Comment by lotsofpulp

Comment by lotsofpulp 4 days ago

> People want cheap healthcare, and it got shoehorned into an odd employer fringe benefit system that really is not at all related healthcare in any intrinsic way.

Healthcare costs, and hence health insurance premiums, are the same with or without an employer intermediary. The only difference is with an employer intermediary, the insured gets to pay their premium with pre-tax income. The cost of the health insurance is still felt by the employer (shown in box 12 of code DD of everyone’s W-2), and seen by the employee in the form of smaller raises, or higher premiums/deductibles/oop max, or worse networks.

>People want job training, and it got shoehorned into extra departments at liberal arts universities intended as aristocrat finishing schools. Job training really has little to no relationship to liberal arts.

Job training didn’t get shoehorned, a cheap filtering mechanism for people worth betting on to be a good hire got shoehorned. But that filter simultaneously got worse and more expensive over time, making it a bad purchase for most students and bad signal for employers.

nradov 4 days ago

Right, the federal tax code is structured to give advantages to employer sponsored health plans. But it doesn't have to be that way. A better approach would be to eliminate those plans and force everyone to purchase individual or family plans through state ACA marketplaces using pre-tax dollars.

Reply View 6 replies

jswelker 3 days ago

Not sure why the down votes. Severing health insurance from employers would be a huge win. It's just such a massive task that the efforts to address it like Obamacare aren't enough even remotely.

Reply View | 2 replies
- hylaride 3 days ago
  
  As a Canadian, for all the faults of our healthcare system, the fact that I don't have to stick with a job to maintain healthcare for myself or my family is a massive amount of freedom I take for granted.
  
  Reply View | 1 reply
  
  lotsofpulp 3 days ago
  
  You don’t have to stick with your job in the US either, you just have to earn enough money to buy it yourself from healthcare.gov. But that goes for everything, from food to shelter to utilities, etc.
  Probably half the jobs in the US don’t pay enough for the employee regularly see a doctor. It might protect them for the $500k emergency heart bypass, but they are not going to be able to afford the $10k out of pocket costs or the ongoing healthcare expenses after they lose their job.
  
  Reply View | 0 replies
trashface 3 days ago

The ACA would need to be changed too, it isn't as generous tax-wise as employer based care. The portion of the premium paid by the subscriber is not automatically tax deductible - they have to itemize or meet certain self-employment restrictions. Many don't, so they are paying effectively with after tax dollars. Its one reason why the ACA rate hikes next year are so brutal.
It matters for early retirees (or these days, people forced out of job some years before they wanted to officially retire). Without self-employment income they can't deduct it, and often for similar reasons they can't itemize. They still get the standard deduction of course, but an person on an employer plan gets that + their cost of premiums, automatically.

Reply View | 0 replies
mjevans 3 days ago

Or, just provide 'basic healthcare' as a human right (and service for being taxed) and make ALL plans on top of that luxury services.
Wouldn't you like to STOP the insanity of "picking" a plan every year (or more) and also end the billing nightmare by just making it all single payer (the government of the people, for the people)?

Reply View | 1 reply
- orangecat 3 days ago
  
  This is entirely due to the employer being involved. I don't have to pick a new auto or home insurance plan every year.
  
  Reply View | 0 replies

jjmarr 4 days ago

> Healthcare costs, and hence health insurance premiums, are the same with or without an employer intermediary.

If you read the fine print of a health "insurance" plan at a large company, you might discover healthcare costs are directly covered by the employer and the insurance company just administers the plan according to "set rules".

In practice, this operates as blame as a service.

Reply View 7 replies

FireBeyond 4 days ago

American health insurance is insurance in name only - picture health insurance models laid on top of your car:
Imagine your car gets totaled. Your insurer says, "Hey, we're going to pay out $25K for your vehicle. So you have a $1,000 deductible, so that's $24,000, and then your copay for a total loss is $2,000, so that brings us down to $22,000. For total losses, your coinsurance as your contribution for your vehicle coverage is 20%, which is $5,000, so here's a check for $17,000. But that's only if you're buying a Hyundai, otherwise the vehicle is out of network and you'll get a check for $8,500 instead."
> If you read the fine print of a health "insurance" plan at a large company, you might discover healthcare costs are directly covered by the employer and the insurance company just administers the plan according to "set rules".
Generally this is done by a TPA (third party administrator). In many ways you can do as you wish, but as insurers have already done the actuarial work, it's generally easier to use a plan and tweak it if desired (like "Give us this plan but pay for 1 massage/week") versus having to figure that out yourself.

Reply View | 2 replies
- lotsofpulp 3 days ago
  
  > American health insurance is insurance in name only - picture health insurance models laid on top of your car:
  Health insurance is more insurance than car insurance in the US. There is a legal out of pocket maximum of $17k or so, and networks don’t matter for emergency situations. In fact, people get millions of dollars of healthcare from health insurance whereas auto insurance provides a maximum of $500k after which you have to use umbrella insurance.
  Health insurance premiums are not insurance premiums, because legally, health insurance sellers cannot underwrite the health risks. Legally, young and healthy people have to subsidize old and sick, via age rating factor caps (3x and even 1x in NY and 2x in MA), and not being able to price pre existing conditions.
  Which means health insurance premiums are mostly a tax if you are healthy and less than 50 years old or so, especially if you don’t plan on giving birth that year.
  Auto insurance premiums are insurance, because the insurer is pricing your risk of loss, based on your driving history/driving distance/location/etc.
  
  Reply View | 1 reply
  
  botacode 11 hours ago
  
  Nitpick:
  $1m Bodily Injury limits are sometimes available for auto policies. Many providers also don't offer over $300k, only some do the $500k option!
  
  Reply View | 0 replies
lotsofpulp 4 days ago

Sure, but the doctors/medicine/hospitals/liability are not any cheaper.
So the healthcare isn’t cheap, but the employer is able to gain more control over their employees by tying a piece of their non employee life to the employer creating more friction to prevent people from shopping for jobs with higher pay, and the employee is getting a small tax benefit.

Reply View | 3 replies
- jjmarr 4 days ago
  
  Yes, but the same insurance company will screw with your coverage depending on your employer.
  My mom's plan randomly denied my medications all the time as a student. My current job's plan always provides coverage.
  Both were the same insurance company, but she's in a different field with a more stingy employer.
  
  Reply View | 2 replies
  
  jswelker 3 days ago
  
  It's especially fun if your employer is in a field with an aging employee population--like higher ed ironically. The insurer gives the same premium rate to all employees, meaning everyone is in the same risk pool. The old and or unhealthy employees make insurance more expensive for everyone at the employer. I've had situations where the exact same insurance plan cost two hugely different amounts of money after switching employers just because of average employee age differences. Really quite perverse.
  
  Reply View | 1 reply
  
  Mountain_Skies 3 days ago
  
  Which gives employers incentive to illegally discriminate against older job candidates but good luck proving it at any specific employer.
  
  Reply View | 0 replies

jswelker 3 days ago

The employer pays a large portion of the employee premiums. As a result the employee is further indentured to the employer because they cannot leave without depriving themselves and family of health care. And it further obfuscates the actual cost of health care. And then the tax code makes this bizarre setup the privileged happy path.

Reply View 0 replies

o11c 3 days ago

> Healthcare costs [...] The only difference is with an employer intermediary, [...]

That's missing the biggest problem, which is that the employer gets a free chance to extort the employee in all sorts of illegal ways lest they be cut off and die.

Wage theft is perhaps the biggest-value type of crime every year (sources disagree, but it's certainly higher than many), and that's only one kind of illegal thing employers do when they have all the leverage.

Reply View 0 replies

hc12345 3 days ago

The intermediary in healthcare makes a significant difference, as, by going through employers and using insurance, the US market is quite fragmented, and there is minimal alignment pushing prices down. The US healthcare provider doesn't get more business by providing a better cost/benefit ratio: It's easier to splurge, and get business via an expensive, comfortable-ish service.

When one then compares US facilities to foreign ones, it's trivially easy to see that many parts of the system just look different, which comes from the perverse incentives of going through employers that aren't big enough to actually push down on providers' prices at all. Both truly private, low insurance systems and universal healthcare systems end up having much better incentives, and therefore lower prices, regardless of who is paying for them.

We get something similar when you compare US universities to those in Continental Europe. It's clear that over there, the finishing school component is so vestigial as to be practically invisible, whole the focus is a filtering mechanism that attempts to teach something. Go look at, say, Spain's universities and see how many open electives are there, or how many university-wide general requirements exist (0). Each degree is basically an independent unit, and chances are you'll never visit a building from a different school. Undeclared majors? Nope. Significant number of students living on campus? Nope. Sports teams, offering scholarships? Nothing of the sort. This also leads to much lower prices to the school itself, regardless of whether it's all paid by taxes or students.

Reply View 1 reply

disgruntledphd2 3 days ago

I don't disagree with your major points but note that Spanish university course syllabi are determined centrally and are identical across Universities which seems incredibly bizarre to me.

Reply View | 0 replies

RHSeeger 4 days ago

> Job training didn’t get shoehorned, a cheap filtering mechanism for people worth betting on to be a good hire got shoehorned

While it may not be optimal, there is plenty of training/learning that happens in colleges.

Reply View 0 replies