Much as the health care fight has been a riveting, nail biter, edge-of-the-seat saga of intrigue, twists and turns, it's about to get a lot more interesting. Here's why:
1. It'll be interesting to see what happens to the House bill when it goes before the congressional budget office to get scored. If a bill with a strong public option can cover more people for cheaper, it's going to be hard to convince the public otherwise. If it can cover more people and effectively reduce health care costs, it'd be crazy to do anything less.
2. It'll be even more interesting to see what emerges from conference committee once Baucus and Grassley meet the likes of Waxman and Pelosi. I think the Democrats haven't begun the internal strong-arming that they'll be pulling on the centrist senators in favor of watering this thing down into meaninglessness.
And here's why they should play hardball
1. Democrats have much more political cover than they had for the stimulus vote, where they needed it to be bipartisan to do something as daring as it was. They needed Snowe, Collins and Specter to show we're all in this together. Health is different. For health, they need 50 votes and budget reconciliation. Above all, they need it to work. The public is behind them by wide margins. No one will care if it's bipartisan once it's up and running. They'll own the thing regardless, for better or worse. No matter what they do, Fox News, Talk Radio and the rest of them won't like it. They may as well retain control over the issue.
2. Health care reform will deep-six the Democratic ticket in '10 and '12 if this thing passes and doesn't work well. The compromises they have been pursuing in the Senate look like a guarantee that the new system won't work well. In effect, harmony, bipartisanship and compromise now will likely spell electoral evisceration later.
3. Imagine the disaster if they pass Baucus' bill as written and everyone over 300% poverty is forced to purchase a private insurance plan at upwards of $200/month. Sure, it's going to be under $ 1 trillion over 10 years, but the costs will be shifted down to the little guy both in terms of premiums and in doing little to mitigate the growth that drives them. Better to pay for subsidies via broad taxes and negotiate via federal clout than to mandate that people pay a big bill they can't afford. If you think tax increases are bad politics, that's a recipe for collapse.
4. Regarding the budget: Bush's tax cuts yielded negligible public benefit and cost $1.8 trillion. Medicare prescription drug coverage cost almost $1 trillion and was done through parliamentary guerilla tactics like budget reconciliation. Time for the D's to step up and own this thing and raise the revenues necessary to pay for reforms with teeth.
5. Speaking of reforms with teeth, consider the "public option" for a moment. The government will not put insurance companies out of business. It'll make them sell a few of their Gulfstreams and company villas to be sure, but these guys will figure out how to make a buck under the new rules. They will be able to offer the public attractive, affordable insurance products that rival or surpass the government's. They'll just have to take less off the top for themselves. The only places in the world where private health insurance markets don't function are where where it's illegal. A recurring controversy in Canada is over whether and how the private sector can sell benefits-- something that's nowhere near the discussion here.
And now to argue by metaphor
Like larger rules of life, health insurance companies will be forced to evolve to changing circumstance. But life flourishes wherever it's permitted, be it in mid-ocean trench heat vents or in antarctic lakes. Health insurance companies will be allowed, even encouraged under the new rules. It's just that health insurance companies have been making Garden of Eden profits for too long now. Time for insurance companies to face real competition, and become the highly adapted organisms that we all need to survive.
Thursday, June 25, 2009
Thursday, June 11, 2009
Health Care Reform, misunderstood
Being part of the industry, it's easy to forget that most people probably have other things to worry about aside from the details of the health reform bills before the Senate and the House. Nevertheless, I'm surprised by how misinformed people are about what's actually being proposed. I really have to wonder where people are getting their information, or if they're just making stuff up based on their own superstitions about government, the poor, and insurance. I just plain don't know where some of the stuff I hear comes from.
For example:
"I don't want Medicaid for all..." ...No one's talking about anything like Medicaid for all. The most government-heavy proposals are that a public plan be formed to compete with the private ones, mostly under the same rules for coverage and financing.
"Free health care? Like they have in Canada? Please..." ...No one's talking about anything being free, or Canadian. Government, business, and individuals will all have to pitch in to get affordable coverage to everyone. What they have in Canada is radically different from anything on the table now, and for its inconveniences and occasional horror stories, it works better than our system by almost any measure.
"I don't want some government bureaucrat telling me what I can and can't have..." ...Putting aside the notion that the same people can't wait to get on Medicare, no one's talking about the government having the right to deny your claims. If anything, the government will make insurance companies have to pay your claims and have to provide coverage regardless of any health problems you showed up with. At most, the government will underwrite research on what works and what's hokey-- something that could save us money. Under the proposed rules of the game, insurance companies, public or private will actually want to pay for what works because they'll have to cover you down the road. Right now we have some private sector bureaucrat telling us what we can and can't have, and they're doing it on the basis of what's best for their shareholders, not you.
"My health insurance is fine, why would I want to change anything?" Putting aside all moral objections here, your insurance is not fine. They can deny you coverage if you sneeze, they can deny claims as they please, and even when something is covered, they can short-change you on their rates... and it costs at least twice what people pay everywhere else in the world. Why do you pay more? Because health care providers charge more to make up for everyone else who doesn't have insurance, and because they perform all kinds of unnecessary and expensive procedures either because they're profitable, or to cover their tracks to avoid a malpractice claim-- not because it's what's best for you.
We can debate what the role of the state should be in financing and organizing health care, but rules that let them select healthy, cheap beneficiaries haven't worked so well once they get a little older and sicker. Competition can be a race to the bottom just the same as it can be a race to the top... it's a question of rules. After all, if I was in business, why would I do something that took away from my profits, like paying a claim when I didn't have to? Knowing that, and knowing that the results are mediocre, expensive coverage for some, the rules of the game need to change. Who does the changing? The government. That's what we pay them for.
For example:
"I don't want Medicaid for all..." ...No one's talking about anything like Medicaid for all. The most government-heavy proposals are that a public plan be formed to compete with the private ones, mostly under the same rules for coverage and financing.
"Free health care? Like they have in Canada? Please..." ...No one's talking about anything being free, or Canadian. Government, business, and individuals will all have to pitch in to get affordable coverage to everyone. What they have in Canada is radically different from anything on the table now, and for its inconveniences and occasional horror stories, it works better than our system by almost any measure.
"I don't want some government bureaucrat telling me what I can and can't have..." ...Putting aside the notion that the same people can't wait to get on Medicare, no one's talking about the government having the right to deny your claims. If anything, the government will make insurance companies have to pay your claims and have to provide coverage regardless of any health problems you showed up with. At most, the government will underwrite research on what works and what's hokey-- something that could save us money. Under the proposed rules of the game, insurance companies, public or private will actually want to pay for what works because they'll have to cover you down the road. Right now we have some private sector bureaucrat telling us what we can and can't have, and they're doing it on the basis of what's best for their shareholders, not you.
"My health insurance is fine, why would I want to change anything?" Putting aside all moral objections here, your insurance is not fine. They can deny you coverage if you sneeze, they can deny claims as they please, and even when something is covered, they can short-change you on their rates... and it costs at least twice what people pay everywhere else in the world. Why do you pay more? Because health care providers charge more to make up for everyone else who doesn't have insurance, and because they perform all kinds of unnecessary and expensive procedures either because they're profitable, or to cover their tracks to avoid a malpractice claim-- not because it's what's best for you.
We can debate what the role of the state should be in financing and organizing health care, but rules that let them select healthy, cheap beneficiaries haven't worked so well once they get a little older and sicker. Competition can be a race to the bottom just the same as it can be a race to the top... it's a question of rules. After all, if I was in business, why would I do something that took away from my profits, like paying a claim when I didn't have to? Knowing that, and knowing that the results are mediocre, expensive coverage for some, the rules of the game need to change. Who does the changing? The government. That's what we pay them for.
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