05 March 2008

Health policy wonkery round-up

Things I've been reading lately:

From the Washington Post: The Healthy Americans Act, sponsored by Senators Wyden (D-OR) and Bennett (R-UT) is still alive and kicking. It's an innovative proposal to "blow up the existing health insurance system," and replace it with a public-private partnership providing universal coverage administered largely by private insurers. Best of all, it eliminates Medicaid (!), which feature alone makes me want to support it.

According to Ezra, Sen Wyden spoke today at the American Health Insurance Plan's conference, speaking to the insurance industry executives, with a surprisingly warm reception. "If your profession decides – as it did in 1993 and 1994 – to go out and spend millions of dollars fighting to preserve the status quo, you may delay reform for awhile but you will increase the likelihood of a government run health system with no role for the private sector.” There is growing support from unlikely industry sources for this sort of health care reform, including large employers like GM, the small business associations, and the SEIU and other labor organizations. If the insurance industry's opposition is co-opted by mandates (which would greatly increase the size of their customer base) and subsidies, that would go a long way towards removing obstacles to reform.

DemFromCT over at Daily Kos published a thoughtful and surprisingly non-partisan, neutral diary on the prospects for reform and the dueling priorities that different players have. Kevin will be pleased to see that single payor was preferred by only 15% of respondants to a survey.

And while we're perusing the Great Orange Satan, jd in nyc has an insightful post on how multipayer universal healthcare works in other countries and the lessons we might draw for US healthcare. Key graf:

The first wave universal healthcare system in the U.S. will expand, not shrink, private health insurance. You have nothing to fear from this, so long as ... a few simple rules are followed.
  1. All individual insurance is guaranteed issue: no insurer can turn you down for coverage based on pre-existing conditions, nor can it drop you once you get sick. When the insurer can't get drop you, it immediately has a much stronger incentive to take care of you. A stitch in time saves nine, and all that.
  2. All individual insurance is community rated: insurers can't charge you 10x as much as your neighbor because you are 50 and have diabetes, whereas she is 25 and has no illness. Large risk pools are created so that the healthy subsidize the sick.
  3. The cost of insurance is determined by ability to pay: the poorest get it for free, and lower income individuals have a sliding scale of subsidization.
  4. Individual and/or employer mandates: if a substantial number opt out of the system, they are disproportionately likely to be healthy and/or poor. each group causes its own escalating problems if allowed to opt out, so this must be strongly discouraged by making it never to one's financial advantage to do so. Penalties must be higher than the cost of coverage for your income bracket (or firm size).
  5. Universal, standard basic insurance package: this has the benefit of ensuring everyone has real health coverage and not crap insurance, and it also lets every provider know a large range of things that are going to be covered no matter what. It dramatically reduces bureaucratic complexity from what we have now, even if it isn't as simple as single-payer.
  6. Some means of comparing and purchasing insurance options in a straightforward and transparent way: self-explanatory, I think. This was the national insurance exchange in Clinton's 94 plan, and is the Health Connector in Massachusetts' current system. Universal access to FEHBP fills that role in Clinton's new plan.
  7. Some additional set of mechanisms for rewarding insurers for helping people to be healthy, but not for enrolling a disproportionate number of people who are already healthy: the idea is to discourage cherry picking, which is hard to do in a guaranteed issue system but possible, and encourage wellness and disease management activities on the part of insurers. There are several options here that I won't go into.
The counterpoint to that is Ezra's op-ed piece, Why health insurance doesn't work, which describes the current perverse market incentives which drive bad behavior by insurers. Key insight:
Health insurance ... is a form of risk pooling that individuals use to smooth out lifetime healthcare costs. Heath insurance does not insure us against risks so much as it insulates us against costs. We pay regular premiums so we don't have to directly pay for irregular care.
'nuff said.

11 comments:

Nurse K said...

The cost of insurance is determined by ability to pay: the poorest get it for free, and lower income individuals have a sliding scale of subsidization.

Private means using the free market to price your product, not someone's income.

If they are forced to take you as a customer even if it would be unprofitable to do so, that's also not free market (or a really dumb business model).

Large risk pools are created so that the healthy subsidize the sick.

Again, doesn't sound very private to me. What if I'm healthy and don't WANT to subsidize the sick with my health insurance premium? What if I want to buy a plan only for well people who rarely need health care?

Sounds like unfunded mandates on insurance companies to me, or a government take-over of a private industry.

shadowfax said...

K,

This is not a purely private plan; you will see that in the very first paragraph I describe it as a public-private hybrid -- at least that's Wyden's plan.

There is a real quid pro quo here to try to get the insurance companies to *want* this deal. They have to accept community rating/guaranteed issue (bad for business) but the "get" is that universal coverage does bring a lot of new (young, healthy, profitable) patients into the pool. And since community rating would apply to all companies, it level the playing field for all the other co's.

Catron said...

'nuff said.

You're kidding, right? Klein could not be more clueless about health care and health insurance.

The absence of competition among health insurers is not, as his article suggests, due to a dysfunctional market. It is prevented by a morass of state laws that prevent people from buying health insurance across state lines.

The whole risk pool meme is just his way of sounding sophisticated on a subject about which he understands virtually nothing.

If his parents weren't friend's of TAP's publisher, Klein would be delivering pizza.

shadowfax said...

Ah, Catron, I knew I could count on you to bring the right-wing talking points. Conservatives love to claim that if only interstate groups were allowed, then there would be no problems creating large enough risk pools ... or something.

But it's a lie, pure and simple.

These interstate pools would be regulated by who, exactly? Nobody. Each state has its own insurance commissioner and strong regulatory authority, keeping insurance honest and fair. The inter-state meme is designed to blow up state regulation of insurance, pure and simple.

The claim that this would open up competition is just a lie, or lt least deeply misleading, and while you may deride Ezra as clueless, I give him props for honesty, and I can't say the same for the right-wingers on this issue.

Nurse K said...

public-private hybrid

Private with government price controls and mandate to give unlimited coverage for free if too poor...Sounds, again, non-private to me. Not even EMTALA forces you to give unlimited care for free.

What this will do is drive up the price for most everyone and re-distribute the increased premiums in the form of unlimited free care to the poor.

Catron said...

… or something.

You obviously don’t understand the argument, yet you call it a “lie.” How open-minded.

I wish everyone were required to take Econ 101 before being allowed to vote. It is self-evident to any economically literate observer that a national health insurance market would produce competition and drive down prices. I thought “progressives” were supposed to be “reality-based.”

And, BTW, Klein isn’t honest either.

Nurse K said...

These interstate pools would be regulated by who, exactly?

You really think the government will have trouble finding someone to regulate something?

HAHAHAH. Come on, now.

I wasn't even aware that insurance companies weren't allowed to have nat'l pools. It seems so intuitive that they would.

shadowfax said...

K,

There is nothing in the Wyden plan about price controls. In fact, the beauty of the multi-payer plan is that there are no centralized payers at all -- juat a network of private payers, each of whom needs to negotiate a price for services from each healthcare provider, just like they do now. This is critical from the physician point of view, because the HUGE problem with swingle payer is the inability to negotiate prices (or say no to a bad deal) -- that would reliably push prices for docs and hospitals way way down.

The competitive pressure between health care plans to maintain a healthy network of providers forces them to negotiate with us. They have the stronger hand, to be sure, but we can say no, and sometimes do, in order to keep payment reasonable.

With a single payer (and medicare) you take what you get and if you don't like it, too bad.

So, to summarize, no price controls.

shadowfax said...

Catron,

Usually you can make a good argument; I usually diagree with you, but your posts are typically well-thought out and cogent.

I've noticed that when you got nothing, you go ad hominem.

I'm just sayin'

Nurse K said...

Here's what it boils down to:

For me, my health care costs out of pocket would increase $347/year "on average."

Yawn. More subsidies that I and most Americans will have to pay. I don't really see what these plans are, but my insurance is not some crappy 80/20 plan.

I think the economic impact of not tying insurance in with employment will be devastating too. Back in college, when I was broke and pregnant, I'd probably have just stayed at the Olive Garden and skipped college, at least for awhile, because I'd get the "almost free" insurance at Olive Garden and still make $100/day in tips. There are a significant # of people who work where they work due to insurance. I think many people will demote themselves or jump around to different jobs more frequently if the insurance is portable.

Also, you say it would be good for physicians, but it seems the payments would be a little more than Medicare. As most office physicians only accepted Medicare and insured patients, this would result in a net cut in payments, no? Obviously, it would probably increase overall payments to ER docs or those providing emergency care under EMTALA, but that's about it?

stephen said...

seriously, Health care has been a problem which certainly needs to get fix