By necessity this is a somewhat short diary because there frankly hasn't been any real discussion (yet) of using what most of the rest of the western world realizes is the most important aspect of universal health care- a Risk Equalization Mechanism (or risk subsidy).
The most unpopular part of the HCR bills is the mandate. In an election year the mandate has less chance of passage than other aspects of the bills. And yet without the mandate regulatory reforms which prevent denial for pre-existing conditions, etc. will make average premiums go much higher. (Also a big no-no in an election year). Yet older people will still have to pay 300% more in premiums, an unrealistic proposal for many.
By sheer necessity Congress will eventually have to stop trying to re-invent the wheel and consider risk equalization subsidies which could make everyone's premiums the same- a very popular thing in an election year.
In European countries which maintain a public/private insurance system and Australia risk equalization is considered critical. Decisions are made about what risk factors, such as age, are worthy of help and subsidies are paid to companies for these higher risks. Not only does it make insurance affordable for people in certain high-risk groups, but it makes their insurance desirable by companies.
As the article on risk equalization in Wikipedia summarizes, higher risks pertaining to inefficent providers and high-cost areas are usually not subsidized:
Although premiums can be rated across many subgroups of insured people, a sponsor may not want to subsidize all observed premium rate variation in practice. The total set of risk factors that insurers use to rate their premiums can be divided in two subsets: the subset of risk factors that cause premium rate variation which the sponsor decides to subsidize, the S(ubsidy)-type risk factors; and the subset that causes premium rate variations which the sponsor does not want to subsidize, the N(on-subsidy)-type risk factors.[2] In most countries, gender, health status and (to a certain extent) age will probably be considered S-type risk factors. Examples of potential N-type risk factors are: a high propensity for medical consumption, living in a region with high prices and/or overcapacity resulting in supply-induced demand, or using providers with an inefficient practice-style.[1] The sponsor determines the specific categorization of S-type and N-type risk factors. When the government takes up the role of the sponsor, this categorization is ultimately determined by value judgments in society. Note that, because the premium subsidies are risk-based, price competition will not be distorted by these subsidies and therefore incentives for efficiency are not reduced.
http://en.wikipedia.org/...
The Netherlands has just revised their health system to one that includes many private incentives and risk equalization is considered the most critical aspect of that program. In the below linked video on the Netherlands new system you need to click on the "T" to translate to English and English subtitles:
http://www.minvws.nl/...
Part of transcript:
>> Voice over: One of the key elements of the new care system is the obligation for insurers to accept patients. This leads to risk-solidarity.
>> Mike Leers: lt is socially irresponsible and unacceptable if insurers were to screen out undesirables that apply. Between healthy people and people in poor health. Whether they are young or old, healthy or ill it doesn't matter. They are all equal. There will be no difference in premium, and no surcharges on premiums. So you are not excluded if you are ill or given a higher premium based on age. That's basically at the heart of risk solidarity.
>> Voice over: Despite the acceptance obligation, health insurers could be tempted to seek to avoid less healthy clients. Therefore the government has created a safetynet of risk equalization. Insurers are entitled to compensationfor expensive customers.
>> Martin van Rijn: Every insurer gets an allowance from the equalization fund. An insurer with many high-risk clients gets a higher allowance than one with less high-risk clients. We look at medication use rates, the number of claims and hospitalization. Therefore insurers don't need to do risk assessments. That's an important social condition of our system.
>> Hanneke Snellen (Director Dutch Arthritis Patient League): The advantage is that patients with chronic illnesses on medication are welcomed by insurance companies. lt becomes interesting to attract these clients as well.
The mandate is a good thing once insurance becomes affordable for all and I'm certainly not discounting it. But to depend solely on it to make the risk adjustments in the present bills not increase premiums may need to be re-thought. Risk subsidies would be very popular if they made everyone's premiums the same and would probably not cost too much (there's no exact figures because risk subsidies haven't even been considered, yet). They would certainly be much less than the proposed subsidies that go along with a mandate.
In summary, the regulatory reforms are enormously popular and will probably pass. They really don't go far enough to make insurance affordable, especially for older people. The mandate is not popular and it's chances are less. The subsidies that go with the mandate are enormously expensive and in the end do not help as much as people would expect.
There is a better way which most of the western world uses, which would appeal to the private sector, and which would be enormously popular.