The "Reform" Deal

Ezra Klein:

[I]f I could construct a system in which insurers spent 90 percent of every premium dollar on medical care, never discriminated against another sick applicant, began exerting real pressure for providers to bring down costs, vastly simplified their billing systems, made it easier to compare plans and access consumer ratings, and generally worked more like companies in a competitive market rather than companies in a non-functional market, I would take that deal.

Me too. Call us when that deal is offered. Of course, Ezra is arguing that that is the deal being offered - "And that may be the exact deal we're getting." It isn't. More . .

To give Ezra credit, he FINALLY addresses some point detractors of this bill make:

Health insurance suffers from market failure in part because it suffers from regulation failure. We're adding the regulations now and we'll see, in 10 years, whether people hate insurers somewhat less, or whether they've embraced the nonprofit model, or whether they're clamoring for public insurance. Either way, putting insurers into a structured market where they'll have to compete against one another and users will rate them should make things a lot better. Public insurance might be the best way forward, but an insurance market that works for consumers is progress nevertheless.

Good to see the admission of regulatory failure. Hard to see the argument for expecting it to succeed now. But, as Ezra says, "we'll see in 10 years."

This part seems fanciful to me:

[P]utting insurers into a structured market where they'll have to compete against one another and users will rate them should make things a lot better.

This is the vaunted exchanges (state based exchanges according to the Senate bill.) The argument seems to be that folks who do not get their insurance from their employer do not shop now. I'm pretty sure they try to. More importantly, "the structure" is rife for collusion, which would be legal by the way, as health insurance companies are exempt from antitrust laws (even if you thought antitrust regulators would be effective in policing them, they can't.)

Finally Ezra's argument that "Public insurance might be the best way forward, but an insurance market that works for consumers is progress nevertheless" misses the mark in two ways, First, the big carrot for political bargaining on health care reform was in fact the mandates and the government subsidies. There will be no second bite at the apple on health care reform. Second, this bill does not create "an insurance market that works for consumers." In the end, this is the dispute - do you believe in these reforms? Is it not fair to say, as Howard Dean does, that they will not and therefore I want to take out the bargaining chip we need to achieve real health care reform?

The Village Blogger argument is that this is all we can get and we will never have another chance again. I think that gets it backwards. Indeed, my argument for sunsetting the mandates is that the ONLY way we can really have another bite at the health care reform apple is if mandates are back in play.

Without the mandates to bargain with, health care reform is dead for a generation.

Speaking for me only

< "If Health Care Reform Dies . . ." | WaPo Poll: 63% Favor Medicare Buy-In >
  • The Online Magazine with Liberal coverage of crime-related political and injustice news

  • Contribute To TalkLeft

  • Display: Sort:
    This presupposition that the market can fix (5.00 / 2) (#1)
    by andgarden on Wed Dec 16, 2009 at 08:40:57 AM EST
    healthcare is, I think, highly questionable. But of course, as you point out, we're not even attempting that. We're just paying the insurance industry more money to continue to do what it's been doing for years.

    It is a failed business model which is why (5.00 / 1) (#8)
    by inclusiveheart on Wed Dec 16, 2009 at 09:19:39 AM EST
    the Congress has done such things over the decades as allow the private insurers to drop expensive patients and deny people with pre-existing conditions coverage.

    For profit healthcare insurance is an oxymoron if the companies actually deliver the services they are selling.


    mccarran ferguson (5.00 / 1) (#14)
    by jedimom on Wed Dec 16, 2009 at 09:50:20 AM EST
    without the repeal of mccarran ferguson (antitrust) and the interstate competition that allows me to shop for a RI plan here in AZ, there will be no meaningful price decrease

    in fact I hazard now that we will be hostage to them our prices will GO UP


    Why do 'experts' say Health Care focus OR Jobs (none / 0) (#19)
    by Ellie on Wed Dec 16, 2009 at 12:17:44 PM EST
    Health care and job stability and creation are intrinsically entwined. My own situation, although in a new venture, can't be much different when it comes to coverage, whether it's a family Mom & Pop shop, a new company launching off a home-based sideline, a mid-range company or even a big business (excepting the VIP Caviar Class Coverage the fat cats have always alloted themselves.)

    Most companies are already running at fumes-level right now. For smaller and mid-range ones, if enough key employees get moderately ill, or require a health-related leave, it makes more sense to downshift parts of the whole temporarily (eg, go with layoffs) and revv up again depending on busy/slow times.

    I don't know what land Obama and his Dems live in, but the arbitrary "Christmas or Never" deadline is deliberately petarded. Not a tpyo.

    I agree with Greenwald et al that Obama, obRahm-a and their Anonymice-infested admin always intended this monumental cave. Not that we haven't seen this Dem Spelunking time and time again-- the small caves acting as harbingers to the gargantuan cave set to occur on arbitrarily pre-set cue: it's the Dem M.O.

    Might as well have stuck a couple of turkey wings on Stupak Pitts, Snowe, etc. and called them Christmas Angels (or fowl-appropriate, holiday appropriate version for Tiny Whiny Joe.)


    Someone answered that question (5.00 / 1) (#21)
    by inclusiveheart on Wed Dec 16, 2009 at 02:59:09 PM EST
    for me a few months ago with what I thought was a fairly plausible answer.  It went something like this:  If the Democrats made the smart argument in favor of healthcare reform related to the positive effects that good reform could have on people's personal economies, then they would have to offer single-payer.  Because single-payer is the only system that really delivers the real cost savings for people, business and government; and since no one wanted to do single-payer they dropped the economic argument.

    I thought that was a plausible explanation.  Now with this Senate bill as it is, it seems like a very good call since they are proposing no systems for keeping premiums in check other than that vaunted (and totally unreliable) "free" (but not really free) market solution intrinsic in the limited exchanges.  Soooo...  FWIW


    Friend who was early Obama supporter (none / 0) (#18)
    by oculus on Wed Dec 16, 2009 at 12:09:30 PM EST
    is fine with exchanges triggered if the insurance companies don't play fair.  Also supports surge in Afghanistan, U.S. drones in Pakistan, and Paul Krugman.

    Fanciful indeed (5.00 / 2) (#3)
    by ruffian on Wed Dec 16, 2009 at 08:51:38 AM EST
    This part seems fanciful to me:

        [P]utting insurers into a structured market where they'll have to compete against one another and users will rate them should make things a lot better.

    I have been in the situation of being self employed and shopping for my own insurance. The market he describes has already existed for years. I went right to ehealthinsurance.com.  Maybe being in competition in that marketplace did bring the prices down a little, but it certainly has not helped much or we would not be having this conversation.

    Yes and how are those ratings (none / 0) (#6)
    by inclusiveheart on Wed Dec 16, 2009 at 09:15:30 AM EST
    going to work?  Are we talking internet polls and text voting?  Sigh.

    No way, no how this will remain in (5.00 / 1) (#4)
    by MO Blue on Wed Dec 16, 2009 at 08:56:47 AM EST
    the final bill.

    I]f I could construct a system in which insurers spent 90 percent of every premium dollar on medical care

    indeed (none / 0) (#5)
    by lilburro on Wed Dec 16, 2009 at 09:02:02 AM EST
    when will Ezra explain what is actually in the bill, as opposed to what he thinks would work?

    It isn't in the bill and when it (none / 0) (#7)
    by inclusiveheart on Wed Dec 16, 2009 at 09:17:13 AM EST
    was being discussed it was nevet universal to all plans offered across the system - it only applied to the FEBP exchange idea which went away after the Medicare expansion idea came up.

    already stripped (none / 0) (#15)
    by jedimom on Wed Dec 16, 2009 at 09:51:10 AM EST
    the CBO scored it and it is being killed already

    That is what I thought (none / 0) (#16)
    by MO Blue on Wed Dec 16, 2009 at 10:01:50 AM EST
    but my google skills are primitive at best and couldn't confirm.

    Seems Ezra is presenting false premises in his arguments for this give away to insurance and pharma.  


    Where are these "non-profit" companies? (5.00 / 2) (#12)
    by Susie from Philly on Wed Dec 16, 2009 at 09:36:57 AM EST
    The Blues are non-profit in name only. In most states (not all of them), there is usually a state-specific non-profit company (and the resulting tax breaks) with literally dozens of for-profit subsidiaries - with whom they contract for overpriced services to fill their coffers.

    Not-FOR-Profit (none / 0) (#20)
    by Inspector Gadget on Wed Dec 16, 2009 at 02:30:17 PM EST
    Not all the Blues. Many are traded on the stock market.

    Those that are calling themselves Not-For-Profit have obviously found a loophole in the tax laws that allows them to bonus their employees with a share of their huge profits and justify a need to raise premiums to make up for it.


    Has that option for immediate Catastrophic (none / 0) (#2)
    by katiebird on Wed Dec 16, 2009 at 08:51:12 AM EST
    Has that option for immediate Catastrophic Insurance survived all this? And what would that be likely to cost under all this?

    I live in a state with VERY few people and no official Cancer center -- how do State-Level-Exchanges work for us?


    The bill may end rescission practices as we have (none / 0) (#9)
    by BobTinKY on Wed Dec 16, 2009 at 09:23:07 AM EST
    come to know them, but the new game will be denial of care to "the insured."  Or making the process of reimbursment so hopelessly complex "the insured" give up.

    Nothing at all promises to alter the basic problem with private insurance companies.  Their self-interest continues to be to rake in as much in premiums as possible and pay out as little as possible.  

    What about pre-emption potential?  Does this bill provide any new pre-emption arguments for insurance companies who are sued for not providing coverage, fraud, little FTA Act violations etc?

    The prime motive of taxing policies (5.00 / 1) (#11)
    by MO Blue on Wed Dec 16, 2009 at 09:32:04 AM EST
    with good coverage is to shift the cost from the insurance company to the consumer. The so called bending the cost curve is designed to increase out of pocket expenses so that people are more reluctant to get health care when they need it.

    Yes (none / 0) (#10)
    by TeresaInSnow2 on Wed Dec 16, 2009 at 09:25:52 AM EST
    All the while you're forced to buy this insurance that denies you care, so you don't even have the option of saving your money and spending it on your own healthcare.

    & if you go to state court to force coverage (5.00 / 1) (#13)
    by BobTinKY on Wed Dec 16, 2009 at 09:37:02 AM EST
    is your case thrown out now because the new law pre-empts these state actions?

    This has been a recent trend of our corporate masters, use the federal government whose regulation & big government they constantly rail against to castrate state consumer protection laws.  So they get two things, federal direction of more money into their coffers and immunity from state laws.


    great point BobTinKY (none / 0) (#17)
    by beowulf on Wed Dec 16, 2009 at 11:45:56 AM EST
    What about pre-emption potential?

    Now that's a very good question!  There are few states like New Jersey that already ban pre-existing condition underwriting, would the Senate bill preempt those state laws?  If they do, does federal pre-emption only kick in with the 2014 reforms or immediately?

    Of course,  that some states already have have guaranteed issue rules without individual mandates sort of undercuts the necessity of mandates for the federal health reform bill.