There is a new “study” [PDF] out today, this time paid for by the Blue Cross Blue Shield Association. It comes only days after the much talked about “study” from AHIP, and (surprise!) comes to very similar conclusions.
The Blue Cross Blue Shield conclusion is that premiums would increase even faster with reform, unless we do exactly what they want. What does the BCBS Assoc. want? A larger government fine for anyone who does not buy their product, the ability to charge older Americans dramatically more, and to have what qualifies as minimum health insurance scaled back even farther.
I don't put any stock in these industry sponsored studies, but I suspect that this will become the new line of attack from the right against reform. If the message that reform will increase premiums for those who already have health insurance insurance gains traction, it could be politically very damaging.
The real fear for the Democrats should be when more legitimate organizations start to examine the issue. There is a lot of waste that could be cut from our system, but the White House cut secret sweetheart deals to, shall we say, shield both the hospitals and the drug companies from serious reform. It is tough to really reduce costs with reform when hundreds of billions in potential savings have been taken off the table.
Showing posts with label AHIP. Show all posts
Showing posts with label AHIP. Show all posts
The Public Option Trigger: Naïveté, Insanity, or Trickery?
Olympia Snowe and Rahm Emanuel are both pushing hard for their “trigger” idea recently. The idea is the public option would only go into effect if the health insurance industry kept raising people's rates at a rapid pace. (I believe, after studying the trigger created by Snowe, that it was designed to never be pulled. I also agree with Robert Reich that the whole concept of “triggers” just doesn't work in a town filled with highly paid lobbyists, but let's leave that issue aside for now.)
The whole concept of a “trigger” is at least perpetrated on the idea that the for-profit health insurance companies can stop themselves from raising Americans' premiums. It rests on the belief that the insurance industry will promise to stop ripping people off, and they deserve another chance to prove that they can.
The recent “study” released by AHIP makes even the concept of a trigger patently absurd. In their study, AHIP not only promised to keep increasing people's premiums, but promised to do it at an even faster pace. They asserted that they were powerless to do anything to stop the increase. AHIP is telling Congress that they will not stop, they can not stop.
AHIP's own study makes a trigger predicated on insurance industry moderation look insane. There is no mystery now about what will happen in the future. The health insurance industry itself admitted that they will fail to bring down premiums if the Baucus bill is enacted.
At best, all a trigger will do is force Americans to endure several more years of skyrocketing insurance premiums. At worst (and most likely), it will give the lobbyists for the for-profit insurance companies several years to work on crippling or removing the trigger, so that there will never be a public option.
Supporting a “trigger” on the hope that insurance companies would promise to shape up sounds like naiveté. Supporting a “trigger” after the insurance companies promised to increase pre
The whole concept of a “trigger” is at least perpetrated on the idea that the for-profit health insurance companies can stop themselves from raising Americans' premiums. It rests on the belief that the insurance industry will promise to stop ripping people off, and they deserve another chance to prove that they can.
The recent “study” released by AHIP makes even the concept of a trigger patently absurd. In their study, AHIP not only promised to keep increasing people's premiums, but promised to do it at an even faster pace. They asserted that they were powerless to do anything to stop the increase. AHIP is telling Congress that they will not stop, they can not stop.
AHIP's own study makes a trigger predicated on insurance industry moderation look insane. There is no mystery now about what will happen in the future. The health insurance industry itself admitted that they will fail to bring down premiums if the Baucus bill is enacted.
At best, all a trigger will do is force Americans to endure several more years of skyrocketing insurance premiums. At worst (and most likely), it will give the lobbyists for the for-profit insurance companies several years to work on crippling or removing the trigger, so that there will never be a public option.
Supporting a “trigger” on the hope that insurance companies would promise to shape up sounds like naiveté. Supporting a “trigger” after the insurance companies promised to increase pre
Did Schumer Cause The AHIP Freak Out?
The individual mandate (without the public option) has been a top priority of the health insurance industry. Who would not want millions of new customers to be forced to buy their very expensive product?
Sen. Chuck Schumer has been working to actively cripple or destroy the individual mandate. An amendment offered in the Senate Finance Committee by Schumer and Snowe reduced the penalty for not buying health insurance, and slowly phased in the penalty over several years. It also reduced the threshold at which a person could apply for a hardship waiver to avoid paying the penalty for not having insurance.
That was only step one in Schumer's attempt to water down the individual mandate. Last Thursday, Schumer made a barely covered announcement that he would seek to further weaken the individual mandate. The penalty collected from people for not having insurance would be placed in a trust fund instead of going directly to the government. Individuals would have up to three years to use the full penalty collected from them to buy insurance.
This three-year trust fund is just asking to be “abused.” It would create a strong incentive for younger people to wait until they got sick to buy health insurance. They could skip having insurance for up to three years without “losing” any money due to the individual mandate penalty. This is exactly the scenario that AHIP is desperate to avoid. If there is to be any Republican support for health care reform, and with progressives threatening to go to war if there is an individual mandate without a public option, it is very likely we'll see the individual mandate continue to be weakened as the bill moves forward.
I do not know if it was solely Schumer's plan to gut the individual mandate that caused AHIP to go on the attack. His efforts to get a public option, regardless how weak, could also pay a role in AHIP fury. I think it is likely Schumer's actions played a big role in the health insurance industry choosing to release their highly dubious study. Weaken the individual mandate and health insurance companies lose a huge potental source of profits from healthy, young Americans forced into overpriced insurance plans.
Sen. Chuck Schumer has been working to actively cripple or destroy the individual mandate. An amendment offered in the Senate Finance Committee by Schumer and Snowe reduced the penalty for not buying health insurance, and slowly phased in the penalty over several years. It also reduced the threshold at which a person could apply for a hardship waiver to avoid paying the penalty for not having insurance.
That was only step one in Schumer's attempt to water down the individual mandate. Last Thursday, Schumer made a barely covered announcement that he would seek to further weaken the individual mandate. The penalty collected from people for not having insurance would be placed in a trust fund instead of going directly to the government. Individuals would have up to three years to use the full penalty collected from them to buy insurance.
This three-year trust fund is just asking to be “abused.” It would create a strong incentive for younger people to wait until they got sick to buy health insurance. They could skip having insurance for up to three years without “losing” any money due to the individual mandate penalty. This is exactly the scenario that AHIP is desperate to avoid. If there is to be any Republican support for health care reform, and with progressives threatening to go to war if there is an individual mandate without a public option, it is very likely we'll see the individual mandate continue to be weakened as the bill moves forward.
I do not know if it was solely Schumer's plan to gut the individual mandate that caused AHIP to go on the attack. His efforts to get a public option, regardless how weak, could also pay a role in AHIP fury. I think it is likely Schumer's actions played a big role in the health insurance industry choosing to release their highly dubious study. Weaken the individual mandate and health insurance companies lose a huge potental source of profits from healthy, young Americans forced into overpriced insurance plans.
Third Way To Health Insurance Industry's Rescue
The health insurance “Democratic” think tank Third Way just put out a memo parroting AHIP's demand for a stronger individual mandate and other changes. The memo proposes:
Four ideas for how progressives can defend a strong individual mandate while also minimizing its burden on the middle class.
What could these four great ideas be. Increasing tax credits to make sure every American can afford quality health insurance? Introducing more cost control mechanism to hold down the rapidly increase cost of health care? Give the American people the choice of a robust public option that would be 10% cheaper than typical private health insurance?
No, their suggestions are straight from the health insurance industry:
This policy memo offers four ideas for maintaining a robust coverage requirement while minimizing its burden on the middle class:
• Option 1: Instead of assessing a penalty, eliminate or reduce tax breaks for people who don’t buy insurance
• Option 2: Allow young people to pay lower premiums
• Option 3: Ease the minimum benefit requirement
• Option 4: Allow more people to buy catastrophic coverage
Let me translate this from Third Way inside-the-beltway talk into plain English:
• Option 1: Instead of assessing a penalty, eliminate or reduce tax breaks for people who don’t buy insurance. Translation: Have harsh financial punishment for people who don't buy private health insurance, just be sneaky about it and try to pretend it is not a direct fine. (AHIP demands a strong individual mandate.)
• Option 2: Allow young people to pay lower premiums. Translation: Increase the community rating ratio so that older people can be charged much more. That way, those sick, old people who need medical treatment will have a tough time buying real coverage. (AHIP's letter asks for a larger community rating ratio.)
• Option 3: Ease the minimum benefit requirement. Translation: let insurance companies not really cover anything. We can just pretend that we expanded insurance coverage by having people buy worthless policies that don't cover their medical problems.
• Option 4: Allow more people to buy catastrophic coverage. Translation: We should force people to buy high deductible (high profit margin) junk insurance. (AHIP's reform proposal ask that they be able to sell super-bare-bones, high-deductible "essential benefits plans," which do not need to follow state minimum benefits laws.)
Well, thank you, Third Way. Doing the bidding of the health insurance industry definitely sounds like a great idea. All we need to do is completely water down what we consider to be “coverage,” then we can all rally around forcing Americans to buy plans from the for-profit health insurance industry. Or, to put that in Third Way speak:
These options can enable progressives to rally behind a strong coverage requirement that can help deliver health care stability and security to all Americans.
AHIP Asks; Baucus Delivers
For a very long time the health insurance industry has been working hard to avoid state benefit mandates. Insurance companies hate that states make them cover conditions that actual Americans suffer from. Paying for medicine treatment when someone gets sicks does terrible things to their insurance profits margins.
When health care reform efforts got started AHIP put out the plan they wanted to see. A big part of that was “essential benefits packages.” They would be:
More costumers, less regulations, less local oversight, few options to Americans to address lack coverage problems. It sounds like an all around big winner for the for profit health insurance companies.
(emphasis mine)
When health care reform efforts got started AHIP put out the plan they wanted to see. A big part of that was “essential benefits packages.” They would be:
available in all states that provides coverage for prevention and wellness as well as acute and chronic care. To maintain affordability, the essential benefits plan should not be subject to varying and conflicting state benefit mandates.Well AHIP asked and Baucus delivered. According to his bill he would create “national plans.”
These national plans must be licensed in every state that they choose to operate and would be regulated by the states in terms of solvency and other key consumer protections and would offer coverage through the state exchanges. Such national plans must be compliant with the benefit levels and categories detailed in the Mark, but would preempt state benefit mandates.The for profit health insurance industry must be so happy. They can finally sell health insurance in any state, while avoiding covering health conditions the voters of those states decided should be covered. In states with good strong minimum benefits rules, health insurance companies will just choose to only offer “national plans” avoiding state law. In affect Baucus would completely strip the states of their power to decide what minimum benefits health insurance plans must cover.
More costumers, less regulations, less local oversight, few options to Americans to address lack coverage problems. It sounds like an all around big winner for the for profit health insurance companies.
(emphasis mine)
Death By Hissy Fits Continues
A month ago I wrote about how Grassley and the rest of the Republican party were trying to kill reform one childish hissy fit at a time. It has proven surprisingly successful, since Chairman Baucus has been rewarding them with surrender each time.
The pattern has continued with Rep. Wilson's rude outburst being rewarded with a provision to bar illegal immigrants from buying health insurance even if they are willing to fully pay for it. This policy is just not cruel and expensive (we all end up paying for illegal immigrants going to emergency rooms because we don't allow them to pay for their own care by buying health insurance), but it is also terrible political optics. Working class Americans will be forced to buy insurance or pay huge fines but illegal immigrants will not.
With a Finance Committee bill expected tomorrow, Senator Grassley and Enzi have moved the goal post again. The New York Time is reporting that Grassley is now opposing an individual mandate that he has previously supported for months,
Even with all but maybe two Republican senators likely to oppose Baucus' bill, he has decided to still include all the terrible compromises he made to win their support. Grassley has proven himself to be maybe the greatest negotiator in Senate history. He convinced Democrats to waste valuable months and adopt many ill-conceived compromises, without needing to risk voting for the final product.
What is at stake here is even more important than health care reform. If Obama and the Democrats allow themselves to be rolled, they will never be feared or respected by congressional Republicans or the special interest groups. Obama should demand that 48 hours after the Baucus' bill is released that a majority of Senate Republicans publicly endorse it, or it will be revamped to reflect his original uncompromised proposal.
Negotiation requires both carrots and sticks. If Democrats pass a bill containing all the awful Republican demands with almost zero Republican support, they will doom any hope of future good faith dealing and real political discourse. The Republicans and special interests will know that if they throw a loud enough hissy fit Democrats will accept their demands without Republicans needing to risk anything by voting for compromise. Giving in now assures “death panels” and “you lie” will become the modis operandi of the Republicans party. If Obama does not stand up to declare a willingness to pass a good, Democrat-only bill, it is going to be dark, loud, shrill, and depressing next three years.
The pattern has continued with Rep. Wilson's rude outburst being rewarded with a provision to bar illegal immigrants from buying health insurance even if they are willing to fully pay for it. This policy is just not cruel and expensive (we all end up paying for illegal immigrants going to emergency rooms because we don't allow them to pay for their own care by buying health insurance), but it is also terrible political optics. Working class Americans will be forced to buy insurance or pay huge fines but illegal immigrants will not.
With a Finance Committee bill expected tomorrow, Senator Grassley and Enzi have moved the goal post again. The New York Time is reporting that Grassley is now opposing an individual mandate that he has previously supported for months,
The committee documents show that Mr. Grassley has reservations about this approach. He believes that “the individual responsibility to have health coverage should be reconsidered and replaced with a reinsurance policy to ensure that affordable health coverage is available to everyone in a voluntary system, with a lower overall cost for the package,” one document says.Hoping to capitalize on Obama's and Baucus' willingness to give in on anything in order to pass something labeled “health care reform,” the AHIP is going for the double jackpot. No sooner than did prominent Democrats signal they might forgo their only idea which could rein in health insurance company profits (a strong public option), the AHIP switched to fighting to protect their favorite cash cow, Medicare Advantage. Our current Medicare Advantage program may have the dubious distinction of being the biggest and most wasteful form of corporate welfare in the country.
Even with all but maybe two Republican senators likely to oppose Baucus' bill, he has decided to still include all the terrible compromises he made to win their support. Grassley has proven himself to be maybe the greatest negotiator in Senate history. He convinced Democrats to waste valuable months and adopt many ill-conceived compromises, without needing to risk voting for the final product.
What is at stake here is even more important than health care reform. If Obama and the Democrats allow themselves to be rolled, they will never be feared or respected by congressional Republicans or the special interest groups. Obama should demand that 48 hours after the Baucus' bill is released that a majority of Senate Republicans publicly endorse it, or it will be revamped to reflect his original uncompromised proposal.
Negotiation requires both carrots and sticks. If Democrats pass a bill containing all the awful Republican demands with almost zero Republican support, they will doom any hope of future good faith dealing and real political discourse. The Republicans and special interests will know that if they throw a loud enough hissy fit Democrats will accept their demands without Republicans needing to risk anything by voting for compromise. Giving in now assures “death panels” and “you lie” will become the modis operandi of the Republicans party. If Obama does not stand up to declare a willingness to pass a good, Democrat-only bill, it is going to be dark, loud, shrill, and depressing next three years.
Baucus's Health Care Plan Is Worse Than The Health Insurance Industry's Plan
Ezra Klein at the Washingon Post released a health care reform draft proposal from the Senate Finance Committee. The plan is not just bad -- it is worse than I would have ever imagined it could be. Just how bad is Senator Baucus's draft proposal? It is worse than the proposal put forward by America's Health Insurance Plans (AHIP). That is correct -- the health insurance industry wrote a better proposal than the Democrats on the Senate Finance Committee.
For the most part Baucus's proposal is almost identical to that of the AHIP lobby. Both do not include a public option and would offer a bare bones insurance plan. Both have an individual mandates, a form of community rating, and some type of health insurance exchange. Both would also limit out-of-pocket cost based on the current HSA standard. In the few places the proposals differ, Baucus's proposal is in fact less generous than the AHIP.
Paying for private insurance
Baucus Proposal – People making below 300% of the federal poverty level (FPL) would get subsidies to help buy insurance. If you make more than $31,500 you are on your own for the full cost of insurance.
AHIP Proposal – People making below 400% of the FPL would get subsidies to help buy insurance. Also everyone buying private insurance would get to deduct the full cost of their plan.
Medicaid Eligibility
Baucus Proposal – Every adult below 100% of the FPL would be eligible for Medicaid. Children below 133% of FDL would be eligible.
AHIP Proposal – Every adult below 100% of the FPL would be eligible for Medicaid. Children below 300% of FDL would be eligible.
The conclusion is simple. To claim that the health care reform plan put forward by the Democrats on the Senate Finance Committee was written by health industry lobbyists would be an insult to the lobbyists. Their plan was slightly better and did more to help average Americans buy health insurance.
For the most part Baucus's proposal is almost identical to that of the AHIP lobby. Both do not include a public option and would offer a bare bones insurance plan. Both have an individual mandates, a form of community rating, and some type of health insurance exchange. Both would also limit out-of-pocket cost based on the current HSA standard. In the few places the proposals differ, Baucus's proposal is in fact less generous than the AHIP.
Paying for private insurance
Baucus Proposal – People making below 300% of the federal poverty level (FPL) would get subsidies to help buy insurance. If you make more than $31,500 you are on your own for the full cost of insurance.
AHIP Proposal – People making below 400% of the FPL would get subsidies to help buy insurance. Also everyone buying private insurance would get to deduct the full cost of their plan.
Medicaid Eligibility
Baucus Proposal – Every adult below 100% of the FPL would be eligible for Medicaid. Children below 133% of FDL would be eligible.
AHIP Proposal – Every adult below 100% of the FPL would be eligible for Medicaid. Children below 300% of FDL would be eligible.
The conclusion is simple. To claim that the health care reform plan put forward by the Democrats on the Senate Finance Committee was written by health industry lobbyists would be an insult to the lobbyists. Their plan was slightly better and did more to help average Americans buy health insurance.
The More AHIP Concedes, The More Proof A Public Plan Is Needed
Ever since Barack Obama took office, the America's Health Insurance Plans have been steadily conceding ground in hopes of killing off a public health insurance option. For years the cost of health insurance has been growing dramatically, the number of uninsured has skyrocketed, and out-of-pocket costs are going ever upwards. While all this has been happening, the private health insurance companies have done nothing to slow the explosion in cost. They did not put forward a serious plan to address the number of uninsured. And they refused to stop cherry picking customers, overcharging women, and fighting claims.
All this changed when it appeared that they might face real competition from a public plan. They first promised to accept all comers. Then they promised to stop charging sick people more. Recently, they promised to stop charging women more than men. And today, they promised to slow the increase in cost by introducing reforms that should have happened years ago.
As long as the health insurance companies fear facing real competition, they will continue to concede. That is how competition works: it forces companies to cut costs and/or increase the quality of their product. Once the public health insurance plan is officially killed, they will stop conceding. Companies only change when they know not changing will hurt their bottom line.
The public plan is already working and is needed so it can continue to improve health care for everyone. If there is no public option, the health insurance companies will soon return to their old tricks. They are still claiming that they should be able to set rates based on “geography.” Being able to charge people more based on “geography” will allow health insurance companies to redline low income, African-American, and/or Hispanic neighborhoods.
This needs to be clear: The only reason the health insurance companies are playing nice is because they fear real competition for the first time. They will only play nice as long as they face real competition from a public health insurance option. If there is no public plan, in the long run, there will be no meaningful reform.
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