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Nancy, Please insane profits ? and this is why insurance companies, including your car and home insurance companies do NOT sell health insurance and insurance companies' profits are 30% less than the S&P 500. And their profits are State regulated unlike, I bet, whatever profession or industry you are/were in. Compare regulated insurance company profits to pharma, medical equipment mfg, MDs, etc. and tell me again why their much lower (7% profits are insane. Nancy, emotional statements without facts do not help your case. Give me one example where an insurance company in Colorado did not pay for critical care within the contractual terms of its policy. Just one. Please back up your statements or immediately retract them as they only inflame emotions when reason is needed and required.
And by having no reduction in the 80% of health care costs, but instead increases, not breaking Federal law regarding pharma purchases(bulk/bidding),and having staff salaries,benefits, vacation days,etc. much higher than insurance companies' staffing, there is no way CC will have lower costs . It is simple math as repeatedly shown above in previous posts.
Again, low cost plans cannot exist unless and until medical costs are reduced. Federal law prohibits bidding for pharma. CC employees will be paid as much or more in salaries and , more importantly, very expensive benefits such as a defined pension plan, that private industry does not offer and cannot afford. Notice that CC will not tell us the salary or benefits to be paid to CC staff and employees. They just say it may be lower than insurance company administrative costs but give no specifics. We don't even know how much the CEO or CFO will be paid. Since the State of Colorado (Insurance Division) oversees health insurance company rates, thus premiums, and their profit is regulated, the same profit percentage will exist regardless of who is insured. If by deleting pre-existing conditions, the medical costs rise by 15% for example, guess what - regulated insurance premiums will also increase. When the profit margin is too low, insurance companies will exit. And this occurred in Colorado decades ago when State Farm, Hartford, Travelers, etc. quit selling health insurance. If one eliminates all insurance company profit, we are left with about a 7% reduction but still will have a medical care increase of ??? - a lot I can tell you when all medical conditions are covered. Personally, I am for the elimination of pre-existing conditions but be aware it comes at a huge increase in your premiums regardless of the plan. So folks until specific questions can and are clearly answered by CC, maybe it is best to wait to make your opinion. Final point - MEDICAL costs make up about 80% of a premium. If there is no significant reduction in these costs, a 10 or even 20% reduction in administrative costs will be insignificant. Simple arithmetic compare- a 10 or 20% reduction of 20% (administrative )to 10 or 20% increase of 80%(medical). Low cost plans covering all and pre-existing are a myth.
joey Andrews, Thank you for your reply. I will call you to obtain the answers to my questions as requested . May I suggest you post the answers here so all can benefit from the answers. Will you ? Again, thank you for your community service.
Joey Andrew, Previously I posted these questions but never saw an answer. You kindly responded that you had posted an answer but it never appeared. Will kindergarten staff receive salaries higher than those paid to current private day care centers ? Will this staff participate in the very expensive PERA program ? Will they receive all of the paid holidays that 1 thru 12 staff receive ? What are the expected total costs and how much of these will be covered by tuition ? How will the entry of this plan affect private day care centers as far as you providing probable higher salaries and definitely much higher benefits - defined pension, comprehensive health insurance, vacations,etc ? And won't they be charging more per student as they aren't subsidized ?
Nancy, Since bulk purchasing of pharma requires bidding to obtain the best pricing and bidding is against Federal law, I do not understand how CC can reduce this cost. Since CC employees will require salaries and benefits equal to Colorado public employees, which far exceed what private industry offers or can afford, how can administrative costs be lower unless their salaries are equal or lower than private industry which is totally unlikely but is not told to us by CC. One example is the defined benefit pension plan (PERA) which is millions underfunded and is too expensive for private industry to offer anymore. When insurance administrative expenses are taken away, what replaces them as administration must still occur and if CC employees receive Colorado State employee salaries and benefits, administrative expenses will escalate and cannot be reduced. So with bulk and administrative "savings"gone, we're only left with fraud savings of possibly .7 billion. And why can't the fraud initiatives take place now ?
Nancy, I am still looking for answers to my questions, Since most costs are medical costs and medical costs, repeat medical costs, are not being reduced, how can any plan save us money UNLESS medical costs are reduced - MDs, hospitals, pharma, etc ? Administrative costs reductions are minimal compared to medical costs. Again, who or which medical provider is going to lower his/her or their medical charges ? It is simple arithmetic that medical costs, the huge majority of healthcare costs, cannot be reduced unless medical providers lower their charges. Let us agree that administrative/insurance costs can be lowered but this is the minor, 20%, of the total. Medical is the problem. So how is CC or any plan going to have these reduced - specifics please? And this is an open question for anyone and has not been addressed in my opinion. Some comments have said millions or even billions but without any specifics as to how medical costs will be reduced and one or two less billing clerks is an administrative savings not a medical cost reduction. Thank you for your input.
Dan, medical costs, repeat, medical costs were rising at an unsustainable rate which causes a rise in premiums. If medical costs had not risen, insurance premiums would not have risen. I don't understand why people don't get this. I agree major changes are needed. I don't understand why the focus is not on the huge majority of our costs (medical) instead of insurance but I agree that changes in insurance should be included. I'm not for or against ACA. I'm for specific changes which I see missing from many discussions. If insurance companies are limited to a 7% profit, what about limiting all medical providers to that same rate thereby reducing many costs by 30% because medical providers are in the S&P 500 10% profit range.? If you can limit one, why not limit all ? Why not eliminate the massive duplicity of our current hospital system in areas where multiple hospitals exist ? Why not allow bidding of pharma. A shown on 20/20, every , repeat, every word of the pharma section of ACA was written by pharma lobbyists. And, Dan, they sure don't have a lowly 7% profit margin. Just my thoughts and I thank all for their thoughtful posts.
Dan, What if all medical costs were treated like insurance . To prevent high profits, insurance rates are regulated and thus premiums are regulated. Yes this reduce profit and makes it less attractive for those medical providers involved but if it okay to limit insurance companies' profits can that not be extended so our cost increases are contained ?
Additionally, could we not lower costs by reducing duplicate services ? Instead of every hospital doing everything, what about one hospital for orthopedics, one for maternity, one for cancer, etc. ? Wouldn't this increase efficiency, reduce the costs of having duplicate medical equipment, and increase positive medical results. There is a reason MD Anderson is rated each year as the No. 1 cancer hospital by some rating sources - they do not treat other medical conditions.
Chris, today AETNA announced it is withdrawing from most exchanges after losing 300 million and United Healthcare and Humana have already announced their with drawl plans after losing hundreds of millions because of having who shows up having their expenses covered without having a reduction of medical expenses that they paid. There was no reduction of costs. None. Current plans have co-pays so co-pays provide no difference to other co-pay plans. Hoping that medical providers will lower their costs is not backed by fact.
Talk to your Doctor ( hospital, etc. ) about their reimbursement rates that have been negotiated DOWN and you'll quickly see the error in your statement about no incentive as insurance companies know that when premiums rise customers will be lost.
Yes, even though insurance companies return on investment is 30% lower (7%) than the S&P 500 ( 10%) , more money will be received when premiums increase but you very rarely ever see a buy recommendation from financial advisors because that money increase is NOT profit but mainly is used to pay claims. So only only a small portion goes to stock holders.
Nancy, can you divest yourself for a moment from the minor cost of insurance and specifically discuss the major part -medical expenses. Your answer is there is a probability (?) of more reimbursement and a reduction in their staff's expense. How will this reduce medical expenses as CC cannot cost less unless all medical expenses are reduced.? Please don't repeat CC comments that X amount will be saved but tell me which medical expenses will be reduced because i find no specifics regarding the specific reduction of the 80% (medical).
For discussion purposes, let us agree that CC will reduce administrative expenses so we don't have to mention that again. Medical costs are rising much faster than administrative costs and this trend is expected to rapidly continue. Read yesterday's Pilot about the State's review of rural medical costs. Now -bottom line - specifics. What MEDICAL costs will be reduced and how ? I'm talking about MDs, hospitals, pharma, medical equipment, all and only medical . I can't find anywhere specifics as to whom will be paid less or how and that is the only way to reduce medical costs significantly.
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