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Selling X-pensive Insurance to People Who Just Took a 3.6% Pay Cut. [Amended]
That queasy feeling you get when you reach for your wallet to buy that big ticket item, that you really need, but are not quite sure you can afford? It's not just your financial prudence angels whispering in your ear. The US Census Bureau just announced that that real median household income in the United States fell 3.6 percent between 2007 and 2008, from $52,163 to $50,303. That press release also noted that
I favor a more comprehensive healthcare reform that includes mechanisms to lower costs through a public option allowed to pay at or near Medicare rates and through unrestricted negotiations with pharmaceutical manufacturers. The beltway insiders are signaling that a public option will not be included, or that if it is it will not have those features. It also appears that such a public 'option' won't really be available to anyone all ready enrolled in a health insurance plan at their place of employment. That means if your employer decides to reduce the coverage of your existing plan in order to meet ends financially, you're out of luck.
Meanwhile, Republicans are pushing to lower the income level that will be subsidized by the reforms.
Amendment @11:00 AM EST
Some of us 'liberals' are viewing healthcare reform as something that must be accomplished now, or it will not happen at all. I would contend that the Republicans and Blue Dogs understand as well as any progressive or liberal that changes to the system are mandatory for the US to remain competitive in world markets, and to protect an ever more financially threatened middle class. The question I ask myself: What is the difference between the bill that is being described to us by the beltway insiders and a bill that would pass if the Republicans had a majority in congress? In all honesty, I don't see much difference at all. This bill could pass with a 51/49 Republican majority IMO. If you read the link above to the Center for American Progress economic analysis on a public option that is allowed to pay Medicare rates, the projected savings are in excess of $3 trillion dollars over time. That would more than pay for any cost burden put to the taxpayers. Yet we're to believe that 'it just can't be done at this time' and America demands unique solutions to our healthcare problems'. I suppose that descriptor of "unique" is referring to all the public health systems that are operating around the world. So, if you buy that we need something different from the one that's proven successful in the rest of the world, perhaps a strong public option is just the 'unique' solution America requires.
Healthcare reform will get done either now or later. The Republicans know that. Their strategy in this 'reform' effort has been to hobble and make this bill so unwieldy that it will require 20 years of tinkering to straighten it out. The blame for crafting and passing such a inefficient bill will fall on the Democrats shoulders, and the R's are delighting in that, oblivious to the burden it places on ordinary American's. If the Republicans came to power, you can bet that they will address healthcare reform and get a bill passed, (that would be their political resurrection after their recent crash and burn), and I'm beginning to think it wouldn't look a lot different than this bill is shaping up to be. My point in all this is that I believe their should be some benefit to controlling both houses of congress and the presidency, but I'm not seeing it. On that note I would also urge anyone concerned with passing meaningful healthcare reform donate to the organization, Democracy for America, which is collecting funds specifically to mount primary challenges to vulnerable Blue Dog seats. It's time Democrats started behaving like Democrats.
The number of people without health insurance coverage rose from 45.7 million in 2007 to 46.3 million in 2008.I'm curious how much this drop in income will affect the middle class's desire to underwrite a healthcare 'reform' bill that is beginning to look very much like a windfall for the insurance and healthcare industries. As many as 60% of Americans are predicted to receive healthcare subsidies should the bill pass, with the amount of the subsidy tapering off as the income level ascends. That still leaves a lot of middle income Americans being asked to foot the bill for a reform that at this point does not seem to have any active mechanisms for controlling, let alone lowering our healthcare costs.
I favor a more comprehensive healthcare reform that includes mechanisms to lower costs through a public option allowed to pay at or near Medicare rates and through unrestricted negotiations with pharmaceutical manufacturers. The beltway insiders are signaling that a public option will not be included, or that if it is it will not have those features. It also appears that such a public 'option' won't really be available to anyone all ready enrolled in a health insurance plan at their place of employment. That means if your employer decides to reduce the coverage of your existing plan in order to meet ends financially, you're out of luck.
Meanwhile, Republicans are pushing to lower the income level that will be subsidized by the reforms.
This month, under pressure from Republicans and conservative Democrats to draft an even less expensive bill, the Senate Finance Committee may also lower the maximum annual income a family could earn to qualify for subsidies, from four times the federal poverty level (about $88,000 for a family of four) to three times of poverty ($66,000 for that family). That would mean millions of Americans would have no possibility of being eligible for subsidies....It's beginning to look to me as if a bipartisan healthcare reform bill will potentially offer the worst of all worlds, by delivering a high cost product to a captive American populace who just took a 3.6% pay cut, while offering no or limited means to control costs. I suggest that this is an excellent time to call or write your elected representative, senators, and president, and spell out to them that any healthcare reform bill passed should include a public option allowed to pay at or near Medicare rates, and should truly be optional to all Americans, including those within existing employer based healthcare plans. Either that or start writing all over again.
Amendment @11:00 AM EST
Some of us 'liberals' are viewing healthcare reform as something that must be accomplished now, or it will not happen at all. I would contend that the Republicans and Blue Dogs understand as well as any progressive or liberal that changes to the system are mandatory for the US to remain competitive in world markets, and to protect an ever more financially threatened middle class. The question I ask myself: What is the difference between the bill that is being described to us by the beltway insiders and a bill that would pass if the Republicans had a majority in congress? In all honesty, I don't see much difference at all. This bill could pass with a 51/49 Republican majority IMO. If you read the link above to the Center for American Progress economic analysis on a public option that is allowed to pay Medicare rates, the projected savings are in excess of $3 trillion dollars over time. That would more than pay for any cost burden put to the taxpayers. Yet we're to believe that 'it just can't be done at this time' and America demands unique solutions to our healthcare problems'. I suppose that descriptor of "unique" is referring to all the public health systems that are operating around the world. So, if you buy that we need something different from the one that's proven successful in the rest of the world, perhaps a strong public option is just the 'unique' solution America requires.
Healthcare reform will get done either now or later. The Republicans know that. Their strategy in this 'reform' effort has been to hobble and make this bill so unwieldy that it will require 20 years of tinkering to straighten it out. The blame for crafting and passing such a inefficient bill will fall on the Democrats shoulders, and the R's are delighting in that, oblivious to the burden it places on ordinary American's. If the Republicans came to power, you can bet that they will address healthcare reform and get a bill passed, (that would be their political resurrection after their recent crash and burn), and I'm beginning to think it wouldn't look a lot different than this bill is shaping up to be. My point in all this is that I believe their should be some benefit to controlling both houses of congress and the presidency, but I'm not seeing it. On that note I would also urge anyone concerned with passing meaningful healthcare reform donate to the organization, Democracy for America, which is collecting funds specifically to mount primary challenges to vulnerable Blue Dog seats. It's time Democrats started behaving like Democrats.
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The worst of all worlds is my fear and expectation.
And that saddens me to no end.
September 13, 2009 11:04 PM | Reply | Permalink
There is a sneaky sleight of hand here: by talking about annual household income, you get a continual rise of income from the 1970s onward because you are moving from single income to dual income households as "typical." The news is really even worse than is portrayed.
September 13, 2009 11:08 PM | Reply | Permalink
Great point, unfortunately. The move to two-income households is a development that rarely makes it into the equation when discussing how much better off we are today than in years past. Thanks for reminding us here, CT.
September 14, 2009 9:15 AM | Reply | Permalink
There's that. But also I'd like to know whether those numbers include employer-provided health care benefits. There is an argument that real median incomes are rising, but due to rising health care costs, which are hidden from employees as they don't appear on your pay-check, it looks as though incomes are falling. So real incomes may have risen $5000 over the last ten years, but if median HC costs rise $5000, incomes look stagnant.
Of course, that's only relevant to the long-term trend, not the short-term drop Miguel alludes to above.
September 14, 2009 9:44 AM | Reply | Permalink
Great point as well, Obey. But given that we are paying more for health care than most other countries while receiving worse outcomes, we must confront an argument about the value of this benefit. Sure, employers might be paying more than before, but the co-pays are rising and the coverage is lessening. ln terms of dollars being spent, it can be argued that the employee's income is rising. But in terms of benefits received, it is apparent that this benefit is diminishing along with the earnings capability of the workers.
Where is this money going, then? A great deal of it is being wasted in a very inefficient health care delivery system. (And we haven't even begun the necessary debate about how to fix THAT! Too busy working on priority #1, which is the preservation of Insurance Industry profits.) But I believe a look at the earnings of the Health Insurance Industry will show that at least one segment of the economy is doing quite well, thank you very much!
September 14, 2009 10:10 AM | Reply | Permalink
Well, that's exactly the follow-on point. If these are ex-HC benefit numbers, then reform à la single payer - with everyone paying Medicare rates - would lead to an increase in median household income of 2-3000 dollars. IMMEDIATELY.
But of course that can't even make it into the HCR conversation, because it's dangerous crazy talk...
September 14, 2009 10:25 AM | Reply | Permalink
...and the insurance industry wouldn't allow such talk. Yup! Got it!
September 14, 2009 11:03 AM | Reply | Permalink
That is an insane proposition pug. And soshalistic to boot. We could never do that.
September 14, 2009 11:41 AM | Reply | Permalink
People should know this about HC Insurance Cos and Wall Street:
WALL STREET IS BETWEEN YOU AND YOUR DOCTOR NOW.
http://investing.businessweek.com/research/stocks/ownership/institutional.asp?ric=WLP
Wall Street Banks hold these percentages of shares in Health Insurance giants and are increasing shares by the tens of millions
United 77.32%
WellPoint 79.04%
Aetna 79.45%
CIGNA Corp. 68.71%
Coventry Health 82.25%
Health Net Inc. 79.37%
Wall Street is the enemy. Can we afford another bailout for these people and their bonus structure!
Wilson and his ilk are small distractions but congress can not be seen to be supporting Wall Street AGAIN!
September 14, 2009 4:49 PM | Reply | Permalink
Clearly. you have been paying attention.
September 14, 2009 7:12 PM | Reply | Permalink
Clearly, you have been paying attention.
September 14, 2009 7:13 PM | Reply | Permalink
M2
I took away from Obamas speech two nagging feelings, both of which were not good. The more I thought about it I found that the concept of forcing us to purchase a product one had previously been placing on the bottom of our wish list by economic necessity to be bothersome.
I fear now a subtle sink into compromise. I had been working on a blog about how even if we do not get the coverage we need it will not be a complete failure. Think Obama as Atticas Finch-teaser for my blog.
I will place this in my reread at leisure for better comprehension file I keep on my desktop.
M. Paul
September 13, 2009 11:23 PM | Reply | Permalink
Specifically, what quotes in his speech were the root cause of your 'two nagging feelings'?
Thanks
September 13, 2009 11:33 PM | Reply | Permalink
AS
It had to do with "requiring" people to purchase. Without gitting too caried away: I always found the premase that driving is a "privalage" and that paying for auto insurance was "required" to be a joke; but few of us are laughing.
If you have never drove your car to work hoping never to loose your "privalge" becouse you could not aford said insurance you willl have a difacult time understanding my "nagging feeling". Do not get me wrong anything we gain from Obama regarding insurance will be better than the way we are treated now.
I have the speach on my laptop and plan on relistening. Perhaps I can be more spacific afterwords.
M. Paul
September 13, 2009 11:50 PM | Reply | Permalink
The part of this that makes no sense at all are that there are other demonstrably better ways to structure our healthcare system that will save us money in the long run, but they are viewed as 'socialistic' solutions, and as such are anathema to all things American. This whole public "debate" on healthcare has been as stupid as anything I've heard in years. As Crankypants would say, "Bah!".
September 14, 2009 11:49 AM | Reply | Permalink
The problem is we have the perception we're going to be forced to purchase an insurance package that as far as we know has been vastly transformed about as much as Wall Street has since it melted down last year - none, nil, notta. We have the right to be skeptical, especially since the public has the impression our elected leaders in both House and Senate are serving other masters than the voters who elected them. Perhaps we could band together and all refuse our employer-based insurance or personal insurance coverage and just pay the penalty fee in protest. It's about the only way I can see to let Congress know their legislative ability sux!
September 14, 2009 7:17 AM | Reply | Permalink
Miguelito - As someone who offered informative commentary on my recent post on proposed reform, you know that we agree on the need for more aggressive cost control. I expect you also realize that we disagree about the value of a plan without a public option in the sense originally proposed. I support a public option, but I've offered evidence to support my contention that even without it, the proposed legislation would mark a transformative leap for the better in offering Americans high quality affordable healthcare.
Rather than repeat the extensive evidence and commentary from that post and the ensuing thread, I hope readers will visit it as a complement to this post. The link is
http://tpmcafe.talkingpointsmemo.com/talk/blogs/fredmoolten/2009/09/is-the-public-option-important.php#comments
As a practical matter, I now see the chance of a government-run public option in what eventually passes as close to zero, the chance that it would be open to everyone as zero, and the prospect of starting over as almost equally low. I certainly rejoice that we won't start over, given my conviction that we are about to transform healthcare for the better. I would not discourage public option proponents from maintaining the pressure on Congress - first because the public option is a good idea, and second because it will frame the debate more favorably in terms of what eventually emerges. I would strongly discourage any attempt to sabotage the process so as to kill passage of proposed legislation.
I also support efforts to push Congress to maintain adequate subsidies for low income earners. Unlike Obama, I would not oppose taxes on employer-provided health insurance even down to middle income levels, although I doubt that's feasible politically.
Finally, in terms of visceral reactions to what is happening, I believe disappointment that we may not achieve everything we might wish should nor blind us to the major achievements that still await us, not blunt our enthusiasm to advocate for them. I also don't believe that antipathy toward private insurers should blind us to the reality that insuring 46 million more Americans is good for them as well as the insurers, and the fact that the latter will benefit does not negate the benefits to the former.
I could go on and on, but I would prefer readers to visit the post I linked to, where they will find many more details explaining the basis for my conclusions. I will certainly be glad to elaborate further for those who want to take it beyond that point.
September 13, 2009 11:59 PM | Reply | Permalink
Nothing has been accomplished except a big fat giveaway to the corporate pigs. I am all for capitalism but we don't have capitalism anymore...it is corporatism.
There will be no public option Fred. This is it...fini, no public option EVER. The president, and the congress will move on to the next 'reform' where the powers that be can lie to the American people again to figure how to give more money away to the upper 1%...and what sticks in my craw is that they'll say it is all in the name of doing good for the American people.
As optimistic and upbeat as you are I am equally down and depressed. If this president, with this make up in congress, can't deliver for the American people it is never going to happen.
Mark my words...there will be no public otion, nevermind the single payer I prefer, period. First the fat cats get bailed out with the TARP when they almost destroy our economy with their cheap gimmicks, and get bailed out on the public's dime, now we are being told we have to buy insurance in the private market? Yeah, change we can believe in has given me the warm fuzzies.
September 14, 2009 12:31 AM | Reply | Permalink
Minor correction: they didn't almost destroy our economy - they blew that shit up! Then left us with the bill and cashed all the fake money they printed in the form of CDSs in for the real stuff at 100% on the dollar. We're screwed for the rest of my generation.
September 14, 2009 1:46 AM | Reply | Permalink
I don't know kgb...the end of the empire might be soon. A moral rot has infested our fair land, as it has with all empires before us. This was a chance to fix that blight and we're taking a pass.
On a happier note, Clutch was great!!! 2nd time I have seen them in as many months. Next up Down and The Melvins on Tuesday, then Robin Trower on Thursday.
September 14, 2009 1:55 AM | Reply | Permalink
Sounds like you're closing out the summer with a bang! At least we can still rock-out as Rome burns ... I guess that's something.
September 14, 2009 12:44 PM | Reply | Permalink
Burn, baby, burn!
September 14, 2009 12:50 PM | Reply | Permalink
Yes I am...and I failed to mention that on the 5th of this month it was Motorhead.
Ever see the movie Airheads?
Steve Buscemi: Who would win in a wrestling match between Lemmy and God?
Harold Ramis: Lemmy!!
Steve Buscemi: (makes a buzzer noise) WRONG!!! Trick question. Lemmy is God.
September 14, 2009 1:24 PM | Reply | Permalink
I contend that they won't be able to move on as they will be required to address the escalating costs of the bill. We'll be revisiting this for a long time before they actually get the balls to do it right.September 14, 2009 11:55 AM | Reply | Permalink
Whnever I see the words "As a pratical matter" my brain registers it as (and please excuse my language it is not directed at you) "We're sooooooooo fucked!!!!"
September 14, 2009 12:35 AM | Reply | Permalink
Roger Cohen has an op-ed piece, Get Real on Health Care, that would go well with that piece you blog Fred. It offers more possibilities to consider that are working.
September 14, 2009 7:23 AM | Reply | Permalink
Fred, if you've noticed, the public isn't too happy with what little tidbits of info in the pending legislation they're hearing that will have serious ramifications on their lives and create more financial stress than they are willing to carry. I understand your position about controlling costs to keep everything affordable, however, it's apparent the Congress isn't too concerned the consequences of their actions and are throwing gasoline on a fire when they should be using water instead. Slate has an article which says the cost of providing employee health insurance at the same levels has risen so much, employers are pushing more of the cost of the policy on to the employee as well as increasing the co-pay for services - that means less money in paychecks and less disposable income. So the health insurance everyone is so much in love with and fighting so hard to keep rather than explore possibilities of the public option is about to bite them very hard in their wallets. This is definitely a Kobayashi Maru moment. And as we all know, the only way to beat the challenge is to change the rules for winning. The question is ... who is changing the rules and who will be the winners?
September 14, 2009 7:42 AM | Reply | Permalink
Hi Fred. You make some good points. I Amended my post to address them. I repeat those points here for your information.
Some of us 'liberals' are viewing healthcare reform as something that must be accomplished now, or it will not happen at all. I would contend that the Republicans and Blue Dogs understand as well as any progressive or liberal that changes to the system are mandatory for the US to remain competitive in world markets, and to protect an ever more financially threatened middle class. The question I ask myself: What is the difference between the bill that is being described to us by the beltway insiders and a bill that would pass if the Republicans had a majority in congress? In all honesty, I don't see much difference at all. This bill could pass with a 51/49 Republican majority IMO. If you read the link above to the Center for American Progress economic analysis on a public option that is allowed to pay Medicare rates, the projected savings are in excess of $3 trillion dollars over time. That would more than pay for any cost burden put to the taxpayers. Yet we're to believe that 'it just can't be done at this time' and 'America demands unique solutions to our healthcare problems'. I suppose that descriptor of "unique" is referring to all the public health systems that are operating around the world. So, if you buy that we need something different from the one that's proven successful in the rest of the world, perhaps a strong public option is just the 'unique' solution America requires.
Healthcare reform will get done either now or later. The Republicans know that. Their strategy in this 'reform' effort has been to hobble and make this bill so unwieldy that it will require 20 years of tinkering to straighten it out. The blame for crafting and passing such a inefficient bill will fall on the Democrats shoulders, and the R's are delighting in that, oblivious to the burden it places on ordinary American's. If the Republicans came to power, you can bet that they will address healthcare reform and get a bill passed, (that would be their political resurrection after their recent crash and burn), and I'm beginning to think it wouldn't look a lot different than this bill is shaping up to be. My point in all this is that I believe their should be some benefit to controlling both houses of congress and the presidency, but I'm not seeing it. On that note I would also urge anyone concerned with passing meaningful healthcare reform donate to the organization, Democracy for America, which is collecting funds specifically to mount primary challenges to vulnerable Blue Dog seats. It's time Democrats started behaving like Democrats.
September 14, 2009 11:32 AM | Reply | Permalink
Thanks, Miguelito. I had not read the new part at the time I made some further comments below, but in any case, those were more directed at remarks by others than at your post.
Let me just address one issue. You state that the public option should be allowed to pay Medicare rates. Here is where I see a problem at least in the short run. First, of course, is that no hospital or provider would be compelled to accept public option subscribers if the providers could get higher payments elsewhere. Most providers have very little choice when it comes to the Medicare population, but a few do opt out of Medicare, and many refuse to accept Medicaid payments with their rates that are even lower.
The second issue relates to a claim often made by reform opponents that Medicare payments are not higher because they are subsidized by private insurers who pay the hospitals and providers at higher rates, thus allowing the providers to earn an adequate income. My inclination is to believe that the claim is true. The reason it's true, of course, is that there are too many providers providing too many duplicate or unnecessary services - often the most expensive ones - and that this flooded and inefficient market does indeed make it difficult for some providers to survive financially. What this means, I suspect, is that we can't simply try to force down payments to Medicare levels without worsening the quality of care, because both good care and bad or unnecessary care will decline. Rather, the reduction in insurance payments must be coordinated with system restructuring, so that the good parts remain, and can stay solvent because the wasteful elements contributing to costs have been eliminated.
We agree, I hope, that both restructuring and cost reduction are needed. How to coordinate them will be a challenge indeed, both politically and strategically.
September 14, 2009 12:11 PM | Reply | Permalink
We do indeed agree on that Fred. What disturbs me is the absence of addressing these issues in a bill that's touted as "healthcare reform", when in fact it is merely insurance reform, and not a very vigorous reform at that. Then Universal coverage is thrown in as something in and of itself with no regard for the underlying causes that threaten to bankrupt the country, and the system goes rolling along. I think where you and I differ the most is where you stated
I still believe we can see some movement on the part of the Blue Dogs in particular. That is why I made the link to 'Democracy for America' and it's current goal of raising funds for primary challenges of vulnerable Blue Dogs. I don't believe anyone has turned up the heat under the Blue Dogs from within the Democratic Party as of yet, like a recalcitrant Republican would have experienced had s/he challenged their party. If those pols believe that their are large blocks of voters out here from without their home districts who will contribute to their overthrow, perhaps they will be more amenable to a slightly more progressive agenda. Thanks again for commenting.September 14, 2009 12:24 PM | Reply | Permalink
"Medicare payments are not higher because they are subsidized by private insurers who pay the hospitals and providers at higher rates, thus allowing the providers to earn an adequate income."
- Fred, I keep hearing this argument. But I've never seen it backed up by numbers. It's usually just asserted. Care to give the argument a go sometime, or provide a link (in a separate blog or here)?
September 14, 2009 12:38 PM | Reply | Permalink
I can't provide a study or anything to back up that particular remark, but it makes sense to me on its face.
Medicare negotiates below-market rates based on its size and then only pays 80% of the bill with the idea that private coverage will supplement the other 20% for the providers.
That actually never happens as most Medicare members can't afford the supplemental, so the 20 percent becomes a delta that is passed on to the private insurance industry in all sorts of subtle ways.
Rising costs of care is one.
September 14, 2009 2:23 PM | Reply | Permalink
Thanks but I was thinking more of numbers to plug into the model:
Cost of a procedure for provider P = x
Rates negotiated by private insurers = y
Rates negotiated by Medicare = z
Z is ...% less than y
x is than y
z is less than x by ...%, leading to cross-subsidy of medicare beneficiaries by private insurance clients.
Something like that.
I haven't seen the evidence that z is less than x. And, sure, there are complications even after that fact is established, but it's a start for the discussion...
September 14, 2009 2:37 PM | Reply | Permalink
Obey - This is hard to pin down, but the following is a link to one study that showed an inverse correlation between reduced Medicare reimbursements and increased private insurance charges -
http://content.healthaffairs.org/cgi/content/full/25/1/197
I don't doubt that there might be some healthcare facilities that raised their charges to private insurers in response to Medicare cuts, but which could easily have absorbed the Medicare cuts without doing so. On the other hand, many institutions are struggling financially because of duplication (e.g., too many hospitals competing for patients) and would need to compensate for lost Medicare revenues by finding the money elsewhere. In the long run, it is the duplication that needs to be eliminated, but that is not an easy task.
September 14, 2009 5:02 PM | Reply | Permalink
Thanks Fred. Will take a look at the link. Frankly surprised to see this data, as I thought much of the price difference between US and European rates for comparable procedures was due to lack of pricing pressure in US markets. That would still be consistent with this data, I guess, but still strange to see the inverse correlation.
September 14, 2009 7:21 PM | Reply | Permalink
I don't think a single study is conclusive. On the other hand, there are two opposing pressures on insurers, and the net effect is hard to predict. To attract subscribers, they must keep premium costs low. To be utilized by providers, they must make higher bids than competitors under circumstances where providers needn't choose all comers. When providers have the upper hand, insurers may feel forced to bid quite high. This would occur, for example, if a community has a high-prestige medical center that dominates in its ability to attract patients - a provider monopoly of sorts - and the insurers are multiple.
The opposite situation occurs, for example, when there are multiple good providers, who therefore can't be too demanding, but insurers compete to provide group insurance for a major corporation. That corporation can often negotiate very favorable premiums. It is one reason why current proposals tend to leave large employers out of the mix, and focus on small businesses, the self-employed, and the currently uninsured.
September 14, 2009 8:03 PM | Reply | Permalink
And continuing in the fine tradition of modern day American politics the surviving members of the shrinking middle class will have to pay the most.
This time with mandates! And Fines!
This is such a stupid plan. Do they even realize how much these plans cost? Universality for the sake of universality is not exactly the strategy I envisioned. We need to cut costs, with either public option, or alternatively we could set the pricing by regulation (aint' going to happen).
How did the Public option get defined as the left liberal approach? Why is the case not being made on the economic grounds? That should be front and center. Even skeptical conservative economists begrudgingly conceed the point
So with mandates we are going to tell people they have to give their money over to a private company. This will only give more power over to the insurers. I hate to say it but I might end up on the side of the Teabaggers there; it strikes me as unamerican too.
I am really discouraged.
September 13, 2009 11:59 PM | Reply | Permalink
My feeling is that the strategy of the R's is to confound the reform process to the point where everyone will know 5 years from now what a stinker the plan is unless the Dems can successfully amend it/pass a new reform in the ensuing years. At that point the Dems will own the failure, and the R's will ride in on their white stallions and construct a 'fix', saving the day, and resurrecting their failing party in the process.
September 14, 2009 12:00 PM | Reply | Permalink
Bi-partisanship at its finest.
Health care reform = forcing people who can't afford insurance to pay for it
Not really what I envisioned. Again the conservatives and centrists get their way and they are smiling all the way to the bank with the checks from Big Pharma, Health Insurers, Trial Atty's, ect all who will make a killing from this mandate. Why did I ever think things would change in DC? This is like a bad acid trip that never ends...what a fucking nightmare.
September 14, 2009 12:19 AM | Reply | Permalink
The only way to fix it is to flush it all away...this bullshit 3-ringed circus sideshow.
September 14, 2009 1:07 AM | Reply | Permalink
Seriously...I hope that the 'planet killer' hunk of cosmic debris with our name on it hits and hits soon. I will drive down to the sea and wait for the 1,000 foot tidal wave to roll in, laughing all the while at the thought of how 'advanced' mankind thinks it is. We are so advanced that we feel we can play God, deciding who lives and dies, for something as meaningless as how much money can be made. Technological giants, in our own minds at least, and ethical midgets.
Please, let me see that fireball streaking across the sky. Time to start over...
September 14, 2009 1:27 AM | Reply | Permalink
Well, I didn't really mean to suggest anything as drastic as that when I suggested starting over. ;)
September 14, 2009 12:11 PM | Reply | Permalink
Yeah, me too dd. But the more I observe the more I think that is the only way that things will be substantively changed. :-(
September 14, 2009 12:14 PM | Reply | Permalink
Damn, miguel I'm very sorry. Me and dd were posting messages back and forth, must have had him on my mind when I posted this comment.
September 14, 2009 7:23 PM | Reply | Permalink
No worries Obey. We all do it from time to time! ;)
September 14, 2009 7:29 PM | Reply | Permalink
Goodness peeg! You've devolved into a newt (or something).
September 14, 2009 1:49 AM | Reply | Permalink
ack!
September 14, 2009 8:15 AM | Reply | Permalink
It's an 'axolotl'. Think of it as a Mexican 'water pig'. ;O
September 14, 2009 11:37 AM | Reply | Permalink
Beware of chickens, Pig. I think they eat your kind!!!
September 14, 2009 11:55 AM | Reply | Permalink
With amazingly tiny bacon!
September 14, 2009 1:26 PM | Reply | Permalink
They're called bacon bits, I believe and they dress a salad nicely if you can get them before the chickens do.
Ummm, Miguel, I'm not saying I have ever had bacon bits on a salad, but so I've heard. And they said it was particularly pleasant with Ranch Dressing.
September 14, 2009 3:50 PM | Reply | Permalink
ACK!
September 14, 2009 9:03 PM | Reply | Permalink
What you suggest about employers reducing the quality of healthcare provided by their employee health insurance plans is already happening. I apparently made it out in the knick of time, in terms of what services are available to me, although my Cobra payment is a killer. But I'm luckier in that sense than my former colleagues, who were notified, just last week, that their insurance plan has been switched to one which costs them more and provides less -- an "unavoidable decision" they were told, based on "numbers of employees precluding our use of the same plan."
Bosh. It was a line item in the budget they decided to slash, at employee expense.
September 14, 2009 9:18 AM | Reply | Permalink
Slate has a very good article on that very subject...businesses pushing the cost of health care insurance on to employees and jacking up the co-pays.
September 14, 2009 11:25 AM | Reply | Permalink
http://www.slate.com/id/2227984/
September 14, 2009 5:39 PM | Reply | Permalink
I don't know how big they are, but for our company every time one of our employees would get sick and actually use the insurance - the policy holder would double, and once even tripled, our rate. The insurance industry won't write a policy that lasts longer than a year for just this reason. It's your "risk pool" ... and they studiously keep 'em as small as possible so even reasonably minor expenses provide an excuse to jack the rates.
We were literally spending 3 months out of every year pricing and shopping for policies (after the first two times when we were caught with our pants down and had to mad scramble into something). It was an amazing HR burden. We finally evened the situation out by using a staff leasing company ... but you can only do that if you have more than 18 employees.
My point here is that the assertion that somehow employers are profiting by screwing their employees on health care isn't really very accurate. I'd bet much money that the company's bottom line was actually worse after downgrading the policies, not better.
September 14, 2009 12:55 PM | Reply | Permalink
PS -- is that a newt or a fetal pig? In either case, the creature is appealing but alarmingly vulnerable.
September 14, 2009 9:20 AM | Reply | Permalink
It's a lizard of some kind found in the lakes and ponds around Mexico City I believe. Very rare and only in that one area.
September 14, 2009 11:23 AM | Reply | Permalink
It's an Axolotl .
September 14, 2009 12:07 PM | Reply | Permalink
Salamander then. BTW ... salamanders generally have a body form similar to that of lizards.
September 14, 2009 4:34 PM | Reply | Permalink
I've only known of one Newt, so glad you're not that. I bet you didn't want to kill your China pig. But, you can axolotl or axolittle, maybe you'll get something in the middle. Regardless of your avatar, you're nothing if not human, Miguel.
September 14, 2009 10:45 PM | Reply | Permalink
Now this comment is what blogging is all about Don. Joy. Thanks and LOL. :)
September 14, 2009 10:54 PM | Reply | Permalink
We've really got to start framing the discussion in terms of
what constitutes incremental progress rather than incremental reinforcement of a dysfunctional system?
The bill as it is taking form is really short of measures cutting costs whether through market discipline (both among insurers and providers) or through direct government intervention, and basically vastly increases the industry subsidy in the name of universal coverage. It makes progress towards cost-cutting harder, not easier, down the line as industry lobbies get bigger and stronger.
Characterizing opposition to the present bill as 'sabotage' is frankly insulting. The bill should be cut down to (i) the insurance exchange with strict regulations, and (ii) medicaid expansion with some delivery-systems reform.
If private industry cannot or will not provide affordable health care, the solution is not to throw more money at them in a plea on bended knee that they do so. The solution is to provide a government program as a back-stop to help those who the private market shuns.
This bill is insane.
September 14, 2009 9:24 AM | Reply | Permalink
Insane, indeed! We started working on health care reform. We quickly surrendered the initiative to instead develop a "Health Care Insurance Profit Enhancement Act" that disallows a public option because the Insurance Companies don't want the competition.
Has there ever been a more ludicrous argument presented with a straight face than the supposition that the public option is a bad idea because the Insurance Companies could not compete? Just what does this say about the priorities we are working with here?
This bill is insane. It has about as much to do with health care reform as the Patriot Act had to do with protecting Liberty.
Incremental progress I can support. But I agree that we accomplish nothing here other than pouring monies and political capital at an irresponsible reinforcement of a failed enterprise. Disgusting!
September 14, 2009 10:25 AM | Reply | Permalink
September 14, 2009 12:34 PM | Reply | Permalink
Jeezz, Miguel, the Frankenmonster strategy is insane. It's "implement REALLY BAD POLICY in order to show everyone how bad the policy is". It would be like selling heroin to schoolkids in order to make them see how much it sucks to be a drug addict. Or... okay I'll stop with the analogies.
But I'm making the point about a stripped down bill within the context of ongoing negotiations with Snowe, which seem to involve INCREASING subsidies, and simultaneously lowering the cost of the bill by, presumably, restricting Medicaid expansion or diluting Medicare benefits. Which is not insane, but just evil. It's the direction the bill is taking right now...
September 14, 2009 12:49 PM | Reply | Permalink
It's what we're calling "bipartisanship". That's when the majority party crafts a bill that could have been written by the minority party.
September 14, 2009 2:15 PM | Reply | Permalink
I rec this comment.
September 14, 2009 9:12 PM | Reply | Permalink
My girlfriend's employer has cut a lot of jobs in the last year. She has keep hers because she is near indispensable, but has nonetheless taken 3 10% paycuts. I haven't taken a paycut, but then again, haven't had a raise in 2 years either, which amounts to nearly the same. Yes, we are a part of that vanishing species, the middle class. Our government, both parties, shits on us, bought and paid for by the financial oligarchy that now will "reform" healthcare on our backs. They will squeeze ever more obscene profits out of the system (meaning us) while the real level of wellness and the general level of health infrastructure in this country continues to decline.
Hey, so glad that change has come to America.
September 14, 2009 10:25 AM | Reply | Permalink
We have to do something. Mandates without a real public option that as you say uses medicare rates available to all... would be criminal.
I have been communicating with my reps and letting them know that
No Public Option=No Mandate
and
A 'Trigger' is a Joke, a Scam, and an Insult.
I figure if they really can't get the public option without a trigger, that the progressives in congress should fight to remove any mandate in the bill.
That way the whole thing would not be just one big pay off to the corporations.
September 14, 2009 10:39 AM | Reply | Permalink
If you really want to have a system where you can show some genuine savings then we have to get the 29% admin costs down to a single digit number. That percentage is about the industry living high on the hog. It puts money in the pockets of executives, it's money the industry uses to lobby our congress, it's money that goes to various industry junkets and just plain waste. I don't want corporations to have the ability to be soaking me on costs and then using the proceeds to fund a PAC that seeks legislation which is also focused on screwing me. This is exactly why corporations should not be able to participate in the political process. Not only are they not citizens but they will that citizen status to screw real citizens. This is exactly what corporate America has been doing for three decades or so.
September 14, 2009 11:03 AM | Reply | Permalink
Hi tpc- You refer to "industry" but the 29% administrative cost is across the board. Insurer administrative costs are about 11%, and the bulk of administrative cost resides within healthcare itself - costs of hospital admninistration, office rental, staff help and paperwork utilized by physicians and other practitioners, etc.
If insurer costs were reduced to levels comparable to those achievable in other countries, they would sink to about 6%. Some of that may be achievable by currently proposed legislation, which should substantially reduce the need for underwriting that creates different rates for different individuals according to health status, and cherry picks individuals insurers wish to insure while excluding others who would cost them more.
September 14, 2009 11:36 AM | Reply | Permalink
I should have said that private insurer adminstrative costs are about 11% of those insurer's expenses. They are only about 5% of total healthcare costs (out of the 29% you refer to).
September 14, 2009 11:45 AM | Reply | Permalink
I don't buy your numbers Fred. The reason is simple. The insurers have a system in place that significantly influences the costs of the other participants. The overall administrative cost is still way too high. I provide computer services for quite a few medical facilities and the paperwork mill they have to deal with is absolutely crazy. You can break it down all you want but it is still an archaic system. Between insurers, medicare and medicaid the billing alone is a disaster. That says nothing about recording and maintaining individual healthcare records. Out of a dozen or so medical practices I service none of them do things in a common way. Every practitioner has a ton of choices to make to obtain various types of services all of which are focused at achieving common goals with each one going about it in a different way. It is just stupid to have a system where there exists a thousand different wheels to accomplish the same thing. The absence of standardization is extremely costly in the aggregate.
Finance and healthcare are two industries which, unlike most every other industry in this country and world wide, have never embraced any form of standardization for common processes. That they are both a fucking mess should come as no surprise. In highly integrated industries such as these you must have standards. The integration within these industries demands that individual units must be able to interoperate. That is virtually impossible without standards. Having some firsthand knowledge of the mess this has made makes me puke.
September 15, 2009 2:52 AM | Reply | Permalink
I was intrigued by a NYT piece yesterday suggesting something that seems self-evident in retrospect - the Obama Administration never envisioned the public option as a centerpiece of reform, and was surprised that it assumed that status in the eyes of proponents and opponents. Obama judged that option attractive, but not essential. In my recent post, I offered detailed evidence indicating why I subscribe to that position, and I hope those interested will visit the post to review that information.
http://tpmcafe.talkingpointsmemo.com/talk/blogs/fredmoolten/2009/09/is-the-public-option-important.php#comments
Current reform discussions at times refer to the possibility that coming reforms will be "incremental". The term is ambiguous. If it signifies that proposed legislation purports to reform mainly insurance, with less attention to the larger problem of healthcare tself, "incremental" is an appropriate designation. On the other hand, if it implies that the step forward would be minor, "incremental" is surely wrong. Indeed, in my view, we are poised to witness an advance that will be judged historic in moving us toward universal or near universal healthcare coverage for all that is equitable, and as affordable as insurance reform alone can reasonably accomplish. This will be true with a public option, without one, or with some variant thereof - the differences any of these portend is likely to be marginal.
It seems to me that our task at this point is to ensure that the proposed legislation encounters no last minute detours. Equally important, it must be viewed as only opening the door to system reform, via its demonstration projects, comparative effectiveness research, primary care incentives, and other steps toward system restructure. That restructuring will undoubtedly consume a decade or more, but its success or failure will determine our ability to emulate all other industrialized democracies in providing effective healthcare to all at affordable costs.
To reinforce the conclusion that system reform is central, while a public option or its absence is not, it's worth repeating that these other nations vary from those based almost exclusively on public insurance to those that deliver healthcare almost exclusively via private insurers. What these nations share in common is strong insurance regulation, and an organized healthcare system that avoids the chaos that prevails here.
Finally, if there are those here with a different perspective, I would appeal to them to revisit the post I linked to above, and if they wish, address each item cited there in some detail. What I hope to avoid is the circumstance in which any of us solidify our views to the point where evidence and data start to be ignored. At that point, the debate descends into dogmatism, and I don't want that to happen.
I make that appeal based on the evolution of my own perspective on healthcare reform, which has changed considerably since I began informing myself on tbe subject. Specifically, I have gradually, and somewhat grudgingly, been forced to admit that my earlier view judging insurance costs as a major villain and a public option or single payer alternative as an adequate solution has been forced to yield to the evidence about our own healthcare system mess, and evidence as to how other nations have successfully addressed similar challenges.
September 14, 2009 11:06 AM | Reply | Permalink
Thanks for continuing to be a consistent voice of reason on this very important subject, Fred. I may not comment on most of your comments, because they mostly echo things I have been saying since the debate began, but I do enjoy reading them as a way to perhaps better explain myself.
September 14, 2009 11:45 AM | Reply | Permalink
PS: I should have added they echo my comments insofar as they offer more nuanced, medically-educated and liberally-palatable narrative than the one I usually provide. :O)
September 14, 2009 12:02 PM | Reply | Permalink
With less amusing youtube links, however.
September 14, 2009 2:53 PM | Reply | Permalink
Hey Fred again, that was a great post of yours and thanks for supplying yet another link to it. ;) When you state
My contention would be that abandoning a public option now would be just that, a last minute detour. Otherwise you make valid points.September 14, 2009 12:46 PM | Reply | Permalink
There is NOTHING in this bill that makes access to good health care any better for anyone! This is an unmitigated disaster!
September 14, 2009 12:21 PM | Reply | Permalink
I think it's coming down to no public option, no dice. Which is far better than the alternative. After the summer of teabags - republicans will own the corporate rape of America. I say hang it around their corporate-welfare loving asses and see how that goes for 'em. Bring it back next year and try again starting from single payer.
September 14, 2009 1:20 PM | Reply | Permalink
I totally agree, but the sausage king formerly of Chicago is going to make the sausage and get the legislation passed, regardless of the alarmingly high "lips and assholes" content.
September 14, 2009 2:55 PM | Reply | Permalink
Both Hmmm and Kgb were among those I had in mind when I made the appeal above that anyone who disagreed with my conclusion that the impending legislation will be a major advance might visit the link I provided, and then provide a detailed, itemized response to each point I made there, based on quantitative data to the maximum extent possible.
I remain amenable to modifying my perspective, as I have in the past. What I can't accept are dogmatic claims that seem, to my eye, to reflect more the intemperate outrage of people frustrated because they can't get everything they want than the reasoned view of individuals who are less interested in venting their frustrations than in promoting the welfare of the American people.
If the shoe fits, wear it. I am usually fairly tactful, and not being infallible, I respect intelligent disagreement from my position when it is based on logic and evidence. But hundreds of millions of Americans will be punished if we fail to pass the type of proposal that seems likely to emerge, and it is extremely selfish, I believe, to punish them as a form of emotional catharsis.
Again, if the opposition to passage is rational rather than a reaction to frustration, let me see the evidence, but remember that repeating a claim is not evidence, it's dogmatism. Denouncing those who fail to satisfy you and calling them traitors or appeasers is not evidence, it's namecalling.
I will repeat what I said above - my views have evolved as I became better informed about the healthcare issues. What I once thought was mainly a problem of greedy insurers who could be brought to heel by a public option turned out to be something else. That something else was not the conclusion I wanted to reach, but one I was forced to concede based on my scientific background, which taught me that I have go where the evidence takes me. Whether it's the public option or some other reform component, we must view each of these as a policy, not a religion.
Finally, for the third time in this thread, I will repost the link to my earlier post, so that anyone interested in evidence rather than religion can visit it, read the evidence, consider it in detail, comment on it item by item, and then either agree with me or prove me wrong. The link is
http://tpmcafe.talkingpointsmemo.com/talk/blogs/fredmoolten/2009/09/is-the-public-option-important.php#comments
Three time is probably enough, like three strikes in baseball. If anyone chooses to ignore it and continues to dogmatize, I won't repost the link, but I will fervently hope that open-minded readers will know what judgments to make.
September 14, 2009 3:18 PM | Reply | Permalink
Here. I'll repost it for you, now you can stop worrying if people 'choose to ignore it and continue to dogmatize'. ;)
http://tpmcafe.talkingpointsmemo.com/talk/blogs/fredmoolten/2009/09/is-the-public-option-important.php#comments
September 14, 2009 5:29 PM | Reply | Permalink
You misunderstand where I'm coming from Fred. I am a reasonably anti-government independent who chose Obama almost exclusively because he promised no mandates. He was actually quite strong about it and used it against Hillary in the primaries when they were going after the "Hard Working White Voters" who tend to feel like I do. His speech to congress represented a craven and unapologetic abandonment of a very clear promise he made to voters to get their support in this regard. If that's cool with you, fine, but it does raise the question: will Obama actually keep his word about anything? So far, notsomuch. Considering he is point man for the democrats this reflects poorly on all of them.
From a political standpoint, the first mistake you make is the assumption that the "center-right nation" frame is anything but bullshit. It's a republican lie told to make their followers feel/seem less impotent than they actually are. If public opinion was really driving the media narrative, people would be up in arms about mandates. As it is, billions have now been spent on literal lies to get people protesting the Public Option - and the so-called crusaders like "OMGZ! FEMA Death Camps!" Glen Beck haven't issued a peep about the government forcing you to buy a policy. How do you explain that? The media has created an alternate reality that folks like you regurgitate as fact.
I don't bug you anymore because we've reached an impasse where I believe one thing and you believe something else and we are unlikely to change each others minds. Your view relies on either international examples that don't match what's in the bill or broad assumptions that are not specifically spelled out in the bill. I think the epitome of the latter would be point #9 in the post you keep flogging. Ultimately, in order for the rosy scenario you paint to come to pass, we have to assume that despite an avalanche of industry money, the broad strokes of the bill as written would be construed in a pro-consumer fashion. The attacks against the Public Option pretty much prove this is not the intent. If it were, competing with the public option would not impact an industry bottom line already curtailed by other elements of the legislation. Equally possible (and more likely based on the jacking of interest rates, overdraft fees, etc. etc. that followed our recent bail out of these exact same interests) is all the changes in points 1-8 will be financed by simply rolling the profit losses into premiums and a resulting spike in insurance rates that I am forced to buy regardless. If I don't want to, it is tacked on to my taxes and I am forced to pay full market rate for services that were never provided. That is FUCKED UP - more corporate welfare sucked directly out of my pocket and my health doesn't improve one whit. I feel we are better off not taking that risk.
I don't know if you noticed this, but insurance stock performance currently directly correlates to the seeming likelihood of a public option. That's because it would make a system that is far more difficult to game. You seem like a smart guy, but I simply can not believe that you understand the dynamics here better than the industry investors who know EXACTLY why they are investing over 2 million dollars a day to kill the public option.
Eliminate mandates and I will happily support this bill without a public option. With mandates in it, the public option is just barely enough to keep me from joining a militia and saying fuck this government (and might I recommend to the left wing, if you REALLY want to send a message join or start a militia). Remember, it is mandates not the public option that is my major problem with this bill so supporting it is a HUGE compromise on my part. Others were strong advocates for single payer and this also represents a HUGE compromise on their part. It seems to me that the only ones not being called on to compromise are the republicans and democrats who have literally and unapologetically been purchased by corporate interests and are pretending to fight for the demographic of which I am a part - even though what they are doing isn't what we want.
And at the end of the day it's also about keeping one's word. I and the majority of other Americans upheld our end of the bargain. We selected the party who put forth a clear solution. It's not like this just popped out of the blue, it was well discussed and right up front when people went to the polls. As I pointed out to Jason - I fucking caucused! Do you have any idea what that means for an independent who doesn't really like democrats much more than he does republicans? If democrats can't follow through with what they promised because it's "too hard", their mouths shouldn't have written checks they couldn't cash. When (if) Obama loses this without even throwing a single punch into the teeth of his own blue dogs, democrats will have proven themselves to be total pussies. And let me tell you, most Americans don't know shit about policy but they don't like to vote for a pussy. That's what the GOP is banking on - mainly because it works every time. Democrats are the party of wuss.
Pass it as promised or kill it - at least be willing to be bold. I'm with the progressives.
September 15, 2009 12:20 AM | Reply | Permalink
Good comment KGB. I never thought of forming a Public Option Militia, although I'd be more at home in a Single Payer Militia. I had not noticed the correlation between Insurance co stock prices and the perceived likelihood of a public option passing. I might have predicted it though.
September 15, 2009 10:39 AM | Reply | Permalink
The blame for crafting and passing such a inefficient bill will fall on the Democrats shoulders, and the R's are delighting in that, oblivious to the burden it places on ordinary American's
This is an extremely important point. The universality, non-discrimination and pre-existing condition components of the reform package are going to produce upward pressure on the costs of policies for healthy people who are already insured, and the subsidies add to the deficit. If very serious steps aren't taken to lower aggregate costs, the end result could be a plan that is a net loser for a majority of Americans, especially in the near term.
I disagree with Fred that the probability of getting a public option is low. Whatever Obama's personal preferences, his speech gave Congress all the political cover it needs to pass a strong public option. The public now strongly supports Obama's plan, and the plan officially includes a public option.
Communicate this to your Member of Congress: you will blamed for inaction; you will also be blamed if you vote for a reform package that ends up being a big winner for insurance companies and a loser for a majority of middle class Americans.
Over the next several months you can be damn sure that stories will be run describing Americans who continue to have difficulty finding affordable insurance; about insurance companies raking in big bucks from the new markets for policies created by mandates; about small businesses and self-employed Americans who are struggling with health care costs; about continued stagnation of wages caused by expensive health care; and about doctors and executives in the insurance, pharma and medical supplies continue to make fortunes on the back of all this suffering.
September 14, 2009 2:56 PM | Reply | Permalink
September 14, 2009 3:22 PM | Reply | Permalink
I'll take the "attaboys" miguelito:)
... as long as they come along with letters to Members of Congress!
September 14, 2009 3:43 PM | Reply | Permalink
Just faxed my rep and senators two days ago about just this subject.
September 14, 2009 3:48 PM | Reply | Permalink
I disagree with Fred that the probability of getting a public option is low.
Dan, I bet otherwise, and it's a bet I would like to lose. It's based on my perception of political realities as acquired from both good and bad media reporting. My point above, is that a public option, while desirable, is not essential. Having tried to document the reasons for that extensively elsewhere, I won't belabor that point here, but ask readers to review what I've written above.
There seems to be a perception that if something is good for the insurance industry, it must be bad for the public. If it's a case of excessive profiteering, that would be true, but insurer profits are low (about 3-4%, representing less than 2% of total healthcare costs), and insurer overhead is also not exorbitant, and is controllable via legislated minimums on medical loss ratios. On the other hand, if insurers profit because 46 million more people buy insurance, with subsidies if necessary, the insurers benefit, and so do the 46 million.
As to costs, I hope everyone interested has had a chance to review the data I've presented indicating that insurance excess contributes only minimally to this, and that the major contribution comes from a chaotic, disorganized, duplicative, and inefficient healthcare system. Insurance needs to be reformed to address inequities. The healthcare system needs to be reformed to address costs. The proposed legislation does a superb job with inequities, but only begins to tackle the cost problem. After legislation passes, that will be the next serious challenge.
September 14, 2009 3:31 PM | Reply | Permalink
On the other hand, if insurers profit because 46 million more people buy insurance, with subsidies if necessary, the insurers benefit, and so do the 46 million.
But it may also produce a voter revolt, Fred. A lot of people are eventually going to ask why they are paying taxes at the levels needed to fund these subsidies, so that they can put money in insurance industry pockets - and derivatively into the pockets of other highly paid members of health care industry - when they could be paying lower taxes to fund subsidies that achieve the same social bang for the buck, but are not as lucrative for the stakeholders.
September 14, 2009 3:50 PM | Reply | Permalink
But it may also produce a voter revolt, Fred. A lot of people are eventually going to ask why they are paying taxes at the levels needed to fund these subsidies, so that they can put money in insurance industry pockets - and derivatively into the pockets of other highly paid members of health care industry - when they could be paying lower taxes to fund subsidies that achieve the same social bang for the buck, but are not as lucrative for the stakeholders.
Again, I wish I could agree that voter resistance would target those making too much money. Our history suggests it will target those making too litle - i.e., the recipients of subsidies - and the consequences will be reduced taxes and reduced subsidies, but little change in revenues for the wealthy.
I've already asserted that there is only a modest amount that can be squeezed out of the insurance industry, because profits are low and overhead is not exorbitant. That is no reason not to squeeze, but it should be done with the realization that much more must be squeezed from the healthcare system itself.
Unfortunately, that is not simply a matter of reducing profits. Most excess healthcare costs stem from duplicative or unnecessary facilities and services. These include, for example, hospitals in localities that are already glutted with hospital beds, so that each of the hospitals is struggling to stay afloat rather than awash in profits. Eliminating the duplication and inefficiency will cost jobs and create pain for many within healthcare, including those who try to serve the public and who don't earn much money - nurses, technicians, laundry suppliers, etc.
It must be done, but it can't be done by assuming that no innocents will be harmed.
September 14, 2009 4:11 PM | Reply | Permalink
It must be done, but it can't be done by assuming that no innocents will be harmed.
Agreed, Fred. That's why I was so frustrated early on by some of the loose discourse about the interests of health care industry "stakeholders" which seemed to suggest that we could reduce all kinds of waste without affecting any actual people, and in a way which left all the stakeholders just as well off as before. Apparently when people hear about "excess costs" and "waste", they sometimes imagine money literally being flushed down a toilet or thrown into the wind. But excess costs refer to things that are being purchased now that don't have to be purchased, or that at least shouldn't have to be purchased at the prices at which they are presently being purchased. Either way, cost-cutting reforms mean that at least some people suffer some consequences and dislocations.
If for example, some company sells fewer magnetic resonance imagers because hospitals in more regions begin to pool their resources instead of engaging in wasteful and duplicative "arms races", then some of the people who work for companies selling the imagers are going to be hurt. The same is true if the prices of certain medical supplies go down because of more effective competition in the market for those supplies. And if doctors begin prescribing fewer unnecessary tests, then the labs that run those tests need to employ fewer lab techs, purchase fewer supplies from their suppliers, etc. - and some people are affected negatively.
September 14, 2009 4:56 PM | Reply | Permalink
Fred says:
What is not taken into account in this assessment is the inefficiencies and waste that comprise that overhead. If I spend twice as long accomplishing a task my overhead just doubled with the same result to show for it. The whole concept of a public option is to eliminate those inefficiencies, (advertising, marketing, processing inefficiencies, etc), to provide a competitive model for the insurance industry to strive for.September 14, 2009 5:16 PM | Reply | Permalink
If the Republicans came to power, you can bet that they will address healthcare reform and get a bill passed, (that would be their political resurrection after their recent crash and burn), and I'm beginning to think it wouldn't look a lot different than this bill is shaping up to be.
I tend to doubt this very much, Miguelito. The Republicans would move a bill alright. But the Republican approach to health care is the same as the Republican approach to education. They want more "choice": In other words, they want to make it easier for insurers to differentiate different classes of insurance subscribers, so that they can bundle the most fortunate, the healthiest and lowest-risk Americans into groups that can be offered lower rates, and charge higher rates to everyone else. They also love deregulation. They would likely try to pass a law allowing people to shop in whichever state they like for a policy, thus giving a competitive advantage to the least progressively regulated states, and driving the entire market in that direction.
They would also try to address the national competitiveness issues by moving away from the employer-based health care system with initial modest subsidies, but ultimately putting more of the responsibility for health care in the hands of individuals themselves, and allowing the responsibility for outcomes to fall to the lottery of life, and the vicissitudes of luck and genetic endowment. We have already seen that this was the Social Darwinist approach favored by Phil Gramm and John McCain. And McCain is one of the "moderate" Republicans!
The Republican approach to these kinds of competitiveness issues and cost issues has always been to allow the free enterprise system to jettison the weakest, most vulnerable, lowest-skilled and most unproductive Americans from the mainstream economy into a barely maintained underclass. The people who are left in the economically healthier part of the system then reap the economic benefits that come from casting aside the "dead wood".
It has ever been thus: Republicans seek to divide ordinary Americans from one another and stoke cultural and socio-economic tensions and animosities, and then build a coalition between the wealthy and the most easily exploitable of the ordinary classes. Democrats at their best seek to hold the lower and middle classes together, and use their combined power to take on the power of entrenched wealth.
Republican health care reform means better rates for the affluent and the healthy; more profits for providers and insurers, and a crappier life for millions of the most vulnerable. It also certainly means a crappier deal for millions of angry lower-middle class and poor whites, who are seduced into voting against their own economic interests for the sake of sticking it to all those black and brown people.
Democratic reform still can mean: a better and fairer deal for all, paid for by slashing the exploitative profits and extravagant expenditures of the health care industry. This is a very real, very important distinction. And we probably have a very brief window of legislative opportunity to get something decent done.
September 14, 2009 3:41 PM | Reply | Permalink
Yeah. I did overreach a tad there in that regard. Thanks for keeping me honest. My major point is that the R's would easily dismantle an inefficient and costly healthcare reform with the approval of a majority of the electorate if this bill is as poorly crafted as it is shaping up to be. At that point the Dems will be the goat, and the R's will win the day with whatever relief they offer, regardless of it's shape.
September 14, 2009 5:22 PM | Reply | Permalink
This post is why I've been against health care reform all along. The individual mandate is just a tax increase on the middle class (and some of the poor, and not a few rich people) in return for which they get a product they could buy for that amount of money already if they wanted to.
The system now isn't perfect, but it's better than the alternative.
September 14, 2009 4:05 PM | Reply | Permalink
The system now isn't perfect
Gee, you could have fooled me.
September 14, 2009 4:17 PM | Reply | Permalink
I'm not sure if you mean "tax increase". For a person who does not now purchase health insurance but will be required to purchase it under the mandate, they aren't just throwing their money into some kind of general fund pool. They get something directly in exchange for their money: a health insurance policy.
Now maybe they don't want a health insurance policy? Sorry, but all the rest of us need them to get one so that that our policies don't cost as much, and so that our subsidies for lower-income citizens don't cost as much. A lot of these people end up getting health care treatment anyway, and the costs of treating them are passed on to everyone else.
We need everyone to pull their weight.
September 14, 2009 4:39 PM | Reply | Permalink
We need everyone to pull their weight.
Yes. That's what happens in every other major democracy. All of them, in fact, not only cover all members of their societies, but do so at about half the cost, and achieve better health outcomes than we do as measured by the standard criteria of life expectancy and infant mortality.
September 14, 2009 5:07 PM | Reply | Permalink
Why does everyone have to buy something just to make it cheaper for you? Especially giving that we are talking about risk-rated insurance policies, not an actual product (so we're merely talking about statistical improvement, there are no real economies of scale, and no net benefit).
You don't ask everyone to chip in and buy a soda so that soda prices go down. In fact, if everyone bought a soda, soda prices would go up.
In point of which, someone should explain to the Administration that creating $800 billion in new health insurance policies without adding any health cae delivery infrastructure will increase prices for heatlh care services on a real basis.
So effectively what we're doing is (from a middle class taxpayer subject to the individual mandate's perspective) taxing him and providing him with health insurance that (in fact) he is probably going to pay more for than he would have paid for health insurance -when he decided it was too expensive under current law-.
Under the CBO estimates of the House plan, there is roughly $920 Billion in new health coverage for the projected trough year for the uninsured, 2015. $115 Billion of that is paid for by subsidies. The rest is directly removed from people's pockets (and given to insurance companies).
Almost 6% of GDP is redistributed from thing people wanted to spend it on (cars, housing, actual health care, food, energy, their children's college fund) to health insurance.
September 14, 2009 6:04 PM | Reply | Permalink
You guys just don't want to admit or haven't examined what the vast majority of economists have known for at least a while now, that the health/medical market isn't susceptible to the same market forces as any 'normal' product. Google: Kenneth Arrow, Uncertainty and the welfare economics of medical care.el prez sez:
September 14, 2009 7:25 PM | Reply | Permalink
Kenneth Arrow didn't and wouldn't dispute that hospital and doctor services were subject to supply and demand. He argued on welfare grounds that market outcomes were not good welfare outcomes, due to information disparity.
He may be right or he may be wrong, but it is irrelevant to the narrow question we were addressing. If you try to get more work out of the same people and capital stock, you are going to have to pay them more to make them willing to work harder or longer.
You can't just cite Kenneth Arrow and claim that no economic analysis applies to the health care industry, period. He just makes a political economy point about outcomes in the health care market.
Since we're using government intervention to preeempt that market outcome anyway, in our example, his work is irrelevant.
September 15, 2009 6:44 PM | Reply | Permalink
Side note: So you're seriously saying it's BETTER for the United States Government to force its citizens to hand over their money to private enterprises than to order them to hand it over to the Federal Government?
September 14, 2009 6:06 PM | Reply | Permalink
Um ... no. I would prefer that we have a single payer system, so that we the people were compelling citizens to buy health insurance from us, rather than a private firm. But given that not even the Progressive Caucus, the most progressive members of Congress, thinks that single payer is on the legislative table, then we are left with the next best thing: compelling them to purchase insurance from either a private insurer or the public plan.
September 14, 2009 6:27 PM | Reply | Permalink
And if that's the case, I respect the position (though I disagree with it, because I don't want to see pharma and medical research grind to a crashing halt).
I was just a bit surprised by the "but it isn't a tax" argument.
September 14, 2009 6:32 PM | Reply | Permalink
With a sixth of the nation without health insurance - and that figure includes a lot of children - our public discourse on this issue has been dominated for days by one jackass heckler, who accused the President of lying about denying benefits to illegal immigrants, whom we've tempted here with promises of high-paying jobs and whom we've rewarded with work-farm hours and peanut wages. Hear that rustling sound above us? That's from the fluttering wings of our God-forsaken souls taking flight from us.
September 14, 2009 4:09 PM | Reply | Permalink
Nah. That was just Bwak, shifting positions in the rafters, curt. We can still change this.
September 14, 2009 9:23 PM | Reply | Permalink
I second the Amendment!
Sixty four House members, enough to derail a bogus bill, have pledged to vote against any bill sans a strong PO. And I’ve been hoping that the House would hold to Pelosi’s promise of no reform without it. But that promise seems as resolute as the one opposing weakening FISA and gtanting telecom immunity. Steny Hoyer who does Pelosi’s dirty work is now backing off the PO.
We must forget -completely ignore- the corporate-sponsored “teabaggers.” Even those sincere people we know. This 20 to 30% does not represent anyone but the lobbies who back and exploit them or the corporate media who misleads them. How often have the truly poor and needy marched on Washington? Not often because they’re usually busy, you know, trying to survive. And the half of the middle class that's paying attention and actually wants real reform have sat on their hands because they thought they‘d already voted for it. All fools, myself included.
Maybe the answer is to do a little paltry tweaking around the edges (rewrite HIPAA) and call it a day, or to block this “reform” altogether. But let’s not pass another piece of crap legislation (like the Medicare Part D prescription drug program transferring extra taxpayer $billions to Big Pharma) just to say we did.
We can debate and discuss this ever so civilly; refuting each other's points detail by detail, thrust and parry. But what is on the line behind our polite talk? The system needs to be taken away from profiteers on human misery.
Approximately 2500 families filed for bankruptcy today because of medical debts. The same number will file tomorrow, losing most of what they have worked for all their lives- house, savings, and any credit-worthiness. Sixty or so people died today for lack of health care. That is just today! Sixty people died today and sixty will die tomorrow and the day after and every day until this system is fixed. Is it evil to believe that it would be better to let the uninsured continue to die in order to get real reform? I don’t really know, but in the end, I think less will die; less will be wiped out; less will be handicapped or partially disabled if we do it right- for once and all.
September 14, 2009 10:18 PM | Reply | Permalink
*just to say we did*
That's my fear, that Obama has seen this as his Waterloo, and will accept any "reform" just to be able to say that he did "reform" the system..
September 14, 2009 11:01 PM | Reply | Permalink
Excellent comments, Miguelito. I think you nailed it.
September 16, 2009 9:21 PM | Reply | Permalink