Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Tag: Public Option

Shorter Sebelius: Welcome to a regressive tax which will rise faster than wages or inflation

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On August 16, 2009

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As Heinlein once said, I laugh because otherwise I’d cry (and scream, and pound my head against the wall):

Health and Human Services Secretary Kathleen Sebelius said the White House would be open to co-ops instead of a government-run public option, a sign Democrats want a compromise so they can declare a victory on the must-win showdown.(TL)

Ok, so let’s say they ditch it and include an individual mandate, meaning you are forced to buy insurance from private insurers or co-ops (which won’t be able to contain costs).  What is that?

It is a regressive tax.  Given the likely pathetic subsidies it will hit the working and middle classes hardest as it will be a higher proportion of their income than for the rich.  Since health care costs will not be properly contained, they will rise faster than pay will (they have for decades now).  So every year you will be forced to spend more of your money than the year before and will have less money left over.

A regressive tax which rises faster than pay rises.

This is forced increased spending on domestic financial services, which is what insurance is. I guess that’s Obama’s economic plan as well as his health care plan.  And bonus, since there’ll be no denials and no recessions, you won’t be able to get out of it  in any fashion, except death.

Death and taxes, the first gets you out of the second.  And a health care mandate without effective cost controls is an ever growing tax till you die.

If the American Medical Association is for something…

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On July 16, 2009

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well, let’s just say that my reaction is the same, if not quite so virulent, as if George Bush is for something.  At best it’s “what am I missing.  In what way is what they are for evil or stupid and probably both?”

I bring this up because the AMA has endorsed the House health care plan.

The AMA primarily represents the interests of proceduralists in the medical professions.  That is, they look after doctors who get paid for doing things – heart surgery, tests, etc…

Payment by procedure is one of the biggest problems facing the US.  American doctors do more surgeries and order more tests than doctors in any other country.  You might think it’s good, but in fact the data shows it doesn’t improve health outcomes, in fact, too many procedures and tests seem to have a slight negative result.

In their letter the AMA refers to the Sustainable Growth Rate (SGR).  This is the formula by which Congress tries to restrain the growth in Medicare costs.  If they grow too fast, it leads to blanket cuts in rates for future years.  Every year the AMA has to lobby against it, to stop it from taking effect.

There seems to be a wide consensus that the SGR is a bad idea, but it’s also true that increasing rates for procedures is one of the things which is causing health care costs to explode in the US and that paying too much for procedures and too little for other types of preventative and cognitive care (for example, checking medications to be sure they don’t have negative interactions) has lead to perverse incentives.

TNR’s Cohn thinks that if it’s part of a package that tries to reduce health care costs and improve quality, he’s all for it.  But I’m dubious.  The AMA isn’t going to sign onto anything which reduces its members income.

Something else to keep an eye on.

Denying Care Till Profitability: How Insurance Companies Can Force Sick People Onto the Public Plan

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On July 16, 2009

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One of the biggest concerns with having a public option is the possibility that the sickest people will wind up on it, while the healthiest will be in private insurance.  The House plan does what it can to make sure this doesn’t happen: companies can’t refuse to take people because of their medical history, and they can’t rescind policies because of medical history.

But that still leaves a simple way to reduce the amount of money you have to pay out as an insurer.  Deny care when you can.  Drag your feet when you can’t.  Make it hard for sick people to get the money they need.

This sort of behavior is already common amongst insurers, and it’s very hard to fight.

So what happens if there’s a public option which doesn’t engage in this type of behavior?  People sign up, on the exchanges, for private plans.  When they get sick, the insurance company starts giving them the runaround.  Pretty soon they get sick of it, and they cancel that plan and go on the public plan, which they know won’t give them the runaround.

Voila!  Mission accomplished.  Sick, expensive person, now that they cost more than they bring in, shifted from private plan to public plan!
Anyone who thinks that private insurers won’t do this systematically if they think they can get away with it hasn’t been paying attention.  And odds are pretty high they’ll think they can get away with it.

Senate Democrats Against The Public Option Aren’t Caving They Just Don’t Belive In Real Universal Healthcare

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On June 22, 2009

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Chris at Americablog wonders why some Senate Democrats are caving on healthcare when 72% want a public option and 85% think the system needs to be fundamentally changed. He thinks it’s because such Dems are spineless.  That fundamentally misunderstands the situation.  To vote against something that 72% of the population wants indicates a Congress member isn’t a panderer to public opinion.  What it indicates instead is that they either:

  • actually don’t believe in a public option, let alone real universal healthcare a la single payor; or,
  • are being paid enough by insurers and other folks who want the current healthcare gravy train to continue that they are willing to vote against what the majority of their constituents want.

Personally, I’d go with both.  They don’t believe in universal healthcare, and they know that their real constituents aren’t the people who vote for them but the people who fund their campaigns and make sure they, their friends and their families are taken care of.  And no, they don’t think that’s you, the voter and taxpayer.

They don’t believe they won’t be reelected if they vote against a public option.  And given re-election rates of Senators, who are the people causing the most problem, they’re probably right, aren’t they?  Their calculation is that voters are sheep and won’t make them pay any real price for killing a good healthcare plan.

I’d say they’re right.  So given that they probably don’t believe in universal healthcare, that they don’t personally need it since they have good healthcare, that they get paid to vote against it and that they’ll pay no price for voting against it, why shouldn’t they kill it?

Seems like a brain dead calculation to me.  I’m sure it does to Diane Feinstein too.  As another entitled aristocrat once said “let them eat cake”.

Senate Finance Committee: We’re Going to Make You Buy Bad Insurance With No Public Option

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On June 19, 2009

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winged_caduceusSeriously, this is just pathetic:

1) Lower the medicaid coverage rate from 150% to 100% of the Federal poverty line, 133% for kids and pregnant women (once you have the baby, too bad for you)
2) Subsidies stop at 300% of the poverty line (was 400%)
3) No Public Option mentioned
4) Insurance exchanges at the State level
5) Must buy insurance unless it costs more than 15% of your income
6) A fine if you don’t buy insurance unless you’re below the Federal poverty line

For the most part, as Walker discusses, this is actually identical to or slightly worse  than the plan put forward by America’s Health Insurance Plans (AHIP).  Yes, worse than the insurance industry’s plan.  Remarkable.  Baucus is really earning his campaign donations these days.

Of course, this is only one proposal, and in principle others from the House and other Senate committees could be better, and the better ones could be enacted.  Obama has said he wants a public option, and he may whip for it.

But, if something like this is what comes out as the eventual “reform” it is worse than nothing.  Being forced to buy bad insurance, with huge co-pays without a public option to keep prices in check has as its primary value that it is a subsidy for the insurance companies and that it reduces catastrophic healthcare costs for hospitals, because due to forced purchases of bad plans, some of the folks who used to come in at the last minute, after having not gotten care, and then costing the hospital hundreds of thousands of dollars in emergency care, will be partially paid for.  They’ll still come in last minute and not have been properly cared for since the deductibles will mean they didn’t get help, but 70% or 80% of their final death-rattle costs will be paid for.

The problem with this plan is that it won’t control costs.  Without a public option, the insurance companies will have no check on their prices, let alone pressure to actually reduce them.  Because people will be forced to buy bad insurance, they’ll hate the plan, and because “reform” has been passed, we’ll have to wait another 10 or 12 years for another shot.

Obama desperately wants to pass health care “reform”.  The fear is that he may take the easy road, and pass any bill that is “better than nothing”, and that progressives will once again accept the logic that it’s better to get something rather than fight for an actual good bill.

But because Obama does desperately want to pass something, if progressives stand firm in the House or the Senate, and refuse as a bloc to pass anything without a good public option, nothing can pass unless Republicans cross the aisle, which is rather unlikely.

So the answer is to stop being taken for granted.  Stand up for and demand a public option, and refuse to accept a bill which does less.  Don’t let Obama have a cheap victory; a cheap “medicare reform”.  If he wants it, make him whip for a real bill, a good bill, with a public option.  He whipped for money to bail out banks in Eastern Europe.  He whipped for TARP.  He can whip for a good healthcare bill.  And it won’t even cost 700 billion.

Priorities

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On June 17, 2009

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Actions tell you what politicians really care about.  For example the Senate Health, Education,  Labor & Pensions (HELP) Committee hasn’t put out a public option on health care, because two Democratic members won’t vote for it.

“Not even at Rahm’s level has anyone specifically called members of the HELP committee and said ‘we want this public option,’ said the source. “No one from the White House has called and put pressure on any of them.”

Obama says that a robust public option is important to him.  But it’s all about priorities.    The war and IMF money to bail out Eastern European banks was a White House priority, you could tell because Obama himself whipped for it when it was in trouble, just as he did for the TARP bailout funds..  A real public option?  It’d be nice to have, says Obama, just like he said he’d like to repeal the Defense of Marriage Act and Don’t Ask Don’t Tell.

He’d like to.  But he won’t expend any effort or capital for either.

I wonder how much capital he’ll expend for real health care reform.  Is something that can be called “health care reform” enough, or does he really want the real thing?

We’ll see.

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