Adverse Selection

I hope that the rest of the health care bill is freaking awesome. I really do. Because without some major changes the public option is going to suck. What will stop insurers from dumping expensive undesirables into a public ghetto? A guilty conscience? An unprotected public option will do one of two things. Either it will make insurance unaffordable again for anyone who really needs it, or else public option managers will come back to Congress over and over to beg for more money. Either way Democrats will discredit public healthcare by implementing it in the worst way imaginable.

There really is no way around it. Either Democrats protect the public option from adverse selection or they will do themselves more harm than good. As it stands now we might as well let idiot moderates kill the public option and just require private plans to cover everyone who wants care.






67 replies
  1. 1
    General Winfield Stuck says:

    Although the proposals before Congress aim to limit insurers’ incentives to skim off the best risks, the measures are unlikely to eliminate those incentives entirely.

    No bill of this type, or any other is perfect when first implemented. SS and Medicare had all sorts of holes in them when enacted and needed repair over time. I think you might be over reacting just a tad Tim F.

  2. 2
    Yukoner says:

    Or you could look to a simple and elegant solution, just cover everyone under Medicare. Problem solved.
    Yes I know it’s not politically possible etc. etc. Somehow it’s possible in every other first world country though. Go figure.

  3. 3
    Punchy says:

    This is apparently what seems to be giving insurance stocks boosts and their CEO permanent hard-ons. The chance to dump everyone with a cold or mild arthritis? And once hospitals realize that the gov’t is covering all these SuperSick, what the fuck do you think will happen to the cost of a normal MRI or guaze pad?

    This is starting to look like an abortion wrapped in a train wreck and sprinkled with Ebola.

  4. 4
    Mnemosyne says:

    For an article that’s very, very concerned about people being dumped by insurance companies, it’s odd that he doesn’t mention the word rescission even once, especially since I know there’s a clause in the Senate bill that bans it and I’m pretty sure there’s one in the House bill.

    I smell a concern troll.

  5. 5
    General Winfield Stuck says:

    @Mnemosyne:

    I smell a concern troll.

    They are thick as thieves right now.

  6. 6
    Davis X. Machina says:

    The P.O. is now such a progressive shibboleth that you’ll either get a bill with it, neutered enough to fail, but included because it is a shibboleth, and as you point out, neutered enough to discredit public health care, or no bill at all.

    Lose-lose.

  7. 7
    Why oh why says:

    I read that and I wonder: if the current “public option” is such a gift for health insurance corporations, why are they still fighting it to death?

  8. 8
    Kyle says:

    Either way Democrats will discredit public healthcare by implementing it in the worst way imaginable.

    Either way Repigs and Blue Dogs Democrats will discredit public healthcare by implementing it in the worst way imaginable deliberately designing it to fail.

  9. 9
    bystander says:

    Concern troll? Don’t think so. TPM

  10. 10
    Mnemosyne says:

    @bystander:

    Yes, yet another article (and another link) that doesn’t mention rescission. Do they think we’ll be confused if they mention it?

    It just seems really weird to me to worry that insurance companies will use the public option as a dumping ground and not mention even once that the Senate bill bans them from dumping patients.

  11. 11
    General Winfield Stuck says:

    @Mnemosyne:

    It just seems really weird to me to worry that insurance companies will use the public option as a dumping ground and not mention even once that the Senate bill bans them from dumping patients.

    You are being nice. It’s a goddamn lie and I’m sick of them from other dems. I am joining the Druid Ouiji party. Screw dems and their whining concern trollery.

  12. 12
    bystander says:

    Given the way all other plans to rein in the corporations seem to have had “grace periods,” in which the corporations have raced to make hay in advance of constraints and restrictions… and, given the staggered start I understand various elements of health insurance reform will go into effect… I reserve a degree of skepticism around what insurance companies will, and will not, be allowed to do in advance of any legislation. No recision (or am I wrong about that spelling?) sounds good in principle, but someone needs to suggest what will prevent insurance companies from dumping people before the law goes into effect.

  13. 13
    General Winfield Stuck says:

    @bystander:

    but someone needs to suggest what will prevent insurance companies from dumping people before the law goes into effect.

    This is actually a rational concern. I don’t know the answer, but it is a fair question. Maybe some HC wonks can help. But it seems to me if all the other reforms are in place for forcing insurance companies to quit denying people coverage for all the wrong reasons, ie pre-existing conditions and the like, it won’t help them much dumping people now if they have to accept them in a few years. Seems like recision would be something that should go into effect immediately, But I’m not expert in this by any means. And we don’t have a final bill yet, so we really don’t know what we will end up with. This bill, likely more than others, should change drastically in conference.

  14. 14
    eemom says:

    on a related note, check this out:
    http://www.nytimes.com/2009/11.....xDMbNHOnjA
    It verifies what I’ve been suspecting, which is that all the “progressive” pseudo-outrage about Stupidpak et al. is another steaming pile of concern trollery because it will have almost zero practical effect on who can and can’t get an abortion.

  15. 15
    eemom says:

    oh and it’s rescission. Because it works like scissors, cutting the contract.

  16. 16
    matt says:

    I’m painfully underinformed, so this is probably a very stupid question: What is “the exchange” precisely? And is it really more common knowledge than (say) the idea that a public plan might become a dumping ground for high risk?

  17. 17
    bystander says:

    @General Winfield Stuck:

    Well, all the ifs we can imagine, as well as those we haven’t thought of, is the crux of it, isn’t it? For this sucker, the devil really is in the details.

    People tend to assume that the constraints on businesses dumping their employee health care plans will prevent businesses from eliminating those plans in advance of the legislation, too.

    And, there is the entire price issue. If no recision actually has teeth, what is to prevent insurance companies from taking the price out of reach for those who have pre-existing conditions? Dumping you isn’t the only way they can reduce their risks at the margin. I’ve read nothing to suggest that the insurance companies won’t be allowed to do some level of price discrimination.

  18. 18
    General Winfield Stuck says:

    @eemom:

    Ah geeze mom, it was all bystanders fault.

  19. 19
    Davis X. Machina says:

    I’ve read nothing to suggest that the insurance companies won’t be allowed to do some level of price discrimination.

    3:1 in premiums, no? Or is that just based on age?

  20. 20
    wlrube says:

    This is exactly the problem in public education, a problem that many people can’t get their thick skulls around. Poor urban public schools aren’t “failing,” they’re just educating many kids who would be failing no matter what they did, kids that no private school would go near with a hundred-foot pole even if they could manage to cough up the money for private tuition. Same deal with a public option: if it’s designed so that private insurers can dump their expensive-to-insure onto the public plan, the public plan will be a mess through no fault of its own. It will essentially end up picking up the entire tab for the nation’s health care system and allowing private companies to drink themselves silly on profits.

  21. 21
    bystander says:

    Okay. Recission. The root in both cases seems to be rescind. However, recission appears to be the legal variant for the cancellation of a contract.

  22. 22
    Davis X. Machina says:

    On the philological question du jour, while precision and incision have only one s, I’ll be damned if I know why. Latin scindo has a participle scissus, with two s’s — and so should its progeny.

  23. 23
    General Winfield Stuck says:

    @bystander:

    Going back to my original comment on this thread, there were a lot of problems and cracks people fell thru initially with SS and Medicare. No bill that has ever been passed has been perfect and run like clockwork when enacted. And this one will be no exception, and likely will be worse because of all the dishonest politicking and hysteria from lies by opponents.

    I just disagree that having a weaker than desired bill, especially a PO means it will fail. It will be public law with mandates, and when those aren’t met or sabotaged, then the public will demand it be fixed. This is why the wingers don’t want any ANY bill and absolutely no Public Option, because from experience they know they can’t prevent it from getting stronger over time. Same with Medicare and SS that the public will not accept failure from, even from tea baggers who will sign up and be happy they can get coverage. They will still be crazy motherfuckers, and next will show up at rallies with signs saying “Keep Government Out of My Public Option”

  24. 24
    Brachiator says:

    There really is no way around it. Either Democrats protect the public option from adverse selection or they will do themselves more harm than good. As it stands now we might as well let idiot moderates kill the public option and just require private plans to cover everyone who wants care.

    Yep! Absolutely. This is the best short summary of the stakes involved that I’ve read.

    Either you have a strong public option or you strongly regulate the insurance companies.

    The way that the house bill has been drafted, with some aspects of coverage not even kicking in until 2013 seems almost deliberately designed to make health care reform vulnerable and open to attack.

    Cherry picking is exactly what happened with experiments in Texas and California with insurance exchanges:

    Most important, though, our exchange failed not because it wasn’t needed, and not because the concept wasn’t sound, but because it never attained a large enough market share to exert significant clout in the Texas insurance market. Private insurance companies, which could offer small-business policies both inside and outside the exchange, cherry-picked relentlessly, signing up all the small businesses with generally healthy employees and offloading the bad risks — companies with older or sicker employees — onto the exchange. For the insurance companies, this made business sense. But as a result, our exchange was overwhelmed with people who had high health care costs, and too few healthy people to share the risk. The premiums we offered rose significantly. Insurance on the exchange was no longer a bargain, and employers began backing away. Insurance companies, too, began leaving the alliance.

    Texas wasn’t the only state to see its insurance exchange fail. Florida and North Carolina were also unsuccessful. And California, which had the first exchange (established in 1992) and the largest market, shut its doors in 2006. All these state exchanges failed for the same reason: cherry-picking by insurers outside the exchange.

    It’s not just about getting something, anything, now and improving it later. It’s about building in defenses against inevitable attacks by insurance companies to weaken any public option.

  25. 25
    Mnemosyne says:

    @bystander:

    Just to drive us all crazy, the page you linked to seems to indicate that there are two spellings that are both correct: recission and rescission.

    I hate words like that. Don’t even get me started on the three plurals of “octopus.”

  26. 26

    I pretty much agree with you, TimF.

    Without sensible regulation of the private insurance industry, this reform will largely fail, with or without a Public Option.

    It would not surprise me if the HMO money and the politicians that money holds in thrall are working to prop up basically red herring issues like Public Option to keep everyone’s eye off the ball … the ball being an industry that, like the banking industry, has the regulatory process under its thumb and can do any fucking thing it wants to do to us and get away with it. That is the bottom line for the moneyed opposition, and allied with the politically-motivated opposition (a GOP that has prospered on 60 years of opposition to reform) … it’s a powerful force.

    The entire “debate” has been an exercise in misdirection, from Death Panels to Public Option to Stupidak Amendments. The ball we want to keep our eye on is Big HMO and its desire to continue to fuck us over and laugh all the way to the bank.

    Make insurance affordable, and eliminate the profit-motivated exclusions, and I don’t care whether my options are public or private. Why should I?

  27. 27
    bystander says:

    @General Winfield Stuck:

    I’m not so sanguine with respect to social security or medicare. I can’t remember which other writer’s you all dismiss out of hand, so I’ll go with Chris Bowers at Open Left.

    EXCLUSIVE: Conrad, demanding Social Security commission, meeting with Obama tonight

    I understand your point (I think): ie; let not the perfect be the enemy of the good. And, I get that other provide for the common welfare programs began on less comprehensive grounds only to improve over time. But, I also don’t assume that they’re secure. And, I do worry that if health insurance reform is a two-legged stool out of the gate, it will simply topple. The fact that Democrats feel compelled to pass something, and their opponents are poised to howl loudly regardless of what gets passed, tells me very little about the value of what’s being passed.

  28. 28
    Yutsano says:

    @Brachiator: While the exchanges and other PO structures don’t go into effect until 2013, it’s my understanding the anti-recission rules go into effect immediately. I could be wrong but every interpretation of the bill I’ve read about (including from Ezra Klein) has mentioned that fact. Pre-existing condition rule also goes into effect immediately. It may not stop the cherry-picking process, but it will possibly mitigate it some. I do leave open the possibility I am wrong, but there are parts that go into effect upon passage. Or the start date for the law since that has to be the first of the month.

  29. 29
    Yutsano says:

    Make insurance affordable, and eliminate the profit-motivated exclusions, and I don’t care whether my options are public or private. Why should I?

    This. Plus covering as much as possible within reason.

  30. 30
    General Winfield Stuck says:

    @bystander:

    . But, I also don’t assume that they’re secure

    It is not news that any of them are secure, at least financially. The Big Baby Boomer train is coming down the track fast and there are going to be big changes for entitlements when that reality hits us head on. Either more taxes, less benefits, or likely both.

    My point is having a decent but not ideal HCR law on the books at least makes it a player, and given political realities, that is better than not being a player on the books.

    And my point is not to let the perfect be the enemy of the good. It is more like, imperfect is always the rule with sweeping change legislation, and you are right that the devil is in the details. I have heard from some experts, that those details aren’t half bad in the current proposed leg. and from others that they are not so good. I will wait till we actually have a final bill for debate and voting until I get discouraged. It has to have a decent PO structure at least, and the basic reforms that most agree on. If not, I will join you in opposing it’s passage. But not now.

  31. 31
    Mnemosyne says:

    @bystander:

    But Bowers doesn’t say in that article that Obama is definitely going to cut Social Security. He’s taking a meeting with Conrad, but Bowers says that there are four possible outcomes and he’s not making a declaration as to which outcome is going to happen.

    And, as everyone else said, they’ll have to crawl over Nancy Pelosi’s dead body if they want to “reform” Social Security. Remember her famous quote when Blue Dogs kept asking her when they were going to release a Democratic SS privatization plan: “How about never. Is never good for you?”

  32. 32
    eemom says:

    r e s c i s s i o n. Don’t forget the first s. Ya gotta think scissors.

    I don’t mean to lecture though. Just trying to get some use out of my fucking law degree.

  33. 33
    General Winfield Stuck says:

    No mo blogging for me today. It’s turkey eatin’ time. Eat up Juicers and have a thankful Thanksgiving.

  34. 34
    Martin says:

    It’s increasingly looking like the Senate bill isn’t designed to fix insurance at all – just costs. Costs are the harder problem to solve, and frankly, the more important one for the government, both because it helps fix the entitlement problem without cutting benefits and because it’ll be an economic kick in the ass. Get Medicare and overall health care costs down and at least a little bit of the insurance problem will solve itself as employers may return to providing coverage as they had in the past, but selling a public option or even going as far as single payer becomes a lot more likely as those CBO scores will plummet. If what the CBO predicts actually starts to come to pass and we do repeatedly see the $650B savings over 10 years showing up, then in 4 years a bill focusing on health coverage could be a fairly easy sell.

    And as we noted a few days ago, if Democrats fix entitlement costs, that’s a lot of electoral win. Further, if the Senate bill actually does it and the GOP uniformly voted against it, Democrats will bludgeon them with that for at least the next 8 years.

  35. 35
    Yukoner says:

    @Yutsano:

    Plus covering as much as possible within reason.

    I just don’t get this near-universal American attitude. Why can every other first world country cover everyone and do it for less than the USA while American’s cannot seem to grasp the idea that they can do it too?

    Extend your Medicare coverage to all regardless of age and you’ve done it. Why is this outside of reason?

  36. 36
    Brachiator says:

    @Yutsano:

    It may not stop the cherry-picking process, but it will possibly mitigate it some.

    You can’t just mitigate cherry picking. You have to prevent it up front. The article cited and other easily found stories demonstrate that after a certain point, insurance exchanges and other public plans collapse because the healthier patients are lured away.

    And with that, it’s time for me to go get my turkey feed on. So many interesting discussions, so little time to fit them in between bouts of holiday gluttony.

  37. 37
    TaosJohn says:

    KILL THE BILL. Do all of you realize it will allow your current insurers to only cover 60% of the cost instead of 80%? That’s right, you pay 40%. AND of course, benefit will be further reduced, so you’ll pay more for crappier plans.

    Meanwhile, Medicare will be gutted to pay for shoveling more cash to the insurers, which will make me very unpleasant to be around next year when I finally get to go on Medicare.

    Finally, even the few good things, like outlawing exclusion from coverage for pre-existing conditions, won’t go into effect until 2014. Four more years of cascading medical bankruptcies and horror stories… will there even be a country left by then?

    Happy Thanksgiving, too.

  38. 38
    TaosJohn says:

    Look: we don’t have time for this not letting the perfect be the enemy of the good crap. When you utter those words, you’ve already lost.

  39. 39
    Yutsano says:

    @TaosJohn: Okay then, deal with this: YOU WON’T GET PERFECT. Ain’t gonna happen, not with our political system. Throwing a tantrum about it will change nothing. There needs to be a structure in place that no one will be happy with at first but it can be improved. For fuck’s sake what are you not getting here?

  40. 40
    Yutsano says:

    @Brachiator:

    You can’t just mitigate cherry picking. You have to prevent it up front.

    Maybe it’s just my cynicism about big business but I don’t think that can be stopped in its entirety. If they can find a loophole out of covering a really expensive client they will. Even if all rescission is banned it will still happen. We just need to draw the line in the sand as tight as possible, but complete stoppage with how conniving these weasels are won’t happen.

    Actually, my weird idealistic goal is letting the private insurers be the primary payers then the PO makes up the difference. Too much like single payer to fly?

  41. 41
    gwangung says:

    Okay then, deal with this: YOU WON’T GET PERFECT. Ain’t gonna happen, not with our political system.

    Hell, that ain’t never gonna happen with humans, period.

    There needs to be a structure in place that no one will be happy with at first but it can be improved.

    Yeah, exactly.

  42. 42
    dday says:

    There’s something in the bill called risk adjustment. Basically the gov’t pays insurance companies to take on higher-risk patients, smoothing out the risk for everyone. This is how the Dutch and the Swiss keep a private insurance system from trying to evade sick customers.

    It’s not nearly good enough in either bill. The CBO basically acknowledged that when it said the public option would have higher premiums, because as a dumping ground for the sick it would have to charge more.

    If you want to work on something super-important but practically unknown in the bill, work on better risk adjustment.

  43. 43
    gwangung says:

    KILL THE BILL.

    And you REALLY think that we’ll get something MORE progressive?

    Um, no.

  44. 44
    Yutsano says:

    @gwangung: That is what aggravates me more than anything. They think if the bill dies now the next incarnation will be a progressive wet dream. IT. AIN’T. GONNA. HAPPEN. If anything if this health reform bill dies now it will get kicked down the road another forty years when things are beyond crisis mode and not fixable and then we’d all be ungestuppt.

  45. 45
    HyperIon says:

    @eemom: It verifies what I’ve been suspecting, which is that all the “progressive” pseudo-outrage about Stupidpak et al. is another steaming pile of concern trollery because it will have almost zero practical effect on who can and can’t get an abortion.

    Did you miss Cole’s “Stupak is either stupid or lying” post? In the comments it pretty much everybody agreed and those who didn’t were suitably chastised.

    And talking about “progressive” pseudo-outrage is going to get you in trouble here with a several serial commenters. ;=)

    Thanks for the link. It demonstrates that there are at least six sides to every argument about a complex topic.

  46. 46
    SIA aka ScreaminginAtlanta says:

    @Why oh why: Please don’t throw me in that briar patch??

  47. 47
    SIA aka ScreaminginAtlanta says:

    @General Winfield Stuck: Thank you for those rational words. I hope and believe that is true. And I guess they don’t call it “sausage making” for nothing. I’m just really over getting screwed by our own “side”. I’ve been self-employed for 24 years and would love to jump into that public option. This f-ing catastrophic insurance is a catastrophe.

  48. 48
    Ailuridae says:

    Ughh, this is frustrating to read, especially from a BJer. Yes, overall the public option as constructed to have a worse risk pool than any for-profit private plan would. But the abuse the public option addresses is the lack of membership in a risk pool for the self-employed. This debate frustrates me to no end as everyone poo-pooing the public option is somebody who has great health care (Kaiser!) available to them through an employer like the American Prospect.

    I’ve mentioned this before but I am self-employed and have been for a decade. I’m very healthy but if a freak occurence were to happen to me like testicular cancer as of right now, I would likely fight tooth and nail to maintain coverage through treatment. After that I would no longer be able to buy private health insurance. I would have to return to the corporate sector if I wanted insurance so my risk could be spread over a larger employee base.

    What the public option addresses in this case is two fold: I don’t have to fight an insurer while fighting for my life to prove that “behavior X” didn’t lead to cancer and it allows me to continue post cancer with insurance.

    As for the utter and complete bull shit that the public option will constantly be asking for more money: its simply fucking bull shit.

  49. 49
    Yutsano says:

    As for the utter and complete bull shit that the public option will constantly be asking for more money: its simply fucking bull shit.

    It goes back to the Post Office running a deficit. Suddenly they’re $2 billion in the hole and it’s a huge crisis even though they’ve taken major steps to ameliorate the issue. But too many on both sides of the aisle think the Post Office (I’m avoiding the abbreviation to avoid confusion) can just go to Congress and magically ask for more money just like that. They can’t. The public option will have to work under the same constraints.

  50. 50
    Robert Waldmann says:

    Hey yeah let’s “require private plans to cover everyone who wants care.” Oh and for a premium which depends only on their age region and family size.

    Why didn’t congress think of that ? And write it out.
    At length.
    In the bill.

    With the force of law.

    Now such requirements are hard to enforce, so I have an even more daring idea. How about “risk adjusting” so that if private plans find a way to convince “expensive undesirables” opt for the public option money will be taken from them and used to pay for health care for people who opt for the public option ? A wild and crazy weird and wacky idea. There’s just no chance that both bills under consideration include risk adjustments. is there ?

    Wouldn’t it be just great if there were something like that right there in the bill which you denounce ?

    Now one can always worry that regulations won’t be enforced or that lawyers will find loopholes. However, where I come from “unprotected” means “without protection” not “with protections which might be removed or evaded.”

  51. 51
    oh really says:

    It may be unwise to compare Medicare and Social Security with the public option. In the case of both Medicare and Social Security, they began with huge constituencies. The public option, increasingly by design, seems headed toward having a small, perhaps very small membership.

    The smaller the program, the more vulnerable it is likely to be to manipulation and the fewer people there will be to “demand” anything if it doesn’t work or isn’t working well.

    It has been clear for some time that the politicians who oppose the public option would prefer it not exist at all. However, they have worked hard to make sure that if it does exist it will be as small and weak as possible — they know what they’re doing. I’ve seen things that have led me to believe that the final public option is very likely to be hamstrung by design with limitations that will prevent it from accomplishing the things a public plan ought to be able to do. If the initial membership is small enough and sick enough, then premiums will (by design) be higher than those of private insurers, or at least no lower. Lower administrative costs give the public option a head start, but if its membership is small enough and sick enough, that advantage could easily be erased. The higher the premiums are for the public option, the fewer people will be likely to choose it. The fewer people there are, the more limited will be the public option’s ability to negotiate price breaks. The more limited it is, the less attractive it will be. Private insurers will be advertising the benefits of their own plans, while the public option is supposed to be able to operate without much advertising. But that is only true if the benefits of the public option are real and easily identified. A small, sick public option membership is not likely to have such obvious advantages. In that case, the inability to advertise will be a new disadvantage.

    To work well, the public option needs to be designed and implemented in such a way that it is likely to attract as large a membership as possible. The more members it has, the more protesters there will be if there is a problem. Medicare and Social Security both had gigantic and easily identifiable constituencies when they began. They included everyone of or beyond a certain age. Better still, 100% of the population (minus premature deaths) would eventually be part of the group. Further, since older people vote with much greater reliability than younger people, it was to be expected that problems would be reflected at the ballot box. The kind of membership that the public option is likely to have is nothing like that.

    Until we see the final bill, it is impossible to predict anything with certainty. However, there is no reason to be sanguine about the prospects of the public option. If the final bill has designed a public option that will include 3-5 million people, most of whom are the sickest and poorest Americans, and the program is severely limited in its ability to negotiate price breaks, then there is no reason whatever to believe those problems will be solved by dissatisfied members demanding changes.

    The stronger the public option is to begin with, the better chance it has of succeeding — that is, attracting large numbers of both sick and healthy people, both younger and older people, and both richer and poorer people; using its heft to negotiate substantial price breaks from providers; and responding to problems with overwhelming support from its motivated members.

    The weaker it is to begin with, the better will be the chance that it will disappear altogether in a relatively short time. If that happens, it may do serious and lasting damage to the fundamental idea of public health plans, which could set back a universal single payer program by decades. In that case, it would be far better to have no public plan at all now.

  52. 52
    jcricket says:

    I think the insurance companies are actually the public options best friends. Seriously, no matter how bad the public option looks, or how “limited” the exchanges are right now, here’s what will happen.

    Insurance premiums will keep rising through the roof. More and more people will be employed part-time, self-employed, or work for employers that don’t offer insurance at all (this is already happening). This by itself will easily double or triple the size of people on the public option.

    With no change to the existing laws, these people will be eligible for the exchanges and the public option. Yes, some of them will be sicker than average, but really it’s a cross-section of America (with very few rich people).

    Plus, insurers will continue to attempt to gouge people for private insurance through the exchanges. Public plan won’t be cheap or perfect, but it will be non-profit and non-gouging motivated.

    With 10s of millions of people needing the public option will get better, just like Medicare was forced to, just like Social Security did (black people originally weren’t eligible) and just like the VA did. It may be “ugly” on the way there, but it’ll happen.

    With no public option we’ll just be in a position where 10s of millions of people in the next decade will have no option that isn’t fundamentally designed to line the pockets of the private insurance industry (rather than primarily devoted to giving them healthcare).

    Again, were the insurers more sane, fair-minded, moral, etc. this might not be true – but they don’t want to “compete” or “provide insurance”, they are designed primarily to skim 20-30% of healthcare dollars out of those who can pay their premiums. Nothing else.

  53. 53
    jcricket says:

    Medicare and Social Security both had gigantic and easily identifiable constituencies when they began. They included everyone of or beyond a certain age.

    No, no they didn’t. Not at all.

    I know you’re not trying to troll, but please read the history of SS and Medicare. They were so far from universal when they started it’s almost laughable. You would barely recognize it – esp. with how much SS pays out (it was teensy when it started).

    Again, the “capitalists” in the economy kept shoving off obligations (pensions, senior healthcare) onto these programs b/c they realized it was a “better deal” for them than worrying about it themselves (i.e. providing better pensions or funding senior healthcare).

    This, along with “moral” pressure from Dems and moderate Repubs in Congress is what turned SS and Medicare into the near universal (for seniors) programs they are today.

    The biggest dangers to the public option are: not existing (b/c then it’ll take another 15 years for it to happen) and complete lock-out (i.e. being written in a way where it can’t expand).

    But as I posted above, the constituency for the public option/exchanges will triple in the next ten years. If private insurers were “fair” they’d offer affordable plans in the exchanges, but they won’t. So even if the public option seems like it’ll be expensive, it’ll pale in comparison to what private insurers are trying to do (see your cable company for an example).

  54. 54
    jcricket says:

    @Yutsano: And yet Congress won’t let the post office do what real private companies do to cut costs – cut service. I read that cutting Saturday service would eliminate like $2-3 billion (yes, billion) in costs.

    So the Post Office is expected to be break-even (but not allowed to charge enough to earn profits to “set aside” for dips like this), but also do all sorts of non-private-company things (like deliver to everyone for the same charge, including in rural areas).

    If the post office ever becomes a totally private entity or is allowed to charge like one, expect the rural idjits to start screaming about the cost of mail (and somehow blaming the government). It’s this kind of tautology that drives me nuts – government should do nothing, and everything, and be free, but be like a private corporation, and any failing is a sign government shouldn’t exist at all, except when I need it.

    ARGH!

  55. 55
    Bill H says:

    First, no one observes that the Postal Service is a perfect model of what this “health care reform” is all about. The government tells the company what it must do and how it must do it, and it loses massive amounts of money. Under those circumstances, private companies quit. Seems to me the purpose of this reform is to end the business of health insurance altogether, which might not be a bad thing, but this is a pretty underhanded way to do it. If the government wants to do away with private insurance, why not just pass a single payer bill?

    Secondly, in this entire thread about the cost of health care, all of the discussion has been about insurance companies. Insurance companies pay for health care. No one has mentioned hospitals, or doctors, or testing labs, or drug companies. Those industries perform health care and create the health care costs that insurance companies pay for.

    So the higher costs for insurance might, maybe, have something to do with higher prices charged by hospitals, doctors, labs and drug companies? Of course not; it’s all the fault of the insurance companies.

  56. 56
    gwangung says:

    First, no one observes that the Postal Service is a perfect model of what this “health care reform” is all about. The government tells the company what it must do and how it must do it, and it loses massive amounts of money.

    Which, of course, is not true.

  57. 57
    oh really says:

    @jcricket:

    I’m aware of the history of Social Security and Medicare.

    In the beginning, Social Security reliably covered (more or less) only elderly white males. It excluded most African Americans and women. However, that is still a very large constituency, not only in numbers, but also in political influence, especially when compared with a public option plan of three to five million members drawn largely from the poorest and sickest Americans. The effect today of excluding women would be vastly more important politically than it was in in the thirties. The same is true for African Americans.

    I’ve read that in the end, the Social Security exclusions meant that only about half the population was covered. Compare that with a public option membership of three to five million. Currently the US population is over 305 million. That means that three to five million Americans represent somewhere in the neighborhood of 1% to 1.6% of the total population.

    Further, the incentives for wanting to be included in the Social Security system were likely far greater than they will be for people to want to be included in the public option. Since many of the people originally excluded were exactly those people who had the greatest need to be included, it could be expected for there to be continuing pressure over the years to expand the program. The opposite is true now. It is much more likely that the originally members of a public option will be those with the greatest need to be included. Americans who are currently covered by insurance through their employers will only want to switch to a public option (assuming they are even permitted to join the public option) if they fear imminent loss of their employer-based insurance and/or if the public option is cheaper and/or better than what they already have. A public option designed by those who want it to fail is not likely to be especially attractive to someone who has a good coverage through an employer.

    Personally, I think those with insurance through their employers should be a lot more worried about its continued existence than they probably are, but denial is a very powerful force. It’s a lot easier to pretend (and hope) that one’s insurance will continue indefinitely (along with one’s job), than it is to worry about the obvious trends.

    I’m sticking with my contention about the relative sizes of constituencies for Social Security and the public option. I think the same is true for Medicare, only more so.

  58. 58
    General Winfield Stuck says:

    @oh really:

    What you are leaving out, and what makes your analysis silly, is the fact that although a small number of Americans will initially be covered by a PO, upwards of 80 percent or so will also still be covered by their current private insurance that most are happy with. And with greater protection from the other reforms in these bills.

    It sounds like you are arguing about the shortcomings of the PO being proposed up against a single payer system, and that is not what is being discussed in this thread.

  59. 59
    General Winfield Stuck says:

    Actually, the current or last measured percent of Americans on private ins. plans was 65%. But that does not include seniors on medicare and vets treated at VA hospitals.

  60. 60
    Davis X. Machina says:

    Don’t even get me started on the three plurals of “octopus.”

    There are three ways to spell “octipodes”?

  61. 61
    The Other Steve says:

    @dday:

    There’s something in the bill called risk adjustment. Basically the gov’t pays insurance companies to take on higher-risk patients, smoothing out the risk for everyone. This is how the Dutch and the Swiss keep a private insurance system from trying to evade sick customers.

    The Dutch and the Swiss models say an insurance company can’t turn away a customer, and… THEY HAVE TO CHARGE EVERYONE THE SAME AMOUNT!

    The Govt runs a re-insurance program basically to help spread unusual high risk patients across all insurers.

    But basically they can’t just dump patients onto someone else. That is the KEY and I haven’t heard anyone talk about this with regards to this healthcare bill.

  62. 62
    Mnemosyne says:

    @jcricket:

    So the Post Office is expected to be break-even (but not allowed to charge enough to earn profits to “set aside” for dips like this), but also do all sorts of non-private-company things (like deliver to everyone for the same charge, including in rural areas).

    They’re also required to do things like pre-fund the healthcare of current workers to be prepared for their retirement costs, something that no corporation in America is required to do. If not for that Republican legislation, the Post Office would be in the black right now.

    So, yes, it turns out that if you take an efficiently running government department and deliberately cripple it, that department starts having problems! Who’da thunk it?

  63. 63
    Mnemosyne says:

    @Davis X. Machina:

    I’m sorry, but it’s “octopuses.” Greek roots (octo=eight, pus=foot) so it gets a Greek plural.

    I seriously had a knock-down fight about this with some people at work the other day, and I was able to say that Grammar Girl was on my side. This is what I get for working with geeks, though it is nice to be among my own kind at work. ;-)

  64. 64
    bob h says:

    Lieberman objects to the public option because it will be more expensive, according to him. That will be the case only if it is set up so the private plans can cherry-pick the healthy people out. So, what he really objects to is paying for sick people. Some kind of liberalism.

  65. 65
    CalD says:

    As it stands now we might as well let idiot moderates kill the public option and just require private plans to cover everyone who wants care.

    Part of me is tempted to say the same thing. On the other hand, once you have a public option in place in any form then at least you have something that could be improved on, which may be less daunting than starting from scratch. Perhaps it’s an important hurdle to get something passed however watered down it has to be to achieve that.

    Certainly any policy that gets enacted into law right now is likely to see a lot of revisions over the next couple of decades. So regardless of what happens now, the ongoing struggle will be to try and see to it that those inevitable changes are changes for the better.

  66. 66

    @CalD:

    As it stands now we might as well let idiot moderates kill the public option and just require private plans to cover everyone who wants care.

    I thought that was kind of the point of all the obstructionism. Lieberman, Bayh, Landrieu, Snowe, et al got the assignment and have been doing a bang-up job of it.

    CalD: Have to admit, it’s a tough call – push the door open a crack and go from there, or let the idiots kill it and start over? Either way, Americans still won’t have equal and open access to health care, and the idiot moderates win the day.

  67. 67

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