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Over the weekend, America’s Health Insurance Plans (AHIP), the health insurers’ lobbying arm, released a report attacking the Baucus/Senate Finance reform bill. It’s the end of the truce and war is on.
The report, prepared by PricewaterhouseCoopers, is a hatchet job, and the main blow is the claim the Baucus bill will raise everyone’s average insurance rates by $4,000/year by 2019 and by a cumulative $20,700 between now and and 2019, compared to current law. From AHIP’s summary (h/t TPM):
For example, the analysis shows that the cost of the average family policy is approximately $12,300 today and will rise to:
* $15,500 in 2013 under current law and to $17,200 if these provisions are implemented.
* $18,400 in 2016 under current law and to $21,300 if these provisions are implemented.
* $21,900 in 2019 under current law and to $25,900 if these provisions are implemented.In fact, between 2010 and 2019 the cumulative increases in the cost of a typical family policy under this reform proposal will be approximately $20,700 more than it would be under the current system.
But if the reform bills are reducing the numbers of uninsured, imposing mandates to create pools for lowering average costs in the individual and small group markets, and making efforts to reduce provider costs in Medicare, what would cause insurance premiums to rise? AHIP’s hatchetman knows how to build a misleading case.
1. The mandate has weak and delayed penalties for not buying insurance, which will convince young/well people not to buy insurance (until they get sick), so they won’t contribute to the exchange pools, thus raising the average rates. [This is a commonly recognized incentive problem, but there's no consensus on how low/high penalties can/must be to affect compliance rates. The insurers' concern is that the Schumer/Snowe amendment effectively eliminated the penalty in initial years. Massachusetts penalties are higher, but also seem too low, yet the state still gets about 95 percent of eligible people to sign up. The House bill penalties are higher than Baucus' bill.]
2. Cuts in payments to Medicare and other public health programs will force providers to recover the lost revenues by raising rates to private insurers and individuals. [This assumes that Medicare payments would be below provider costs, which Medicare administrators dispute. And hospitals and PHrMA already cut deals to lower their Medicare/caid revenues by $155 and $80 billion respectively, with no claim they'd shift those costs to private insurers. There is no agreement that Medicare cuts result in $ for $ cost shifts to private insurers (see here), but this may be a relative market power issue: Medicare has more negotiating power than private insurers, relative to consolidated hospitals and local provider networks; these are anti-trust issues.]
3. New taxes on high-end plans will be passed through and result in higher premiums for employer-based plans, while new taxes on other medical services/devices will be passed through in the form of higher insurance premiums for everyone.
As Ezra Klein reminds us, PwC is also known for the hatchet job it did in defending the tobacco industry from proposed taxes on cigarettes. Klein and TNR’s Jon Cohn reveal the consultant’s flaky assumptions that allow it to reach its conclusions. Klein finds the key footnote that drives all the results:
A footnote — how come the good stuff is always in the footnotes? — on page E-2 of the report sort of gives away the game. It reads: “Impact assumes payment of tax on high- value plans, full cost-shifting of cuts to public programs, and full passthrough of new industry taxes.” That’s written to obscure, but what it means is that the report assumes no behavioral changes in response to new policies.
Klein also argues that the AHIP report compares raisins with plums. Current law allows insurers to sell junk insurance at lower premiums, but high co-pays and thin, misleading coverage. Reformed insurance products with higher actuarial value to consumers would naturally cost more, but the point was to provide real, not phony, insurance.
By releasing this hatchet job, AHIP is signaling its truce with the Obama Administration is over and it’s now open warfare on Congressional health reform efforts. While the target is the Baucus reform bill, the arguments could apply generally to all the bills.
And the report adds the usual hit on how a public plan/option would make matters even worse, because, AHIP argues, public plans just don’t pay providers enough. So those responsible private insurers would have no choice but to sustain the entire health industry by raising their premiums.
More:
Jon Cohn/TNR, Is the insurance industry declaring war?
TPM, Senate Finance Committee slams AHIP report
“This report is untrue, disingenuous and bought and paid for by the same health insurance companies that have been gouging too many consumers for too long as they stand in the way of reform yet again,” Scott Mulhauser said. “It’s a health insurance company hatchet job, plain and simple.”
White House/DeParle on PwC: “These guys specialize in tax shelters.”
SC/Seminal, AHIP Explains How it Will Cherry-Pick the Exchanges…
Kaiser Health News, original story on Schumer/Snowe amendment to weaken penalties for not buying insurance
77 Comments
This was probably the insurance industry’s gameplan all along: Whittle down any proposal as much as possible and then kill off the remnant. It is what they did back in 1993.
It also reflects the standard GOP practice. Gut, defang, and neuter an inconvenient bill, then vote against whatever may be left. Almost like it was from the same playbook…how strange…
And WHO on the left shall respond with an equally strong salvo?
Come on, guys! Load your Graysons and get ready for battle!
It’s all Kabuki except for Grayson. That’s Samurai time.
i don’t trust ahip – at all. but i do see good reasons to expect insurance costs to increase with reform. first, because if regulations to prevent denial of care, exclusions due to pre-existing conditions, etc are effective then we can expect costs to rise as more healthcare is paid for via insurance. this is not a bad thing, but it is a real cost.
Yes, if you improve the product and cover care you used to deny, the costs will go up. The offset was to bring in more premiums from people who didn’t get sick often, so you could keep the average down (or not rising so much).
AHIP fears the offset is undermined, and they’re probably right.
The irony is that there is a kernel of truth in part of what AHIP is saying, but it’s packaged with questionable assumptions, and sponsored by insurers who everyone has been making the villain, which allows the Senate Finance and WH people to dump on it as just another report from a greedy special interest — and we’re all supposed to forget that taking care of AHIP’s special interest — i.e., it’s very survival — was one of the guiding principles for the Senate and WH negotiations. Lots of hypocrisy to go around; lots of heat, little light in this fight.
LOL. exactly.
and add in that congress didn’t ask the cbo to evaluate total costs (total national healthcare expenditures including, fed, state and local, household and employer). we’ve complained about this issue before (that only scoring the fed cost is incomplete) but the problem is really brought out by this fight now with ahip. if congress had gotten comprehensive cost analysis from the cbo, we’d have a better idea what to expect — and the ahip would have less opening for these kinds of games.
really, i’ve got to wonder… didn’t anyone in congress or the wh think this could happen? didn’t they want to have good data to counter the ahip if it should be needed? or is teddy right and this is all kabuki to make the senate finance committee bill look better than it is (see how hard the ahip is fighting? they wouldn’t do that unless they hated the bill.)
the threads of hypocrisy and kabuki are too complicated for me to unravel and my head hurts when i try.
The light was extinguished when Medicare for All was taken off the table, because no other proposal could be benchmarked against it.
one thing i wanted to mention wrt to the mandate is i think MA should be a good test case. we had much of the regulations prior to the 2006 reform: no exclusion for pre-existing conditions, community rating, etc. (this is something i pay attention to – it’s important to me since i’ve had cancer and in many states can’t purchase insurance at any price).
so, if mandates help with costs by including more young healthy people in the insurance pools, shouldn’t we have seen that in MA after 2006? my own experience is that the first year was very good, my premiums stayed about the same and prescription drug coverage was added. after that first year though, annual cost increases have gone back to normal and my premium went up iirc about 20% this year. yuck.
anyway, if my experience is not unusual, i have doubts that the mandate will be effective at controlling costs. but i really don’t know and so wanted to ask you about that.
The experience you describe is what one would expect, no? If in the first year, you bring in a lot of people you didn’t have before, then you’d expect average rates to fall or at least not rise as fast. But once everyone is in, there’s no further price effect (from averaging in many new low-cost patients), and so you’d expect average premiums to rise again to track the underlying cost increases from providers.
In other words, the mandate is a one-shot deal that helps by averaging lots of new folks. Once they’re all in, there’s no further effect. And the mandate is not a mechanism for driving down the underlying provider costs which even the most efficient insurance system has to reflect.
There was news recently wrt to Kerry’s amendment (which was not acted on in Senate Finance) to allow the exchange administrator to “negotiate” with insurers to bring down their premiums. The claim is that Mass. Connector does this (though I think it’s only for the lowest-level coverage??) and that helps keep premium increases limited. I haven’t seen any empirical study to show whether/how effective that is. But again, there’s a limit — insurance premiums have to reflect provider costs, and if there is no check on provider costs, premiums will still rise, which is what I think Massachusetts is seeing.
If, as claimed, the public option has some effect on this, it would only be because the PO administrators used their market power (needs to big enough to have it) and policy goals/commitments to induce providers to reform payment incentives and cost structures to actually lower the costs of care, not just be a “more efficient insurer.” It’s a theory that needs to be tested, and it assumes that Medicare has done this and can do more if pushed by a MedPAC group committed to that. We’ll see. If it doesn’t work, we’re all going broke.
I should add that there is another way a very strong PO could lower premiums. If it has large market power, compared to the hospitals/provider/networks, and if those providers were exercising market power today, charging prices well above long-run marginal costs (the amounts they’d need to provide/sustain care over time), then the strong PO with market power might be able to bargain payments down.
The more I think about this, the more I’m convinced the tough nut is the providers and the measures they use to sustain high prices/incomes. We clearly pay doctors much more here than Europe does, and so lots of the cost savings that reforms are going after depend on our ability to squeeze money out of doctors, particularly specialists and the providers that make money from them.
Early on, the WH cut deals with drug makers ($80 billion) and hospitals ($155 bn) who agreed to give blood at the office, but no more. So what’s left? Device makers, insurers — both of whom are taxed in the Baucus bill — and doctors. And the reforms want to use MedPAC or something to push for lower provider costs — but the providers are fighting to make sure their deals are honored and not upset by future MedPAC recommendations, which severely limits what MedPAC can accomplish, assuming the House agrees to give it cost-cutting powers, which it doen’t want to do.
http://www.nytimes.com/2009/10/11/health/policy/11cost.html?ref=health
it sure wasn’t sold that way by reform boosters.
but you make a good point. i guess i should have expected it (i didn’t).
more questions though… if healthcare provider costs continue to increase at same rate, but % of risk pool using healthcare is lower (because of all those healthy people now included), total provider cost increase will remain the same but be less on a per member basis? is my thinking wrong on this or is it just that the change is so small as to be unobservable?
p.s. left scarecrow some very late replies on a previous ahip thread:
http://seminal.firedoglake.com/diary/8870
A vibrant PO, which competes with the insurance companies, will LOWER cost of DOING the business as a result of cutting a few layers of bureaucracy that the private insurers have.
And that will either FORCE the private insurers to LOWER the premium costs, or go out of business.
That’s the REAL threat to the insurers.
This crap about AHIP and the PWC inbred report is non-sensical, to me.
They’re not gonna be screwed from weak mandates, they are gonna get screwed HARD with a government run PO that competes with their coverage.
And that seems to be where we are headed at this point. WITH mandates, too, that WON’T help the insurers because people will opt to adhere to the mandate by going with the PO, that offers subsidies up to 400% of poverty income. Young and uninsured poor will FLOCK to that, not to the insurers.
So, like TeddyP, I’m confused AND concerned about this kabuki, and why it was unleashed.
I’d offer, this shot across the bow by AHIP is saber rattling to try and scare the public into pressuring their senators before tomorrow’s voting. Alas, like the PalinBots plan fails, SENATE’S CLOSED TODAY!! Of course, it’s just a first shot, in the open. There’s another month at LEAST before a final Reform Plan is finally agreed upon, and voted upon, and signed by Obama.
All in all, I’m pretty much with Mz. Hamsher’s take on it all.
AHIP and the insurers are in a state of panic, and they fucking SHOULD be.
We are closing in on them.
The lefty pajama clad blogosphere has kept the will of 77% of we the people in the news, and Obama/Rahm KNOW they will pay a HUGE price in ’10 if they DON’T pass a vibrant and competitive PO.
Their asses are on the line on this and they know it.
Their asses are on the line because Jane/FDL and all the blogosphere and Keith and Rachel, and Ed, and Dr. Nancy and more have been active, vibrant, visible, and effective.
We have finally convinced them, in the WH, and in Congress to some extent, their asses are on the line on this.
Sorry, corporations, deals are all off on this one. Go ahead, SPEND your money to lobby the Republicans, and donate to their campaigns. Won’t help!!! GOP has ruined itself. It will be wasted corp money.
Tide’s turning, just enough to be measureable, methinks. Just enough to be hopeful, with the end game close at hand now.
Pass the ammunition and the brandy! Just don’t load the ammo while hitting the brandy! Bless Ya Citizen Norske!
*G*
Great thread, great comments, thanks one and all!
disagree.
the threat, if there is one, is to profits and therefore possibly executive salaries. but that is not a big percentage of costs.
expect cost competition to mean private insurers work harder to deny care, manage customer base (for the more healthy).
Hope you’re right Larue, but I don’t see it yet. When we see Obama strat talking about the PO again, then we’ll know we’ve made some progress.
We all know the answer to the Healthcare problem in this country, it is for profit, and that means profits at ours and sick peoples expense.
The easy answer is Nationalize the Health Insurance Industry. How many Countries when they saw our oil Companies stealing their oil and not giving them squat for it, just nationalized there oil business, kicked us out and took over.
We didn’t consider them socialists for doing this, and still buy their oil today. They had the smarts and the guts to stand up for themselves, and do what was right for their Countries.
This way the people that work for the insurance companies would not lose jobs, and they could carry on doing what they do for us, our Government instead of for the Insurance big wigs, and the Wall Street investors.
ASK Yourself if they have all that money from premiums, why would they be selling stock and having to share the profits with investors. It’s so they can make even more money, with other peoples money.
Why bother keeping the insurance industry around. Eliminate the Health Insurance Industry, and Nationalize the Health Care Industry. All the doctors and hospitals will work for us. No profit. Profit is the problem.
It would seem then that if a strong public option were passed, it could eventually use its natural advantages (no shareholders to pay, no megamillion CEO’s and other execs, little advertising, no corporate jets, junkets, etc., etc.) to get an edge on the insurance co’s. The idea being that it might become “the little engine that could” eventually chop down the incredibly wasteful healthcare cartel. As far as pricing competitiveness and risk pool assessment goes (e.g. dumping ground for the sick,) I’m healthy as a tic and I would join it just on general principles. Wouldn’t you? How could it be worse than these damned evil insurance co’s? Take away pre existing conditions and rescission and you might have something worthwhile and, WITH VERY DUE DILIGENCE, hold us until we can join the rest of the world and get an honest to goodness single payer type system.
The public option turning into something better down the road, is passing the problem to years to come. It’s alot like saying that lump of coal will turn into gold if I look at it long enough. We should be demanding single payer, we forget we pay these guys and are supposed to be their bosses. Yet we are waiting to see what they give us. HA Ha!
Yup. I’m convinced. AHIP is right. It all costs too much. By contrast, Medicare is relatively inexpensive, like the superior healthcare in the rest of the industrialized world. Let’s put everyone on Medicare.
bingo.
The sole purpose of the AHIP report is to give cover to the pols, so they don’t appear to be so much in the pocket of the industry. Seems to be working like a charm. It is probably the only reason Baucus postponed the vote, to be after the AHIP report was issued.
yeah, i think you and teddy are probably right.
a big tell is that congress hasn’t had the cbo do comprehensive cost analysis (see my comment @7 and for more background diaries here and here) as was done previously.
in other words, our dem congress set themselves up for the ahip report.
Am I the only one getting an error message in place of what I assume is a video clip at the top of this post? A hard refresh doesn’t help.
EDIT: Never mind, it’s there now…but carriage returns don’t seem to be working.
It just seems to me that if the insurance cos. didn’t pay their ceos so much (and look for more to pay them), and if they didn’t spend so much lobbying, they would have much more money to pay for actual health care. Also, if the corp and the corp bureaucrat were held responsible for the death of a policyholder who was denied help, then we might see a positive response from the insurance industry.
re MA. i looked at the connector this summer when i had to change plans (bcbs changed their plans again, so i took the opportunity to re-evaluate my options. ended up with bcbs plan most similar to my previous plan). i thought the connector was next to useless from a consumer’s pov. or maybe i’m too stupid to take advantage of it’s benefits, but if that is the case i doubt i am alone.
wrt to provider costs, i agree some med specialties are way overpaid but are those salaries a big component of our national healthcare budget? last winter i downloaded some cost data from the oecd to do cross country comparisons, but the data i saw (just the freebie stuff) did not have doctor salary cost in the break out. do you know of a good source for that data? i don’t have time to go looking right now, but would love to take a look at the primary data (sorry, data geek alert *g*).
re market power. this from hipparchia (links in original):
again, based on personal experience as a patient, i am a little concerned about unintended consequences of pressuring docs to lower costs (resulting in piece work pressure to see many patients a day) or leave the network. especially when it is elites not dependent on the po who are designing the cost controls. unlike the private for profit insurance companies, we actually need healthcare providers. in fact, we need surge capacity to meet occasional public health problems (bird flu, natural disasters, etc). fetishizing “efficiency” in this area is not necessarily good public health.
to summarize my rambling… i agree with you that some doc salaries are an issue although i don’t know how much of one in terms of percent of total healthcare costs. but i don’t think the answers are quick or simple as negotiating via market power. subsidizing education, making it easy for foreign health care providers to immigrate here to practice medicine (per dean baker’s idea), and other things may be better mechanisms for controlling doc salaries while minimizing neg affects on doc availability and healthcare quality.
I am seeing the video on firefox. Wonder if there is something you need to download to see that kind of video.
Thanks, eg. It’s there now. I don’t normally have any trouble seeing videos. I don’t watch while I’m at work anyway, but was startled to see a big ol’ error message in its place.
Hilarious…four-month-old “fat” (but healthy) baby turned down for health insurance. Publicity ensues and Murder By Spreadsheet, Inc., immediately backs off.
http://crooksandliars.com/susie-madrak/four-month-old-baby-turned-down-healt
Can someone ‘splain to me why it’s equitable to pay for “universal” medical care on the the backs of the healthy?
sure.
for the same reason i pay for public education although i’ve never had children. for the same reason i pay for the courts although i’ve never been sued.
some things we consider to be rights and a sane society makes provision to provide them to all members the society.
So pay for medical care the same way that courts and schools are paid for–by a tax, not by some cockamamie mandated “insurance” scheme.
Sounds good.
Plus, I don’t pay to go to public school or use the court system.
All medical should be free to the end user. It’s our human right.
I think government mandates are more distortive than taxes because the true cost is hidden.
preaching to the choir. single payer hr 676 does what you suggest (pay via taxes) and also covers all healthcare costs from first dollar (no copays, no coinsurance, no deductibles) for about the same amount (total national healthcare expenditure).
i think mandated “insurance” scheme is profoundly stupid, unlikely to work to significantly lower costs and many people will continue to die and go bankrupt because of major illness.
stupid stupid stupid.
Just checkin’. *g*
sounds like we are on the same page, or at least close to it. shocking *g*
Is your roof finally permanently fixed?
yes! finally! just this past week!
thanks for asking. i’m so reassured to have a new roof before the start of another winter.
Snoopy dance!
lol, yes!
and now since almost all of the branches that could possibly fall on my roof have already done so, i hope this roof will last a good long time.
One of the silver linings of being a senior citizen is that some things you do (or get done) will last the rest of your life.
30 year warranty! if i end up needing a new roof then, that means i’m still living in my own home at 79. not going to complain about that.
Heh.
First, point if you are human, an American, at all religious, you should have compassion and want to help your fellow man.
Second, You are paying for all this mess now, from the illeagals, the poor, and the uninsured, to the profits of the insurance industry, the taxes for all the Governemnt programs, the profits of all health care providers, drug companies, medical suppliers and manufacturers, fat cat get rich at all cost doctors, and yes all the other crooks that are praying on the industry.
You seem to love paying for all of that, while being healthy, but are so self centered as to only care about yourself. If your health fails, and your insurance doesn’t pay it all, why should we help you.
Apparently this morning the news is out that AHIP admits they only looked at four provisions in the bill.
This is the very reason we need Medicare for all. It ends all this endless bullshit from corporate insurance interests. Once they’re gone we start on the next major league corporate interest that is corrupting America. After that we keep going until the last major corrupting influence is gone.
but then ahip wouldn’t be around to donate to the dems! and before we defanged them they would donate to republicans!
don’t you care what happens to careers of our beloved dems in congress?
/snark
Hmmm… Good luck with that. The human animal is amazingly resilient and adaptive. For every law you can come up with to stop the thieves and incorrigibles, and every corrupt enterprise you can bust, there will be at least two simple schemes that will get around it. Within a relatively short time.
Daily show has good call-out of cnn.
Break up the monopoly and watch the prices drop. Remember Bell Telephone? They’d charge by the minute if you called another state. Now, you can call anywhere for twenty bucks a month.
STOP THE PRICE GOUGING!
The difference between telecom & medical industry is that the latter has built-in economic power because of the knowledge gap between buyer & seller and because the customer is vulnerable. Medical care prices have been rising more rapidly than overall inflation forever, long before there were insurance cartels.
“The cynic knows the price of everything and the value of nothing.” Oscar Wilde
I think progress is being made. This Baucus bill is better than I thought it would be two weeks ago. Moreover, I think it will be improved as it moves towards Obama’s desk.
It will fall well short of perfect, but it will be a moderate step forward. Like it or not, that is how our political system works.
imo, that’s a cop out for dem failure. failure of vision, failure of will, failure to govern for the common good. not a failure of greed though.
The campaign for publicly financed medicare is going to be a marathon, not a hundred yard dash. Whatever the Insurance Companies get out of this round will be a Pyrrhic victory. This is not going to be a repeat of 1994, because the stones that cover the maggots that infest American health care have been overturned for all to see. People are talking to each other about what is happening to them; they no longer think they are the only ones being screwed by the system. The second reason is that the demise of the Republican Party greatly lowers the leverage the insurance companies have over the Democrats. They can threaten to throw money against them in the campaigns, but they are going to spend a lot of money for nothing. In addition Grayson and in less but growing measure the White House, are calling them out.
I’m not particularly optimistic for this round. But I think we will get what we want on the next one, and some of what we want on this one. This is not a one-off deal.
that’s not what i call an individual mandate enforced by the irs. this round, if the dems are successful, is going to extend the power of private for profit health insurance companies and that’s a shame. especially as they will continue with their business model of controlling costs via denial of care.
it’s been a massive distraction, organized by the dem party, away from solutions that work.
and yes, it’s a marathon. which means we shouldn’t wait to start supporting universal healthcare until we can already see the finish line. or we’ll never start.
Another reason that ensuring that House progressives backstop HR 3200 (with a strong public option) is necessary.
All we really need at the start is a public plan that works and that can later be opened up to a broader range of people. And an exchange that insists on apples-to-apples comparison of plans.
hr 3200 does not have a strong public option.
if adverse selection undermines hr 3200′s weak public option before it is expanded (more likely than not), that will be used as evidence that gov run health insurance doesn’t work. put a stake in single payer and even significant expansion of a public option.
there are very big risks involved. that is why, imo, a weak po is worse than no po (although a strong one, like hacker’s original proposal is imo worth trying if that’s all we can get for now).
Is anyone live-blogging the vote today in the Finance Comm?
I didn’t need a study by Price Waterhouse to predict this. Three weeks ago I said here that adding all the people with pre-existing conditions to the insurance rolls while delaying the beginning of any public option would increase premiums for everyone–no matter mandating everyone to join.
This just isn’t a very well thought out plan. They really need to totally scrap what they’ve got going on and begin again to design a single payer system that doesn’t have backlogs and waiting lists. THAT is what we need. And don’t echo “Medicare for all” because Medicare has no backlog or waiting list because it doesn’t handle but a small part of the population. You scale it to everyone, and it will have waiting lists. So, a new way needs to be devised.
of course costs will increase with obamaco. scarecrow says so @6.
i’m sure that will make it popular with the public (not!).
disagree slightly with you about waiting lines though. medicare already takes care of the sickest portion of the population. also with a multi payer system, healthcare providers have to spend a lot of time dealing with various insurance companies — single payer will free them up to concentrate on patient care.
not saying i know there won’t be any problem, but i don’t think it will be as big a deal as you say. we already have wait lists in some areas (like where i live) and by prioritizing urgent care we can manage (for example, replacing a knee can wait a for a couple of months. cancer can’t).
As Uwe Reinhardt just concluded on C-span’s Washington Journal, “Corporate Aristocrats!” Jefferson feared corporate aristocrats with good reason. Consider this a tax penalty for people who cannot afford overpriced health insurance purchased from tax exempt corporations? People loose property in addition to life to corporations. You are being forced to associate….
was the Uwe Reinhardt interview any good? i’ve heard him speak several times (via podcast) and thought he was excellent.
Lets say Madison and Jefferson are :) at his interview!
“Corporate servitude and protectionism enabled under the color of law by corporate aristocrats; Health care!”
I was floored….
great! thanks for the heads up, i will give it a listen.
Rock on the move!
Half a trillion in corporate welfare, to the very corporations who now want to raise rates? Tax exempt corporation at that!
Senate Finance Committee Vote Liveblog
Senate Finance Committee Vote Live Blog
It seems to me the provider market is top heavy with specialists dispensing expensive forms of medicine. The higher than average costs for these services could be avoided by implementing reforms that focus only on primary health care, the least expensive and most comprehensive type of health care most people will need. As it is, people are paying very high premiums to cover Cadillac care for all (who are not barred).
He’s wrong.
Insurance premiums won’t go up.
We’re going to put them out of business.
Some points to consider and their implications.
The basic fact when considering an alternative to private insurers is that any plan that does not devote a portion of the premium to profit will necessarily be cheaper. This applies both to the PO as much as to the single payer plan. Public plans have a comparative advantage with respect to the price of premiums over private for profit plans. Everything follows from this fact.
An as yet missing piece of information is when does a plan to manage risk become viable. That is, what element of a plan to manage the cost of a risk allows for the price of the premium to fall. Presumably this happens when the aggregate cost of the risk decreases as the number of participants in the plan increases. But this can only happen when some proportion of the participants with low risk associated cost is reached relative to those participants with high risk associated costs.
If this is correct than it doesn’t matter what the total number of participants in the plan is. What matters in attaining the lowest premiums, is the proportion of low risk low cost participants relative to high risk high cost participants. This will be true if the number of participants is 47million, as those eligible for the PO, or 300 plus million participants as would be available for the single payer plan.
In this regard it bears re-emphasizing that premiums will always be lower in a publicly administered plan than in a for profit managed plan, because the public plan is more efficient, that is, paying a bill is done more efficiently by single entity (think Medicare) than by 1,300 entities paying that same type of bill but retaining a portion of it for themselves.
Of course there is very strong need for clarifying with readily available calculations the benefits related to cost of premiums that public plans offer. It makes arguing for it so much easier.
Lastly, there seems to be little point in the polemic between the PO advocates vs. the single payer advocates. The PO if viable will lead to single payer and supplant private insurers, in due course. What needs to be done in essence is to assure that a comprehensive mix of low as well as high risk participants comprise the PO plan. The issues of affordable premiums and of lowering the cost of health care curve will the follow.
“AHIP ends truce with Obama.”
Excellent! The truce should never have been signed.
Now that we’re getting appropriately polarized, let’s get in the trenches and fight like hell. Maybe Obama will condescend to join us.
assuming this isn’t all more kabuki
– I know I know, my inner cynic is showing
I actually think is all kabuki, by two-headed serpents.
Head One/AHIP, tries to convince those happy with health care that they’ll suffer more economically and that their government, scythe in hand is waiting to pounce. They’re the pimps.
Head 2/Baucus, plays the happy centrist hooker role.
Either way, they still work together to ensure that you will get fu**ed, one way or another.
Perhaps if this war is real- though I tend to agree with hazmaq’s post above- then maybe it’ll convince Obama that he’s better off working with us.
Not holding me breath, though.