The economics of health insurance.

[SwimExpert]

Meet Bob.

Bob is an American. Bob buys dinglehoppers. Bob pays $10 to buy a dinglehopper. When he pays $10, Bob gets one dinglehopper. Bob would like the cost of dinglehoppers to be lower. But that is what they cost. If dinglehoppers were more expensive he probably would not be able to afford them, and so he would not buy them. How do you buy something you can't afford, after all?

Meet Jim.

Jim is a businessman. He comes up with a great idea. He sees that there are alot of people who like to buy dinglehoppers. Dinglehoppers are vital. People need dinglehoppers at times. There are also times when people want extra dinglehoppers that they don't really need but they value anyway. Bob sees an opportunity to make money off of this market. Not buy making dinglehoppers. Instead, Jim wants people to pay him for their dinglehoppers.

Dinglehoppers are a good business. Bob spends about $120 a year on dinglehoppers. Some people spend less. Some people spend more. The thing with dinglehoppers is that people usually don't buy them one at a time. They tend to buy many dinglehoppers at once. Some people need alot of dinglehoppers.

Bob, meet Jim.

Jim would like to pay for your dinglehoppers. No, he's not going to give them to you for free. Jim wants to sell you dinglehopper insurance. This is how it will work. Instead of having to pay $120 when you need a bunch of dinglehoppers, all you have to do is pay Jim a low monthly fee. Jim charges just $10 a month for each person. Then, when you need dinglehoppers, you'll just bill them to Jim.

Jim, meet Sally, Edward, Tim, Beth, and Richie. They buy dinglehoppers too. They'll buy your dinglehopper insurance.

Sally spends $40 a year on dinglehoppers. But she thinks it's a good idea to have a backup plan, just in case she suddenly needs alot more than she can afford. Edward spends $90 a year, Tim spends $170 a year because he has a pre-existing dinglehopper addiction, and Beth spends $70 a year. Richie rarely buys dinglehoppers himself and averages only $20 a year. But he's married and his wife needs alot of dinglehoppers at times, to the tune of about $130 a year, so he buys a family plan.

Jim, meet bookeeping.

EXPENSES
Bob = $120 (12 dinglehoppers)
Sally = $40 (4 dinglehoppers)
Edward = $90 (9 dinglehoppers)
Tim = $170 (17 dinglehoppers)
Beth = $70 (7 dinglehoppers)
Richie = $$150 (15 dinglehoppers)
total = $640 (64 dinglehoppers)

REVENUE
Bob = $120
Sally = $120
Edward = $120
Tim = $120
Beth = $120
Richie = $$240
total = $840

Profit = $200

Jim, you're squeezing out a decent. But you want more, don't you Jim? You might need to change things up if you want to stay in business. Time to add a deductible when it's time to renew your policies. Let's go with a $50 yearly deductible. Just look at next year's profits grow!

EXPENSES
Bob = $70
Sally = $0
Edward = $40
Tim = $120
Beth = $20
Richie = $100
total = $350

Profit = $490

Wow, that's great! Congratulations on your success! Oh but Jim, meet the dinglehopper industry. They have been charging $10 per dinglehopper. But they are raising their prices to $15 a dinglehopper. Why are they raising prices? Because in their estimation they can do that without negatively affecting total units consumed. They think that the increased revenue will offset any decrease in consumption. Next year's profits are about to take a hit.

EXPENSES
Bob = $130
Sally = $10
Edward = $85
Tim = $205
Beth = $55
Richie = $$175
total = $660

Profit = $180

Looks like you're going to have to so something else. Let's increase the policy rates to $15 a month. While we're at it, let's also add in a co-pay. This way the policy holder pays 50% of the amount after their deductible. Where does that leave us?

EXPENSES
Bob = $60
Sally = $20
Edward = $45
Tim = $85
Beth = $35
Richie = $75
total = $320

REVENUE
Bob = $180
Sally = $180
Edward = $180
Tim = $180
Beth = $180
Richie = $360
total = $1260

Profit = $940

Something funny is happening, though. Some people are now paying more for their dinglehoppers than before.

EXPENSES
Bob = $115
Sally = $55
Edward = $70
Tim = $110
Beth = $77.50
Richie = $$137.50
total = $565

But Jim assures everyone not to worry. See, total spending is down, he says. Most people are paying less, he says. Even if you are paying more, the cost of dinglehoppers went up. Jim insists he had nothing to do with that. But what Jim doesn't point out, is that your spending is not the only spending on dinglehoppers. Jim's business is also spending $320 on dinglehoppers. That makes the total cost of dinglehoppers $885. That's much more than before!


And this, ladies and gentleman, is the economics of health insurance. This is the reason health insurance costs have ballooned over the years. This is the reason why we now spend far more on health care per year than ever before. This is why Gruber so desperately wants healthy people to pay into Obamacare, dumping their money into something just to get less out of it than they ever put in. Jim is a middle man. He is in it for profit. When Jim pays out for your dinglehoppers, he has to collect that cost plus a profit from his client base. Jim's next step is going to be to increase the premiums on those people who incur the most costs. And then, when people start complaining that the costs of dinglehoppers it out of control and that they can no longer afford dinglehoppers or dinglehopper insurance, Jim will convince the government to force you to buy it.

 

[Dekster]

Meet Bob.

Bob is an American. Bob buys dinglehoppers. Bob pays $10 to buy a dinglehopper. When he pays $10, Bob gets one dinglehopper. Bob would like the cost of dinglehoppers to be lower. But that is what they cost. If dinglehoppers were more expensive he probably would not be able to afford them, and so he would not buy them. How do you buy something you can't afford, after all?

Meet Jim.

Jim is a businessman. He comes up with a great idea. He sees that there are alot of people who like to buy dinglehoppers. Dinglehoppers are vital. People need dinglehoppers at times. There are also times when people want extra dinglehoppers that they don't really need but they value anyway. Bob sees an opportunity to make money off of this market. Not buy making dinglehoppers. Instead, Jim wants people to pay him for their dinglehoppers.

Dinglehoppers are a good business. Bob spends about $120 a year on dinglehoppers. Some people spend less. Some people spend more. The thing with dinglehoppers is that people usually don't buy them one at a time. They tend to buy many dinglehoppers at once. Some people need alot of dinglehoppers.

Bob, meet Jim.

Jim would like to pay for your dinglehoppers. No, he's not going to give them to you for free. Jim wants to sell you dinglehopper insurance. This is how it will work. Instead of having to pay $120 when you need a bunch of dinglehoppers, all you have to do is pay Jim a low monthly fee. Jim charges just $10 a month for each person. Then, when you need dinglehoppers, you'll just bill them to Jim.

Jim, meet Sally, Edward, Tim, Beth, and Richie. They buy dinglehoppers too. They'll buy your dinglehopper insurance.

Sally spends $40 a year on dinglehoppers. But she thinks it's a good idea to have a backup plan, just in case she suddenly needs alot more than she can afford. Edward spends $90 a year, Tim spends $170 a year because he has a pre-existing dinglehopper addiction, and Beth spends $70 a year. Richie rarely buys dinglehoppers himself and averages only $20 a year. But he's married and his wife needs alot of dinglehoppers at times, to the tune of about $130 a year, so he buys a family plan.

Jim, meet bookeeping.

EXPENSES
Bob = $120 (12 dinglehoppers)
Sally = $40 (4 dinglehoppers)
Edward = $90 (9 dinglehoppers)
Tim = $170 (17 dinglehoppers)
Beth = $70 (7 dinglehoppers)
Richie = $$150 (15 dinglehoppers)
total = $640 (64 dinglehoppers)

REVENUE
Bob = $120
Sally = $120
Edward = $120
Tim = $120
Beth = $120
Richie = $$240
total = $840

Profit = $200

Jim, you're squeezing out a decent. But you want more, don't you Jim? You might need to change things up if you want to stay in business. Time to add a deductible when it's time to renew your policies. Let's go with a $50 yearly deductible. Just look at next year's profits grow!

EXPENSES
Bob = $70
Sally = $0
Edward = $40
Tim = $120
Beth = $20
Richie = $100
total = $350

Profit = $490

Wow, that's great! Congratulations on your success! Oh but Jim, meet the dinglehopper industry. They have been charging $10 per dinglehopper. But they are raising their prices to $15 a dinglehopper. Why are they raising prices? Because in their estimation they can do that without negatively affecting total units consumed. They think that the increased revenue will offset any decrease in consumption. Next year's profits are about to take a hit.

EXPENSES
Bob = $130
Sally = $10
Edward = $85
Tim = $205
Beth = $55
Richie = $$175
total = $660

Profit = $180

Looks like you're going to have to so something else. Let's increase the policy rates to $15 a month. While we're at it, let's also add in a co-pay. This way the policy holder pays 50% of the amount after their deductible. Where does that leave us?

EXPENSES
Bob = $60
Sally = $20
Edward = $45
Tim = $85
Beth = $35
Richie = $75
total = $320

REVENUE
Bob = $180
Sally = $180
Edward = $180
Tim = $180
Beth = $180
Richie = $360
total = $1260

Profit = $940

Something funny is happening, though. Some people are now paying more for their dinglehoppers than before.

EXPENSES
Bob = $115
Sally = $55
Edward = $70
Tim = $110
Beth = $77.50
Richie = $$137.50
total = $565

But Jim assures everyone not to worry. See, total spending is down, he says. Most people are paying less, he says. Even if you are paying more, the cost of dinglehoppers went up. Jim insists he had nothing to do with that. But what Jim doesn't point out, is that your spending is not the only spending on dinglehoppers. Jim's business is also spending $320 on dinglehoppers. That makes the total cost of dinglehoppers $885. That's much more than before!


And this, ladies and gentleman, is the economics of health insurance. This is the reason health insurance costs have ballooned over the years. This is the reason why we now spend far more on health care per year than ever before. This is why Gruber so desperately wants healthy people to pay into Obamacare, dumping their money into something just to get less out of it than they ever put in. Jim is a middle man. He is in it for profit. When Jim pays out for your dinglehoppers, he has to collect that cost plus a profit from his client base. Jim's next step is going to be to increase the premiums on those people who incur the most costs. And then, when people start complaining that the costs of dinglehoppers it out of control and that they can no longer afford dinglehoppers or dinglehopper insurance, Jim will convince the government to force you to buy it.

What is a dinglehopper?

 

[OKTexas]

Meet Bob.

Bob is an American. Bob buys dinglehoppers. Bob pays $10 to buy a dinglehopper. When he pays $10, Bob gets one dinglehopper. Bob would like the cost of dinglehoppers to be lower. But that is what they cost. If dinglehoppers were more expensive he probably would not be able to afford them, and so he would not buy them. How do you buy something you can't afford, after all?

Meet Jim.

Jim is a businessman. He comes up with a great idea. He sees that there are alot of people who like to buy dinglehoppers. Dinglehoppers are vital. People need dinglehoppers at times. There are also times when people want extra dinglehoppers that they don't really need but they value anyway. Bob sees an opportunity to make money off of this market. Not buy making dinglehoppers. Instead, Jim wants people to pay him for their dinglehoppers.

Dinglehoppers are a good business. Bob spends about $120 a year on dinglehoppers. Some people spend less. Some people spend more. The thing with dinglehoppers is that people usually don't buy them one at a time. They tend to buy many dinglehoppers at once. Some people need alot of dinglehoppers.

Bob, meet Jim.

Jim would like to pay for your dinglehoppers. No, he's not going to give them to you for free. Jim wants to sell you dinglehopper insurance. This is how it will work. Instead of having to pay $120 when you need a bunch of dinglehoppers, all you have to do is pay Jim a low monthly fee. Jim charges just $10 a month for each person. Then, when you need dinglehoppers, you'll just bill them to Jim.

Jim, meet Sally, Edward, Tim, Beth, and Richie. They buy dinglehoppers too. They'll buy your dinglehopper insurance.

Sally spends $40 a year on dinglehoppers. But she thinks it's a good idea to have a backup plan, just in case she suddenly needs alot more than she can afford. Edward spends $90 a year, Tim spends $170 a year because he has a pre-existing dinglehopper addiction, and Beth spends $70 a year. Richie rarely buys dinglehoppers himself and averages only $20 a year. But he's married and his wife needs alot of dinglehoppers at times, to the tune of about $130 a year, so he buys a family plan.

Jim, meet bookeeping.

EXPENSES
Bob = $120 (12 dinglehoppers)
Sally = $40 (4 dinglehoppers)
Edward = $90 (9 dinglehoppers)
Tim = $170 (17 dinglehoppers)
Beth = $70 (7 dinglehoppers)
Richie = $$150 (15 dinglehoppers)
total = $640 (64 dinglehoppers)

REVENUE
Bob = $120
Sally = $120
Edward = $120
Tim = $120
Beth = $120
Richie = $$240
total = $840

Profit = $200

Jim, you're squeezing out a decent. But you want more, don't you Jim? You might need to change things up if you want to stay in business. Time to add a deductible when it's time to renew your policies. Let's go with a $50 yearly deductible. Just look at next year's profits grow!

EXPENSES
Bob = $70
Sally = $0
Edward = $40
Tim = $120
Beth = $20
Richie = $100
total = $350

Profit = $490

Wow, that's great! Congratulations on your success! Oh but Jim, meet the dinglehopper industry. They have been charging $10 per dinglehopper. But they are raising their prices to $15 a dinglehopper. Why are they raising prices? Because in their estimation they can do that without negatively affecting total units consumed. They think that the increased revenue will offset any decrease in consumption. Next year's profits are about to take a hit.

EXPENSES
Bob = $130
Sally = $10
Edward = $85
Tim = $205
Beth = $55
Richie = $$175
total = $660

Profit = $180

Looks like you're going to have to so something else. Let's increase the policy rates to $15 a month. While we're at it, let's also add in a co-pay. This way the policy holder pays 50% of the amount after their deductible. Where does that leave us?

EXPENSES
Bob = $60
Sally = $20
Edward = $45
Tim = $85
Beth = $35
Richie = $75
total = $320

REVENUE
Bob = $180
Sally = $180
Edward = $180
Tim = $180
Beth = $180
Richie = $360
total = $1260

Profit = $940

Something funny is happening, though. Some people are now paying more for their dinglehoppers than before.

EXPENSES
Bob = $115
Sally = $55
Edward = $70
Tim = $110
Beth = $77.50
Richie = $$137.50
total = $565

But Jim assures everyone not to worry. See, total spending is down, he says. Most people are paying less, he says. Even if you are paying more, the cost of dinglehoppers went up. Jim insists he had nothing to do with that. But what Jim doesn't point out, is that your spending is not the only spending on dinglehoppers. Jim's business is also spending $320 on dinglehoppers. That makes the total cost of dinglehoppers $885. That's much more than before!


And this, ladies and gentleman, is the economics of health insurance. This is the reason health insurance costs have ballooned over the years. This is the reason why we now spend far more on health care per year than ever before. This is why Gruber so desperately wants healthy people to pay into Obamacare, dumping their money into something just to get less out of it than they ever put in. Jim is a middle man. He is in it for profit. When Jim pays out for your dinglehoppers, he has to collect that cost plus a profit from his client base. Jim's next step is going to be to increase the premiums on those people who incur the most costs. And then, when people start complaining that the costs of dinglehoppers it out of control and that they can no longer afford dinglehoppers or dinglehopper insurance, Jim will convince the government to force you to buy it.

With the advent of maobamacare health insurance has gone the way of the dinosaur, we now have health care which is nothing but a wealth redistribution scheme of the left.

 

[Kosh]

Meet Bob.

Bob is an American. Bob buys dinglehoppers. Bob pays $10 to buy a dinglehopper. When he pays $10, Bob gets one dinglehopper. Bob would like the cost of dinglehoppers to be lower. But that is what they cost. If dinglehoppers were more expensive he probably would not be able to afford them, and so he would not buy them. How do you buy something you can't afford, after all?

Meet Jim.

Jim is a businessman. He comes up with a great idea. He sees that there are alot of people who like to buy dinglehoppers. Dinglehoppers are vital. People need dinglehoppers at times. There are also times when people want extra dinglehoppers that they don't really need but they value anyway. Bob sees an opportunity to make money off of this market. Not buy making dinglehoppers. Instead, Jim wants people to pay him for their dinglehoppers.

Dinglehoppers are a good business. Bob spends about $120 a year on dinglehoppers. Some people spend less. Some people spend more. The thing with dinglehoppers is that people usually don't buy them one at a time. They tend to buy many dinglehoppers at once. Some people need alot of dinglehoppers.

Bob, meet Jim.

Jim would like to pay for your dinglehoppers. No, he's not going to give them to you for free. Jim wants to sell you dinglehopper insurance. This is how it will work. Instead of having to pay $120 when you need a bunch of dinglehoppers, all you have to do is pay Jim a low monthly fee. Jim charges just $10 a month for each person. Then, when you need dinglehoppers, you'll just bill them to Jim.

Jim, meet Sally, Edward, Tim, Beth, and Richie. They buy dinglehoppers too. They'll buy your dinglehopper insurance.

Sally spends $40 a year on dinglehoppers. But she thinks it's a good idea to have a backup plan, just in case she suddenly needs alot more than she can afford. Edward spends $90 a year, Tim spends $170 a year because he has a pre-existing dinglehopper addiction, and Beth spends $70 a year. Richie rarely buys dinglehoppers himself and averages only $20 a year. But he's married and his wife needs alot of dinglehoppers at times, to the tune of about $130 a year, so he buys a family plan.

Jim, meet bookeeping.

EXPENSES
Bob = $120 (12 dinglehoppers)
Sally = $40 (4 dinglehoppers)
Edward = $90 (9 dinglehoppers)
Tim = $170 (17 dinglehoppers)
Beth = $70 (7 dinglehoppers)
Richie = $$150 (15 dinglehoppers)
total = $640 (64 dinglehoppers)

REVENUE
Bob = $120
Sally = $120
Edward = $120
Tim = $120
Beth = $120
Richie = $$240
total = $840

Profit = $200

Jim, you're squeezing out a decent. But you want more, don't you Jim? You might need to change things up if you want to stay in business. Time to add a deductible when it's time to renew your policies. Let's go with a $50 yearly deductible. Just look at next year's profits grow!

EXPENSES
Bob = $70
Sally = $0
Edward = $40
Tim = $120
Beth = $20
Richie = $100
total = $350

Profit = $490

Wow, that's great! Congratulations on your success! Oh but Jim, meet the dinglehopper industry. They have been charging $10 per dinglehopper. But they are raising their prices to $15 a dinglehopper. Why are they raising prices? Because in their estimation they can do that without negatively affecting total units consumed. They think that the increased revenue will offset any decrease in consumption. Next year's profits are about to take a hit.

EXPENSES
Bob = $130
Sally = $10
Edward = $85
Tim = $205
Beth = $55
Richie = $$175
total = $660

Profit = $180

Looks like you're going to have to so something else. Let's increase the policy rates to $15 a month. While we're at it, let's also add in a co-pay. This way the policy holder pays 50% of the amount after their deductible. Where does that leave us?

EXPENSES
Bob = $60
Sally = $20
Edward = $45
Tim = $85
Beth = $35
Richie = $75
total = $320

REVENUE
Bob = $180
Sally = $180
Edward = $180
Tim = $180
Beth = $180
Richie = $360
total = $1260

Profit = $940

Something funny is happening, though. Some people are now paying more for their dinglehoppers than before.

EXPENSES
Bob = $115
Sally = $55
Edward = $70
Tim = $110
Beth = $77.50
Richie = $$137.50
total = $565

But Jim assures everyone not to worry. See, total spending is down, he says. Most people are paying less, he says. Even if you are paying more, the cost of dinglehoppers went up. Jim insists he had nothing to do with that. But what Jim doesn't point out, is that your spending is not the only spending on dinglehoppers. Jim's business is also spending $320 on dinglehoppers. That makes the total cost of dinglehoppers $885. That's much more than before!


And this, ladies and gentleman, is the economics of health insurance. This is the reason health insurance costs have ballooned over the years. This is the reason why we now spend far more on health care per year than ever before. This is why Gruber so desperately wants healthy people to pay into Obamacare, dumping their money into something just to get less out of it than they ever put in. Jim is a middle man. He is in it for profit. When Jim pays out for your dinglehoppers, he has to collect that cost plus a profit from his client base. Jim's next step is going to be to increase the premiums on those people who incur the most costs. And then, when people start complaining that the costs of dinglehoppers it out of control and that they can no longer afford dinglehoppers or dinglehopper insurance, Jim will convince the government to force you to buy it.

Shows that far left economics should never be taught in schools!

 

[SwimExpert]

Shows that far left economics should never be taught in schools!

Are you saying things are cheaper when there are more layers of profit in between the consumer and the provider? Do you think that Walmart will sell you a TV at a lower price than what the manufacturer charged Walmart?

 

[g5000]

Insurance provides a very valuable service in that it manages risk.

 

[The Rabbi]

Insurance provides a very valuable service in that it manages risk.

That is true. But irrelevant to health insurance these days because the government has equated insurance with health care. So insurance policies are supposed to cover anything and everything. And the cost of providing anything and everything is prohobitive.

Lots of things have pushed up health care costs. But the inability of consmers to shop based on price is one of the biggest.

 

[JoeMoma]

It would be wise to only buy insurance for the catastrophic need for dinglehoppers. If people paid the cost of routine use of dinglehoppers out of pocket, the free market would help keep the cost of dinglehoppers down. The purpose of insurance is to pool the risk of having to pay for an otherwise unaffordable amount of dinglehoppers when a person's life may depend on the dinglehoppers. Because of the low probability of needing perhaps 1000 dinglehoppers all at once, the cost of catastrophic dinglehopper insurance should be affordable.

 

[g5000]

Insurance provides a very valuable service in that it manages risk.

That is true. But irrelevant to health insurance these days because the government has equated insurance with health care. So insurance policies are supposed to cover anything and everything. And the cost of providing anything and everything is prohobitive.

Lots of things have pushed up health care costs. But the inability of consmers to shop based on price is one of the biggest.

Agreed! One of the most important reforms I would like to see is the ability to buy health insurance the same way we buy auto, home, and life insurance.

The government has sliced and diced and constrained the insurance market to that you have no bargaining leverage whatsoever, and that forces prices ever upward.

It is outrageous the government is in the market and gets to write the rules for its competitors.



Another social benefit of insurance is that it removes uncertainty.

 

[healthmyths]

Meet Bob.

Bob is an American. Bob buys dinglehoppers. Bob pays $10 to buy a dinglehopper. When he pays $10, Bob gets one dinglehopper. Bob would like the cost of dinglehoppers to be lower. But that is what they cost. If dinglehoppers were more expensive he probably would not be able to afford them, and so he would not buy them. How do you buy something you can't afford, after all?

Meet Jim.

Jim is a businessman. He comes up with a great idea. He sees that there are alot of people who like to buy dinglehoppers. Dinglehoppers are vital. People need dinglehoppers at times. There are also times when people want extra dinglehoppers that they don't really need but they value anyway. Bob sees an opportunity to make money off of this market. Not buy making dinglehoppers. Instead, Jim wants people to pay him for their dinglehoppers.

Dinglehoppers are a good business. Bob spends about $120 a year on dinglehoppers. Some people spend less. Some people spend more. The thing with dinglehoppers is that people usually don't buy them one at a time. They tend to buy many dinglehoppers at once. Some people need alot of dinglehoppers.

Bob, meet Jim.

Jim would like to pay for your dinglehoppers. No, he's not going to give them to you for free. Jim wants to sell you dinglehopper insurance. This is how it will work. Instead of having to pay $120 when you need a bunch of dinglehoppers, all you have to do is pay Jim a low monthly fee. Jim charges just $10 a month for each person. Then, when you need dinglehoppers, you'll just bill them to Jim.

Jim, meet Sally, Edward, Tim, Beth, and Richie. They buy dinglehoppers too. They'll buy your dinglehopper insurance.

Sally spends $40 a year on dinglehoppers. But she thinks it's a good idea to have a backup plan, just in case she suddenly needs alot more than she can afford. Edward spends $90 a year, Tim spends $170 a year because he has a pre-existing dinglehopper addiction, and Beth spends $70 a year. Richie rarely buys dinglehoppers himself and averages only $20 a year. But he's married and his wife needs alot of dinglehoppers at times, to the tune of about $130 a year, so he buys a family plan.

Jim, meet bookeeping.

EXPENSES
Bob = $120 (12 dinglehoppers)
Sally = $40 (4 dinglehoppers)
Edward = $90 (9 dinglehoppers)
Tim = $170 (17 dinglehoppers)
Beth = $70 (7 dinglehoppers)
Richie = $$150 (15 dinglehoppers)
total = $640 (64 dinglehoppers)

REVENUE
Bob = $120
Sally = $120
Edward = $120
Tim = $120
Beth = $120
Richie = $$240
total = $840

Profit = $200

Jim, you're squeezing out a decent. But you want more, don't you Jim? You might need to change things up if you want to stay in business. Time to add a deductible when it's time to renew your policies. Let's go with a $50 yearly deductible. Just look at next year's profits grow!

EXPENSES
Bob = $70
Sally = $0
Edward = $40
Tim = $120
Beth = $20
Richie = $100
total = $350

Profit = $490

Wow, that's great! Congratulations on your success! Oh but Jim, meet the dinglehopper industry. They have been charging $10 per dinglehopper. But they are raising their prices to $15 a dinglehopper. Why are they raising prices? Because in their estimation they can do that without negatively affecting total units consumed. They think that the increased revenue will offset any decrease in consumption. Next year's profits are about to take a hit.

EXPENSES
Bob = $130
Sally = $10
Edward = $85
Tim = $205
Beth = $55
Richie = $$175
total = $660

Profit = $180

Looks like you're going to have to so something else. Let's increase the policy rates to $15 a month. While we're at it, let's also add in a co-pay. This way the policy holder pays 50% of the amount after their deductible. Where does that leave us?

EXPENSES
Bob = $60
Sally = $20
Edward = $45
Tim = $85
Beth = $35
Richie = $75
total = $320

REVENUE
Bob = $180
Sally = $180
Edward = $180
Tim = $180
Beth = $180
Richie = $360
total = $1260

Profit = $940

Something funny is happening, though. Some people are now paying more for their dinglehoppers than before.

EXPENSES
Bob = $115
Sally = $55
Edward = $70
Tim = $110
Beth = $77.50
Richie = $$137.50
total = $565

But Jim assures everyone not to worry. See, total spending is down, he says. Most people are paying less, he says. Even if you are paying more, the cost of dinglehoppers went up. Jim insists he had nothing to do with that. But what Jim doesn't point out, is that your spending is not the only spending on dinglehoppers. Jim's business is also spending $320 on dinglehoppers. That makes the total cost of dinglehoppers $885. That's much more than before!


And this, ladies and gentleman, is the economics of health insurance. This is the reason health insurance costs have ballooned over the years. This is the reason why we now spend far more on health care per year than ever before. This is why Gruber so desperately wants healthy people to pay into Obamacare, dumping their money into something just to get less out of it than they ever put in. Jim is a middle man. He is in it for profit. When Jim pays out for your dinglehoppers, he has to collect that cost plus a profit from his client base. Jim's next step is going to be to increase the premiums on those people who incur the most costs. And then, when people start complaining that the costs of dinglehoppers it out of control and that they can no longer afford dinglehoppers or dinglehopper insurance, Jim will convince the government to force you to buy it.

This is all supposition.
First of all THERE NEVER WAS A HEALTH FINANCIAL crisis in that there never were 46 million uninsured.
Second the single largest contributor to health insurance premiums increasing is a figure of $650 to $850 billion.
This is a number that the experts, i.e. physicians calculate they cost the insurance companies.
The insurance companies just go ahead and pay the claims.
The facts are insurance companies pay 95% of all claims submitted the first time.
So when a physician orders an additional MRI... who cares? The insurance company pays.
"Why would a physician order an additional MRI? "Defensive medicine."

Here are the facts...SOURCE: http://www.jacksonhealthcare.com/media/8968/defensivemedicine_ebook_final.pdf
Proof is 90% of physicians surveyed say they order $850 billion a year in wasted duplicate tests, referrals all out of FEAR of being SUED!
Physicians estimate the cost of defensive medicine in US at $650 to $850 billion per year.
--- Emergency medicine, primary care, and OB/GYN physicians are most likely to practice defensive medicine.
--- 79 to 83% of surgeons and OB/GYNs have been named in lawsuits.

BUT NOTE this:
"Physicians contracted by the federal government practice significantly less defensive medicine as they are protected against lawsuits by the
Federal Tort Claims Act. "
-- Only 48% practice defensive medicine compared to 92% of non-government physicians.
-- 89% of physicians support a patient’s right to be compensated fairly for true negligence.

So all because ambulance chasing lawyers, idiots who sue their physician over some minor issue and we have $850 billion in "defensive medicine" but the insurance companies don't care... they just raise the premiums.
Again why don't Federally contracted physicians practice defensive medicine..."1946 Federal Tort Claims Act"...

The reality is until the costs of defensive medicine is reduced, companies pay the claims and increase the premiums!
That's the fact.

 

[JoeMoma]

Meet Bob.

Bob is an American. Bob buys dinglehoppers. Bob pays $10 to buy a dinglehopper. When he pays $10, Bob gets one dinglehopper. Bob would like the cost of dinglehoppers to be lower. But that is what they cost. If dinglehoppers were more expensive he probably would not be able to afford them, and so he would not buy them. How do you buy something you can't afford, after all?

Meet Jim.

Jim is a businessman. He comes up with a great idea. He sees that there are alot of people who like to buy dinglehoppers. Dinglehoppers are vital. People need dinglehoppers at times. There are also times when people want extra dinglehoppers that they don't really need but they value anyway. Bob sees an opportunity to make money off of this market. Not buy making dinglehoppers. Instead, Jim wants people to pay him for their dinglehoppers.

Dinglehoppers are a good business. Bob spends about $120 a year on dinglehoppers. Some people spend less. Some people spend more. The thing with dinglehoppers is that people usually don't buy them one at a time. They tend to buy many dinglehoppers at once. Some people need alot of dinglehoppers.

Bob, meet Jim.

Jim would like to pay for your dinglehoppers. No, he's not going to give them to you for free. Jim wants to sell you dinglehopper insurance. This is how it will work. Instead of having to pay $120 when you need a bunch of dinglehoppers, all you have to do is pay Jim a low monthly fee. Jim charges just $10 a month for each person. Then, when you need dinglehoppers, you'll just bill them to Jim.

Jim, meet Sally, Edward, Tim, Beth, and Richie. They buy dinglehoppers too. They'll buy your dinglehopper insurance.

Sally spends $40 a year on dinglehoppers. But she thinks it's a good idea to have a backup plan, just in case she suddenly needs alot more than she can afford. Edward spends $90 a year, Tim spends $170 a year because he has a pre-existing dinglehopper addiction, and Beth spends $70 a year. Richie rarely buys dinglehoppers himself and averages only $20 a year. But he's married and his wife needs alot of dinglehoppers at times, to the tune of about $130 a year, so he buys a family plan.

Jim, meet bookeeping.

EXPENSES
Bob = $120 (12 dinglehoppers)
Sally = $40 (4 dinglehoppers)
Edward = $90 (9 dinglehoppers)
Tim = $170 (17 dinglehoppers)
Beth = $70 (7 dinglehoppers)
Richie = $$150 (15 dinglehoppers)
total = $640 (64 dinglehoppers)

REVENUE
Bob = $120
Sally = $120
Edward = $120
Tim = $120
Beth = $120
Richie = $$240
total = $840

Profit = $200

Jim, you're squeezing out a decent. But you want more, don't you Jim? You might need to change things up if you want to stay in business. Time to add a deductible when it's time to renew your policies. Let's go with a $50 yearly deductible. Just look at next year's profits grow!

EXPENSES
Bob = $70
Sally = $0
Edward = $40
Tim = $120
Beth = $20
Richie = $100
total = $350

Profit = $490

Wow, that's great! Congratulations on your success! Oh but Jim, meet the dinglehopper industry. They have been charging $10 per dinglehopper. But they are raising their prices to $15 a dinglehopper. Why are they raising prices? Because in their estimation they can do that without negatively affecting total units consumed. They think that the increased revenue will offset any decrease in consumption. Next year's profits are about to take a hit.

EXPENSES
Bob = $130
Sally = $10
Edward = $85
Tim = $205
Beth = $55
Richie = $$175
total = $660

Profit = $180

Looks like you're going to have to so something else. Let's increase the policy rates to $15 a month. While we're at it, let's also add in a co-pay. This way the policy holder pays 50% of the amount after their deductible. Where does that leave us?

EXPENSES
Bob = $60
Sally = $20
Edward = $45
Tim = $85
Beth = $35
Richie = $75
total = $320

REVENUE
Bob = $180
Sally = $180
Edward = $180
Tim = $180
Beth = $180
Richie = $360
total = $1260

Profit = $940

Something funny is happening, though. Some people are now paying more for their dinglehoppers than before.

EXPENSES
Bob = $115
Sally = $55
Edward = $70
Tim = $110
Beth = $77.50
Richie = $$137.50
total = $565

But Jim assures everyone not to worry. See, total spending is down, he says. Most people are paying less, he says. Even if you are paying more, the cost of dinglehoppers went up. Jim insists he had nothing to do with that. But what Jim doesn't point out, is that your spending is not the only spending on dinglehoppers. Jim's business is also spending $320 on dinglehoppers. That makes the total cost of dinglehoppers $885. That's much more than before!


And this, ladies and gentleman, is the economics of health insurance. This is the reason health insurance costs have ballooned over the years. This is the reason why we now spend far more on health care per year than ever before. This is why Gruber so desperately wants healthy people to pay into Obamacare, dumping their money into something just to get less out of it than they ever put in. Jim is a middle man. He is in it for profit. When Jim pays out for your dinglehoppers, he has to collect that cost plus a profit from his client base. Jim's next step is going to be to increase the premiums on those people who incur the most costs. And then, when people start complaining that the costs of dinglehoppers it out of control and that they can no longer afford dinglehoppers or dinglehopper insurance, Jim will convince the government to force you to buy it.

This is all supposition.
First of all THERE NEVER WAS A HEALTH FINANCIAL crisis in that there never were 46 million uninsured.
Second the single largest contributor to health insurance premiums increasing is a figure of $650 to $850 billion.
This is a number that the experts, i.e. physicians calculate they cost the insurance companies.
The insurance companies just go ahead and pay the claims.
The facts are insurance companies pay 95% of all claims submitted the first time.
So when a physician orders an additional MRI... who cares? The insurance company pays.
"Why would a physician order an additional MRI? "Defensive medicine."

Here are the facts...SOURCE: http://www.jacksonhealthcare.com/media/8968/defensivemedicine_ebook_final.pdf
Proof is 90% of physicians surveyed say they order $850 billion a year in wasted duplicate tests, referrals all out of FEAR of being SUED!
Physicians estimate the cost of defensive medicine in US at $650 to $850 billion per year.
--- Emergency medicine, primary care, and OB/GYN physicians are most likely to practice defensive medicine.
--- 79 to 83% of surgeons and OB/GYNs have been named in lawsuits.

BUT NOTE this:
"Physicians contracted by the federal government practice significantly less defensive medicine as they are protected against lawsuits by the
Federal Tort Claims Act. "
-- Only 48% practice defensive medicine compared to 92% of non-government physicians.
-- 89% of physicians support a patient’s right to be compensated fairly for true negligence.

So all because ambulance chasing lawyers, idiots who sue their physician over some minor issue and we have $850 billion in "defensive medicine" but the insurance companies don't care... they just raise the premiums.
Again why don't Federally contracted physicians practice defensive medicine..."1946 Federal Tort Claims Act"...

The reality is until the costs of defensive medicine is reduced, companies pay the claims and increase the premiums!
That's the fact.

What does that have to do with dinglehoppers?

 

[The Rabbi]

Insurance provides a very valuable service in that it manages risk.

That is true. But irrelevant to health insurance these days because the government has equated insurance with health care. So insurance policies are supposed to cover anything and everything. And the cost of providing anything and everything is prohobitive.

Lots of things have pushed up health care costs. But the inability of consmers to shop based on price is one of the biggest.

Agreed! One of the most important reforms I would like to see is the ability to buy health insurance the same way we buy auto, home, and life insurance.

The government has sliced and diced and constrained the insurance market to that you have no bargaining leverage whatsoever, and that forces prices ever upward.

It is outrageous the government is in the market and gets to write the rules for its competitors.



Another social benefit of insurance is that it removes uncertainty.

Not just that. Every medical procedure. Try pricing a colonoscopy some time No one knows.

 

[SwimExpert]

Insurance provides a very valuable service in that it manages risk.

On the other hand, government mandates to buy and maintain expensive insurance, which may not even be usable if needed, creates substantial risks.

 

[SwimExpert]

Insurance provides a very valuable service in that it manages risk.

That is true. But irrelevant to health insurance these days because the government has equated insurance with health care. So insurance policies are supposed to cover anything and everything. And the cost of providing anything and everything is prohobitive.

Lots of things have pushed up health care costs. But the inability of consmers to shop based on price is one of the biggest.

We have a winner.

For some reason, too many people nowadays seem to equate getting a flu shot with being in a horrific car wreck and being in a coma for a week. And they equate the unexpectancy of a fall that breaks your arm with the unexpectancy of having a heart attack and suddenly requiring a quadruple bypass.

 

[hipeter924]

Shows that far left economics should never be taught in schools!

Are you saying things are cheaper when there are more layers of profit in between the consumer and the provider? Do you think that Walmart will sell you a TV at a lower price than what the manufacturer charged Walmart?

Only if it will get you in the door, to buy other stuff.

 

[The Rabbi]

Insurance provides a very valuable service in that it manages risk.

That is true. But irrelevant to health insurance these days because the government has equated insurance with health care. So insurance policies are supposed to cover anything and everything. And the cost of providing anything and everything is prohobitive.

Lots of things have pushed up health care costs. But the inability of consmers to shop based on price is one of the biggest.

We have a winner.

For some reason, too many people nowadays seem to equate getting a flu shot with being in a horrific car wreck and being in a coma for a week. And they equate the unexpectancy of a fall that breaks your arm with the unexpectancy of having a heart attack and suddenly requiring a quadruple bypass.

They think if you have insurance then suddenly everything is "free." It is monstrous. ANd it creates an enormous misallocation of resources.
We've bought our own policies over the years. Soem years we had $10 doctor copay, other years we paid the full price on doctor's visits, about $50. When my kids were small they would complain about ear ache. When we had the 10 copay we'd take the kids right away because hey, it's only 10 to find out. Sometimes they had an infection and sometimes they didnt. When we had to pay the 50 office visit we'd decide to wait a day or so and what developed. Sure enough, sometimes the pain went away and other times we took them to the doctor. But we were a lot slower to use a doctor's time when we had to pay the actual cost.