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View Diary: Health Care Reform Bill Mythbusting #1: "Junk Insurance" (133 comments)

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  •  The individual mandate is perpendicular (0+ / 0-)

    to regulatory effectiveness.

    Ok, so I read the polls.

    by andgarden on Thu Dec 17, 2009 at 08:29:25 PM PST

    [ Parent ]

    •  You still aren't answering the question (1+ / 0-)
      Recommended by:
      CalliopeIrjaPearl

      Look: all the frontpagers, Kos, and the FDL team keep insisting that we should pass a stripped-down bill with ALL the insurance regulations but no mandate.

      This is completely incoherent. You cannot have the insurance regulations without a mandate. If you insist on removing the mandate, fine, but then you have to insist on removing the insurance regulations as well.

      So tell me this: if in the absence of a public plan, you still insist on there being insurance regulations, how do you propose we avoid adverse selection issues?

      •  Oh, you mean how is supposed to work (1+ / 0-)
        Recommended by:
        thethinveil

        for the insurance companies? Well, they're being bribed with subsidies. The money that you get from subsidies isn't free. You either use it to buy healthcare or it doesn't exist for you (or, under the proposed regime, your taxes go up).

        Ok, so I read the polls.

        by andgarden on Thu Dec 17, 2009 at 08:43:50 PM PST

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      •  We can't regulate the beef industry (4+ / 0-)
        Recommended by:
        andgarden, 0wn, thethinveil, DaveVentura

        unless there's a mandate that everyone buy beef. If there's no mandate, the regulations must be removed.

        Is that really your argument?

        Member, The Angry Left

        by nosleep4u on Thu Dec 17, 2009 at 08:44:25 PM PST

        [ Parent ]

        •  Yup, that's what it amounts to (1+ / 0-)
          Recommended by:
          thethinveil

          There seems to be this disconnect where proponents don't realize that the subsidies go straight to the insurance companies. That's not for us, that's for them.

          And if that ins't enough incentive to get them to consent to regulation, then we'd better ask why.

          Ok, so I read the polls.

          by andgarden on Thu Dec 17, 2009 at 08:45:50 PM PST

          [ Parent ]

        •  That's a complete non-sequiter (3+ / 0-)
          Recommended by:
          sja, glynis, Common Cents

          Insurance works through risk-pooling. If you simultaneously (a) require that insurance companies accept everyone regardless or health status or age and if you insist on community-rating, BUT you (b) allow people to opt out, then you quickly develop adverse selection. Healthy people can opt out. The remaining risk pool is sicker. Thus more expensive to insure.

          This is very basic economics here. This is why virtually every health economist endorses a mandate.

          Now, if you remove the mandate, how do you expect to preserve the regulations?

          This is not a facetious question. There may well be some other way to do it, and if you have another proposal, please by all means share it.

          •  Its not a non-sequiter (3+ / 0-)
            Recommended by:
            andgarden, 0wn, thethinveil

            Its an application of your exact argument to the beef industry. Seriously. Re-read your previous post.

            Member, The Angry Left

            by nosleep4u on Thu Dec 17, 2009 at 08:54:03 PM PST

            [ Parent ]

          •  You are making a connection without evidence (2+ / 0-)
            Recommended by:
            0wn, thethinveil

            What is the relationship between the mandate and the regulations? Are you just saying that it's unfair to subject insurance companies to regulations without a mandate? Well, boo hoo. How about this, I would settle for a public plan and no additional regulations. I'll even give you the mandate.

            Ok, so I read the polls.

            by andgarden on Thu Dec 17, 2009 at 08:57:38 PM PST

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            •  This has nothing to do with unfairness (2+ / 0-)
              Recommended by:
              glynis, Common Cents

              This is basic economics. If you are running an insurance scheme - of any sort, whether it be non-profit, private, or yes, even public - everybody needs to pay in. That's how Social Security works, for example.

              If you require insurance companies to accept anyone and if you require them to charge people roughly the same rates, then if healthy people can opt out, the risk pool gets worse. The cost-per-person goes up, and the cost spirals.

              States have tried community-rating without an individual mandate. Of those states, Massachusetts is the one with the lowest premiums. Community-rating that allows people to not buy insurance just leaves the sicker people the ones buying insurance.

              •  The community rating stuff is not the regulation (1+ / 0-)
                Recommended by:
                thethinveil

                I'm talking about. Heck, I don't even consider that regulation. I'm talking about recision etc.

                There is no connection, unless you think the insurance companies will be less cooperative on those issues without a mandate.

                Ok, so I read the polls.

                by andgarden on Thu Dec 17, 2009 at 09:11:31 PM PST

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                •  The mandate works both ways (1+ / 0-)
                  Recommended by:
                  glynis

                  Yes, you have to buy insurance. But at the same time, the company cannot refuse to sell you the product. And they can't kick you off at any time.

                  Your argument is that they should be able to do the last two without a mandate.

                  The problem with rescission without universal coverage and, yes, a mandate, is again, that with a sicker risk pool, if you get very sick, you are suddenly a bad risk. And by keeping you in there and paying your costs, the price goes up for others - and they may drop out of the system, thereby increasing the expense of insuring the pool yet again.

                  •  Have you ever studied utilities regulation? (1+ / 0-)
                    Recommended by:
                    thethinveil

                    Do you know how impossible it is to get accurate information out of such services about their real costs?

                    I don't disagree with the model you present, but it's all predicated on insurance company transparency and good faith that I do not take as a given. That's why the mandate must be tied to the availability of a public option. Otherwise, there is no real way to determine whether the insurance companies are just making up their costs.

                    Ok, so I read the polls.

                    by andgarden on Thu Dec 17, 2009 at 09:20:29 PM PST

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                  •  Civil Rights Have Been Around For A Long Time (1+ / 0-)
                    Recommended by:
                    thethinveil

                    In any number of areas businesses have been required to do business with people in other non-discriminatory ways (such as race) where at the same time Civil Rights didn't require those newly-liberated from having a mandate to buy anything. Somehow businesses not only survived but thrived post-Civil Rights despite Civil Rights not requiring mandates.

                    •  Is it more expensive to serve black customers? (1+ / 0-)
                      Recommended by:
                      glynis

                      Insurance is a different ballgame than a normal business.

                      I am not arguing the health insurance industry are all cuddly. I'm simply pointing out that ANY insurance scheme, be it private or public, requires broad participation if you're going to keep the cost-per-person low. (Social Security being a perfect example - everyone pays in, though it's the elderly who benefit.)

                      You can't require guaranteed issue, community-rating, bans on rescission and denials of care based on pre-existing conditions, without requiring universal participation or else the cost will skyrocket, even under a public, not-for-profit plan.

                      If you are arguing that the mandate needs to be removed, then fine. But you have to insist in that case that most of those types of reforms go as well.

          •  So Precisely How Much Would It Cost? (0+ / 0-)

            What is the dollar amount difference between having a mandate and not having a mandate? Saying it is something set in stone without quantifying it just goes nowhere.

            •  Here you go (2+ / 0-)
              Recommended by:
              sja, glynis

              Here's Paul Krugman arguing in favor of Hillary Clinton's health care mandates against Obama's opposition, back in February of '08:

              To answer this question you need to make a detailed analysis of health care decisions. That’s what Jonathan Gruber of M.I.T., one of America’s leading health care economists, does in a new paper.

              Mr. Gruber finds that a plan without mandates, broadly resembling the Obama plan, would cover 23 million of those currently uninsured, at a taxpayer cost of $102 billion per year. An otherwise identical plan with mandates would cover 45 million of the uninsured — essentially everyone — at a taxpayer cost of $124 billion. Over all, the Obama-type plan would cost $4,400 per newly insured person, the Clinton-type plan only $2,700.

      •  And the thing (2+ / 0-)
        Recommended by:
        sja, glynis

        I keep coming to on the mandate issue - and I say this as someone with libertarian tendencies that preferred Obama's plan in the primaries primarily because it DIDN'T include mandates - is that it's an essential part of the Medicare savings in the bill.

        It's one of the things we don't talk about much and aren't particularly controversial - but Medicare gets a significant health boost in this bill.

        The mandates are more or less what makes this possible -- much of the cost savings in Medicare amount to:

        1)cutting or eliminating some of the subsidies Medicare already provides to hospitals to make up for uninsured treatment... i.e., Medicare, to some extent, pays for the unfunded mandate of EMTALA already... it's a big reason - not the only, but a big reason - it's going broke.

        2)Cutting a PhRMA direct program under Medicare.

        Both of these Medicare cuts don't touch benefits - but it saves Medicare a lot of money.

        The problem with cutting mandates is that you probably have to get rid of at least item 1) and maybe item 2)...

        I guess everyone's got their own blog now.

        by zonk on Thu Dec 17, 2009 at 08:53:42 PM PST

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        •  Please draw the connection directly (0+ / 0-)

          between mandates and regulations.

          Ok, so I read the polls.

          by andgarden on Thu Dec 17, 2009 at 08:58:07 PM PST

          [ Parent ]

          •  Not sure I understand the question (1+ / 0-)
            Recommended by:
            glynis

            Are you talking about why the Medicare provisions are so dependent on them?

            If so -

            It's one of the hidden costs of Medicare.  Medicare reimbursement to providers isn't "flat" - meaning, there are all kinds of provisions, formulas, and systems where Medicare pays one hospital or provider more than another.

            In particular - Medicare has provider classifications called "DSH" (Disproportionate Share Hospitals - mainly urban hospitals that serve the poor and uninsured) and "CAH" (Critical Access Hospitals - usually rural hospitals that are geographically necessary).

            Medicare keeps the doors open in many of these hospitals by paying them at higher rates than the 'baseline' rates it pays.

            Medicare also covers things like 'charity care' - hospitals sometimes classify procedures and services where the patient cannot pay as 'charity care' (BTW - everyone should be aware of these... hospitals don't HAVE to tell you about them if you're uncovered, but if you explicitly ask if they participate in any charity care programs - they must tell you).

            All these are essentially mechanisms where Medicare pays providers to cover some of the costs of treating the uninsured.

            The idea is -- if 95% of Americans are now to be insured, and payment is made that way - Medicare no longer has to pay for these extras, and that can be cut from Medicare.

            It's cost shifting - but since Medicare has its own budget and trust fund, it helps keep Medicare healthy by cutting these costs (letting Medicare shift to its more traditional poor, disabled, and senior coverage).

            I guess everyone's got their own blog now.

            by zonk on Thu Dec 17, 2009 at 09:12:00 PM PST

            [ Parent ]

      •  really? We already did them a favor (0+ / 0-)

        by eliminating the public option.

        When will we ever learn that PROFIT cannot be a part of the equation when endangering people's lives adds to a company's bottom line?--Earicicle

        by billlaurelMD on Fri Dec 18, 2009 at 08:57:47 AM PST

        [ Parent ]

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