> As an employer I care about my health insurance plan’s cost. BUT I also have no clue about what one plan vs another really means or how they’re maybe gonna save me money long term. I simply don’t have the time to understand that, and I’m probably more informed than most on the subject having worked in the sector. I too care about predictability more than cost.

As an employer, my insurance brokers are able to show me very easy to compare tables listing premiums/deductibles/oop max/copays.

It’s all pretty comparable as long as you’re comparing within the same types of networks (HMO/PPO/EPO/etc), especially with metal levels.

If anything, HDHP PPO plans or Kaiser Permanente type HDHP HMO plans do have an incentive to keep costs down as they compete with each other for my business. I’ve been able to go to my health insurance website, and type in a healthcare procedure or exam and it will usually tell me the cost at various facilities. Nowhere near perfect, but a good start towards price transparency.

This all would work a lot better if everyone was forced to buy health insurance from healthcare.gov and employers were completely removed from the equation.

You’re totally right, and I love those charts. But let’s be clear about what they’re telling us: what we are buying for our employees. It provides no information about how those costs will increase or any “gotcha” features of the plan. While it provides information about a copay and percentage an employee pays and a deductible, I have no clue if plan 1 has negotiated 25% lower prices from the local hospital system vs its competitor. Likely, all the major plans have more or less the same negotiated rates with providers, but that opacity makes it even harder for anyone to drive efficiency.

Kaiser is a very interesting example actually. Because they own both sides of the business (provider AND payer) they have a big incentive to be efficient. They do pretty well! There’s a few issues: 1.) they are still part of a larger market, so they have to pay for doctors, which means they can’t be TOO far below market salaries. Many doctors are paid on both salary and based on how many and what procedures they do i.e. how much revenue they bring to the hospital. Your doctor in many cases is paid on commission. Kaiser doesn’t do this, which some docs like, but others don’t. 2.) they are regionally limited. You can’t get Kaiser in a lot of places in the US. I’m not sure why it hasn’t scaled nationally, I’d really love to know.

Oddly, I’m told by a friend who works there that Kaiser is run internally as two halves, the insurer and the provider, they then negotiate somewhat independently and keep each other accountable.

Anyway, my pet project is something like what you suggest, decoupling insurance for employment. As an employer (and by extension an employee) I pay no taxes on a health plan I buy. I pay with pre-tax $$. As an individual if I buy insurance I pay with post tax $$ unless it makes up a certain percentage of my income and that falls above some threshold and... I lost track it’s too complicated. It shouldn’t be, there should be a way to properly decouple employment and healthcare.

>But let’s be clear about what they’re telling us: what we are buying for our employees. It provides no information about how those costs will increase or any “gotcha” features of the plan.

You're definitely right about this, but in my experience, they're all the same negotiated pricing. And the insurance companies will conveniently group different doctors/healthcare facilities based on their costs into different tiers.

You can also be sure prices will keep going up, and I like to assume that I am liable for my out of pocket maximum since healthcare providers just bill willy nilly anyway, so I know I need to keep enough cash for 2 years worth of out of pocket expenses (in case something happens in Nov/Dec of one year and carries into next year). Hint: plan to have babies in April/May, so any complications all get stuffed into one plan year, and you hit out of pocket maximum sooner. Plus you avoid the new inexperienced resident doctors coming in during June.

>It shouldn’t be, there should be a way to properly decouple employment and healthcare.

It's really simple, remove the tax benefit from employers purchasing health insurance, and give it only to individuals purchasing on healthcare.gov. Ideally no one would have a tax benefit period, and everyone would be forced to go to healthcare.gov and employer plans and whatnot would be outlawed. Politically, big business will fight that though since price transparency helps people compare job offers properly and makes it easier for people to change jobs.

> Hint: plan to have babies in April/May, so any complications all get stuffed into one plan year, and you hit out of pocket maximum sooner.

As an Australian medical student I'm horrified to think that this would be a genuine "hint" that would be relevant in a first-world country.

There's lots like that in the US, and to a much lesser extent in Europe as well. In the US I had a family member whose husband kept a not-great job because its insurance paid for her cancer treatment, whereas if he'd tried to switch jobs the other insurance might not have.

Even in Germany my (private) deductible is 3000 EUR so if I thought I might need "something done" I'd try to do it early in the year: if I spend 2999 in December the counter resets on January 1st. And I'm told I have a pretty sweet deal compared to America.

In the US, the first scenario is not a problem anymore since the Affordable Care Act requires coverage of pre existing conditions.

True, but I wouldn't place any bets on the longevity of the ACA until at least, say, mid-January.

It's actually a poor hint. You want to choose to be pregnant just before you elect your coverage for the following year. Then you can buy the gold plated care with a tiny out of pocket maximum. Then you can go back to a lower quality plan until you're ready for baby #2

I hadn’t thought of that strategy! But my wife didn’t want to deal with brand new resident doctors, so avoiding the months of June onwards was important.

Also, I’m not sure if the out of pocket savings make up for the compounded investment earnings of a triple tax advantaged HSA contribution. However, it could work if both spouses get insurance from employer and they already have a kid, and the husband chooses an HDHP with HSA and puts one child under his insurance so he gets to contribute max amount to HSA, while wife chooses low deductible low out of pocket max plan and puts new baby under that.

But I wouldn’t waste my time figuring that out or doing that paperwork, it can’t be worth the different in out of pocket maximums and deductibles if you account for the headache of doing the paperwork.

>>It shouldn’t be, there should be a way to properly decouple employment and healthcare.

>It's really simple, remove the tax benefit from employers purchasing health insurance... and employer plans and whatnot would be outlawed.

How do you get from here to there without it turning into a boon for certain employers at the expense of their employees? That is, how do you ensure that the money currently paid in benefits is passed along to employees to purchase their own plans and not pocketed (partially or in total) by companies.

One way would be to allow companies to pay employee's healthcare premiums on the employee's behalf. That's almost like the current system, but still decoupled:

1. Employee buys their own plan from healthcare.gov.

2. Employee can choose to pay directly, using pre-tax dollars. Tax law is changed to that healthcare premiums are deducted from AGI for everyone who pays them.

3. Employee can choose to submit plan documentation to employer, who will pay some/all of the premium on the employee's behalf. In this case, employer gets the tax break. If only partially paid, employee pays the rest and gets to deduct that portion.

Financially, it's a wash either way. It gives the employee control over their health plan, and it changes the 'perk' status of employer-paid healthcare. It also gives time for employers to transition away from the "reduced salary + healthcare premium" model, because they'll be competing with employers who pay higher salary and no healthcare premium. Many employees will probably prefer the higher salary, because it's more flexible and feels better. That transition can occur over time without disadvantaging any employees, because the overall costs and tax implications are the same.

That will be forced to happen as people will need to purchase insurance and demand more pay.

If anything, people will have mobility to move to different jobs and the ability to actually see which job pays more or less, so employers will have to actually compete.

And half the people the US already don’t get health insurance from employers.

As an employee, I find those charts pretty much useless, because I don't really know what kind of health care I need. Not just that I can't predict the unknown future of my health, but that I don't even know what the difference will be between an HMO and a PPO if I need something other than routine medical care.

I've been fortunate to leave me with little need to deal with medical issues, and further fortunate that I don't have to optimize for price. But it means that every year I get shown a chart and tick off an entry more or less at random. Maybe on that day I'll guess that the more expensive plan would give me a better experience if I need it; maybe I'll decide that I might as well save money.

I assume that people who have to deal with health care systems have learned which kind of system fits their needs. I've been unable to figure it out from the charts. They make the prices clear enough, but the value is largely opaque.

> When a pandemic rolls around, all elective care gets shut down, so hospitals lose money despite being needed more than ever.

Sort of off-topic, but I'm increasingly starting to believe that this kind of complexity in business models should be disallowed in general. I mean in particular the cases of selling something with a high margin in order to fund something else that's sold at or below costs. Be it related items ("razor and blades model") or unrelated (elective vs. non-elective care).

My usual reason is that it's anti-competitive and allocates incentives in the exactly wrong way, leading to ridiculous waste (that's how we get throwaway printers with expensive cartridges), but healthcare example points to another problem: stability. A critical system whose functionality is strongly subsidized by "extra offerings" is a system that fails when those extras aren't being bought for some reason.

In engineering, simplicity is desirable. So should it be in business. After all, transparent pricing is important for proper functioning of free markets, and such schemes confuse the pricing.

The "razor and blades model" is maybe not the best example here, as it's entirely voluntary for the consumer.

The ads convinced me to buy overpriced Mach 3 blades for 20 years, but at no time was I prevented from buying a safety razor and having cheap blades and a better shave. I could even buy one from Gillette if I really wanted to.

I'm not sure I'd want regulation protecting me from being a wasteful consumer, but I do think that something as important as a hospital shouldn't be allowed to run on whatever Ponzi scheme is momentarily profitable.

Perhaps we could regulate them more like we do banks? Something about maintaining certain critical capacity, or you lose your license to facelift?

Predatory pricing is related, but it relates to a business selling something so low it drives competitors out of business.

So I suppose if that applies where you live, and you had a business selling only the low-margin type of item, and your competitor was selling below cost, then you'd have standing for action. I'm not sure if consumers ever get a say though outside of regulatory agencies like the ACCC.

This would destroy the ability of businesses to take on fixed costs.

Or imagine a hospital that only did high margin elective care. Instead of keeping the low margin service available while it struggled financially, it just wouldn't offer any services. Winning!

Interestingly, loss/waste aversion has caused problems in US healthcare. CON laws haven't done anybody any good, save incumbent hospitals.

> Instead of keeping the low margin service available while it struggled financially, it just wouldn't offer any services.

Margins are controlled by businesses. If there was no way for anyone to do "high margin X to subsidize low margin Y", then previously below-cost prices would raise to better reflect the real costs of providing a good or service.

Then you'll find that in many cases, these "real costs" are too high for many who need it, leading many low margin services to stop being offered and many consumers turned away. Hardly a win.

Complex subsidies can broaden the market and serve the underserved, that's a win. It's classic engineering arrogance to dismiss all complexity as unnecessary or harmful, as if the economy is a passion project that should not deign to serve those who can't or won't bear the full cost of each individual product.

If there is margin on the service, it isn't really a subsidy, it's capacity utilization (building a hospital that can do 100 surgeries a year instead of a hospital that can do 45 knee surgeries a year and filling the slots with other services).

I guess you can probably re-frame your argument using some other similar measure though.

NPR has done a couple series on how dollar stores (Dollar General/Dollar Tree/Family Dollar, just search "NPR dollar general" to see the content) can setup shop directly next door to a traditional grocery store and erode the traditional grocery store out of business. Reason being - dollar stores sell only the high margin items for low prices, whereas the grocery store has the expectation that they will provide all the staples people need, even the super low-margin items like lettuce. Once a grocery store loses the competition on the high margin items, they can no longer subsidize selling the low margin items and go out of business. A real (and growing) problem in many communities.

Very much agreed. Systems thinking should be taught from kindergarten.

From what you can tell, is there any real and sensible reason for having health insurance paid by employers? Is it just an artifact of the past? I honestly can't see a single benefit from this system.

It’s an accident. The TL;DR is: During WW2 wages were frozen and employers were looking for benefits they could offer to hire workers. Health care was one. https://www.nytimes.com/2017/09/05/upshot/the-real-reason-th...

And afterwards wages were pro-forma unfrozen, but income tax went up to ridiculous levels in the higher brackets like 90%.

So sneaking some tax free compensation to your employees was just as valuable.

How do proponents of “Medicare for all” propose to fix any of these issues? (Honestly, not trying to stir the pot)

Nationalised health systems work very hard on cost control. There is a lot of FUD spread about e.g. the UK's NHS but the actual numbers show that it provides an excellent healthcare service to everyone for the same amount as Medicare+Medicade+health insurance for federal and state employees (in total via these channels half the people in the US have their healthcare paid for by the US taxpayer). I.e. the NHS is nearly twice as efficient as the US system.

I guess just copy their methods?

I'd imagine the lack of billing staff at NHS hospitals probably helps keep the cost down quite a bit?

Sadly they've added a billing system for 'health tourism'. Before that they didn't ask too many questions just treated people. I guess the billing system pays for itself? Not sure.

In the US medical billers make like $8/hr, I'm not sure that's a huge cost center compared to the $400k/yr physician.

But is the ratio 1 to 1? Or are there way more medical billers than physicians?

Anyway, it's an unnecessary cost.

One of my previous employers had approximately a dozen billers for 75-or-so physicians, and the average physician salary was $500k.

Presumably the billers spend a lot of time trying to get money out of insurance companies? We don't have those either..

[We do have private healthcare provides but even they seem much cheaper than the US system]

Edit: Any time the US healthcare system is described on HN it all sounds rather bureaucratic and stressful - as if being sick wasn't bad enough already!