Insurance Companies, With Help of Big Tobacco Research Team, Declare War on U.S. Health Care System

If the private insurance companies are so worried (0.00 / 0)

about going out of business because people will too eagerly embrace the public option, then this doesn't seem like the smartest move.

"In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H.L. Mencken

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by: PI Lawyer @ Mon Oct 12, 2009 at 19:11:27 PM UTC

That's not the key point to examine (0.00 / 0)

Don't just blow off something someone says because you don't trust them. Rather, determine whether what they say has any merit. In this case, there is some merit to the message.

Out of concern that subsidies will not be adequate to make insurance affordable, Senate Finance gutted the penalty on the individual mandate. Thus, it will be cheaper for many people to pay the penalty than purchase coverage.

However, the insurance companies will still be required to take all-comers, regardless of pre-existing conditions, and can't charge different rates based on health status.

The result will be what's called 'adverse selection' - many people won't buy coverage until they are sick or anticipate having significant medical expenses. This will drive up the average cost-per-insured, which in turn will drive up premiums.

The report apparently also attributes some premium increase to cost shifting due to Medicare cuts (this is not an unreasonable assumption, as we know it occurs now)and new taxes on some insurance plans being passed on to consumers (also not an unreasonable assumption). In addition, there seems to be some consensus among health policy experts that current proposals do little to affect health care cost growth. So premiums will also continue to rise as health costs rise relatively unchecked.

The takeaway for Democrats shouldn't be 'those damned insurance companies' -- it may feel good to vent, but there is nothing about that response that helps one single person get health coverage. Rather, we should be insisting on a meanginful penalty so that people comply with the mandate, and larger subsidies so that people can AFFORD to comply with the mandate.

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by: hopemorrison @ Mon Oct 12, 2009 at 20:38:00 PM UTC

I'd disagree (0.00 / 0)

We need to hit back hard against the big lies, not debate the details. Which is why the White House has a Reality Check blog now, and they've already taken apart this piece of crap report.

Now, a very great man once said that some people rob you with a fountain pen.

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by: Phillip Martin, Progress Texas @ Mon Oct 12, 2009 at 20:58:07 PM UTC

[ Parent ]

I'm not sure (0.00 / 0)

Did you just look at the WH blog or did you look at the CBO letter as well (http://www.cbo.gov/ftpdocs/106xx/doc10642/10-7-Baucus_letter.pdf)? Because as much as I want to take the WH at its word -- they say some things that aren't supported by the CBO letter. The adverse selection issue they treat thusly:

"The Congressional Budget Office estimates that under the amended SFC proposal, by 2014, 15 million people will enter the exchanges, and by 2015, 22 million will enter, enabling adequate risk pooling and minimizing the adverse selection that the AHIP analysis assumes."

But CBO doesn't speak to the impact on risk pool adequacy and adverse selection that I could find. So it doesn't appear that, at least on this point (which is pretty important), the WH response 'takes apart' the report.

I wouldn't suggest that AHIP has released an unbiased report, but I WOULD suggest that the combined effect of inadequate subsidies, ineffective penalty and guaranteed issue with community rating is something we should look at very closely if we actually care about affordability. The statement that we should fight the lies and not debate the details is only half right -- and if you don't figure out the details, you don't really know whether someone is telling lies.  

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by: hopemorrison @ Mon Oct 12, 2009 at 21:44:08 PM UTC

[ Parent ]

Yes (0.00 / 0)

I blogged on the CBO letter last week.

Now, a very great man once said that some people rob you with a fountain pen.

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by: Phillip Martin, Progress Texas @ Tue Oct 13, 2009 at 14:11:45 PM UTC

[ Parent ]

I didn't catch your blog last week (0.00 / 0)

But do you see what I mean about the CBO letter not addressing the adverse selection topic in a substantive way?

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by: hopemorrison @ Tue Oct 13, 2009 at 21:05:54 PM UTC

[ Parent ]

Don't debate the details. (0.00 / 0)

Go straight to history.  Every time the government regulates an industry costs increase.  Just that simple.

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by: sdhook @ Tue Oct 13, 2009 at 01:16:30 AM UTC

[ Parent ]