By John Ballard
My guess is that most seniors enrolled in Medicare Advantage and other private plans have no clue what will happen as provisions of the Affordable Care Act go into effect. One way or another the costs of medical care in America will go down. This post by Naomi Freundlich offers a snapshot of what is in store.
...30% of seniors are now enrolled in private Medicare Advantage plans, while 23% of Medicaid enrollees receive coverage through a private managed care organization. Another 15 million Medicaid recipients receive care through managed care plans that are a mix of private and public insurers.
What does this privatization mean for health care savings in the long term?...
Kind of typical reporting though: not actually misleading, but bordering on it. For instance it says that, �Just last week alone, United Health Groups announced that its fourth-quarter profits had risen 21%.�
ReplyDeleteHorrors! An increase of 21% in their profits. They must really be ripping us off. Well, maybe not so much. Their profit margin in Q4 2010 was 4.3% and in Q4 2011 it lept all the way up to a usurious 4.9%. For the year, profit margin in 2010 was 4.9% and it went all the way up to a back breaking 5.0% in 2011.
For comparison, Microsoft made a profit margin of 31.7% and the much-loved Apple Computers made 25.6% profit margin.
Fair point. But calling health insurance "private" is also imprecise with nearly half of all healthcare money coming from tax dollars in one form or another (Medicaid/Medicare reimbursements plus Part B collected from SS checks then channeled to Medicare Advantage). Someone covered by insurance sees payments to medical providers as a benefit but for accounting purposes they are "losses" against the profit line.
ReplyDeleteUm, a little non sequitur there? How is United Health Group profit margin related to Medicare and/or government payments? The writer is implying a connection between the health insurance industry and unreasonable profits, and I am refuting that implication. How did a discussion of health insurance not really being "private" arise?
ReplyDeleteNon sequitur? As you said, "a little."
ReplyDeleteI think private implies a sink-or-swim business in the private sector, doing business in a market less contaminated by politics and tax money. Most insurance (life, casualty, liability, flood, fire, etc) falls into that group. Health insurance, however is somewhat amphibian.
Corporate groups, mutual arrangements and the now ascendant concierge/retainer plans are indeed private. But as long as Medicare and Medicaid remain the biggest fish in the tank, disbursing tax money rather than venture capital, supplemental insurance and TPA plans at least belong in a quasi-private category. That's why I said "Fair point. But..."
Furthermore, the costs associated with private insurance are actual, but the so-called "costs" associated with health care supplemental plans derive from a byzantine hodge-podge of approximations coming from an array of sources which defy analysis. When you look closely at medical billing it approximates the proverbial throwing a bunch of shit against the wall and see how much will stick. (In the private sector that kind of accounting would fold up like a cheap ironing board. The main reason it survives, very much like fossil fuels, is an artificial political arrangement which pumps tax money into the revenue arteries.)
Your last point merits a good deal of discussion. I recently had a minor surgery, two days in the hospital, billed at $49,000. Insurance paid something like $21,000 and the rest was written off. I was already past the "out of pocket limit" for the year (it hasn't been a good year) and paid zero. An uninsured patient would be stuck with the $49,000 tab and they are, presumably, making a profit at the insurance contract amount of $21,000. Horrifying.
ReplyDeleteAnyway, as to your point about contamination between private and public expense, it seems to me that ACA worsens that issue, and significantly so, rather than improving it. I'm not sure that is an advance.
Well, I lost my train of thought. Insurance rates are a different issue than health care costs, and I'm not sure that the latter will be affected as much as the writer of that article thinks they will. Most of the discussion revolves around insurance more than it does health care.
ReplyDelete