.

But, that, of course, would be illegal...
posted by Thorzdad at 9:35 AM on January 11, 2011 [1 favorite]

We now have to police our words on metafilter because some public figures like to use gun metaphors?

If you can come up with a good explanation for why, in the midst of a particularly divisive and chaotic time, it is productive to name-call an entire group of people "gutless craven swine", I'd love to hear it.

And if you can't come up with a good explanation why, then...what exactly are you defending this kind of name-calling for?
posted by EmpressCallipygos at 9:42 AM on January 11, 2011

Here's a nice quote from the article to keep this all in perspective:
How significant is the impact? While we won’t have full national numbers until small businesses file their 2010 tax returns this April, the anecdotal evidence is as meaningful as it is unexpected.
posted by mandymanwasregistered at 9:47 AM on January 11, 2011

Lets not derail this thread but I was going to say "freedom of speach" but I will just link this instead
posted by Ad hominem at 9:58 AM on January 11, 2011

Boehner has put the repeal debate on hold only because Giffords got shot. The debate was supposed to begin on Monday. They know that there is no chance or real repeal. The whole thing is kabuki to allow Republicans to go around riling up the base with threats of "Second Amendment remedies" and such if they don't get their way. That kind of rhetoric is a bit unseemly given current events, hence the postponement. A bad break for Republicans.
posted by JackFlash at 10:01 AM on January 11, 2011

But, that, of course, would be illegal...

Not if your industry happens to enjoy an antitrust exemption...
posted by jim in austin at 10:03 AM on January 11, 2011 [2 favorites]

This is pretty great news. I am thinking about starting a small business myself, and would love to be able to offer healthcare to my employees if things really get moving. But whether that ever happens or not, it's great that more people may be able to get healthcare coverage. The system still needs tons of work, but this is movement in the right direction.

Also, and this is something that I've been talking about for years, this is really GREAT news for business, especially small businesses. They will be able to attract and retain employees that they just couldn't afford in the past, meaning that they may be more competitive. Great news.
posted by Mister_A at 10:05 AM on January 11, 2011

Still ticked off that health insurance isn't done like auto insurance: in a free market, without being tied to employment.

Think about it: why on earth should health insurance be tied to your job? Your car insurance isn't. Neither is your home or renter's insurance.
posted by davidmsc at 10:32 AM on January 11, 2011 [3 favorites]

So someone with a bigger clue about the insurance industry should probably speak up here, but it seems like health insurance and auto insurance are like apples and oranges in an awful lot of ways. (For starters, it's generally considered unethical to declare a living person a total loss and sell them for parts....)
posted by nebulawindphone at 10:41 AM on January 11, 2011 [1 favorite]

why on earth should health insurance be tied to your job?

It was originally set up this way in an attempt to ensure universal coverage, I believe.
posted by shakespeherian at 10:45 AM on January 11, 2011

Think about it: why on earth should health insurance be tied to your job? Your car insurance isn't. Neither is your home or renter's insurance.

Historically in Canada health coverage was pushed by farmers thus they wanted the government to take care of it as a lone framer with a broken leg is is a very, very bad place. In the US it was trade unions and, as a compromise, the government agreed to give companies tax breaks to provide health insurance to their employees since they weren't all that interested in paying for it.

But it's totally arbitrary and the US stands out compared with every other Western country on the issue.
posted by GuyZero at 10:54 AM on January 11, 2011

why on earth should health insurance be tied to your job

The real question is why health insurance in the U.S. is tied to the free market. Because of adverse selection and moral hazard, a free market in health insurance breaks down. The ban on pre-existing conditions and the universal mandate are just patches on a system that is fundamentally a market failure. Universal Medicare would work much better and dramatically reduce health care costs. The U.S. has the most expensive health care in the world by a factor of two or three and free market insurance is a big part of that.
posted by JackFlash at 11:12 AM on January 11, 2011 [8 favorites]

Think about it: why on earth should health insurance be tied to your job? Your car insurance isn't. Neither is your home or renter's insurance.

You can and you may find it is cheaper. Particularly if you are young, otherwise healthy and have no kids. Use a FSA to tax deduct the premiums and deductibles.
posted by humanfont at 11:56 AM on January 11, 2011

It was originally set up this way in an attempt to ensure universal coverage, I believe.

No, it was an unintended side-effect of wage freezes in the 30s and 40s. Unable to compete on wages, employers started offering health insurance benefits as a way of differentiating themselves.
posted by jedicus at 12:06 PM on January 11, 2011 [2 favorites]

> AHaWO, fwiw

My cat says this a lot.

What does it mean?
posted by mmrtnt at 12:16 PM on January 11, 2011

Not sure what your cat means by this (feed me? I'm horny? Yo, pinkish get me a kipper?)

but what I meant was

(Arsenio) Hall and (Warren) Oates, For What It's Worth.

fwiw is fairly standard, and AHaWO is just my lazy way of dealing with a long user name.
posted by edgeways at 12:31 PM on January 11, 2011

Did the ACA do anything to create an actual insurance market? Or is it still all going to be basically workplace-based limited choice coverage like it has been for those fortunate to have insurance up until now?

We can only wait to see if HCR will actually eliminate some of the great inefficiencies in the insurance market, but HCR as passed definitely did try to push the US's health care system towards functioning and free markets. Health Insurance Exchanges were one of the major changes in health care reform, as far as I understand it. Of course, it was kind of hard to hear any of this over the vocal minority's shouts of "Socialism!" at the top of their lungs. Just to fend off arguments on such an emotional topic, I'm not trying to say any of this in a normative way, I'm just describing what has happened as I see it. Above I was only describing why it didn't make sense for an insurer to let health care costs baloon, not saying that health insurance should be a free-market system. In fact, I have a high moral interest, and possibly financial interest, in a single-payer system but am pragmatic and if a free-market system ends up working well for everyone in the US I wouldn't oppose it ideologically.
posted by Llama-Lime at 12:36 PM on January 11, 2011

In the era of politeness, what is a fascist-killing machine to do?

Sing "This land is your land..."?
posted by TedW at 1:55 PM on January 11, 2011 [1 favorite]

Think about it: why on earth should health insurance be tied to your job? Your car insurance isn't. Neither is your home or renter's insurance.

Not that it is a good idea, but they certainly can be. I get both car and homeowners insurance as a benefit and pay taxes on them as well. The ability of my employer to bargain for group discounts means that it is a good deal for everyone. The larger the risk pool, the more equitable the premiums and all that...of course, the largest pool would be everyone, but THATS SOCIALISM!!!
posted by TedW at 2:10 PM on January 11, 2011

Seems like anyone clever enough to run an insurance company is clever enough to set up a kickback scheme to circumvent this.

*shrug* At some point we have to assume that a system can be set up and policed or else what's the point of doing anything? Peacay links to some Ezra Klein articles above; he has written several times about the rhetoric about the defect-reducing aspects of the law and critical complaints that enforcement won't happen or exceptions will be made, etc etc, and he says essentially "look, we have to assume that a passed law will be enforced and not simply subverted. Otherwise we're saying that the republic is incapable of governing itself and everything is doomed. If that's what you think then what does it matter if we do anything?"

Still ticked off that health insurance isn't done like auto insurance: in a free market, without being tied to employment.

You can still go out and buy your own insurance. You just don't get one of the big benefits of getting it through your employer: having it be an untaxed benefit.

Removing the tax exemption on health care was discussed during the HCR debates but it was massively unpopular. Which is unfortunate, because the hidden nature of its cost contributes to the problem. Unsurprisingly you can find stuff from Klein about this too. He has some interesting things to say about how this relates to middle class wage stagnation in the last twenty years.
posted by phearlez at 2:21 PM on January 11, 2011

You can still go out and buy your own insurance. You just don't get one of the big benefits of getting it through your employer: having it be an untaxed benefit.

Well, you also don't get the TRULY big benefit of getting it through your employer, which is that insurance companies offer businesses incredibly great rates because of the guaranteed pool participants called "employees".

I've tried to purchase insurance on my own, more than once over the past 15-20 years. The rates for individual insurance are 2-3x what employer-based insurance costs, and that's combining the employee and employer contributions to such plans.

The system is designed so that really only those who are really doing well financially or those who can get insurance through their work can get coverage. The rest of us are left with waiting lists for (now being shrunk or eliminated) state-run basic insurance plans, or most likely, no coverage at all.
posted by hippybear at 2:28 PM on January 11, 2011 [1 favorite]

We now have to police our words on metafilter because some public figures like to use gun metaphors?
posted by Ad hominem


Eponysterifilthycravenswineical
posted by spitbull at 2:47 PM on January 11, 2011

I have also purchased coverage myself and think you're not presenting the facts exactly correctly.

Business plans often have better rates because they are pools, period, not guaranteed participants. Risk is distributed in a way it's not when they sell a single policy. Add in more competition for the business and economies of scale with regards to paperwork/billing and it's not surprising you pay more as an individual.

Your phrasing also implies a deliberate design choice to screw folks ("is designed so that") which I don't know if you meant that way or not. If you did, I disagree. The system does disadvantage a lot of people and I think it's unacceptable, but I don't think it's deliberate in that way.
posted by phearlez at 2:55 PM on January 11, 2011

Oh, I don't think someone sat down and said "this is how we're going to create this system".

But why are business rates better? If I'm buying a policy from Insurance Company A, I become part of their pool. It isn't like they create separate insurance pools out of each business that uses them, is it? I'm pretty certain they spread the risk across their entire group of policy holders, not segregate the money into bunches of little batches, one for each workplace. I could be wrong about this, but that would be exactly the wrong way to run an insurance business, as far as my limited knowledge of how business and insurance works lets me understand.

And if there were real competition for the business, why aren't insurance companies striving to compete based on cost and services regardless of where the customer is coming from? And I don't really see where the paperwork generated by an individual policy would require 2-3x the money per person than when purchased through a workplace.

Anyway, system design can arise across time. Business models evolve. But saying that the eye is designed to interact with a specific spectrum of light doesn't mean I believe in an Omnipotent Watchmaker in the sky.
posted by hippybear at 3:21 PM on January 11, 2011

You are wrong hippybear. My previous employer, a small business of less than 20 employers, was able to insure my family (dental included) for less than $750 a month, with only a $500 deductible for a standard PPO type of plan from one of the major insurers. In my current job search I'm talking to a 7 person company and looking at a $1000 a month premium, a $4000 deductible, and generally crappy coverage once it actually starts covering anything, with no dental at all. Again, from one of the big name insurers. The difference is that the previous employer was a very young company. The potential new employer has a much older age basis. Older = more expensive to insure.

When I try to get individual family coverage with a Type I diabetic in the house they basically just laugh at me.
posted by COD at 3:47 PM on January 11, 2011

And I don't really see where the paperwork generated by an individual policy would require 2-3x the money per person than when purchased through a workplace.

If I have two customers, A and B, and A purchases 5 widgets from me every month and B purchases 50 I still need to send each an invoice, track their payments, etc. Yet one spent 10x as much with me.

The insurance market is heavily weighted towards business accounts because of the pre-tax issue, so individuals are the oddity. There's also another reason to charge individuals more - they're more likely to be cherry picking when they buy insurance and waiting for a time of need. A business with a pool can't game the system that way, really, but an individual might.
posted by phearlez at 3:54 PM on January 11, 2011

COD: Yes, but does the insurance company then segregate the funds received from either of those companies into little accounts, and only pay out claims from those? Surely that isn't really how their business operates. It sounds more like they're doing what they can to take as much money from their customers as possible using whatever excuse they can, rather than actually forming little micro-pools for their insurance business.

I mean, again, I could be wrong about that. It would explain much about the current state of the system if that is what they are actually doing.
posted by hippybear at 4:07 PM on January 11, 2011

Hippybear - not that I know of. They are paying out claims from the general pool, but charging based on the micro-pools, I guess. However, I suspect they are tracking profit and loss on a micro-pool basis through. Wasn't there some news last week from CA about BC/BS raising rates 50% and more on individual policies?

All I know it is getting to where I'm going to need a part time job just to keep my wife alive. Diabetes is a very expensive disease to manage.
posted by COD at 4:17 PM on January 11, 2011

I mean, if the whole point of the individual mandate in the PPACA law is to increase the pool to a point of universal coverage, and insurance companies can still charge whatever they want, offering a 30-year-old wildly varying policies at rates based on the other people who work in the same company, then how is this new law going to do anything to actually make insurance logical and affordable?

Sorry, I'm probably just a bear of very little brain. But this whole insurance thing... just flummoxes me.
posted by hippybear at 4:18 PM on January 11, 2011

My current HMO plan (UHC) works out to $84 per month. Not great coverage, no dental, no vision, and prescriptions are $20 to $60 per refill, if covered. But still, comparatively pretty cheap. That's because it's a student plan from a very large university of mainly 18- to 24-year-olds who are required to have insurance (most are on mom or dad's plan). The university employee plans (with a choice of providers and plan types) are not so cheap, but they're still pretty good because of the sheer number of people in the pool.

Big pools are good.
posted by zennie at 6:33 PM on January 11, 2011

Big pools are good.

Imagine the savings if the pool was every man, woman and child in the country...
posted by jim in austin at 6:49 PM on January 11, 2011 [4 favorites]

Just because a pool is big doesn't mean it's fair. Plenty of large companies have stratospheric health benefit costs because they had the gall to hire mostly women right out of college, who then got pregnant and had kids (insuring a 25-year-old woman costs almost twice as much as a 25-year-old man). Same goes for companies that hire lots of older people or disabled people. Ultimately that means these groups get paid a little less or find it a little harder to get a job. Until that's fixed, how can we say we have an equitable health care system?
posted by miyabo at 8:30 PM on January 11, 2011

If you, as an insurer, double costs, then a competitor's premiums will be half of yours, and presumably most of your customers would switch to a competitor and leave you with far less money.

If you, as a cell phone company, charge for incoming phone call minutes, then a competitor will offer free incoming cell phone minutes, and presumably most of your customers would switch and leave you with far less money.

That's why we have any damn cell phone companies that offer free incoming voice and text.

(And the cell phone industry doesn't even enjoy an anti-trust exemption.)

look, we have to assume that a passed law will be enforced and not simply subverted. Otherwise we're saying that the republic is incapable of governing itself and everything is doomed.

Well, I guess that's what we're saying, because I simply don't see the nation's Republican governors, with a vested interest in seeing "Obamacare" repealed, enforcing the restrictions on profit-taking, or not rubber-stamping increases in premiums >10%, or investigating rescission due to "fraud".
posted by dirigibleman at 11:51 PM on January 11, 2011

That's why we have any damn cell phone companies that offer free incoming voice and text.

(And the cell phone industry doesn't even enjoy an anti-trust exemption.)

This isn't a very effective analogy. A cell phone company requires usage of a portion of a limited public spectrum and a TREMENDOUS infrastructure investment over a decades-long time horizon. Running an insurance company may require a huge quantity of personnel and cash but that's far more nimble than deploying and maintaining 3,000 cell towers.

Well, I guess that's what we're saying, because I simply don't see the nation's Republican governors, with a vested interest in seeing "Obamacare" repealed, enforcing the restrictions on profit-taking, or not rubber-stamping increases in premiums >10%, or investigating rescission due to "fraud".

Then what do you care? You've decided that any partial victory is, in fact, a total defeat. If you're incapable of winning - and if you don't think this system will be implemented I don't know why you think a more aggressive one would be - then what's the point in wanting anything? Accept the inevitable and complete betrayal of everything important to you and go sit in mom's basement with your Souxie and the Banshees albums and clove cigarettes.

I'm sorry we don't have a public option too, but this rending of garments about oh-no-it-won't-be-enforced defeatism is an embarrassing binary thinking. When has any societal change just been completed with a sign of a pen and no need for supporters to keep fighting for expansion and enforcement? You wanted this to be like the civil rights for black Americans where Lincoln freed the slaves and nobody was ever harassed, beaten, killed or discriminated against again?

Oh wait, it wasn't like that. And social security has expanded from its original state, as has medicaid and medicare and unemployment insurance and ...

There's nothing wrong with wanting more and demanding change. All progress depends on the unreasonable man. But progress on this issue will not be made by focusing solely on what we did not get, it will be accomplished by rejoicing in what we did get and helping other people see the goodness in it. Klein has pointed out again and again that individual components of the health care law are hugely popular but the law itself is not.

How is pre-supposing failure for the good parts going to change that perception and get people on board for the next level of improvement?
posted by phearlez at 9:04 AM on January 12, 2011 [3 favorites]

How is pre-supposing failure for the good parts going to change that perception and get people on board for the next level of improvement?

I agree with you wholeheartedly phearlez, but I would also add that, while assuming failure isn't constructive, identifying and drawing attention to any potentially serious sticking points in the implementation of the reforms--any vulnerabilities that could be used by political opportunists to help undermine the legitimacy of the reforms for that matter--is still valuable and necessary.

For instance, in light of the current political situation in Florida, it's more important than ever that HCR advocates keep a close, critical eye on how Governor Rick Scott moves to implement the health insurance exchanges (given his checkered record at the helm of the health care company penalized for carrying out the largest Medicare fraud in US history and the all-too-convenient timing of Scott's political ambitions in Florida, coinciding as they do with the initial roll-out of the state insurance exchange mandated by the reform).

If I were the administration, I'd take a very keen interest in the specifics of how the HCR gets rolled out in Florida under Scott. Highly visible failures in a state the size of Florida could jeopardize the whole proposition of HCR over the long term.
posted by saulgoodman at 1:38 PM on January 12, 2011

I agree with you wholeheartedly phearlez, but I would also add that, while assuming failure isn't constructive, identifying and drawing attention to any potentially serious sticking points in the implementation of the reforms--any vulnerabilities that could be used by political opportunists to help undermine the legitimacy of the reforms for that matter--is still valuable and necessary.

Absolutely, and why I say this is going to be an ongoing fight that may last our entire lifetimes. We're still fighting some of the mop-up battles from the civil rights movement.

My issue is with folks who have publicly thrown up their hands at the failure to get a public option or single payer and who have declared the whole thing pointless and doomed. That's self-fulfilling prophecy both from a practical and public relations position.
posted by phearlez at 1:46 PM on January 12, 2011 [1 favorite]