Obamacare & Adverse Selection

Discussion in 'Politics & Religion' started by kxvid, Mar 23, 2010.

  1. kxvid


    IMO the healthcare bill has a fatal flaw: it will create adverse selection hell.

    For example, people are required to buy government approved insurance or pay a fine. This will create an incentive for healthy people to buy the cheapest possible government approved health insurance (or pay a fine if it costs less). If these people get sick, they will be able to switch to an expensive plan with lots of coverage. Insurance companies will not be able to deny these people from their rolls due to the ban on discriminating against people with preexisting conditions.

    Another example, say your healthcare insurance doesn't cover an expensive medication you take but another insurer does. You could simply switch to the insurer that covers the medication and stick them with the bill.

    A few likely results?:

    A homogenization in insurance plans available. No insurer will want to offer a plan with more coverage than their competitor because sick people will immediately sign up for that plan.

    Bankrupt insurers due to adverse selection.

    A continuity in the increase of healthcare costs as % of GDP.


  2. kxvid


    Interesting article on obamacare:

    One other thing to consider:
    The healthcare bill does not make it illegal for an insurer to discriminate against people with preexisting conditions. It does make it illegal for an insurer to discriminate against people signing up for a "qualified health insurance plan" (ie, government approved insurance).

    The bill is likely to create a two tiered insurance marketplace. One tier being people with qualified health insurance, the second tier non qualified health insurance (ie: health insurance that isn't govt approved and subject to uninsured taxes). Non qualified health insurance is likely to have lower premiums and better coverage due to insurers being able to guard against adverse selection.

  3. You're kidding yourself. The system is in place in dozens of countries and works extremely well.

    In Australia, were I live, you pay 1% of your salary to cover medicare and everyone has access to decent healthcare - everyone for free.

    If you earn over 50K and don't have private heath insurance, you get taxed another $500, which is about the cost of private health care for a single person.

    So 99% of people with good salaries opts in. By going private, you get to choose your own doctor or surgeon - and you get private rooms for hospital stays.

    With this system, everyone has access to healthcare. Getting sick doesn't bankrupt anyone. And if you want really top line cover, you insure for extras and pay a slightly higher premium.

    It's a much better system than what you have now.

    Don't be so dogmatic. The status quo wasn't working. Anything will be better than what you had.

    We haven't had a medical insurer go bankrupt in the 30 year time the system has been in place.

  4. pchan


    "In Australia the current system, known as Medicare, was instituted in 1984. It coexists with a private health system. Medicare is funded partly by a 1.5% income tax levy (with exceptions for low-income earners), but mostly out of general revenue. An additional levy of 1% is imposed on high-income earners without private health insurance."


    When you get a primary stat wrong its kinda hard to take you serious. Do you really live in Iowa and voted for Obama?
  5. Well, its still 1.X percent. Such a small friggin amount that you don't notice it. And the other $500 on 50K is the other 1% percent, if you do the math.

    I live in Melbourne, Australia.

    You guys crack me up. You vote in a new president who promises change, then when they get it in, you get pissed off when they change things.

  6. Well, in our defense, not everybody voted for Obama. Nor did I vote for bank bailouts or national health care. But I still get the tax!

    America has something now that Australia did not when she instituted national health: the most efficient, well-funded and effective lobbying industry the world has ever known. This insures that only the most self-serving bits make it into the bill.

    This bill is ~2000 pages and will cost a Trillion dollars. Here's a safe bet: it will cost more than that, there will be more unintended side effects than anyone now imagines, and the middle class will be worse off.
  7. they're pissed a black man is in charge. the nonsense they spout shouldn't fool anyone. Most of the nutwings posting on here are lowlifes in real life.

  8. Someyounguy, well the middle class may well end up worse off, but remember this.

    You may not always be middle class.

    If you get sick and lose everything to pay for an operation. You may one day be working class. Or mere survival class. And if that day comes, you'll be glad the new bill was passed.

  9. And ....

    Australia has a significantly higher life expectancy than the US

    Australia has significantly lower rate of preventable deaths than the US

    Australia has significantly lower rate of infant mortality than the US

    Australia spends a substantially smaller percentage of GDP on heathcare than the US

    And ...

    You can substitute "many western countries" for "Australia" in the above statements. No health care system is anywhere near perfect but by objective measures many perform better than the US has done.
  10. rc8222


    I didn't vote for Obama but many in my family did, and now every one of them are freaking out over his signing this ridiculous Government takeover of our healthcare into law. I tried warning everybody prior to the 2008 election as to what a radical, liberal socialist Obama is, but no one would listen. Now, with our healthcare system no longer being the best in the world, I can only say to those in my family, and everyone else that voted for Obama who are furious about this takeover of our healthcare system, "YOU GET EXACTLY WHAT YOU DESERVE"!!!!!!!!! Once the rationing begins, I hope it's every Obama supporter that get's denied the urgent care they need. Take what Obama said at a townhall on healthcare a while back when told a woman who was 105 years old received a pacemaker. Obama considered the procedure for this old lady a waste, and that she should maybe be given a pill instead because the pacemaker wouldn't really prolong her life. Welcome to Obamacare. Which equates to a death sentence for the elderly, since the U.S. Government will now have sole authority to decide exactly what get's covered/not covered in your health insurance policies.

    #10     Mar 25, 2010