Skip to main content

As noted in a recommended diary today, Blue Cross Blue Shield of North Dakota has a 90% market share in that state and is organized as a non-profit mutual company, in theory owned by customers.  Allegedly, BCBSND has a poor record of cost control.  Both Paul Krugman and Ezra Klein think a public option would help solve the serious problem is high insurance rates in non-competitive markets, and few are less competitive than North Dakota's.  North Dakota's dominant health insurance company is also in the midst of some executive compensation scandals.

But, if this near monopoly is so bad, why isn't health care in North Dakota more expensive?  It has the fifth lowest private health insurance rates, and the second lowest Medicare reimbursement rates in the country.

Ezra Klein and Paul Krugman, in the midst of a debate over the importance of the public option this week.  Klein wasn't convinced that a public option would provide meaningful cost control outside monopoly markets, while Krugman thought that a public option would have a major cost control impact even in non-monopoly markets.

But, they both actually agreed that an important function of the public option would be to help by providing competition in markets like North Dakota with a single dominant insurer.  

Ezra Klein conceded that:

There are real advantages to the presence of a public alternative. Competition matters, for one thing, and there are a lot of states where one or two private insurers essentially control the market.

Similarly, Krugman argued that "a public plan would probably provide the only real competition in many markets."

If competition matters, then states like North Dakota, where one company has a 90% market share, should be among the most expensive places in the country to buy private health insurance.  But, it isn't.

Despite the fact that one company has a 90% market share of its private health insurance market, North Dakota turns out to be a place with above average rates of private health insurance coverage, and relatively low private health insurance rates.  It also has good rates of health care utilization and good health outcomes.

A single person premium for an enrolled employee there is $364 dollars per year less than the national median of $3,706 (about 8% below the national median).  North Dakota is the fifth most affordable state in the nation in which to buy health insurance.  

North Dakota's Medicare reimbursement costs are also relatively low: $1,304 a year per beneficiary less than the national median of $6,070 per year per beneficiary, more than 20% below the national median, the second lowest in the nation.

If we want to lower health care costs, North Dakota is better as a model than it is as a cautionary tale.

North Dakota can be seen a couple of ways.  One is as proof that non-profit insurance plans are more competitive and drive out for profit insurers given a chance.  Ergo, non-profit co-ops without government involvement are good enough, without government ownership or privileges.  

It is also proof positive that conservative Republicans (who are strongly disproportionately represented among North Dakota voters) can manage just fine in a world with essentially no for profit health insurance companies.

You could look at North Dakota as proof that in the absence of competition, even the lack of a need to make profits and little need to do marketing doesn't prevent abuses by insurance company executives.  Yes, North Dakota's rates are low, but they would have been lower if the executives of this non-profit were unfairly enriching themselves.  This is the point that today's recommended diary on health insurance industry abuses tried to make today.  But, as annoying as excessive executive compensation is, it is something that doesn't directly matter to the people who pay health insurance premiums unless it translates into higher health insurance rates.  

The case that a public option would lower both executive compensation and in turn, health insurance premiums can be made, but it isn't at all rock solid.  

A public option might press a dominant player to be competitive, but so can a new non-profit co-op, or new rules that allow health insurance companies to market themselves across state lines.  Allowing interstate insurance company competition increases competition (at least until the industry shakes out), but also could gut the authority of state insurance regulators, which is one of the reasons that North Dakota's health insurance rates aren't out of control, despite a monopoly.  North Dakota's Blue Cross and Blue Shield is not only a non-profit, it is also has its rates regulated a bit like a utility company.  

Also, forcing new players into market could force all companies in the market, including BCBSND to spend more on marketing and claims administration, and less on health care.  Is that really a good idea?  This would destroy the benefit of some of the cost control methods, already in place, that Krugman thinks that a public option could provide.

The notion that North Dakota's insurance market is seriously broken, due to a lack of competition, compared to states with more health insurance competition, doesn't hold water. North Dakota's status as a de facto single payer state, due to this near monopoly by a non-profit health care provider, may actually be benefitting the state with reduced administrative costs and increased leverage with providers that single payer systems create.

Indeed, it is ironic that while North Dakota can't really resolve the argument between Ezra Klein and Paul Krugman over whether a public option will have much of a cost control impact in a state where there is competition, it actually disproves both of them on a point where they agree, that competition reduces costs, even when the monopoly player is already a non-profit company.

Is more than industry structure at work here?  Sure it is.  North Dakota partially has low health insurance rates and high levels of coverage because people who are seriously poor, or need cutting edge health care services tend to leave the state.  But, there is no convincing evidence that North Dakota is running its health care system any worse than any other state, despite the fact that it is a poster child for a lack of competition in the health insurance market.

Originally posted to ohwilleke on Tue Sep 08, 2009 at 06:23 PM PDT.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Tip Jar (6+ / 0-)

    "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

    by ohwilleke on Tue Sep 08, 2009 at 06:23:37 PM PDT

  •  What I learned from Atul Gawande's (2+ / 0-)
    Recommended by:
    ExStr8, sabredance

    ...New Yorker article a few months ago, about McAllen TX, was that health insurance companies aren't the real variable in the cost of medical care.  Rather, it's how doctors and hospitals operate, especially the nexus between them.

    http://www.newyorker.com/...

    Al que no le guste el caldo, le dan dos tazas.

    by Rich in PA on Tue Sep 08, 2009 at 06:28:05 PM PDT

    •  I agree. (5+ / 0-)

      Grand Junction, Colorado which is being touted as a model of low cost health care provision with good results is subject to exactly the same legal regulations as the Denver metro area which has higher costs and more competition between insurance companies.

      Those on the ground describe the benefits as coming from better doctor and hospital cooperation, which I can attest to, having represented one of the two main hospitals in that city as a lawyer for several years (until I left for the big city about a decade ago).

      But, it is also worth mentioning that one of the leading providers of health insurance in Grand Junction, specifically Rocky Mountain Health Plans, is a locally based non-profit health insurer.

      "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

      by ohwilleke on Tue Sep 08, 2009 at 06:35:55 PM PDT

      [ Parent ]

  •  Um, maybe because everything is cheaper (17+ / 0-)

    in North Dakota, in fact it's 7% below the average cost of living of the US.

    It's not Democrats v. Republicans or Liberal v. Conservative. It's People v. Money.

    by superfly on Tue Sep 08, 2009 at 06:33:51 PM PDT

    •  If competition mattered (1+ / 0-)
      Recommended by:
      greengemini

      health insurance premiums would be significant less cheap relative to the national median than the overall cost of living.  Instead health insurance in North Dakota is a little more cheap than the cost of living overall.

      Whether little competition translates into high health insurance costs depends mostly upon whether one of the dominant insurers is a non-profit and the strength of local rate regulation.  A rate regulated non-profit, like BCBSND is still a better situation, even in the face of a near monopoly, than lots of competition among for profit health companies with little rate regulation.

      "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

      by ohwilleke on Tue Sep 08, 2009 at 06:42:11 PM PDT

      [ Parent ]

      •  And if it had some real competition, (3+ / 0-)

        ND's rates might even be lower.

        And if ND's citizens could buy into Medicare, they might even be lower than that.

        We can probably play the "if this, then that" game all night.

        It's not Democrats v. Republicans or Liberal v. Conservative. It's People v. Money.

        by superfly on Tue Sep 08, 2009 at 06:56:51 PM PDT

        [ Parent ]

        •  The entire premise of lack of competition being a (1+ / 0-)
          Recommended by:
          JackND

          problem is that health insurance premiums are high relative to the cost of living as a result.  If that isn't true, then lack of competition is not as big a factor as widely believed.

          Could there be other ways to lower costs in North Dakota.  Yes.  But, a buy into Medicare isn't on the table.  And, the argument that competition from a public option would make anything better is decidedly mixed.

          Making public policy decisions is fundamentally an "if this, then that" game.  All public policy decisions are like that.  The best you can do is look at the facts.  When the facts don't match theory, as is the case in North Dakota, where lack of competition doesn't appear to have driven up health insurance costs, then you need to revise the theory.

          Once you have the best theory available, you make choices within the realm of the politically possible.

          When two of more widely heard participants in the political debate over health care on the liberal side predict something that doesn't happen, then maybe the economic theory that they are using is wrong.  

          "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

          by ohwilleke on Tue Sep 08, 2009 at 07:15:49 PM PDT

          [ Parent ]

          •  You're arguing a strawman, (1+ / 0-)
            Recommended by:
            Larsstephens

            but your definitely kicking its ass.

            Both Krugman and Klein have stated that competition isn't the only element that will drive down price (both have talked about treating health insurance companies like public utilities), and neither have argued that the inverse, the lack of competition, is the sole driver of rising health insurance costs.

            In fact, your diary makes it clear that regulation is probably the key factor in keeping costs low in ND, even if you didn't mean it to, and that regulation is keeping the cost of health insurance pretty much in line with the cost of living in ND, surprise, surprise.

            None of this changes the fact that if BCBS had some real, actual competition, its prices would be even lower. I don't need facts and theories and studies and white papers to figure that out, it's common sense, but by all means, keep arguing against it and dazzling everyone with bullshit.

            It's not Democrats v. Republicans or Liberal v. Conservative. It's People v. Money.

            by superfly on Tue Sep 08, 2009 at 08:21:24 PM PDT

            [ Parent ]

    •  yea thats very true (4+ / 0-)

      I live in North Dakota and my best friend used to hire skilled college educated people and he said that its hard to get out of state college educated people to come to ND for jobs because on paper people could move 3 states away and make like 10% more.

      Also we get paid far less than people in other states. So if you live in NY or NJ and see how low those numbers are then come here and work for the wages we get then come back and tell me that we pay very little for insurance.

      My brother pays $280 a month to insure my 14 month old niece which is more than it takes to insure me.

      •  If North Dakota can get doctors to work for less (0+ / 0-)

        further off the beaten path, then maybe we need their negotiators in other states.

        (I live in Colorado, by the way, and lived in ND for about six months some time ago).

        Still, even relative to the overall cost of living, health insurance is still below average in cost in North Dakota.  And, $280 a month to insure a dependent honestly doesn't sound that expensive, indeed, it is right in line with the cost of health insurance in North Dakota relative to the nation generally.

        "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

        by ohwilleke on Tue Sep 08, 2009 at 06:53:16 PM PDT

        [ Parent ]

        •  do you work for blue cross? (1+ / 0-)
          Recommended by:
          superfly

          Because from the sound of it you do.

          •  No. (3+ / 0-)
            Recommended by:
            moggie12, joedemocrat, Larsstephens

            A decade ago I worked for a community hospital.  I don't recall ever working for a health insurance company of any kind.

            My interest in seeing if BCBSND was really expensive flows mostly from looking a mutual companies and co-ops and credit unions generally.  They tend to provide more consumer protection with less regulation.

            In Colorado, medical malpractice insurance is organized on a comparable model, with a single dominant player that is a non-profit and indirectly controlled by the state's leading association of physicians, the Colorado Medical Society.

            "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

            by ohwilleke on Tue Sep 08, 2009 at 07:19:15 PM PDT

            [ Parent ]

            •  Don't recall? (2+ / 0-)
              Recommended by:
              superfly, Larsstephens

              They tortured people to get false confessions to fraudulently justify their fraudulent invasion of Iraq.

              by Words In Action on Tue Sep 08, 2009 at 07:41:57 PM PDT

              [ Parent ]

              •  You're a lawyer long enough it becomes a habit (2+ / 0-)
                Recommended by:
                moggie12, Larsstephens

                and really, the point is that I'm not shilling for insurance companies.  

                Can I say that I've never practiced in a law firm that somebody has done work that I've never even been aware was going on that somehow involved a health insurance company?  No.

                But, do I have any financial or business motivations to argue for health insurance companies?  No.

                "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

                by ohwilleke on Tue Sep 08, 2009 at 07:49:27 PM PDT

                [ Parent ]

        •  Again, doctors can work for less (0+ / 0-)

          because everything costs less. This is Macro Econ 101 here, it's not a matter of negotiation.

          It's not Democrats v. Republicans or Liberal v. Conservative. It's People v. Money.

          by superfly on Tue Sep 08, 2009 at 07:01:34 PM PDT

          [ Parent ]

          •  or is it MicroEcon 101? (0+ / 0-)

            I forget which is which sometimes.

            It's not Democrats v. Republicans or Liberal v. Conservative. It's People v. Money.

            by superfly on Tue Sep 08, 2009 at 07:02:20 PM PDT

            [ Parent ]

          •  Doctors are usually harder to attract to (1+ / 0-)
            Recommended by:
            SarahLee

            rural areas than urban areas, and often insist on comparable pay to urban areas as a result.

            If health care is cheaper relative to the cost of living in ND, than elsewhere, that doesn't prove the point.

            "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

            by ohwilleke on Tue Sep 08, 2009 at 07:20:45 PM PDT

            [ Parent ]

        •  Monopsony... (1+ / 0-)
          Recommended by:
          Larsstephens

          Another potential factor is simple monopsony.

          Since BCBS is pretty much the only game in ND, any doctor, clinic, or hospital that wants to provide care has to either accept BCBS -- and their rates -- or go cash only.  BCBS has a great deal of leverage to keep medical costs down in ND, and no reason not to use it.

        •  Now that's a lawyer talkin, if I've ever heard (0+ / 0-)

          one.  

          To anyone in the upper middle class, that might sound cheap but, for one thing you don't know what the terms of that policy are, and for another you don't know how hard it is to afford $300 a month for one kid's insurance when you're pulling down $40K or less.

          "Well, yeah, the Constitution is worth it if you can succeed." -Nancy Pelosi, 6/29/07.

          by nailbender on Tue Sep 08, 2009 at 09:31:31 PM PDT

          [ Parent ]

    •  I know that property values are lower there (0+ / 0-)

      than most places in the country, so per square footage rates for facilities must be lower as well.  Wages are also lower than many parts of the US.  This all factors in, as you point out.

      "Well, yeah, the Constitution is worth it if you can succeed." -Nancy Pelosi, 6/29/07.

      by nailbender on Tue Sep 08, 2009 at 09:27:37 PM PDT

      [ Parent ]

  •  The cost/pay breakdown for North Dakota is (11+ / 0-)

    ranked the same. It says nothing about the no competitiveness of health care, it's a false positive. Rents in ND are also among the bottom 5, as is average pay, which was 48th, being lower than economic powerhouse Mississippi. that would have far more to do with it

  •  My wife's from ND (8+ / 0-)

    And this is a case where statistics do not represent reality.

    Since it is very rural, the elderly are far more likely to stay with family instead of a nursing home. Anyone living west of Bismark has a long drive to reach anything other than basic care. So they don't.

    Not to mention the large number of people without enough money to afford health care. As my wife just said "we just didn't get sick."

    And you don't even want to know just how crappy the VA in ND was! When my father-in-law moved down here, he was shocked he could actually make an appt and see a doctor within weeks.

    •  Nursing home subsidies from the government (0+ / 0-)

      come out of Medicaid not Medicare.  Keeping the elderly out of nursing homes would tend to increase Medicare costs as a result.

      And, health care for the elderly doesn't impact private health insurance costs at all.  Indeed, to the extent that the under sixty-five year old population is older than other states, it should drive up health insurance costs, since older people with private health insurance need more care.

      Sure, there are people in North Dakota who are uninsured.  Just fewer of them, on a percentage basis, than in most states.  

      The "we just didn't get sick" part is the myth.  The people of North Dakota utilize health care more often than people in the median state (probably because they are more likely to have health insurance).  There is no evidence that North Dakotans who have health care are using less of it.

      "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

      by ohwilleke on Tue Sep 08, 2009 at 06:48:15 PM PDT

      [ Parent ]

      •  Medicare initially pays for a... (2+ / 0-)
        Recommended by:
        SarahLee, Larsstephens

        certain amount of nursing home care. After that they take your assets and once you are poor Medicaid kicks in.

        •  Nursing home care costs don't strongly drive (0+ / 0-)

          total Medicare costs but do make up a very big piece of Medicaid costs.

          Ending the inefficient asset recovery system for Medicaid is another pet project of mine.

          "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

          by ohwilleke on Tue Sep 08, 2009 at 07:24:09 PM PDT

          [ Parent ]

          •  I don't get why nursing homes cost so... (1+ / 0-)
            Recommended by:
            Larsstephens

            much money. It isn't like the service is that great. The staff isn't that well paid either. Where does all the money go?

            •  Rent + Food + Cleaning Service + Nurses (0+ / 0-)

              Nursing homes provide essentially 100% of the housing (furnished), plus maid service, plus prepared food of their residents.  On top of that, they provide 24 a day nursing care and nurses aren't cheap these days.

              Turnover is also pretty high.  A decided minority of tenants stay more than two years.  So money has to go towards keeping the place full and they have some bad debt amounts.

              A typical nursing home costs about $3,000 a month in round numbers.  Staying at a middle range motel ($100 a night) cost about the same, with no food and no nurses.

              At low end motel prices ($30 a night), plus $20 a day for prepared food (about the cost of eating out at cheap restaurants for every meal), you're half way there and you haven't even begun to pay for the 24 hour nursing staff.

              "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

              by ohwilleke on Tue Sep 08, 2009 at 07:45:40 PM PDT

              [ Parent ]

    •  Isn't the VA run by the feds? How does... (1+ / 0-)
      Recommended by:
      Larsstephens

      ND have anything to do with the VA?

      •  The VA is a single payer, single provider system (1+ / 0-)
        Recommended by:
        Larsstephens

        for eligible veterans.  The doctors and everyone else in the system are government employees.  If it sucks in ND, it has something to do with the VA bureacrats who run the local facilities and the federal funding allocation system for the VA.

        The VA got a very bad reputation in the Reagan years, turned out to be exemplary under Clinton, and has slipped a bit since then.

        FL probably has a good VA hospital system since its Congress critters are so attuned to the needs of older residents who have lots of health care needs and are often vets, and to the needs of vets generally, since they are overrepresented in the South.  More political pressure leads to better service.

        "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

        by ohwilleke on Tue Sep 08, 2009 at 07:57:56 PM PDT

        [ Parent ]

  •  Very interesting.. (6+ / 0-)

    I believe there are mulitple factors that determine health care costs in each state. The presence of competition is only one factor.

    North Dakota is more rural, has a lower cost of living, and so on.

    It would be great if somebody knowledgeable enough to put together a list of 50 states, health care, costs, and all the contributing factors - we have urban/rural, cost of living, malpractice laws, how competitve the marketplace is, quality of health care, and probably more.

  •  no doubt demographics play a role (5+ / 0-)

    but it sounds like state-level regulation is important too. That kind of regulation is not on the table in any of the current bills in Congress.

    Join the Iowa progressive community at Bleeding Heartland.

    by desmoinesdem on Tue Sep 08, 2009 at 06:43:27 PM PDT

    •  Exactly. (6+ / 0-)

      North Dakota's Blue Cross and Blue Shield is not only a non-profit, it is also has its rates regulated a bit like a utility company.

      That's a key point and not incidental to why prices are not sky high--it's probably the main reason prices are not sky high.

      "The work goes on, the cause endures, the hope still lives and the dream shall never die."

      by Bush Bites on Tue Sep 08, 2009 at 06:49:15 PM PDT

      [ Parent ]

    •  Who says Congress has to do all the work? (1+ / 0-)
      Recommended by:
      Larsstephens

      Utility regulation of prices can be a model for states with little competition.  

      States can't fix all the problems.  In particular, they are in a poor position to bring about universal coverage.  

      But, states are in a good position to engage in profit/price regulation in their own states if a lack of competition makes this desirable.

      "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

      by ohwilleke on Tue Sep 08, 2009 at 06:58:42 PM PDT

      [ Parent ]

  •  But you said its prices are regulated. (1+ / 0-)
    Recommended by:
    Words In Action

    Don't you think that's why its prices are reasonable?

    "The work goes on, the cause endures, the hope still lives and the dream shall never die."

    by Bush Bites on Tue Sep 08, 2009 at 06:44:59 PM PDT

    •  If it is a factor (2+ / 0-)
      Recommended by:
      phonegery, joedemocrat

      than why not do that in states without competition.  This is not a state that has a natural love of regulation, but it manages.

      Utility regulation isn't necessarily any worse than competition, and it has the virtue of discouraging complexity, instead of favoring it.  Non-price competition is one important reason why the health insurance market is so opaque.

      "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

      by ohwilleke on Tue Sep 08, 2009 at 06:56:37 PM PDT

      [ Parent ]

      •  no love of regulation now, but a history (1+ / 0-)
        Recommended by:
        phonegery

        of "socialism" with the Non-Partisan League, Bank of ND, State Mill.

        There are a lot of "govt off the backs of the people" types, now, though.

        There are plenty of working folks that are uninsured, though. My mom used to serve that population.

        They do have some laws with teeth though, and a strong insurance commissioner.

        Competition isn't the only way to solve this problem, but given that most other options have been removed from the debate and aren't in the bills, it seems like the best way to try to keep costs down given the available choices.

        One thing that nobody likes to bring up on any side of this is the possibility that wages and pay are just too low, and have not kept up with other costs like health insurance.

        We would not need as many subsidies to make insurance affordable if people got real wages.

        "Come on, Mr. President. Show us America is more than a circus or a market." Bill Moyers

        by whitewidow on Tue Sep 08, 2009 at 08:22:31 PM PDT

        [ Parent ]

  •  And as for Repubs putting up with non-profits. (2+ / 0-)
    Recommended by:
    greengemini, Larsstephens

    Well, you know, they also get power from the Tennessee Valley Authority in the South and Hoover Dam in the West and none of them are going to refuse Social Security or Medicare or quit using the post office, roads or trying to turn the public schools into Christian Madrasahs.

    Hypocracy has never bothered the Wingnuts.

    "The work goes on, the cause endures, the hope still lives and the dream shall never die."

    by Bush Bites on Tue Sep 08, 2009 at 06:56:53 PM PDT

  •  Costs are low in ND for everything, from land (4+ / 0-)

    to salaries.

    And who knows what the quality of health care is like there?  

    Would you want to be in a hospital in ND if your life depended on it?

  •  This is the problem right here-- besides the (6+ / 0-)

    other problem laid out in the recommended diary, which is the BCBS execs taking millions in bonuses and flying around in private jets and all that:

    to repeat, this is the problem:  "$364 dollars per year less than the national median of $3,706 (about 8% below the national median)."

    So average individual insurance in ND is $3670 a year.  That works out to $300 a month.  Let's say you're someone working a minimum wage job.  40 hours a week x $7.50 an hour, let's say.  That means that you'd have to work about a week to pay for your monthly premium cost, as an individual. Let's say your rent is $400 a month.  That leaves you less than two weeks' salary to live on.  And you have to pay all this other stuff, like prescription drugs (if you take any), food, transportation, phone, laundry.  Can you do that with less than two weeks' salary?

    And what if you're an individual with health problems?  Surely your premium is more than that minimum/average.  How are you going to afford a premium that's even higher than that?  Not to mention the extra doctors' visits, or visits to specialists that are not covered, etc. etc.  And how the heck do you save for anything?  And what if you have a kid?  Or if you have to help out relatives or do eldercare?  Where do you get the money if your health insurance is eating up 1/4 of your salary?

    No, I'd say that North Dakota is not a good example of an affordable healthcare package.

    The point is:  the only way to get all Americans covered is to have a public option.  Because there are going to be plenty of people for whom even $3000 a year is too much money to be able to afford for coverage.  

    Your diary is logically laid out and you write cleanly.  As you say, "there is no convincing evidence that North Dakota is running its health care system worse than any other state."  I do think you have made that point.  

    But you are a little disingenuous in making your point.  For as you note,  "people who are seriously poor, or need cutting edge health care services tend to leave the state."  Indeed.  Therein lies the entire point of the entire argument in favor of a public option in any healthcare package put on the President's desk.  People who are seriously poor are American citizens with the basic need for healthcare.  People who need cutting edge services are American citizens with special needs for healthcare.  All are American citizens who are entitled to healthcare services as part of the government infrastructure and services package they pay for when they pay taxes.  And the only way they all will be covered-- rather than forced to wander from state to state or languish, dying-- is through the government's providing a public option for healthcare.  Quibbling about whether or not North Dakota is really as bad as someone says it is with regard to reduction of costs or expense of services, isn't going to help us make the larger-- and urgent-- case for getting coverage for all citizens as soon as possible.  

    •  Apples and oranges. (1+ / 0-)
      Recommended by:
      joedemocrat

      [T]he only way to get all Americans covered is to have a public option.  Because there are going to be plenty of people for whom even $3000 a year is too much money to be able to afford for coverage.

      No.  A public option has virtually nothing to do with getting everyone covered.  If you are making the minimum wage, the problem is that you don't have enough money to pay what it costs to provide health care, not that health care is too expensive.

      All of the health care reform proposals solve the problem of affordability by giving people who can't afford health insurance premiums money to make it possible for them to afford it.  It is a straight transfer payment, just like Social Security.

      Nothing about the universal coverage provisions of health care reform have anything particular to do with the public option.  Indeed, fewer than 10 million people out of 300 million plus in the United States are expected to utilize it, if there is one.  But, there are 45 million uninsured people in this country.

      The public option is an attempt to control costs, mostly cost growth, particularly in less competitive markets.  But, that's it.  The public option is not a vehicle for delivering government subsidies.  None of the proposals on the table call for the public option to have any meaningful public subsidy apart from the subsidy available to anyone wanting to buy any kind of health insurance.

      "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

      by ohwilleke on Tue Sep 08, 2009 at 07:09:35 PM PDT

      [ Parent ]

      •  And if it can control those costs along the lines (1+ / 0-)
        Recommended by:
        Larsstephens

        of the bargaining power that Medicare has had, then that in the long run frees up more money for whatever subsidies that can be proposed with the aim of helping to get everyone covered.

        •  Medicare has unsustainably rising costs too. (0+ / 0-)

          Not quite as fast as private insurance, but rapidly rising none the less.

          But, to get Medicare's benefits, you need tools that no public option on the table has.

          Controlling costs lifts all boats.  But, the kind of cost control that either Medicare or a public option provide make almost no difference to the aim of getting everyone covered now.  They make a little percentage growth rate dent (bend the curve) down the road when everybody already has coverage.

          "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

          by ohwilleke on Tue Sep 08, 2009 at 07:35:49 PM PDT

          [ Parent ]

  •  Grandma don't retire in ND (0+ / 0-)

    even if she was an x-ball busting bronc rider (she loved the cowboys). She went to Florida, or was it Arizona? So, we could kill all the old people to bring the rest of the states into ND compliance.

    North Dakota's Medicare reimbursement costs are also relatively low: $1,304 a year per beneficiary less than the national median of $6,070 per year per beneficiary,

    What about the statistic where Medicare pays out 40% of its dollars in the last few years of granny's life? That $6,070 wouldn't even cover granny's C-section...so a pregnant granny would be more coveted?

    Remember, the car is covered by insurance and we are relieved that no one died. As for granny, isn't she dead yet? Hey granny, when you die, can I have your Buick?

  •  The whole point of this across state... (2+ / 0-)
    Recommended by:
    joedemocrat, Larsstephens

    Allowing interstate insurance company competition increases competition (at least until the industry shakes out), but also could gut the authority of state insurance regulators, which is one of the reasons that North Dakota's health insurance rates aren't out of control, despite a monopoly.  North Dakota's Blue Cross and Blue Shield is not only a non-profit, it is also has its rates regulated a bit like a utility company.  

    lines BS mantra is to get around state regulations! The GOP wants to use the federal government to gut state laws (which BTW totally goes against their ideology of federalism).

    So the insurance companies will be able to set up shop in a low reg state like Georgia and sell crap insurance to people in the other 49 states. Those other 49 states won't be able to oversee a darn thing. It is a total scam!

    •  I fully agree that we should regulate insurance. (3+ / 0-)
      Recommended by:
      phonegery, joedemocrat, Larsstephens

      But, there is nothing sacred about regulating it at the state rather than the federal level, or visa versa.

      The fact that banks and employee benefit plans and telephone calls are largely regulated at the federal level, while insurance is largely a matter of state regulation, is nothing more or less than a historical accident.

      For that matter, dual regulation isn't at all unusual, and federal minimum standards that states can exceed if they wish are found in many areas of law (e.g. franchise regulation and mortgage broker regulation).

      Regulating insurance at the state level undoubtedly reduces competition, particularly in small states.  In the insurance industry, compliance with state regulations costs a similar amount in every state, but is a much bigger chunk of gross revenues and net profits in smaller states, which is why there is often less competition in those states.

      "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

      by ohwilleke on Tue Sep 08, 2009 at 07:32:27 PM PDT

      [ Parent ]

      •  Banks are regulated at the state level as... (2+ / 0-)
        Recommended by:
        phonegery, Larsstephens

        The fact that banks and employee benefit plans and telephone calls are largely regulated at the federal level, while insurance is largely a matter of state regulation, is nothing more or less than a historical accident.

        well as the federal level. Life insurance is regulated at the state level too and that works out fine. It has nothing to do with a historical accident either. Before the New Deal state regulated most things and the feds hardly did any regulating.

        Regulating insurance at the state level undoubtedly reduces competition, particularly in small states.  In the insurance industry, compliance with state regulations costs a similar amount in every state, but is a much bigger chunk of gross revenues and net profits in smaller states, which is why there is often less competition in those states.

        If you get rid of state laws the result will be that in small states like ND a big insurance company from CA or NY will buy up or out compete the smaller insurance companies in ND. Eventually we will end up with a couple huge nationwide health care companies and we will be in the same mess as before.

        I honestly don't understand the whole competition argument when it comes to health insurance. Single payer is the exact opposite of competition and it works out rather well.

        My local township has one local fire department and one local police department (like most cities and towns in the US). No one is arguing that we need more police departments in my township.

        •  Some banks are regulated entirely at the federal (2+ / 0-)
          Recommended by:
          phonegery, Larsstephens

          level, some at the state and the federal level.  Most of the regulation that really matters (like the FDIC and check processing rules) is federal for all banks.

          The accident is what came to be regulated at the federal level.  If the politics of the New Deal had played out differently, we could easily have state regulation of commodities exchanges and employee benefits, and federal regulation of insurance companies and worker's compensation, for example.

          Employee stock ownership plans are primarily regulated at the federal level rather than the state level primarily due to the efforts of one citizen and one member of Congress, for example.  There is no grand organizing principle that explains why one industry is regulated at one level and another is regulated at another level.

          The virtue of competition is that it works even when politicians and the people who run the competing companies are corrupt.  You don't have to have faith in the political process to nearly the same extent.  

          Also, there is almost certainly more than one police department in your township.  In addition to a local police force, you are probably served by a county sheriff, a county coroner's office, several private security forces, the FBI, the DEA, the Secret Service, the Air National Guard, the National Guard, the Civil Air Patrol, and the Coast Guard (if you have any coastal area).  Also, you are probably served by a county or district level prosecuting attorney, the state attorney general with a criminal prosecution arm, the U.S. Attorneys' office for your state, and specialized criminal prosecution arms of the U.S. Justice Department in Washington D.C.  They also sometimes deputize JAG officers to make prosecutions from the military.  Overlapping jurisdiction is one of the way that monopoly risks involved with single bureacrats are avoided in the law enforcement community.

          "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

          by ohwilleke on Tue Sep 08, 2009 at 08:10:00 PM PDT

          [ Parent ]

          •  This is totally different. This is... (0+ / 0-)

            Also, there is almost certainly more than one police department in your township.  In addition to a local police force, you are probably served by a county sheriff, a county coroner's office, several private security forces, the FBI, the DEA, the Secret Service, the Air National Guard, the National Guard, the Civil Air Patrol, and the Coast Guard (if you have any coastal area).  Also, you are probably served by a county or district level prosecuting attorney, the state attorney general with a criminal prosecution arm, the U.S. Attorneys' office for your state, and specialized criminal prosecution arms of the U.S. Justice Department in Washington D.C.  They also sometimes deputize JAG officers to make prosecutions from the military.  Overlapping jurisdiction is one of the way that monopoly risks involved with single bureacrats are avoided in the law enforcement community.

            separation of powers and federalism. The county sheriff has responsibilities that my local police department does not have. My state police patrols the highways and does other things that the county sheriff doesn't do. Yes, sometimes things overlap. They aren't supposed to be competing with each other though (even though that sometimes happens). They aren't trying to drive each other out of business! Just the opposite; they are suppose to work with each other and share information.

            I completely understand and appreciate that this fractured law enforcement system makes the departments more accountable and transparent but it isn't the same as companies competing with each other in the market place.

    •  I've been reading about the Republican idea... (1+ / 0-)
      Recommended by:
      Larsstephens

      They want to allow people to buy health plans across state lines, as people can auto insurance. The arguement is this will increase competition thus lowering prices.

      However, won't this be a "race to the bottom" so to speak. Yes, premuims drop for younger/healthy folks because they will flock to states that don't have a community rating and have fewer mandates. But then older/sicker people have much higher premuims. So the idea doesn't lower health insurance costs - it just shifts them from one group to another.

      It might be possible to "fine tune" this idea and have a national "community rating" law and national minimuim standsrds. Then its possible this idea may help. But I don't know for sure.

      •  States regulate automobile insurance to a great (2+ / 0-)
        Recommended by:
        phonegery, Larsstephens

        extent as well.  For example, some states have no fault automobile insurance, while others have fault based automobile insurance.

        The biggest interstate players in the health insurance market today are "self-insured" big businesses (e.g. Wal-Mart) where an insurance company administers what looks like a health insurance plan for a fee, but doesn't set aside reserves against the possibility that claims will be high or low in any given year; the company just pays whatever it costs to pay providers for all its employees directly.  States are pre-empted by federal law from regulating these plans by ERISA.

        "Learn from yesterday, live for today, hope for tomorrow." -- Albert Einstein

        by ohwilleke on Tue Sep 08, 2009 at 07:54:10 PM PDT

        [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site