Obamacare allowed health providers to form vertical monopolies, raise costs - Politics Forum.org | PoFo

Wandering the information superhighway, he came upon the last refuge of civilization, PoFo, the only forum on the internet ...

Provision of the two UN HDI indicators other than GNP.
Forum rules: No one line posts please.
#15296842
(This thread involves healthcare in the United States)

It took 13 years, but Elizabeth Warren is at long last acknowledging that ObamaCare has increased healthcare prices and industry consolidation. Who would have believed it? Government price controls and profit caps have resulted in unintended consequences.

(Elizabeth Warren is a Senator from the Democratic Party who was a Presidential candidate in the 2020 election. She came in close second place to getting the nomination, right behind Joe Biden)

The Massachusetts Senator and Republican Senator Mike Braun of Indiana this week wrote a letter to the Health and Human Services Department inspector general complaining that the nation’s largest health insurers are dodging ObamaCare’s medical loss ratio (MLR). The result, they say, is higher costs for patients.

The MLR is a de facto cap on profits. It requires that insurers spend at least 80% or 85% of premium dollars on medical claims. Democrats claimed the rule would make health spending more transparent and reduce insurer spending on overhead. “Consumers will receive more value for their premium dollar,” the Obama HHS said.

Instead, as we’ve been pointing out for years, the rule has spurred insurers to merge with or acquire pharmacy benefit managers (PBMs), retail and specialty pharmacies, and healthcare providers. This has made healthcare spending less transparent since insurers can shift profits to their affiliates by increasing reimbursements.

The Senators cite a Journal news story in September that found insurers were paying affiliated specialty pharmacies more than 20 times for generic drugs what manufacturers charged. Patients can get slammed by hefty out-of-pocket cost for these drugs if they have high deductibles or co-insurance requirements.

“Even worse,” the Senators write, “insurers can use their PBMs to steer patients to their own pharmacies, while disadvantaging competing pharmacies with lower reimbursements and predatory fees.” In a 2017 editorial we highlighted complaints that CVS’s PBM was paying independent pharmacies less than the wholesale drug cost while billing Medicaid for significantly more.
The Senators complain that insurers have evaded the MLR by vertically integrating with other companies in the healthcare supply chain. “Cigna, United Health, and CVS Aetna each own or are affiliated with the country’s three largest PBMs,” they write. Insurers are also increasingly buying providers. CVS this year acquired primary care provider Oak Street Health.

“Just a year after the MLR requirement was put in place, UnitedHealth Group formed Optum, which now includes a PBM and a specialty pharmacy, as well as over 70,000 physicians,” the Senators write. Coincidence? “Today, UnitedHealth Group sends 25 percent of its medical claim revenue to its Optum subsidiaries—in other words, to itself.”

They correctly point out that an insurance conglomerate can inflate medical payments to affiliates to comply with the MLR “while keeping more money for itself.” Market competition would normally act as a check on premiums and profits. However, by driving industry consolidation, ObamaCare has reduced healthcare competition and increased costs.

Hospitals have acquired independent physician practices to gain more leverage with vertically integrated insurers, allowing them to bill more for services. Independent pharmacies have closed or been sold to the giants. It’s no surprise, then, that health premiums have risen on average about 20% faster since 2011 when the MLR took effect than in the five preceding years.

ObamaCare’s market distortions are spurring a bipartisan movement in Congress to regulate PBMs. It’s a familiar story: Big government intervention creates incentives and raises costs that help big business, and then politicians demand more government intervention to fix the distortions they caused.

Elizabeth Warren Has an ObamaCare Epiphany, The Wall Street Journal, Nov 2023
https://www.msn.com/en-us/money/other/e ... r-AA1kunTI


Once again, it looks like insurance companies have found a way to rig the system.
So it looks like the passage of one comprehensive system of laws has caused a problem, and now it looks like they're going to have to pass another law to patch the problem.
Only I suspect this new law, to limit monopolies, will end up having unintended effects combined with the original package and will push up prices and reduce the possibility for health savings, which was part of the whole package deal in Obamacare. It was argued that through vertical integration, insurance companies would be able to achieve cost savings.

I bet the insurance companies only avoided pouring money behind opposing Obamacare, back during the time it was passed, because of provisions like this that they knew would benefit them. So part of this does seem like a little bit of a "bait and switch".
#15296877
This article provides a long explanation why Obamacare ended up driving insurance coverage into monopolies.

Obamacare Works Better With Monopoly Insurers – People's Policy Project (peoplespolicyproject.org)

It had to do with incentives built into Obamacare for the ACA's market exchanges. If an insurance company became the only one in the marketplace providing coverage for a local area, then it could increase the price difference between the "lowest cost silver plan" and "second lowest cost silver plan". With competition out of the way, an insurance provider could game the system and maximize the government subsidy provided to consumers.
This drove insurance companies to consolidate, to allow their lower income consumers to get a bigger subsidy that could be used to help pay for the insurance.
#15299528
Pants-of-dog wrote:And insurance companies are required by law to maximize profits for their shareholders.

They are doing so.

Should companies not be allowed to profit?

There's nothing preventing people like you from organizing together and forming your own co-op (cooperative) group. Under the ACA ("Obamacare") plan, this would be equivalent to a "public option".
#15299615
Look, just nationalise the healthcare system. That will solve the problem of private companies profiteering from people’s misery. The problem with Obamacare is that it wasn’t radical enough. When it comes to public health, socialism is the only humane answer.
#15299619
Potemkin wrote:Look, just nationalise the healthcare system. That will solve the problem of private companies profiteering from people’s misery. The problem with Obamacare is that it wasn’t radical enough. When it comes to public health, socialism is the only humane answer.


No one talks about what the health care system was like before it was privatized in the USA. It was a lot of socialized medicine. Once that was phased out by Richard Nixon? You have the mess you see now.

Socialism is the only humane answer for health care.

Mexico has universal health care. But they need to improve it a lot. Less wait times, more medicines that are free or affordable, and more dental and eye care that includes specialized care.

But Mexico has universal health care. It also has universal child care.

They are working on completing a train. Part of it will be about helping the Panama canal with back up and lack of flow now that it has become a victim of climate change. Once that planned railroad system is completed you shall see a lot of different infrastructure being invested in that.

If pay goes up as much as it has. If pensions keep going up for older Mexican citizens, and youth get to study for free and get stipends and scholarships? Mexico in 50 years is going to forge ahead a lot.

Socializing medicine was critical in that plan.
#15299641
Potemkin wrote:Look, just nationalise the healthcare system. That will solve the problem of private companies profiteering from people’s misery. The problem with Obamacare is that it wasn’t radical enough. When it comes to public health, socialism is the only humane answer.


Plenty of European countries have privatized healthcare systems and they work just fine (e.g. Germany, the Netherlands, etc).
#15299643
wat0n wrote:
Plenty of European countries have privatized healthcare systems and they work just fine (e.g. Germany, the Netherlands, etc).



They don't have extreme levels of income inequality. Also:

"One of the major similarities across healthcare systems in Europe is that all citizens are included. Even in partially privatized systems, an individual mandate is in place (and strictly enforced) to ensure that healthy people are in the system to help offset the costs of sick people. Another commonality is that healthcare in Europe (regardless of system) is largely funded by tax dollars collected from employers and the public.

https://www.griffinbenefits.com/blog/how-does-healthcare-in-europe-work
#15299644
Puffer Fish wrote:There's nothing preventing people like you from organizing together and forming your own co-op (cooperative) group. Under the ACA ("Obamacare") plan, this would be equivalent to a "public option".


You mean the public options that were scrapped by legislators before the ACA became law?

Anyway, the fact that someone could make a non-profit medical insurance company does not change the fact that companies are required to make money for shareholders and they do this by charging the client as much as possible and giving the client the least amount possible.

Is this bad?
#15299647
late wrote:They don't have extreme levels of income inequality. Also:

"One of the major similarities across healthcare systems in Europe is that all citizens are included. Even in partially privatized systems, an individual mandate is in place (and strictly enforced) to ensure that healthy people are in the system to help offset the costs of sick people. Another commonality is that healthcare in Europe (regardless of system) is largely funded by tax dollars collected from employers and the public.

https://www.griffinbenefits.com/blog/how-does-healthcare-in-europe-work


Yes, the Europeans making contributing compulsory. But the providers are not managed by the government, necessarily.

The US could follow that example, but many voters don't want to.
#15299649
wat0n wrote:
Yes, the Europeans making contributing compulsory. But the providers are not managed by the government, necessarily.

The US could follow that example, but many voters don't want to.



Yes, the brainwashed ones..

But when Republicans got serious about killing Obamacare, even they started screaming at their Republicans.

Go figure.
#15299650
late wrote:Yes, the brainwashed ones..

But when Republicans got serious about killing Obamacare, even they started screaming at their Republicans.

Go figure.


Indeed, many people are unaware that you can't get stuff for free.

If you want health insurance, you need to contribute. If you don't want to then don't whine when you have to deal with the consequences.
#15299655
Pants-of-dog wrote:It is not necessarily true that people need to contribute to a public fund in order to access healthcare.

For those who live somewhere with a single payer system, there is no obligation to contribute in order to access care.


Sort of.

One based on health insurance (like the ones used in the US, Germany, the Netherlands and others) does require people to contribute.

Single payer systems also require funding, which comes from general taxation. Although this spending is not usually earmarked, so service provided to individuals is not tied to their past contributions, it is still true the public at large will need to contribute by paying their taxes and specifically accepting higher taxes rates or broader tax bases than if they didn't fund it this way.

Regardless of which way is chosen to fund the system, one thing that's clear is that it can't operate without funding in the long run.

One of the issues in the US healthcare system is that some people truly don't want to contribute, which ultimately makes the system more expensive for everyone because this makes pooling harder. And although they may end up heavily indebted or go bankrupt, they will still be served. This risk doesn't seem to be enough of a reason to contribute.

Another issue is that the US doesn't have "a" healthcare system, there are several systems that live together. This also makes pooling harder and therefore service more expensive.

And to this, you can add all the other bad incentives like e.g. monopolistic power and unaddressed instances of moral hazard
#15299658
wat0n wrote:
Indeed, many people are unaware that you can't get stuff for free.

If you want health insurance, you need to contribute. If you don't want to then don't whine when you have to deal with the consequences.



Many people don't know what they are talking about.

My source pointed out that Europe uses taxes to help with health care... There are several benefits to that, not that you would know what they are.
#15299661
late wrote:Many people don't know what they are talking about.

My source pointed out that Europe uses taxes to help with health care... There are several benefits to that, not that you would know what they are.


I can tell it is you who doesn't know what you're talking about.

It doesn't even make sense to talk about "Europe" when it comes to their healthcare systems. There is no universal approach and the different countries follow completely different strategies.

The Netherlands doesn't even have a government payer to begin with, even if it's subsidized, and insurance is compulsory with refusers risking fines. Germany does have a government payer and private insurers. The UK has the NHS, which is funded through taxation.
#15299662
wat0n wrote:Sort of.

One based on health insurance (like the ones used in the US, Germany, the Netherlands and others) does require people to contribute.


Those are not single payer systems.

Single payer systems also require funding, which comes from general taxation. Although this spending is not usually earmarked, so service provided to individuals is not tied to their past contributions, it is still true the public at large will need to contribute by paying their taxes and specifically accepting higher taxes rates or broader tax bases than if they didn't fund it this way.


So you agree that a specific person need not pay into the funds in order to access health care,

Regardless of which way is chosen to fund the system, one thing that's clear is that it can't operate without funding in the long run.

One of the issues in the US healthcare system is that some people truly don't want to contribute, which ultimately makes the system more expensive for everyone because this makes pooling harder. And although they may end up heavily indebted or go bankrupt, they will still be served. This risk doesn't seem to be enough of a reason to contribute.


In a single payer system, risk pooling is not an issue since everyone is automatically included in the pool.

Another issue is that the US doesn't have "a" healthcare system, there are several systems that live together. This also makes pooling harder and therefore service more expensive.

And to this, you can add all the other bad incentives like e.g. monopolistic power and unaddressed instances of moral hazard


Yes, there are many examples of market failure when dealing with healthcare. This is why the single payer system works better.
#15299663
Pants-of-dog wrote:Those are not single payer systems.


Yet they're among the best systems in the world.

Pants-of-dog wrote:So you agree that a specific person need not pay into the funds in order to access health care,


Yet society at large does need to pay taxes to fund a single payer system, which people who refuse to purchase insurance also don't want to do.

Pants-of-dog wrote:In a single payer system, risk pooling is not an issue since everyone is automatically included in the pool.


It isn't an issue in multiple payer systems depending on their design either.

Pants-of-dog wrote:Yes, there are many examples of market failure when dealing with healthcare. This is why the single payer system works better.


That depends on how you define to "work better".

Switzerland was ranked #1 by the most recent Euro Health Consumer Index (2018) for example. It is not a single payer system, at all.
#15299664
wat0n wrote:
It doesn't even make sense to talk about "Europe" when it comes to their healthcare systems. There is no universal approach and the different countries follow completely different strategies.



I quoted it.

"Another commonality is that healthcare in Europe (regardless of system) is largely funded by tax dollars collected from employers and the public."

You don't know, and you don't waste time learning, and even when I wave it under your nose, it goes right over your head.
#15299665
late wrote:I quoted it.

"Another commonality is that healthcare in Europe (regardless of system) is largely funded by tax dollars collected from employers and the public."

You don't know, and you don't waste time learning, and even when I wave it under your nose, it goes right over your head.


Contributions to private healthcare are not taxes.
  • 1
  • 2
  • 3
  • 4
  • 5
  • 9

Replace the word "democracy" with the[…]

Also, how can be Trump presidency disastrous fo[…]

The number of 100 trucks a day was floated in t[…]

https://debatepolitics.com/attachments/s[…]