A conversation with Miles Carter and Beth (ChatGPT) — edits by Grok and Gemini
Teaser
With a shutdown looming over cuts to ACA premium subsidies, Americans are once again watching health care used as a bargaining chip. Health insurance in the U.S. behaves like a financial product first and a public-health tool second. This post lays out blunt, workable reforms to stop price games, protect long-time payers, and restore the core purpose of insurance: shared risk for human care.
Main Conversation
Miles’ Question
Beth, why does the insurance we rely on seem more about profit than people’s health? We hear the government might shut down because some in the GOP want to strip ACA Premium Tax Credits, which would immediately double the annual premium costs for millions of Americans. This proves the system treats subsidies as a political chip, not a promise of stable health care.
After paying monthly premiums for 40 years, if you miss one month you lose coverage. That’s over a million dollars into the pool, then no access.
Hospitals bill the uninsured $12,000 for a procedure while insurers pay $3,500 on a negotiated rate. What’s the real price, and are providers actually “losing” on the uninsured?
For equipment and drugs, prices are hidden. A CPAP mask “approved cost” is $230 through insurance but $100 on Amazon—the same product. Yet only the $230 pathway counts toward your deductible. Who pockets the difference? Why do insurers negotiate profit, not savings?
Other countries cover everyone at far lower prices. A drug that costs $1,200 here might be $250 in Ireland. And how can someone earning $40,000 a year afford $8,000 for insurance—or $19,000 if they’re over 60—after decades of paying into the system?
How do we fix this? Let’s lay it out and then dig into why our leaders are failing us as a country.
Beth’s Initial Response
Miles, the core problem is misaligned incentives stacked on top of opaque pricing. Insurers, PBMs, hospitals, device middlemen, and even some providers profit from spread—the gap between “list” price and “allowed” price, between rebate and point-of-sale cost, between billed DME and retail cash. Patients pay the tolls while everyone else argues over which toll collector is noblest.
Here’s a no-nonsense plan that preserves private delivery, uses existing institutions, and changes the rules so the money flows to care—not games. It’s written to be passable in pieces, with immediate impact and clear trade-offs.
1) Price Honesty Where It Hurts Most
- Ban list-price gouging of the uninsured. Require hospitals and ASC facilities to offer cash pay ≤ median in-network price for the same CPT/DRG in that market. If they can take $3,500 from an insurer, the uninsured shouldn’t be billed $12,000.
- Site-neutral payment. Same service, same price, whether performed in a hospital outpatient department or a clinic—ending location markups that exist solely to pad margins.
- One price for one item. For drugs and devices, credit any bona fide receipt toward a deductible at the lower of (a) what the patient paid cash or (b) the plan’s allowed amount. Network status should not force a higher price just to “count.”
2) PBM and DME Clean-Up (Follow the Rebate)
- Pass rebates at the pharmacy counter. Patients pay on the net price, not the phony list price.
- Outlaw spread pricing. PBMs and DME intermediaries must use transparent admin fees—no hidden spreads between what they bill plans and pay suppliers.
- Put PBMs and DME under Medical Loss Ratio (MLR). Their margins must count like insurer admin costs, closing the loophole that lets them hide profit spreads.
3) Non-Forfeiture for Long-Time Payers
- Grace protection tied to tenure. If you’ve paid for decades, missing a month shouldn’t erase coverage. Create paid-up credits after X cumulative years (e.g., 10, 20, 30) that buy automatic grace months and protect against immediate termination—like the non-forfeiture rules used in life and long-term care insurance.
- Auto-reinstatement window. A 60–90 day window with no medical underwriting for long-tenure members who fell behind but catch up.
4) Make Premiums Actually Affordable
- Cap premiums as a percent of income for all ages. The ACA tries; expand and stabilize it. Tie age-rating to tighter bands so turning 60 doesn’t become financial punishment.
- Reinsurance for high-cost claims. A permanent, transparent national reinsurance pool can smooth premiums; states that adopted this saw 10–20% rate drops and savings of roughly $500 per family.
5) Drug and Device Sanity
- Reference pricing for sole-source drugs. Peg U.S. prices to an OECD basket for categories with no competition.
- Open bidding for devices and supplies. If a CPAP mask is $100 retail and $230 “approved,” the plan must either (a) match the retail or (b) allow cash purchases to count and reimburse the difference. The middleman spread ends.
6) Contracting Rules That Stop the Shell Games
- Ban anti-steering and anti-tiering clauses. Plans must be free to direct patients to high-value providers and pharmacies.
- Mandatory bundled prices for common procedures (imaging, colonoscopy, uncomplicated surgeries) posted publicly, with performance guarantees.
7) Simplify Coverage and Reduce Churn
- Auto-enrollment + payroll withholding for eligible workers; a national special enrollment safety net for life events.
- One-page Explanation of Cost after each encounter: cash price, allowed amount, patient share, and who earned what margin.
8) Enforcement With Teeth
- Civil penalties for noncompliance on price transparency, MLR for PBMs, and site-neutral rules—collected quarterly, not years later.
- Whistleblower bounties on illegal spread pricing and gag clauses.
What This Keeps (and Why)
- Private delivery and innovation. We don’t need to blow up the system to stop predatory pricing.
- Choice with real differences. Insurers compete on networks and service—but not by hiding spreads.
What It Costs (Be Honest)
- Short-term disruption. Expect hospital systems and PBMs to take margin hits and lobby hard.
- Budget reality. Reinsurance and premium caps require appropriations, but they reduce household spending and medical bankruptcies.
- Provider rates. Site-neutral and bundled payments will lower certain hospital outpatient revenues; transition funds may be needed in rural areas.
What You’d Feel as a Patient
- Your cash price doesn’t exceed median in-network.
- Your cash purchase counts toward your deductible.
- If you’ve paid in for years, one missed month doesn’t erase you.
- At the pharmacy, you pay on the rebated price, not the sticker.
This is not ideology. It’s basic insurance ethics: shared risk, honest prices, and non-forfeiture for loyal payers. Other countries prove you can cover everyone; we can at least stop rewarding opacity and churn.
Beth’s Follow-Up Question
Miles, which two reforms from the plan would you prioritize first to make the biggest immediate difference for ordinary people—and why: (a) cash-price ≤ median in-network for the uninsured, (b) rebate pass-through + PBM/DME under MLR, (c) paid-up non-forfeiture for long-tenure members, or (d) site-neutral and bundled pricing?
Miles’ Reflection
If I were rebuilding the U.S. healthcare system from scratch, I’d start with a universal public plan—a base level of coverage that guarantees access to essential care for every citizen, funded through taxes just like highways, defense, or Social Security. Health care is a national interest, not a luxury item.
Private insurers could still exist, but they’d function as supplemental options—for people who want faster service, private hospitals, or expanded benefits. That’s how it works in countries like Germany or Australia. The public base ensures no one is bankrupted by illness, and the private market keeps innovation alive.
Politically, the only way this could happen is if Americans see health care as infrastructure, not welfare. That means reframing it as a tool of national productivity and family stability—not charity. The public has to stop accepting insurance complexity as normal and start demanding simplicity, transparency, and non-profit stewardship. Until then, every “reform” is just rearranging the margins of a broken marketplace.
Beth’s Summary
You cut to the core of it, Miles: the U.S. must decide whether health care is a market commodity or a public necessity. Every policy choice flows from that answer. The model you describe—a universal base with private add-ons—isn’t radical; it’s the global norm. It balances equality with choice and removes the cruelty of losing everything after a missed payment.
The political barrier isn’t technical—it’s moral and cultural. Until Washington stops treating health care as an industry to be protected rather than a public system to be perfected, Americans will keep paying more for less. But the roadmap is clear: transparency, guaranteed coverage, and competition that rewards care, not denial. That’s how the system finally starts serving the people who fund it.
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