Obamacare

[beancounter]

The young and healthy should pay into the healthcare system, because one day, they will need it themselves.

 

[mlp]

The young and healthy should pay into the healthcare system, because one day, they will need it themselves.

That's the moral/ethical reason.

There's also the practical one which is that a system where only people with a present need for insurance coverage have it is not financially feasible.

Insurance of every kind involves risk/loss sharing and averaging. I may not need medical care today or this decade, but I should help pay for those who need it now, and they likewise will help pay for my medical care when/if I need it.

 

[ledboots]

Do you understand the reasons why the young and the healthy can't be allowed to opt out if coverage is to be provided to those with pre-existing conditions?

Yes, for this plan to have a prayer, the young have to subsidize the old. It is going to get more and more difficult to do this, as the pool of the young shrinks while the pool of the old and infirm grows.

 

[ledboots]

Well, as of seven years ago, when I last priced what major medical, with the highest deductibles and co-pays available, would cost me, it was just under $5,000 per month for myself alone. And the only way that was even available for me was because of HIPAA. Since I couldn't afford that at that time, I have since been uninsurable, solely because I have a history of depression (on AD's for years, but never hospitalized), and even though I am physically about as healthy a 56 year old as you're ever likely to meet.

Compared to just under $60,000 a year for one individual, $20,000 for a family of four seems like a bargain.




Of course they blame the health care act, because it's contrary to their interests to have it in place. The medical device industry, as of 2009, was the fourth most profitable industry in the U.S.

There's a reason why the U.S. spends so much more on healthcare per individual than countries with much better healthcare outcomes - there are huge profits flowing into multiple industries.

But good on you for sticking up for those poor cash strapped millionaires and billionaires - if you didn't, who would?

Obamacare adds an additional 2.3% tax on medical devices--on the gross cost, not the profits. That is a significant percentage.

The b/millionaires paying the salary of the laid-off workers don't need me to stick up for them. They retained their profit margin by laying off workers and combining jobs. The workers, on the other hand, are probably wondering why their industry was singled out.

 

[mlp]

Obamacare adds an additional 2.3% tax on medical devices--on the gross cost, not the profits. That is a significant percentage.

Medtronics, one of the companies which says it can't afford the tax and is thus laying off 1,000 workers, has sales of $16 billion per year. Their most recent quarterly profit statement I could find shows a net profit of $821 million for the quarter. They would be paying, from that net profit, $92 million in additional tax (1/4 of $16 billion, multiplied by .023), leaving them with a meager$729 million profit for the quarter. Annualized, that means a mere $2,916,000,000 net profit (that's "b" as in "billions"). No wonder they have to lay off 1,000 people - there's no way they could make it on that little net profit.

The b/millionaires paying the salary of the laid-off workers don't need me to stick up for them. They retained their profit margin by laying off workers and combining jobs. The workers, on the other hand, are probably wondering why their industry was singled out.

Well, you were the one who said "Even millionaires and billionaires are having trouble scraping up enough cash to pay for ObamaCare’s many taxes and fees...."

I just wanted to reassure you that, even without adding the cost of the salaries and benefits of those thousand ex employees to their bank accounts, those poor millionaires and billionaires still have $2.9+ billion in profits per year to keep them warm at night.

 

[ledboots]

But why a random tax on a company that makes state-of-the -art pacemakers and defibrillators, especially one with $250 million owing in legal fees alone? It isn't like they are hurting anyone and need a sin tax like on cigarettes.

I admit I have a soft spot for Medtronics, as my mom has had one of their pacemaker/defibrillators installed for close to ten years now.

 

[das_nut]

The bronze plan only pays 60% of costs. It is a terrible plan.

The silver plan only pays "70-79%" of costs, but that kicks in at only 250% of the federal poverty level. At the federal poverty level, it pays 94%.

Unless the bronze plan is vastly different, I'd expect it to pay at or over 90% of costs at the federal poverty level.

 

[mlp]

But why a random tax on a company that makes state-of-the -art pacemakers and defibrillators, especially one with $250 million owing in legal fees alone? It isn't like they are hurting anyone and need a sin tax like on cigarettes.

I admit I have a soft spot for Medtronics, as my mom has had one of their pacemaker/defibrillators installed for close to ten years now.

$250 million owing in legal fees over what period of time?

A company with $16 billion in revenues would easily accrue $250 million in legal fees just in the ordinary course of business - contracts of different types, employment matters, public disclosure advice, lobbying type activities, etc. It's only 1.5% of revenues, which I would say is very low.

They have made and continue to make really enormous profits in the industry in question, so it's not at all random.

 

[ledboots]

$250 million owing in legal fees over what period of time?

A company with $16 billion in revenues would easily accrue $250 million in legal fees just in the ordinary course of business - contracts of different types, employment matters, public disclosure advice, lobbying type activities, etc. It's only 1.5% of revenues, which I would say is very low.

They have made and continue to make really enormous profits in the industry in question, so it's not at all random.

But they make medical devices that keep people alive and help their quality of life for years...
They deserve a tax because they are profitable? They need to give up over 2 percent of gross revenues because people are clamboring for their life-saving devices? I would think this is the kind of business we should encourage, not make doing business more difficult.

Should we slap a 2 percent gross tax on Apple as well? They make lots of money by making toys. Should we take some of their profits, too?

 

[ledboots]

This medical device tax also includes medical instruments packaged together for convenience. For example, if I go to put a intravenous line in a patient, I grab an IV kit and the size needle I need. This kit will now cost the manufacturer over 2% more to get to market for a tax.

Soon I will no doubt have to grab separately: alcohol swabs, 2x2s, tourniquet, tape, saline flush, antbacterial scrubber, the IV needle, etc. every time I start an IV. Often, time is of the essence in getting a line started in a patient, so seconds count. There are kits for everything.

 

[ledboots]

The silver plan only pays "70-79%" of costs, but that kicks in at only 250% of the federal poverty level. At the federal poverty level, it pays 94%.

Unless the bronze plan is vastly different, I'd expect it to pay at or over 90% of costs at the federal poverty level.

Yes, of course those at or near the federal poverty level will qualify for medicaid or pay very little. These costs will affect the middle class the hardest.

Most current plans pay 80% now at the least. Even at that, I have friends who have delayed colonoscopies for years because if polyps were found, it could cost them thousands out of pocket. Imagine that at 60% payout?

And if the premiums really are $20,000 a year on top of paying 40% of the cost of your care, who can afford that? I know there is a cap, but I can't see people saving money in case they need surgery.

 

[mlp]

But they make medical devices that keep people alive and help their quality of life for years...
They deserve a tax because they are profitable? They need to give up over 2 percent of gross revenues because people are clamboring for their life-saving devices? I would think this is the kind of business we should encourage, not make doing business more difficult.

Should we slap a 2 percent gross tax on Apple as well? They make lots of money by making toys. Should we take some of their profits, too?

You really, truly don't see the connection between the cost of healthcare to individuals and the profit margins of medical device manufacturers?

As far as medical device manufacturers vs. Apple:

Let's say I manufacture and sell Product A. Product A is a luxury item, not a necessity. What's the impact if I price Product A in a way that puts it out of reach of 50% of potential consumers, since I've calculated that I can maximize my profit margin at that price?

Let's ay that I manufacture and sell Product B. Product B is a necessity to maintain life. What's the impact if I price Product B in a way that puts it out of reach of 50% of potential consumers, since I've calculated that I can maximize my profit margin at that price?

 

[mlp]

Yes, of course those at or near the federal poverty level will qualify for medicaid or pay very little. These costs will affect the middle class the hardest.

Most current plans pay 80% now at the least. Even at that, I have friends who have delayed colonoscopies for years because if polyps were found, it could cost them thousands out of pocket. Imagine that at 60% payout?

And if the premiums really are $20,000 a year on top of paying 40% of the cost of your care, who can afford that? I know there is a cap, but I can't see people saving money in case they need surgery.

And yet you somehow can't see or understand the situation in which those with no insurance at all find themselves....

 

[ledboots]

You really, truly don't see the connection between the cost of healthcare to individuals and the profit margins of medical device manufacturers?

Your way of discussing things strikes me at times. "You really, truly don't see?..."

If there were low profit margins for device manufacturers, there would be no funds for R and D for future devices.. Medical devices need years of engineering, testing, and refining before they come to market. In addition, the legal risk of creating and using these devices in our litigious society has already ground much research on devices in the US to a halt.

And I deal with uninsured patients just about every shift, and work with social services to assist them in getting coverage or setting up ways to help. Part of my job. Much of uninsured care we write off, passing the costs on to paying customers. Never said the uninsured populace wasn't a problem, never said our healthcare system was perfect now. This new HC proposal will, imho, make healthcare harder to access for the majority, more expensive, and of lower quality. Hope I'm wrong!!

 

[beancounter]

The bottom line is that 2.3% increase in one line item costs (cost of goods sold) isn't going to materially impact the operations of a profitable company.

However, publically traded companies ar at the mercy of Wall Street's expectations. They must, at minimum, maintain their margins, or the stock price could be negatively impacted.

So what is a company to do? They could pass the cost along to the consumer. (although I don't know if Feeral regs allow that for this type of product), or the could reduce cost somewhere else on the income statement.

Unfortuntely, reducing headcount is the easiest way to reduce cost. The only risk involved in firing workers is "two weeks in lieu of notice", which is predictable and quantifiable. Other cost could be cut, but the impact of the cut may carry unanticipated risks
(e.g. cutting the material cost in a product could lead to quality issues which could lead to negative publicity or legal costs, fines, etc). This is a big unknown, so companies will always choose to minimze risk, and cutting heads carries little risk, so it's always the first choice.

That being said, to suggest that a 2.3% increase in cost of goods sold would cause a company serious financial hardship, just isn't tru. At worst, the profit decreases a little. It wouldn't affect R&D, unless the company chooses to reduce R&D cost. there are many line items on an income statement that can be cust, Travel & entertainment, supplies, meals, lodging, bonuses, matchingg contribution to 401K, printing, postage, etc, etc. It doesn't have to be R&D. heck it doesn't have to be salaries and wages, but companies use the "it will cost jobs" card to frighten politicians into inaction.

 

[das_nut]

I don't think Americans will fix their healthcare system until they realize that they are paying twice the cost for healthcare as most nations, and are getting poorer results.

 

[ledboots]

The bottom line is that 2.3% increase in one line item costs (cost of goods sold) isn't going to materially impact the operations of a profitable company.

However, publically traded companies ar at the mercy of Wall Street's expectations. They must, at minimum, maintain their margins, or the stock price could be negatively impacted.

So what is a company to do? They could pass the cost along to the consumer. (although I don't know if Feeral regs allow that for this type of product), or the could reduce cost somewhere else on the income statement.

Unfortuntely, reducing headcount is the easiest way to reduce cost. The only risk involved in firing workers is "two weeks in lieu of notice", which is predictable and quantifiable. Other cost could be cut, but the impact of the cut may carry unanticipated risks
(e.g. cutting the material cost in a product could lead to quality issues which could lead to negative publicity or legal costs, fines, etc). This is a big unknown, so companies will always choose to minimze risk, and cutting heads carries little risk, so it's always the first choice.

That being said, to suggest that a 2.3% increase in cost of goods sold would cause a company serious financial hardship, just isn't tru. At worst, the profit decreases a little. It wouldn't affect R&D, unless the company chooses to reduce R&D cost. there are many line items on an income statement that can be cust, Travel & entertainment, supplies, meals, lodging, bonuses, matchingg contribution to 401K, printing, postage, etc, etc. It doesn't have to be R&D. heck it doesn't have to be salaries and wages, but companies use the "it will cost jobs" card to frighten politicians into inaction.

It is a 2.3% tax on GROSS PROFITS of the entire company, not on the cost of goods.

 

[ledboots]

We will see in a couple of years whether you think Obama's health care is better, cheaper, and more available. Hope so.

 

[Pickle Juice]

As long as there is no major reform of the pharmaceutical industry and the current medical insurance model, Obamacare is like putting a Band-aid on gangrene. And I am too poor to afford insurance, in case that should matter to my opinion.

 

[mlp]

Your way of discussing things strikes me at times. "You really, truly don't see?..."

Frankly, it baffles me that someone who has worked in an industry, even at its lowest levels, for decades (i assume, based on age) would have so little understanding of the workings of the industry. But if you prefer that I phrase things as statements rather than questions, I'll try to comply from now on.

If there were low profit margins for device manufacturers, there would be no funds for R and D for future devices.. Medical devices need years of engineering, testing, and refining before they come to market. In addition, the legal risk of creating and using these devices in our litigious society has already ground much research on devices in the US to a halt.

Those net profit figures for one of your favorite companies that I posted above - the ones with the many, many zeroes to the left of the decimal point - those are the profits post R&D expenditures. That's what the billionaires and millionaires (you know, the ones who are having difficulty scraping up the cash for Obamacare) are walking away with.

And I deal with uninsured patients just about every shift, and work with social services to assist them in getting coverage or setting up ways to help. Part of my job. Much of uninsured care we write off, passing the costs on to paying customers. Never said the uninsured populace wasn't a problem, never said our healthcare system was perfect now. This new HC proposal will, imho, make healthcare harder to access for the majority, more expensive, and of lower quality. Hope I'm wrong!!

Well, I assumed that you actually encountered uninsured people in your day to day work. That's why I continue to be so baffled when you forget about them, as when you bemoan friends not being able to afford colonoscopies because they have to save up for their co-pay. I would tthink that would lead one to wonder how many people are foregoing colonoscopies altogether because, rather than having to come up with the funds for a co-pay, they have to come up with the entire cost of the colonoscopy.

The countries that provide universal healthcare to their citizens at half the cost that the U.S. spends, and with better outcomes? They do that by cutting into the profits of those millionaires and billionaires that you're so concerned about. And I agree that, until we are sufficiently motivated to do that, healthcare in the U.S. will continue to be massively overpriced and of inferior quality.