What Changed?

I’ve been expecting a number on this, and now we have one.

Hundreds of thousands of young adults are taking advantage of the health care law provision that allows people under 26 to remain on their parents’ health plans, some of the nation’s largest insurers are reporting. That pace appears to be faster than the government expected.

WellPoint, the nation’s largest publicly traded health insurer with 34 million customers, said the dependent provision was responsible for adding 280,000 new members. That was about one third its total enrollment growth in the first three months of 2011.

Others large insurers said they have added tens of thousands of young adults. Aetna, for example, added fewer than 100,000; Kaiser Permanente, about 90,000; Highmark Inc., about 72,000; Health Care Service Corp., about 82,000; Blue Shield of California, about 22,000, and United Healthcare, about 13,000.

The Health and Human Services Department has estimated that about 1.2 million young adults would sign up for coverage in 2011. The early numbers from insurers show it could be much higher, said Aaron Smith, executive director of the Young Invincibles, a Washington-based nonprofit group that advocates for young adults.

The GOP House majority ran on repealing and replacing the PPACA. They have been busy since the election with holding useless, purely political votes in the House to repeal parts of the existing health care law. In fact, the one and only health care plan Republicans have put forth is Paul Ryan’s health care plan, which replaces Medicare with a private, underfunded voucher system and drastically cuts Medicaid under the guise of “block grants”.

Although we all know that around 40% of Medicaid spending currently goes to the elderly and the disabled, Ryan’s proposal for drastic cuts in Medicaid continues to be portrayed as gutting a program “for the poor”. Medicaid is a program that serves the poor but it also serves the most vulnerable people in the country: the elderly and the disabled. They’re not just “the poor”. And, Medicare and Medicaid are connected. It is disingenuous to talk about health care for the elderly and limit the discussion to Ryan’s 6,000 dollar Medicare vouchers. That isn’t the reality of people’s lives.

Republicans in the House are seeking repeal of a health care reform law that is benefiting people now, today, and they have offered nothing to replace it. Paul Ryan seeks to dramatically change the existing health care system, and has offered nothing to the people who would be without access to health care under his proposal. At the state level, Mitch Daniels in Indiana, under pressure from a certain conservative political faction, just agreed to deny access to clinics to 20,000 people who had access to those clinics.

Less than two years ago we had a health care debate in this country. We reached broad public consensus that we need to expand access to health care. Conservatives are now seeking to limit access to health care or, in the case of Mitch Daniels, actually limiting access, and no one seems to notice.

Did I miss something here? Did the public intellectuals and media personalities decide somewhere along the line that we don’t need to expand access to health care, but instead need to limit access? What changed?






75 replies
  1. 1
    cleek says:

    What changed?

    the GOP changed the conversation to benefit themselves. they turned the conversation to fiscal matters. and that allowed them to view health care as a fiscal matter. and the Dems follwed.

  2. 2
    Yevgraf (fka Michael) says:

    Death panels. Also, too.

    American exceptionalism! We’re number one, and need to get back to the greatness envisioned by Reagan!

    /Hugh Hewitt

  3. 3
    ajr22 says:

    In regards to Greenwald, he is quick to attack people for believing what American officials tell them, yet he just tweeted and article citing Pakistani officials. The article claimed one of Osama’s children saw him captured then shot in the head, and that he had only been living there a few months. I mean clearly the Pakistanis are trust worthy enough for Glenn to spread their spin.

  4. 4
    WereBear says:

    Did the public intellectuals and media personalities decide somewhere along the line that we don’t need to expand access to health care, but instead need to limit access?

    They say what they are told to say.

    I remember when news outlets would run heartrending stories of people suffering without health care.

    There’s more, now. And yet you have to dig to find them.

  5. 5
    Bruuuuce says:

    Nothing changed: the GOP and its wholly owned subsidiaries (most Big Media, in particular) still think health care is meant for the privileged few (i.e., them) and Too Good For The Hoi Polloi, Dontcha Know, M’Dear.

    That broad agreement still exists among the people who benefit from the law, and would benefit even more if we could continue to move away from for-profit healthcare as the rule in the US.

  6. 6
    Mike Kay (Team America) says:

    so about 600,000 have insurance today just from this one provision of HCR.

    Too bad we didn’t kill the bill.

  7. 7
    AAA Bonds says:

    Maybe no one in America cares about anything or pays attention to anyone. Maybe everyone just likes exciting debates.

    I’m not excluding the folks who believe that “serious” positions are defined as the range between the White House and the Republicans.

  8. 8
    Napoleon says:

    @ajr22:

    The article claimed . . .that he had only been living there a few months

    Anyone who believes that needs their head examined. The compound CLEARLY was built to house someone like OBL and to think that they didn’t use it for that purpose for years and years takes a complete suspension of your critical facilities.

  9. 9
    Davis X. Machina says:

    @Mike Kay (Team America): But each one of those 600,000 postpones the advent of the public option by a few hours.

    Bastards. I hope they’re happy. I hope they can live with themselves.

  10. 10
    Muley Graves says:

    Did the public intellectuals and media personalities decide somewhere along the line that we don’t need to expand access to health care, but instead need to limit access?

    Nothing changed at all. What do you think all the debate was about during the health care reform bill – who we were going to expand access to?

    Jeez, no. The insurers want the smallest pool possible paying the highest premiums possible. Reform has already been an utter disaster for them, because, as you’ve just pointed out, it makes the pool bigger – and it gets worse every day. That’s why they’ve been throwing money at the Tea Party and the Republicans, and indeed, to ANYONE who will promise to shrink the number of people they have to cover.

  11. 11
    kay says:

    @AAA Bonds:

    Maybe no one in America cares about anything or pays attention to anyone. Maybe everyone just likes exciting debates.

    I think they do care. I talk to people about health insurance and health care all the time, because I’m a lawyer in a small town and they ask me questions.

    I think they care a lot. I think they’ve been brutally misinformed, and, further, I don’t blame them.

    I think they have to live their lives and don’t have to time to read policy papers, and they shouldn’t have to.

  12. 12
    Belafon (formerly anonevent) says:

    What changed?

    The Republicans won the house, which gave them a mandate to undo everything in the past two years. I thought that was obvious. (Republican thoughts.) Remember, no conservative thinks that any changes will affect them, only other people.

  13. 13
    gex says:

    This is what is allowing my brother’s girlfriend to have health care coverage. For the baby they are expecting. Otherwise, they’d be screwed.

    Also, this baby is going to be Chinese, Jamaican, Native, Swedish, Irish, and German. I predict a high degree of adorability.

    ETA: I should add that instead of forcing insurers to allow her parents insurance to cover her the other option is for the tax payers to do so via MN Care. So repeal would just mean that instead of paying for her own coverage, tax payers would. Fiscally sound!

  14. 14
    kay says:

    @Muley Graves:

    who we were going to expand access to?

    Yeah, that, and who pays. I agree it wasn’t about health care. It was about who deserves basic health care and how to pay for it; the various mechanisms.

    We’re going backward. It’s like we never had the two year debate.

  15. 15
    Martin says:

    @Davis X. Machina: Indeed. I hope all of those 24 year-old pregnant women receiving free prenatal care reflect long and hard on their selfish act that has denied Jane Hamsher the political victory she so clearly deserved.

  16. 16
    kay says:

    @Belafon (formerly anonevent):

    Oh, no. They ran on repeal and replace.

    Replace. Not dismantle the current system and replace with no system.

    I’d ask them, seems like the obvious question, but I guess that’s too divisive.

  17. 17

    @AAA Bonds:

    Maybe no one in America the Village cares about anything or pays attention to anyone outside the Village. Maybe everyone the Villagers just likes exciting debates.

    FTFY. Americans care deeply about fixing our horribly fucked up health care system. Our media elite don’t because IGMFY, so they focus on their interests: inside the beltway debates and treating politics like a sporting event.

  18. 18

    @kay:

    Not dismantle the current system and replace with no system.

    But replacing it with the law of the jungle is still replacing it with something, so they weren’t really lying. And anyway, IGMFY, so IOKIYAAR.

  19. 19
    JCT says:

    @kay:

    I’d ask them, seems like the obvious question, but I guess that’s too divisive.

    Actually, it’s interesting — I have to look for the link (I’m pretty sure it is from ThinkProgress, they’ve been doing yeoman’s work on this). But apparently a constituent at one of the Republican’s town halls basically asked about the “replace” part and the Rep said something about it being covered in the very next bill they voted on — a complete and total lie.

    Found it: http://thinkprogress.org/2011/.....th-reform/

    They are dishonest about this to the core.

  20. 20
    Gin & Tonic says:

    All I know is my 24-year-old currently unemployed (not for lack of trying) son has health insurance now, whereas last fall he didn’t. The peace of mind for my family is very significant.

  21. 21
    kay says:

    @Roger Moore:

    I got direct mail flyers from Rove’s operation every day that promised REPLACE.

    The “replacement” was gutting Medicaid and ending Medicare?

    Seems like someone might want to raise this itty bitty truth problem they have, no?

  22. 22
    benintn says:

    It’s healthcare v. health insurance.

    Most Americans feel that insurance as a middle man gets in the way of access to affordable care.

  23. 23
    gex says:

    @kay: Somehow, that standard is never applied to them.

  24. 24
    Martin says:

    @Muley Graves:

    The insurers want the smallest pool possible paying the highest premiums possible.

    Uh, what bullshit is this? The insurers definitely don’t want the smallest pool possible – insurance has huge overhead in a private market because you have to write contracts with fucking everybody – every pharmacy, physicians group, hospital, etc. And that overhead is largely fixed as a function of the geographic size of your market. If you’re covering Minnesota, it doesn’t matter if you have 10,000 policies or 10,000,000, you’re going to be writing and negotiating roughly the same number of contracts.

    They want the largest low-risk pool possible, and because they have so much information on us, they can shape that reasonably well. They don’t want a small pool, they just don’t want the risky pool. Fuck, why would they even be in business of writing group policies, the backbone of all major insurers if they wanted a small pool?

    The insurers were mostly on board with ACA until the Dems decided to target insurers, rather than care providers as the source of rising costs. The insurers biggest threat right now is that their pools are shrinking, but they can’t get money out of customers fast enough to keep up with their costs. That’s why they’re culling the edges of their customer pool. They know the result is a death spiral, but they’re out of options. The insurers aren’t large enough to effectively negotiate drug and equipment prices. They can’t write contracts that span the whole country, so they get shafted by hospitals and physicians for patients that are out of network. The insurers wanted the assistance on reducing costs that ACA initially focused on. They want to expand their pools – desperately.

  25. 25
    Church Lady says:

    Our oldest could have obtained health insurance through the University she is a TA at. Instead, we kept her on our family plan. It didn’t cost us a dime more in premiums and saved her from having a deduction from her already meager paycheck.

  26. 26
    Shawn says:

    You asked what changed? Obama ran up a $16 trillion dollar debt illegally attacking Libya and giving healthcare to people who shouldn’t have it, and now Republicans just want a little fiscal sanity. Is that really so bad?

    In case you can’t tell (I know there are some Republicans who read this blog), I’m being sarcastic.

  27. 27
    benintn says:

    The GOP version of “replace” is 1) tort reform, 2) vouchers, and 3) smoke and mirrors.

  28. 28
    Martin says:

    FYWP moderation!

  29. 29
    kay says:

    @Martin:

    I will get you out and then I have to work, so it’s all yours :)

  30. 30
    Redshift says:

    Yes, the debate is over because Republicans won some House seats, so they should get to do whatever they want and Democrats are going against the will of the people if they oppose them. Mysteriously, when Democrats won the House and Senate and a presidential election by historic margins, it didn’t stop Republicans from fighting tooth and nail against everything they did, and talking about what “the American people” want.

    One might think they just lie about everything. One might further ponder that if they have to lie constantly about what they’re doing, it probably means that thinking people wouldn’t support their policies if they told the truth.

    Fortunately for them, thinking people aren’t their base.

  31. 31
    Just Some Fuckhead says:

    @Church Lady:

    Our oldest could have obtained health insurance through the University she is a TA at. Instead, we kept her on our family plan. It didn’t cost us a dime more in premiums and saved her from having a deduction from her already meager paycheck.

    Weird, because it was my understanding an adult child couldn’t qualify for their parent’s insurance if they could get health insurance through their employer.

    From an article on the internet: Federal law has few restrictions other than an age cut off at 26 and that the adult child cannot obtain insurance through an employer, said Sara Collins, a researcher for the Commonwealth Fund.

  32. 32

    @kay: I think from this town hall meeting in New Hampshire, that ol’ Congressman Charlie Bass, held we are beginning to see that average folks are catching onto to this fraud. I know other reports exist of newly elected members being asked about “that vote” they made. It may not be on the front page right now but the word is spreading. Maybe a well organized Letters to the Editor campaign to every paper in the country, no matter how small, would be in order? Kay, draft up a sample so folks can “make it their own” with appropriate language and have them send them in.

  33. 33
    Dave says:

    @Gin & Tonic: To quote the VP, it’s a big fucking deal.

    I remember going without health care insurance for about 10 months after finishing college before I got a job that paid enough for me to buy an individual policy. That was terrifying, to say the least.

  34. 34
    Zifnab says:

    Did I miss something here? Did the public intellectuals and media personalities decide somewhere along the line that we don’t need to expand access to health care, but instead need to limit access? What changed?

    Somebody screamed “budget deficit!” and all the so-called fiscal conservatives jumped out of the pool.

    The typical response you get from people when asking “Why do you oppose expanding coverage?” is “We can’t afford it! $14 Trillion debt!11eleventyone1!”

    Not that this was a concern back in ’01 or ’03, mind you. But we’re supposed to fund wars with our tax cuts. We just can’t fund health care unless we cut our health care costs to raise the money to give people tax credits for free market health care.

  35. 35
    Bob Loblaw says:

    Others large insurers said they have added tens of thousands of young adults. Aetna, for example, added fewer than 100,000; Kaiser Permanente, about 90,000; Highmark Inc., about 72,000; Health Care Service Corp., about 82,000; Blue Shield of California, about 22,000, and United Healthcare, about 13,000.

    And thus every health insurance stock price is up >30% over the last six months.

    And Republican voters still believe the PPACA was some unbearable act of soc!ali$m. It was the thoroughly competent, corporatist third way of policymaking. The people trying to kill it were doing it for purely ideological and feudalistic reasons, not corporate ones. The GOP would sooner burn the country down and rule upon a heap of ashes, because they think improving the lives of their citizens is a slippery slope to their own political irrelevance.

  36. 36
    Martin says:

    @The Ancient Randonneur: I think the issue was sufficiently muddled that the GOP could get away with it for a while. What I believe the GOP miscalculated on was trying to swap out Medicare for a voucher program and expecting the public to remain bamboozled. That was a simple enough proposal that everyone caught on pretty quick, and when they realized they were being fed a line about that they seem to have started to wonder whether the broader health care repeal/replace proposal was bullshit as well.

  37. 37
    Davis X. Machina says:

    @Just Some Fuckhead: Grad students occupy a never-never land, between employees in sensu stricto and students. (They’re like football players at BCS-eligible schools that way….)

    As students, they’re probably eligible to join whatever the insurance is that the university offers to all students. My son, for instance could have insurance as a student through CMU’s Pennsylvania flavor of Anthem/Blue Cross, or as a dependent on my policy from another state.

  38. 38
    gene108 says:

    Access to healthcare, like voting, is a privilege to be reserved for the wealthy.

    I mean, how can someone feel superior to another person, if that low-brow slob has access to the voting booths and doctors?

    Only a Communist country would try to make everyone equal.

    (/sarcasm)

  39. 39
    Redshift says:

    @Martin:

    The insurers wanted the assistance on reducing costs that ACA initially focused on.

    Uh, what bullshit is this? Insurance company overhead and profits, along with the fact that it’s not profitable to pay for things like preventive care because the profit is likely to go to a different company, are a large part of the additional costs we pay relative to other countries.

    The insurers were mostly on board with ACA until the Dems decided to target insurers, rather than care providers as the source of rising costs.

    More bullshit. We knew by the end of the healthcare debate that they were funding anti-reform astroturf groups and ads at the same time they were “on board” and being catered to.

    Yes, there are a lot of areas of our healthcare system that contribute to its high cost, and while some of those are the providers, even part of that is because of the incentives produced by how they get paid.

    If what you’re saying is that the insurers were on board until Democrats decided that the most effective way to control costs was to try address all the areas that contribute to cost increases rather than giving insurers a pass, then I would agree. If the choice was between a system that might succeed at controlling costs and a system that would keep insurers on board but would be destined to fail, they definitely made the right choice.

  40. 40
    Ukko says:

    @Just Some Fuckhead: I think that it was probably just the standard crappy student insurance the offer all students. It is attached to the student status and not the GTA position so that exception won’t apply.

  41. 41
    Stefan says:

    Weird, because it was my understanding an adult child couldn’t qualify for their parent’s insurance if they could get health insurance through their employer.

    I’m not sure that being a TA would really qualify as having an employer. It’s part-time work.

  42. 42
    Redshift says:

    @gene108: Yes, and “rationing” is evil unless it’s rationing by ability to pay, in which case IGMFU.

  43. 43
    jonas says:

    @Muley Graves: Not quite. Insurers want a *big* pool of people, preferably healthy ones. A huge influx of healthy, young people on their parents’ policies paying extra premiums is gravy. They pay in, but rarely does the insurer have to pay out on expensive surgeries or chronic disease care for them. It’s seniors and people with chronic diseases (preexisting conditions) that they would like to unload.

  44. 44
    Martin says:

    @Davis X. Machina: Correct. I don’t think Church Lady’s kid could get health care because of the TA employment, but because of the graduate student standing. Many (most now?) states require that health insurance be offered to graduate students. Many states now require that undergraduate students be insured, either under their parents or through a group policy offered by the university.

    PPACA is completely orthogonal to these, as far as I know, but students were a known class of people that PPACA would not significantly affect because there are so many other efforts to either require or guarantee them access to insurance. Either the insurers were going to get them from the university group policy or the parents policy, so there might be some shifting, but no significant increase in the number of people to insure. That’s why the age limit was significant because it pulled in all of these recent grads that lost multiple opportunities for insurance – at the same time the student guarantees fell away, so did the ability to ride on mom and dad’s policy. So the gains are mostly in the 22-26 population, along with the non-college bound.

  45. 45
    Davis X. Machina says:

    @Martin:

    So the gains are mostly in the 22-26 population, along with the non-college bound.

    A demographic that would be unlikely to encounter employer-based health insurance anyways, if I recall my semi-unemployed-bartender-cum-landscaping-classics-major youth….

  46. 46
    Just Some Fuckhead says:

    @Stefan:

    I’m not sure that being a TA would really qualify as having an employer. It’s part-time work.

    Maybe, but typically health insurance isn’t available to part-time workers and health insurance is clearly available here. I read the ACA provision as “health insurance not otherwise being available”, not “unless you opt out of something available” or “the something available wasn’t to your liking.”

    Does a Walmart employee get to opt out of Walmart’s shitty coverage if they can get better coverage under their parent’s insurance? Not to my understanding.

    I dunno. Sounds like exploitation of a provision designed to make insurance available to those who would not otherwise have it available. The provision does expire when the exchanges come online, right?

  47. 47
    gex says:

    @Martin: They want to reduce the pool in certain ways. They don’t want high risk/high cost people on their roles. The rescission problems we were having wasn’t them trying to expand coverage, for crying out loud. It’s pretty obvious they’ll take as many people they can who cost way less than they pay in premiums.

  48. 48
    JCT says:

    @Davis X. Machina: Not to mention the high yield when you pick up early medical problems in this cohort.

  49. 49
    gex says:

    @Redshift: Remember how in the late 90’s, early 2000’s the market monkies would cheer every quarter about the billions in profits that United Health care earned?

    You are spot on.

    I never understood how people were complaining about health care costs rising while celebrating the gross profits of UHC. Sad they couldn’t make the connection.

  50. 50
    Elie says:

    Nothing has changed. Its a battle (changing health care AND its surrounding economics)that is going to take years and years and is directly linked to our whole attitude about the role of not just government but bring back the rights of citizens. The opponents will argue and do anything to defeat these changes and will at times take mutually exclusize and opposing positions as necessary. Healthcare dramatically links the social and the economic and will be fought in both spheres.

    Expect the crazy, the inconsistent and many many schemes to derail or confuse…We have a lot of fat little piglets on the teats of American healthcare and they want to stay fat

  51. 51
    Martin says:

    @Redshift:

    Uh, what bullshit is this? Insurance company overhead and profits, along with the fact that it’s not profitable to pay for things like preventive care because the profit is likely to go to a different company, are a large part of the additional costs we pay relative to other countries.

    Well, I know this from talking to many of those executives.

    Insurers, like pretty much every business out there, is terrified of a shrinking customer base. Unless you’re one of those super premium luxury brand with sky-high margins, you want an expanding customer base. The problem is that insurers, due to the rapidly rising cost of healthcare (which they’re paying) and the somewhat expanding use of healthcare (which they have some better control over) have been caught in a cycle where their expenses are increasing faster than their ability to generate revenue. Many of the people that they want on the rolls (healthy people) stopped buying insurance as the premiums grew, figuring that they’d be better off using that premium money for the few small expenses they had. So their ability to attract new customers was lost, and they resorted to cutting expenses (denying payment) and dropping customers. That’s a terrible pattern for any business to be in, and insurers know this.

    Early on, Obama’s plan was entirely focused on cost containment, because early on it was entirely focused on reducing the governments health care costs. The WH wasn’t going to focus initially on expanding coverage or on reducing out-of-pocket costs for you and me. Their argument was that if they can’t get Medicare/Medicaid in check, then they’ll never be able to do anything for anyone else. So the focus was on getting Medicare/Medicaid down in cost. The mandate ultimately became part of that effort as it became clear that a big chunk of Medicare spending was on deferred care for people that dropped their insurance when they retired before age 65.

    Under this strategy, most everything was focused on getting down drug prices, equipment prices, eliminating the Part C subsidy, and streamlining and modernizing what the government pays for treatment. The insurers would be left largely alone in this effort. They’d benefit from the cost savings by having the Federal government negotiate prices down in areas where the insurers are too small and too balkanized to do it successfully. Drug prices are the big one there. In exchange, the insurers wouldn’t fight the Part C subsidy going away, they’d accept being mandated to provide more preventative care (which most of them want to do anyway) and other regulation on rescission. And they’d get a larger pool, some of which were people they had dropped for being too expensive, but most would be healthy people paying premiums and not incurring significant costs, at least for a while.

    The insurers weren’t thrilled with the plan, but it was quite honestly the only plan they had. Their business is dying. They know it’s dying. They know it’s going to collapse under its own weight at some point. Now, more of the for-profit guys were fighting this. Their business model, particularly the national insurers is different enough from the non-profits, that this was too risky. But the non- and not-for-profits, and in particular the regional non-profits, were all for this. They’re not profit driven in the way that you expect – they’re much more revenue and balance sheet driven, and the earlier outlines of PPACA promised to give them a lot of the stability they needed back, at the expense of profits that they only returned to policy holders anyway.

    It was the summer of 2009, when Dems (like Hamsher) decided that the insurers needed to go entirely, and started to get some real traction on the idea, combined with Republicans stirring up their base against the plan that insurers started to abandon the WH plan. They’re not going to support a plan that puts them out of business, but Obama was counting on having the insurers on board to help push health care costs down.

    What the Dems fucked up on is that 94% of the costs of healthcare is outside of insurance companies. Focusing on that 6% at the expense of the 94% is simply stupid, when the opportunity existed for the insurers and the government to team up and seriously make a dent in expenses. The plan was to do that, and then see what resulted. If after that the insurers were being greedy and not helping to expand coverage, then a 2nd bill would tackle the next biggest problem. For a while, the WH and the bulk of the insurance industry were in agreement, but single payer and to a lesser degree the public option killed that. The GOP gave them political cover to bail out.

    Dems were fighting the battle but ignoring the war.

  52. 52
    RalfW says:

    This is how the GOP has “governed” in the past decade in Minnesota. I hate to give any credit to T-Paw, but in this he was dastardly clever: he just went ahead and brazenly moved policy, decided which bills to sign and veto based entirely on his own internal (or donor advised) compass.

    To hell with what voters say they want. A big f’off to any poll that contradicted his decisions.

    I guess people 1) saw him as decisive and thus studly and worthy of leadership, 2) believed the fluffy lies he spun weekly on the radio that reflected moderate policies that people liked but in no way matched up to what he did, and 3) the media mostly didn’t grock this deceit.

    And, like, half of all voters are low-information people who thought T-Paw playing hockey was enough for them anyway.

  53. 53
    Paul Ryan says:

    Hundreds of thousands of young adults are taking advantage of the health care law provision that allows people under 26 to remain on their parents’ health plans, some of the nation’s largest insurers are reporting. That pace appears to be faster than the government expected.

    Away with this welfare hammock!

  54. 54
    Martin says:

    @gex:

    I never understood how people were complaining about health care costs rising while celebrating the gross profits of UHC. Sad they couldn’t make the connection.

    UHC in a good year would bank about $1.5B. In a bad year, they’d lose about as much. The US is now consistently overpaying the health care system (everyone outside of the insurers) to the tune of $1T.

    Where do you think our attention should be focused?

  55. 55
    Bulworth says:

    so about 600,000 have insurance today just from this one provision of HCR.

    Runaway government spending! Debt crisis! Welfare hammocks! Don’t Tread On Me!

  56. 56
    Sly says:

    What changed?

    Nothing. Policy is, was, and always will be for nerds. Nerds that you actually have to pay to do research. When news outlets stopped being the vanity / public service projects of monied interests and shifted to a for-profit model, the idea was that media outlets could cut specialist “beat” reporters who concentrated on one specific field and simply farm out that expertise to contributers.

    The result is that we have media personalities who need simple narratives upon which they can cling to provide a thematic basis for their reporting. They need this because most modern media personalities are really, really stupid. One of the major functions of modern political parties is to provide these narratives, and its something they do rather well. The correct narrative is decided by perceived electoral success of the political party that advances that narrative. Newsmedia is, by its very nature, a reactive institution.

    So when you say we had a consensus on health care policy a year ago, I can’t help but disagree. We had paid political consultants and strategists offering up choices for the news consumer, not experts in health and welfare economics.

    GOP Strategist says A, Democratic Consultant says B. Controversy! Let’s see if we can flog it for five minutes. Five minutes are now up. Cut to commercial. Please invest in Oppenheimer Funds and lease an Audi.

    Modern newsmedia exists purely to sell you shit that you don’t need and likely don’t want. Everything else is simply filling otherwise dead air or blank pages.

  57. 57
    WereBear says:

    @Sly: They need this because most modern media personalities are really, really stupid.

    Yes. Feature.

    Smart people watch TV less and less. So smart people appear on TV less and less.

  58. 58
    gene108 says:

    @Martin:

    Are you implying I shouldn’t get a CT scan on the latest CT-Scan-3000-XL machine, when an ultra-sound work just as well for me?

    I’m sorry, but if a hospital doesn’t have the CT-Scan-3000-XL, why should I go it over one that does have the CT-Scan-3000-XL machine? Why shouldn’t a hospital keep buying up new equipment to make sure they don’t lose a patient to the hospital that does get the CT-Scan-3000-XL?

    It’s not like perpetually buying in medical equipment – in a sort “arms race” – will drive up health care costs.

  59. 59
    mpowell says:

    What the Dems fucked up on is that 94% of the costs of healthcare is outside of insurance companies. Focusing on that 6% at the expense of the 94% is simply stupid, when the opportunity existed for the insurers and the government to team up and seriously make a dent in expenses. The plan was to do that, and then see what resulted. If after that the insurers were being greedy and not helping to expand coverage, then a 2nd bill would tackle the next biggest problem. For a while, the WH and the bulk of the insurance industry were in agreement, but single payer and to a lesser degree the public option killed that. The GOP gave them political cover to bail out.

    Where is your 94% coming from? The loss ratios on health care insurance companies are frequently under 80%, which is why this was part of the debate (and got in the bill from what I understand). Comparatively, I think medicare’s loss ratio is over 95%. Now, some of that is probably paying people to catch fraud. But a lot of it is paying people money to deny claims. Which also drives up provider costs as they fight back. The insurance companies aren’t the only probably with our health care costs, but the estimates I’ve seen suggest that they add a 30% overhead.

    Long term, provider costs have to be brought under control. But private insurance companies are also a part of the problem.

  60. 60
    Percysowner says:

    In regard to the TA, I think she is in the same position as my daughter. The law says children up to age 26 may be covered under their parent’s insurance unless their JOB offers them coverage. My university requires every student to have health insurance, either through their parents or through a school policy, BUT that policy is not tied to my daughter’s job. She has never been offered insurance through her job (TA’s are part time only and only full time employees qualify for insurance, per the insurance company BTW, the employer doesn’t set that rule). So the TA is just fine staying under her parents policy.

    If she graduates and gets a job that offers insurance, even if it is less valuable than her parents then she has to take that and be dropped from her parents policy. So kids under 26 shouldn’t work for McDonald’s that offers a “health insurance policy” to their employees that is worth than nothing, because they will be in deep trouble.

  61. 61
    Martin says:

    @mpowell:

    Where is your 94% coming from? The loss ratios on health care insurance companies are frequently under 80%,

    Total spending, rather than just insurer spending. You’re ignoring all of the out-of-pocket costs and higher costs that state and federal programs face.

    Only 6%-7% of all health care spending is in administration. About the same goes to investment in facilities and equipment. About 30% of all spending goes to hospital care. Another 20% or so is physician and clinical services. Prescription drugs are about 10%. Nursing and home care about 10%. And you get a bunch of stuff like dental and odds and ends each coming in around 5%.

    And MLR is a dangerous number to focus on too much as it’s merely a balance sheet number. Accounting is notoriously unreliable as an indicator of what’s really going on. For example if an insurer is moving into a new market, they need to build up their statutory reserve to ensure that they can pay for services in the event of a disaster or sudden loss in revenue. Should premium dollars that go to the reserve gets counted in the MLR given that those dollars when paid out may pay for administration? Maintaining a high MLR would then require minimizing the rate at which those reserves can be built. When insurers are facing higher and higher future obligations due to care expenses growing faster than inflation, they need to build their reserves faster to compensate, so they report lower MLR.

    Medicare isn’t reporting a MLR. They’re reporting an administrative overhead, which is part of the MLR, but not all of it. Even in 2009, Medicare brought in $698B in revenue, and paid out $564B in claims. In a simplistic MLR calculation, they had a loss ratio of 81%, about the industry average. The difference is that almost all of that ‘loss’ went into the reserve whereas even in the best case with an insurer, a lower percent gets reinvested. (That administrative cost for Medicare excludes fraud, which is another 1% or so.) And insurers and HMOs have different rules for MLR. In a pay for service scenario, the main recourse for excess premiums is to dump them into the reserve, or to refund them for a not-for-profit. For an HMO, they can hire some doctors, or build a new lab, or buy that CT-Scan-3000-XL to replace the year-old CT-Scan-3000-L. The VA has a pretty good MLR because being a single payer plan, they control their expenses relative to a fixed revenue, rather than having to do it the other way around as insurers do.

    I’m not trying to make excuses for insurers here – some are truly wasteful of their policyholder’s dollars, but the reality is much more subtle than the top line MLR vs Medicare numbers would suggest. In an apple-to-apple comparison, the insurers appear to only have about 2x the administrative overhead (which includes profits) of Medicare/Medicaid. Now, that’s not nothing – it’s billions, and it’s worth paying attention to – but compared to where the big money is being wasted, it’s pretty small change.

    Bottom line, health insurance profit margins run around 3%-4%. Drug manufacturers are 15%-20%. Drug delivery, also around 15%. Healthcare IT around 10%. Home healthcare, about 10%. Medical labs, 8%-10%. Medical equipment 8%-10%.

    Insurers are basically just a strange form of retailer. Their costs are overwhelmingly driven by the upstream costs of those that are supplying the healthcare. Hospitals and medical groups have some of the same problem as their costs turn into the drug and equipment manufacturers revenues and profits, and so on. Truth is that the health insurance guys are about the leanest pool of profits to target relative to the whole.

  62. 62
    Martin says:

    @gene108:

    It’s not like perpetually buying in medical equipment – in a sort “arms race” – will drive up health care costs.

    Actually, this is the danger of MLR minimums, particularly for HMOs. If an HMO is about to report a MLR that is too low under PPACA, their simplest solution isn’t to refund premiums or readjust the cost of policies, it’s to go and spend that money on a new CT scanner or something else. It’s really easy for HMOs to hit their MLR numbers. Much harder for insurers, which is why so many insurers have attached HMOs so that they can shift dollars and expenses around. They’ve been rewriting the rules on what should be counted in the MLR under PPACA to help smooth out some of those problems, but this is ultimately all accounting voodoo, and any accountant should tell you not to rely on it too much.

    Rather than focusing entirely on profit margins and MLR (not saying they should be ignored), ultimately we need to focus on spending relative to GDP and what we’re getting for our money.

  63. 63
    alwhite says:

    Interestingly, my provider is making it much more cumbersome to insure my family. I now have to provide birth certificates for each child, my marriage license and the first page of last years 1040. They say I will have to do this every year from now on.

    SO you know that will really help bring down the costs as they deal with all this pointless paperwork. I wonder how many people will not have documents “good enough” for them?

  64. 64
    singfoom says:

    @Martin: I’ve really enjoyed your comments on this thread, very informative.

    So it’s complicated. Well that just doesn’t play with us American voters. Do you think you can compress it all into a single sentence using small words? /snark

    What’s your opinion on the change from fee-for-service doctor compensation vs. the salaried model? I know from what I’ve read that one change there leads to a lot better outcomes from a financial perspective…

  65. 65
    alwhite says:

    As for “what changed”. The public was even more in favor of HCR back in 92, it was a big part of the Clinton win. But then the Wurlitzer was cranked up to full steam & BANG! Same thing here except the Wurlitzer failed within the time frame allotted (actually I am not sure it really failed, we’ll see about that). But it did flip the House & the constant tune, plus the lack of immediate impact from ACA have the effect that the majority are unsure or against it now.

  66. 66
    Elie says:

    @Martin:

    “ultimately we need to focus on spending relative to GDP and what we’re getting for our money.”

    And that is where it gets tricky. Getting “more” for your money may actually be about getting less. If getting your treatment with the new fangled X-4000 results in no better long term outcomes than the cheaper X-2000, then that would be good right? Or do we know? So much of “good health” and good outcomes are related to social and economic factors. People with friends and good jobs tend to be healthier no matter how much equipment or medical care they have access to. Also, who defines whether what we are “getting” is adequate or not? Medical care has been improving outcomes while “doing less” commonly as understanding of disease improves. No one stays in the hospital after uncomplicated knee replacement more than a couple of days anymore. Of course, doing “less” may not actually cost less in terms of whether we are now paying more for the atraumatic instrumentation and other gadgets, but one can always hope.
    Also, medications can sometimes be a substitute for certain mechanical or technical interventions. Some of these drugs may be expensive, but may still be less in cost compared to the alternative medical treatment without the drug. Too much of the time though, people just look at the bottom line category of costs without taking that into consideration.

  67. 67
    Martin says:

    @singfoom:

    What’s your opinion on the change from fee-for-service doctor compensation vs. the salaried model? I know from what I’ve read that one change there leads to a lot better outcomes from a financial perspective…

    Well, I think it leads to better outcomes from a care perspective. In a fee-for-service model, you actually do have some room for competition which can help pull down costs, which you mostly lose in the salary model. But even the best physician cannot fully put the economics out of their head when providing care under a fee-for-service model. It’s always there. Anesthesiology is a pretty good example of perverted incentives that the pay-for-service model provides.

    But the counter argument comes in two areas. One is that physicians on salary aren’t saving us much money, mainly because their salaries are so fucking high to be competitive with fee-for-service. Unless we can get the salary competition in check, ideally by turning out many, many more doctors, salary isn’t going to save us a whole lot. The other argument is that salary works well in high density areas like cities, but not for rural areas. And rural areas are a big, big problem in cost containment. We don’t want extra hospital beds and equipment soaking up our health care spending. We want salaries to at least keep a ceiling on payroll costs. But out in North Dakota, you need hospitals a certain distance apart. You might be able to serve the entire state population with 4 major hospitals, but if it takes 2 hours to get to the hospital because it’s so far away, then you’ve screwed up care for the sake of efficiency. Rural areas need a different model than urban ones. They need more low-volume care facilities that have full services. Those are going to be expensive because there’s no economy of scale there – more beds will be idle, more staff idle, equipment not used, etc. And you can’t say ‘oh, well they only had 4 heart attacks there, so let’s do away with the cardiologist’. When you need a cardiologist, you need a cardiologist. A PA won’t substitute. And here is where the fee-for-service model works better. Keeping a physician on salary is going to be very expensive unless you can split that salary across multiple providers, have the doctor rotate and be on call for emergencies. That’ll work if all of the hospitals are under the same administration, but it gets logistically very mess when it’s multiple outfits. Fee-for-service tends to work better here.

  68. 68
    Martin says:

    @Elie: Correct. But, we put the incentives on ‘doing stuff’ rather than on ‘not doing stuff’. I bring up the CA energy market a lot, but it’s a good example of this implemented. Most energy markets are set up so that energy providers make more money by selling more energy. Conservation is their enemy since revenues are their driver. CA flipped this around by creating a system that makes energy companies more profitable by delivering less energy per customer. The state told energy providers that as their customers use less power, they can raise rates in order to split the difference on revenues. (Simplified) half of the lost revenues go back to the customer and the other half go back to the energy company purely as profit. This turned energy companies from being the opponents of conservation into being the funders of conservation as it’s far cheaper for them to give me a rebate to buy CFCs, knowing they’ll get half of that energy revenue back later, than it is for them to build power plants so they can all of the revenue.

    We need to approach health care similarly. The incentives need to be on how long care providers can keep us healthy and out of the hospital, rather than on how long they can keep us in the hospital. Ironically, the insurers that we’re so eager to attack already have this incentive, but not the care providers that we constantly give a free pass to.

  69. 69
    Resident Firebagger says:

    What, more customers for the insurance companies? And young customers who, for the most part, won’t get out what they put in? And almost three more years (if ever) till we see the rest of the awesome PPACA?

    Republicans are, of course, awful, awful people. But you should still be disgusted that the bar is set as low as the PPACA in the first place…

  70. 70
    kay says:

    @Resident Firebagger:

    And young customers who, for the most part, won’t get out what they put in?

    This is such a stupid argument, for people who claim to want single payer. It comes right back and bites you in the ass if you’re claiming to be a liberal, which is why conservatives use it.
    How do you think Medicare for All works? It works because less sick people pay into a program that subsidizes sick people. That’s how pools work.
    Keep telling young people they shouldn’t pay into a program because they’re healthy, go crazy, but at least be aware that you’re arguing the conservative side on any program that doesn’t immediately benefit them.

  71. 71
    gene108 says:

    @Martin:

    any accountant should tell you not to rely on it too much

    Hehehe..I’m an accountant…I know how to rewrite reality with journal entries :-)

  72. 72
    Elie says:

    @Martin:

    I agree and would argue further that some of this needs to be out of the compensation model altogether. Who do we pay for understanding how having more social ties and strong personal affiliations will keep you healthy longer? Its out of the realm of how medicine usually practices and the psycho-social is not generally included. I believe that we have to “demedicalize” some of our health/social care and allow other provider types to help us stay well. These would include accupuncturists to herbalists or even some form of spiritual guides… I am not trying to champion “quackery” but I think that there is a lot beyond typical “allopathic” medicine that can keep us healthier and happier at decreased cost.

    Now I have no illusion that the docs will not necessarily like that it could mean (Oh no!), decreased incomes for many of the docs, but perhaps include a number of other practitioners in the balance.

    Uwe Reinhardt, the medical economist wrote many years ago about the transfer of wealth that we provide docs and other providers to support their high end lifestyles and that this was costing us a lot of money. I am cool with some of that as their training is expensive and what they do requires expertise — its just what of their services are core and need to be reimbursed at those higher levels and what could be done more cheaply (and possibly effectively) by other practitioners.

    Also, if you want to get a little taste of the wave of the future, there are some companies now that are offering electronic medical records, practice management and some levels of online physician care (Hello Health is one). Not having to “see” the doc face to face all the time might really scale down costs even more…

    Just some thoughts and thanks again for your many interesting and informative comments, Martin.

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