Would it be possible to have the public option run by the insurance companies

[Perky]

Hear me out. I am just noodling about this out load.


I am not looking to enrich the inusrance companies, and while I have deep concerns over their historical tactics, I also unsderstand that the nature of the insurance business is to mitigate risk. At the same time, I am also looking at issues of political experdiency, cost of the public option, the unknowns of the public vs private competition which has never been tried before and repubublican arguments about bureaucracy anf govenrment bloat.

I want everyone to be covered at reasonnable rates and sooner rather than later.

So what if, major insurance players were given the right to bid on the ability to sell the public option. Rather than the government setting up and paying for all that infrastructure themeselves? Government outsources lots of things. There would obviously be many strings attached. No denials of coverage. Do dropping of coverage, Rates substantially lower than local retail rates and a requirement for substantial automation.

I have no objection to a single payer, I have no objection to a federal solution. I have no love for the insurance companies.

At the same, thie issue is not figuring out the best way to punish corporate titans, it is about making sure wa have a way for people to pay for coverage at a reasonable cost.

It ought to be clear that the bloated insurers are not going away but it should also be clear that a public option could be considerbly less expensive if we did not have to build the bureaucratic infrastructure necessary to cover 45 Million initally. The prospect of getting 45 Million new customers has to be attractive to the provider community. It would push down the cost of private insurance as they would be required to reduce overhead expense. Why not outsource and leverage the exisiting structures?

It would also decimate all republican arguments about a government takeover of health care and a bureaucrat standing between you and your doctor bullshit; that while a fearmongering lie is also a potent argument that resonates.

[cali]

1. no. and the gov't has the infrastructure already.

[ccharles000]

2. I agree

[Perky]

3. What? Medicare and Medicaid?

[hlthe2b]

6. See my post below re: Medicare... Medicaid is jointly run by states

and is thus highly variable... Medicare is, in fact, the optimum example... So, if there is a sneer on your face when you say Medicare(?!) then I suggest you inform yourself.

[Perky]

13. No sneers

Medicare is highly efficient, but it is also woefully understaffed and prone to fraud. Not saying it is not a viable approach. Just saying that there are capacity limits in the existing infrastructure and we are talking aabout doubling its size. Copuld it be used as a model. Of course, but there are reasons it has not been used and is apparently not seen by Obam or anyone else as a viable path either to enfold or leverage or use as a model.

:shrug:

If you can tell me why this it the political reality I would be more than willing to be educated.

[hlthe2b]

16. Yet you are not concerned about insurance fraud?

Geebus...

[Perky]

22. WHere did I say that?

Wait how are you defining insurance fraud?

I am talking about the level of false claims being filed by people bilking the system and the lack of a capacity to stop it.

[hlthe2b]

24. Fighting fraud in every context is always a necessity

That you are concerned with doctors who defraud Medicare but say nothing about private insurance fraud, when you are purporting that the status quo health insurance system must be protected against "bitch slap" at all costs, does very much imply that.

[bornskeptic]

29. Government estimates are that fraud costs Medicare $60 billion/year

http://www.msnbc.msn.com/id/22184921

That is about 15% of the $408 billion 2009 budget allocation, almost the same percentage as the total of administrative expenses, taxes,and shareholder profits for private insurance companies. Medicare doesn't examine claims with the care that private insurers do, which makes it more vulnerable not only to to outright fraud, but also to less conscientious doctors padding their incomes by ordering unnecessary procedures.

[hlthe2b]

33. There has been an increase in Federal prosecutions....

SO, where are your same figures for private insurance fraud? Back up your statement that "Medicare doesn't examine claims with the care that private insurers do" which, in reality, is MSM speak for private insurers pad their profit by denying claims.. I hardly call THAT practice effective "due diligence." Of course I don't work nor invest in big insurance.

[hlthe2b]

4. Medicare averages 2 1/2 % overhead

Pray tell ANY insurance company that comes even remotely close to that. I am fucking tired of insurers and other greedy profiting off of the declined health care to each of us? You surely OUGHT to be as well.

[Perky]

8. Of course I am

But I am not convinced that we get where we need to by simply bitch slapping the status quo.

[hlthe2b]

14. Yes... we must look out for the poor widdle insurance companies

at all costs...Wouldn't want to "bitch slap" those mega million$ CEO salaries and lobbyist expense accounts that fund them working against our interests. That is status quo that we must protect at all costs....







:sarcasm:

[Perky]

17. I don't want the status quo aither.

I have no love for the insurance companies and amn ot looking to protect them,,,, but bitch slapping them does not solve the underlying problems.

[hlthe2b]

19. And you know this, how?

[Perky]

20. Ummm because I read.....

Seriously there has been no discussion about folding in either program into the public option, Or expanding those programs to cover the uninusred.

You would think that would be the simimplet approach, but it is very clear that there is no debate along those lines.

[hlthe2b]

23. Then perhaps you need to "READ" a bit more about the

systems across the world and the 80 plus years of excesses in the private sector that has made us among the worst industrialized countries in the world for the standard quality of health indicators.

[Perky]

45. I thought we were talking about medicare and medicaid

not what are clearly better solution in other countries.

[endarkenment]

27. wtf? 'bitch slapping'?

I'm not clear how insurance companies came to be entitled to extract huge profits from their stranglehold on providing access to health care, but I am flabbergasted at your characterization of providing an alternative to their nonsense as 'bitch slapping'. The term itself is misogynist, and its use in this context is peculiar to say the least.

[Perky]

46. did you happen to read the rest of the subthread?

the issue is not finding a way to destroy private insurers. It is about insure universal access, permanence and affordability for everyone, Simply railing against the insurers for what they have done gets us nowhere. Finding a way to penalize them as an end unto itself gets us nowhere. It is not about the insurance companies.... It's about the uninsured. and in the case of the OP it is about the cost of an effective program, not about enriching anyone.

[endarkenment]

48. The private insurers cannot compete with a real public option

because the entire basis of their profitability depends on denying coverage and maximizing charges. That behavior results in a 30%+ 'overhead' where a non-profit could provide superior services with a 2-3% 'overhead'. It isn't that we need to destroy private insurers, it is that they do not provide health care, they are a barrier to access to health care, and extract rent from us as the price for passing through their artificial barrier. If they can find a way to compete with a public non-profit system, good for them, otherwise too bad for them and good riddance.

Note that there are universal health care systems that continue to have private insurers providing services, they just generally do not perform the central role they play in our system, and for very good reasons.

Reform is largely about the insurance companies. They have a corrupt stranglehold on our healthcare system. They use their influence to block and obstruct meaningful reform and to bake in their obscene profits. And you are here trying to find some way to continue to protect those profits. Why? They do not provide health care, they obstruct access to healthcare.

Healthcare reform is not simply 'about the uninsured', it is about the absurd costs and mediocre results of our system. We pay more per capita by far than any other country and yet by standard measurements we are 37th in outcomes. We have a crappy and expensive system that hurts our businesses, leaves millions completely out of the system, and puts most of us one medical crisis away from bankruptcy. Health care reform, meaningful real health care reform, affects all of us and benefits all of us, except of course for those profiting off of the insurance racket.

[Princess Turandot]

58. FYI The claims management portion of medicare is contracted out...

Medicare has no claims management infrastructure. Claims processing/billing/payment etc. is actually done by private insurance companies under contract to Medicare. They negotiate a fixed percentage rate with them. Much of the time, but not always, it's a Blue Cross Blue Shield entity within a state that has the contract. (They sometimes split up the physician/institutional billing to different companies.)

The enrollment/beneficiary management portion is done by the federal government.

[TreasonousBastard]

59. FWIW, I mentioned this early this AM and absolutely nobody...

is acting as though they read it.

Nobody's paying any attention to you, either, and I'm gobsmacked that such a huge and obvious fact is staring them in the face and they all just ignore it.

(Maybe they just don't believe us-- nothing is true without a link, unless it follows the party line.)

[Perky]

68. This surprises you?

[shraby]

5. How about combining Medicare and Medicaid into

one entity called single payer or public option thereby possibly reducing the overhead even more then fold the new plan into it.

[liberal N proud]

7. Insurance companies wouldn't do it unless there was a profit

Public option needs to be non-profit.

[Perky]

9. why?

[cali]

11. because they are for profit entities, answerable to stock holders.

[Perky]

15. But in this case they would also have contractual obligation to the feds.

not to mention the fact that they would want to renew the contracts

[liberal N proud]

18. Its all about the shareholder in the corporate world

Nothing else matters. NOTHING!

[zipplewrath]

34. Not obvious

I'm not a big fan of the Public Option being administered by private companies. However, it isn't a given that this is a bad idea, it's merely based upon a severe mistrust of the government/corporate relationship.

Large private companies (well publicly traded companies) frequently are "self insured" in that they pay the costs of their medical benefits directly. However, they usually contract out the administration of those benefits to private companies. The administrative costs are then negotiated/bidded and can include incentives for reducing the total cost to the company. That does several things for the company and amongst them is the ability to managed costs. The administrative costs are rarely a function of the total cost of the health care provided, and more often than not are merely a function of the total number of people to be covered. So even though the insurance administrator may charge 30% of some number, it is merely 30% of their costs, not 30% of the total health care costs.

The reasons that subcontracting the running of the public option is bad is because of the variety of ways in which it can be done badly. The first and worst problem is if it is subcontracted at the state level. Big states like California can leverage their size, but a state like Vermont doesn't have a population large enough to negotiate particularly good rates. Furthermore, it creates an environment in which the rules vary widely and wildly and companies can't leverage their performance in one state into another. Even if we avoid the state level subcontracting, multiple contracts creates multiple and competing sets of rules which then become political footballs to be lobbied over. These aren't the hallmarks of a good cost reduction strategy.

The entire purpose of the public option is so that there is at least one plan pursuing low cost through efficient operation. Insurance companies will only pursue lower costs as it relates to higher profit. Anything that has a higher cost to them, but a lower cost to the consumer, will be rejected. If the public option is successful, it will be predominately because it negotiates lower rates, and rewards EFFECTIVE treatment. If they are successful (and really, it's hard to see how they can't be if allowed to) the insurance companies know they can't compete because even copying their model, they'll have 13 - 30% of burden for their own profits. They might find ways to be a LITTLE more efficient, but probably not that much better.

Make no mistake, the objection to the public option/single payer is all about, and only about, protecting the profits of the insurance companies, the drug companies, and to some extent the commercial hospital system. Everything else is just so much smoke.

[yy4me]

10. Fox in hen-house. ..Just my opinion. Another way to enrich their

coffers. I see no merit in giving the insurance companies more control over healthcare They have most of it now.

[vaberella]

26. Explain how? Except getting paid by the government.

In the end they would have to answer to the Gov on everything and they'd be under major oversight rules and not to mention we could ensure the proper management of those who are currently insured and paying. There are other problems affecting the idea the OP provided, but I don't think your statement qualifies. Well it's weak at best.

[avaistheone1]

70. Sure let's put KBR in charge. Or how about Halliburton?

All the government oversight hasn't worked too well in those cases.

I don't want my health care or my taxpayer dollars managed by profit-obsessed health insurance vipers.

[saltpoint]

12. The insurance companies, and the politicians they pay off, are the problem.

A strong public option brings considerable pressure to bear on the source of their power by offering a competing model, and with it, the potential to shift the public health care paradigm in the country.

IMO to accomplish this, they have to be forced to reconfigure their role. GM is not now where it was -- or what it was -- in 1965. Things can change. The insurance execs know that there is pro-public option talk spreading through the villages. No doubt their lobbyists are madly afoot, and checkbooks are being whipped out as we speak.

There are insurance company representatives making health care / level-of-care decisions for sick patients at this hour who cannot themselves get a bandaid from its box to someone's scraped knee. I really don't want to have people like that in charge of any public component inasmuch as they only function as profiteers now.

[backscatter712]

21. Foxes guarding the henhouse. Uh, no. n/t

[vaberella]

28. It can't, the government would have a self interested role because they're funding. n/t

[backscatter712]

55. And the insurance companies wouldn't find a way to game the system?

"Ooops, the cost containment measures failed." Better pass it to the next insurer. "Oops, they keep delaying treatments." But if you spent some $$$$$$$$$$, you could get a promise of service that sucks slightly less if you go for a private insurer...

No. I want the insurers completely out, and the public option completely in government hands, under Congressional oversight.

[avaistheone1]

73. The government's so called 'self interested" role has not worked to well in their

contracts with KBR, and Haliburton etc. It has been a disaster.

[endarkenment]

25. That would make it a for profit non-public option

with the usual 30%+ excessive 'administrative overhead' that the for-profits extract from us for doing as little as possible to provide actual health care.

So no, your proposal is self-contradictory nonsense. For profit 'insurance' charges as much as it can get away with to provide the least possible actual health care. Their goal is to maximize profits not provide health care. What part of that do you still not understand?

[masuki bance]

30. I hope it covers dyslexia. nt

[FormerDittoHead]

31. HEY! THAT'S EXACTLY WHAT THEY WANT! THANK YOU FROM YOUR AETNA COVERAGE DENIER!

Talk about a corporate wet dream.

[vaberella]

32. The idea could work if we want another way to destroy an insurance company.

It's a functional plan, but it's so destructive for the private insurers on it's face that there is no way they will agree to the idea.

It would fail before it even started. Your plan would lead in affect to single payer faster than the way O is doing it, but the private insurers would catch on. Let's say you don't put any major mandates on your plan. Currently I see nothing in the public option that excludes those on Medicaid/Medicare---it seems that all three will be under one major umbrella including WIC and SCHIP recipients.

If we pass it on the private insurers it would flood their system but that's not a bad thing. What's interesting is that Medicaid was doing something like this. Medicaid is government funded but when you are on it you have to choose a private insurance plan----I was on Fidelis, but there's CIGNA, Healthfirst, GHI, and many others. Now what's interesting is that in NYC, because of the amount of people on Medicaid it's interesting to note that several private insurance companies actually had to merger with one another. It opened the plan and made the network of practitioners larger but made the health insurance company a bit smaller---well the amount of choice anyway.

With your plan we'd see the same thing. Insurance companies would be competing like crazy. Those who manage to pull enough people in their pool from a free public option then many of the insurance companies would just fail. That works in our favor, and then it contracts the pool. Mergers and just out right failures will happen. However, with people leaving one plan to another and the level of competition continously growing the private insurer entities would later contract----you'll notice this is what happened with telephone providers (landline and mobile), MCI, Vonage, Bell Atlantic, AT&T and so on. Some fail over time and don't last.

What's interesting and would help it along and ruin the cycle is the fact that the government would have a vested interest. I think most people forget that when reading your post. The Government would be funding, and providing the supplementary money with just the insurance companies there----similar in what's found with Medicaid. So the insurance companies would have to listen to Government rules and regs and oversight. This could be done well---but with failures and the competition leading to many failures eventually the government would end up having to take a more hands on role because most insurance companies would have fallen to the wayside either through direct failure or some merger.


I like it...but no one will support it. Those who don't understand the many directions this could go and those who just don't like insurance companies. And if insurance companies are smart...they'd hate it.

[Perky]

39. Great comments.. but WHo says the Public Option would be free>

Obviously it would be less cost andsubsideices and there would have to be a mandate and some price to be paid by the consumer. Were the public option free all the insurers would immediately fail. And certainly in the short run there would be chaos

[vaberella]

53. Let me rephrase. By default it would be similar almost to the way medicaid is set up. n/t

[BR_Parkway]

35. Ins Co's make money off investments in stocks and such, seems like

we've already done that with government ownership of warrants and stock in these companies we've bailed out - why not simply let the returns from those 'investments' go towards paying the medical bills

[TreasonousBastard]

36. Medicare already works this way...

Since around 1997 or so Medicare enrollees could sign up for Medicare Advantage-- a choice of HMOS run by the same private health insurance companies everyone loves to hate.

Since maybe forever, Medicare claims were processed by private insurance companies, and in 2003, this was overhauled to assign regional contractors to handle both parts A and B-- insurance companies who bid for the contracts.

I heard last week that there's something up with Tricare (a military health plan) being further outsourced to private insurance and providers.

But, hey, at least you admit you are just asking about this stuff-- how's about everyone else who just up and demnds their way is best? And how we gotta get rid of insurance companies so we can have a public option or single payer (that uses insurance companies.)

[harun]

37. The nature of the insurance business is NOT to mitigate risk, it is to

make profit.

[Perky]

40. Denyying coverages and increasing preiums is risk mitigation

[harun]

41. I suppose in terms of mitigating risk to their balance sheets but definitely

not in terms of mitigating risk to individuals with massive unforeseen medical expenses.

[Perky]

43. Yeah ok

and so what was your point?

[harun]

49. You had two choices, you get to pick one

a) Mitigate Insurance Companies risk, keep money, make more profit
b) Mitigate Customers risk, pay them

You don't get to pick both and neither does the insurance industry.

My point was don't say "mitigate risk" if you mean the main purpose is make profit. If you meant "make profit" then don't use the term "mitigate risk", which is actually the illusion insurance wants people to think they are actually there for. They want you to think they are there for mitigating your risk to unforeseen events, when they are trying to mitigate their risk to ever having to pay you anything. It was just a very obfuscated use of terms.

Anyway, I digress...

[Hepburn]

38. Hell fucking no!!!!!!!!!!!!!!!! eom

[LiberalFighter]

42. What would be the incentive for insurance companies running public option?

[Perky]

44. Income predicatability

lower operating cost... Lower risk.

[Thothmes]

66. A long term Government Contract to provide

the service comes to mind.

[On the Road]

47. It Might be Feasible

but would require a lot of regulation and a change in the basic business model. Health insurance is very complicated, which would make utlities-style regulation difficult.

The federal single-payer seems to be a better option. I think the hope is now that a public option will both provide competition to control prices immediately and in the long run lead to a single-payer system.

[Sebastian Doyle]

50. Would it be possible to have Pat Robertson run the American Atheists Association?

:shrug:

[kenny blankenship]

60. Brilliant! We could let General Dynamics, Lockheed, & KBR share control of the General Acct. Office!

I think we're on a roll here!

[Sebastian Doyle]

61. Fred Phelps can be the new chairman of PFLAG

He certainly has "organizational experience".

[kenny blankenship]

62. Exxon-Mobil could be put in charge of the EPA

You can't tell me a company that big and flush with dough doesn't have the spare administrative capacity to oversee the eensy-weensy operations of our skeleton crew of environmental Protectors. Utility maximization going on both ends! Hail, Efficiency!

You know what? I think if we asked them they'd agree to do it just out of the goodness of their hearts.

[TheKentuckian]

51. Medicaid and Military benefits already are to very large extent.

I'm not sure that is optimal but it is certainly possible, even plausible.

[vaberella]

54. Yup. n/t

[GOTV]

52. The necessary regulation would be portrayed as the government takeover

They'd tell us not to be fooled. Major insurance companies may be involved but it's government bureaucrats, through their regulations, that are actually making all the decisions.

And they'd have to do that because the necessary regulations would cause profits to be smaller than they would be without regulations.

[Orangepeel]

56. they do an okay job with people who have government subsidized insurance (e.g., federal employees)

I guess because the pool is large enough that they don't want to lose it, they seem to treat government employees with some degree of fairness. They don't exclude people with pre-existing conditions, cover most stuff and have reasonable copays and caps.

[endarkenment]

57. We (taxpayers) pay for those low copays, the no exclusions and low caps.

This is a good program because it costs a lot. The insurers continue to take their 30%. There is no benevolence emitting from the insurance companies here.

[Orangepeel]

72. Of course. But the question wasn't if insurance companies can be benevolent

It was if they can be paid to administer a plan the government subsidizes in a way that works (at least that is how I interpreted it. Clearly they can if the pool is large enough for them not to want to lose by fucking over those who are in it.

[Puzzler]

63. Yes...

It's not necessary, but you could have a basic government plan that is sold by the insurance companies. For example our auto insurance in BC works this way.

[Spazito]

64. Private insurance companies are FOR PROFIT...

the ONLY priority they have is to generate a return on their shareholder's investment. Less claims = more profit = greater return to the shareholders.

[Perky]

65. But they would be getting millions of new policy holders with a much smaller incremental and costs

less risk

[lumberjack_jeff]

67. No upside. All downside. Do. Not. Want. n/t

[kiva]

69. Private companies would only do so if there was a profit to be made.

And how would they make that profit? Probably the same way they do now: charge those buying insurance more than the company has to pay out for claims, meaning that across the board we would be overpaying for our health care. Companies would also likely continue to dictate how much care individuals would receive--"A mastectomy, Ms. Jones? Why that can be done as outpatient surgery, no need to stay in that expensive hospital!"--to limit costs, you know, standing between you and your doctor.

This is the saddest in a series of arguments that oppose any real changes to our health care. First it was, no universal health care because it's unrealistic to start from scratch, let's just patch up the crippled system that we already have by adding on a public option. Then it was, but we need to make this politically palatable, so we'll quietly drop controversial procedures (like abortion) from the plan. Now someone on this board is suggesting that we pay taxes to pay the insurance companies so they can continue to screw over Americans.

We need health care for all Americans, not more vampiristic corporate shills promoting profits for big business.

[Perky]

74. Actually no.

Feds would set the standards... Everyone is covered. can not be dropped.

The insurers make money not off the preiums and denials but off the per person risk and the fact that they are getting 45 million new customers. THe incremental cost to them is marginal and there is no risk to mitigate with denials and delays.

[Aramchek]

71. Hell No!