Community Rating
| Tue Jul. 28, 2009 4:35 PM PDT
Scott Lemieux isn't happy with the compromise healthcare bill being put together in the Senate:
The normal justification for passing a compromise bill is that once a new system is entrenched it can be tweaked later. But I don't think it applies in this case. The public option is the core of the reform;
a Blue Dog bill isn't so much half a loaf as a few meaningless crumbs. And far from making a public option more viable in the future, if anything, passing something that could be called health-care reform will reduce the impetus to pass actual reform. And, worse, a bill with no public option will further entrench the insurance industry and make it easier for them to block actual reform in the future.
Ezra Klein disagrees. Partly this is because a public option would cover only a small fraction of the currently uninsured ("That's not a gamechanger, it's a tweak"), but mostly because he thinks what really matters isn't how they're covered, but merely that they're covered:
What has kept health-care reform at the forefront of liberal politics for decades is moral outrage that 47 million of our friends and neighbors are uninsured. That medical costs are one of the leading causes of bankruptcy in the United States. That an unemployed machinist gets screwed by fly-by-night insurance schemes while a comfortably employed banker need never worry. That the working class ends up in emergency rooms with crushing chest pains because they didn't have health insurance and didn't get prescribed cheap blood pressure medications five years before.
One of these days I need to think this through more rigorously, but I have a slightly more idiosyncratic view that's closer to Ezra's than Scott's. Both coverage and a public option are important, but I think what's more important than either one is a simple change that — to my surprise — hasn't attracted any real opposition: community rating on a national scale. Basically, this means that insurance companies have to take all comers at the same price. They're allowed to adjust premiums for things like age and gender, but they can't refuse you due to preexisting conditions. If your blood pressure is high or you have a family history of breast cancer, they still have to accept your business.
This hardly solves every problem. In particular, it doesn't do much to rein in costs. But if you combine (a) Medicare, (b) our current employer-based insurance regime, and (c) community rating along with subsidies for low-income families, you've essentially institutionalized universal healthcare insurance. Not everyone will take advantage of it — there will always be a few people who go without coverage even if it's affordable — and you still a need a few other things like out-of-pocket caps. Still, it's basically a statement that everyone in the country can and should be covered. And once that becomes a cultural norm, it will never go away.
It will also, I suspect, eventually turn the private healthcare insurance industry on its head. But maybe not. That's the part I haven't thought through completely. But if there's any single thing that's critical, it's moving public opinion in the direction of viewing healthcare as a universal prerogative. Community rating plus low-income subsidies doesn't get us 100% there, but it gets us pretty far along.
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Comments
Let's just all give up. Who cares about our kids?
Submitted by dollared on Tue Jul. 28, 2009 5:04 PM PDT.
Kevin, you and Ezra want a bill more than you want reform, and you want a win a battle more than you want to win the war. You guys need to be l-i-b-e-r-a-l-s.
Look, it's really quite simple: we no longer can afford to piss away 20% of our national income, year in and year out, on hidden taxes and disastrous policies. We could do that when we were the richest nation in the world, but now we're the world's greatest debtor.
So stop fooling around with the little things. We need single payer with cost controls, but I'll settle for the strongest damn public plan around. We need to spend less, and we'll never get there with Full Insurance For All. We just get poorer. And we need to end the employer mandate. Now. The auto companies employ more people in Canada because the employers don't pay for health care there. It's a huge international competitiveness problem. Stop it. Now.
Next, we need to stop pissing away $800B a year on Homeland Security, whatever that is, and Defense, which we know is offense. Cut it 5%/year until the next Bush is elected.
Next, we need to stop pissing $700B/year away on foreign oil. We need real, aggressive mileage targets. Oh, did I mention that it owuld make our cars more competitive in international markets? And lower pollution? Why are we pissing around?
Finally, we need to save all this money because we need to spend it on EDUCATION. The only way we will compete in the world economy is to raise our collective education level. In one generation.
Oxen need to be gored, Kevin and Ezra. Get the hell out of the way.
Dollared
Taxpayer handout to the industry
Submitted by JohnH on Tue Jul. 28, 2009 5:15 PM PDT.
Kevin, I'd almost always agree with you. We desperately need change at almost any cost, and I'm still in despair at the costs of best as enemy of the good from Nadarites. But this once, I think you're dead wrong.
Think of what it says, chiefly to the insurance industry. You can't possibly lose any clients or have any pressure to cut costs or profits. You need to grow to make even more money? We are forcing anyone who can to buy from you, no strings attached, not even competition that might make it more affordable. And we'll even send you a trillion in taxpayer dollars on top of it all, just for you. Oh, you also have to insure a tiny percentage more of the population.
In combines the very worst of quote-unquote socialism, meaning taxpayer subsidies, with the very, very, very worst of the current system: rampant profits and high costs to consumers. I swear, I'm buying stock first thing tomorrow.
Beat 'em with humor
Submitted by Anonymous (not verified) on Tue Jul. 28, 2009 5:19 PM PDT.
Call your congressman, wake him up.
http://www.youtube.com/watch?v=dqd0XiNvtI0
I say, Doctor, is there something I can take to relieve this belly ache?
sp
Canadian experience of incrementalism
Submitted by Anonymous (not verified) on Tue Jul. 28, 2009 5:49 PM PDT.
If the Canadian experience has any applicability at all (and that's certainly debatable), it would be that universal single payer coverage cannot be achieved in a single massive stroke overnight. It had to come in baby steps which built confidence amongst young voters and took advantage of the fact that in the long run older voters, locked into old ways of doing things, do indeed die out incrementally. It also had to contend with determined opposition from doctors (The Saskatchewan doctors' strike), well-financed disinformation campaigns from the insurance companies that stood to lose a line of business, and politicians of the rightwing persuasion. In the end, the inefficiencies of maintaining many overlapping and competing insurance bureaucracies was so obvious that it could not be ignored. Nevertheless, room for supplemental insurance policies was carved out for the private firms and they have prospered with it selling deluxe hospitalisation, dental insurance, infill drug insurance to cover gaps in the public plans. If there is one thing that has ensured its success it would be the drug formulary, the list of approved medications and the price that will be paid for bulk purchases by the plans. It has greatly reduced the cost of all medications to end users be they public or individual (as should be obvious to American customers of Canadian dispensaries). Think of the process as a thirty year adventure in good governance instituted in incremental measures. We have not reached the end. Dentistry is not covered and there is now ample evidence linking dental inflammation to more dire health conditions such as heart disease for instance. But we shall get there eventually. "I have seen the promised land. I may not get there with you", etc. etc.
Problem is
Submitted by gyrfalcon on Tue Jul. 28, 2009 8:50 PM PDT.
we are much, much, much better here in the U.S. at ignoring inefficiencies than our good neighbors north of the border.
As Somerby keeps pointing out almost daily, the fact that health care in the U.S. costs per person twice what it costs in other advanced countries with comparable health outcomes hasn't even been part of the dialogue, ever, in the occasional political upheavals about health care.
There really is very little that's directly comparable about Canadian culture and politics on this kind of issue.
American exceptionalism,dontcha know. We stand alone, and we're damn proud of it. Unfortunately.
Community rating doesn't work without a mandate
Submitted by kth on Tue Jul. 28, 2009 6:06 PM PDT.
If the insurance company has to take all-comers, and can't profile or screen for health risk, then the premium they will have to charge (to even remain solvent) will be much higher than a healthy young person with few assets will be willing to pay.
OTOH, If you make everyone (themselves or through their employers) buy insurance, then that's a huge windfall for the insurance companies--unless it comes with strings attached in the form of community ratings.
But simultaneously forcing insurers to accept everyone, and everyone to take out insurance, seems like a fair enough social contract that you wouldn't have to have a public option (though you could always enact one later if private insurance premiums spiraled out of control).
Private insurance premiums
Submitted by gyrfalcon on Tue Jul. 28, 2009 8:58 PM PDT.
have ALREADY spiraled out of control. That's the whole point!
But nobody's talking about ...
Submitted by Pauline May (not verified) on Tue Jul. 28, 2009 6:47 PM PDT.
... the non-profit mandate of this proposal I've been reading about. If the insurance companies are restricted from making a profit, what really is the downsize? Doesn't that achieve, ideally, cost-containment that really is the bigger goal?
I just wanna know. Not sayin' the no-public-plan is a good idea. Just trying to understand what's to be afraid of here. If the some entity other than the government administers the plan, all the while not making a profit, what's the big deal?
Pauline
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A universal catastrophic
Submitted by urban legend on Tue Jul. 28, 2009 7:28 PM PDT.
A universal catastrophic umbrella can be repositioned politically as a minimalist government intervention simply protecting every American from devastating financial loss, whether they lose a job or not -- even though, shhh!, it's "single payer" for what it covers. Who can oppose that -- in the interest of preserving private insurers' profits on the misery of a catastrophic health condition -- and survive politically ? That fundamental change plus (2) eliminating discrimination for pre-existing conditions or any risk at all for insurance underneath -- they will have to price and on the aggregate risk -- and (3) assisting lower income people to buy such pre-umbrella insurance, will get us where we need to get, including huge cost reductions.
If you don't provide good
Submitted by dob (not verified) on Wed Jul. 29, 2009 7:03 AM PDT.
If you don't provide good primary care, just catastrophic coverage, you don't provide incentives to treat expensive conditions while they're still cheap. Indeed, depending on who's footing the bill, you may provide incentives to delay treatment until it's expensive.
Ideological roadblock.
Submitted by BigTom (not verified) on Tue Jul. 28, 2009 7:50 PM PDT.
The 800 billion pound gorrila is ideology. As a country we are totally hung up on the free enterprise, profit based system. I guess we consider it is our unique contribution to the world -and only going in with both feet is worthy of us. So we cannot countenance that for profit is incompatible with decent medical care. Even liberals are afraid to challenge this idea. The corollary, is that we can't recognize when we are not in fact best in the world at something. Even to suggest that we aren't the best is heresy, and we will quickly burn heretics and the political stake. So we can only beat around the bush. This approach is more likely to generate costly paperwork, just more opportunity for more parasitic employment/profits generating stuff that is orthogonal to the true purpose of the system -enhancing human health and well being.
Until we overcome out fundamental intellectual hangup, we won't succed in changing anything in a fundamental way.
The only other way I can think of to "reform" our medical system, is to impose a new one, i.e. we let a foreign invader occupy our country and impose a new system on us. Of course you won't find any takers for this task.
Can you comment on this?
Submitted by KathyF (not verified) on Tue Jul. 28, 2009 11:38 PM PDT.
http://blogs.tnr.com/tnr/blogs/the_treatment/archive/2009/07/28/yes-mick...
Jacob Hacker makes a good argument for including the public plan, but it's pretty deep in the weeds.
"And, worse, a bill with no
Submitted by bob h (not verified) on Wed Jul. 29, 2009 2:55 AM PDT.
"And, worse, a bill with no public option will further entrench the insurance industry and make it easier for them to block actual reform in the future."
I am all but certain that whatever form the overhaul takes, the private insurers will try to reneg on the reforms they are called on to make. Within a few years, their perfidy and treachery and utter failure to contain costs will open more eyes, and their position will become untenable.
All we need at this point is a public option foot-in-the-door, which can be expanded later.
Anything more than $40-50
Submitted by Anonymous (not verified) on Wed Jul. 29, 2009 4:42 AM PDT.
Anything more than $40-50 (what folks pay in Canada) per month is un-affordable for me, and I work full-time.
An individual mandate with no public plan is what we'll end up with, mark my words. Hell, according to conservatives, I can easily afford 15 percent of my salary. That's more than $300 per month, by the way, and $100 more expensive than the state-run plan I currently can't afford.
Next you'll be rationalizing the lack of cost control: double-plus good they raised the chocolate rations, etc.
This country is a hopelessly-broken, corrupt oligarchy, a Potemkin democracy.
And that norm...
Submitted by JohnH on Wed Jul. 29, 2009 5:09 AM PDT.
Oh, and I'll add that I'm not sure it does set a norm. If we in effect prove that universal health care truly is unaffordable, with a system that goes from costing way more than that in other countries to beyond belief, we could easily have doomed any chances for further reform. The private sector will shortle: see, the government is involved, and look what happens.
As for community ratings, do you really think that private insurers charge so much because people don't have the info to choose between private insurers? Come on. It's that they set the prices. In most communities, there isn't even a choice between them.
Adverse Selection
Submitted by Jeremy (not verified) on Wed Jul. 29, 2009 5:33 AM PDT.
Community rating is important, but it doesn't solve the adverse selection problem, it merely changes the mechanism by which the problem operates. If insurers have to take all comers at the same price, it gives them a strong incentive to find some way other than preexisting conditions and price-discrimination to exclude high-risk insureds from their insurance pool. For example, by constructing a pool of benefits and/or deductible/co-pay schedules that are unattractive to higher-risk, higher-cost patients, and/or by setting premiums at a very high level. This may not be a bad thing; it could over time push us toward what most progressives would likely agree is the best system: a government plan for basic healthcare needs, plus "boutique" private plans for extra bells and whistles that the government won't provide. But it could also result in the worst of all worlds: private insurance companies skimming the lowest-risk, lowest-cost patients for their private plans while shunting the higher-risk, higher-cost patients onto the government plan. The devil is in the other details of insurance industry reform, and of any public plan that gets developed. And of course, if we end up not getting a public plan, this dynamic is likely to result in a serious increase in healthcare costs unless we decide to start regulating health insurers more like public utilities (something nobody seems serious about doing).
Worst Possible Result
Submitted by serial catowner on Wed Jul. 29, 2009 6:13 AM PDT.
What Kevin has described as an acceptable outcome is actually the worst thing that could happen.
If it did, the insurance companies would immediately raise everyones rates, explaining loudly how they hated to do so but the health care reform was making everything more expensive. Naturally the government, state or federal, would be paying higher rates also to these companies for subsidized patients.
Everyone would eventually discover they had crappy insurance and health care, but now the doctors and insurance companies would be blaming "health care reform"- and making hay while the sun was shining. The total cost of health care would shoot upwards with little or no actual benefit.
If, alternatively, progressives draw a line and refuse to cross it, the issue is not going to go away. This isn't a one-time offer that expires on August 7th or September 31st. If progressives refuse to support a bad measure, the public will demand a good measure. This is a problem that affects everyone and you can't read a comment thread without seeing the public demanding a real solution.
Progressives should not support a bad outcome. The bad outcome will immediately become the object lesson in why we can't reform health care, and then the game really will be over. Bad outcomes that leave us hanging on a meathook for a mau-mauing by the insurance industry are the worst of all.
The adverse selection
Submitted by Joe S. (not verified) on Wed Jul. 29, 2009 6:24 AM PDT.
The adverse selection commenters have a point, although I think that the adverse selection problem is at least reduced by community rating, although not eliminated.
But community rating will cut costs. Insurers will no longer have any incentive to devote an enormous amount of resources into denying insurance coverage. Yes, they will still try to deny insurance payments. But denial of coverage is expensive (think of the resources devoted to medical exams and litigation over rescissions.) Depriving them of these expenses will save the system a fair slug of change.
will save the system a fair slug of change.
Submitted by karog on Wed Jul. 29, 2009 7:12 AM PDT.
And you think those savings will be passed on to the consumer.
Ha ha ha ha ha ha ha ha ha ha ha ha ha!
I can't even say nice try.
Kevin, the missing piece is
Submitted by Barbara (not verified) on Wed Jul. 29, 2009 6:33 AM PDT.
Kevin, the missing piece is rating caps -- insurers would not be permitted to profit from providing "basic services," which is how it works in Switzerland, and would only make profits from selling supplemental insurance. To do this correctly, you would have to control the way rates are developed (e.g., can't include marketing as more than 5% of total, and must exclude any excessive compensation, which can be paid only from profits -- e.g., other lines of business), and year over year increases.
You would also need to ensure that the premium could not exceed a certain percentage of income, for incomes under a certain FPL, with subsidies from the fed. This would give feds skin in the game to try to control costs. Look, what seems to be missing from a lot of debate is recognition that providers are the main cost centers and cost drivers -- insurers get obscene profits for the value they actually contribute, but it's providers that drive demand. Forcing insurers into a corner that hobbles their profit making opportunity and exposes their inability to control costs would be a great leap forward.
Not guessing Baucus has any intention of doing that, but it would probably be an acceptable first step.
Waterloo indeed
Submitted by Anonymous (not verified) on Wed Jul. 29, 2009 6:33 AM PDT.
Kevin, you're too willing to trust the system. Who thinks the insurance companies will act nice under any circumstances for more than show? It's just not in their DNA to change. We have to have a robust Public Option at the very least, just to keep an alternative choice alive.
I'm willing to bet that Obama pulls this off through reconciliation, and then the Democrats will own healthcare reform. Just as they own Social Security and Medicare. No Republicans will support this, just as they didn't support FDR or LBJ. But their descendants will take a revamped healthcare system for granted. On the other hand, if Obama can't force this through, then he'll be greatly damaged in all sorts of ways. Including a powerful progressive backlash. And the United States will have killed healthcare reform for another couple of generations.
The only new development in this process is the accountability we can impose on Dems who kill this off. I swear to G*d I'll hound them, and of course make no more contributions to the DNC or Obama himself under any circumstances. This IS his Waterloo, but not in the way DeMint thought - it's a fundamental test of whether we were all right to give him so much power. Yes he can? He sure better.
How Congress can screw this up
Submitted by an old guy (not verified) on Wed Jul. 29, 2009 7:38 AM PDT.
I've been wondering how our wonderful legislative branch can go through all this sturm und drang and have us end up with a worse system than we have now. I do have total faith in their abilities.
Probably we'll end up with a personal mandate (for the unemployed) to buy poorly regulated private insurance at ridiculous cost as today, coupled with inadequate subsidies for the poor. And to put the icing on the cake, we'll have an employer mandate that discourages hiring in this jobless "recovery" (they are already working on that. See:http://angrybear.blogspot.com/2009/07/worst-tax-ever.html)
Oh, and community pool rating won't really help, the insurers will just make getting treatment so onerous that you will either die waiting or move to another insurer who will treat you equally poorly.
"Oh, you need chemo, but we have to have two oncologists coordinate on the treatment plan, and one of them is out of the office for the next 6 months"
Baby moral steps?
Submitted by UglyMoe on Wed Jul. 29, 2009 8:08 AM PDT.
With 60 democratic senators, a house majority, and a democratic president we should be able to aim a little higher than fully appeasing the merchants of health premiums.
A moral fight requires backbone not backpedaling.
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