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The Audacity of Greed: How Private Health Insurers Just Blew Their Cover
The health-insurance industry has finally revealed itself for what it is.
Background: The industry hates the idea that's emerged from the Senate Finance Committee of lowering penalties on younger and healthier people who don't buy insurance. Relying on an analysis by PricewaterhouseCoopers, insurers say this means new enrollees will be older and less healthy -- which will drive up costs. And, says the industry, these costs will be passed on to consumers in the form of higher premiums. Proposed taxes on high-priced "Cadillac" policies will also be passed on to consumers. As a result, premiums will rise faster and higher than the government projects.
It's an eleventh-hour bombshell.
But the bomb went off under the insurers. The only reason these costs can be passed on to consumers in the form of higher premiums is because there's not enough competition among private insurers to force them to absorb the costs by becoming more efficient. Get it? Health insurers have just made the best argument yet about why a public insurance option is necessary.
Right now they run their markets and set their prices, and pass on any increased costs directly to consumers. That's what they're threatening to do if the legislation attempts to squeeze, even slightly, the colossal profits they plan to make off of thirty million new paying customers.
They want every penny of those profits. They demand every cent. And if the government dares raise their costs a tad higher than they expected when they first signed on to support the bill, they'll pass those costs on to consumers in the form of higher premiums. They can carry out their threat only because they have unaccountable, untrammeled market power.
But they've now hoisted themselves on their own insured petard. They've exposed themselves. If they had to compete with a public insurance plan, they couldn't get away with this threat. They couldn't pass on the extra costs. They'd have to compete with a public insurance option that forced them to give consumers the best deals possible.
Now's the time for Senate Finance Committee and the White House to say to the insurance industry: You want to play hardball? Okay. We'll play it, too. You didn't want a public insurance option. That was one of your conditions for supporting the bill. You wanted gigantic profits from having thirty million new paying customers and the market to yourself. We agreed because we wanted your support and were afraid of the negative ads and hurricane of opposition you could finance. But you're even greedier than we imagined. And now you've demonstrated that greed to the American people. They don't want to turn over even more of their hard-earned money to you. So, insurance companies, we've got news for you. We're going to make sure Americans have the freedom to choose a public insurance option that's cheaper and better, and you're going to have to work hard to keep them your customers.
Background: The industry hates the idea that's emerged from the Senate Finance Committee of lowering penalties on younger and healthier people who don't buy insurance. Relying on an analysis by PricewaterhouseCoopers, insurers say this means new enrollees will be older and less healthy -- which will drive up costs. And, says the industry, these costs will be passed on to consumers in the form of higher premiums. Proposed taxes on high-priced "Cadillac" policies will also be passed on to consumers. As a result, premiums will rise faster and higher than the government projects.
It's an eleventh-hour bombshell.
But the bomb went off under the insurers. The only reason these costs can be passed on to consumers in the form of higher premiums is because there's not enough competition among private insurers to force them to absorb the costs by becoming more efficient. Get it? Health insurers have just made the best argument yet about why a public insurance option is necessary.
Right now they run their markets and set their prices, and pass on any increased costs directly to consumers. That's what they're threatening to do if the legislation attempts to squeeze, even slightly, the colossal profits they plan to make off of thirty million new paying customers.
They want every penny of those profits. They demand every cent. And if the government dares raise their costs a tad higher than they expected when they first signed on to support the bill, they'll pass those costs on to consumers in the form of higher premiums. They can carry out their threat only because they have unaccountable, untrammeled market power.
But they've now hoisted themselves on their own insured petard. They've exposed themselves. If they had to compete with a public insurance plan, they couldn't get away with this threat. They couldn't pass on the extra costs. They'd have to compete with a public insurance option that forced them to give consumers the best deals possible.
Now's the time for Senate Finance Committee and the White House to say to the insurance industry: You want to play hardball? Okay. We'll play it, too. You didn't want a public insurance option. That was one of your conditions for supporting the bill. You wanted gigantic profits from having thirty million new paying customers and the market to yourself. We agreed because we wanted your support and were afraid of the negative ads and hurricane of opposition you could finance. But you're even greedier than we imagined. And now you've demonstrated that greed to the American people. They don't want to turn over even more of their hard-earned money to you. So, insurance companies, we've got news for you. We're going to make sure Americans have the freedom to choose a public insurance option that's cheaper and better, and you're going to have to work hard to keep them your customers.
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Insurance company insatiable greed has never been in doubt. And as the old saying goes, "Figures don't lie but liers figure." The real question is why OUR elected representatives are letting these con men have anything to say in this debate. Sadly we all know the answer to that question.
The truth here is that if the Democrats don't get their act togeather and give us something that looks like Medicare for anyone who wants to buy in come electionday they are going to find they've got their peckers caught in a ringer. If they keep trying to make Republicans happy they will end up making them happier than they want to. Obama is right that this is the make or break issue and it is THE one that the voters put the Democrats in the majority for. Put out or get out!
October 13, 2009 5:06 AM | Reply | Permalink
Let us see if our leaders have the acumen to draw this common-sense conclusion and the competence to explain it to the public in a way anyone can understand.
October 13, 2009 7:22 AM | Reply | Permalink
Why should this be a suprise at all? It appears the exact outcome of universal coverage in Massachusetts. That is higher cost and less choice for consumers.
The only way a public option can offer lower prices to consumers is to shift costs to others. That is not cost reduction it is the politically strong preying on the politically weak.
October 14, 2009 3:04 PM | Reply | Permalink
Over the past 7 years, the private health insurance consortia have seen their profits increase by 428%. If a public option could realize such a profit margin for the government over the next seven years, we could probably pay down the national deficit, maybe even the debt in record time. Hard to figure why Republicans are so against the public option.
October 14, 2009 3:40 PM | Reply | Permalink
Public Option? Hell, try Single Payer.
These companies have outlived any useful purpose they may have had, if they ever had one.
October 13, 2009 7:50 AM | Reply | Permalink
With this cheap, last-minute trick, insurers have undermined the idea that they are partners to be trusted. That makes it much easier to proceed without them.
October 13, 2009 7:57 AM | Reply | Permalink
This is one of the most disingenuous posts by Reich I've ever read.
It's full of insincere rhetoric ("..revealed itself for what it is") that makes me wonder if everything else he's ever written on the industry was misinformed and misguided.
It's also full of wishful thinking and reeks of rather weak spin ("But the bomb went off under the insurers"). Any organization, private or public, that sells a service passes its costs to consumers. Ask New Yorkers about price hikes for subway rides. Or utilities. Or funeral services.
But the real gem is this: "You wanted gigantic profits from having thirty million new paying customers and the market to yourself. We agreed ..."
Good to know that Reich believes himself to be one of the captains at the wheel of our socialist ship. The gray cardinal, perhaps, the power broker behind the scenes, member of that elite club, not just another frustrated paid pundit watching from the shore.
Well, at least he has the balls to admit that the team of captains, to which he thinks he belongs, has really tiny invisible balls and is completely useless, since they "wanted the support", "were afraid" because they knew they couldn't survive the "hurricane of opposition".
Robert "Impotent Vanity" Reich wanted to produce a clever rant about how the mask fell of the industry's collective face. But lost his own instead.
October 13, 2009 8:12 AM | Reply | Permalink
Actually any company, public and (especially)private, both passes the costs to the customer and absorbs costs. It is a balancing act. For the private sector where there is suppose to be competition, one must seek to maintain profits while at the same time keeping costs down so the customers don't going running to the competition. If insurers believe that they don't need to do this balancing act, then it is obvious the free market is not really at work here and that there will need to be something else done.
October 13, 2009 9:04 AM | Reply | Permalink
"then it is obvious the free market is not really at work here"
- agreed.
That was obvious for over a decade to anyone who's bothered to look. Too bad Reich is not advocating to actually try genuine free market for a change, instead of the cripple we got.
But, of course, that's the name of the game - blame something that doesn't exist as a pretext to sneak in something else.
October 13, 2009 12:00 PM | Reply | Permalink
For your view to have any merit you would have to assume that demand is perfectly inelastic and that demand would not fall off as prices go up. But that is fiction. The truth of the matter is that corporations are not immune from having to do with less profit and even take losses.
Corporate Shills (aka Republican and Democratic DC whores) will tell you that corporations never pay taxes nor suffer any losses in profit since they can always pass on any extra cost to the consumers. And the dittoheads just nod and buy that fiction.
October 13, 2009 2:01 PM | Reply | Permalink
So how is your career as a self-appointed lobbyist for the insurance companies going now?
October 13, 2009 8:58 PM | Reply | Permalink
This might be understandable as a stump speech for Health Care for America Now, but coming from Robert Reich it's patronizing nonsense.
There is no evidence that competition alone will drive down costs much in an employer based health insurance system.
The profit margin of the health insurance industry is three or four percent. Profits are an issue, and we should end for-profit insurance, but their actual dollar value isn't the biggest issue.
A public insurance option in an Exchange open to the entire public was never on the table. The size of the Exchange is a much more significant issue than a public option in a mouse Exchange open only to 30 million people. This fact is often deliberately hidden from view by Democratic think tank types who don't want to endanger their prestige by favoring Medicare for All.
October 13, 2009 9:07 AM | Reply | Permalink
We're [Obama and the Senate Finance Committee] going to make sure Americans have the freedom to choose a public insurance option that's cheaper and better . . . . Robert Reich
Talk about an idea that's DOA! The PwC report is a stalking-horse prepared to give cover to Baucus' garbage bill; that's all it is.
Break out the butterfly nets. Reich has finally gone around the bend!
October 13, 2009 9:25 AM | Reply | Permalink
... but Baucus's garbage bill now gets tossed into the mix with the other Senate bills and whatever the House passes. So the odds are it will be improved upon.
October 13, 2009 9:00 PM | Reply | Permalink
Let's see if those in the position will clearly see the intention. After all, insurances are made to ease our financial burden. - habanos
October 13, 2009 9:51 AM | Reply | Permalink
I reported you for abusing the TPM policies. Selling cigars is not kosher.
October 13, 2009 11:56 AM | Reply | Permalink
This all assumes that the Democrats running the Senate ever wanted a public option in the first place. For some reason they were quite eager to give that up as a part of the compromise and I can only suspect it's because they never really wanted it. Didn't want to build it, don't want to run it, don't want to maintain it later, want no part of it at all. Remember, it was the FIRST thing they compromised on. Reich is right, now's a good time to bring it back but they won't. They never intended on pushing it in the first place.
October 13, 2009 10:32 AM | Reply | Permalink
Healthcare reform needs a “Parody Option.” Check out “Healthcare Fighting (King Fu Mix)” at http://www.youtube.com/watch?v=8nc1VwJOb9Y
October 13, 2009 10:40 AM | Reply | Permalink
At times, Robert Reich has something useful to say, but not this time, and I find his misinformation about healthcare and the AHIP "bombshell" unfortunate, one reason being that the insurers got at least one part of their argument right this time.
First the notion of "colossal profits" is an absurdity. As Khin pointed out earlier, insurer profits have consistently run at about 3-4% (less than 2% of overall health system costs), and though their overhead adds some unnecessary expense, elimination of profits and reduction of overhead to levels found in single payer countries would only slightly reduce healthcare costs, and would do little to change the unsustainable trajectory of rising costs. That requires reform within healthcare itself.
I won't go into all the points the AHIP argument got wrong (e.g., they ignored a public option component, pretended taxes on the "cadillac plans" wouldn't change the mix of plans offered by employers, and implied that it would be a bad idea to force insurance plans to cover a reasonable percentage of total medical services an individual would need) - all that is to their discredit.
However, the one point they got dramatically right, and the most important element in their claim that insurance premiums would rise excessively, is that the Baucus bill contains too weak a mandate for individuals to purchase insurance, thereby allowing many young, healthy, low risk individuals to opt out and put the insurance burden on everyone else.
They are absolutely right, and this is one of the great weaknesses of the Baucus bill, which should be rectified by the entire Senate. The insurers strategically targeted the Baucus bill for this criticism, because the mandates proposed in the Senate HELP Committee bill and the House bill, HR3200 are much stronger.
In the one sense that the insurance industry has identified a serious weakness in the Senate Finance Committee bill, I agree that they have done the public a service.
October 13, 2009 10:50 AM | Reply | Permalink
The insurance industry doing the public a service? There are serious weaknesses in the SFC bill, but the insurance industry is hardly pointing them out in order to do us a "service". Their goal is to stop ANY bill from passing that would cut into their profits. The Baucus bill is actually a gift to them, compared to a bill that would have ensured either single payer or public option. But they won't be happy until all chains are off and they're allowed to go on, business as usual.
The industry itself would laugh at the notion that they're actually doing us a "service". Sorry, but I'm laughing, too.
October 13, 2009 11:23 AM | Reply | Permalink
Indeed, Ramona, they are doing the public a service by exposing a serious weakness in the Baucus bill. That is not to say they are doing this out of altruism. Rather, in this instance, their interest and the public interest happen to coincide. That's not true for the rest of their criticisms, only the one regarding the weakness of mandates in Baucus, where mandates are much feebler than in the House bill or the Senate HELP Committee bill.
October 13, 2009 2:00 PM | Reply | Permalink
Fred, The 3-4% profit thing is very disingenuous when you consider all of the high salaries and bennies, plus all the extra employees are included in operational expenses. It is like apples to oranges comparing administrative expenses of these companies to government-run. Will you at least admit that?
October 13, 2009 2:50 PM | Reply | Permalink
Fred Moolten said...As Khin pointed out earlier, insurer profits have consistently run at about 3-4% (less than 2% of overall health system costs), and though their overhead adds some unnecessary expense, elimination of profits and reduction of overhead to levels found in single payer countries would only slightly reduce healthcare costs, and would do little to change the unsustainable trajectory of rising costs.
I disagree that reducing health insurance costs would "only slightly reduce healthcare costs".
As a real life example, let's look at Medicare. Studies consistently show that Medicare is significantly more cost efficient than private insurance. In fact, private insurers offering Medicare Advantage policies require 14% more in premiums than the standard Medicare plan, while offering very little. (The study I read said they provided about 1-2 points of that 14% in increase in services).
So it looks to me that going to a Medicare for all system could save 14% over private insurers immediately. What other single change can be expected to produce a double digit percentage reduction in cost?
October 13, 2009 11:54 AM | Reply | Permalink
Well, since profits are figured after costs, the outlandish salaries of the high-level insurance movers and shakers are not part of that 3 - 4%. Neither are all the salaries of the beurocrats whose jobs are solely to say "no" when asked a patient-oriented question. Neither are advertisements. All of the above is included in the "cost of doing business."
Eliminate those things, and you're starting to talk about real money.
So quit talking about profits being so small -- these costs occur BEFORE profits are calculated. How many people who administer Medicare and Medicaid make 7 figure salaries?
October 13, 2009 12:08 PM | Reply | Permalink
It's actually rather easy to make it look like you're not making a profit at all. If they're reporting 3-4%, that's just to keep the IRS off their backs. You have to take into account all the perks, bonuses, executive business conferences is swanky resorts, and the myriad other ways a company rewards its executives and hides its profits. If we wanted to really make a fundamental change in the way business is run and government is funded, we'd change the tax law so that these things can't be written off as operating expenses.
Of course, then they'd just move the last of their operations out of the country.
October 13, 2009 12:49 PM | Reply | Permalink
Eliminating insurer profits and reducing their overhead to levels in single payer nation would have only minor effects on healthcare costs. The CEO salaries are outrageous on a moral basis, but contribute only trivially to insurance costs.
It's reasonable to be indignant about inequities perpetrated by the insurance industry, but it is simply inaccurate to claim that squeezing the industry or even eliminating its profits would have much effect on healthcare costs. For more on this, see http://www.healthbeatblog.com/2009/08/who-is-making-the-biggest-profits-from-us-healthcare-you-might-be-surprised-.html
October 13, 2009 1:47 PM | Reply | Permalink
OK, you answered my question. You won't admit anything, or you just don't get it.
How about this:
I have a mom & pop store, and the total income of the store in a year is $500,000.
I pay $200,000 a year to vendors; $80,000 a year for salaries, $20,000 a year for electricity, advertising, rent, and upkeep. I pay myself $80,000, and the rest is profit.
If I act like an insurance company, I still pay $200, 000 to vendors; I have to employ 5 more people to decide who can get into the door of my business, for a total of $250,000 in salaries; that increases electricity fees & advertising. I pay myself $1,000,000 dollars, so I have to raise prices so that I can do all of the above (selling the same damn product) for WAY more money so that I can still claim a lame profit of 3% and expect people like Fred to swallow the BS I am selling.
Yep! I have to raise prices so that I can support all of the above, and I can still hide behind the small profit because people like Fred just don't get it.
October 13, 2009 7:11 PM | Reply | Permalink
The simple fact that these executives abscond openly with such exhorbitant salaries is evidence of the failure of the Boards of Directors to represent the interests of the shareholders and the company. This IS a VAST Right-wing conspiracy. If shareholders really owned the companies, would they rather see a CEO make that kind of money, or would they prefer it went into their own profits? The monies originate in 401Ks and Mutual Funds these days, so the players are so far removed from the crime as to be ignorant of how serious the scam really is.
October 14, 2009 12:05 PM | Reply | Permalink
Do you think allowing them to compete across state lines (enlarging risk pools) would help significantly?
October 15, 2009 10:25 AM | Reply | Permalink
I almost forgot. A big part of having a Medicare style plan available is the simplification of paperwork.
My wife and I both have chronic health conditions. We have required a lot of healthcare services and have way too much experience with fighting with insurance companies.
I'll give you one of the most ridiculous examples of an insurance company causing increased costs. We have now fought (multiple times over multiple bills) to get a provider paid when a bill was presented with my correct plan number, my correct ID number, and "John Doe" as my name. Why was it rejected? Because I'm signed up as "John Q. Doe", and they refuse to pay without my middle initial being specified. This is a classic foot dragging technique. It creates at least double billing work for the provider (3 or 4 times the work on some occassions), and it negatively impacts their cash flow. Talk to any small medical office and you'll get an earful about how much of their administrative costs go to dealing with insurance companies.
Now I happen to live in a major metropolitan area. My employer is great and they had a couple of insurance company choices. We went to another company because of the problems the employees were reporting, but many people don't have those choices. With a public option, they would.
Can you imagine multiple employers deciding that they'd rather pay for the public option because it was cheaper and there was less dissatisfaction reported by policy holders? It's no wonder why the private insurers are crapping their undies.
October 13, 2009 12:16 PM | Reply | Permalink
See my comments above. Insurers often do things that are unfair, but they are only a minor contributor to cost excess. Those who hope to see significant cost constraints from insurance reform alone will inevitably be disappointed. The major cost reductions must come from within the healthcare industry itself.
Regarding previous comments about Medicare, its costs are rising at a rate only slightly lower than that of private insurers, and like them, is on an unsustainable trajectory. Medicare does save subscribers some money, but most of this is because it pays providers (physicians and hospitals) less than the private insurers do, not because it is much more efficient. (Whether it is even slightly more efficient is arguable, because the baseline on which this is calculated differs between the Medicare population and other groups). Some providers - the Mayo Clinic in Arizona, for example - have recently decided to refuse Medicare subscribers for primary care because they claim their reimbursements are too low. I'm not sure I agree with Mayo, but it illustrates the point that Medicare squeezes the providers more than the private insurers do.
October 13, 2009 1:56 PM | Reply | Permalink
As long as you keep playing the "profits" game, your arguments won't carry much weight. Profits are an artificial construct of the insurer's tax attorneys, nothing more. Focus on the costs.
The reason why the US has poorer outcomes but much larger expenditures (either per-capita or percent-of-GDP) than other industrialized countries is largely because we have a private insurance system that does nothing other than transfer money from one place (employers, mostly) to another place (actual providers) at a very high vig. If insurers get squeezed out of existence in favor of single-payer, I feel as bad for them as I do for the buggy-whip manufacturers, who I'm sure would have commissioned a PWC report if they could have.
As far as providers getting squeezed, well, that is another place which needs to improve efficiency. My nearest hospital just added a large cardiac tower. All private rooms, beautiful architecture and appointments; a real pleasure to stay in. But entirely overbuilt and far more expensive than is needed for good outcomes. I don't want to stay in a 20-bed ward anymore than anyone else, but we need to change the system that entices hospitals to build such palaces, secure in the knowledge that those lucky enough to have private insurance will pay more and more to stay in it, while 30% of the local community has no access to healthcare except for the emergency room and the recently reduced Medi-Cal payments.
October 13, 2009 3:04 PM | Reply | Permalink
The facts support your point about providers, Mad Dog, but not about insurers. If you look at medical loss ratios, which are the percentage of premium dollars spent on medical services rather than profits and overhead, they average about 85 percent - i.e., about 85 cents out of every premium dollar is paid to physicians, hospitals, and other providers. However, you want to divide up the rest in terms of profits vs overhead, it is still only 15 percent of private insurance budgets, and only about 5 percent of total U.S. healthcare costs. The bottom line is that a totally perfect insurance system would still save only a small fraction of what needs to be saved, considering that other nations, whether based mainly on public or private insurance, spend only about half of what we do.
At the risk of belaboring the point, we need insurance reform to ensure that everyone is covered equitably, without discrimination or exclusions based on health status. That's important, but it isn't going to save much money. The latter requires savings within the healthare system itself. Excessive focus on the insurance element is leading to a neglect of the need for healthcare reform as a separate item from insurance reform.
October 13, 2009 5:23 PM | Reply | Permalink
Fred catch some clues.
One reason average profit levels are low is that much of the industry is technically set up as non-profits to start with. So profits are not the right metric here, instead it is Medical Loss Ratios which are the actual percentage of premium dollars going to providers. If the problem really wa on the provider side you would expect MLR to be going up, instead the trend has been strongly down from levels over 90 to current MLR ratios under 80. You cannot explain this because of excessive testing either because of defensive medicine or self-dealing by doctors nor by increased pharma costs, all that would score on the MLR side. Instead insurance companies are currently taking more than a dime extra out of every premium dollar than they used to, and are pushing for even lower MLRs.
You can dodge and twist all you want but you can't avoid confronting MLRs at some point.
October 13, 2009 7:44 PM | Reply | Permalink
Current medical loss ratios tend to average about 85-90 percent in the large group market and less in the individual or small group market, although estimates vary, and many states already have floors mandated. However, this is beside the point, because both the House bills and Senate HELP Committee bills mandate floors on medical loss ratios. If that is the only concern, one needn't demand a public option or other forms of competition. The point remains that insurer excesses, although they exist, account for only a small portion of excess healthcare costs, and obsessive focus on the insurance end tends to neglect the main problem - excesses within healthcare itself.
It is not correct, in my view, to claim that if the problem were on the provider side, MLRs would necessarily be increasing. Private insurers are under pressure to give investors a return on investment, and so it is only competition and legal constraints that prevent them from reducing MLRs. I think this is illustrated by profit margins, which have tended to remain the same in percentage terms even as their absolute amount in dollars has increased.
October 13, 2009 8:15 PM | Reply | Permalink
I cannot resist pointing out here that the most commonly used estimates of administrative overhead that would be reduced by single payer include overhead on the provider side that is necessary to maintain billing of a huge number of separate insurers. This is actually where the majority of the overhead comes from, so by concentrating only on insurers you are giving the system short shrift.
October 14, 2009 1:16 AM | Reply | Permalink
You make an interesting point. So....will anything be as cost effective as a single payer system? This is where many progressives started out on the question of reform, and we ended up arguing for a po only by default. Perhaps once (and if) a po clears both houses of Congress and it becomes clear it isn't 'bending the curve' enough, people will begin to talk about inefficiencies of a multiple payer system. A propos: I think in Germany the central government negotiates on behalf of private, non-profit insurers, which are highly regulated. Is that the direction we are headed? I wish there were more discussion on this model. I happened across an article and an interview by/with Uwe Reinhardt on the topic. It sounded like a elegantly simple solution to the cost problem, like a hybrid private/single payer system.
October 15, 2009 10:41 AM | Reply | Permalink
I see now that you are claiming an MLR of 85. Maybe a link would be helpful. Also something examining rate of change in both health care costs and insurance co MLRs. In any event there is no rational reason why the average cost af administrating plans as a percentage of premium dollars should be going up at all. Is the marginal productivity of your insurance co employee go UP just because the average provider charge does? That doesn't make sense.
Social Security admin costs run at 1% not because SSA employs miracle workers, not even the biggest booster of SS claims that, it is because the huge flow of money makes the diversion to the flow meters insignificant. Those same efficiencies of scale should have applied to those admistering an ever increasing flow of money to providers, yet where SSA has been holding administrative costs steady on a percentage basis, insurance company performance has been deteriorating.
Why?
October 13, 2009 8:04 PM | Reply | Permalink
Bruce - see my comments above. I'm not suggesting that insurance executives stay up nights figuring how to improve their service to the public, but rather that they are constrained by multiple forces - return to investors, demands for higher reimbursements from providers, and competition (when it exists) to offer consumers an attractive price. Rather than claim that insurers are giving the public the best deal possible, I'm suggesting that there are relatively small benefits to be gained by pressuring them to do better. I'm all for it, but without unrealistic expectations.
October 13, 2009 8:21 PM | Reply | Permalink
Bruce - I'm still looking for the latest (2008-2009) nationwide averages, but I haven't found them yet. If you have very recent data, could you cite it and the reference?
October 13, 2009 8:42 PM | Reply | Permalink
Here's Wendell Potter stating that in 2008 it was slightly over 80 percent, a decline from earlier years that he attributes mainly to demands by investors:
http://blog.case.edu/singham/2009/08/26/the_health_care_debate15_the_ruthless_science_of_health_industry_profits
October 13, 2009 8:54 PM | Reply | Permalink
A vast majority of Americans are against a public option. That has been firmly established. We could wage an endless debate as to WHY most Americans feel this way (paranoia, misinformation, insufficient trust in government, etc), but the bottom line is there is a sizable group of Democrats not willing to stick their neck out and support a public option. At least not at this juncture.
The reason likely has to do with their desire to get re-elected. The same reason why politicians in California have no desire to tackle the illegal immigration issue that has wrecked its economy is the same reason why certain Congressional Democrats want no part of the public option. Namely, it could come back to bite them at the polls and it runs counter to their special interest relationships.
The hilarity of the situation is that the private insurance industry is going to win this fight. If the oil lobby has taught us anything it is that our politicians can be bought.
Just today the Congressional Budget Office confirmed that it cannot guarantee that any of the impending pieces of legislation will result in Americans saving a dime when it comes to their health care costs. This seems to be one of those debates in which there will be no winner. Nobody likes the health insurance industry. Their tacit support of high penalties for younger, healthier people who fail to purchase an insurance plan is abjectly Unconstitutional. Some Democrats, meanwhile, are doing their damndest to shove through what would amount to be the largest piece of partisan legislation ever passed by the U.S. government.
There's no winners here. This will end badly.
October 14, 2009 11:40 AM | Reply | Permalink
Since we all know that 78.6% of Americans are in support of their Senators only if those senators vote favorably on bills to honor state citizens, and 65.32% of Americans are against their senators if they have lunch more than once a week with female lobbyists, then it must follow that exactly 69.28% of Americans favor whatever I favor.
I got my statistics the same place you got yours.
October 14, 2009 4:46 PM | Reply | Permalink
"A vast majority of Americans are against a public option."
Cite your source for this "firmly established" fact?
October 14, 2009 2:47 PM | Reply | Permalink
Bravo!
October 14, 2009 6:21 PM | Reply | Permalink
All for it, but I'm pretty pessimistic about a po having any real effect on pricing, too. If they/it are/is created, we'll wonder what all the fuss was about in a few years.
No, we should've maybe been considering a single payer system, which saves on cost at both the insurer and the provider end, or something like the German system, which is highly regulated, like utilities. What a waste.
October 15, 2009 12:43 AM | Reply | Permalink
Actually, I went back to look at this and I was partly right and partly wrong. According to a study earlier this month by Quinnipiac University, 61% of all respondents FAVOR a so-called public option compared with 34% who oppose it.
The kicker, however, is that 47% of participants oppose "the president's health care plan" while 40% approve of it.
http://blogs.wsj.com/washwire/2009/10/08/quinnipiac-most-americans-support-public-option/
At the end of the day I'm not sure any of these findings can amplified. For one, the plans being debated in Congress are not Obama's. They were all written by Congressional Democrats. So when the survey finds that a majority disapprove of "the president's health care plan" I'm not sure exactly what plan its referring to.
The only thing I'll add is that there is a huge difference between being pro-healthcare reform and pro-public option. Those are two entirely different animals that seem to get lumped together far too often.
October 15, 2009 12:49 AM | Reply | Permalink
I should also point out that 62% of independent respondents do not believe any substantial health care reform should be passed without some Republican support.
I'm guessing the 1 lone vote from Olympia Snowe is not sufficient.
October 15, 2009 12:53 AM | Reply | Permalink
That's actually a misleading number as well. I'm too lazy to track down the precise number (it was on Greg Sargent's Plum Line over the last couple of days) but while a majority didn't want a bill passed without republican input/support as you note, if it was between republican support and not passing reform at all, a substantial majority preferred reform without the republicans. Besides even if that weren't the case, since when do only independents count? (don't get me wrong, as a life-long independent, I appreciate the power, but it doesn't really make much sense)
October 15, 2009 2:27 AM | Reply | Permalink
Also: I should add, I'm all for government activism of some sort to straighten the healthcare system out. They need to regulate, regulate, regulate. Seriously.
A further intriguing idea that might save money is allowing insurance companies to compete across state lines. Anything that diversifies and expands the risk pool has got to be good for cost, I think. This is Ron Wyden's province, Snowe's for it. I hope it's part of the final package.
I think a lot of fresh thinking is called for. Let's push for a public option - a strong one, that looks like Medicare and automatically folds in Medicaid and SCHIP, sort of like what Jacob Hacker set forth - without raising expectations too high for it, or making some kind of totem out of it. It's just a piece of the puzzle.
October 15, 2009 12:57 AM | Reply | Permalink
The is nothing to gained from any of these arguments. Why? Because the bottom line is conservatives don't want any spread of the cost to those who can afford from those who can't, in other words, no group responsibility. The system is unfair by design. Profit making is predatory by nature. To allow single payer or a weaker public option is to democratize the cost, thus spreading the responsibility. It will never happen because this country is a cesspool of elitist f&ck heads. People with the most money get to pray on those who have the least by exercise of influence the greater proportion of wealth buys on the rules of society. Democracy that could be the great equalizer has been tamed by the wealth of the upper class. It's done folks. The only option you have left it "THE PUBLIC OPTION" the only public option that ever existed, and that's open war with the f&ck heads. Otherwise you are just a bunch of sheepish slaves.
October 15, 2009 2:44 AM | Reply | Permalink
Zeno of Citium:
The system is definitely unfair by design, if you want to call it a "system" at all. In reality, our health care system is more of a disparate collection of procedures and rules than it is a system.
On a general level, the word "reform" is being thrown around as if it will create a one size fits all solution to what amounts to 2 completely separate problems.
The first problem is finding a way to provide access to the tens of millions of Americans that are uninsured or under-insured.
The second goal is to find a way to reduce the costs for everyone else who already has insurance.
Problem is, the Baucus Plan seems to be concerned primarily with the first goal while neglecting the second. As I mentioned in an earlier post, the Congressional Budget Office just said on Tuesday that based on its findings, it cannot guarantee that people who already have health insurance will "save a dime" if the Baucus Plan, or something comparable, gets passed into law.
While Baucus' Plan was in committee last week, it was decided to significantly reduce the amount of the fines that people would face should they refuse to buy insurance. The insurance industry, however deceitful, was actually correct in noting that this would allow younger and healthier people to remain uninsured at little or no penalty. Thus, when they get sick or injured and must get coverage, the new laws would require the insurance companies to cover them; thus driving up prices.
Shared responsibility is one thing, but when the American people get stuck with yet another trillion dollar price tag (this will be the 3rd trillion dollar expenditure under Obama) and discover their own costs don't go down one solitary cent, there may very well be hell to pay.
October 15, 2009 11:46 AM | Reply | Permalink