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View Full Version : Economics What kinds of post-retirement health care options do you find acceptable?


cdcox
04-06-2011, 03:10 PM
See the MULTIPLE CHOICE poll. Consider it from the perspective of how you will pay your health care costs post retirement. If you don't plan to retire, consider that your health deteriorates so that you are no longer employable, but are still enjoying life.

Also consider your political point of view and what you consider best for the country.

FD
04-06-2011, 03:31 PM
Is this just for myself or for everybody? Also, you assume in option 2-4 that a market for insurance for the very old will exist in the absence of Medicare, what is the basis for this assumption?

chiefsnorth
04-06-2011, 03:35 PM
The common sense approach is that everyone should pay for routine costs out of pocket and if they aren't well to do then they should buy insurance to cover catastrophic events, which is what insurance is supposed to be.

cdcox
04-06-2011, 03:40 PM
Is this just for myself or for everybody? Also, you assume in option 2-4 that a market for insurance for the very old will exist in the absence of Medicare, what is the basis for this assumption?

It would be for everyone. But I want you to consider both the financial situation for yourself and your political views.

I don't think option 2 is a very viable market. The risks are huge so the costs would be sky high -- maybe $20K per year.

Option 3 would require regulations. Insurance companies would offer products that would have to meet those regulations. Whether enough young people bought into them to keep the costs low for everyone, I don't know.

See above for option 4.

But with the Tea Party talk of killing Medicare long term, the question of how Americans would provide for their health care post-retirement becomes worthy of discussion.

FD
04-06-2011, 03:44 PM
It would be for everyone. But I want you to consider both the financial situation for yourself and your political views.

I don't think option 2 is a very viable market. The risks are huge so the costs would be sky high -- maybe $20K per year.

Option 3 would require regulations. Insurance companies would offer products that would have to meet those regulations. Whether enough young people bought into them to keep the costs low for everyone, I don't know.

See above for option 4.

But with the Tea Party talk of killing Medicare long term, the question of how Americans would provide for their health care post-retirement becomes worthy of discussion.


I agree that option 2 would almost certainly not exist in the market, its not clear to me that option 3 would either.

I voted for options 4 or 7.

cdcox
04-06-2011, 03:51 PM
The common sense approach is that everyone should pay for routine costs out of pocket and if they aren't well to do then they should buy insurance to cover catastrophic events, which is what insurance is supposed to be.

I agree in principle.

For Seniors, routine costs (including non-subsidized prescriptions) could run $10,000 K per person per year. Manageable for some but not everyone.

I'm not sure how a catastrophic policy for seniors would work. Virtually every one in the pool is going to cash in hundreds of thousands of $ worth of benefits. Premiums would be sky high and most would probably take their chances. I think the way it would work is you die when you run out of money to pay for treatment.

bobbymitch
04-06-2011, 03:54 PM
I had an excellent health plan that continued after retirement. Granted it cost 1/3rd of my pension, but it was worth it.

When I turned 65, they became secondary insurance. There was no continuance of existing coverage even if I decided to opt out of Medicare. On a positive note, my bottom line income improved since the premium dropped more than the Medicare premium.

cdcox
04-06-2011, 03:54 PM
I voted 4, 6, 7 and 9. I threw in a vote for single payer. Would need to see the details, but I still want it on the table for discussion. This thing is a mess.

ClevelandBronco
04-06-2011, 03:54 PM
I think the way it would work is you die when you run out of money to pay for treatment.

Ideally you should schedule your death to take place well before that point.

FD
04-06-2011, 04:35 PM
The common sense approach is that everyone should pay for routine costs out of pocket and if they aren't well to do then they should buy insurance to cover catastrophic events, which is what insurance is supposed to be.

But a market for catastrophic care for the very old simply wouldn't exist. Its not feasible. Even routine costs for the elderly can be many thousands of dollars a year. Eventually a person will get a serious illness or injury and the bill will be in the hundreds of thousands of dollars. If you vote for option 1, you're essentially saying that they should just resign themselves to death at that point, right?

vailpass
04-06-2011, 04:36 PM
Elderly insurance premiums need to be subject to a means test so those above a certain income/financial standing level pay for their own healthcare.

For those who have contributed all their life to social security/medicare there needs to be a government assisted insurance pool.

For those who have not contributed a minimum dollar amount/number of years to ss/medicare basic: bare-bones catastrophic health insurance subsidized by the govt.

For non-citizens: 0.

BucEyedPea
04-06-2011, 04:38 PM
If I were to be seriously ill I would just rather die. Then re-incarnate.

suzzer99
04-06-2011, 07:40 PM
Interesting poll. What is Ryan's proposal? I know there are vouchers involved but how does he plan to handle the adverse selection problems inherent in private insurance?

cdcox
04-06-2011, 10:21 PM
I had an excellent health plan that continued after retirement. Granted it cost 1/3rd of my pension, but it was worth it.

When I turned 65, they became secondary insurance. There was no continuance of existing coverage even if I decided to opt out of Medicare. On a positive note, my bottom line income improved since the premium dropped more than the Medicare premium.

That's the reality. A private insurance company wasn't going to insure you past 65 even if you give them 1/3 of your salary. It is a money losing proposition for them.

alnorth
04-06-2011, 10:43 PM
Tough poll. I voted for 3, 4, 6, and 7

Option 1 is silly. Some people will win the lottery, and others will needlessly die. Option 2 is impossible. No insurance company in their right mind will offer insurance for the elderly at a price that they could afford. Option 5 is useless because there aren't enough old rich people on medicare to make a difference when the problem is the spending. Option 8 is what our stupid congress has picked for decades. Option 9 is politically impossible.

7 is my preference, though I'll settle for 6. As ugly as it sounds, we need health care rationing. No, that doesn't mean kill 69-yr old grandpa who has expensive treatable cancer but is otherwise healthy.

We spend an incredibly horrific amount of money to prolong low-quality life for just a few more weeks. Those last few weeks are shockingly expensive. If you can pay for it, great. If you cant, the prognosis is basically "he's dead within the year no matter what" and in the meantime you will require machines and nursing in an ICU to stay alive, a mature adult needs to step in and say "I'm sorry, but the taxpayers are paying for this, and its just not worth it. We have to pull the plug."

I think that cutting down needlessly expensive end of life care that prolongs the inevitable a couple weeks will save a tremendous amount of money. Do that, then re-evaluate how big the remaining shortfall is to see if more is needed.

cdcox
04-06-2011, 10:46 PM
Interesting poll. What is Ryan's proposal? I know there are vouchers involved but how does he plan to handle the adverse selection problems inherent in private insurance?

I think that is the fatal flaw with the Ryan proposal. If we throw health care on individual accountability and market forces, I think 90% of people are going to be one major illness from the poorhouse or the grave.

The way I see it is that the only way for people to have reasonably priced health care in old age is to pay a moderate rate during your whole life. When you are young, you have to pay more than your share so that when you get old you can have health care at a reasonable cost. There are two mechanisms to achieve this: through insurance with one huge pool of participants or through taxes.

alnorth
04-06-2011, 10:51 PM
The way I see it is that the only way for people to have reasonably priced health care in old age is to pay a moderate rate during your whole life. When you are young, you have to pay more than your share so that when you get old you can have health care at a reasonable cost. There are two mechanisms to achieve this: through insurance with one huge pool of participants or through taxes.

Yep. Only way this works is to either force group health plans on everyone, or continue using the might of the federal government to force taxpayers to pay for old people (medicare) while recognizing that we probably need to cut their benefits (or raise payroll taxes I guess, but good luck) before it bankrupts the country.

suzzer99
04-06-2011, 10:59 PM
Well in theory the idea behind Medicare is that you pay for yourself by paying in when you're young. The problem is skyrocketing costs and the gigantic boomer demographic bubble.

FD
04-06-2011, 11:11 PM
Tough poll. I voted for 3, 4, 6, and 7

Option 1 is silly. Some people will win the lottery, and others will needlessly die. Option 2 is impossible. No insurance company in their right mind will offer insurance for the elderly at a price that they could afford. Option 5 is useless because there aren't enough old rich people on medicare to make a difference when the problem is the spending. Option 8 is what our stupid congress has picked for decades. Option 9 is politically impossible.

7 is my preference, though I'll settle for 6. As ugly as it sounds, we need health care rationing. No, that doesn't mean kill 69-yr old grandpa who has expensive treatable cancer but is otherwise healthy.

We spend an incredibly horrific amount of money to prolong low-quality life for just a few more weeks. Those last few weeks are shockingly expensive. If you can pay for it, great. If you cant, the prognosis is basically "he's dead within the year no matter what" and in the meantime you will require machines and nursing in an ICU to stay alive, a mature adult needs to step in and say "I'm sorry, but the taxpayers are paying for this, and its just not worth it. We have to pull the plug."

I think that cutting down needlessly expensive end of life care that prolongs the inevitable a couple weeks will save a tremendous amount of money. Do that, then re-evaluate how big the remaining shortfall is to see if more is needed.

Very well put.

cdcox
04-06-2011, 11:11 PM
Well in theory the idea behind Medicare is that you pay for yourself by paying in when you're young. The problem is skyrocketing costs and the gigantic boomer demographic bubble.

I agree we have to do something about the costs. Even if that means that at age 70 I get turned down for an expensive cancer treatment that would give me a 5% chance of recovering. We absolutely must control costs, but I think it is draconian to scrap the whole system. I seriously think that would reduce life expectancy in this country.

CrazyPhuD
04-07-2011, 05:55 AM
See most people won't see this but I would argue that option 2 and option 3 are almost 100% identical. The only difference between the two is subtle. If you took the premium savings when you were young and banked/invested them then you would be able to afford the large premiums when you get older. The only difference between the two is that in option 2 you have to manage your money whereas in option 3 someone else manages your money for you.

Let's be honest why does both Medicare and social security exist? They exist because if they didn't, there are enough people that are incapable of managing their finances/saving for the future that they would starve or die when they got old because they couldn't save enough.

In a sense, you could argue that both Medicare and Social security aren't in fact entitlement programs, instead they are are forced savings programs. Since people can't manage their own money the government forces you to save when you are young for living expenses and health expenses when you are old. In short they'll provide a basic existence and a basic income when you are old.

If the government would actually get it's hand out of the cookie and leave the money alone to be invested and grow over time it might actually work correctly with little need to bail it out. Unfortunately the government is also drawn from the same set of people that are incapable of managing their own money so the government is completely incapable of managing it's own money too.

That said even if the system worked as designed there are still issues. The one big plus about having people pay individually based upon their own health is that you have an incentive to take care of yourself. If you take care of your own health you will pay less. If everyone is thrown into the same big pool then there is no incentive to be healthier than the sickest person.

You could argue that one of the reasons that we have an obesity epidemic is because we never pay for our own health insurance, our employer does. If we had to pay individually and our premium was based upon our predicted future health we would care a whole lot more about it. Think about it, if for every pound you gained your premium went up to represent your increased risk of future health problems, you would care a whole lot more about those extra pounds. Now there is little penalty and as a result there is little incentive to fix it.

So we could go to a completely private system that would allows us to get rid of social security and medicare, but I don't realistically seeing that happen. I have complete faith in our general incompetence as a society. As such, it is a given that there will always be a large fraction of our population that will never be able to manage their money long term. So unless we all of a sudden change to a society that allows people to starve and die because they cannot pay when they are old a purely private solution will be unlikely to work.

So what is the future, some variation of the system we have now. You force people to save when they are young and if you want to encourage better health then you force them to save even more when their health deteriorates due to obesity or smoking or other behavioral health issues. Now the reality is even if you do this to encourage better health it may or may not affect their take home pay. Afterall if your health goes down your future medical costs are likely to go up but your future retirement costs will likely go down because you are more likely to die sooner. SO it is entirely possible that being unhealthy may not affect your take home pay. Your increased contribution to your health care costs may be balanced out by your decreased contributions to your retirement savings.

As much as I might like to have a private option enforce this savings system, all one has to do is look at all of the pension systems in trouble to recognize that the private system is probably not going to work either.

patteeu
04-07-2011, 10:46 AM
It would be for everyone. But I want you to consider both the financial situation for yourself and your political views.

I don't think option 2 is a very viable market. The risks are huge so the costs would be sky high -- maybe $20K per year.

Option 3 would require regulations. Insurance companies would offer products that would have to meet those regulations. Whether enough young people bought into them to keep the costs low for everyone, I don't know.

See above for option 4.

But with the Tea Party talk of killing Medicare long term, the question of how Americans would provide for their health care post-retirement becomes worthy of discussion.

I think all of the options presented have flaws. I chose options #1 and #3.

#1 because it would fix out of contol health care cost inflation and therefore be good for the country in that respect, but it would probably mean most of us being sicker and dying significantly sooner so I don't really consider it a great option for individuals.

#3 because any reasonable insurance scheme needs to be based on spreading risk broadly so risk pools need to include high risk and low risk individuals or else we might as well revert back to option #1. I agree that regulation would be required.

Here are the components of what I consider the best option:

Risk pool must include entire cross section of society - Some form of mandatory participation must be included to force the healthy into the system.
Catastrophic coverage only - Routine medical up to a certain dollar amount should be out-of-pocket.
Death panels - The government should not be in charge of rationing. Rationing should be driven by cost and ideally subject to competition. The government's role should be to act as referee between the consumer and the insurer to make sure that the insurer provides what it promised to provide. The wealthy should be able to pay for denied treatment if they want to do it out of their own pockets.

patteeu
04-07-2011, 10:55 AM
But a market for catastrophic care for the very old simply wouldn't exist. Its not feasible. Even routine costs for the elderly can be many thousands of dollars a year. Eventually a person will get a serious illness or injury and the bill will be in the hundreds of thousands of dollars. If you vote for option 1, you're essentially saying that they should just resign themselves to death at that point, right?

To be honest, most people should probably die sooner than they do in today's system. We can't afford to keep offering everyone all the medical science known to man until we can no longer keep their hearts beating.

It would be interesting to know the difference in life expectancy / quality of life between our current system (with all the bleeding edge, expensive technology we've developed to date) and our current system using only technology available to us 10 years ago (at today's reduced prices). While I'd expect that our current system provides improved life expectancy and quality of life, I'm not sure the incremental benefit is worth the incremental cost.

patteeu
04-07-2011, 10:58 AM
Tough poll. I voted for 3, 4, 6, and 7

Option 1 is silly. Some people will win the lottery, and others will needlessly die. Option 2 is impossible. No insurance company in their right mind will offer insurance for the elderly at a price that they could afford. Option 5 is useless because there aren't enough old rich people on medicare to make a difference when the problem is the spending. Option 8 is what our stupid congress has picked for decades. Option 9 is politically impossible.

7 is my preference, though I'll settle for 6. As ugly as it sounds, we need health care rationing. No, that doesn't mean kill 69-yr old grandpa who has expensive treatable cancer but is otherwise healthy.

We spend an incredibly horrific amount of money to prolong low-quality life for just a few more weeks. Those last few weeks are shockingly expensive. If you can pay for it, great. If you cant, the prognosis is basically "he's dead within the year no matter what" and in the meantime you will require machines and nursing in an ICU to stay alive, a mature adult needs to step in and say "I'm sorry, but the taxpayers are paying for this, and its just not worth it. We have to pull the plug."

I think that cutting down needlessly expensive end of life care that prolongs the inevitable a couple weeks will save a tremendous amount of money. Do that, then re-evaluate how big the remaining shortfall is to see if more is needed.

We chose different options from the menu, but I think we're on a similar page.

mlyonsd
04-07-2011, 10:59 AM
To be honest, most people should probably die sooner than they do in today's system. We can't afford to keep offering everyone all the medical science known to man until we can no longer keep their hearts beating.

It would be interesting to know the difference in life expectancy / quality of life between our current system (with all the bleeding edge, expensive technology we've developed to date) and our current system using only technology available to us 10 years ago (at today's reduced prices). While I'd expect that our current system provides improved life expectancy and quality of life, I'm not sure the incremental benefit is worth the incremental cost.

"I'm not dead yet". "You soon will be". (Monty Python)

cdcox
04-07-2011, 11:23 AM
Patteu -- do you see free-market tea-partiers actually agreeing to the level of regulation required to make option 3 work? I thought the mandatory insurance was one of the unforgivable sins of Obama-care? I could agree with option 3 with subsidies for the working poor and the those truly unable to work.

ClevelandBronco
04-07-2011, 11:24 AM
I think all of the options presented have flaws. I chose options #1 and #3.

#1 because it would fix out of contol health care cost inflation and therefore be good for the country in that respect, but it would probably mean most of us being sicker and dying significantly sooner so I don't really consider it a great option for individuals.

#3 because any reasonable insurance scheme needs to be based on spreading risk broadly so risk pools need to include high risk and low risk individuals or else we might as well revert back to option #1. I agree that regulation would be required.

Here are the components of what I consider the best option:

Risk pool must include entire cross section of society - Some form of mandatory participation must be included to force the healthy into the system.
Catastrophic coverage only - Routine medical up to a certain dollar amount should be out-of-pocket.
Death panels - The government should not be in charge of rationing. Rationing should be driven by cost and ideally subject to competition. The government's role should be to act as referee between the consumer and the insurer to make sure that the insurer provides what it promised to provide. The wealthy should be able to pay for denied treatment if they want to do it out of their own pockets.


I see the word regulation and I bristle instinctively, but your reason for choosing #3 makes sense. Sign me up.

patteeu
04-07-2011, 11:40 AM
Patteu -- do you see free-market tea-partiers actually agreeing to the level of regulation required to make option 3 work? I thought the mandatory insurance was one of the unforgivable sins of Obama-care? I could agree with option 3 with subsidies for the working poor and the those truly unable to work.

No, I don't. While I generally agree with the tea-partiers (and Republicans for that matter), I don't think they understand that insurance won't work for something like this if it's voluntary. The risks of age are too predictable.

cdcox
04-07-2011, 01:09 PM
Thanks patteeu. So do you think tea-partiers:
a) aren't smart enough to understand this situation
b) are blinded by their ideology
c) are willingly screwing over most Americans for the benefit if the rich
d) other

Anyone want to step forward and explain how option 2 could be feasible?

Rain Man
04-07-2011, 01:48 PM
I don't know enough about this to be fully informed, but my thoughts are:


#1 should always be an option. If someone has the bucks and wants to pay for whatever, they should be able to do it outside any organized system. So that's a no-brainer, but not as the only option.

All of insurance is based on making a profit, so I don't think age discrimination really exists in insurance. It just costs more. Discrimination based on pre-existing conditions does exist, and I think it's reasonable for society to say that's not right, and for society to share the burden if someone catches a bad break on the dice rolls.

So my thinking is...

1. Regulate insurance so that everyone pays the same rate for their entire life, regardless of pre-existing conditions or age or gender. This is useful because it means that people will be overpaying in their peak earning years and underpaying when they can least afford it, but they always get coverage. All it does is transfer wealth across time, which is no different than a savings account. Insurance companies can make a reasonable profit by administering it, but pay into, or receive from, a normalization fund depending on the age distribution of their clients, to ensure that they don't dissuade older or sick people from signing up.

2. If you can't pay the insurance, you don't get it. Sorry, but if you want stuff you have to be able to pay for it, and the new cost is predictable.

3. The cost of insurance should cover the cost for society to ensure treatment for children for all treatments between the cost of $5,000 and $100,000. If you're under 18, it's not your fault if your parents can't afford insurance. But under $5k and they pay, and over $100k, well, sorry about that, but you got unlucky. However, if your child gets treatment, it's paid for on a sliding scale depending on your income. If you're low income, it all gets paid. The proportion declines with income, so if you're high income, none gets paid, so if you're high income you might want to buy some of that price-constant insurance for your kids unless you're feeling lucky.

4. It'd work the same way for uninsured adults. Additionally, if an adult doesn't buy insurance, their cost goes up to cover those premiums when they eventually do buy insurance later in life. You can't avoid it when you're young and hop on the train later when you need it.

5. If you don't like the system, just pay out of pocket.

patteeu
04-07-2011, 01:50 PM
Thanks patteeu. So do you think tea-partiers:
a) aren't smart enough to understand this situation
b) are blinded by their ideology
c) are willingly screwing over most Americans for the benefit if the rich
d) other

Anyone want to step forward and explain how option 2 could be feasible?

Obviously, there are some a's in every group, but in general, I'd say b.

There might be some c too, although I think you used unnecessarily charged language to describe it. Speaking for myself, I'm willingly supporting a system that will necessarily end up with poor people getting less subsidized health care while rich people will still be able to purchase whatever gold plated care their pocketbooks can support. I don't see this as screwing anyone over and I don't do it because I want to benefit the rich at anyone else's expense.