Health Care Questions From JoeTS To Wonky BMGers

I’m going to break my questions up into separate question numbers.  At times like this I wish I could wield the bullets and dividing lines of KBusch (make a post that teaches us, seriously!) but I will make due.  

Flip it.  I promise there aren’t any swastikas or Lyndon Larouche love sonnet’s.  


My first question is regarding the funding.  In the previous post that this stemmed from, Charley’s Q&A says, in regards to the PO:

How is it funded? Just like normal insurance: You pay premiums. It’s not free.

 

He later says

Is it Medicaid? Is it Medicare? Is it S-CHIP? No, no and no. Those are entitlements — benefits that are extended to people deemed eligible (the poor, old, and kids respectively), paid for by tax dollars. Again, the public option for health insurance would be paid for by premiums; it’s not a “free lunch.”

I’ve heard and read that one of the ways of funding this reform is going to be a $500 Billion cut to medicare (or medicaid?  I get them mixed up).  So if I pay taxes to medicare, something I may very well take advantage of some day, God willing, and it gets cut from it and goes to this reform, wouldn’t tax dollars be funding it?  Granted, I’m aware there’s more to this reform than just the PO, but PO is the whole point of it, so there would no doubt be such action going on.  

Let’s work of the assumption that zero tax dollars will initially go into the PO.  

This will be a program that by its design and a greater part in its intent will benefit the lower income citizens in our country.  It’s no secret (which is why I’m not going to go link hunting) that lower income people are prone to poor diets, more dangerous jobs, and other factors that cause them to have more health problems than the middle and upper classes.  Obesity is a huge problem low-income citizens have.  Obesity causes a myriad of health problems.  Once again, not secrets.  

If we have a PO that is funded by their premiums, but these premiums are less than if they are on private insurance, what we have is less insurance premiums pay for the insurance of people who would use more health care dollars than the middle and upper income citizens that pay higher premiums.  Since the PO is going to be a function of the Federal Government, when deficits occur, and I have every reason to think they would, do you think that tax dollars wouldn’t be bailing such a function out?  

That said, my questions regarding Hawaii stands:

Your Hawaii case is not really comparable, since as the article says, it was paid for with “public funds”, i.e. tax dollars. So that would be more like S-CHIP “crowding out” private insurance — that happens on the margins, but apparently not very much. Again, the “public option” would be paid for by subscriber premiums, not tax $.

And if demand overwhelms the supply offered, vis-a-vis cash 4 clunkers, how long before tax dollars are tossed into it?  It’s going to happen.  

I know that question works off a lot of generalizations, but I feel like they are sound in their logic.  

__________________________________________

My second question is more about the philosophy of the PO.  

Once again, our esteemed tenor notes

People shifting to the public option from private insurance is indeed a possibility! The question is whether you think that’s ok on principle or not.

First of all, if we are at this level of debate where people are already counting votes to see if this would pass, how has it not been determined who is going to be eligible for this?  Charley agrees that this is super duper important.  

Why should we focus on this point more?  

Look, I’m not a raving lunatic.  The Catholic in me knows that we NEED to do something to help people who are unable to help themselves.  I don’t think that the federal government is the right way to solve their problem, out of political principle, but it seems more and more like there isn’t much of a recourse.  That said, I think that if we have a PO, it needs to be designed to only be at the disposal of people who need it.  If we have very laxed merits to determine eligibility into a PO, we run the risk of creating, as the Lewin Group sees it, the largest insurance company in America — the PO.  Out of sheer principle, I disagree with this.  We elected Obama and Company, but we are still a capitalist Democracy.  I don’t think we should establish public alternatives to private entities that will easily overwhelm the private entities.  

I’m not really sure how to phrase my question, but you get the jist of my concern.  

This post was originally published with Soapblox and contains additional formatting and metadata.
View archived version of this post
.



Discuss

16 Comments . Leave a comment below.
  1. It's late so...

    ... I'm only going to tackle a small part of this.

    Regarding funding, this is my understanding:  The intent is to come out of the transition with a PO system that is paid for by premiums.  That is obviously impossible from the start line, however.   It will necessarily be subsidized to start with to get it going.  Of course, this'd be exactly the kind of thing we'd expect of a new private start up as well... there is an initial capital outlay necessary to get into the business in the first place.

    The claim of the measure being budget neutral after ten years is a claim about the legislation as a whole, not just the PO.  (Although that can mean different things about the total expenditure to get us there.)  Some money is found by use of the 500B cut, of course.  To put the 500B in perspective,... my understanding is that it's about 10% over 10 years.  With that in mind, there are other programs that are supposed to find savings within Medicare anyway.  The claim is that these savings should cover this 10%.  I'm guessing that this savings will be more 'back-loaded' than 'front-loaded' because the mechanisms are institutional in nature.  In particular the provisions for the enacting of MedPAC policy perscriptions (a Republican initiative originally... MedPAC, not the provision in this legislation), will, I think, actually find this 10% all on it's own in all likelihood.  Now, if you're not already aware, MedPAC is a group created by the legislature (Created by the GOP congress of the late 90's) of policy and health care experts who meet in order to analyze medicare in order to find ways to save money and improve delivery and outcomes.  Most of the time their ideas (as you'd expect from a group of pure technocrats) are quite good, but in order for their ideas to become enacted they have to go through the legislature again and politics usually kills all the good stuff (surprising I know).  The provision in the bill is that these policy perscriptions by MedPAC would be automatically accepted (in total... this is important because many times the individual ideas depend on each other in order to make any gains) and enacted unless blocked by a joint resolution.  So if you have a panel of technocrats who have been working on the problems already for over a decade, I actually have faith that they can find 10%, especially considering that many of the inefficiencies to be found and corrected are institutional and policy related in nature to begin with.

    That's what I have for now.  Like I said... it's late.

  2. Joe, you need to use some HTML codes

    1. First bullet
    2. Second bullet
    3. Third bullet
    4. Fourth bullet

    Your parting comment here

    And then your final blab here

    I'm not a web developer (maybe KBusch is). You can go to this link which shows the above HTML code. Just plug in your own bullets and paste into the BMG window.

    Try it!

    • Bullets

      are ul not ol. "ul" stands for "unordered list" and "ol" for ordered list. Hence ol gives you numbers. There are all sorts of other things one can do with shapes, numbering, etc. But JoeTS, you're right they belong elsewhere.

      • I just use punctuation.

        A list of points: * the first point * the second point     - first part of second point     - second part of second point * the third point

        Now, the trick is getting extra spaces in there.  You only get one in HTML.  But, you can do this:

        nbsp; nbsp;

        where you put an ampersand [the & character] before each non-breakingspace; command.

  3. crap!

    Joe, I had a whole big comment ready to go, and then I lost it. Blast. Will re-create as I can -- later.

  4. A long bit about the PO

    The biggest costs of the bill are the expansion of Medicaid and the subsidies to help lower-income Americans afford insurance.  As has been stated before, the PO will probably have start-up costs, but current proposals force it to survive on premium revenue.  (This is called the 'weak' PO.  The 'strong' PO would be supported by tax dollars and/or use Medicare rates to make it cheaper than private insurance.)

    This will be a program that by its design and a greater part in its intent will benefit the lower income citizens in our country.

    I disagree with this statement.  As currently conceived, the PO will benefit middle-income Americans (low-income folks qualify for Medicare or Medicaid) who are not employed by large companies or the government.  It is this group - folks who currently either buy individual-market insurance or go without - who would have access to and get the most value from a well-regulated 'exchange' and a public option.  The options under discussion now usually don't allow people employed at big employers to have access to the PO.  

    If we have a PO that is funded by their premiums, but these premiums are less than if they are on private insurance, what we have is less insurance premiums pay for the insurance of people who would use more health care dollars than the middle and upper income citizens that pay higher premiums.

    A) assuming the PO needs to support itself on premiums, it can't underprice its premiums.  B) other insurers won't be able to discriminate based on health status.  Given these two things, the PO shouldn't collapse due to costs being greater than premiums.

    how has it not been determined who is going to be eligible for this?

    Because it's still being debated!  The House has a bill, but  Senate finance hasn't put one out yet.  And even after that there are Senate floor amendments and reconciliation!  This hasn't been decided yet because the answer to the question affects how many votes you can count.  It's all very fluid right now.  That said, I agree that it's really important.

    I don't think we should establish public alternatives to private entities that will easily overwhelm the private entities.

    Well, I think that's okay if the public alternative is clearly cheaper and better.  That said, public universities haven't easily overwhelmed private universities, and public housing loan programs haven't easily overwhelmed private loans.

    Under EVERY scenario, the PO will compete with private insurers. In that situation, there are a few options:

    1)  the PO gets no taxpayer subsidy.  In this case, it's competing freely, and I don't know what the problem is.  If it's cheaper and better, people will switch to it (and they should!).  If it's cheaper and more restrictive or lower quality, maybe some people will think that's okay for them (and that's fine).  If it's expensive but better quality, maybe some people are looking for that.  If it's expensive and low quality, people will stay away (and they should!).

    2)  the PO gets taxpayer subsidy (or can demand Medicare rates), and is cheaper than private insurers.  People will likely switch to it (again, depending on their quality / expansiveness of benefit), and we can debate whether this is a good thing (government coercion / market influence / etc.).  I think this is clearly the more problematic case, and, again, why we should be spending time not on PO: Yes or No? but on PO: Who and How?

    Hope this is useful. Sorry for the long-windedness.

    • Thanks for your answers

      And I think, for me, the big issue comes down to tax payer subsidization.  

      this point:

      Well, I think that's okay if the public alternative is clearly cheaper and better.  That said, public universities haven't easily overwhelmed private universities, and public housing loan programs haven't easily overwhelmed private loans.

      I can tell you from going to a public university, there isn't much of an alumni network to take advantage of and the college I get my degree from is important for prestige reasons when applying for jobs.  Health care insurance is just getting someone to pay for health related costs.  Unless the private insurers will be able to offer something that the PO won't, the overwhelming may happen.  

      • One aspect of...

        ... adverse selection (the practice of insurers 'choosing' their customers) is that it creates a race to the bottom in the competition.  That is, nobody wants to be particularly good at anything because you'll attract all the sick people that want that good thing it it'll throw off your risk pool.  

        Making adverse selection illegal would go a long way to mitigating this in theory.  (Of course, to really mean anything there also needs to be premium controls otherwise pricing people with pre-existing conditions out will end up being 'adverse selection by other means'.)  Once the playing field is leveled in terms of who you can deny, providers may actually compete.  So I'd expect an increase of 'this provider provides something that the other provider (or PO) doesn't'.

        It's not just that health care isn't like other commodities,... typical free market mechanisms also don't produce the desired results that they do for other commodities.

      • Alumni networks

        For what it's worth, I'm an alum of Michigan, which boasts an ENORMOUS (and energetic) alumni network. I think it has something to do with football...

        I agree that for competition to work, the competitors have to strive to offer desirable, differentiated products.  I think that can happen with a PO in an Exchange environment.

  5. It seems to me we have a competing message concerning the PO

    The opponents keep saying the PO will put private insurance companies out of business since surely it will be cheaper for them to offer this PO. The proponents say NO, people will keep their private insurance like you have today.

    -  First I'd say it will be tough for "people" to keep their private insurer if their company selects the PO by default.

    - Second, the tough balance might be the PO will have to be "inferior" to private insurance or EVERYONE will switch to it... but how inferior can it be before PO customers complain about it?

    - Right now some doctors don't take Medicare customers since the reimbursement is too low. What will stop Doctors from not accepting the PO customers if they deem payments are to small compared to private insurance customers?

    Maybe it is hidden but I still don't see "cost savings" in the reform bill. As an example, if we were to put the fictitious 45-50 million people who have been "denied" healthcare insurance on Medicare, wouldn't that take a system already with 40 million people on it that is a train wreck? How will adding these people decrease the $74 Billion unfunded liability of Medicare? I heard the premium payments will pay for this but let's be honest, the vast majority of people being added will be lower income people who will all qualify for low premiums or no premiums. Does anyone know of a computational model of this proposed system where numbers could be plugged?

    • Its not 45-50 that are denied medicare

      its something like 20% of that number are not on it but could be.  The reasons for which, I don't know.  

      • I've asked for a true unbiased number but can't get it.

        The right (Sen Hatch just last night) keeps saying the 45 million is broken up as 6-8 million illegal immigrants, 12-15 million people who are eligible for Medicare, 12-15 million Americans who could afford insurance but opt out and about 2-6 million Americans who truly need medical insurance but can't afford it. The number goes from 45 to 47 to 50 million plus it often is 45 million people vs. 45 Americans... and I heard the word "denied healthcare" the other day from Lawrence O'Donell just to demagogue a little.

        But even these controversial numbers aside, I have yet to see a simple model showing the investment required, the savings predicted and time lines.

        Obama was asked yesterday about Cash for clunkers being a mess/disaster. He tried turning it around by replying it was a good problem to have and that nobody ever anticipated the success. BUT... my take on his answer was this was yet another knee jerk program in which even his people DIDN'T KNOW WHAT WAS GOING TO HAPPEN. We have been throwing spaghetti at he wall to see what sticks with bank bailouts, stimulus bill, GM bailout, cash for clunkers and I quite frankly am not ready to gamble 1/6 of our economy on a "hope". What are the numbers and I mean from CBO and not the left.

        • The Cash for Clunkers program did exactly what it was supposed to do

          it was a stimulus program for (a) new car dealerships (b) new car factories in the USA (c) auto-related banking and insurance industries

          and it was a tremendous success.  Car sales went way up, inventories dropped substantially, and some factories will operate more hours for the next month or two to "catch up".  Lay-offs at dealerships were put on hold for a while, and people ended up spending more cash (and getting multipliers thanks to loans) which makes its way throughout the American economy.

          Given that it was an economic stimulus package that did it's job, it sure was nice that the gov't put a little environmental spin on it.  Not substantial, but a little bit.  Too much enviro spin, and the Japanese companies would have done too well and there wouldn't have been enough Americans interested.  And remember, we don't choose how much to drive based on gallons of gas; we choose based on distance.  So, going from 17 to 20 mpg (an increase of 11%) is like going from 34 mpg to 50 mpg because for each 100 miles, each auto uses 1 gallon less gas (6 to 5 in the first auto, 3 to 2 in the second auto).  Nudging up the worst performers is a far more efficient systematic way to reduce gasoline consumption than increasing the number of hypermilers by a small overall number.  Personally, I would have liked to have seen slightly higher step-up requirements and slightly smaller subsidies (to stretch the program longer), but that's Monday morning quarterbacking.

    • the PO and a Republican alternative

      First I'd say it will be tough for "people" to keep their private insurer if their company selects the PO by default.

      My understanding of all the current PO proposals is that it would be for the individual/small group market, and that large employers wouldn't be able to purchase it.  That said, this tough situation is no different than the present situation where employers have a huge amount of control over your health insurance options.  

      Second, the tough balance might be the PO will have to be "inferior" to private insurance or EVERYONE will switch to it... but how inferior can it be before PO customers complain about it?

      Isn't this what competition is all about?  If you are worse, people don't choose you, if you're better, people do?  I'm confused.

      A Republican alternative for Healthcare Reform

      Some interesting ideas here, for sure.  I wish it was something the Republicans actually talked about / promoted / offered as an alternative vision.  Unfortunately, the nihilist party has taken the Kristol tactics to heart, fully believing that no reform is better - at least for them politically - than any reform (even while continuing to pretend that they think reform is necessary).  

  6. Wong?

    Is Joe Moshe just another "terrorist" or a whistleblower caught in the dragnet. http://www.huffingtonpost.com/...

    Is Joe Moshe Bar a leading bioscientist who knows what purpose the bird/swine/unicorn vaccine program will serve. http://www.abovetopsecret.com/...

    So, I'm not Uri Geller who claimed to bend spoons with his mind. I'm not exceptional in my paranormal episodes yet last night, the dreams, the visions. Not good at all.  

  7. if the private market in health insurance was working...

    If the free market was actually working in the health insurance industry,

    a. would there be uninsured people? Why aren't the insurance companies doing a better job of making products available to people that are currently uninsured?

    b. would health insurance companies be able to make such obscene profits? Aetna's CEO made $24 million last year.

    It's not like these are non-profit companies. They're out to make money. At least a government provided insurance company would not be motivated by greed. It'd probably be motivated by efficiency. At least, that's what I would want.

    There have been studies that show that uninsured people have a lower quality of life, shorter life expectancy, and worse health because even if emergency rooms are available at low / no cost, they are used reluctantly and much later in the process of the disease / problem.

    One of the problems with the current system is that people generally do not have a choice about insurance to get. They work for a company which has contracted with one particular insurance company which offers a few plans. If they change jobs or move to a different state, their insurance has to change. That doesn't really make sense to me from a personal perspective.

    Additionally, it has to be remembered that Doctors are people who have taken many years (at least 7 years post college) out of the work force and assumed a lot of debt ($75k+ / year of medical school) to take on jobs that have a ton of responsibility and lately seem to garner little trust or respect.

    If Doctors are not reimbursed by insurance (public or private) sufficiently, they may opt out entirely.

    Sorry for the ramble.... :)

« Blue Mass Group Front Page

Add Your Comments

You must be logged in to post a comment.

Tue 2 Sep 2:50 AM