Caption: A pistol with a trigger lock. Pour molten lead down that keyhole and you'll have the kind of "trigger" that Congress is talking about with regard to health insurance reform.Image credit: University of Washington
Via Dana Hunter, I ran across this piece of Think Progress stupidity this morning:
A new report from the Urban Institute argues that a “strong” public option — one that is triggered in the event that overall growth in national health spending exceeds a pre-determined target — may do more to control health care spending than the public option proposals offered in existing legislation:
In the absence of enough political support to pass a strong public option at this time, a “trigger” for a strong public option should be considered for inclusion in health reform legislation whether or not a weak public option is included as a political compromise. Even the threat of such a plan being triggered offers the potential to affect market dynamics between insurers and providers.
The report says that the Senate and House’s public option provisions (which require the public plan to independently negotiate rates with providers) hold little hope of lowering costs in areas of the country with high provider concentration. In areas where hospitals have “too strong a market presence to be excluded from insurer networks,” hospitals could dictate prices, stripping the public plan of its ability to negotiate cheaper rates, the report warns. According to a 2006 study, 86% “of large metropolitan areas were considered to have highly concentrated hospital markets.”
New Report: Triggered Public Option Is Better Than The Existing Public Option Provisions
[emphasis and link from original]
I don't dispute the last paragraph - that's one of the valid objections to the current public option proposal. However, what people who think that a "triggered" public option will be better at controlling the insurance industry than any other public option need to keep in mind is this: This is a trigger that will never be pulled, no matter how bad the situation becomes. The insurance companies will make sure of that.
This is so obvious it hardly seems worth discussing, but the fact is that smart people have been gaming these systems for years. Food isn't part of the Consumer Price Index, our chief indicator of inflation. Everyone needs food. We can, depending on our situations, not worry about housing prices, or automobile-related expenses, but food is basic. We all pay for it somehow. Yet they leave it off the CPI. They don't tell you the real level of unemployment every month, just the number of people who are still actively looking for work. While there are certainly people who aren't employed who don't need or want to be, there's a big difference between the actual number of people who are unemployed by circumstances and not choice, and the number of people counted as unemployed.
The system will be gamed to benefit those who can afford to change it. Right now, that's the financial industry, including insurance.
I don't care if that option is "if this doesn't work, screw it - we're going to single-payer", it's not going to matter. It will never be taken. Now, go back and think about how useful an option is when it quite clearly will never be taken advantage of.
3 comments:
Senate Majority Leader Harry Reid (D-NV) released a merged version of the Senate comprehensive reform on 11/19/09,
which Mike Oliphant, whom manages www.benefitsmanager.net for Utah based health insurance plans for employers could get
behind and support some of it (Patient Protection and Affordable Care Act, or H.R. 3590).
This should encourage the private sector health insurance carriers to form INSURANCE EXCHANGES which is what we have
done here in Utah. They carry the risk and burden, not the tax payer. See more about this at www.utahhealthplans.info
You would be surprised about the willingness of carriers to co-share risk amongst their immediate competitors. They simply
focus on profit from the 4 to 5 percent administration fees. A government run public option could not achieve this.
Nonsense. First of all, private insurers insist on medical loss ratios of less than 4 to 1, meaning that at least twenty percent of their revenues will go toward profit and expenses. The five percent overhead you refer to is typical of non-profit insurance companies, most of which have been bought out by commercial insurers in this country. Second, Medicare operates on a "medical expense ratio" that translates to about three percent overhead.
It's also not surprising that insurance companies cooperate on risks. They have one of the few exemptions from federal anti-trust rules.
You're right, Paul, expecting that insurance will decrease in price, or even stop increasing so much, is a good way to end up disappointed. They're not going to get better at insuring Americans, because that's not their job. Their job is to take money from our employers and keep as much of it as possible.
The only thing Congress really seems to be changing is that more of us will be paying money for insurance. So far, I see no reason to hope that it will enforce the bans on pre-existing conditions, rescision, or any of the other practices that insurance companies are getting away with now to the detriment of the people they're supposed to be insuring.
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