They are not solely responsible, but of course they bear some responsibility. ACA has a Medical Loss Ratio that requires insurers to spend 80% or 85% of premium revenue on medical services "thereby limiting administrative costs and profits to the remaining 15-20 percent."[1] In other words the only way for them grow profits is to increase cost.
What you wrote seems fully consistent with the blogpost. Unless you are suggesting that health insurance companies collude with providers to raise the cost of medical service?
It doesn't require collusion, just misaligned incentives.
"Perversely, with the MLR requirement capping profit margins and administrative costs, insurers are discouraged from containing health plans’ premium increases. Economists have noted that the MLR requirement effectively turns health insurers into “cost-plus” businesses: If insurers’ predicted premiums are less than the actual medical care spending on claims, it can lead to higher MLRs and less profits, within MLR restrictions. Professor Scott Harrington warned early on that MLR requirements could reduce insurers’ motivation to control premium increases. Prior research has found that the MLR requirement is associated with stronger financial performance for insurers, since they can raise premiums to cover higher claims and still comply with the MLR threshold."
That’s an opinion from an economist along with prior behavior, not reality. I’ve talked to one of the guys who worked on the ACA, and his take was basically providers will do things like e.g. buy up all the cardiologists in an area, then jack up prices across the board. Employers need to provide a certain bundle of services under the ACA. That’s where people are taking advantage.
They’re locked into a red queen race. Providers merge to gain scale and negotiation power. Insurers merge to gain scale and negotiation power. The ACA encouraged scaling up to drive down unit costs, but it just resulted in companies scaling up to protect their margins.
After the ACA passed it's really hard for insurers to differentiate on policies because so much is mandated. They're essentially all identical products that are going to have similar prices.
Not really. They're highly regulated in their offerings, and the government mandates how much they spend on care vs. overhead. They can't effectively compete so the only option is to negotiate slightly higher payments to providers and PBMs every year so they can take more profit in absolute terms.
> the only way for them grow profits is to increase cost.
And, of course, things like spurious denials drive up costs for them and for the providers. More direct costs, more costs at the provider they have to cover...
From the insurance company perspective, it's a win-win!
Anecdote is not the singular of data, but when my late wife was dying of cancer, the oncologist was attempting to follow standard care procedures. Preauthorizations were denied even after physician consultation with the insurance company.
My research showed me that the insurance companies contract with other companies (who they may or may not own) to handle the dirty work. It was only after learning the magic incantations to directly contact the "third-party" company that I was able to get traction.
"We do not believe this treatment is warranted."
"Well, her doctor believes it, so she's going to get the treatment. The only question is whether you pay now, or after I file a small claims case."
It was miraculously authorized at that point. It's the same fucking thing with car insurance. The poor people who can't fight really get screwed.
None of your links provides data on spurious denials. The third link does provide this statistic:
"Over a six-year period between 2019 and 2025, almost half of a large set of denied health insurance claims in New York state were reversed when the cases reached independent review organizations, comprised of clinicians unaffiliated with insurers"
But that doesn't get into the reasons why the claims were denied in the first place. It doesn't tell us anything about bona fide spurious denials vs. improperly filed claims (mistakes in the paperwork), clerical errors, or clients placed under investigation for claiming too early (after applying) or too often (making a lot of spurious claims), or care providers who do the same.
Insurance companies are concerned with adverse selection and moral hazard. A client who files a lot of claims shortly after getting insurance raises the suspicion that they were not honest about their health prior to applying. Similarly, a client who claims every drug a pharmacy carries raises other suspicions.
Of course, most clients aren't like that, but a not-insignificant minority are, and a small number of clients can file a very large number of claims.
> But that doesn't get into the reasons why the claims were denied in the first place.
The first link in that article does. It starts off by noting that this the third level review, so there were ample chances for the insurance company itself to fix things, and also says that "The report also showed that 47.1% of denials on the basis of medical necessity, 44% of denials based on care determined to be experimental or investigational, and 42.9% of formulary denials were overturned."
It's a pipe dream to assume that, by the time the appeals got to that point, it could be chalked up to administrative error.
> Insurance companies are concerned with adverse selection and moral hazard. A client who files a lot of claims shortly after getting insurance raises the suspicion that they were not honest about their health prior to applying. Similarly, a client who claims every drug a pharmacy carries raises other suspicions.
Yes, every Canadian gets 5 abortions a year, even the men. But seriously, the moral hazard goes the other way. It is so fucking difficult to get doctor appointments that the insurance companies should be doing everything in their power to help keep people healthy, rather than worrying about the 0.1% of the population that suffers from Munchausen syndrome.
Medical fraud is like retail stock shrinkage or fraudulent credit card charges -- no one on the customer side is aware of it, because it's handled on the other side and baked into pricing.
But there are substantial amounts of both straight fraud and too aggressively up-coding / over-billing.
The meta problem is that the because of the nature of the industry (legitimate volume dwarfs fraud), it's more financially impactful to pull levers that impact legitimate volume (read: prior auth requirements).
The anti-fraud systems are also pretty robust. As you'd imagine, insurers have been dealing with this for more than a few decades by now.
By failing to provide adequate treatment early in a disease course, further exacerbations and comorbidities can appear, and these can become their own chronic conditions requiring further ongoing treatment.
By adding tons of paperwork and time and effort. When a denial happens, often the doctor himself has to communicate with the insurance company via phone, instead of, you know, doctoring.
This often proceeds over multiple rounds. And then either the company eventually pays, or the consumer has to pay and try to get reimbursed later.
You asked this question 30 minutes after even a casual reading of my other comment, and a little thinking about it, would have fully answered it.
I would like to assume good faith, but your other comments indicate a high probability that you are an insurance company shill.
And in response to your other question about collusion, no there doesn't have to be collusion. Insurance companies putting onerous bogus requirements on providers will automatically drive up the costs.
I am deeply offended by your allegation. Not everyone who disagrees with you is a shill. I would not make the same accusations about you, nor would I act as if I can estimate the probability that you are. HN's commentary guidelines address this.
You can consider my mistake to be in conceptualizing the cost of "medical services" too narrowly, as just the medicine, and not the providers' surrounding administration. To that end I take your point. In theory, at least. Do you know how much this has? In particular, you refer to the back-and forth negotiation of claims--on what do you base this claim?
Be offended all you want. It's a free country, but, to be perfectly frank, you are still making it difficult to believe you are writing in good faith, as I will show.
> You can consider my mistake to be in conceptualizing the cost of "medical services" too narrowly, as just the medicine, and not the providers' surrounding administration.
Which is fine, except that my very first comment that you responded to explicitly explained "More direct costs, more costs at the provider they have to cover..."
So I already explained that which you said you missed, before your first comment questioning it.
> Do you know how much this has? In particular, you refer to the back-and forth negotiation of claims--on what do you base this claim?
When I wrote "You asked this question 30 minutes after even a casual reading of my other comment, and a little thinking about it, would have fully answered it." I was serious.
You still asking this question, instead of looking at that comment, indicates that at best you are completely unserious. For your edification, here is a link to that comment:
The insurance company that provides your ACA plans gets money from the government for doing so. How much money they get is tied to a few things (not an exhaustive list):
1. On average, how healthy is your group of ACA plan holders? If the group has a bunch of chronic conditions, they get more subsidy money to offset the increased care costs. Going to the PCP allows them to have official medical evidence of those conditions.
2. The government gives these plans quality ratings to help people compare them to each other. These ratings are partially based on how often patients get their annual screenings and patient satisfaction. A gift card for a PCP visit accomplishes both aims.
There are also more practical concerns. Preventative care is cheaper than an acute incident for the company. You'd rather catch an arrhythmia at a PCP appointment than pay for the cost of a heart attack.
I had an ACA "marketplace" plan back for my family back in 2017 when I was self-employed. My premiums were >$15K / year for a >$10K deductible and no tax credits (because of my income).
There are all sorts of perverse incentives in play. Many plans won't pay for weight loss drugs (obviously GLP-1s, but even beyond that) but will happily pay for gastric bypass, for one simple example.
Gastric bypass surgery happens once. Many bypass patients require lifelong prescription nutritional supplements and all require lifelong lab monitoring.
Ulcer risks increase severalfold.
High risk of hernias, osteoporosis and complications thereof.
It's not just surgery and no immediate cost. But then again, any of those issues are options for denial, so...
The hostility towards self driving is so baffling to me. Setting aside the question of which company is going to get there first, it seems patently obvious that self driving is clearly the safer future for drivers and pedestrians. after all, self driving cars are getting better, and human drivers are not.
That said it's not guaranteed that the version we get will be without drawbacks, and imo we should be trying to shape a better version of the future by passing regulations now before unwanted behaviors calcify. Stuff like limiting how many empty miles cars are allowed to drive so that ppl don't just circle their cars around the block to avoid paying for parking, or regulating how long security updates need to be supported to keep insecure cars off the roads.
Self-driving cars decrease the internal costs of driving (allowing you to do it without having to pay attention) while keeping the external costs (congestion, danger, pollution, noise, etc) basically the same. So we'll end up with more driving, with society at large bearing the cost.
Locking this future in for good because of "present infrastructure" would be short-sighted.
> keeping the external costs (congestion, danger, pollution, noise, etc)
Are there actually self-driving car services that aren't EV-based? Just that helps with several of those criteria, and they're substantially less dangerous than human-driven vehicles.
Yes, but this is about self-driving cars and the point being made is that those in turn are also all electric, not directly about EVs.
Unfortunately for all the improvements in the tech, self-driving is only now roughly at the level that Tesla claimed to have already achieved a decade ago with their "Paint It Black" video, which makes it difficult to say if we ever get benefits significantly beyond "emergency stops for things you didn't personally see":
Smaller parking lots because the car can drop you off at the door and then put itself somewhere without enough room to open doors? Dunno. Situational awareness and fleet communication to safely allow perfect bumpers-in-contact slipstreaming at 120 MPH, keeping down energy costs while also reducing travel times and allowing narrower roads with fewer lanes? Perhaps not. Using WiFi or whatever to directly contact other vehicles on the road, eliminate the need for so much horn honking? Not yet, that's for sure.
And so on.
I'd like self-driving to fix all the problems the sci-fi vision says it could, but even with a million times the experience of a typical human driver, current machine learning clearly just isn't generalising the way I expected it to back in 2009 when I was wowed by the developments and took self-driving cars seriously.
If self-driving does fix as many negatives as possible (and again, I know this is presently an "if"), what remains? I assume one thing would be the commuter belts get even deeper as speeds go up because the long-term historical trend is commute time is constant regardless of speed, but that's the only thing I can think of?
So far as I can tell, the problem with self driving has nothing to do with the infrastructure, but rather that machine learning doesn't generalise quickly from even "merely" a million times as many examples as humans get to experience.
Electric cars that are much less or at all maintainable by yourself or 3rd parties resulting in easy lock in and higher prices. Heated subscription seats will only be the beginning.
A lot of internet connected sensors, cameras and GPS resulting in complete surveillance of any public space since by design its a moving panopticon with AI. Flock is a joke compared to this.
Remote control from bad and "good" actors that could do _anything_ to _anyone_ at _anytime_. Since all of them are running proprietary software where plausible deniability is by design.
Loss of independent transportation. Once self driving hits critical mass it will become mandated, only for your safety of course. Meaning anybody or any group of people currently not in power could be refused service for any or no reason. Mandated breathalyzer will look like a toy in comparison. Please upload your ID and scan your face to drive. You want to drive to this protest? I don't think so Dave how about I reroute you to the next education facility locks doors. Have you ever seen people use vehicles in a natural disaster, war or other public unrest emergency situation to save lifes? Well in the future you won't since self driving cars are nothing more than a hunk of metal without connection or remote permission.
nevermind all this. i agree with it, but it's irrelevant.
this is like discussing what will happen when we have UBI or teleporters or mars habitation. It's so far in the future it's funny.
As mentioned elsewhere, there is no such thing as a self-driving car. Waymo just removed the ability for their cars to go on freeways recently. There's no Teslas for rent within 50 miles of my house.
My friend just got a 2026 tesla and he has to take over to stop it from using the wrong lanes on freeways, or going straight in a turn lane.
My wife's driver assist in the subaru tries to kill me every time i use it, me and everyone in the car with me. so i shut it off. maybe there's been an OTA update that fixed it, who knows. All i know is there's a massive class action just waiting against subaru, once their eyesore system kills enough people.
There is no self-driving car, such that, right now, i could order one, and it would show up at my house.
we are 40 years from a fully autonomous, self-driving and self navigating car. and that's being conservative. We'll probably get some intermediate "partial self driving" like we have now with addons like "pre-planned routes" like I-10 or whatever.
My friend drives in Los Angeles with his tesla. I live in Louisiana.
we've corrected, conservative 40 years but probably 20 years (2046) there will be a plurality of agreement that fully autonomous driving has arrived, and in the general sense, not just "certain parts of Frisco and the Valley."
my friend may just be hoping he gets to see it, 40 years is a long time for him. me too, but i might see it.
The backdrop is driving for Uber/Lyft/Doordash/etc is the only job out there for a lot of people, and taking that away leaves them high and dry. You can say it's not Waymo's responsibility to give them jobs and provide for their needs, and you'd be right, but then, on a societal scale, who's is it? Without an entity who's responsible for that, it's easy to see hostility against self-driving cars as a symptom of that. Who's going to pay to put food on the table if I don't and can't find a job? On a personal level, yes, that's my problem, but it's not a problem that everyone out there is equipped to solve on their own.
> driving for Uber/Lyft/Doordash/etc is the only job out there for a lot of people
We regularly fuck over this class of people. The backlash is broader, and my opinion, driven by a combination of taxi economic interests (see: New York, where Hochul and Mamdani have significant taxi-lobby money interests) and genuine but misplaced care for drivers.
In the about page, this author states that they produce "original reporting and commentary on the criminal justice system and civil liberties." I really think it is a mistake to blur that line. These days it feels like you can pretty reliably predict what narrative a journalist will present on any given story based on their individual poltics.
How can you reasonably expect to be viewed as an objective reporter of facts if you also are acting as a commentator trying to shape public opinion?
I used to think that it was possible to “objectively report facts” but the reality is we all have biases. Everyone needs to decide for themselves what is worth mentioning. So even if you state only 100% true facts, you can present a skewed lens on reality. This is how most propaganda works: not by spreading false facts but by selectively spreading true ones.
This guy is way out of his depth.
[1] https://www.rand.org/pubs/external_publications/EP71133.html
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