By Yasha Levine
December 22, 2009 The Exiled
Showing posts with label Baucus. Show all posts
Showing posts with label Baucus. Show all posts
Wednesday, December 23, 2009
Friday, October 16, 2009
Krugman: Insurance industry's overreach helps reform?
A Hatchet Job So Bad It's Good
By Paul Krugman
October 15, 2009 | New York Times
[....]
As I said, the individual mandate probably should be stronger than it is in the Finance Committee's bill. But there's a reason the mandate was weakened: fear that too many people would balk at the cost of insurance, even with the subsidies provided to lower-income individuals and families. So why not address that cost?
Aside from making the subsidies larger, which they should be, there are at least two changes to the legislation that would help limit costs. First, health exchanges — special, regulated markets in which individuals and small businesses can buy insurance — can be made stronger, in effect giving small buyers a better bargaining position. Second, the public option — missing from the Finance Committee's bill — can be brought back in, giving private insurers some real competition.
The insurance industry won't like these changes, but that matters less than it did a week ago.
There's also another point, which House Speaker Nancy Pelosi has stressed. Part of the opposition to a strong individual mandate comes from the sense that Americans will be forced to buy policies from a greedy insurance industry. Giving people, literally, another option — the right to buy into a public plan instead — would defuse that opposition.
[Indeed, BaucusCare, if passed by Congress as is, would be a corporate socialist giveaway to the insurance industry by mandating that every American buy private health insurance or else pay a tax penalty. -J]
Even with stronger exchanges and a public option, health reform would probably increase, not reduce, insurance industry profits. But the insurers wanted it all. The good news is that by overreaching, they may have ensured that they won't get it.
Monday, October 12, 2009
Free-market case for public option
I've said all this before but if you want to hear it again from a non-partisan MSM source, by all means.
By Max Fisher
October 11, 2009 | The Atlantic
Free-market conservatives and libertarians have made the case that sweeping health care reform, especially the inclusion of a government-run health insurance option, would undermine the free-market for health insurance. They rightly say that, without a free market, there are little or no incentives for promoting innovation or efficiency. The great thing about our system is that the more companies compete for our business, the more they must produce a better product at lower cost, and so on. But this is a fallacy because the health insurance industry is not a free market right now.
Something like televisions exist in a free market because consumers, if they don't like any of the new TVs on the market, can simply keep their old one. If they really don't like the market, they can even forgo owning one altogether; it will make you unpopular on game day, but it won't risk your life. Insurance is different. Anyone with a sense of basic self-preservation has no choice but to buy health insurance every single month. You cannot opt out, there are few options to choose from, and it's difficult to know how to price your future risk of injury. So health insurance companies have distorted incentives to innovate or provide a more cost-effective product.
A public option would, crazy as it might sound, make health insurance a free market. If there exists a government-run plan, which by all accounts would be basic and geared towards affordability, consumers will have the ability to opt out of the private insurance market. Private providers would finally have real incentives to provide a better product and innovate by building an insurance plan stronger than public insurance. Fears that a public option might decree certain treatments "not cost-effective," which are not as outlandish as some liberals think, should delight free-market conservatives because it would be an opportunity for private insurers to step in. Worried you might develop a condition requiring $60,000 medication that no public option would ever include? Buy a blinged-out private plan that, for an increased premium, will.
The hurrahs over last week's CBO score make this even more important. The deficit-positive badge on Baucus's plan makes it all the more likely that his version of reform will be similar to the final product, which means greatly enhanced coverage, through a weak but present mandate and other provisions, but no public option. In short, it means 29 million more people will buy private health insurance, which is great for them. But with insurers getting millions of guaranteed customers without having to improve their product, the incentives for innovation go way down. The already unfree health insurance market would become even less free.
Something like televisions exist in a free market because consumers, if they don't like any of the new TVs on the market, can simply keep their old one. If they really don't like the market, they can even forgo owning one altogether; it will make you unpopular on game day, but it won't risk your life. Insurance is different. Anyone with a sense of basic self-preservation has no choice but to buy health insurance every single month. You cannot opt out, there are few options to choose from, and it's difficult to know how to price your future risk of injury. So health insurance companies have distorted incentives to innovate or provide a more cost-effective product.
A public option would, crazy as it might sound, make health insurance a free market. If there exists a government-run plan, which by all accounts would be basic and geared towards affordability, consumers will have the ability to opt out of the private insurance market. Private providers would finally have real incentives to provide a better product and innovate by building an insurance plan stronger than public insurance. Fears that a public option might decree certain treatments "not cost-effective," which are not as outlandish as some liberals think, should delight free-market conservatives because it would be an opportunity for private insurers to step in. Worried you might develop a condition requiring $60,000 medication that no public option would ever include? Buy a blinged-out private plan that, for an increased premium, will.
The hurrahs over last week's CBO score make this even more important. The deficit-positive badge on Baucus's plan makes it all the more likely that his version of reform will be similar to the final product, which means greatly enhanced coverage, through a weak but present mandate and other provisions, but no public option. In short, it means 29 million more people will buy private health insurance, which is great for them. But with insurers getting millions of guaranteed customers without having to improve their product, the incentives for innovation go way down. The already unfree health insurance market would become even less free.
Thursday, September 24, 2009
Insurers, seniors, & Glenn Beck (?!) fighting BaucusCare cuts to 'private Medicare'
Thus concludes the article from conservative Forbes: "Yet the irony here is that ObamaCare opponents [correction: BaucusCare opponents - J] are now casting their lot with a government program [Medicare Advantage] that has been a giveaway of taxpayer money for years. Does that make any sense?"
Yes, it make perfect sense, when you realize that: (1) old people are as selfish as everybody else, and don't mind getting more for less at taxpayer's expense; and (2) every time Congress "reforms" Medicare or health care, the insurance companies somehow end up more profitable than ever thanks to their aggressive, dirty lobbying for subsidies and giveaways.
(The same will happen under BaucusCare with mandates, because private insurers will be guaranteed more customers, and they won't have to compete with a cheaper public option, i.e. "socialism.")
In this case, Medicare Advantage was supposed to be "privatized" Medicare, which means, as it usually does with outsourced government services, that private businesses are released from their usual requirement to cut costs and work efficiently because taxpayers are footing the bill no mater what.
Disgustingly, Humana and other private insurers aren't one bit ashamed to march columns of silver-haired geezers to DC to preserve their $12 billion annual subsidy; meanwhile these welfare queens have got sobbing nutjob Glenn Beck and GOP "thought leader" Newt Gingrich shilling for them to teabagging cognitive-dissonance sufferers.
Strange Bedfellows In the Baucus Brawl
By David Whelan
September 23, 2009 | Forbes
"It sounds like Joe McCarthy," said top-rated radio host Glenn Beck on his talk show this morning.
The provocative commentator was referring to, of all things, a dispute over the Medicare Advantage program. Before this week, Medicare HMOs were a favorite topic of nobody but health policy wonks.
Medicare Advantage, whereby the elderly can opt for an HMO instead of the government-run fee-for-service plan, has attracted one in four Medicare members since its creation in 2003, mostly because the government lavishly subsidizes the private plans. These subsidies, which average 14% more money per member than what's spent on the conventional government plan, allow the Medicare HMOs to waive or reduce the $96 monthly premium that members must pay to enroll in ordinary Medicare while also collecting goodies like "silver sneakers" gym memberships.
The growth of Medicare Advantage has been a windfall for the big managed care plans like Humana, UnitedHealth, and Wellpoint, which now cover a total of 10.5 million old people. From 2003 to 2007, during the Bush-years expansion, the Morgan Stanley HMO stock index rose five-fold, mostly attributed to Medicare.
Yet fiscal watchdogs have always viewed the program with suspicion. It costs about $12 billion a year extra to cover Medicare HMO members. There's an irony here since privatization was supposed to save Medicare and taxpayers money. (See "Unfilled Prescription.")
Medicare Advantage plans have also been accused of bad behavior. They cherry-pick the healthiest members (See "How Cherry Picking Could Hurt Obama's Health Care Plan.")
And they've regularly been accused of deceptive marketing practices to get seniors to sign up. During the Bush years, Medicare HMOs collected generous rate increases across the board, by exploiting a formula that favored rural counties packed with seniors. Medicare Advantage plans went nuts signing these folks up, often without doing the hard work of building a provider network of doctors and hospitals.
To make a long story short, Medicare Advantage has always been a ripe target for cuts that would pay for health reform.
But cutting the plans was never going to be easy politically, a situation akin to shutting a military base or closing a tax loophole.
["Keep the guvmint out of my Medicare" indeed! - J]
When threatened with cuts in the past, the plans had orchestrated massive publicity campaigns that involved nudging--some would say scaring--their members into calling their congressmen to complain. During budget debates in the Senate in 2007, Americas Health Insurance Plans, the HMO lobby, flew in hundreds of elderly Medicare Advantage members to act as citizen lobbyists. In an even more cynical move, the health insurance industry cast Medicare Advantage as a plan designed to serve poor blacks and other minorities. Whatever they did worked because attempts at cutting the plan after Democrats took over both sides of the Hill always failed. The Bush White House last year threatened to veto any Medicare bill that cut the HMO reimbursement rates. (See "An Even Earlier Demise?")
Nevertheless, President Obama, starting during the campaign, has promised to cut Medicare Advantage.
Humana, the most Medicare Advantage-heavy company, with 1.5 million Medicare members and $1.1 billion in annual Medicare-related profits, has been a question mark on Wall Street since Obama's election because of fears that its golden goose may be cooked.
Those industry fears are getting closer to reality. According to the more moderate version of the bill, released last week by Sen. Max Baucus who chairs the Senate Finance committee, Medicare Advantage will face $123 billion in cuts over the next 10 years.
In anticipation, earlier this month Humana sent a letter to its Medicare members, asking them to join a "Partners" program that would help lobby lawmakers to keep funding intact. The letter included the warning that health reform "could mean higher costs and benefit reductions." See an example of the letter here.
Baucus, a target of earlier rounds of Medicare Advantage lobbying, struck back, asking Medicare to tell Humana to cease making such communications with its members. "It is wholly unacceptable for an insurance company to mislead seniors," said Baucus in a statement. Medicare complied. (Read the letter.)
Humana backed down and closed its Partners program. But in a statement, spokesman Jim Turner said that Humana believed it did nothing wrong by sending out the mailer and that: "Medicare Advantage members deserve to know the impact that funding cuts of the magnitude being discussed would have on benefits and premiums."
Which brings us back to Glenn Beck. Since the Baucus-Humana brouhaha transpired earlier in the week, Beck and other ideological opponents of ObamaCare have been rallying around Humana and the Medicare Advantage program. On Beck's show he said that the president and his allies are targeting free speech--and thus the McCarthy reference. Yet the irony here is that free-market ObamaCare opponents are now casting their lot with a government program that has been a giveaway of taxpayer money for years. Does that make any sense?
By David Whelan
September 23, 2009 | Forbes
"It sounds like Joe McCarthy," said top-rated radio host Glenn Beck on his talk show this morning.
The provocative commentator was referring to, of all things, a dispute over the Medicare Advantage program. Before this week, Medicare HMOs were a favorite topic of nobody but health policy wonks.
Medicare Advantage, whereby the elderly can opt for an HMO instead of the government-run fee-for-service plan, has attracted one in four Medicare members since its creation in 2003, mostly because the government lavishly subsidizes the private plans. These subsidies, which average 14% more money per member than what's spent on the conventional government plan, allow the Medicare HMOs to waive or reduce the $96 monthly premium that members must pay to enroll in ordinary Medicare while also collecting goodies like "silver sneakers" gym memberships.
The growth of Medicare Advantage has been a windfall for the big managed care plans like Humana, UnitedHealth, and Wellpoint, which now cover a total of 10.5 million old people. From 2003 to 2007, during the Bush-years expansion, the Morgan Stanley HMO stock index rose five-fold, mostly attributed to Medicare.
Yet fiscal watchdogs have always viewed the program with suspicion. It costs about $12 billion a year extra to cover Medicare HMO members. There's an irony here since privatization was supposed to save Medicare and taxpayers money. (See "Unfilled Prescription.")
Medicare Advantage plans have also been accused of bad behavior. They cherry-pick the healthiest members (See "How Cherry Picking Could Hurt Obama's Health Care Plan.")
And they've regularly been accused of deceptive marketing practices to get seniors to sign up. During the Bush years, Medicare HMOs collected generous rate increases across the board, by exploiting a formula that favored rural counties packed with seniors. Medicare Advantage plans went nuts signing these folks up, often without doing the hard work of building a provider network of doctors and hospitals.
To make a long story short, Medicare Advantage has always been a ripe target for cuts that would pay for health reform.
But cutting the plans was never going to be easy politically, a situation akin to shutting a military base or closing a tax loophole.
["Keep the guvmint out of my Medicare" indeed! - J]
When threatened with cuts in the past, the plans had orchestrated massive publicity campaigns that involved nudging--some would say scaring--their members into calling their congressmen to complain. During budget debates in the Senate in 2007, Americas Health Insurance Plans, the HMO lobby, flew in hundreds of elderly Medicare Advantage members to act as citizen lobbyists. In an even more cynical move, the health insurance industry cast Medicare Advantage as a plan designed to serve poor blacks and other minorities. Whatever they did worked because attempts at cutting the plan after Democrats took over both sides of the Hill always failed. The Bush White House last year threatened to veto any Medicare bill that cut the HMO reimbursement rates. (See "An Even Earlier Demise?")
Nevertheless, President Obama, starting during the campaign, has promised to cut Medicare Advantage.
Humana, the most Medicare Advantage-heavy company, with 1.5 million Medicare members and $1.1 billion in annual Medicare-related profits, has been a question mark on Wall Street since Obama's election because of fears that its golden goose may be cooked.
Those industry fears are getting closer to reality. According to the more moderate version of the bill, released last week by Sen. Max Baucus who chairs the Senate Finance committee, Medicare Advantage will face $123 billion in cuts over the next 10 years.
In anticipation, earlier this month Humana sent a letter to its Medicare members, asking them to join a "Partners" program that would help lobby lawmakers to keep funding intact. The letter included the warning that health reform "could mean higher costs and benefit reductions." See an example of the letter here.
Baucus, a target of earlier rounds of Medicare Advantage lobbying, struck back, asking Medicare to tell Humana to cease making such communications with its members. "It is wholly unacceptable for an insurance company to mislead seniors," said Baucus in a statement. Medicare complied. (Read the letter.)
Humana backed down and closed its Partners program. But in a statement, spokesman Jim Turner said that Humana believed it did nothing wrong by sending out the mailer and that: "Medicare Advantage members deserve to know the impact that funding cuts of the magnitude being discussed would have on benefits and premiums."
Which brings us back to Glenn Beck. Since the Baucus-Humana brouhaha transpired earlier in the week, Beck and other ideological opponents of ObamaCare have been rallying around Humana and the Medicare Advantage program. On Beck's show he said that the president and his allies are targeting free speech--and thus the McCarthy reference. Yet the irony here is that free-market ObamaCare opponents are now casting their lot with a government program that has been a giveaway of taxpayer money for years. Does that make any sense?
Wednesday, September 23, 2009
Morris: Baucus plan is a tax on middle class
Let me say for the record: we can't get something for nothing. If we insure more Americans, either they must pay for it, or government must. The problem with BaucusCare is that, without a strong public plan or single-payer, there are no real ways to lower the cost of health spending. The plan is not liberal enough.
Yes, mandating more healthy people to participate in the private health insurance system will in effect be taking money from healthy people who don't want insurance to subsidize the health premiums of older, sicker people. But insurers always use lower-risk groups to cover their costs of higher-risk groups. This is the essence of insurance. If anything, mandates are a giveaway to the private health insurance industry. But as a nation, if we're not going to cover everyone who wants insurance but can't afford it through a public plan, then we have to find another way. It is irresponsible of us to have so many uninsured people.
But what about those families of four who don't want health insurance, won't a mandate be a real tax on them like Morris says? Show them to me. Show me the family that doesn't want affordable health insurance, at least for its children.
I thought conservatives were always complaining about the deficit and runaway Medicare spending. So if Obama is proposing to cut Medicare, shouldn't conservatives be happy? Methinks Dick the Pollster is trying to scare old folks into the Republican fold in 2010.
Look, in 2009, the health spending for a typical family of four is $16,700, according to the private Millman's Index. And yet Morris is worried because the CBO estimates that, under BaucusCare, in 2016 the average family of four will pay $15,000 with premiums, deductibles, and co-payments. Maybe I'm missing something or comparing apples to oranges here, but the Baucus plan looks like a savings (especially considering the 8 percent real annual growth rate in U.S. health spending).
What would be the cost if we did nothing, and kept the "best health care system in the world?" Health care economist Uwe Reinhardt has written about it repeatedly:
"At an annual growth rate of 3 percent, a wage base of $60,000 now will grow to $80,600 in 10 years. On the other hand, at an annual growth rate of 8 percent, [the real annual growth rate in health spending from 2005 to 2009 - J] a family's total spending on health care would grow from $16,700 now to $36,000 in 10 years.
"It follows that 10 years hence health care would swallow up 44 percent of this family's gross wage base in 2019, before any allowance for employer- or employee-paid fringe benefits and taxes. It is the perfect storm into which America's lower middle class now is being pushed, if the leaders of America's health system continue to manage that system in their customary style, totally in abstraction from the fiscal agony that their expensive managerial and practice style visits on the rest of the country."
By Dick Morris
September 2009 | Creators.com
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