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Public Option Plan in 2013: Two percent to 25 percent of all Americans could be eligible to sign up?
What real difference would it make ???What's the big deal about the numbers of people who may or may not elect to chose the Public Option versus a private plan in the Exchange? If the Public Option plan is to be administered by contracted private companies on a state-by-state, region-by-region basis, why do the national numbers of those available to choose the PO have any meaning?
Read: Who Would Be Eligible For A Public Option? Far more than "10%" of the Population at Maggie Mahar's HealthBeat blog.
If 2% of the population "mandated" to have insurance were to choose the PO that would be equal to 6 million people.
On the other hand . . .
If 25 % of the population "mandated" to have insurance were to choose the PO that would be equal to 75 million people.
Now, putting aside the numbers who may or may not be available to chose the PO, the question arises, who is going to actually be administering this so-called PO plan?
Read: What role will insurance companies play in the "public option"? at PNHP.org.
What seems to be overlooked by the general public is the probability that private companies will be chosen by the HHS to administer these programs on a state-by-state, region-by-region basis. That is, if a state so chooses not to opt out.
From the above post at PNHP.org:
On Saturday, October 24, the Washington Post published an article which said in passing that the "public option" will be run by insurance companies. "The public option would effectively be just another insurance plan offered on the open market," said the article. "It would likely be administered by a private insurance provider, charging premiums and copayments like any other policy." To my knowledge, that is the first time any media outlet or blog, with the exception of the blog maintained by Physicians for a National Health Program, has warned the public that the "public option" will be run by private corporations, not public employees.
In addition: Since the "playing field" is going to supposedly be "level" between the private plans offered through the "Exchange" and that of the PO plan offered through the Exchange what difference or effect will the overall national numbers make in actual bargaining power when the design of the implementation is reduced to a state-by-state, region-by-region basis of costs relative to the expenses of heath care within those particular states or regions?
Other than the possibility of reduced costs though subsidies for individuals and/or families with incomes between 133/150% and 400% of poverty, this can of worms has become quite mixed as to whether or not the implementation of such a plan will benefit the consumer through lower costs.
With coverage being "mandated" and the distinct probability that private for-profit insurance corporations will be contracted and tasked for the implementation and administration of this reform, for damn sure it's going to benefit the private sector insurance companies.
If anyone has a better take on this than me, or sees it in a different light, please chime in with your ideas.
I await with bated breath for Fred Mooten's post to diffuse and confuse this point I've attempted to raise.
~OGD~
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Well you got me confused Ducky. I mean this is scary shit.
If I am caught driving on the public roads and the cop asks for proof of insurance, I am screwed.
If I show up in the ER with appendicitis am I prosecuted if I have no such proof?
The landlords of this nation are going to decide.
That is all I am sure of.
November 3, 2009 7:01 PM
Hi OGD - In attempting to confuse the issue to your satisfaction, here is my latest understanding. According to unofficial reports, the CBO estimates that the current PO version would save about $25 billion over ten years. That assumes the low level enrollment CBO estimates. The savings would be greater if enrollment exceeded their predictions.
http://www.nationaljournal.com/congressdaily/cda_20090925_6347.php
The savings are not due primarily to lower premiums paid by PO subscribers than by private insurance subscribers, but rather by downward pressure on the latter from the PO. Costs are necessarily determined in part on a regional basis, as in Medicare.
As for administration of a PO by private insurers, that's how Medicare works, and so the PO would be no exception. The insurers are of course compensated for their service, as would be any administrator, but they don't dictate the premiums or the payments for services provided.
November 3, 2009 7:23 PM
One qualification to my statement that the insurers administering Medicare can't independently determine revenues and payments - I believe that insurers administering Medicare Part D (the prescription drug program) have independently negotiated favorable drug prices with drug companies to help reduce the rate of cost increases within that program.
The House version of current reform legislation offers the PO a similar opportunity.
November 3, 2009 7:28 PM
Huh?
From that dated link of September 25, 2009:
Save who $25 billion over ten years? The government?
I'm referring to people being provided affordable health care coverage Not the savings related to the federal deficit and/or federal budget savings.
Again . . . I'm speaking of the purported savings to be found in this so-called affordable universal health care coverage of individual consumers.
What difference does it make if there are 6 million or 75 million individuals nationwide who select to participate in the PO, when the various marked-up bills in the House and Senate have the states administering the premiums relative to the "regional cost factor" in those various areas of the country, i.e., higher, medium, or lower cost areas?
The total number of participants nationally will not have any effect on the premium rates charged regionally. And so, in effect, those national numbers will have no effect on competitively leveraging private plans within the Exchange to reduce their rates.
The CBO has shown that a public option with negotiated rates instead of Medicare rates plus 5 percent may have higher premiums than private insurance plans.
So, just to bring everyone up to date of the latest CBO and JCT report, here is the link to the report issued this past Thursday dated October 29, 2009:
http://cbo.gov/ftpdocs/106xx/doc10688/hr3962Rangel.pdf
Onward and downward . . .
~OGD~
November 4, 2009 1:04 AM
And just to help direct you to the above . . .
Here is the actual paragraphs detailing the "negotiated rates" and the effect on premiums:
What a great fucking deal (snark) the leadership is cutting for the people . . .
~OGD~
November 4, 2009 1:21 AM
The savings, OGD, would accrue to insurance purchasers. If your point is that the PO would never had made much of a dent in the excessive cost of U.S. healthcare, that is correct, but would be equally true for a more "robust" public option, or for a single payer system for that matter in the absence of other reforms (a subject for a different blog post).
The total cost of U.S. healthcare over the next 10 years is expected to exceed $300 trillion, and whether a PO saves $25 billion, $100 billion, or even more in the case of extension to more individuals, it was never destined to save more than a fraction of one percent of overall costs. This has nothing to do with the "deal the leadership is cutting for the people" but with the reality of where excess healthcare costs lie, which is outside of the insurance sector.
As to why the PO would be a net cost saver, I explained some of that above, and I've already addressed in detail elsewhere the CBO analysis regarding relative premium costs of the PO vs private plans. The bottom line, bowever, is that the PO will save money, as expected, but very little in a relative sense, as has also been expected for the many months it has been discussed. That is why many analysts familiar with proposed reforms endorse the PO as beneficial, but also emphasize that it is not central to reform efforts, including those in current proposals that promise far greater steps forward.
November 4, 2009 10:31 AM
I meant to say $30 trillion, not $300 trillion, but the savings from the proposed PO would, as stated above, amount to only a miniscule frac5ion (less than one tenth of one percent).
November 4, 2009 10:35 AM
Fred Moolten says the public option
Had you said "designed" rather than "destined", I might agree with you on this Fred. I know you read the report from the Center for American Progress on the subject of the public option which I discussed in my blog here. That CAP study by two reputable economists, (Cutler & Feder), concluded that the bulk of the projected savings here hinges on reducing the price paid through existing programs such as Medicare and Medicaid. The study concludes that by 2035, we should be realizing annual savings from instituting their proposed changes of $1.2 trillion, or 3 percent of GDP. As I said in that blog, "Watch for the opponents of a strong public option to oppose a provision to allow it to negotiate payment rates through the medicare program". We've been sold a bill of goods, and it's called the public option.November 4, 2009 1:52 PM
I don't think we disagree widely, Miguelito. My point was that the savings within insurance alone due to a PO would be minor; they include the $25 billion over ten years for the current proposal or the larger estimate for the original proposal using Medicare rates. Those are savings in federal subsidies, and there would be additional savings for those paying full premium costs, but the total would still be small.
Your point, as I understand it, is that the PO could negotiate a downward direction to excessive costs within healthcare itself, starting with current Medicare rates and advancing from there. Perhaps, but my argument would be that compared with Medicare itself, the PO would have much less leverage to do this. As I see it, the onus is on Medicare to take the lead, and current proposals provide some opportunities for this in terms of primary care, preventive care, and alternative payment mechanisms. If Medicare pressures providers into offering better service at lower costs, insurers outside of Medicare, whether private or a PO, would rush to contract with the providers who accomplish this, and so the increase in efficiency would spread throughout the system.
Would a PO expedite this? It might to a limited extent, but the critical test will be how Medicare itself addresses the need to restructure the healthcare system it reimburses.
November 4, 2009 2:17 PM
I do see your point regarding Medicare, however if the PO isn't allowed to base its payments on Medicare rates, the argument for the PO to reduce rates is moot. However the issue of reducing costs through a PO also has a lot to do with what OGD was pointing out in this blog. That even if 75M subscribers enrolled, it would be administered through state or regional groups, (by private insurers at that!), so all the bargaining power that might have been accrued due to the numbers is diluted. Let's face it, this legislation is not directed at reducing healthcare costs, but largely at expanding coverage. It looks to me like the insurers and healthcare industry is getting just about everything they wanted.
November 4, 2009 6:34 PM
OGD, it's a simple case of being designed to fail. Medicare for All is the only option that makes sense for common, everyday, ordinary Americans. All the rest is just another convoluted means of enriching the most powerful special interests.
November 4, 2009 1:01 PM
It sounds to me like a Third Party Adminstration system, similar to the way worker's comp is managed for self-insured employers. Esentially, there are these companies with tons of money who can post a bond and manage their own workers comp. They do this because it gives them some control of the program. They can hold the examiners accountable for processing the claims rather then ignoring the claims and making the examiners justify the expenses. But all this happens within the framework of the law and the courts and the bureaucrats are eager to get involved if things appear out of whack. It may not be a bad system if it is well-regulated.
A lot will depend on how these companies are paid. In the end, if their is no incentive to actually examine a claim, it will become wasteful. Do companies get reimbursed for bringing in other parties to manage a claim: a nurse, a voc counselor, an investigator and an attorney? Because if they are, then these claims will be worked to death and every claim seen as an opportunity to bring their friends to the trough. If they are paid a flat rate per claim, with no incentive to examine the claim, they will be pushed through as fast as possible leaving many people with their injuries addressed insufficiently.
If the Administrator is using other people's money and not their own, claims will be managed differently. It is not necessarily a bad idea.
November 4, 2009 1:22 PM
OGD:
Do I understand this correctly? That day is night, black is white and public is private, after all?
November 4, 2009 2:30 PM