Doug Nielson's List: Health Insurance

• Just as Ellwood and the Jackson Hole Group had before him, Hacker said enhanced “competition” among insurance companies was the solution to the health care crisis.
• Until about 2007, when the Herndon Alliance first began publishing its “research,” there was only one variant of the “political feasibility” argument, the one that said the insurance industry is too powerful to beat. The Herndon Alliance variant claimed single-payer is not feasible because Americans don’t want it.
• In the House, single-payer legislation, HR 676, has been rammed back onto the table, thanks to hell-raising by the single-payer movement, including the arrests of some brave doctors and nurses who disrupted hearings in the Senate Finance Committee last May.
• And this particular government-run business may never get very big; it may not even survive. If it doesn’t get big, or doesn’t survive, it won’t develop the huge public fan base that protects popular programs like Social Security and Medicare.
• “Public option” proponents who urge us to support even a token “public option” must remember how much is at stake here. At stake is not only the willingness of the public to believe that government health insurance programs can outperform the insurance industry. At stake as well is whether Congress will give the insurance industry a trillion dollars per decade of taxpayer money.
• These subsidies will probably amount to a trillion dollars per decade. If the “public option” doesn’t survive, or survives but never insures more than a tiny percent of the population, that will mean that all or nearly all of that trillion dollars will go to the insurance industry.
• After all, one could imagine a scenario in which enrollees in the “public option” are the only ones who get subsidies. That was Hacker’s original plan.
• A well-fed insurance industry is bad news for both single-payer and “public option” advocates.
• “public-option-insurance-industry-bailout”
• To sum up: “Public option” proponents who claim that any “public option” is better than no “public option” because even a skinny little program can be beefed up later are sadly mistaken. A weak “public option” may not survive to be beefed up later, and whether it survives or not, it will serve as fig leaf that will let Congress justify an insurance industry bailout. A strengthened insurance industry is the last thing either the “public option” or the single-payer wing of the universal coverage movement needs. Please say after me: A weak public option is far worse than none at all.

8 more annotations...

• The new draft also includes provisions regarding a “public plan,” but those provisions did not have a substantial effect on the cost or enrollment projections, largely because the public plan would pay providers of health care at rates comparable to privately negotiated rates – and thus was not projected to have premiums lower than those charged by private insurance plans. (page 3)
• Obviously the “public option” in the Senate bill (zero enrollees, 34 million people left uninsured) and the “public option” in the House bill (10 million enrollees (maybe!); 17 million people left uninsured) are a far cry from the “public option” originally proposed by Professor Hacker (129 million enrollees; 2 million people left uninsured).
• Of Hacker’s five criteria, only one is met by these bills!
• First, any insurance program, public or private, that has to compete with other insurers is going to have overhead costs substantially higher than Medicare’s. (It is precisely because Medicare is a single-payer program that its overhead costs are low.) Second, the multiple-payer system Hacker would leave in place would continue to impose unnecessarily large overhead costs on providers.
• Democrats have raised public expectations for reform to unprecedented levels.
• We have plenty of evidence now that conservatives will react to the mousey version of the “public option” as if it were “a stalking horse for single-payer.”
• At least then, when a particular session of Congress comes and goes and we haven’t enacted a single-payer system, we will have educated the public about the benefits of a single-payer and have further strengthened the single-payer movement.

5 more annotations...

• An element of this argument is Obama’s emphasis on eliminating the federal deficit. He stresses that most of the government deficit is due to the outrageous growth in costs in federal health programs. Thus, a crucial part of the message he is transmitting is the health care reform objective of reducing costs.
• The comment that “government should keep its hands off my Medicare,” as heard at some of the town hall meetings, is not as paradoxical or ridiculous as the liberal media paint it. It makes a lot of sense. An increasing number of elderly people feel that the uninsured are going to be insured at the expense of seniors’ benefits.
• the 48 million people who don’t have any form of health benefits coverage.
• But, however important, this is not the largest problem we have in the health care sector. The most widespread problem is not being uninsured but underinsured: the majority of people in the U.S. – 168 million, to be precise – are underinsured.
• It will be an embarrassing and uncomfortable moment during the 2012 presidential campaign if someone asks candidate Obama about what has happened to some of the people whose stories he told in the 2008 campaign.
• increasing taxes on the rich
• Programs that are not universal (i.e., do not benefit everyone) are intrinsically unpopular. This is why antipoverty programs are unpopular. People feel that they are paying, through taxation, for programs that do not benefit them. Compassion is not, and never has been, a successful motivation for public policy. Solidarity is.
• In the same way, the problem of noncoverage by health insurance will not be resolved without resolving the problem of undercoverage,
• He needs single-payer to be among the options under discussion. And he needs single-payer to make his own proposal “respectable.”
• If there is no left alternative, the Obama proposals will become the “left” proposal, and this will severely limit whatever reform he will finally be able to get.
• Large sectors of the grassroots of the Democratic Party that voted Democratic in 1990 stayed home in 1994.
• We are already seeing this. Why aren’t those on the left out in force at the town hall meetings on health care reform? Because the option they want – single-payer – has already been excluded from the debate by a president they fought to get elected.
• Ezekiel Emanuel (who did indeed write that old people should have a lower priority for health care spending) are leading the country along a wrong path.
• broadening and improving Medicare for all.
• it seems to me that the role of the left is to initiate a program of social political agitation and rebellion (I applaud the health professionals who disrupted the meetings of the Senate Finance Committee), following the tactics of the Civil Rights and anti-Vietnam War movements of the 1960s and 1970s.

13 more annotations...

• If Congress enacts reform, in 2013, individuals will be required to purchase health insurance.  This is the centerpiece of the "reform."  The proposal has come straight from the insurance industry: criminalize the uninsured and subsidize unaffordable private insurance premiums with public funds. 
• But analysts say that business strategy may be reaching its limits, with companies finding it harder to raise prices without losing substantial numbers of customers."
• The article closed with a quote from a health business analyst: "The hail Mary may be that we turn to some sort of universal care."
• If the government would only criminalize the uninsured and pay the premiums for the poor, the industry said, it would stop denying people insurance coverage because they are ill.
• and grant payments to employers whose plans cover retirees aged 55-64. 
• But as the Congressional Budget Office began adding up the price tag -- over a trillion additional dollars in costs over the coming decade -- lawmakers moved to scale back the subsidy. 

  • already the cutting back begins
• Bankruptcies in the United States in 2009 will affect 3.8 million people.  Two-thirds are the result of debt due to illness -- more than three-fourths of them have health insurance.  To prevent this, HR 3200 would cap personal costs (at $5,000 for an individual and $10,000 for a family) -- but only for covered services, not all out-of-pocket costs. 
• Consider that 40% (the direct cost to the employee) of the market price for insurance coverage for a family of four would equal two-fifths of about $16,000 -- $6,400 annually or $533 per month.  Plus co-pays, deductibles, and the rest of the usual unaffordable out-of-pocket expenses. 
• Some of the provisions that would begin in 2010 include new taxes, increasing Medicaid payment for primary care services to 80% of Medicare rates, and prohibiting insurance companies from recissions --- rescinding policies for reasons other than nonpayment of premiums (often the allegation of failing to disclose a pre-existing condition.)

  • the positive

• But the public option amounts to a moral posture, not a workable reform.  Single payer would eliminate the insurance industry from health care; a "public option" cannot.  A "public option" won't liberate the resources squandered by the private insurance companies.  Instead, it adds duplicative waste in administrative overhead to the system.  

   

   The most relevant evidence comes from the state of Maine.  Maine has offered a "public option" since 2003.  In six years this program has managed to cover only 10% of the uninsured and has not forced its competitors to lower costs.  
• Does it really make sense to believe that a "public option" tossed amid the heavily monopolized insurance market in the U.S. would stand a chance at competing for the healthy and wealthy patients?
• In exchange for a pharmaceutical industry promise to forgo $80 billion in profit over 10 years, Tauzin told the Los Angeles Times, the President promised not to allow importing of drugs from Canada or Europe and not to reform Medicare Part D.
•  (Medicare Part D has been another government-delivered industry bonanza -- for it prohibits the government from bargaining for drug prices.)   In return, PhRMA has pledged $150 million in advertising in support of the Presidents' reform effort. 
• Because the reform discussions have included Medicare cuts, the Right also found fertile ground among seniors.  A Democratic Party-friendly poll found that 39% said "yes" when asked "Do you think the government should stay out of Medicare?"  
• So, at the end of August, the Republican Party took the position of "hands off Medicare."  To leave in place "Medicare Advantage" (which pays private insurance companies 12 to 17% more than it pays for the costs of care of traditional Medicare) and Medicare Part D (another huge giveaway to the drug and insurance industry), the Republican Party tied itself in knots after decades of calling for the abolition of Medicare. 
• In August, the Congressional Budget Office released a study that underscored once again evidence of superior quality of care at the VA: better than Medicare, better than private practice, and better than managed care.  If we were to engage in a truly evidence-based debate over how to pay for health care using a "uniquely American" model, it would be a debate between single payer, based on the Medicare model, and socialized medicine, like the VA
• Although polls have shown for decades that a majority, including physicians, favor national health insurance, the depth and passion of grassroots activism for the proposal is something new.  For the first time, this fall, single payer may be voted on the floor of the House of Representatives. 
• At the end of July, as the Energy and Commerce Committee completed deliberations on HR 3200, Representative Anthony Weiner of New York, with six others, put forward an amendment to replace the text of HR 3200 with the text of HR 676.  Committee Chair Waxman interrupted to say that House Speaker Nancy Pelosi offered to allow single payer to be voted on by the entire House of Representatives if the amendment were withdrawn from the Committee.  Weiner accepted.  Perhaps the prospect of defeating single payer on the floor of the House of Representatives seems, to the Democratic Party leadership, a way to at last get single payer off the table. 
• excellent prospects to build a movement for single-payer national health insurance will persist.

17 more annotations...

• The game in health care reform has mostly come down to whether or not the final bill that is hammered out from the work of these five committees will contain a public option - i.e., an option for citizens to buy in to a government-run health care plan. Because the plan wouldn't have any profit motive - and wouldn't have to waste money on executive bonuses and corporate marketing - it would automatically cost less than private insurance.
• Once such a public plan is on the market, it would also drive down prices offered by for-profit insurers - a move essential to offset the added cost of covering millions of uninsured Americans.
• The early indications are that there is no public option in the Baucus version; the chairman hinted he favors the creation of nonprofit insurance cooperatives, a lame-ass alternative that even a total hack like Sen. Chuck Schumer has called a "fig leaf."
• Nearly a third of all health care costs in America are associated with wasteful administration. Fully $350 billion a year could be saved on paperwork alone if the U.S. went to a single-payer system - more than enough to pay for the whole goddamned thing, if anyone had the balls to stand up and say so.

  • The Congressional Budget Office projects that under the House bill, the subsidies will cost upward of $773 billion by 2019.
• Even though the Democrats enjoy a political monopoly and could have started from a very strong bargaining position, they chose instead to concede at least half the battle before it even began.

• One of the all-time classic moments in the health care reform movement came when the second protester to stand up, Katie Robbins of Health Care Now, declared, "We need single-payer health care!"

  To which Baucus, who looked genuinely frightened, replied, "We need more police!"
• Behind closed doors, Obama also moved to cut a deal with the drug industry. "It's a dirty deal," says Russell Mokhiber, one of the protesters whom Baucus had arrested. "The administration told them, 'Single-payer is off the table. In exchange, we want you on board.'" In August, the Pharmaceutical Research and Manufacturers of America announced that the industry would contribute an estimated $150 million to campaign for Obamacare.

  • the Pharmaceutical Research and Manufacturers of America announced that the industry would contribute an estimated $150 million to campaign for Obamacare.
• They agreed to back down on single-payer, seemingly with the understanding that Pelosi would push for a strong public option - a sort of miniversion of single-payer, a modest, government-run insurance plan that would serve as a test model for the real thing.
• The public option is hardly a cure-all: Among other things, it does nothing to reduce the $350 billion a year in unnecessary paperwork and administrative overhead that makes the current system so expensive and maddening.
• Simply by removing the profit motive, the government plan would be cheaper than private insurance.
• On July 9th, in a harmless-sounding letter to Pelosi, 40 Blue Dogs expressed concern that doctors in the public option "must be fairly reimbursed at negotiated rates, and their participation must be voluntary." Paying doctors "using Medicare's below-market rates," they added, "would seriously weaken the financial stability of our local hospitals."
• In the end, the Blue Dogs won. When the House commerce committee passed its bill, the public option no longer paid Medicare-plus-five-percent. Instead, it required the government to negotiate rates with providers,
• In one fell swoop, the public plan went from being significantly cheaper than private insurance to costing, well, "about the same as what we have now," as one Senate aide puts it.
• The party could now sell voters on the idea that it was offering a "public option" without technically lying, while at the same time reassuring health care providers that the public option it was passing would not imperil the industry's market share.
• The concession to the Blue Dogs comes at a potentially disastrous price: Without a public option that drives down prices, the cost of other health care reforms being considered by Congress will almost certainly skyrocket.

• Which means ...

  "If you have coverage you like, you can keep it," says Sen. Sanders. "But if you have coverage you don't like, you gotta keep it."
• grandfather clause
• Low-wage workers currently offered these plans often reject them and join Medicaid, effectively shifting the health care burden for Walmart employees on to the taxpayer. If the HELP committee's grandfather clause survives to the final bill, those workers who did the sensible thing in rejecting Walmart's crap employer plan and taking the comparatively awesome insurance offered via Medicaid will now be rebuffed by the state and forced to take the dogshit Walmart offering.
• This works out well for the states, who will get to purge all those Walmart workers from their Medicaid rolls. It also works great for Walmart, since any new competitors who appear on the horizon will be forced to offer genuine and more expensive health insurance - giving Walmart a clear competitive advantage. This little "glitch" is the essence of the health care reform effort: It changes things in a way that works for everyone except actual sick people.
• Those principles seem to have been: no single-payer system, no meaningful public option, no meaningful employer mandates and a very meaningful mandate for individual consumers. In other words, the only major reform with teeth would be the one forcing everyone to buy some form of private insurance, no matter how crappy, or suffer a tax penalty. If the public option is the sine qua non for progressives, then the "individual mandate" is the counterpart must-have requirement for the insurance industry.
• The federal version of the Massachusetts plan would slap the uninsured with a hefty tax penalty - making the HELP committee clause barring people from opting out of their employer-provided plan that much more outrageous.
• If things go the way it looks like they will, health care reform will simply force great numbers of new people to buy or keep insurance of a type that has already been proved not to work. "The IRS and the government will force people to buy a defective product," says Woolhandler. "We know it's defective because three-quarters of all people who file for bankruptcy because of medical reasons have insurance when they get sick - and they're bankrupted anyway."
• Democrats pointed out that under the House plan, the federal government would pay the costs of any "newly eligible" members of Medicaid. But that phrasing, it turns out, was a semantic trick designed to undersell the cost to the states. When Massachusetts imposed a similar mandate under Romney, thousands of people who were already eligible for Medicaid, but had not enrolled, immediately joined the program in order to avoid the tax penalty for being uninsured. So while the House plan would pay for "newly eligible" patients, it won't cover the "oldly eligible."
• Another neat trick involves the federal subsidies for low-income people who make up to 400 percent of the poverty level. The Congressional Budget Office projects that under the House bill, the subsidies will cost upward of $773 billion by 2019. But some aides think that number could end up being much higher. "Without a real public option to drive down costs, the federal support to make sure everyone gets coverage is going to get very expensive very fast," says Behan, the aide to Sen. Sanders.
• Here's the other thing. By blowing off single-payer and cutting the heart out of the public option, the Obama administration robbed itself of its biggest argument - that health care reform is going to save a lot of money. That has left the Democrats vulnerable to charges that the plan is going to blow a mile-wide hole in the budget, one we'll be paying debt service on through the year 3000. It also left them scrambling to find other ways to pay for the plan, making it almost inevitable that they would step in political shit with seniors everywhere by trying surreptitiously to whittle down Medicare. As a result, the Democrats have become so oversensitive to charges of fiscal irresponsibility that they're taking their frustrations out on people who don't deserve it. Witness Nancy Pelosi's bizarre freakout over the Congressional Budget Office. When the CBO questioned Obama's projected cost savings, Pelosi blasted them for "always giving you the worst-case scenario" - which, of course, is exactly what the budget office is supposed to do. When you start asking your accountant to look on the bright side, you know you're not dealing from a position of strength.

  • key
• To recap,
• In fact, the various reform measures suck so badly that PhRMA, the notorious mouthpiece for the pharmaceutical industry which last year spent more than $20 million lobbying against health care reform, is now gratefully spending more than seven times that much on a marketing campaign to help the president get what he wants.

  • follow the money
• Or will they? At the end of July, word leaked out that the Senate Finance Committee, in addition to likely spiking the public option, had also decided to ditch the employer mandate.
• It is a fight to the finish now between Really Bad and Even Worse. And it's virtually guaranteed to sour the public on reform efforts for years to come.
• "They'll pass some weak, mediocre plan that breaks the bank and even in the best analysis leaves 37 million people uninsured," says Mokhiber, one of the single-payer activists arrested by Baucus. "It's going to give universal health care a bad name."

28 more annotations...