Talk Elections

http://politicalwire.com/archives/2012/05/11/health_care_game_changer.html (http://politicalwire.com/archives/2012/05/11/health_care_game_changer.html)

The Obama administration will soon announce $1.3 billion in rebate checks to nearly 16 million Americans from health insurance companies.

Mark Halperin: "From almost the moment the Affordable Care Act (a/k/a "ObamaCare") was signed into law, the administration has been playing defense... But the rebate provision of the law -- the fruits of the so-called '80/20 rule' -- is about to kick in big time, as millions of Americans receive rebate checks or premium reductions from insurance companies who have failed to spend enough on patient care. This cash could be a true game changer in public attitudes about whether the law actually is beneficial and good public policy."

So, everyone gets 60€.

Not even enough to fill up my car (maybe Americans can fill theirs twice) ... :P

Now President McCain is sure to win reelection after the Bush administration's "let's send everyone a check!" policy totally worked.

Yes, I must give credit to the Dems for structuring the law so the ripe hanging fruit in the Garden of Eden can be so easily plucked before the election (not only this but that you can hang with your parents' policy that sbane is want to coo about), with the thorns saved for after. But apparently voters see the thorns behind the fruit anyway, even if they might not be the thorns that they should really be worrying about.

Yes Torie, keeping those who are in internships or graduate school on health plans where their costs are lower due to employer contributions is a good thing. Employer contributions into health care for everybody is necessary for the system to stay solvent. Whether you do that with payroll taxes followed up by subsidization of care or through schemes like keeping people on their parents plans till 26 is your choice. I prefer the former since it helps out everyone and not just those whose parents have insurance, bu the Republicans haven't proposed that have they? And speaking of which, have the Republicans proposed a plan that will ensure most of the uninsured get insured?

Well, it's not like they're going to start supporting ordinary Americans any time soon.

Mittens is chatting about insurance premium subsidies. He will need to flesh something out. But yes, the Pubs have not been particularly helpful on this. Granted I am not that familiar with the Ryan plan, or what it encompasses, but I think it just caps stuff, probably because the details of how to achieve some cap in real life through triage is just to politically toxic at the moment.

In any event, sbane, you are an adult and should have your own plan, with subsidies if impecunious (obviously temporary in your case). Tying adult kids to their parents' hip does not fit into my sense of aesthetics.

It's not just about me. Anybody who is not getting support from their work is paying more for insurance. Employers pay a lot into the system and anybody without that support is at a disadvantage.  The question is how do we pay for the subsidies. Will it be all from the people as opposed to businesses? Do we soak the rich, or do we institute a payroll tax that hits everyone and employers? Need I mention this will actually help small businesses provide insurance who otherwise cannot afford insurance due to their inability to negotiate rates as opposed to large corporations. Also Obamacare did institute exchanges where employers can come together to provide insurance at cheaper rates. Another good part of Obamacare that should not be thrown out with the bath water.

I'm sure this will sway the Supreme Court with their gold-plated health insurance coverage.

Does tying health care into employment fit your sense of aesthetics?  It doesn't fit mine.  The system worked somewhat when we had a semi-feudal employment situation where people tended to stay at one principal job for most of their life, but the lords want to clear the highlands and not have to bother with the well-being of their serfs any more.

I also think in theory getting away from the employer provided healthcare system is a good idea, but we must realize employers pay a lot for healthcare. How do we make that up if we move away from this system?

didn't you say your parents paid for 8 years of college?

Some form of individual subsidy for low-income and/or high-risk people.  For people who are well enough off that all they need is catastrophic health insurance for non-routine care, why should anyone else be paying for their health care?

Yes, they did, college, business school and law school (and I know I am very fortunate, yes I do), with their own money, not someone else's through statutorily imposed non means tested cross subsidies.

Money is fungible. If the government mandates that people will be paid more in the form of mandatory health insurance, this will translate into lower cash compensation over time. But since the numbers involved are fairly minimal no one's going to notice.

In the case of being on a parents' plan until 26, without having to pay a market based premium, that means somebody is subsidizing that discounted premium, in this case other insureds, to wit a cross subsidy. I agree with your post of course as to the effect of requiring folks to have a certain level of coverage through the vehicle of an employer plan, as opposed to an individual plan, where the money goes into the employee's pocket, and then out the other to pay the premium.

Anyway, there are two issues here - one is requiring folks to have insurance with some minimum coverage to avoid/mitigate the moral hazard problem, and the second is the cross subsidy issue. Conflating the two leads to confusion.

So you are saying that kids who are covered under their parent's plans are being subsidized by others who are insured under that group plan? You do realize family plans cost more than individual plans?

I don't know why you are having such a hard time understanding this since it's quite simple, but the subsidy for the premium is coming from the company and is a part of the compensation package. There is no cross-subsidization of the premium costs. Where there is cross-subsidization, which will occur in any health plan, is from the healthy to the sick. So a healthy 24 year old's premium (subsidized in part by the company as compensation for their parent) will be paying for the sick olds who work for the company and are part of the same group.

It is not possible to have a regulation that simultaneously makes consumers, insurance agencies, and health care providers *all* better-off.  If having children on their parents' plans until age 26 made everyone better off beforehand, there would be no need to mandate it because everyone would have that sort of health insurance already.

But what about the sick 24 year olds?  Granted, there aren't many of them, but since being covered under your parent's coverage is optional, the sick 24 year olds are far more likely to take advantage of that than the healthy 24 year olds.

When you can keep you kids on a plan until 26, paying less than if the kid got his own insurance, because the company has to do it, and cannot charge a market rate for it (if it could, then of course why not?), that sbane my man is a subsidy which someone is paying, in this case other insureds. And then when you hit 26, the field reverses, and you get to subsidize others (e.g., moi!) as opposed to you/your parents being subsidized. Wonderbar!

So kids in employer plans are subsidized right now by others who are insured?
I don't think you know what you are talking about here. Nobody pays market rates when they are covered by their employer.....

Maybe this will come as a shock to you, but employers on average pay about 65-75% of premium costs.

Presumably the employers pay market rates, and if the law does not allow insurance companies to charge market rates for employers due to kids up to age 26 being covered, then somebody else has to pay.

You do get the point, that if insurers could offer plans at market rates that cover kids up to age 26, and there was a demand for it, then obviously they would offer the product. But I think Obamacare forced insurers to cover kids up to age 26 without a premium increase, which means to stay in business they must get the revenue from elsewhere. There is no free lunch!

Yeah, you don't get it.....it didn't force insurers to do anything. Companies on the other hand were mandated to cover adult children if they already provided healthcare to dependents. So the same plan that allowed kids to stay on the plan till they were 19 or until they got out of college (btw, why shouldn't grad students be covered then?) would have to be extended up to age 26. Meaning the parents would be paying a part of the premium, with the employer covering the rest. And of course it would still be purchased at market rates from the insurer. Employers wouldn't be allowed to charge more for an adult child than those under the age of 18, which is where you are getting confused I suspect.

Also I seem to have found the reason why individual health plans are more expensive. Just way more administrative costs. When insurers cover individuals, they want to make sure they aren't taking on a sickly and so they spend way more on ensuring that. Thus administrative costs are way higher than they are with group plans (where administrative costs are already much higher than the global standards). So even at market rates, a young adult in the individual marketplace would end up paying more than they would if they could buy insurance through a group. Something Obamacare makes possible just in case you didn't know.

http://www.americanprogressaction.org/issues/2009/03/administrative_costs.html

Isn't this a subsidy, to wit not being "allowed to" charge market rates?  I will take a look at your link. The assumption that with government involvement, "administrative costs" will just magically disappear or at least be slashed, is one that I question of course.

There is nothing approaching a "free market" in health insurance, with or without some of the tinkering Obamacare does around the edges.

Yet this comes close. If there's a market inefficiency or a prisoner's dilemma that is cured with a regulation, it's possible for everyone to be better off.

What are the market inefficiencies, other than those perhaps caused by government regulation, to wit, one cannot shop for plans outside one's own state?

So kids of all ages are being subsidized right now? Because the plan is not being changed, just the eligibility.

Also in Switzerland, where insurance companies are private (not sure if non-profit), administrative costs are about 5% of total costs. For individual plans here, it runs above 20%. You are deluded if you somehow think we have the best health care system, even after excluding those dirty uninsureds.

The scope changed, but not the price. That suggests a subsidy. This administrative cost issue does deserve study of course. I do know that the billing system through insurance companies is expensive and time consuming, and needs to be revamped. In fact the way medical services are delivered needs to be revamped, using HMO's and having telephone consults, and everything getting computerized, and so forth.

If you can find where I ever wrote that the US has the best health care system in the world, putting aside the uninsureds or otherwise, I will give you one of  my properties. I am confident that I didn't, because I think our current system sucks. Cheers.

If you can shop for plans outside your state, all insurance companies will relocate to the state (South Dakota, Delaware, take your pick) that offers it the least regulation and croniest enforcers, and decline to offer policies adhering to higher standards, and that will be all that's in the market. We can rule that out.

The market is inefficient because:
1. Customers are woefully underinformed about what procedures to get and what they should cost, and it's not realistic for them to become experts
2. People often need health care at times where it's an emergency and they can't comparison shop or do their homework
3. The tax provisions which tie insurance to compensation mean that many companies have oligopsonistic power which hurts everyone outside of them
4. Similarly, with health care as a form of compensation, individuals don't have incentive to know or care what things cost
5. People value life and health in bizarre ways that break market analysis
6. Yes, government regulation
7. Adverse selection
8. Moral hazard

Well yes, you need national standards. That goes without saying, if you are going to subsidize premiums up to a certain level of coverage. So you say, well we have found vendors on a competitive bid basis or whatever (probably most of them HMO's, so if someone wants a PPO, they will have to pay the additional cost because it won't be subsidized), who will charge a premium not to exceed X for this level of coverage, which we will subsidize on a means tested basis (well everyone would get a tax credit if they have insurance, but folks of means will be paying more taxes to offset the credit), so now go out there and shop nationwide for the best deal you can get, and hey, if you can get it cheaper, from a company that is sound, and performs well, with the given level of coverage, you get to keep the savings.

Price transparency and performance results, all on line, would mitigate a lot of the lack of information issue. Health care needs to be severed from the employer, and insureds need an incentive because they will be paying out of pocket, to comparison shop. I did not mean to suggest that the current system does not have market inefficiencies, but rather that they are not so much inherent to the product, but more due to dumb rather than smart government intervention or tax policies or the like, or the way we handle the care of lack thereof of the impecunious, and/or feckless.

This should not be about ideology. It should be about pragmatism. Ideology in this realm really, really sucks. I hate it!

Ugh, you must pay for healthcare yearly when getting it through your employer. If your kid stays on your plan longer, you pay more for longer and so does the employer. Again you refuse to answer my question, but do you think the employer paying for a kid who is under the age of 18 a subsidy or part of compensation?

And you think the current private insurance system sucks leaving aside Medicare and Medicaid? That's news to me. I always though you had a love affair with insurance companies. And I don't think they are evil or anything but the way our system is set up imposes these extra costs on them. In our system the healthy might just not purchase insurance if not provided by their employer, which is why insurance companies are paranoid about making sure they know exactly what every applicants health history is. In a group, the paranoia subsides a bit. And if we ensured that the entire population had to join the market, the paranoia would subside further. Hmm, I wonder which bill did that.

As for reducing costs we need to go to a system where payments are made based on outcomes and not services provided. Easier said than done though. And I'm glad to see Romney talking about it. Though if a Democrat came out and proposed it (let's not forget the individual mandate was a republican idea) suddenly all republicans would be against it.

Part of it is a government subsidy because the "compensation" is not taxed (while the poor individual has to use after tax dollars), but otherwise presumably yes, it is a part of compensation. And then suddenly for the same price insurance companies have to keep covering the rug rats until age 26 rather than 18 or 21 or whatever. That suggest a subsidy, because if that rule did not screw them, why wouldn't they just do that on their own? So since all insurance companies have to do this, they recover their additional costs through raising premiums on others.

Anyway, those are my factual assumptions and reasoning. I hope I answered your f'ing question!  :P

Fair point on the tax incentives, something that needs to be changed of course.

The people getting screwed here are the employers providing insurance, not the insurance companies. They have to pay for a part of their premiums for about 5-6 years longer than they would otherwise. They will likely take this out of compensation for the employees or raise premiums for the family plan. I couldn't find much complaining about this on the Internet so I don't know exactly who is so pissed off about this. Seems like you are alone here. :P

As for the insurance companies, I am sure they love this arrangement. More customers for them who otherwise would likely not purchase health insurance unless they needed access to health care.

And my overall point here is that parts of Obamacare are good. Not just the letting adult children stay on plans but the creation of exchanges and letting people form groups to lower costs as well as the individual mandate which is also a good idea. Changes should be made to it but the whole thing should not be discarded. Republicans only want to do that for political reasons so they can get credit for health care reform when in fact they were too timid to start when they were in power.

We start anew, and if some parts of Obamacare are the best way to go, then sure. For example, how to deal with the uninsured sicks, and how folks can move from insurance company to insurance company after they get sick, is a hideously complex problem potentially. Obamacare might have some mechanisms that might prove useful.

As to the 26 years old thing, it seems that next to nobody understands the complex cross subsidy issues, except myself and that lawyer Clement who argued that Obamacare was un-Constitutional before SCOTUS, with that being its Achilles Heel legally. :P So your internet anecdote does not surprise me at all. Obamacare makes zero logical sense here for the reasons that I outlined, but then much of what we end up doing doesn't.

You are certainly wrong about insurance companies being forced to cover more people for the same money. Completely wrong.

What did Clement say btw? I am interested in reading or hearing that. Which day of the oral arguments was that?

I still don't understand why I am wrong, but whatever. I am just obtuse I guess. But I explained my reasoning.  In fact I think that was one thing that was mention by Anthem in one of their rate increase letters - the mandatory to age 26 thing. I guess it could be researched.

I have to run now, but I will discuss Clement later. I think I have some posts up about it, which you might do a search for. Once you have cross subsidies, you can't have a clear limiting principle to the degree of the erosion of what remains of the limits of the reach of the commerce clause is the gist of it. Without the cross subsidies, I think you can as to the mandate, even though the solicitor general was too incompetent to explain that, and Clement clearly was not going to help him. Clement was ready to pounce on the cross subsidy aspect of the mandate, like a cat near a big fat wounded bird limping along on the ground. That left poor Ruth Bader Ginsburg muttering well, social security has a cross subsidy too, and yes it does. But guess what?  SS is a tax!  Game, set and match.

Oh I remember that, but that was not dealing with keeping adult children on their parent's insurance, but rather cross subsidies from the young who purchased their plans to the old.

Also it looks like if you have an individually purchased family plan, insurers would be required to keep on your kids until the age of 26. Of course you would still be paying the premium for the family plan so I don't see what the problem is. If covered by your employers, you and the employer would be paying the premiums on a shared basis.

This is what is confusing you I think....this is what the department of labor says.

https://www.dol.gov/ebsa/faqs/faq-dependentcoverage.html

I am not sure what the bolded part means exactly, or its intent. This will just have to be researched as to whether insurance companies are losing money on these 18 to 26 year olds.

I think it means others who are dependent on health insurance from another persons employment such as spouses and children under the age of 18.

What it means is that the people who were kicked off their parent's plan because they were too old but are now eligible to be covered cannot be charged the higher rate that some plans charge if the parent chooses to drop coverage of their dependents, but then seeks to resume coverage.

Ah, thanks for that. So does the requirement to cover kids up to 26 years of age a burden on insurance companies as opposed to those paying the premiums, whether it's just the parent in an individual plan or the employer and the parent in an employer provided plan?

A drop in the bucket compared to some real game changers:

http://www.huffingtonpost.com/dean-baker/do-liberals-have-to-be-lo_b_940798.html


http://www.deanbaker.net/images/stories/documents/End-of-Loser-Liberalism.pdf


Once a cost is off the government budget, it's automatically cheaper and more efficient right?

I assume it's something similar to Dems not proposing a budget in years because Paul Ryan's and other repubs budget was too far to the right.

I mean why propose a health care bill when Obamacare was as far left as it can go with the complete socialization of healthcare?


One of two things needs to happen in these senerious

1. Either the other party proposes a plan as far left or right as the original plans and they work something towards the middle. Which would involve both parties actually having real plans for both healthcare and the budget.

or

2. Congress continues to be as dysfunctional as it already is.

Is this a joke?

It probably should be infractable to use the word "socialism" or "socialization." These days they are just contentless expletives, and should be inksable.

I mean feel free to explain to me where I'm wrong. I'm not saying Obamacare is a bad thing in fact I do agree with how it adresed the healthcare issue in our country.

By socialization I mean mandating everyone to buy healthcare so because everyone is puting money in so then you can distribute the HC to the whole country.

And let me explain I don't belive socialism is a dirty word I just associate it with the extremeist on the far left because I've seen a lot of similarities between the socialist party specificlly in france and far left democrats.

Democrats I don't associate with socialism, however extreme democrats who wants to repubuild this country by applying a hundread taxes, rasing corprate taxes and taxing the rich so they can spend more do seem to cross that border in my opinion.

Just like I have a tendency to associae people on the far right as extreme neo-con capitalist who don't truly understand why certain things that support the middle class and the poor sholdn't be cut before the military budget.

Again I'd be happy to be corrected as I'm only 18 and gained and intrest in politics within the last 7 months.

Well geez, Torie, if you are going to put a property on the table, that's enough to bring me out of my self-imposed dungeon.


And:


Of course, I am compelled to be fair about the qualification you made immediately after the above comments.


This qualification is enough to prevent me from winning the bet for either myself or on sbane's behalf.  But, s*%t, you put a free property on the table...you can't blame a guy for trying. 

Would you settle for buying me a drink, Steve?

It would be a pleasure to buy you a drink anvi.  And btw, just because the US health care system has some plus points vis a vis Britain, or did, or whatever, does not mean it is anywhere near getting out of the land of suckdom. I have been ranting about how silly and dysfunctional it is since about the time you kissed your first girl. :)

Health care should be affordable and universal.

Saying Obama's plan is as far left as you can go just sounds ridiculous if you look at it from an international perspective. And you say forcing everyone to buy health insurance is "socialization" and far left but that is actually a Republican idea. Do a little search on the individual mandate and you will see this is what the Republicans proposed in contrast to Hillarycare and most supported it until 2009 when it suddenly became unpopular with them when Obama endorsed it. A real Democratic plan would be to provide a public option with high subsidies for the poor and no mandate. Countries like France have no mandate, if you don't want health insurance you don't need to get it. But of course they pay their premiums through payroll taxes basically. And they also pay about 30-40% copays with a cap on total expenditures per year. Yet, there is no mandate to purchase private insurance, and I can see why it pisses off people. Really the solution is to tax, and provide subsidies for the poor so they will willingly get insurance, not to mandate buying insurance and then providing them with little subsidies. This is what Obamacare does, and while you may not agree with it, by no definition of the word would it be left wing. Indeed, it is a right wing solution.

Fair enough.  That has been a long time.

By the way, I just wanted to add one note to a question you posed a few weeks back.


As I said at the time, I have no problem with this, particularly with the means tested subsidies.  

With the private insurers competing for business part, my support as based on pragmatism and a qualification.  In the Bismarck systems I prefer, insurers are private, but also non-profit, meaning that they are not publicly traded.  They do complete for some business, for example, in some cases, the top 10% of income earners can opt out of minimum public packages and buy special plans from them, and in others they sell competing supplemental plans atop publicly required minimum coverage.  Now, granted, private insurers don't turn much of a profit in the U.S. compared to private companies of other industries.  But the fact that they are publicly traded means that they do have to attract shareholders and turn a profit.  And that profit-incentive naturally creates a motive to cut costs, and in this case the biggest costs are medical bills themselves, hence the Medical Loss Ratio.  This, accompanied by the fragmented structure of our health care system with almost 30% of the population covered by competing government coverage that leads to such dramatic cost-shifting. is what leads to monstrous results like recision and pre-existing conditions exclusions that prevail in our country.  In short, it's always seemed to me that for-profit insurance that has to draw private investment in order to survive fundamentally skews motives with regard to paying medical bills.  Sure, insurers here have to offer good coverage in order to thrive in the competitive market.  But they also have to make often crushing decisions about what not to cover in order to contain costs and keep investors happy, as opposed to non-profit private payers in Bismarck systems that only have to cover the costs of capital and maintain good management.  This is just one of the ways that the American system does things that lands us in morally problematic ground; the profit-motives that are found in our insurance system are among the very things that lead us to ration against people who need basic coverage the most, rather than rationing against insured consumers who over-utilize or forcing ourselves to find ways to contain provider costs in various ways instead of merely defending ourselves against them by massive pooling that can be accomplished by a relatively small number of companies.  So, in terms of the things I really believe in with regard to insurance; a multipayer system featuring private insurers--absolutely yes, but publicly traded for-profit insurers---well, in an ideal world, I'd rather not have them.

But this is not an ideal world, and for-profit insurance isn't going anywhere in the U.S.  I'm not trying to demonize these companies, nor the many exceedingly good people who work in the industry.  The choices we have made are systematic ones, and they were made decades ago.  The medical bills have to be paid, and such companies pay mine well enough.  So, any health care reform that will ultimately succeed in the U.S. and make it a better country has to work for the insurers we have.  There are all kinds of other things that need fixing in our system--from unrestrained cost inflation related to rampant over-utilization to defragmenting public and private coverage to more rationally separating basic care, catastrophic care and supplemental care--to keep us busy and, if we find good solutions, will make huge and needed differences.  

So, with those qualifications in mind, I'm ok with solutions that involve private companies competing for business--it's a feature of the American health care system that is entrenched.  But, in my heart of hearts, I don't believe everything in life should be inspired by profit-motive, and paying medical bills falls into that category of things that, to my mind, shouldn't.      

Wow I'd completely forgotten about the complete flip flop the right did on the mandate I'd actually read up on it earlier this year.  Thanks for the info.

Back when the right was pursuing privatization of Social Security, they held up Chile as the model to use. Chile's system is based on... a mandate forcing people to save. Which means that if and when the Republicans bring up social security privatization again, they're going to have to deal with the idea of the mandate or push through a repeal that guts the program altogether.

By the way since you brought up Hillary Care didn't Obama actually campaign against an individual mandate?

I don't think it was an issue really talked about in 2008. Universal healthcare was talked about in broad terms, with perhaps the public option being mentioned. Of course when I say hillarycare, I am talking about her healthcare plan she proposed under President Clinton in 1993-4.