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California to get a 59% increase on insurance premiums

Discussion in 'Off-Topic' started by Archbob, Jan 7, 2011.

  1. Archbob

    Archbob Ancient CFC Guardian

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  2. GenMarshall

    GenMarshall Blood Elven Ghost Agent

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    Good thing this is happening over in California and not creeping up to the east coast. This would be bad for business, making them pay more for health insurance thus cutting into there coffers. Eventually trickling down to hiring less.
     
  3. schlaufuchs

    schlaufuchs La Femme Moderne

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    Good thing my dad and my family get free health care from the gubment.

    Thank science that Obama passed the health care bill allowing me to bum off my dad's plan until I'm 25 :D
     
  4. JerichoHill

    JerichoHill Bedrock of Knowledge

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    The company, a member of the Blue Cross Blue Shield Association with 3.3 million members, which announced the move late Thursday, stressed that its decision has "almost nothing to do with the federal health reform law" and that ultimately the law will help slow down health care costs.

    <--in before someone blames Obamacare for this


    <--thats from the article and BCBS themselves.
     
  5. El_Machinae

    El_Machinae Colour vision since 2018 Retired Moderator

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    Woah. I guess the new plan is "don't get sick".
    There's a serious need to kitchen-sink these health care problems.
     
  6. classical_hero

    classical_hero In whom I trust

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    Surely now Americans should see the need for a public option.
     
  7. FriendlyFire

    FriendlyFire Codex WMDicanious

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    :lol: fixed for you
     
  8. Cutlass

    Cutlass The Man Who Wasn't There.

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    Not many of them, no. Americans are good at drawing the wrong conclusions from things like this. :p
     
  9. bhsup

    bhsup Deity

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    An insurance company, whose purpose is to make money, still will lose millions after this rate hike. You really think the government will be as efficient? Hell no. They'll lose trillions insuring the country if we all go 'public'.
     
  10. GoodSarmatian

    GoodSarmatian Jokerfied Western Male

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    Why shouldn't it be ? The government doesn't need to pay millions to CEOs, it doesn't need to spend money on lobbying and marketing.
    As I understand it a public is just an option. If it's more expensiev and offers lower quality care than private isurance then keep your old plan.
     
  11. Zelig

    Zelig Beep Boop

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    If you don't think American government figures can run efficient healthcare, I'm sure you could pay some Europeans to do it for you.
     
  12. Oerdin

    Oerdin Deity

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    Let's face reality here. For those of you who don't know the consumer insurance over sight committee has the power to control insurance rate increases in the state and routinely does. Thus the insurance companies usually massively inflate their increase knowing full well it will get cut by 2/3rds by the state government before it is allowed to take effect. It's really just a game.

    BTW the insurance company itself claims health care reform has nothing to do with rate increases and instead claims that healthy people have canceled their insurance due to the bad economy leaving them with fewer insurance payers and more of them being sick. Personally, I think there is some of that but greed is an obvious other factor they didn't mention. Blue Shield's big rate increases started almost exactly when the company went from being a nonprofit to being a for profit. That's not a coincidence.
     
  13. Cutlass

    Cutlass The Man Who Wasn't There.

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    And yet Medicare has 1/3 the administrative costs of private sector health insurers....
     
  14. bhsup

    bhsup Deity

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    Well if the feds wouldn't inundate private companies with hellish paperwork requirements....
     
  15. Kozmos

    Kozmos Jew Detective

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    Would mean lots of underhanded dealings yea?
     
  16. Bestbank Tiger

    Bestbank Tiger Deity

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    Three cheers for the individual mandate!
     
  17. Cutlass

    Cutlass The Man Who Wasn't There.

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    Seriously, that's not a big deal. The private insurance companies impose vastly higher costs of health care providers in the way of paperwork. Most of the people who work in any doctors office or hospital are filling out paperwork for the insurance companies. IIRC, at least 18% of total health care costs, and up to half of a doctor's costs, are the paperwork requirements imposed by private sector insurers.
     
  18. El_Machinae

    El_Machinae Colour vision since 2018 Retired Moderator

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    There are two reasons to get insurance. The first reason is disaster mitigation. You pay a bit into a common pool so that you're covered if some disaster happens, it's not devastating. Simple economics is that if you can afford to survive the disaster without insurance, then you should not get insurance. Ostensibly, you expect to pay more in premiums than you receive in compensation, or the company isn't viable. It's only because you cannot handle the consequences of disaster that you would get insurance. The second reason is being sneaky. The goal there is to pay less in premiums than you collect in benefits. This requires you to trick the actuaries.

    The reason why Blue Cross's premiums have gone up is belt-tightening by those who actually cannot afford to get sick. They used to have premiums to mitigate disaster, but cannot afford them any longer. Blue Cross cannot reduce the cost of their premiums in order to recapture this pool: the prices are determined by competent actuaries. So, Blue Cross has lost a revenue pool. The only people who cannot afford to drop coverage are people who know that they already need it. So, Blue Cross's costs aren't going down, because the people who're collecting their needed benefits aren't going to drop the policy.

    This is why it's so different from the public option.

    What's going to happen when the economy recovers? Well, people will buy new insurance. They're not going to buy it from Blue Cross, they're going to buy it from new companies whose actuaries attempt to give them cheap insurance for them. These new companies never have motive to accept Blue Cross's desperate clients, because those are the expensive clients. What this means is that new companies will start up with 'healthy clients', Blue Cross will continue to lose healthy clients to the new companies, and the costs will be increasingly born by those who are truly desperate.

    So, the reason why Blue Cross will fail is not due to mismanagment, but because the actually sick people will becoming increasingly kicked to the curb and abandoned. And the new companies will continue to endeavor to make profits off of the healthy while avoiding the sick.

    This is a failure of the free market and healthy insurance. It's not a success. The only aspect being served by the free market theory is agreeing that, yes, health care is an elastic product.

    Add to that: a public option is actually cheaper than the current system due to a variety of factors. So, this premium hike is hurting sick people disproportionately. And maintaining the current system is merely a way of making sure that the whole country pays more for healthcare than it needs.

    This is why it's so different from the public option.

    edit: xpost: Cutlass. I'm pretty sure you're citing me when it comes to that 18%. Please be careful, because I've never generated that number myself and it's only IIRC. Don't get trapped into a type of cryptamnesia :)
     
  19. Souron

    Souron The Dark Lord

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    It's a business. It's primary function is to make money. It's not greed when it's successful. It's a job well done. It's capitalism.
     
  20. Terxpahseyton

    Terxpahseyton Awake

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    The idea of the free market is not to trick your costumers into accepting higher costs. If a company argues a cost increase is absolutely necessary for reason x but reason x only accounts for say half of the cost increase, it is a way of deceiving the customer and hence goes against the fundamental mechanisms which are supposed to make the free market work (informed customer and all). So in my humble opinion it is very much legit for a convinced advocate of the free market to stigmatize such behavior.
     

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