Originally posted in alt.support.cancer.prostate

 According to a front page article in today's NY Times, insurance
 companies have been quietly changing the way they share costs for some
 expensive drugs.  Whereas previously, if they covered the drug at all,
 they just charged a fixed copay, they will now charge some percentage
 of the cost of the drug which could range from one fifth to one third.
 The change started with Medicare Part D plans, most of which do it,
 but it has been increasingly taken up by private medical insurers.
 They do it to restrain the rate of increase of medical insurance
 premiums in the face of increasing employer resistance to the cost.

 Since my cancer has not recurred, I'm not really familiar how much HT
 drugs cost, but I've heard that Lupron, for example, can be pretty
 expensive.  But suppose someone comes up with a miracle drug which can
 keep prostate cancer in remission without serious side effects.  Since
 the number of men needing such a drug is still a relatively small part
 of the population, it is likely such a drug would be very expensive,
 as many other cancer drugs are.   It could easily happen that such a
 drug would be unavailable to you, even though you had what you thought
 was good insurance because you couldn't afford your share of the cost,
 which could range from hundreds to thousands of dollars per month.

 It turns out that in some cases you may be able to switch to a plan
 that only charges a copay, but of course such a plan might cost a lot
 more, and you have no assurance the new plan won't start doing the
 same thing.

 It can be argued that people who are healthy shouldn't pay for the
 care of people who are sick.  That violates the basic principle of
 insurance, which is to share risk and costs and the larger the insured
 pool the better.  If you start segregating the population into
 different insurance pools, the pool with the sicker people will be
 more expensive  and, if they have a choice, healthy people will migrate
 to the less expensive group.  So the sicker pool will get sicker and
 more expensive.  (In the extreme case, each person could be his/her
 own insurance pool, which would mean each of us would pay the total
 cost of our individual  health care.)  This is called the problem of
 adverse selection.  There is no magical way around it. It has nothing
 to do with ideology.

 In principle, there still wouldn't be a problem if the total cost of
 health care never exceeded a certain amount which one could expect a
 reasonably prudent person to amass.  But that is clearly not true for
 medical care.  My wife and I, thanks to TIAA CREF doing well in the
 90s, have enough of a retirement accumulation to last us provided we
 don't live too long.  And, in the interest of prudence we have some
 additional savings.  We live comfotably, but we don't spend freely as
 if there were no tomorrow.  But it is easy to envision medical costs
 using up enough of what we have so we literally would not have enough
 to live on.  Fortunately, we have Medicare, which so far at least has
 put a limit (still too high) on what we have to spend on medical care.
 I keep hoping that if things get bad enough with respect to the costs
 of medical care to affect us that the American people will do
 something unheard of, such as electing people who will actually do
 something about it, but I am not holding my breath waiting for that to
 happen.

 I think this indicates a fundamental problem with private medical
 insurance.  Insurers can and do charge different rates to different
 classes of people.  The basic incentive is to cut costs by managing
 risks, i.e., whom they insure.  That is what, from a corporate
 perspective, they should be doing.  But imagine the uproar if the
 government run part of Medicare started charging radically different
 rates to different people based on how sick they were.  It just
 wouldn't be politically feasible for them to do it.  (But many
 Medicare Part D plans, which are private, apparently do it with
 respect to expensiv drugs.  We shall have to wait to ss if that
 remains politically feasible.)  A single payer system, whether run
 by governments of by some external agency, doesn't suffer from this
 drawback.  Its basic incentive is to reduce costs.  It can exhort
 people to live healthier life styles and perhaps encourage more
 preventive medicine, but there isn't much more it can do.  But it can
 try to control costs by bargaining with providers---which is something
 private insurers also try to do but can't do as effectively, again
 because of the size of the pool.   That may have downsides too, but
 if the public doesn't like them it can make its will known through
 political pressure.

 Note that public health insurance, which in effect every advanced
 country but the US has, is very different from "socialized medicine"
 in which the government actually employs the providers.   Examples of
 the latter are the National health Service in Great Britain and the
 Veterans Administration in the US.  Such an arrangement has advantages
 and possible dangers of its own.  Such service can be pretty good,
 e.g., lots of prominent American politicians are happy to get their
 medical care at Walter Reed, or it can be not so good as some people
 say it is in Great Britain.   The medical care in France and Germany,
 from what I've heard about it, is generally as good or better than
 that in the US and costs a lot less, but I don't know to what extent,
 if any, docotrs are slaried by the government in those countries.

 In the US, we are just not going to get a single payer system any time
 soon.  The proposals that make the most sense to me are to set up a
 mixed system in which private insurers can't segregate by risk and
 provide also a Medicare like alternative.  If the private insurers
 can manage to thrive in such a system and provide good care while
 controlling premiums, they will survive.  If they can't, they will
 leave the business for more lucrative opportunities.  If I unserstand
 Canada correctly, they basically ban private medical insurance.  If it
 takes a long time to schedule certain elective procedures compared to
 the US, it is, I think, basically because the difference provincial
 insurance systems won't pay for enough of them to reduce the waiting
 time.  The Canadians can of course change that if they have the will
 to, but Canadians appear willing to sacrifice more for the common
 good, i.e., to keep down costs, than American are.  In any case, there
 is no significant support for such a system in either of the two major
 political parties and no presidential candidate has proposed one.

 I don't believe it is possible to deal with these problems through the
 tax system since few people have high enough incomes or enough other
 resources to pay the potential costs.  Of course you could reimburse
 them the full amount using tax rebates, but i can't see that flying
 politically, and it would require many people who don't now file to
 learn how to do it.

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