The Real Lesson of John Oliver’s Medical Debt Forgiveness Stunt

money-burdenLate-night TV host John Oliver recently caused a stir by attacking debt collectors in a clever way. He set up his own collection agency, bought $15 million of medical bad debt, and then forgave it all. This was all done on TV, to the cheers of his audience.

Oliver claimed to have outdone Oprah Winfrey, who once gave a car to each person in her studio audience. Oprah’s car give-away cost $8 million, just over half of Oliver’s. So, Oliver wins the charitable ego competition, right?

Nope. Oliver did not forgive $15 million of medical debt. That was the face amount of the accounts receivable. He bought them for about half a cent on the dollar, or about $60,000 total. The lesson of Oliver’s stunt is that medical accounts receivable are very hard to collect. That is why they trade so cheaply in the secondary debt market.

Oliver said the portfolio comprised about 9,000 deadbeat patients. So, the average debt was $1,667 (Although, I am sure there was a large variance around the mean.)

Hospitals report they collect less than one third of patients’ fees at the time of service. No wonder they have so much trouble collecting. Then, they futilely sic debt collectors on patients whom they know are unlikely to pay. It causes a lot of pain for little benefit. As discussed previously, Medicare regulations force providers to perform this pantomime, instead of writing off charitable care efficiently and effectively.

The real lesson of John Oliver’s stunt is that government regulations make it nearly impossible for patients to discharge their debts in an orderly and responsible way.

Comments (53)

Trackback URL | Comments RSS Feed

  1. John Fembup says:

    Thanks. That explains how Oliver got the $15 million. He didn’t.

  2. Don Levit says:

    Very interesting
    Isn’t forgiveness of debt taxable income to the debtor?

    • Yancey Ward says:

      Yes, it is. It would be hard for the IRS to determine it, even in this day and age, so it is likely none of Oliver’s beneficiaries will get a bill for taxes.

  3. Bob Hertz says:

    One could certainly argue that large deductibles for hospital care are, at best, pointless, and at worst, almost barbaric.

    Most hospital admissions are either ordered by doctors for obvious reasons, or take place in emergencies.

    A deductible is certainly not going to keep a comatose or bleeding patient out of the hospital, or shouldn’t.

    As John points out, deductibles are expensive to collect and often are not collected at all.

    Deductibles are a big part of the ‘administrative cost burden’ that Bernie Sanders uses (and misuses) to justify single payer.

    However — if we wiped out hospital deductibles, then hospital care would be free and outpatient surgery would look more expensive. That would not be good either.

    So at the moment I have to admit we must keep deductibles.

    But involving collection agencies is unnecessary.

    How about this:

    The people on Medicare all get Social Security.

    So if they owe $1200 in deductibles, then the government takes $50 or $100 from their next 12 or 24 social security checks.

    • dennis byron says:


      It is not correct that “The people on Medicare all get Social Security” but you are on to something with that idea

    • Ron Greiner says:

      Bob, I signed up a 52-year-old woman in Orlando on Friday with a $2,500 deductible that cost $288 a month. If she would have dropped her deductible to $1,500 her premium would have increased to $444 a month or $1,872 a year more to drop her deductible only $1,500.

      Usually insurance agents know this and don’t want ZERO deductibles like you. What are you thinking?

  4. dennis byron says:

    This paragraph is highly misleading for three reasons:

    “Hospitals report they collect less than one third of patients’ fees at the time of service. No wonder they have so much trouble collecting. Then, they futilely sic debt collectors on patients whom they know are unlikely to pay. It causes a lot of pain for little benefit. As discussed previously, Medicare regulations force providers to perform this pantomime, instead of writing off charitable care efficiently and effectively.”

    1. The sentence that begins “As discussed previously, Medicare…” basically has nothing to do with the previous sentences in the paragraph because Medicare either pays prospectively or well after the fact and the beneficiary is not involved with payment either way at the “time of service.”

    2. Following your contorted linkages, we find that although it is true that some 1991 HHS OIG interpretation of a 1987 (I think) change to the 1935 Social Security Act does consider a Medicare provider waiving a Medicare co-pay to be a kickback, nothing says the provider then has to turn the debt over to a collection agency. And the scale of such non-payment is now and most likely was then trivial. Well over 90% of the people on United States Medicare not on Medicaid have public or private insurance that covers all or all but a nominal amount of any Medicare co-pay or deductible. And Medicaid almost always pays 100% or requires an even more nominal payment than Medicare.

    3. The paragraph is also a great example of the problems with academic research into Medicare and all health care that this and similar organizations release. The link you provide is to a now three-year-old post also on this blog. The now three-year-old article on this blog links to a now 13-year-old Commonwealth Fund research report. The now 13-year-old Commonwealth Fund research report makes the claim on which you base your “Medicare-regulations-force…” statement on now 20/25-year-old data collection and analysis. Please stop suggesting policy changes to my Medicare health insurance based on some now dead or retired academic’s thinking about something my grandmother did or didn’t do.

  5. Allan (formally Al) says:

    I’m not quite sure how people perceive of hospital medical debt. Much of it is bogus. I have a little experience with it so let me provide two examples. A minor OP surgical procedure $7,800. The insurer paid $400. Had it been a cash pay patient and a deal was made for that patient to pay $2,000, 5 X the usual rate, the hospital would be complaining that they couldn’t collect the other $5,800. Case #2 Surgical procedure G all Bladder in-patient. The patient had no insurance and was billed far more than the average receipts for such a procedure. The patient had no money but made a deal to pay a down payment and so much a month without interest. I don’t remember the figures, but the down payment was a good chunk of change and the patient was paying on a regular basis to the point that she paid far over the charges the average person’s insurance or Medicare would have paid. She was told to stop paying by a friend about a year or two later. She should have been on Medicaid in the first place. I am sure the remainder of her debt was considered bad medical debt.

    Guess who benefits from these shenanigans. Hospitals and insurers. When you get a $200,000 bill you thank God that you had that very expensive insurance, but if it were only $10,000 you would be cursing up and down. The highest confirmed price I saw was 20:1, the case above. Under those circumstances, patients are incentivized to pay more than they might have. The hospitals also report charity care and reimbursements differ. Whether some of this money is used in the calculation of federal reimbursement is a cloudy issue.

    • Ron Greiner says:

      AL, 20:1 WOW! I enrolled an English woman on Friday who called me 2 days earlier for her 38-year-old boss (Male) who was in ER with no insurance. I told her his insurance would be $128 a month for a $2,500 deductible before she told me about him in the ER.

      She called back and enrolled herself and told me he had an appendectomy which is no big deal with insurance after recovery. The press has reported that Florida hospitals will charge uninsured people 10 TIMES more than an insured person. Gov. Scott calls this “price gouging” and he aught to know.

      My son has crohn’s and his Rx is getting very expensive. His current shot, that he takes every 2 weeks, cost is $3,961.96. Item Descriiption: HUMIRA PEN 40MG/0.8ML-2

      A year ago the cost was only $2,300 every 2 weeks. If we knew the truth and the real cost was only $39.61 for that shot the mark up would be 100:1 –

      Did you see Dr. John Goodman writing in FORBES saying that the Republican Senate has adopted his goofy plan for REFORM? Goodman wants sick people to be able to change health insurance companies AFTER they get sick and the old insurance company has to pay money to the new company, crazy. Goodman says that insurance companies can then specialize on different medical problems, whatever that means. I’m sure that we should have an insurance company that only wants crohn’s patients like my son so they can spend $100,000 per year, per person, just on Rx.

      Goodman also wants to start taxing the tax-free HSA. I’m thinking Goodman should retire and let clearer minds lead the way. Sometimes these PHDs are lost in space.

      • Allan (formally Al) says:

        Ron, I know the 20:1 example is valid because it happened to my wife at the hospital where I have privileges. It was for a minor procedure that I could have done with a pen knife. The bill was $7,800 and the insurer paid $350 and I paid $50. I know loads of examples.

        As far as John Goodman goes, I believe he is one of the sharpest minds studying this situation. He thinks things out clearly and long term. I am not saying this present plan is perfect, no plan is, but it is well thought out. It might need adjustments and some people might fall through the cracks requiring additional help, but in general I believe it to be a valid proposition, certainly far better than the ACA.

        You are much closer to one that actually may run into trouble, but when looking at a program one has to look at it without emotion. During WW2 Churchill didn’t evacuate his family from a place that was going to be bombed by the Germans. That might have given away the fact that the British were reading the German codes. It takes a strong person to be able to divorce themselves from personal sacrifice and I don’t expect you or anyone else to do so.

  6. bob hertz says:

    Thanks Al for the detailed anecdotes.

    For some time now I have favored what I will call “transparency with teeth” for hospital bills.

    The hospital would be forced to disclose the Medicare rate for the care it provides. If their own charge was 125% of Medicare, that would be a safe harbor.

    If their charge was higher, the patient could take the bill to a health care claims court, with no payment due and no negative credit reporting until the claim was settled. The claim courts or arbitrators would be funded by the government, so the patient would not need an attorney.

    Hospitals would probably dread these courts, and settle more bills quickly to stay out of them.

    Incidentally, I wonder if these shenanigans have disappeared in Maryland with its all-payer fee schedule?

    • Allan (formally Al) says:

      Bob, thank you, but I hesitate in elevating one price to the appropriate price. Medicare prices do not necessarily represent the appropriate price or the appropriate way of doing something. I prefer to use contract law where there is a meeting of the minds regarding what is performed and what the charge will be. If a physician doesn’t spell it out that is his problem. Let him prove he is worth more than the Medicare price or the lowest price normally charged etc. If you want transparency that is the fastest way to get it.

  7. Bob Hertz says:

    I do not love the Medicare fee schedule either.

    But I wonder if contract law needs more “teeth” in medical care.

    If there is no meeting of the minds prior to one’s medical care, how does contract law deal with a drastic overbilling?

    Most courts I believe will rule in favor the doctor or hospital.

    What can we do that is different and better.

    Would we have to look at the reason their was no meeting of the minds:

    – emergency

    – patient indifference

    – provider refusal to provide an estimate

    How would you deal with these situations?

  8. Allan (formally Al) says:

    “But I wonder if contract law needs more “teeth” in medical care.”

    If there is no meeting of the minds there is no contract or at least a judge should interpret that no contract existed. That places the terms of the deal in the hands of the judge and dependence upon the type of judges we choose. A young lady was raped and the rapist was given only 6 months. If we the people don’t demand judges that uphold the rights of women we will see more of this. The same occurs with doctor bills.

    • Ron Greiner says:

      That is correct Allan. We need judges that will put a few of these MDs in prison when they over charge and destroy a young family’s life.

      These MDs over-charge then sell the debt to bill collectors who hound these poor young families.

      If some of these doctors ended up behind bars the rest might think twice before committing their fraud.

      • Allan (formally Al) says:

        Ron you must understand the difference between civil and criminal proceedings. Overcharging or the claim of overcharging belongs in civil court unless there was fraud. There is no such thing as overcharging in the context you used if the charge was agreed by contract (though there are certain exceptions for extreme conditions)

        Physicians have a right to collect debt, but that debt needs transparency all along the line from start to finish. Intellectual property should be owned by the individual unless sold (also with certain exceptions).

        • Ron Greiner says:

          When my youngest son was born in 1984 my wife was in the hospital 22 hours and the bill was $22,000. She did not have even 1 shot and the hospital staff did NOTHING.

          I know I signed a document saying that I will pay the hospital everything that they charge, and I did and it took years.

          This is corrupt and these medical providers, at least the MDs, have taken an oath to look after the best health of the client. Charging $22,000 is very depressing for a guy with 3 little children.

          Al you might think a CONTRACT like that makes all MDs drive BMWs and deserve wifes that must go shopping with a Golden VISA but it is illegal with other services and some of these Doctors should be in prison.

          The doctor didn’t come to the hospital when that son was born and I called him 4 times and each time he said he was just leaving.

          Al, it was criminal to charge $22,000 in 1984 with 22 hours in the hospital for a NORMAL vaginal birth.

          RICA Act because there are many people at the hospital all working together to assault young hardworking families with illegal billing. If you do this to people Allan, like many MDs do, you should be banned from practicing medicine.

          There is more than Contract Law going down here Allan.

          • Allan (formally Al) says:

            Hospitals are different stories than physicians and even more complicated because of all the regulations and mandates. We need people to choose their hospital based upon cost as well as other concerns.

            Your doctor didn’t charge the $22,000 which I agree is horrendous. All our rules, regulations, third party payer have created this mess.

            I always gave an approximate charge if the person was paying out of pocket. But don’t tell us that you are the one to determine what the right price is. That is between the buyer and the seller.

  9. bob hertz says:

    Al, I do not think we want a million ER bills a year to be stuck waiting for a judge to rule on them. For one thing, there aren’t enough judges.

    That is why I proposed Medicare + 25% as a safe harbor.

    We need some guideposts. I only proposed Medicare because it is available.

    The single payer folks get around the price gouging issue by funding all hospitals with global budgets and having rigid fee schedules for doctors.

    We probably both agree that this is impossible and undesirable, but then the burden is on us to make laws that protect patients.

  10. Allan (formally Al) says:

    Bob, we already have those bills so you aren’t adding anything. As soon as people provide transparency the question won’t be trying to figure out how much should be paid rather how to get the money.

  11. Bob Hertz says:

    But how will some providers be forced to provide transparency, if they do not provide it now and they make more money by not providing it?

    We could have a law that states “no disclosure, no liability”….i.e. if my provider does not give me a binding estimate, I do not have to pay the bill.

    But this would be a legal earthquake. So again I ask, what small steps can we take?

  12. Allan (formally Al) says:

    Firstly the courts can sort out a few cases which will make almost all adhere to a ‘meeting of the minds’. If your auto mechanic told you that needed a new engine, what do you think your first question would be? Think of how different states handle auto mechanic repairs.

    • Barry Carol says:

      If the new engine costs more than I can afford or more than I think it’s worth to fix the car, I can just scrap the car and buy a replacement. We can’t do that with people. That’s why the auto mechanic analogy doesn’t work.

      Lots of hospital based care gets performed under emergency conditions. That’s where much of the problem is though it’s not so easy to get a binding estimate even for care that can be scheduled well in advance. I think the lack of transparency problem could be solved if providers thought it was important enough to make it a priority but they don’t even though more and more patients have high deductible insurance plans.

      • John Fembup says:

        Also – a physician has to “repair” the patient while the motor is running – the auto mechanic has it a bit easier. 😎

  13. Allan (formally Al) says:

    “If the new engine costs more than I can afford or more than I think it’s worth to fix the car, I can just scrap the car and buy a replacement. We can’t do that with people. That’s why the auto mechanic analogy doesn’t work.”

    That is why sensible people carry health insurance and why we have the safety net knonw as Medicaid.

    There are many ways of approaching emergency care which indeed is a problem. Once again that is a good reason to carry insurance, high deductible of course.

    You complain it is not so easy to get a fee in advance. Pay me and I’ll get it for you.

  14. bob hertz says:

    High deductible insurance is not the financial solution that it used to be.

    At my agency yesterday I quoted the following premiums for a 63 year old male:

    $6,500 deductible — $600 a month

    $500 deductible — $800 a month

    The old chestnut used to be that if you took a high deductible policy and put the premium savings in an HSA, you would come out ahead rather quickly.

    Not any more.

    This is due of course to the mandates that have been packed into all ACA policies, even the high deductible ones.

    • Barry Carol says:

      Thanks Bob. A couple of years ago, I priced a Humana Medicare Supplemental Plan F based on both a zero deductible and a $2,000 deductible. The $2,000 deductible was $800 per year cheaper than the zero deductible which means the policyholder would save 40% of the value of the incremental risk he chose to self-insure. Your 63 year old would also save 40% of the incremental risk in the form of a lower premium — $2,400 per year in premium savings in exchange for absorbing $6,000 more per year in potential out-of-pocket exposure to medical claims costs. As a practical matter, I don’t know how much in actual medical claims costs the insurer would actually pay out on the high deductible vs. the low deductible plans but it looks to me like another example of how high deductible plans coupled with a Health Savings Account are oversold in terms of the premium savings customers can realize in today’s world.

      Separately, if people could just buy the benefits that they wanted, it seems that the only people who would sign up for, say, IVF, would be couples who are having trouble conceiving. The only people who would want maternity benefits would be women of childbearing age who intended to become pregnant in the near future. Only people with an alcohol or drug abuse problem would be interested in those benefits and only people with a personal or family history of mental illness would want those benefits. In short, we would have adverse selection on steroids and the premium for those benefits would be prohibitively expensive or might not be offered at all. Since freedom and free market principles wouldn’t serve people who need those benefits, the costs would presumably have to be socialized at high cost so all the healthy people who can pass underwriting can help pay for them through taxes. But hey, they would pay less for their health insurance so they should be happy. No?

      • Allan (formally Al) says:

        Barry, if your mindset is one that keeps thinking in terms of what the left says today then you will feel that high deductibles /HSA’s are oversold. They aren’t at all because you think in terms of government setting prices and dictating insurance. That is what happens with the collectivist model. Costs continue to rise, unnecessary rationing occurs and the situation becomes hopeless. That is what we see in collectivist nations. Compare Estonia and Belarus both of which were in a hopeless condition until Estonia adopted a free market.

        I won’t even comment on your second paragraph because it is mostly collectivist rhetoric. This business of covering every last item makes healthcare costs become unaffordable for most which is what we are seeing today due to the collectivists. We have Medicaid as a safety net. We don’t have to destroy a healthcare system to satisfy needs that will never be satisfied.

        This does not mean that we cannot have healthcare that remains affordable after a serious illness develops. There are many things that can be done, hopefully, to help as many people as possible. But, I have seen all the roadblocks placed by you in front tax code changes so that all people can be treated equally. I also see how you don’t seem to give much of a hoot when a person loses a job due to illness and subsequently loses their insurance. That later group who worked and paid for decades is who I worried most about in my practice for the worst cases I saw was due to the tax favoritism to employers, not all the hogwash I see presented on this subject.

    • Ron Greiner says:

      Bob, you write, “The old chestnut used to be that if you took a high deductible policy and put the premium savings in an HSA, you would come out ahead rather quickly.

      Not any more.”

      Bob, why don’t you tell us the total Out-Of-Pocket (OOP) for these 2 deductibles? You make it sound like after the deductible these plans pay 100% and I don’t believe you. Are you saying that the $500 deductible pays 100%?

      Bob, there is a reason that I enrolled the 1st tax-free HSA and not you. We know for a fact that the max OOP for the $6,500 deductible is $6,850 because that is the Obamacare law of the land.

      I’m sure some uncomplicated people will believe you.

  15. Allan (formally Al) says:

    Bob, there is a trading value placed on each thing we purchase. When the system subsidizes a purchase that trading value doesn’t necessarily fall. Look at how costs for higher education have increased. Thus costs in healthcare go higher and higher though the care provided doesn’t.

    We have to back peddle to get the costs under control using free market techniques.

  16. Don Levit says:

    At a $200 per month difference in Bob’s example it will take over two years at one percent interest to accumulate $6,000
    With the HMA $248 per month accumulates to a $20,000 paid up plan in $35 months

  17. Don Levit says:

    Should read in 35 months

  18. Barry Carol says:

    I came across an interesting article in the most recent (June) issue of Health Affairs magazine that breaks down U.S. healthcare costs in 2013 by broad categories. This helps us to understand more precisely where healthcare spending goes and how it is allocated. The 13 broad categories add up to 88.8% of 2013 healthcare costs with the other 11.2% left unallocated. The breakdown is as follows with dollar amounts in billions:

    Circulatory system — $294, 12.0%
    Musculoskeletal system – 211, 8.6%
    Mental disorders – 201, 8.2%
    Digestive system – 184, 7.5%
    Injury and poisoning (mostly trauma) – 160, 6.6%
    Respiratory system – 147, 6.0%
    Screening, prevention and exams – 146, 6.0%
    Neoplasms (mostly cancer) – 129, 5.3%
    Nervous system – 125, 5.1%
    Dental – 109, 4.5%
    Genitourinary system – 101, 4.1%
    Endocrine system – 101, 4.1%
    Other categories – 260, 10.6%

    About one quarter of that last, miscellaneous category is normal pregnancy. The rest includes perinatal conditions, skin diseases, infectious diseases, blood diseases and congenital abnormalities.

    People can debate which of these should be covered by insurance and to what extent. They can also debate how to cover the unhealthy and already sick, the role, extent and financing of subsidies and the tax treatment of premiums.

    • Allan (formally Al) says:

      Numbers of this type are very misleading in the context I think Barry is thinking about. He wants pregnancy covered and even includes IVF as we see included above. Medical insurance covers disease. Barry should be pushing for another insurance that covers the multitude of things he wants to cover and MANDATED. IVF, is he kidding? Pregnancy is not a disease though some apparently believe it is to such an extent that they even wish to cut out a viable baby in pieces from a mother’s body just like they would cancer.

      Every one of these costs that Barry mentioned has been artificially raised because of the collectivism he promotes. Thus, with a freer marketplace, every one of those numbers would fall.

      He says “People can debate which of these should be covered by insurance and to what extent”, but what he is really talking about is a debate that ends in a collectivist type of mandate, not a free market.

      • Ron Greiner says:

        Barry wants pregnancy covered by health insurance for men. But, Barry wants younger men to be 1/6th cost of 64-year-old men, unlike Obamacare’s 3:1.

        If Barry was the dictator this Obamacare problem would get fixed pretty fast to everybody’s satisfaction.

        Barry would keep employer-based insurance because young women should lose their health insurance if they become too sick to work FULL TIME because of their cancer. So Barry doesn’t have all of the answers.

        • Barry Carol says:

          Ron – I never claimed to have all the answers. You keep harping on people who get too sick to work and lose their employer coverage but you never address what happens to people who have IM coverage and get too sick to work and can no longer afford their premium. You cherry pick a couple of your wealthy MD clients who got sick and could had savings and investments to afford their premium but a lot of ordinary people don’t have that option once they lose their job which, for most people, is their cash flow that pays for their financial obligations.

          In Germany, most people get their health insurance through their employer. If they lose their job, the unemployment insurance fund pays their premium. If they retire, the pension plan (equivalent of our social security) pays their premium. In theory, COBRA could last indefinitely instead of for just 18 months and taxpayers could help pay for it like they did for a while after the 2008 financial crisis. Or maybe unemployment insurance could cover the premium indefinitely like it does in Germany. There are ways to address these issues besides just leaving people out in the cold which includes IM policyholders who don’t have sufficient savings to pay their bills after they lose their job.

          • Ron Greiner says:

            Barry, you support people losing their insurance after they get sick. Then you change the subject and say some won’t pay without income. That is different than a TERMINATION notice.

            Then you are so goofy and say that COBRA should last longer, ha ha.

            Obamacare needs smarter people than you Barry. You my friend don’t have a clue but are full of opinions that kill people.

            • Allan (formally Al) says:

              Limiting my comment to only those working people that become ill and lose their jobs and insurance I find it disconcerting that Barry places his concern on less meritorious issues. Of the expensive sick that are not on Medicare or Medicaid, many of those unable to meet their medical needs are those that paid insurance through their employers in lieu of salary. They lost their insurance when they became ill. In my practice it was that group that dominated the numbers of those that were in trouble through no fault of their own and needed assistance.

              • Ron Greiner says:

                Bob Hertz told Barry that 100% of employees that he sells to, that become too sick to work, will have their coverage TERMINATED!

                You Allan, an MD, tell Barry that these people are in trouble when they need their insurance the most.

                Barry is a Democrat Socialist and the facts will mean nothing to him. He will never change his mind. Bob makes big money selling this dangerous insurance but Barry gets nothing.

                Barry, like all Central Planners, think that killing millions of people is just a statistic. How many people have died since WW-2 because of losing their employer-based health insurance because of ELIGIBILITY REQUIREMENTS?

                How many were women Barry?

                • Allan (formally Al) says:

                  Ron, Barry has some ideas that I consider foolish, but he is a decent individual that expresses his views. In the case of healthcare we can classify him as a collectivist who unconvincingly tries to divert the criticism of collectivist policies. I think if he opened his eyes wide he would feel differently, but sometimes people develop tunnel vision where too much emotion is involved. That type of vision at times affects all of us.

      • Barry Carol says:

        I never suggested that IVF should be a mandated benefit. While I empathize with couples who are having trouble conceiving, I don’t think it should be covered by insurance. The cost averages $15K per try around here. Maybe they should look into adoption instead or pay out of pocket if they can afford to.

        I think pregnancy should be covered by insurance but how that cost is allocated among the insured population is open for debate. Most women in the U.S. have their babies in hospitals which are expensive places. Malpractice insurance for OBGYN’s is pretty darn expensive too, especially in some of our more litigious jurisdictions. People could, in theory, use nurse midwives instead and have their baby in a birthing center like they do in France and other countries. The downside is that they won’t have timely access to a NICU if there is a problem when things can go south pretty fast I’m told. Medicaid, by the way, pays for 40% of all births in the U.S. I don’t think the middle class and lower middle class should be expected to pay for pregnancy and childbirth out of pocket when we cover it for poor people.

        • Allan (formally Al) says:

          You linked IVF to pregnancy coverage, drug and alcohol abuse coverage, etc. You are afraid those groups and others would have to pay too much. You are a staunch supporter of mandates and pregnancy coverage. I want people covered for things like heart disease, but even there without mandates. If you wish to buy a policy for yourself that includes pregnancy then go ahead and do it, but don’t force the rest of us to buy into your preferences.

          One of the reasons for the high birthrate among Medicaid patients is that our welfare state subsidizes every child born. It is a money making proposition.

          If you wish everyone to have access to a good NICU then start paying for hotels so pregnant woman can live next to those hospitals throughout the later portion of their pregnancies.

          • Barry Carol says:

            Allan – With all due respect, I seriously doubt that low income women are having more babies than they otherwise would because Medicaid will cover their hospital stay for labor and delivery. Raising children is a long term, expensive and challenging proposition. Besides, even uninsured women or women with health insurance that doesn’t include labor and delivery benefits can just show up at the ER and be treated under EMTALA. Sure the hospital can go after them later for payment but if they don’t have much money, the bill will likely be written off as uncompensated care while the hospital still incurred all the costs associated with providing the necessary services.

            In the end, the hospital would recoup those costs by charging more for other services, tests and procedures, especially those that are covered by insurance for most people. They have to cover their costs somehow. No margin, no mission.

            • Allan (formally Al) says:

              Barry, read the written word. “One of the reasons for the high birthrate among Medicaid patients is that our welfare state subsidizes every child born. It is a money making proposition.” People start with the welfare subsidies, food stamps, housing, Medicaid and each child adds an additional monthly stipend. Are you trying to say that there is no extra money paid for each additional child? This is well documented and the payments don’t occur just once but for 18 years for each child.

              • Barry Carol says:

                The 1996 welfare reform law put a time limit on benefits and imposed a work or job training requirement. The rolls were cut in half or more depending on the state.

                • Allan (formally Al) says:

                  A welfare denier.

                  The article by Michael Tanner When welfare pays better than work seems to have a different take than you.

                  “welfare for a mother with two children. In the Empire State, a family receiving Temporary Assistance for Needy Families, Medicaid, food stamps, WIC, public housing, utility assistance and free commodities (like milk and cheese) would have a package of benefits worth $38,004, the seventh-highest in the nation.

                  While that might not sound overly generous, remember that welfare benefits aren’t taxed, while wages are. So someone in New York would have to earn more than $21 per hour to be better off than they would be on welfare.That’s more than the average statewide entry-level salary for a teacher.

                  Plus, going to work means added costs such as paying for child care, transportation and clothing.Not to mention that, even if it’s not a money-loser, a person moving from welfare to work will see some form of loss — namely, less time for leisure as opposed to work.”

                  Each successive child adds additional income.

  19. bob hertz says:

    In my brief example above, I would encourage the 63 year old to buy the more expensive low-deductible plan. At his age, the likelihood of a claim in the next 2 years is fairly large. He could be out of pocket over $12,000 in no time with two large claims and a high-deductible plan.

    In one sense that was not a good example. A 63 year old should not just be starting on his/her HSA. They should have a large one already.

    I think we should find ways to make HSA’s more mandatory.
    The more I read of history and the older I get, the more I believe in paternalism. Forced savings are a good thing overall, and they take many forms.

    Union leaders forced employers to fund pensions, in many cases, and millions of workers live comfortably in old age on those pensions. The Mormon church virtually forces people to save and give, and the results are impressive.

    As you see, I really don’t care if forced savings comes from the left or the right. I am coming to believe that forced savings is the only way for America to get through the mixed blessing of much longer lives.

    • Barry Carol says:

      Eight years of zero or near zero interest rates are making life even more difficult for middle class savers and they’re no picnic for the banking and insurance industries either. Pension funds, for their part, count on significant investment returns to help finance their pension liability. Fixed income investment returns virtually disappear at interest rates of 1% or less.

      • Allan (formally Al) says:

        That tells us that despite protestations that the economy is making a good rebound it really isn’t and Obama’s policies have been abysmal failures.

  20. John Fembup says:

    “forced savings is the only way”

    After people have accepted forced spending, what can be the objection to forced savings?

  21. Bob Hertz says:

    True, Barry, but savings in a mattress beats no savings at all.