Do you think healthcare will pass?

[Vepres]

If Wyden's amendement passes then it will be a bigger victory than public option.

I wasn't aware of this amendment, but kudos to Sen. Wyden! He's been one of the better Democrats in the Senate lately.

[Torie]

Would not the Wyden amendment increase the cost of employer plans, because allowing its participants to shop around would tend to cause a selective drain of the youngest and the healthiest participants, raising the cost for the remaining relatively older and more sick?  Just asking. Health care is a hideously complex issue!  But then I suspect most of us knew that.

 In any event, young folks are nice fodder for lowering the health insurance cost for us olds, bless them.

[Beet]

The Politico has a downbeat article on the numerous issues still to be worked out:
http://www.politico.com/news/stories/1109/29798.html

The Atlantic has a surprisingly upbeat article on the cost curve side of the Senate bill:
http://politics.theatlantic.com/2009/11/a_milestone_in_the_health_care_journey.php

[Sbane]

Would not the Wyden amendment increase the cost of employer plans, because allowing its participants to shop around would tend to cause a selective drain of the youngest and the healthiest participants, raising the cost for the remaining relatively older and more sick?  Just asking. Health care is a hideously complex issue!  But then I suspect most of us knew that.

 In any event, young folks are nice fodder for lowering the health insurance cost for us olds, bless them.

Why couldn't older folks also shop for a better insurance plan under the exchange? The thing about the exchange is that all plans will have to have a certain amount of coverage so it's not as if the young can buy some extremely lean plan at a low cost. And I do believe they are trying to end price discrimination based on the health of the patient so an insurance plan wouldn't cost that much more for them than anyone else.

[Torie]

Would not the Wyden amendment increase the cost of employer plans, because allowing its participants to shop around would tend to cause a selective drain of the youngest and the healthiest participants, raising the cost for the remaining relatively older and more sick?  Just asking. Health care is a hideously complex issue!  But then I suspect most of us knew that.

 In any event, young folks are nice fodder for lowering the health insurance cost for us olds, bless them.

Why couldn't older folks also shop for a better insurance plan under the exchange? The thing about the exchange is that all plans will have to have a certain amount of coverage so it's not as if the young can buy some extremely lean plan at a low cost. And I do believe they are trying to end price discrimination based on the health of the patient so an insurance plan wouldn't cost that much more for them than anyone else.

Sbane, here is an article that CarlHayden found on the issue of inter-generational transfers.  You should perhaps be a bit more suspicious of this medical services will be better and cheaper for everybody (except those profit gouging insurance companies (as opposed to the drug companies which have lobbied their way through this relatively unscathed)) free lunch stuff that many of the Dems are hawking.  That in my opinion is very disingenuous marketing.

[anvi]

Anyway, some kind of health insurance reform legislation will pass.  The only question seems to be whether it will have a public option in any form or not.  If they can't get a public option through in the Senate, they have to pass the rest of what they have.

Torie,

While I agree with that article's complaint about intergenerational transfer, the article also completely passes over, in its repeated reference to 18-24 year-olds, the facts that the bills before Congress would allow single children to remain in their parents' family plans until the ages of 27 to 28 and that they also shave benefits off of senior care by gutting Medicare Advantage subsidies.  But, it must be conceded that there are still lots of intergenerational problems with current plans.  (Not for nothing, but none of this would be a problem if we operated on a multipayer privatized non-profit financing Bismarck model like Japan does: Japan has a much larger rapidly aging population than the U.S. and the system exhibits almost no rationing of care, but still holds its annual GDP expenditures on health care down to about 8%.) 

I agree that the health insurance company profit margins are not the issue.  I do think that the advertising and administrative expenses of for-profit health insurance companies cost us 20 plus cents on the dollar for health care coverage, and that alone proves that for-profit financing of health care is monumentally inefficient.  Those administrative costs largely go to rationing who gets coverage, which adds fundamental injustice onto cost inefficency; we should not be rationing who gets covered, but what gets covered.  If all we do is mandate coverage for everyone in a for-profit financing system, utilization will dramatically increase and costs will continue to spiral upward.

Finally, I don't see how the current reform bills would compromise drug company research.  Under current law, drug companies get substatial tax breaks, foreign tax credits, research and experimentation exemptions and expensing of research expenditures from the government.  What, in current legislation, changes any of that?

[Torie]

Good comment anvikshiki, but don't you think that there will be substantial administrative expenses in administering a government plan?  And if one gets away from individual evaluations and pre-existing conditions as part of premium price setting, don't you think that will reduce the administrative expenses of private plans in any event? 

And as for drug companies, yes they largely escaped having to slash the prices of their drugs, so yes, they are largely unaffected by the proposed legislation, which is what I suggested I think.

[anvi]

Torie,

I do think that administrative costs for the public option will be substantially higher than they are for Medicare.  Medicare's administrative costs come in at around 1.5%.  The public option legislation drafts mention the plan's goals of ensuring quality care for chronic diseases and other things, and utilization management of this kind will certainly boost administrative costs.  Administrative costs for the public option are currently projected by CBO analysis to rise to at least 8% if not more.  If the public option on the other hand reduces utilization management tools, then its administrative costs will be lower, but its high payout rate for claims will jack up its premium rates to levels comparable to private market premium rates.  I also agree with you that the guarenteed issue mandates of current health care legislation would eliminate a lot of actuarial work in private companies and this would lower their rates some.  All in all, the public option's administrative costs will still be at least a good few percent lower than standard administrative expenses in the private market, largely due to the fact that the public plan will not have to market itself as much, will not have to pay executive salaries and will not have to produce profits for stockholders.  These lower costs will exert some downward pressure on administrative rates in the private market, and that would be a good thing.  But premium rates for the public plan might end up being roughly comparable to private market rates in the end.  Moreover, since current legislation stipulates that the public option pay providers no less than Medicare and no more than average private plans, providers will be able to deal with a public option without too much, if any, cost-shifting to other insurers, especially with universally mandated coverage. 

I think, to be honest, too much is made of the public option, by both its proponents and detractors.  Proponents hope it will be a squeeze-play on private insurance, and opponents fear it will herald a government takeover of health care, and I think the evidence shows that both of these expectations are just wrong.  The eligibility requirements of the public option restrict the number of people who will sign up for it to 1. individuals or families making less than 400% of the poverty rate, 2.) active and retired military, who are already on cheaper plans and won't sign up for it, 3.) small businesses with less than 100 employees (three years after the public plan is up and running) and 4.) people whose employer-provided health coverage costs them more than 12% of their anual income.  In other words, the public option is specifically designed to offer competitively priced health insurance to low-income citizens.  Current CBO projections estimate that in the end only about 6 million people will sign up for the public plan by 2019, with about 30 million more currently uninsured customers signing up for a private plan competing in the envisioned health insurance exchanges.  That's five new customers for private plans in comparison to one new customer for the public plan--not much of a squeeze play.  Compared to unified (so-called socialized) health care systems in other countries, the public option strikes me as very small potatoes. 

Speaking for myself, I much prefer a Bismarck-model health system to ours; as far as I'm concerned, health care financing should be multi-payer and non-profit.  I gained this attitude from living for three years under Bismarck systems in Germany and Japan.  Absent a unified health care system in the U.S., nothing anybody comes up with is going to save us huge emounts of money in health care.  But, if we can come up with ways to save a little more than we are now and cover everybody, that's certainly an improvement over what we've got.