The last time I wrote about the health care bill my post took for granted that any Public Option measure would include provisions to block private insurers from dumping sick and old clients. The reason is simple. If insurers can drop expensive clients for essentially any reason then the existence of a public option will encourage them to commit any skullduggery to keep nobody but the healthiest clients (until they get sick, of course. then they’re screwed) and leave the government to manage everyone else. Caring for the neediest would drive public plan premiums through the roof, it would force public plan managers to make all of the most unpopular decisions and it would probably force public plan managers (and not the cream-skimming private plans) to hit up Congress again and again for cash.
If a bill like that reaches the Senate floor then we might as well spike it. I am not kidding about this. Both the politics and the policy will suck hard for Democrats. A “public plan” with no dumping protection could function worse in practice than if we did nothing at all. A public plan flameout will delegitimize the Democrats and probably kill off any future support progressive health care reform.
Once again we can thank Democratic moderates for crippling a good bill (remember state aid in the stimulus?) for no reason except to put some daylight between themselves and the dirty fucking hippies. It concerns me that nobody in America seems to take policy seriously other than the Democratic left.
My rant only makes sense insofar as the final health care bill effectively controls dumping. In the link in this post Ezra suggests that risk sharing will not be as effective as I assumed it would be. If I’m wrong then everything is fine. If I am right then we’re screwed. I guess we will wait to see the reconciled bill.
Have you even seen the Insurance Company definition of “sick” and “old”? Fat babies get denied. People with acne get denied. Pregnancy is a pre-existing condition. Any unreported ache or pain becomes grounds for denial of care.
Who the hell is going to want to sign up for this trainwreck, given any viable public option? The health care industry is jacking up rates and excising customers left and right. You’ve got a pool of 40 million people who are uninsured.
Crank down administrative costs from between 15% to 30% and down to the modest Medicare 2-6% and then let’s talk about how much extra these “uninsurables” are going to cost us. Given the ridiculous litmus tests insurance companies are using to dump patients, I think they’re cutting more meat than fat at this point. Assuming you mop up everyone not on a private plan, if you can’t run a non-profit insurance company that contains 12% of the US population, the public option was never going to work anyway.
I posted this question on a thread yesterday, and would really like some feedback from commenters. Why aren’t business interests getting behind a public option? Their health insurance premiums are going up, too. The competition would help keep premiums down and I fear nothing less than a backlash of skyrocketing premiums down the road when banning of pre-existing conditions goes into effect. Please eddy-cate this dumb MF on this, I may be missing something.
that is, “banning of discrimination based on pre-existing conditions” — oh, for the edit function
Serious question: could the reason (or part of the reason) why the public option doesn’t come online until 2013 be that they have time to rejigger it to deal with problems like this? It seems like there’s so many moving parts to deal with (if there’s no mandate, or if there’s no dumping protection, or if it can’t insure at around medicare rates, or [other stuff], then it breaks down), that there’s no way we realistically could’ve hit them all in the first pass, especially not with the Blue Dogs.
I don’t know, this may also be the part of me that thinks that health care reform isn’t done, even if we got everything we wanted out of a public option. More shit needs to be done, and as long as we’ve got reason to revisit the reform later on rather than just shoving whatever we got now through and calling it a day, I can’t say that I’m all too concerned yet.
I think that Democrats–par for the course—rolled over on the HCR bills in both houses. It’s stripped down and defanged enough segments of the bill where it quite likely won’t work because of the small numbers of people that are going to make up the pool of “public option” recipients. Then you have the problem that the public option won’t phase in until 2013. The insurance companies are busy jacking premiums up left and right while purging people in the same manner.
But hey, what can we expect when our legislators are bought off by the very individuals and corporations they should be protecting the people they represent?
Off topic, here is a link to the greatest rant of all time. Careful, it is not safe for work due to the “F-bomb” frequency.
They Live By Night
This is exactly why the progressive wing of the party is so frustrated with the Democrats. Why do they always underplay their hand? During the Bush II years they were practically tripping over themselves to compromise with the Repubs, lest they be called “French” or something. And then they were anyway. And now that they control both houses–including a 60 person majority in the Senate–they’re still acquiescing in the face of any opposition. Fucking Democrats don’t know how to haggle.
What is the matter with the criminals and corrupt assholes in Washington DC these days? How come their criminal activity only takes about 5 minutes to detect?
There used to be artistry in their thievery…
Maybe it’s because NOBODY CARES how corrupt, crooked, fucked-up and just plain vile these people are. Maybe people already assume government leaders are criminally on the take…we are so screwed in this country…
There is no health care reform unless they get rid of the dumping clause. Gee. Long live rescission!
According to Ezra who is, as near as I can tell, the smartest and best informed person there is on this stuff, they DO actually have some risk sharing provisions that would give more money to plans that take on riskier propositions (such as the public option would wind up being)… the CBO’s latest score just thinks they probably aren’t tough enough, and wouldn’t cover over the whole difference. I don’t know, presumably that formula could be tinkered with and perfected later though.
He certainly seems to agree that the nightmare scenario you describe here is possible, but it’s not inevitable, and there are SOME good things a public option would do anyway.
He also points out that the public option, as currently constituted and scored by the CBO (i.e., one not using medicare rates, which was a battle lost months ago) probably won’t to much to control costs anyway, and it’s other bits of the bill that are doing most of the good stuff that will happen.
Ezra is pretty much mandatory reading on this stuff, and he writes so darn WELL too.
I’ve often wondered if cynicism became self reinforcing in dealing with our political masters. People said “they’re all crooks, there’s nothing you can do to stop them”, and probably had good reason to say so. Then people take office knowing that anything they do will be written off with, “what did you expect, they’re all crooks.” Cynicism justifies actions that promote more cynicism that justify actions that …
Just imagine of Jefferson, Hancock, Adams said “Those guys from England, they’re all crooks but what can you do”….
just sayin we don’t need a new revolution, we just need a new revelation…
I think the reason nearly nobody is honestly talking policy (maybe a few lefties consider the public option to be something other than a stalking horse for single payer – those would be the few honest ones) is that the unspeakable problem is that health insurance companies are obsolete and need to be shut down. Conservatives and moderates are just trying to keep them alive somehow, while lefties at least recognize the need to shut them down, there is little realization among the public that such radical steps are necessary or even legally possible.
For example, the ‘no pre-existing condition’ rule that is likely to pass is fundamentally incompatible with the insurance business. The only exception is for large group plans, where the large number of people covered pools the risk a fair bit. But as for selling insurance to the public in general? Not a sound business model for some time, and never will be, especially if consumers have any real regulatory protection.
As soon as blocking coverage for pre-existing conditions is in effect, these companies can not predict costs and can not reasonably set premiums. I don’t know what you call the new services these companies will provide, but they will not be underwriting and they will not provide insurance.
The public option is just a politically feasible way to get reform in place that establishes the means of dealing with the next insurance crisis, when the insurance companies get out of the business. If I go on FDL, I can state that. If a liberal goes on Morning Joe, I will be rejected as a kook for saying that. So anyone more moderate than Dennis Kucinich, or who wants to be taken more seriously than him, has to dissemble about what the public option is really going to do.
OT President Obama is going to end the HIV travel ban.
What will Sully say now.
@They Live By Night: “Fucking Democrats don’t know how to haggle.”
Is it somehow just not getting through to people that the “moderate” Dems are BOUGHT, or are the implications of that fact not clear?
The Dems are not weak, or spineless, or cowardly, or cowed, or timid, or out-of-touch, or misunderstood, or clueless, or stupid, or lacking in knowledge of “how to haggle.”
They. Are. Bought.
Bought is what they are. Bought. Paid for. Purchased. Bribed. Owned.
Short Bus Bully
“We might as well spike it”?
Are you retarded? Yeah, much better to come all this way and then fall on your sword and declare a moral victory right?
Fucking left-wingers still don’t get it!
You claim that the dumping would ruin the whole program and Repubs would use that against us, which is true. BUT YOU DON’T THINK THEY WOULD USE THE FACT THAT WE SPIKED OUR OWN PROGRAM AND WALKED AWAY WITH NOTHING AGAINST US?
Repubs are all about the circular firing squad, this is true, but Dems eat their young.
Again, are you retarded?
Hang on. I have been assured that everything up to this point has been kabuki theatre.
You telling me August actually happened?
This is what I hate about our politics. The time span between “too early to get worked up” and “too late to do anything about it” is about negative 2 months.
@Demo Woman: Well, part of the bill outlaws rescission to begin with. And another part of the bill outlaws variable rates for customers based on medical records.
I need pick through the whole damn thing to figure out exactly how it all works.
This is the one thing that gives me a little hope about Obama and his pragmatic approach to things.
I hope he knows his history and didn’t go full the monty on HCR. He knows that this is an up-hill similar to the Civil rights movement and some changes will have to be implemented incrementally. We’re talking about 100s of billions in yearly profits. The rich fucks will fight like hell to keep them.
That said, I’m not impressed in the least that Obama and the Dems didn’t bargain from a position of strength. They acted like a bunch of cowardly pussy-boy bitches with regard to hard-nosed negotiation.
@Short Bus Bully: His point isn’t just passing HCR w/o dumping protection would be bad for democrats.
His point is that it would be bad for HEALTH CARE. We would be in an even worse world where insurance companies covered all the health folks, but once you got sick you would be passed on to the impossibly overburdened public option. Even more people would die.
It isn’t always about democrats v. republicans.
Or are you retarded?
No recision = more expensive health insurance.
No dumping = more expensive health insurance.
No pre-existing condition exclusions = more expensive health insurance.
All the awful things insurance companies do to us do reduce health insurance premiums. Regulating those awful things out of existence means pricier insurance. Period.
Which is why we need to kill insurance as a mechanism for paying for health care. It’s incompatible with affordable health care.
@joes527: Just to add…
I don’t really know whether the bill moving forward is as bad as that.
But I am sure that it is possible to pass Health Care Reform(R) (now with extra Public Option(TM) ) and end up with a worse system than we have today.
If the anti-recission measures aren’t effective enough, or if the Public Option is structured so that it doesn’t provide a downward pressure on insurance rates then we are screwed.
(I just don’t know whether this describes the bill that is moving forward)
And jesus fuck but I despise the comment system here. It’s following the system of “upgrades” where every change is for the worse.
I know – firsthand – that it’s hard managing this stuff but it’s REALLY frustrating as a reader.
That all depends. If the bill is also setup such that the Public Option doesn’t ever kick off otherwise insurable people, then I think it’s ok. While it would be more expensive, it would also have the effect of changing the insurance landscape (rapidly) to single-payer.
The insurance companies would then just be in the business of providing premium insurance while the Public Option would offer baseline coverage.
The budgeting for it would be awful (and no doubt the Democrats would pay a political price for it) but the end result would be far better than what we have today. That’s my take at least.
They Live By Night
You’re right, of course, but they’re weak-willed as well. They compromise on everything, whether there are lobbyists involved or not. Makes me long for the days of Dan Rostenkowski-he was corrupt as could be, but he was tough as nails and he delivered.
You know I think the reason that the GOP hasn’t unveiled any solid ideas for health care reform is that they would too closely resemble the movie “Soylent Green”. Recission and ridiculous pre-existing condition exclusions (i.e. an infant is overweight or and infant is overweight – no coverage for you) are just two examples of dysfunction of our system. I think that the health insurance industry has been and will contine to hold a gun to our heads when it comes to our health. We should repeal their anti-trust exemptions and show them that we’re tired of playing by THEIR rules.
Wouldn’t now be the time to maximally attempt (with whatever marginal chance of any victory) to amend to deal with these sorts of problems rather than ending the reform program entirely?
That aside, ‘moderate’ Democrats should bear in mind that whatever their excuses, if people actually end up hating whatever change is produced, they will blame Democrats, whether or not the ‘moderates’ and ‘centrists’ go around saying “BUT, NANCY PELOSI!!!” or not.
It is in their direct electoral interests to make sure the effects of HCR on the vast majority does not make things worse (subjectively especially).
But isn’t this how health care works in single payer/single provider countries? The government (take NHS for example) provides the baseline coverage. There’s nothing that prohibits individuals from buying premium health coverage from insurers (or from insurance companies to restrict clientele to only the healthiest).
At any rate, I think this actually is the desired end-state. The only problem with this path is that it’s going to give the GOP a ready made fiscal irresponsibility argument since the Public Option would get extremely expensive (in a hurry). But, while they would rail on it for political purposes, there’s no way that anyone outside of the Paulista wing would actually try to reverse it.
“A public plan flameout will delegitimize the Democrats and probably kill off any future support progressive health care reform.”
Who’s Will, Kemosabe?
The Democrats’ inability to offer a coherent explanation for what they’re trying to accomplish in health care has delegitimized them. Now we’re just waiting to see how bad the consequences are.
The difference is that countries with single payer don’t have private companies sucking a huge chunk of the money out of the system.
There is no way we could have a functional “single payer” system under those terms. It would be permanently underfunded and people would die like flies.
@They Live By Night:
Don’t know how, or don’t want to?
It seems to me that if the “dumping” nightmare had any real likelihood of playing out as posited, the insurance companies wouldn’t be fighting the public option tooth and claw like they are. I could be wrong, of course.
Also, I thought all the legislation being considered DOES prohibit dumping, public option or not? Did I miss something?
@moosehockey: Why aren’t business interests getting behind a public option?
Big companies don’t support it because health insurance offers them a competitive advantage over large companies.
Big companies also don’t support it because they already don’t give a fuck about their workers (Walmart).
Big companies w/o small-company competition (automakers) don’t support it because they are run by Republican assholes who are at constant war with the Dems over labor issues.
Big business doesn’t support it because they know a lot of their workers are there for benefits, and that some of their best workers may leave to start their own companies if they had access to an affordable plan.
Small companies don’t support it because they buy glibertarian propaganda.
That’s been my theory all along, but I’m not buying it anymore. I think incumbents know that in 9 out of 10 districts, their re-election is a foregone conclusion, and they never really have anything to fear from their constituents no matter what policies are in place and who is responsible.
I think it holds a bit more sway in the Senate, but very few seats will be lost based on this or any other single policy.
Money is rolling in, their seats are safe = fuck the public
Even with provisions banning dropping you or changing your rates based on age/health/etc, insurers will be able to control who they insure fairly well. All they have to do is market their plans to the folks who are most profitable to insure (post-mandate, this will undoubtedly be young adults). Ideally customers would be able to objectively compare insurers and choose the best one for their money, but we all know that this doesn’t happen in health care. People still buy namebrand drugs; it’s too hard to become an educated consumer.
The only solution to this (working within the current framework) that I can think of is subsidizing risk. Give insurers money for insuring people with cancer and diabetes; tax insurers who don’t. Combine this with a cap on individual premiums, a ban on considering preexisting conditions, and a requirement of uniform rates for everyone given the same level of coverage. Insurers could still find loopholes in this system, so the law would need to empower an independent board (like the one proposed for Medicare) to evaluate how it’s working and make changes w/ the goal of eliminating actual or de facto discrimination in health insurance.
I see bob already addressed my point.
Shorter me: If the Democrats botch this up and install a fiasco of a system, THEY DESERVE TO LOSE—but most all of them will skate.
HRC – Hillary Rodham Clinton OR Human Rights Campaign.
HCR – Health Care reform.
It’s been a rough week for dyslexics.
Could still get into an “adverse selection” death spiral. Even if the public option has far lower administrative costs, if its population is quick a bit sicker than competing private plans who cherry pick enrollees, then it will eventually die.
But they use curse words!
With the Dems, the safe money’s on screwed.
How? Let’s leap ahead 5 or 10 years and the costs from the Public Option are getting out of control. Do you really think the insurance company is going to be dying to get that customer base back? Do you think the GOP is going to be rushing to boot everyong from age 45 to 65 back onto the private insurer street?
As I said, the Democrats would get hammered over fiscal irresponsibility but it would setup a new reality where the baseline is that unhealthy people (myself included) have a backstop in the federal government. That’s not going to be unwound. What you’ll have is a debate over the level of risk subsidies to insurance companies, tort reform, coverage mandates, etc. Not to say these things aren’t important but we’d be looking at a “how do we improve Medicare” type of a debate instead of “should everyone be covered” debate.
Does this suck for Democrats? Sure, but it’s also better for the country in the long run.
Not really. IIRC, private health insurance in countries with single payer systems is primarily for upgrades. You can get private insurance so that if you, say, end up in the hospital, you can get a private room, but you get the same level of care as everyone else. You can’t pay more to be able to skip the line and get an MRI ahead of everyone else.
I keep meaning to read more about the German and Swiss systems, which seem to be a bunch of heavily regulated private companies rather than single-payer, but I haven’t gotten around to it.
Exactly. Health insurers would be in vastly worse financial shape without Medicare/aid. I’m sure they are very, very happy that Pelosi swapped subsidies for expanding Medicaid in the House bill. They benefit from a mandate that gets people insured who avoid it because they’re healthy, not a mandate that gets people insured who can’t afford it because they’re poor (and thus more likely to be unhealthy) or so unhealthy that insurance is too expensive.
The real reason why the GOP & Blue Dogs don’t want health care reform – their supporters all agree our system works just fine:
That’s basically a product/packaging decision. There’s no reason that you can’t set it up any number of ways – you could have hospitals that offer priority for “premium” providers or you could have it work (as you said) as an ‘upgrade’ function. So yeah, there’s a decision around how you structure what private insurance can and can’t do but there’s nothing that pre-fixes those rules.
Conservative love for Swiss/German (and Dutch and French) healthcare is either uninformed or facetious. Existing insurers would go out of business if a fraction of the reforms needed to replicate one of those systems were implemented here.
Health insurers want to be growth companies… want to see their market cap rise much faster than inflation. Eliminating inefficiency could only help with this to a small degree, so costs need to rise. No one’s buying stock in Euro insurers (the ones in countries that are even allowed to turn a profit, anyway).
Tim, you just don’t get it.
You don’t start off with single payer which would have the strongest ability to control and manage health care costs currently about18% of total GDP and rising fast. You don’t then fallback to a solid strong Public Option without giveaways worth hundreds of billions to those in the health care industry. Nope, none of that which you have previously stated would be best for the country as a whole and have the ability to put in place.
Instead, you spend upwards of a year playing 20-dimensional chess. In which in one of those dimensions it makes sense to give up your queen, knights, rooks, and bishops in trying to lure while begging the other player to the board who still tells you that’s not enough and to piss off. Strategery, Democratic style.
You just did a pretty good job describing ‘adverse selection.’
@Mr Furious: There might be a lot of Democrats who think that based on the current situation that their seats are ‘safe’.
But if — and again, I’m saying “if”, not simply presuming, actually I’m somewhat optimistic — what actually passes is not only technically not good but causes ordinary Americans, especially a majority of them, to dislike or hate it, then their previous haughty electoral calculus goes out the window, no matter how many dollars they’ve gotten from lobbyists.
Sure, their incomes on corporate boards or foundations may have been ensured if they made insurance / pharma masters happy enough, but their seats? Far from it.
@ Xenos # 12: Sorry to say this, but you have no idea what you’re talking about here. Insurance actually works BEST when you don’t know what will happen to people. Think of fire insurance. It’s cheap because we don’t know who’s house will burn down ahead of time, but we know it might be us… so EVERYONE buys the insurance, which makes a big pot of money to pay off the people whose houses do burn down. The whole POINT of insurance is to spread uncertain risks over enough people that the risk is diluted enough to be affordable to everyone.
Health insurance doesn’t work very well, partly because we have TOO good an idea who will get sick. If Grandad has a 100% chance of needing health care next year that will cost more than $10,000, then why would you ever want to sell him insurance? You would lose money for sure, unless you charged him more than $10,000, in which case that isn’t insurance, that’s just him paying the doctor what he was going to pay anyway, except with an added middle man. If nobody could ever predict which person would get sick or not, then it would be like house fires – affordable.
@ Joe #16: August was about killing the entire process, and that didn’t work. The public option using medicare rates was killed in the Finance committee.
What we’re seeing for the public option now is a compromise on a compromise. No single payer? Ok, a public option? No medicare rates for public option? Ok, negotiated rates? Ok, and states can opt out if they want.
If the compromise goes any further (opt in or trigger), then it is fail. The public option would either never start (triggers pretty much never get pulled), or it wouldn’t ever get enough people to have a big enough risk pool and negotiaton leverage against providers (i.e., doctors and hospitals).
BTW, in Canada, no, you are not allowed to pay for insurance that would let you jump a line for faster service – conservatives propose this occasionally, and get huge smackdowns by the voters who hate the idea. The kiss of death in Canadian politics is when your health care proposal is branded “American style”.
@Zach # 36:
There are some provisions for that in the current bill. They call it “risk adjustment”… essentially I think it comes out as taxes on plans enrolling lots of very healthy people, that pay out to plans enrolling lots of unhealthy people.
The theory is that you don’t have to force everyone to take all comers, you just punish them enough for skimming and help them for taking the expensive people, and if you do enough of that, the incentive to skim disappears, because it’s equally profitable to take either kind of person.
Devil’s in the details of course, and what the latest CBO score says (according to Ezra anyway) is that they aren’t doing enough risk adjustment, so the public option would STILL end up costing more than others due to its riskier pool of people.
There a Parrot-style sketch in there. I envision Keith Olberman or Alan Grayson as the irrate pet shop customer, a run-of-the-mill MSM talking head as the pet shop owner, and a guest role for Joe Lieberman or Max Baucus as the parrot.
I agree with your assessment.We are screwed because the insurance industry is dictating the policy.Much of Congress is in their pocket.It`s sad how this country has been devouredby these greedy creeps.
Public campaign financing is a good answer, bhut we have to work for it.
Look liberals and Democrats have that warm feeling about finally getting most people health insurance. That’s nice but you need to realize that the warmth felt is from wetting you pants.
Neither the House or Senate bills really deals with cost controls. Yes to a point they confront issues related to insurability and costs related to that. But that’s a side show. People complain about the cost of insurance but the underlying and real problem is the cost of medical care. Both what MD’s and hospitals are paid and technology providers. Little by little the lobbyists for those groups have stripped out cost controls turning this into a ticking budgetary time bomb.
If there is not a robust public option, then the adoption of a Swedish style private system is better. Basically a government defined benefit and universal coverage, i.e. everyone is accepted and everyone pays essentially the same with an allowance for age.
@sleeping dog: Exactly.
In the end, cost control means spending less money, and when you spend less money, that means a whole bunch of people are getting paid less money. And those people won’t be the poor ones, who are normally so obligingly quiet when getting the shaft.
Interesting how handles work around here. “Soylent Green” is the handle I’ve been using here for about two years, but comment #27 isn’t mine and its author simply co-opted the name. Admittedly I rarely post anymore, so go for it, twenty seven. Hope you’re good at it.
You can for elective surgery. See: Australia.
But for emergency stuff or for doctor’s visits, it’s a level playing field.