Health insurers: It’s not fair — we can’t compete!

Isn't the health insurance industry basically making our own case for us when they say stuff like this?

“There’s no way to run a side-by-side competition within the current structure,” said Karen Ignagni, the chief executive of America’s Health Insurance Plans, the industry’s trade association. If the unstated and eventual goal of the public plan is to push private insurers out of the way — a de facto nationalization of health care — “let’s have a debate on a government-run system,” Ms. Ignagni said.

I mean, you don't even need to do a lobbyist-to-honest-English translation. They're saying straight-up — We can't deliver as good a product as the government. Save us! Rather than justify their own miserable existences, Ignagni wants to change the conversation to whether “government-run system” is any good or not.

Come on, Karen! Stick up for yourself! Make an active case as to why private insurance is better — provides better quality, controls costs, is more humane, more efficient.

What — you can't make that case? You don't say.

PS: Howard Dean will crusade for the public option. YEAAAARRARRGH!

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  1. Throwing a bone (maybe...)

    Perhaps their only argument would be that Private Insurance requires no tax-funded subsidies, which I am assuming would be part of a universal government plan?

    • Yes it would

      In order to be universal, even a private-system mandated for everyone would be subsidized, as there's a large segment of the population which can't afford the premiums.

      I'd even go so far as to say pretty much everyone except the very rich can't afford their damn premiums...

    • Aren't we already subsidized?

      It seems to me that the government already subsidizes the private employer-based system, because the portion of the premiums the employer pays (and generally the portion of the premiums the employee pays, I think) are not taxed. So if your marginal tax rate is 25%, and the premium is $10,000 per year, then you're being subsidized to the tune of $2,500 per year, right?

      TedF

  2. Agreed

    I think what this suggests is that there is no need to mandate a single-payer system. Simply make everyone eligible for Medicare, and the private insurers will wither away.

    Just think of the economies of scale!

    TedF

    • Obama has already ruled out $quot;medicare for all$quot;

      And any other single-payer solution. For reasons best known to the administration.

      Personally, I think that is a huge mistake. Including single-payer as an alternative increases the pressure on the insurance industry to compromise.

      • $quot;For reasons best known to the administration.$quot;

        Reasons perhaps fairly well known to certain of Obama's campaign contributors or lobbyists? (I don't have anyone specifically in mind, so call it baseless conjecture if you want) A socialist Obama is not- for better or for worse.

      • I guess I am confused about the President's plan

        Here is what the Whitehouse.gov website says:

        Establish a National Health Insurance Exchange with a range of private insurance options as well as a new public plan based on benefits available to members of Congress that will allow individuals and small businesses to buy affordable health coverage.

        I thought this meant that the President is not in favor of mandating enrollment in the public plan, but rather opening the public plan to anyone who wants to enroll.

        TedF

        • It does.

          As I understand it, the idea is that private individuals will be able to buy into the FEHB (Federal Employee Health Benefits) program.  But remember that FEHB is not Medicare-for-all.  It's just another large buyer of private insurance.  So the rates are probably better than you'd get on your own (except in MA, where the Connector actually has pretty good rates already), but it's still Blue Cross/Blue Shield, or your local HMO, or whatever.

      • Probably for reasons of skillful politics

        Look, if he creates a system that leads people into public insurance such that after a number of years, a base has been built for something like single payer, chances are Obama will go with that.  And he's clearly trying to put exactly such a system into place.  But if he said that it might possibly lead to single payer, then it'd be a lot harder to implement now, because even though it's pretty far from single-payer now, it'd be treated as such.  Opponents clearly want to object to it on those grounds, so Obama's "ruling it out" serves to blunt that line of attack significantly.

        He's much better off not trying to sell single-payer to the country right now, which would lead to a huge battle (despite most polls showing over 50% support for it, you know it'd lead to a huge battle and would be very difficult to do).  Instead, he can sell the country on something much easier, but which has a built-in mechanism that could, if successful, lead to an evolution towards single-payer later on.

        Obama's been working like this very consistently in his political career, the transition, and the presidency: He seeks to move forward in ways that are effective and at the same time not "scary", and by doing so, builds support and slowly builds towards the next improvement - without mapping out how far we'll go later on.  He's willing to just do what works now, what's both possible and helpful, without having to commit to later paths in advance.  He's quite good at it and it's a reasonable strategy.

        • But this strategy easily could go wrong

          If we go for something "much easier" now, and that something, because it doesn't have the cost control that single payer has, doesn't significantly reduce costs, and the public option soaks up a lot of taxpayer dollars, the result could be a backlash against the whole idea.

          The window for this type of change only opens once in a blue moon.  We might be better off undertaking the "huge battle" now, rather than putting it off.

          • That's not the choice at this juncture

            I don't think anyone suggested that it was realistic to completely replace the current health care system with single-payer at a national level now.  We were talking about where we're heading in the future: It is possible to move in that direction, and we can probably get there later on.  The question that came up was about the fact that Obama has supposedly "ruled out" going there in the future, and I said that he needs to do that in order to succeed at the first step, the one that he is making now (and that is a very big step).

        • explain to me

          how reinforcing a system of private insurance companies (and government bureaucracies that interact with them in a congenial manner) allows for an evolution towards single payer.  

          Single payer will put private insurance companies out of business, they'll fight it tooth and nail.  Generally, when it comes to presidential politics, if you don't do it first, you don't do it.  So assuming you're right on Obama's strategy, we've got at least 8 years before actual health care reform is an option, that stinks.  

          Howard Dean should have been Secretary of HHS.  

          • the senate plan,

            which obama has said he supports, contains a provision for state health care. That's different than the fehb and much more like medicare. The fact that it won't be medicare will just make it more expensive and difficult to impliment, but baby steps...

            If the Obama/senate plan goes there, that's a huge reform. Here's just some of the things that it would do:

            1. Give most people who don't have insurance now decent insurance. 2. Allow everyone across the country to be insured with the plan of their choice, regardless of preexisting conditions. That alone represents a fundamental, 180 degree turn from where we are today. In Massachusetts, we already have that... but we're one of only 1-2 states where you can be insured regardless of preexisting conditions. 3. Help people who most need it help with their insurance costs. 4. Allow access to a public option which will be cheaper, available to everyone and almost certainly better than the typical HMO (at least within a few years) because politicians are accountable to the public whereas HMOs aren't.

            Option 4 is why we'll almost certainly move to a German-like, near-single payer system. In Germany, people can use government insurance or private insurance. 90% choose the public. I don't know if this country will ever have 'true' single payer, but within 5-10 years, we could have a system very similar to Germany's... which would be a vast improvement.  

  3. Are you really this blind? What this woman is attempting to say is that the Fed Gov makes the rules and controls the printing presses

    The fed Gov when it controls healthcare will do as it damn well pleases not according to law. The Gov will make and break the rules as it goes along. Tey will tell doctors and providers to provide services for nothing or we will revoke your license---- same for hospitals.

    You people are frightening. You think that Gov gives a crap about individuals in the healthcare system ( users and providers) and the quality of healthcare providers.  . God help us. We wil have the same quality of healthcare in Russia. And you deserve every bit of it!

    • The government already operates a healthcare system

      Between Medicare, Medicaid, and TRICARE, the VA, etc., the government is already the largest health insurer in the nation. Why not allow anyone who wishes to pay for that coverage? If the private insurers can compete, more power to them! Right?

      TedF

    • Yeah, we are

      You people are frightening.

      Have you considered leaving, fraidy cat?

    • your logic escapes me

      You think that Gov gives a crap about individuals in the healthcare system

      ... whereas you think private insurers give a crap about individuals in the healthcare system?

  4. Snark aside

    I think MCRD is basically correct, the lobbyist is trying to scare us with the big bad federal government. The thing is, when you consider all the safety nets, Medicare, Medicaid, veterans' care, and everything else, would we really pay more with single payer? I'd like to see that math (or rather, have it explained to me).

    I refuse to believe the longer lines argument, the lines I wait in now are plenty long. So I don't buy the "We'll become Canada" argument. I think Canada has long lines because it has a much smaller healthcare system. Now someone will say "That's because it lacks the profit motive," but we'll still have much greater demand, and therefore much greater supply. Even with single payer, there will be bucks to be made.

    • long Lines

      I think we also need to address the issue of rationing of health care.  People opposed to a single payer system  belive it will ration health care so much that people will be waiting for months and years for doctor visits and surgeries.  In many ways, they're right.  

      An equitable health care system would ration care, but it would do it based upon need, not income.  We have a rationed system right now, if you have insurance you get your share, if you don't, you get no share.  We can build in safeguards to improve care but for some, it will be worse.  If it become better for everyone, however, that's the right thing to do.  

      Right now, especially in Massachusetts, many people consume too much health care.  My daughter was born at the Brigham, it was a low risk pregnancy, she was healthy, there were no signs that complications would occur.  Still, when given the option, we opted to go with the hospital we thought was the best.  In a single payer system, we likely would have been told to go to a community hospital, it would have cost far less and the outcome would likely have been the same.  

      If we were forced to use a community hospital, in some very small number of cases, unexpected complications and the inability of the hospital to properly deal with it would result in tragedy.  If my daughter was that statistical allowance, I can't imagine how I'd feel and I would always wonder what would have happened had I gone to the "best" hospital.  This fear, is exactly why I shouldn't have total control over the choice.  Rationing health care is hard, but necessary.      

      • That is certainly a well-reasoned argument

        And I commend you for addressing the fundamental problem with single payer so forthrightly.  Not sure I'm willing to give up that choice.

  5. Start your own health insurance company

    Start your own health insurance company without the marketing and administration overhead of a private insurer, offer to pay the doctors and hospitals what they'd get in single payer, and maybe you'll sign up a million people and become rich.  

  6. Nonprofits

    I think the status of many or most of the private insurers as nonprofit corporations cuts the legs out from under their argument that government competition would be unfair to them. If there were shareholders who had made investments and whose interests deserved some consideration, then I would agree that the government ought to tread lightly. But the nonprofits don't have shareholders. What they do have is an entrenched management that earns outsized compensation. It is those managers who really stand to lose here. I think we owe them no such consideration.

    TedF

    • That's true around here,

      but less so, I think, in other parts of the country where outfits like Aetna are big players.

  7. The Ted Kennedy Plan

    is to open Medicare to everyone.  SCHIPS is essentially Medicare for kids.

    This makes sense from the government's point of view.  The entire structure is in place so all that needs to be revised are the eligibility rules.

    Private industry knows it cannot compete with a government plan NOT because the government plan will be better but because the government plan will be cheaper to the participant, i.e., it will have much lower premiums, ARTIFICIALLY lower.  

    Actually, it could have zero premium cost for that matter because the government can levy taxes to pay providers.  The insurance industry can't do that.

    The TRUE financial cost of a one-size-fits-all universal Medicare system, though, the actual dollars spent in the program per person, will be the same or higher than our private health expenditures because, as is the case in the Medicare program, utilization, regulated by subsidized premiums and out-of-pockets, will soar.

    I was involved in caring for a grandmother and Medicare is not as good as private insurance.

    Why do we think any delivery system which at its heart is a political system will deliver quality health care?  How good is the care in the VA system?  There's a government run health system for you.

    Come to think of it, can someone give me an example where the feds actually out-perform the private sector?

    Foreigners coming to the US for medical treatment go to Mayo Clinic or Mass General or Anderson or Cleveland Clinic.

    They don't go to the VA.

    • VA: $quot;The Best Care Anywhere$quot;

      You are completely wrong, as usual, about the VA. And I've posted the same damn link every time you bring it up. The VA is a success story -- a huge one.

      The VA has the highest rate of patient satisfaction of any health care delivery system in the United States, by far-higher even than fee-for-service Medicare, with its limitless choice of doctors. As readers of this magazine are likely to know (see "Best Care Anywhere," Washington Monthly, January/February 2005), the VA also comes out on top of virtually every study ranking the quality, safety, efficiency, and cost-effectiveness of U.S. health care providers.

      As Harvard's John F. Kennedy School of Government gushed when awarding the VA a top prize in 2006 for innovation in government: "While the costs of health care continue to soar for most Americans, the VA is reducing costs, reducing errors, and becoming the model for what modern health care management and delivery should look like." In studies of health care quality, few private systems even come close to the VA.

      I don't expect you to read or believe it this time, Shep, because you never read or believe it. Eppur si muove.

      Foreigners don't go to the VA because they can't, and because no, it's not glamorous. It just happens to be good care at a good price.

      • Great article/link, Charley

        Shep must have been thinking of Walter Reed, which I admit I also thought was associated with the VA. Very informative story.

      • VA

        Yeah, yeah, VA's great.  Make you wonder why a full 1/3 of all veterans opt to buy into Medicare D even though they get coverage free at VA.  Reason is that VA only has a limited drug formulary compared to Medicare or, of course private pay.  

        Let me know if you qualify for VA coverage. Schedule a physical and when you get the appointment in 6 months, tell me how your day went because prepare to spend the day.  

        But wait! You have a study that says otherwise. Nevermind.

        • You're not providing any counterpoints

          You're providing hypothetical anecdotes (very useful, those) and statistics that come from I don't know where.

          You might ask that 1/3 of vets why they choose Medicare part D. Is it the reason you find most convenient, or something else? Maybe it's better coverage; maybe they're suckers. Don't know. If you posted a link we can discuss.

      • Why is there so much talk of improving the VA if it's so damn good already?

        link

      • Eppur si muove

    • VA health care

      Well, of course foreigners can't go to the VA unless they're US veterans.

      The VA has a lot of problems.  But a recent New Yorker article by Dr. Atul Gawande says, "The veterans' system has low costs, one of the nation's best information-technology systems for health care, and quality of care that (despite what you've heard) has, in recent years, come to exceed the private sector's on numerous measures. But it has a tightly limited choice of clinicians-you can't go to see any doctor you want, and the nearest facility may be far away from where you live."(http://www.newyorker.com/reporting/2009/01/26/090126fa_fact_gawande)   A quick search disclosed at least a couple of studies which confirmed equal or better quality at the VHA.

      Medicare doesn't cover everything, but people are very satisfied with it, except for Part D, the privatized drug coverage with multiple, confusing, and expensive competing plans.  Of course, visiting foreigners aren't eligible for Medicare either.

      And you're confusing insurance with delivery systems.  Medicare pays a lot of folks' bills at Mass General; under Medicare you have almost complete choice of doctors and hospitals.  I don't know of any proposal to create a national health care delivery system -- universal health care proposal just  intend to insure everyone.

    • BS

      The TRUE financial cost of a one-size-fits-all universal Medicare system, though, the actual dollars spent in the program per person, will be the same or higher than our private health expenditures

      That is not remotely close to being accurate. America's health care expenditures is soaring to nearly 20% of our entire GDP -- whereas countries with single payer systems, systems that are better and insure everyone, pay a little over 10% of their GDP to health care. We would save around 5% of our GDP if we switched to a single payer system, or something akin to Germany. Individuals and families would each stand to save thousands of dollars a year, which could then be spent on, ah, stuff. Whatever you'd like.

      There's so much overhead with private insurance, as well as price gouging, and lobbyist shit that goes on and makes us spend far more on our drugs... which would all go away if we switched to single payer or at least moved in that direction.

      I was involved in caring for a grandmother and Medicare is not as good as private insurance.

       

      Again, sorry, you're wrong. Medicare enjoys much higher approval ratings than anyone who has an HMO. Medicare's not perfect - we need to do a lot especially around drugs and donut holes - but medicare's still much better than HMOs, which routinely deny people access, drop them off plans and refuse to pay for treatments all across the country. Remember, living in Massachusetts we've forced HMOs to not do some of the hideous things they do in other states (like deny based on preexisting conditions)... Medicare doesn't do any of that crap here, but only because we've forced their hands. In other states, they're quite happy to allow someone to die who would otherwise pay for their insurance, all for a profit margin.

      Come to think of it, can someone give me an example where the feds actually out-perform the private sector?

      According to opinion polls... health care. You can add security to the list - compare our military to blackwater. Education. Public schools in general are far superior to most private schools... and it more or less comes free with our citizenship/tax dollars. The private sector fucks up just as much, or more, than the public sector. Enron. AIG. Citi. Need I go on?

      • Medicare

        Is very effective because it pays $10 for services that cost the medical practice $20, thus shifting the cost onto all of the other patients, which means they pay $50 for the services that cost $20.

        Where do those costs get shifted once everyone is paying $10?

        • Cost

          First, I think private insurers do this, too, by limiting reimbursement for particular services. You can see this when you get a bill from the hospital. Let's say the "cost" of your procedure is $10,000, and BCBS pays the hospital $8,000, per their agreement. The hospital eats the remainder.

          But this is sometimes a bit of a fiction. My sense is that the "cost" of a medical service, i.e., the amount that a provider bills, bears no necessary relationship to the actual cost the provider incurs in providing the service. My sense is that providers sometimes start with the amount of money they know they need to operate their hospitals, dole out free care, etc., and with the amount of reimbursement they know they are going to receive from the insurers, and then work from there to figure out what the "cost" should be.

          But I don't have any links to prove it!

          TedF

          • No doubt

            I'm sure that is exactly what happens.  I'm also sure that Partners or BCBS pays differently than Teenytiny Insurance.

            Nevertheless, the hospital needs $X to remain open, and is presently forced to go through very complex maneuvering in order to see that $X is received.  Which is a legitimate criticism of the existing system.

            But to pretend that this could be fixed by putting everyone on Medicare is to acknowledge that the number of available places to seek health care- hospitals, clinics, offices, etc.-- will decline, possibly by a lot.  Unless the new, expanded medicare actually pays what things cost, which would have the effect of undermining the "it will be so much cheaper!" argument.

          • This happens because...

            Providers are not allowed to demand collection of more than the statutory BCBS rate for a given procedure.

            This is part of a game providers play, the same game that begins with the sign in the office that says "Please pay when services are rendered." The provider asks you to pay $12,000 for something that the state says is worth $8,000.

            When the provider bills the insurer, the insurer reimburses at the statutory rate. The provider writes off the remainder. Nobody "pays" the remainder. It's the same game as when a retailer screams about a "ONE TIME SALE" at "50% OFF LIST" -- when NOBODY ever pays "list".

            The provider hopes that some folks will simply pay the initially-posted price. I suppose that some probably do.

            Oh, and finally, when my family was forced to get our health care on a "private pay" basis in the early nineties -- because nothing REMOTELY affordable was available then -- I was astonished at how much less the providers charge to private-pay patients.

            A piece of medical equipment, for example, that had a BCBS price of $2,400 turned into $495 as a private-pay.

            I think the message here is that ANY correlation between cost and price has long since been obscured in the tangled provider/insurer/patient maze. It is a serious and fundamental mistake to apply any assumptions from other sectors to health care.

  8. Waste

    Administrative Waste Consumes 31 Percent of Health Spending

    Average overhead among private U.S. insurers was 11.7 percent, compared with 1.3 percent for Canada's single-payer system and 3.6 percent for Medicare.
  9. Not sure I buy the assumption...

    ...that private insurers couldn't compete.  My understanding of the British National Health Service is that the public system is available to everyone, but people have the option of purchasing additional private insurance.  We have that here with education.  Public education (K-12) is available to all yet there are still plenty of private schools and supplementary tutorial services in business.  Even those on Medicare sometimes purchase supplemental insurance.

    I also want to address rationing, which strikes me as the bogeyman of this debate.  First, we do plenty of waiting for treatment under the current system.  It's often several weeks before a doctor can make you an appointment if it's not urgent.  There is often waiting time in the ER, though this usually means someone has determined from a health standpoint that you can wait, so that's almost a good sign.  When I went to Belgium (which has single-payer) with a class a few years ago one of my classmates got sick.  She was able to see a doctor the next day and paid the equivalent of $20 each for the appointment itself and her medication.  From that time on, I have refused to believe the scare-tactics opponents use regarding having to wait forever for so-called rationed care.

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