New California Voter "Initiative" to "Regulate" How Much Health Insurers Can Charge

Posted by scojohnson 6 years, 4 months ago to Legislation
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So, apparently, forcing people to buy health insurance from ObamaCare, now has the panic-effect that the people being forced to buy it, never realized that health care was expensive to begin with... or that maybe they are no different from anyone else that already buys it.. and there's no free lunch. Now there is a voter's initiative to require insurance carriers to "justify" how much they charge a customer. So much for supply & demand...
SOURCE URL: http://www.bizjournals.com/sacramento/news/2014/06/23/rate-regulation-initiative-covered-california.html?ana=e_du_pub&s=article_du&ed=2014-06-23&u=kzKE2P2+BoSp+997oyyNCCJb0z6&t=1403570132


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  • Posted by $ blarman 6 years, 4 months ago
    And what happens when the insurance companies just bail out entirely, leaving the whole mess to the government to fund with taxes?

    California is already bankrupt, this will just force them to make it more obvious.
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    • Posted by evlwhtguy 6 years, 4 months ago
      The Obamacare requirement for insurers to cover anyone even with pre-existing conditions, will in fact make it easier for insurers to drop out of the market. Before they could be accused of abandoning paying customers and consigning them to having no insurance...BUT NOT NOW!!!
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      • Posted by IndianaGary 6 years, 4 months ago
        Don't forget that the tacit default of ObamaCare is Medicaid, so someone will be forced to take these patients.
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        • Posted by 6 years, 4 months ago
          Most providers don't want anything to do with it... thus the reason it really (probably) won't affect taxpayers as much as initially predicted... you can't force a doctor to take a patient for an $8.00 office fee or whatever, its not worth their time. They can send the patient down the road, and there isn't any fault to them if no one else takes them either.

          For the moment, these people will feel like they have health insurance, and probably happily vote democrat again, at some point, the reality will set in that a 70% coverage plan with a massive co-pay, that no one will take anyway, will be a big rip-off... (pretty much to subsidize old people on Medicare).
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  • Posted by $ ObjectiveAnalyst 6 years, 4 months ago
    Price controls do not work. If regulators want to help they should get out of the way, allow for interstate commerce and more competition. Tort reform! Loser pay! Bureaucrats and politicians never aim at the root of any problem... problems they create and exacerbate.
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    • Posted by $ Solver 6 years, 4 months ago
      When you say, “work”, do you mean reduce the cost and increase the quality of health care?
      There are are those who's “work” goal is to have big government control everything they can. They "work" hard spending tons of appropriated resources toward that purpose.
      If one defines “work” as big government growing even more progressively parasitic, then boy does it “work.”
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    • Posted by 6 years, 4 months ago
      That's because the trial lawyers are a very big donor to the Democratic party...

      FYI, Democrats control about 63% of state government in California, they had a super majority of 65%+, but 3 of their senators are currently suspended for illegal activity and broad-based corruption... one of them was a gun smuggler it turns out (and I'm not talking Curio & Relics..)... rocket launchers, fully automatic assault rifles, etc.. while being the author or co-author of much of our stupid gun control laws... and he still did a good showing in the primary from house-arrest while awaiting trial.. http://ktla.com/2014/06/06/leland-yees-s...

      Shrimp Boy might have bought the votes... http://www.thetruthaboutguns.com/2014/03...

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      • Posted by $ ObjectiveAnalyst 6 years, 4 months ago
        Hello scojohnson,
        I'm sure the Californians don't appreciate the moniker "The land of fruit and nuts" but come on... Californians with sense, do something about this! Of course it isn't just there... we have our share of crooks elected as mayors in our largest cities in the recent past. What is wrong with people?
        Respectfully,
        O.A.
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      Posted by Boborobdos 6 years, 4 months ago
      The health care system in America was broken a long time ago. We are extremely expensive and not as good as others. Broken. Any attempt to fix it is a good thing.
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  • Posted by UncommonSense 6 years, 4 months ago
    Stupid voters...instead of regulating how much student-loan indebted doctors can charge, why not regulate their stupid politicians into not taxing X amount of taxation on everyone?
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    • Posted by 6 years, 4 months ago
      Something tells me if taxes were "regulated" to be lower... there wouldn't be so much of an issue with people affording everything else on their own without 'assistance'.
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  • Posted by CircuitGuy 6 years, 4 months ago
    I didn't read the article, but this keeps happening. People keep trying to rearrange the coins on the table in a clever way that will make them worth more.

    Supply and demand is alive and well. Some willing buys and willing customers offering some kind of "concierge buying club" will find a way to come together despite the rules. The people looking for a law to make things they buy cheaper or things they sell more expensive will be consistently disappointed..
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  • Posted by scinch 6 years, 4 months ago
    Price self regulates to equilibrium on supply and demand as buyer and seller regulate their behavior. Qs = Qd creates the market price. However, prices cannot regulate themselves if the price is unknown. This is how health care operates. You want to control prices then hospitals and health care providers should be regulated to merely post the prices they charge and let the consumer decide if there is value there. Prices will adjust as both buyer and seller negotiate what they are willing buy and sell at a particular price.
    One advantage that health care has over the consumer is that of demand elasticity. There are no substitutes for medical care if you need it.
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    • Posted by 6 years, 4 months ago
      One thing that seems to be a characteristic of healthcare as well, is the "at any price" is fine if needed, so true price discovery never happens... particularly in a third party (or single-payer) system.

      For example, lets say that the most-demanding customer for a trip to Mars might pay $20 million to get there, but there isn't any way the supplier can accommodate that without "pooling" quite a few $20 million payers. Hence, in some cases, the cost of the supply may out-run the buyers' willingness to pay.

      This can be a characteristic of healthcare as well, some diseases may be relatively easy to cure, but are so rare that costs to develop the therapy can't be recouped within the availability of the "sick" pool of customers... so only "popular" diseases are attempted.
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    • Posted by Robbie53024 6 years, 4 months ago
      Problem is, most consumers don't actually pay the listed or unlisted price. They pay a deductible, usually a fixed price.
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      • Posted by 6 years, 4 months ago
        That is how insurance (of all types) works... and in a free marketplace, it works well. For example, auto insurance for the young is generally kind of expensive because they are inexperienced drivers and around age 21-24 tend to go out and party, etc. The elderly pay quite a bit less because they drive less, and drive with safer habits (statistically). It works because it dissuades a young risky driver from buying a new corvette convertible (or requires them to 'buck-up' to do it).

        In healthcare though, government has tweaked the system (to get votes, I would argue). The young, which will use healthcare sparingly at most, are being 'coerced' to pay much more than their risk pool would suggest, and the elderly (which will consume healthcare by the mountain-load), are being discounted heavily with premiums subsidized by the younger subscribers and the taxpayers.

        Very much, a recipe for disaster, and abuse by providers.

        California mucked around with the electrical market once, and the results were disastrous... rolling blackouts and $2000 monthly electrical bills for households. Obviously, the "leaders" didn't learn their lesson.
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      • Posted by scinch 6 years, 4 months ago
        ...and an insurance premium that is pooled with all the other premiums. The object is that the hospital and other medical services bill with codes for a "supposed" reimbursement/payment for services rendered. The insurance company needs to turn a profit and wants to keep what they pay at a minimum. Thus the supply and demand equation is set by the (buyer) doctor/hospital and the (seller) insurance company. Thus when Qd>Qs...there will be a shortage of services.

        The actual consumer to be a part of the supply/demand equation...one start under this model is insurance companies having to post their prices for the benefits provided. This can have the effect of forcing insurance companies having to compete in a tight market. This of course means the reduction in the prices of services and materials in the hospital/medical provider market because insurance companies will reduce the amount of reimbursement to the medical provider.
        Hidden prices and collusion to a certain degree creates a non-competitive marketplace that allows for an oligopoly model of business.

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        • Posted by Robbie53024 6 years, 4 months ago
          The providers quickly determine what the insurance companies reimburse, and the insurance companies seem to reimburse at the same rates, often based off Medicare reimbursements. Thus, what you suggest is already happening, to a large degree. It is that the consumers are not in the loop.
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  • Posted by Herb7734 6 years, 4 months ago
    I wonder how many times regulation has to fail before regulators get it? They seem to live in an alternate universe that makes everything their Swiss cheese brains think up becomes a reality that works.
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    • Posted by 6 years, 4 months ago
      They always think that if they state it by fiat... it must be so.

      I think this is awesome, California already has very high insurance because of the lack of competitors in the market place... every offered "policy" has to be reviewed and approved by the California Department of Healthcare Services "Managed Care" section. This pre-dates ObamaCare by decades... and all policies have to be compliant with state requirements, sufficient capital in the company, etc... so we basically have a few different flavors of BlueCross/BlueShield and other flavors of BlueCross/BlueShield... very few other competitors.

      Most just don't bother and go sell it somewhere else.
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