Giantaxe

Medical cost inflation is lower post-ACA than it was in the years leading up to its passage. Whether that continues to be the case is more debatable:

Will Obamacare cut costs? | The Economist

Steerpike

$400/mo is cheap (relatively/comparatively), assuming a full family (spouse/dependent kids). If you go to the 'private' (as in, non-group / employer) healthcare exchanges, your rates are set (almost) entirely based on age, location, size of deductible (bronze/silver/gold/etc) and number of people covered.


Example - Covered California™ | Official Site | Affordable Care Marketplace (I'm familiar with how the CA site works, but you can do the same at the Fed site or other state sites) - 4 people, ages 40/40/10/15, Contra Costa County, (entered huge household income to bypass the whole 'subsidy' thing). Cheapest Bronze offering is $831 from Kaiser. Cheapest Silver is $1,080 from Blue Shield.


Dropping ages to 30/30/10/5, cheapest bronze is now $769, cheapest silver $999.


yes, CA is expensive, but I don't think you are going to get under $400 anywhere in the country.

dc koop

I was a member of Kaiser Permanente for many years. When the scandal became public about Kaiser doctors being given bonuses for keeping down the number of specialist visits and treatments I bailed out soon after.

morpeth

In state I live in there are no $400 a month premiums for medical insurance for a family unless one goes through Obamacare.In fact many local employers even offering insurance employee could have to pay up to $400 per month just for their portion of premium. Interesting is what temp agencies do, if they have to offer health insurance they charge the employee so much that many just do not sign up for insurance- since a very high percentage of local factory jobs are through temp. agencies and paying $9 to $12 an hour, many do not have insurance.

Pulaski

One of the reasons that the cost of the US medical system is so high is that doctors order too many tests, and send too many people to specialists, who then recommend too many procedures to "correct" "conditions" that while being statistical outliers are not actually anything that necessarily requires medical intervention.

IMO much lower cost insurance would likely be possible if it only covered things that are medically necessary.

morpeth

Doctors sometime give reasons for excessive tests as "defensive" measures against lawsuits.

Pulaski

Oh, I am familiar with the reasons, but you could train a chimp to order all the tests and send everyone to a specialist.

morpeth

True but doesn't change one of the reasons for some many tests.

thinbrit

I believe that any reduction in health care costs have been all but invisible to the average Joe. As a percentage of wages, which I believe is what really matters, these figures speak for themselves





Forbes Welcome

Steerpike

I wish people would be more specific / accurate when discussing this topic. What I believe you mean is, you can't get such a rate unless you qualify for a subsidy (or if you are very young). I currently have a plan 'through Obamacare' (an ACA compliant plan) and I don't get a subsidy. You get a subsidy if your income falls below certain thresholds. My point being, it's the subsidy that makes it lower, not being an 'Obamacare' plan (ACA compliant).


I'm currently working as a consultant at a benefits provider, and thus have access to a good deal of info about this. Having under 100 employees, the rates they are charged for insurance for their OWN employees is based on age of participant. I asked them what it would COST THEM if they employed me as a permanent employee. As a 57-year-old, it would cost them $850 to add me to their plan (their plan is similar to a 'silver' plan on the exchanges). If they hired a 25-year-old, it would cost them a LOT less. But they charge all employees a flat fee of $40/paycheck for individual coverage (but pass on full rates for spouses/children).


A 'silver' plan on the exchanges, for a 57 year-old, costs about $820. So bottom line is, as a 57 year old, the 'going rate' is about $800+ for a high-deductible plan, whether a company buys it or an individual buys it. The huge difference is, of course, that the employer is choosing to discount/subsidize that premium for the employee.


As a matter of interest, if the company were to grow to over 100 employees, their premium (as charged by their insurer) would switch from an 'age based' rating system to an 'experience based' rating system - that is, their annual premium would be set based on actual 'past claims activity' for the employee base. So if 4 people all came down with expensive illnesses one year, the next year their premiums would go up. But for now, with under 100, there isn't enough of a 'statistical base' to do that and thus, age is the deciding factor.


I think that this simply means, they are choosing not to subsidize the rates. They aren't legally allowed to charge MORE than the underlying cost (maybe allowing for a small % for admin).

morpeth

A bit confusing- reference to medical cost inflation, then reference to deductibles, and a graph showing growth in premium costs. Are not these different things ?

But the graph showing growth in premium costs highlights the effect on premiums of ACA.

morpeth

A company I know has typical starting wages of $2,200 per month, and since when possible they prefer to hire workers over 30, it is not untypical the worker is married with a wife and two kids. Their typical insurance plan ( and it s a company with over 4,000 workers), costs the company $1400 per month, of which the employee would pay $300. If a worker is out for the family leave medical act, the company still pays for the health insurance.

So company pays net 50% of salary for medical costs, or put another way for every $1 in salary it costs them $1.50. ( not counting employer taxes etc). The company uses overtime ( sometimes forcing workers to work 30 to 40 days straight with no time off), and temps costing $1,800 a month ( salary plus temp agency fee), to keep number of full time workers as low as they can.

Year ago I did an analysis of labor costs for a plant in Mexico compared to a plan in the US. At that time the cost per $1 of salary in the US was $.25, in Mexico $.75 for benefits and employer taxes, when adjusted for productivity, the actual cost difference overall not as great as one would assume ( each industry different of course in terms of salaries and productivity). I wonder today what the comparison would be.

scrubbedexpat099

I remember noticing that the local County spends nearly as much on Health Insurance as wages.

Giantaxe

I don't think it even shows that. It shows that salaries haven't kept up with health insurance costs. That's mainly due to stagnation in wages post the financial crisis as opposed to an increased rate of premium/health cost increases post ACA. It doesn't tell us anything about health cost inflation pre- versus post- the ACA provisions coming into force.

Pulaski

For most Americans wages have been stagnant for 20-25 years!