A non hysterical explanation of mandates

[grantcart]

1) We all hate mandates. That is not however an excuse not to put in a little effort to understand why mandates have become an inherent part of health care reform.

2) It is possible to be against mandates. It should be done in an informed manner.

3) It is absolutely true that mandates will increase the revenue of the plans that are offered - again this is true regardless of whether the plan was for profit, not for profit, private or public.

4) The reason that mandates are included in the plan is not to increase gross revenue.

5) The reason that mandates are included in the plan is because if you

a)require an insurer to accept all applicants regardless of preexisting conditions and
b) prohibit fee differentiation because of pre-existing condition you will create a condition of 'regulatory adverse selection'. (explained below)

Illustration

In other words if the insurer (again it doesn't matter if it were a public option plan or a private plan) were forced to accept everyone who needed insurance but the people who didn't need insurance weren't required to get it then many people would simply wait until they have an expensive condition and then join the plan. This would force the plan (again either public or private) to increase their premiums. This would encourage more people to drop the insurance starting a viscous cycle with more and more healthy people dropping out and more and more chronically ill people signing up until you ended up with a very expensive plan that was only serving the most critically ill.

This well accepted economic reality is called the "adverse selection spiral".

If you take away the mandate to buy insurance then you must also take away the condition on the insurer (whether it is a private plan or public plan) that they cannot make an individual assessment on accepting an applicant or charging different fees to an applicant based on their preexisting condition.

NO FEE OR ACCEPTANCE DISCRIMINATION ON PREEXISTING CONDITION = MANDATED COVERAGE

People who are arguing against mandates either

1) Don't understand the basic economics of how insurance works (whether it is public or private the actuarial reality is the same).

or

2) Are happy to accept the current system that allows insurers to pick who they accept and discriminate on the basis of pre-existing conditions.

You simply cannot have both an elimination of discrimination of preexisting conditions (on both acceptance and fee) and at the same time make it voluntary.

Regulatory Adverse Selection

http://en.wikipedia.org/wiki/Antiselection


The term adverse selection was originally used in insurance. It describes a situation where an individual's demand for insurance (either the propensity to buy insurance, or the quantity purchased, or both) is positively correlated with the individual's risk of loss (e.g. higher risks buy more insurance), and the insurer is unable to allow for this correlation in the price of insurance<1>. This may be because of private information known only to the individual (information asymmetry), or because of regulations or social norms which prevent the insurer from using certain categories of known information to set prices (e.g. the insurer may be prohibited from using information such as gender or ethnic origin or genetic test results). The latter scenario is sometimes referred to as 'regulatory adverse selection'<2>.

The potentially 'adverse' nature of this phenomenon can be illustrated by the link between smoking status and mortality. Non-smokers, on average, are more likely to live longer, while smokers, on average, are more likely to die younger. If insurers do not vary prices for life insurance according to smoking status, life insurance will be a better buy for smokers than for non-smokers. So smokers may be more likely to buy insurance, or may tend to buy larger amounts, than non-smokers. The average mortality of the combined policyholder group will be higher than the average mortality of the general population. From the insurer's viewpoint, the higher mortality of the group which 'selects' to buy insurance is 'adverse'. The insurer raises the price of insurance accordingly. As a consequence, non-smokers may be less likely to buy insurance (or may buy smaller amounts) than if they could buy at a lower price to reflect their lower risk. The reduction in insurance purchase by non-smokers is also 'adverse' from the insurer's viewpoint, and perhaps also from a public policy viewpoint.

Furthermore, if there is a range of increasing risk categories in the population, the increase in the insurance price due to adverse selection may lead the lowest remaining risks to cancel or not renew their insurance. This leads to a further increase in price, and hence the lowest remaining risks cancel their insurance, leading to a further increase in price, and so on. Eventually this 'adverse selection spiral' might in theory lead to the collapse of the insurance market.

To counter the effects of adverse selection, insurers (to the extent that laws permit) ask a range of questions and may request medical or other reports on individuals who apply to buy insurance, so that the price quoted can be varied accordingly, and any unreasonably high or unpredictable risks rejected. This risk selection process is known as underwriting. In many countries, insurance law incorporates an 'utmost good faith' or uberrima fides doctrine which requires potential customers to answer any underwriting questions asked by the insurer fully and honestly; if they fail to do this, the insurer may later refuse to pay claims.

Accusations that President Obama wants to enforce mandates because he is selling out to commercial interests is based in the kind of ignorance that you would expect to see in freeperville. These slurs are not based on understanding the basic economics of insurance.

Insurance plans must have an actuarial reality to them. If you require an insurer to accept all applicants and not differentiate fees regardless of their pre-existing conditions then you have created an adverse selection that can only be remedied with a mandate.

If you do not want mandates then you must allow the insurers (whether it is a public plan or a private plan) to charge different fees to different risk groups.

[rmp yellow]

1. Are you implying that Obama was hysterical during the campaign?

As he opposed a mandate back then?

[grantcart]

4. Candidate Obama stated that he didn't think a mandate was

necessary because he thought that most people would buy insurance, but mandates would be necessary if people tried to game the system.


The regulatory conditions in this bill are much more severe. Not only are insurers unable to decline or drop somebody they are also unable to offer different fees to people based on preexisting conditions.

That means a 35 year old with bone cancer will get the same rate as a normal 35 year old man.



As for the "hysterical" part, candidate Obama did not go around accusing other Democrats of having sold out to corporate interests simply because they advocated a stronger mandate than he did.

So the "hysterical" part is aimed at those at DU who are accusing the President of accepting the mandate in exchange of future campaign contributions and other such nonsense.

[rmp yellow]

8. Do you think his campaign was hysterical using "Harry and Louis" ads to attack a mandate?

Paul Krugman (2-1-2008): The Obama campaign sends out an ugly mailer. Sorry, but this is just destructive — like the Obama plan, the Clinton plan offers subsidies to lower-income families. And BO himself has conceded that he might have to penalize people who don’t buy insurance until they need care. So this is just poisoning the well for health care reform. The politics of hope, indeed.

http://krugman.blogs.nytimes.com/2008/02/01/obama-does-harry-and-louise-again/

[grantcart]

16. It would have been "hysterical" if he had, like some DUers are today,

accusing the President of pursuing mandates because he is interested in getting future campaign contributions.


As for the substance of your reply, I have to say Krugman was correct.

[LaydeeBug]

84. he did. nt

[Cha]

15. I think you know the OP is not implying Obama was

"hysterical" and are only being disingenuous.

[Raine1967]

19. +1

I despise strawmanning debate.

As you know Cha -- the op said what the Op said this person is trying to bring in something that was never discussed to make their point. Glen beck is a king at that shite.

[rmp yellow]

27. I think you didn't see the Harry and Louis mailer in 2008 n/t

[Cha]

31. Yeah, disingenuous.

[rmp yellow]

37. So you are disingenuous about the mailer, I guess

Having seen it but having said nothing about it.

[grantcart]

33. Criticism of the mailer is valid

The "hysterical" comment is referring to other posters who are saying that Obama sold his position on mandates in exchange for campaign contributions,

An ironic charge because as I type it the TV is playing its HC ad asking people to oppose HC reform that includes the public option.

[bvar22]

77. The ONLY reason Obama won my support over Hillary....

...in the primaries is that he OPPOSED individual mandates to purchase Health Insurance.
Their policy stance on every other major issue was virtually identical.
So, at least in my case, he DID indeed sell "his position on mandates in exchange for campaign contributions." The fact that Obama immediately changed his position after the election just does not look good.....one of the many "disappointments".

I am sure you also know that there valid are non-hysterical reasons for opposing the mandated private purchase of Health Insurance.

[cliffordu]

2. K&R.

[Tace]

3. There's Another Option: Get Rid Of The Insurance Companies

Pointing out a fundamental injustice in our insurance system does not justify that injustice or the absurdity of making it illegal for poor people not to purchase insurance from companies whose CEO's are making millions of dollars per year.

Just get rid of the insurance companies. Problem solved.

[grantcart]

6. Getting rid of the insurance companies (which I support) would not change

the actuarial reality.

The economic principle of adverse selection is the same for a public plan as it is a private plan.


By definition all universal single payer plans are mandated plans although some are mandated with seperate fees and some are mandated by government taxes, none are voluntary.

[Tace]

10. Yes, I'm Thinking Of A Taxpayer-Funded Single-Payer System

Everyone would be covered from birth. I understand the adverse selection problem. That's why I'm suggesting covering everyone to start. I'm not against insurance in a fundamental sense, just for-profit medical insurance.

[grantcart]

14. We are in agreement - my only point is that single payers are also mandated systems

[dflprincess]

59. Big difference having a mandate for a single payer system

and being told you have to help a private insurer make up the money they spent lobbying against your interests.

They may tell us everyone will have to be accepted by these crooks, but I'm not hearing a whole lot about how they'll be forced to actually start paying claims and not offering only policies with premiums and out of pockets that are so high we still won't be able to afford them.

At least with a single payer system we know we'd have access to care. The mandate requiring we purchase shoddy products from the crooks who have been robbing us does not come with that guarantee.

[LooseWilly]

98. Thank you... elegantly stated... without the profanity I'm on the verge of typing...

I'm not a fan of paying companies that've been in the business of making a profit off my eventual death and disability... having care in the meantime might make me feel less apt to strangle a medical practitioner... just to set some ground rules...

[backscatter712]

82. Single payer has an individual mandate by definition.

Except instead of calling it a premium, it's called a tax.

Everyone has to pay it, and everyone benefits.

Don't tell me single-payer doesn't have a mandate.

[jeanpalmer]

97. self-delete

.

[masuki bance]

5. Which describes Obama during the primaries?

"..People who are arguing against mandates either

1) Don't understand the basic economics of how insurance works (whether it is public or private the actuarial reality is the same).

or

2) Are happy to accept the current system that allows insurers to pick who they accept and discriminate on the basis of pre-existing conditions..."

[Kurt_and_Hunter]

11. Neither

People who are arguing against mandates...

3) ...are running against candidates who have already argued for them, and are willing to embrace a little economic silliness secure in the knowledge that their supporters and potential voters are about personality, not policy.

[grantcart]

12. technically no

The Obama/Biden Plan http://www.barackobama.com/pdf/issues/HealthCareFullPlan.pdf required that insurers accept all applicants but it did not explicitly state that insurers would not be able to differentiate fees on the basis of preconditions.

This is a small but critical distinction. If insurers were required to accept all applicants but have different fees based on risk categories they could overcome adverse risk selection. The moving parts don't really fit because an insurer could accept everyone on paper but charge rates to some risk groups that would be unmarketable.

So in all honesty Senator Clinton's position on mandate was much more realistic and upfront.

[Kurt_and_Hunter]

17. Isn't it funny how little that is discussed...

A law saying, "You must offer insurance to any applicant" would be no burden on an insurer. Some applicants would be offered insurance at $250,000/month, but not summarily declined.

When people talk about eliminating pre-existing conditions it seems to be assumed that very sick people will pay roughly the same rates as everyone else.

That means that either government or other policy-holders will pay the difference.

It's odd that everyone says that has universal support because it has to be part of some larger reform. And Republicans who say they support it, but nothing else, ought be asked how they propose to pay for it.

Since it has to be balanced with universal participation and some sort of government option saying, "Of course everyone supports eliminating pre-existing condition denials" is crazy talk. But it is said every day in discussion of bi-partisanship and blue-dog point of agreement.

[grantcart]

22. I still don't understand how they are going to common rate people

Is there going to be no discrimination based on smoking? or age?


Is a 20 year old going to pay the same rate as 50 year old.


The more you get into any details the clearer it becomes that single payer is the only rational approach. You common rate the percent of income tax of 20 year old and 50 year old but the disparity of income will actually take care of the disparity of cost.


It is kind of depressing that we have to go through all of this drama for a system that all intelligent people know can only become 2nd or 3rd best.

[Kurt_and_Hunter]

24. Ironically, pre-existing condition ban is some sort of national health-care

For it to mean anything the level of subsidy implied is so high that the private insurance system cannot pay for it without the addition of other parts that all equal that old-devil socialism somehow.

It has many features of a national health insurance system, just without many of the good parts.

[masuki bance]

18. ...

http://campaigncircus.com/video_player.php?v=7688

[Bluenorthwest]

7. Which is why it is a crime to profit from basic health care

in our peer nations that mandate insurance purchase. A crime, not a detail. Commanding the purchase of a for profit product of any kind is simply wrong for everyone but those who take the profit.
Which is why the apparently hysterical candidate Obama ran so strongly opposed to mandated purchase. So very strongly against that he used her support of mandates as mud to be flung as his rival.

[Kurt_and_Hunter]

9. This is a superb thread, but will provoke some Orwellian comedy

Excellent post. Everything is just as you say and always was--the economics are not a recent development.

And this is why many were appalled during the primaries that one of our candidates would say anything else.

Paul Krugman has been vilified here as a PUMA for saying things that were not optional--particularly for an economist.

And those lovely "Democratic" tea-bagesque voices here that were saying, "Tell Hillary to keep her hands off my paycheck."

And now some people will applaud your excellent post who, a year earlier, would have spewed bile at you for the same post.

We have never been at war with East-Mandatia.

______________

There are doubtless also some who are the inverse of what I describe. If anyone bitching about mandates today had a different view while supporting Hillary or Edwards, then it is "We have always been at war with East-Mandatia"

[grantcart]

13. At the time you were right and I was wrong

[Kurt_and_Hunter]

21. Whoops. I didn't mean anything personal at all.

I assumed that you would have been in the camp, "No candidate makes sense all the time. We chose them in their totality."

I have never supported a candidate who didn't offer something for nothing. Reagan's success in painting paying for anything as somehow unpatriotic has mandated that all successful candidates say crazy things about costs.

And I don't fault Obama on this much. In an election you opponent stakes out a position you take a somewhat contrary position.

My beef is with the self-styled reactive aparatchiks, not with someone who disagrees on a complex policy point.

(I seriously doubt you ever demanded that Hillary keep her hands off your paycheck.)

[grantcart]

25. Just business nothing personal taken

and the response is that now that I understand the bill better candidate Clinton lost an opportunity to explain her position in such a way as to make the case more accessible.

But I have to agree with the Krugman assessment (and is quoted in the thread) which I am sure I railed against at the time that it is "poisoning the well".

Obama is going to have resistance on this because of what he said during the campaign.

Fortunately for him the well of "actually studying what is going on" is not actually drank from by very many folks.

Actually he is lucky because the media has really gone to sleep on this one and could really tag him on it.

The Republicans are limited because the Insurance companies know that the mandates are both necessary and will, atleast in the short term, increase profits.

[Kurt_and_Hunter]

28. One benefit of not putting forward a plan

It would be hard to assess anything going forward in terms of campaign promises. Obama certainly never promised to veto any legislation with a mandate.

In fact, the campaign promise that was broken was the implicit promise to propose a plan to Congress. (That applies to all candidates and all proposals.)

I find it maddening that a man who had a large PERSONAL mandate did not recognize that a PERSONAL mandate requires individual action.

"I just won and I say pass this thing here."

(Had George W. Bush entered office with a plan to encourage Congress to address the "tax crisis" I doubt his tax cuts would have passed.)

[TomCADem]

20. Delete

[TomCADem]

23. Aren't Gas Guzzler Taxes A Similar Type Of Mandate?

Shouldn't we all be free to buy huge gas swilling, greenhouse gas belching SUV's constrained only by our conscience? So, what if the SUV imposing external costs on my neighbors the way going uninsured might also impose such costs? Any mandate is an impairment on my freedom!

:sarcasm:

[Justitia]

26. My family mbr, who did risk assessment, statistics, actuarial, etc for ins companies, says it's BS

and set up to serve the ins companies bottom line. I'm talking about the entire definition of "adverse selection".

My family mbr has been in this side of insurance for 40+ years.

The entire theory was created by the insurance industry (it's the first line of the wiki entry) as a solution in search of a problem.

Basically, it was a bullshit postulation (note all the speculative language - count the "may"s) to justify charging different prices to different people - IN WAYS THAT SOCIETY AT LARGE WOULD FIND ACCEPTABLE.

Now, it has been accepted as rec'd knowledge and too many people have bought the entire line of thinking hook, line & sinker.

Unfortunately, including those politicians who believe mandates are a "must" to make universal coverage "work".

[grantcart]

29. Well I guess it would be interesting to actually hear from your family member

It should be noted that upthread that Krugman, no friend of insurance companies, basically castigated Obama during the campaign for not accepting this basic economic premise for health care reform.

So I guess that your family member would also say that Krugman has been duped too!

[Justitia]

34. We talked about that...he sees it as too many accepting "rec'd truth" from the ins industry.

Because the pool of statistical scientists in insurance is exceedingly small (my family mbr is one of these), and the information is extremely DENSE, too many take some of these "definitions" and "assumed outcomes" as gospel truth.

It's not easy to plow through the information, it is easier to accept what insurance companies claim as their limitations.

I've noticed that Krugman, has lately struggled with the concept of mandates as well.

I tended to agree w/Obama during the campaign that the vast majority of Americans WANT to have coverage and if they could afford it, they would have it.
Note, that holds true in our current employer based system. Some employees certainly don't participate - except for the lucky few that don't pay any premiums for their employer based coverage, then 100% coverage is guaranteed.

My only point in all this is to say, maybe we should retain our skepticism when it comes to accepting ins. companies arguments for a mandatory purchase of their product - that's all.

[grantcart]

38. Now that I understand your point more clearly

The Wikipedia article actually acknowledged that there is some that share that point



Whilst adverse selection in theory seems an obvious and inevitable consequence of economic incentives, empirical evidence is mixed. Several studies investigating correlations between risk and insurance purchase have failed to show the predicted positive correlation for life insurance<3>, auto insurance<4><5>, and health insurance<6>. On the other hand, "positive" test results for adverse selection have been reported in long-term care insurance<7> and annuity markets<8>. These "positive" results tend to be based on demonstrating more subtle relationships between risk and purchasing behavior (e.g. between mortality and whether the customer chooses a life annuity which is fixed or inflation-linked), rather than simple correlations of risk and quantity purchased.

One reason why adverse selection may be muted in practice may be that insurers' underwriting is largely effective. Another possible reason is negative correlation between risk aversion and risk level in the population: if risk aversion is higher amongst lower risk customers, adverse selection can be reduced or even reversed, leading to 'propitious' or 'advantageous' selection<9><10>. For example, there is evidence that smokers are more willing to do risky jobs than non-smokers<11>, and this greater willingess to accept risk might reduce insurance purchase by smokers. From a public policy viewpoint, some adverse selection can also be advantageous because it may lead to a higher fraction of total losses for the whole population being covered by insurance than if there was no adverse selection<12>.



Two points

1) The research on it is very thin, especially as it relates to HC insurance

2) It points to reducing but not eliminating the degree of influence adverse selection would have.

There isn't enough data to overturn widely held economic models that transcend mere industry opinion.

[Justitia]

40. exactly! His empirical evidence showed a much larger correlation w/risk aversion

which is highly subjective.

Health ins is such a unique product in the field too, it really does not work at all like other types of insurance.

I don't have all the answers, but I can say I don't like mandates because we are putting inordinate burdens on the wrong parties and it will damage the most vulnerable in the worst ways.
As an accounting type person myself, it's also like not matching the right items together (revenues & expenses, vs. accts receivable & dividend pymts).

Not to mention the administrative nightmare of mandates (which could quickly wipe out any cost efficiency gained) and the absolutely nuclear political fallout over the ideological idea of "mandated insurance".

[Hello_Kitty]

42. Mandates are to a lot of Democrats what tort reform is to Republicans

It's like the magic elixir that will cure all the problems with health insurance.

[Prism]

30. Why not subsidize pre-existing conditions?

Granted, it would be a trainwreck in assigning value to the various maladies people suffer from. But it seems to me that an elimination of the pre-existing condition restrictions could potentially be paid for via a subsidy, relieving the need for mandates to spread around the costs.

The problem with mandates at this point in time isn't only the galling requirement by government to purchase products from private, for profit entities, it's that the hardship waivers aren't nearly adequate enough to shield the barely-making-it working class from further strain.

As a financial advisor, I could spin a list with dozens of clients who would not currently meet the requirements of the hardship waivers, but would be ruined if they had even a smidgeon of their income further diverted to mandated premiums.

I just cannot support any plan that increases the strain on working Americans who can barely string together a buck as it is.

[grantcart]

32. what is your understanding of how high the highest income that will

receive some form of subsidy will be under the current Senate Finance Bill?

[Prism]

35. My understanding:

In the Baucus bill under consideration, the hardship waiver would be available should the cheapest available premiums exceed 10% of income. (I know Schumer has introduced amendments attempting to lower this figure to varying degrees).

The last incarnation of negotiations I read had the tax credit capped at $43,000 a year income for individuals and $86,000 for households (I think those numbers are correct).

[grantcart]

36. That's why I asked - I thought $ 88,000 for a family was pretty good

[Prism]

44. The devil is very much in the details

The credits work on a sliding scale, built to guarantee the lowest incomes only pay about 3% income towards premiums and scaling up income tables until the top hits about 13%

For example, take a family currently making a little over $60k a year who do not have health insurance. On the sliding scale, with the subsidy, we're still going to hit them with a mandate that can total up to $650 a month.

Many families simply cannot afford this. While the idea may seem attractive on the surface, once you start crunching the numbers, you start realizing all kinds of people - mainly the middle and working classes - are going to be saddled with an extra expense that could make the difference between just holding on and falling through the cracks.

[grantcart]

45. I understand - right now that explains our situation

$ 650 would be a great buy and we couldn't afford it!


I almost wish that the Public Option doesn't make it and the whole thing goes back!

I have a sneaky suspicion that the Republicans actually do want the bill to pass for the reasons we have been talking about, it also takes health care off of the front burner, and straddles the Democrats with all of the problems.


Then they simply have to sit back and argue and say vote for Republican to slow the train down.


If the economy wasn't in such bad shape because of Bush and the deficits not so aggregious because of the Bush tax cuts then it would be relatively simple to simply increase the subsidy.

[Prism]

46. Here's the table I'm looking at

Was going to edit this into the previous post, but you already replied ^^ Just so you can see where I'm getting my numbers from:

http://www.tnr.com/sites/default/files/FinanceAnalysis.pdf (edit: We're also looking at gross incomes when discussing these subsidies).

Looking at the mandate plan, even with subsidies, I'm seeing a ticking timebomb being lobbed directly into the middle and working classes. We're slathering spackle onto the crumbling lode-bearing portions of a teetering economic structure. This reform now might seem not entirely horrible, but it's going to erode incomes and tip too many families over the brink. It will aggravate all kinds of parts of the economy that really don't need the added stressors.

I do understand the impulses and politics behind the Baucus negotiations, but what we're increasingly ending up with is a temporary satisfaction for a guaranteed future disaster. We could see the financial collapse coming years ago. There were all sorts of warning lights flashing crazily. No one listened. This reform plan is similar. There are all kinds of horrors being patched in that will really hurt people down the road.

I wish we'd start from scratch, too ;/

[grantcart]

53. You should make a seperate OP of it tomorrow

People don't understand the details. I don't understand the charts and a professor nicnamed me "charts" in college because of my affection for them lol.

While your right that it is going to erode incomes it is going to provide a tremendous lifeline to people that are sick.

The problem isn't starting from scratch, its there isn't enough money for subsidies.

I suppose we get it passed and hope that it puts pressure on other areas, i.e. military to reduce their budgets.

[Prism]

83. I mostly agree

Looking at families who cannot treat chronic conditions, receive coverage due to pre-existing, or are currently paying upwards of $1000 or worse a month for premiums, the change will provide some much needed relief.

I think, when you get down to nuts and bolts, my biggest problem is that these mandates shift the costs very much to the middle and working classes. The money does need to come from somewhere - only 70% of increased costs due to acceptance of pre-existing and similar classes would be absorbed by the new age ratings on premiums (which is a back door system unto itself that would require an entire different thread to sort out). However, the burden seems disproportionate and corrosive to a lower 85% who are absorbing so much economic pain in the first place. I'd much rather a form of progressive income tax to fund these changes rather than this mandate system that will hit millions of families who can ill afford it.

Right now, it seems like reform is bending over backwards to prove to the for-profit companies that their billions will remain intact. But the only way of doing that is placing the burden on everyone else. This seems the opposite to me of the direction reform should be going.

[quakerboy]

65. I keep hearing 66,000. and thats only if you have 2 kids and 2 adults

Ive been looking at the various numbers in a fair amount of depth. Its been a good exercise, actually, because I have learned that after a few raises between my wife and I, some of the numbers are a lot better than they used to be, and better than I had thought they were. I feel extraordinarily lucky to be in that situation right now.

I ran some numbers based on what I was quoted when I was looking at buying personal health insurance, and based on the MA plans that can be accessed online. And I threw numbers based on moving up to BC, an option I gained when I married my Canadian wife, into the mix.

If I had a job lined up up there, Canada would be, by far, the way to go, money wise. And the MA numbers were better than what I got quoted here in Oregon. But either of the latter two would immediately put an end to any Frivolous spending. For instance, the savings we have been trying to build toward a down payment on a home. Or the occasional extra payments I put toward my student loans.

All of which means, if I was hit with a mandate, and my wife and I don't get much better paying jobs in the mean time (and I make more than most of my old college buds already) I would be just paying off my student loans when I hit retirement age. In the mean time, we would have to rely on an 03 focus to last us until roughly 2039. At that point we could quit working, and not need a car anymore, living on Social Security.

If it was something that would guarantee that every person in this country would have health care when they needed it, I would be willing to take this hit, and hope that things get better. But I refuse on principle to support a system that will not cover a lot of people, where for profit companies and highly paid businesspeople will continue to deny coverage, skim off the top.

[Prism]

75. It depends what goes into the final bill

Right now, progressive representatives have pressured the current bill into granting subsidies to any four-person household that makes up to four times the federal poverty level. ($22,000 x 4 = $88,000).

However, there is pressure to bring the limit down to three times the federal poverty level. That might be where you're hearing the $66,000 figure. There's been a lot of wrangling over that, but as far as I know, that four-times level is still in the bill.

[dflprincess]

60. HR3200 permits premiums of 11% of income

and allows additional annual out of pockets ("cost sharing") of $5K for individuals and $10K for families (in addtion to expenses not covered by the insurance, like vision and dental). These premiums and out of pocket limits can go up annually,

In addition, Pelosi has said the income caps could be lowered. I know there has been some talk of dropping it to 3x the poverty level which would be about $32,000 for a single.

This is not affordable. We need a plan that has been paid for up front and has limited copays ($5, $10) at point of service. Expecting people to be able to afford $5,000 or $10,000 in annual expenses before the insurance kicks in is no improvement over what's going on now.

[Greyskye]

39. K&R for helping me to understand the issue better myself.

:thumbsup:

[Hello_Kitty]

41. I reject a couple of your premises

Adverse selection:

The vast majority of people without insurance, including the young healthy ones, would get it if it were a) affordable - and I mean REALLY affordable and b) provided decent coverage. How many young people with comprehensive employer provided coverage do you see opting out of it so they can pocket the $60 to $100 a month that is their share of the premium? I've never seen one in any job I've been in that provided good coverage. OTOH, I knew plenty who didn't bother to make 401k contributions. Back when I was selling insurance I found out that the coverage available to people on the individual market is ridiculously expensive and inadequate. A young healthy person in a job with no benefits is making a perfectly rational decision to take his/her chances rather than fork over $200 a month for a premium and STILL be up to $5k out of pocket each year before the insurance kicks in. Yet people are looking at the current situation with young, uninsured people and saying, "See! We have to make them buy it!"

Public vs. Private

1) Don't understand the basic economics of how insurance works (whether it is public or private the actuarial reality is the same).

From an actuarial standpoint, you're correct. You're omitting one important detail. The profit motive of private insurers in the U.S. Even the so-called "non-profit" ones like Blue Cross are skimming 30% or more off of every dollar in premium. Most of that overhead is direct profit or activities centered around creating and protecting profits. By comparison, the most generous estimates have the uninsured adding 8% to the average family's premium. It's funny how it's so all-fired important to force insurance on everyone so we might* bring that 8% down but god forbid we lay a finger on the much larger corporate profit margin.

I'm leery about mandates not because I don't understand how insurance works (I've sold it before so believe me I understand what a risk pool is), but because the mandate seems to be the big non-negotiable thing here and we don't even know what's going to be mandated on people yet and what kind of controls are going to be put on the insurance cos. Sure, we can tell them they can't deny or drop preexisting conditions, but what's stopping them from putting a brazillion bureaucratic hurdles in front of you every time you try to use your coverage? And when we say that insurance will be subsidized so it's "affordable" who is making that determination? Every bill I've seen allows a substantial percent of a middle class individual or family's income to go to health insurance. The general consensus seems to be that if you're at 400% FPL, you can "afford" up to 12% of your income just on premiums. We also don't know what the ultimate mechanism for enforcement will be - I've seen IRS levied fines and even rumors of jail terms. And how will people entitled to subsidies receive them? A tax credit that requires them to put the money up front for the insurance and get a refund at the end of the year or will the insurance co. bill the government directly? All those things are important to know and need to be put in place BEFORE there is a mandate.

*I think it's rather naive to assume that if the cost of health care goes down that much due to requiring everyone to be insured, that the insurance companies would generously pass the savings on to us in our premiums. Why would they? They'd probably figure if you're already paying X amount you're willing to keep paying it.

[grantcart]

43. "From an actuarial standpoint you are correct"

The point of the OP is advancing the actuarial reality.


I prefer the public option. If mandated to buy private insurance I would get a hardship exemption before buying it.

Your other points basically support the Public Option over the Private Insurers and I agree 100%.

But even if you ONLY HAD A PUBLIC OPTION, IF YOU DID NOT ALLOW THE PUBLIC OPTION TO ASSESS BY RISK AND ACCEPT ALL APPPLICDANTS WITHOUT PRECONDITION YOU WOULD STILL HAVE TO HAVE A MANDATE TO AVOID ADVERSE SELECTION.

I certainly understand somebody being against mandates, but you also have accept that the plan, even if it was a public plan, would, if the plan was voluntary, have to rate and charge people according to their risk group.

The OP is not intended to disagree with that position but to the outlandish charges that the President has accepted mandates in order to pocket more campaign contributions from HC insurers, even while typing this they are running another ad attacking his plan.

I also agree that HC companies would never reduce prices based on cost but only if forced to with a robust Public Option.

[boppers]

47. Fee differentiation *is allowed*, I thought?

I thought I saw a proposal where it was capped by age group, but I think it would be perfectly acceptable to also have differentiation based on current smoking, drinking, and other recreational substance use, current body mass index, and other self-determined factors.

Genetic factors, or historic factors (past smoking, prior medical issues, for example), much less so... but to treat a morbidly obese, chronically drunk, daily pot smoker the same as a person who choses to be healthy? That seems like an unfair subsidization of other's health choices. At best, it merely discourages making healthy decisions, at worst, it encourages social backlash at the individuals who are seen by others as "abusing" the system.

[grantcart]

49. I would be interested in any reference you have on it

I distinctly heard that they could not discriminate on the basis of pre-existing conditions.

BTW by definition all single payer systems paid by taxes have no "fee differentiation", not only mandated you pay by a progressive tax.

[boppers]

51. Looks like I was hearing about Baucus' version.

"There also would be “limited variation in premium rates” for tobacco use, age and family composition."

http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisplayFullDocument&orgId=574&topicId=25132&docId=l:1040747608&start=4

Is age a pre-existing condition?

:evilgrin:

[grantcart]

52. having only those three criteria for fee variation is quite strong

I think it reinforces the actuarial argument that mandates are necessary.



Its kind of a stunning change in the status quo when you think of it. I was declined 9 years ago because of an obscure ear related condition, clearly they didn't want my age and weight but couldn't use that.


now they couldn't decline or charge more for a non smoking HIV patient who has a bad kidney and is epileptic.

[amandabeech]

88. Under the Baucus bill, older people, who must also save for retirement,

will pay 5X as much as younger people.

Not all older people have decent incomes. Many of us have lost jobs over the past 15 years and have incredible difficulty getting new ones. I have four first cousins over the age of 50, and only one has been able to hold on to his job, another had to take a severe cut, one is working temp, one (me) was working a temp job until the spring and one has been out of work for two years. Each of us has a college degree and I have a graduate degree.

I simply don't know where the money is coming from.

[backscatter712]

48. I agree with you, as long as we have a strong public option, to keep prices down...

and also to make sure insurers treat their customers right instead of denying claims. The competitive pressure is desperately needed, and currently not there because of the insurer's cartel-behavior.

If we don't get a public option, we're all gonna get fucked.

But yes, we need a mandate along with the prohibitions on discriminating against people with preexisting conditions - it's basic economics.

[grantcart]

50. agreed without the public option it would be a disaster.

[JCMach1]

54. Mandates without cost controls are a disaster waiting to happen!

[grantcart]

55. that is why without the Public Option this would be a mega disaster

I don't think that the FED government would be very effective in administering cost controls simply because their would be an army of lobbyists to challenge all of the small print.

Get a public option pass Wyden's ammendment so that anybody can get it and let the market control the prices.


Having said that - even with the Public Option this is going to be a bitter pill for the healthy and a lifeline for the sick.

[JCMach1]

80. I fully agree...

[brentspeak]

56. You have a funny -- and predictable -- way of lying.and being disingenuous

You first compare those who oppose the mandate to "Freepers" -- then claim they are the ones who are engaging in a "slur".

You then, with all the shamelessness of a $5 prostitute (perhaps even less than that), lie through through your a$$ by erecting the strawman of two types of completely made-up "People who are arguing against mandates" who you fit into one of two completely made-up points-of-view.

Par-for-the-course K-Street bull$hit rhetoric.

[grantcart]

62. Your reading comprehension approximates a 6th grader:

Quoting from the OP

1) We all hate mandates. That is not however an excuse not to put in a little effort to understand why mandates have become an inherent part of health care reform

and

If you do not want mandates then you must allow the insurers (whether it is a public plan or a private plan) to charge different fees to different risk groups.

There is no aspersions to people who, understanding the principles involved prefer the current system to change to a system that is clearly going to bring some pain. This solution, as imperfect as it is, will also provide tremendous relief to people with chronic health conditions that cannot get care. They will be accepted without discrimination and will not pay a different fee.

In the thread you can read thoughtful discussions by Kim and Hunter, Prism, Boppers and Hello Kitty that all engage in a thoughtful discussion of issues.

But there is only one responder on this thread who has taken an intelligent discussion and launched a personal attack.

That is you. Somebody disagrees with you then they are a "cheerleader" and "haven't read the post".

You stand alone.

Everyone who reads the thread knows that I didn't compare people who don't like the mandate to freepers (I already admitted that I didn't like it,that it is a bitter medicine).

No those that act like Freepers are those that because they are ignorant of the basic workings of actuarial calculation (the key point that has not been seriously challenged) stoop so low that they accuse the President of accepting mandates for the prospect of future campaign contributions, or has taken direct bribes, or other criminal activity.

How small is the mind and how dark is the soul that could be so perversely motivated that they would take a such an attack against President Obama. It is the kind of mind that we see on Fox, it is the cartoon image known as Glenn Beck, it is the spirit of Freepers.

Rather than understand and have an intelligent conversation on a complex problem, one in which Paul Krugman warned candidate Obama about (see upthread) some would seek to go to the bottom rung of dignity and insult the President who has served so far with intelligence, humility and self restraint.

So please go on with your uninformed belligerent attacks on President Obama. They are not well grounded in fact, almost always devoid of logic, lack any sense of proportion, have no context and reveal an obsessive compulsion to try and tear down someone who is clearly, clearly, clearly way above your self appointed station. You dwell in the basement.

Do me this favor. Every time you engage in an attack on the President, mention me. For I stand with him.

Even when I disagree with him I have found his epistemology and rationale have always been instructive. So feel free on your next attack on the President to include the phrase "and some here at DU" so that you continue to narrowly stay within the rules. Let everyone understand that you are attacking me.

Your disparaging words to me I wear as a badge of honor.

[kid a]

74. Thank you Grantcart - you put my often knee-jerk reaction to BS into rational words!

[grantcart]

79. I don't seek him out but if he comes he knows what is waiting for him.

[brentspeak]

81. In short: Obama lied about the mandate, and you post long-winded, sychophantic apologetics

which also contradict themselves -- in addition to not exactly making much sense ("I have found his epistemology and rationale have always been instructive.)

[cliffordu]

85. Blah de blah de blah de woof woof woof.

[grantcart]

86. That you don't understand epistomology is not surprising.

You have typically again gone off point.



The point that you started your typical "hysterical" rant is that you objected to being referred to as being compared to "Freeper".

You have alleged that Obama has taken the position on mandates because of criminal activity including taking campaign contributions and bribes.

This is typical of your behavior. It is the same logic and style of freepers.

You promote yourself and attack others and do nothing to advance any particular argument.

You have been stripped naked and you stand alone on this thread in both the methodology, nature and crudeness of your attacks. The fact that you don't understand Obama's epistomology or his approach to solving complex problems is not surprising.

Your hysterical apocalyptic irrational blustering does offer the President one advantage, the juxtaposition is a useful contrast between pragmatic progressive leadership that actually achieves something and a "Beck" like self indulgent compulsion to attack without reason or fact. That you would put me in the President's camp in any capacity is a compliment I thank you for.


edited for type

[brentspeak]

87. I understand what "epistomology" is

What I don't understand is bizarre linkage of that word with Obama pushing for a mandate. It gives sychophantic butt-kissing a whole new meaning.

[grantcart]

89. Again it is a problem with your ongoing ability to read and stay on point

Here is what I actually said,


Even when I disagree with him I have found his epistemology and rationale have always been instructive. So feel free on your next attack on the President to include the phrase "and some here at DU" so that you continue to narrowly stay within the rules. Let everyone understand that you are attacking me.



So my statement was not specific to the President's opinion on a mandate but more specific to the areas where we disagreed. The point is that the President has a special quality in his speeches in that he doesn't simply explain certain facts or decisions he goes to great lengths to explain HOW he arrived at that decision. In fact his campaign speeches, when you take out the emotive crowd pleasing rallies was as much an attempt to show how he arrived at a decision as he wanted to show exactly what that policy is.



Vulgarity can be an entertaining and even witty way for a facile and intelligent mind to express itself, as George Carlin demonstrated.

Or it simply is evidence of a rather limited intellect that realizes they cannot sustain the debate from the premises they have been arguing. You are no George Carlin.

In as much as you have not sustained any reason to accept that the President's decision to include a mandate (a decision that is actually accepted by every single person advocating reform, at this point no one is advocating for a voluntary system) you have resotred to calling me:

"liar"
"shamless as a $ 5.00 prostitute"
author of "K-Street bull$hit rhetoric"
guilty of "sychophantic butt-kissing"

Now this, along with your continued and enthusiastically sustained slurring of President Obama proves exactly the point I was making about

Accusations that President Obama wants to enforce mandates because he is selling out to commercial interests is based in the kind of ignorance that you would expect to see in freeperville. These slurs are not based on understanding the basic economics of insurance.

Many people have added substantive comments on this thread. Some offered and challenged some of the premises involved in the basic discussion of "adverse selection" and "adverse selection spiral". One commentor even made the point that while it is the accepted pervailing view there may be an academic question as to whether or not it should be considered as universally applicable as it has. But no one has really disputed the premise that if your are going to restrict an insurer's ability to restrict acceptance or fee differentiation then you are going to have to have a mandate.

No one, that is, except you. And your argument is that it is "bullshit sychophantic butt kissing".


Again words coming from you are not a surprise, they reflect the poverty of your argument, the limitations of your vocabulary, the obsession with attacking the President, and your obsession to express yourself in uncivilized personal attacks.

Again coming from you I wear them with honor.

Could you go so far as to say that I am "the most (add your additional favorite vulgarities here) bullshit sychophantic butt kisser in DU and possibly in the entire blogosphere"?

This honors are not easily won and I would love to make others jealous that you consider me the most "(add your favorite vulgarity) bullshit sychophantic butt kisser at DU".

[cliffordu]

92. And, if I may be so bold.....

Sometimes we have to respect our limitations. Our friend cannot seem to respect his.

More's the pity.....


Excellent post, by the way.

Did you debate in college??

[grantcart]

93. high school - didn't have it in college but there were other alternatives

[cliffordu]

94. I suspect you were a master at those pasttimes too.....

[amandabeech]

90. Those of us with pre-existing conditions will pay premiums based on age.

Under the Baucus plan, the age bias cannot exceed 5X; under the House plan, 2X.

I am not sure that I will be able to eat, clothe myself and pay what I expect to be a very large insurance premium at 54.

I have already been in the situation in which I had coverage, but could not afford to use it and did not seek preventive care because I would not have been able to afford it for anything serious like cancer, diabetes or heart trouble.

I greatly concerned that even the public option plan, if it is available, will still be too expensive, particularly because I live in an expensive metro area where there are supposed to be jobs even though I can't seem to get one.

If people like me are forced to buy insurance at 5X that of a young person, I expect that many like me will continue to forgo care until we make it to Medicare age, at which time we will swamp all doctors who will still accept Medicare patients.

[cliffordu]

70. Now, now, big fella, what is it? Something stuck in the diaper there.....??

Just messed yourself a little, it'll be alright. Too much gibberish in your diet....

While you get cleaned up, could you could check your posts for little stuff like 'speling' and punk-chew-ay-shun.

And by the way, your grammar? Maybe a mint, or a toothbrush, please....

Once you do all that we'll let you call someone Hitler, M'kay???/

[Odin2005]

57. Oh, quit talking sense!

Good post! :)

[brentspeak]

58. Why do I have the feeling you didn't understand a word the OP said

but simply rec'd it mindlessly for cheerleading purposes?

[Odin2005]

61. I comprehended the OP just fine thank you very much.

Nice to see that you arrogantly think your positions are self-evident truth and thus everyone who disagrees with you is an unthinking "cheerleader". :eyes:

[Cha]

72. "Mindlessly cheerleading"? Is that all you got, brentspeak? Personal

attacks?

[BlooInBloo]

63. Something is very wrong in this thread. There's too much actual discussion...

Except for "that guy", of course.

[goclark]

69. You are so right

It is refreshing to see a thread that is addressing a difficult yopic not get interrupted by those that wish to NOT discuss the issue.

[cliffordu]

71. Watch your fucking mouth or I'll publish those photos of you and Bekkerhead

doing the macarena and singing at the karaoke bar in Poulsbo late last night.

Oh wait - You weren't talking about me??

Nevermind.

[quakerboy]

64. Plainly put

I will not accept a mandate without a public option. Anyone who votes for that will no longer have my support.

I understand the need for a mandate. Getting everyone into the pool is important for the success of health care. However, I think it is optimistic to the point of insanity to think that the insurance companies will decrease their prices just because everyone will have to buy in. Rather than lower prices to reflect the greater numbers of people and the actuarial needs, they will raise all the prices to as much as they think they can get away with on their newly captive audience.

It is my understanding that many insurers are already charging based on having the riskier populations in their risk pool. But they move heaven and earth to make sure that as few as possible are included, even as they charge based on their inclusion. And the fact is that many other countries include everyone, risky or not, and do it a far more affordable prices. So it is possible to reduce the costs and still add the more "risky" persons.

With the reservation that 15-20 years down the line, if insurers drop their prices out of the goodness of their hearts, I may change my mind, a mandate without a public option is a deal killer. From the top to the bottom. From my representative, my senators, my president, and the party itself, I reject any who would push or even passively accept such a plan.

That is an ultimatum. I do understand the issue. And I also have my requirements. I refuse any health plan that is wholly or partially reliant on the good nature of a profit driven corporation.

[grantcart]

66. I agree 100% except I expect that having gotten the public option in as a wedge

that within 8 years we will start to have single payer in some smaller states like Vermont and Delaware and be on our way to single payer by state.

[goclark]

68. I love this thread ~ thanks so much grantcart

for being willing to insist that this be an informed discussion and not about President Obama.

It's not about President Obama as some want it to be, he never promised anyone of us that we would have Health Care as "our own Rose Garden!"

I love this thread because intelligent minds are weighing in on the ongoing debate for quality Health Care. That is what should be done.

After all of the intellectual threads ( this one gets high marks) come together ~ I still want there to be a "Health Care Final DU Plan For Dummies."

Heath Care Dummies -- I'm the DU leader of that group. :patriot:
My IQ on Health Care is still waiting for the ABC - 123 of it.

Again, enormous thanks to all of you that have contributed to this thread. I wish there could be a Special Forum just for this topic. It's that important right now.

[Monk06]

67. The US will not have a fair an universally available health care system as long a private insurance

companies are allowed to be part of the health care
system.

Insurance Reform leaves the Insurers in charge. They
will resist any and all reform to maintain their control
of the health care industry.

It is essential to the very survival of insurance companies
that the reduce claim payments to an absolute minimum. In so
doing they treat every insurance claimant as a suspected fraud
artist.

The classic example is the idea of the preexisting condition. From
the insurers POV someone with a preexisting condition is a thief
trying to cheat the company. This in spite of the fact that most
people are unaware of the preexisting condition.

It is one of the ironies of advanced medical technology that it
allows the insurers to trace the origin of a disease back before the
purchase of an insurance contract. So that MRI that provides the
valuable diagnosis of a previously unknown condition gives the insurer
the information and the pretext they need to cancel your claim.

Small wonder that insurance companies are happy to foot the bill for hi
tech diagnostics !!!!!!

[ipaint]

91. It really is that simple.

They make money denying care. A mandate will give them more opportunities to do just that.
These are the same insurance companies killing tens of thousands a year denying access to care. Our regulatory agencies are revolving doors for industry lobbyists, lawyers and executives. Expecting any regulatory reform beyond that which appears to be reform is incredibly naive. This is just like the banks and wall street. They are all inter-dependent.

The insurance companies will continue with business as usual. Wall street depends on it. They all know they are looking at a massive migration of customers out of private policies into medicare in the next two decades. Something needed to be done or they really would be facing declining profits and falling stock prices. The only thing non-negotiable in this whole sordid staged mess is the mandate. I'm sure the insurance companies are working round the clock right now to set up the various obstacles to care for those they would have traditionally just sent a denial letter to. Nothing and no one in our current government will stop them from operating that way.

Not to mention there is no strong public option in any bill that has the teeth to take on the insurance companies. If something emerges it will be built to fail. The industry purchased that guarantee a long time ago.

There is no difference between republicans privatizing social security or medicare and democrats continuing to privatize healthcare.
The person who got the ball rolling towards universal care in Canada was not a middle of the road guy. He was a leftist, a crazy leftie by the new DU standards. And he told the people the truth.

It is no wonder that folks get "hysterical" about mandates to these private ins. vultures. I can't help but wonder how someone who watched a loved one killed because an ins. company denied them the care they paid for, now having to scrimp, save and sacrifice to make the unsubsidized portion of their payment to those same criminals.
Subsidies also guarantee folks who are trying to pull themselves out of wage slave status will be forever giving any gains in wages to the insurance companies as their subsidies are reduced. Those same subsidies/taxpayer dollars will be spent in the most inefficient way imaginable- going towards excessive profit and bloated overhead.

Mandates/taxes similar to social security and medicare going towards the support of healthcare for all, no-one left behind, that sounds great to me. We need everyone paying into a system like that.

Mandates to create and support a permanent legal gatekeeper out of the industry that has killed hundreds of thousands of insured and uninsured americans over the last 2 decades, they have got to be kidding.

[Monk06]

100. This part of your response is deserves to be highlighted ....

"Subsidies also guarantee folks who are trying to pull themselves out of wage slave status will be forever giving any gains in wages to the insurance companies as their subsidies are reduced. Those same subsidies/taxpayer dollars will be spent in the most inefficient way imaginable- going to wards excessive profit and bloated overhead."

I have come around to the view that the reason conservatives hate taxation is that
it cuts into the profits from CORPORATE TAXATION, which is what excessive corporate
profit represents.

Corporations now have the power to impose user fees, rationing through caps in coverage, age
discrimination in service charges, fines and fees for 'late' payment, unregulated in tersest
on CC interest rates and services charges.

And to think the Revolution started because of a puny little tea tax by the British Government.

[HamdenRice]

73. krnt for serious discussion

[ZombieHorde]

76. "People who are arguing against mandates either"

or

Realize other countries are able to do so much better through excellent leadership.

[grantcart]

78. are you familiar with how Canada transitioned to single payer?

Are you aware that the authors of the "public option" are advocates for single payer?

[Lydia Leftcoast]

95. I'd be happy to have a mandate IF there were a public option OPEN TO EVERYONE

Otherwise, it's corporate welfare.

[grantcart]

96. Wyden's ammendment would do that and it seems to be gaining steam.

[harun]

102. That's good news.

[harun]

101. 100% CORRECT. If they want to make some one buy a plan

they have to make it so that person can buy in to the public plan.

The politicians themselves admit this is Corporate Welfare. Rest is just spin. No constituents are asking for mandates, only the insurance industry, lobbyist's and politicians are.

[jeanpalmer]

99. It's not the mandate that's the problem

It's the kind of mandate.

Obama is proposing nothing to lower the outrageous cost of healthcare in this country. There are no cost reduction/containment elements to his ideas (he doesn't have a plan). His idea is to maintain the high cost of healthcare but through mandates force everyone to conribute to it. His insurance exchange likely will lower insurance premiums by a very small amount, if at all. It could raise them. But it does nothing to control them in the long run.

Also, his mandate forces people to support an industry that is inefficient, works against the public interest, and is not needed.

Obama's mandate will mandate a payment/tax system that is very regressive, even with subsidies. The burden will fall almost exclusively on middle class and poor.

The kind of mandate that would serve the people is a single payer system coupled with an aggressive cost reduction/containment effort, with payment mandated through income tax payments.

[grantcart]

103. Ezra Klein and other economists disagree

The bill sets up a commission to evolve away from "fee for service" and also introduces more competition.

These are the two key components of reducing costs.




http://voices.washingtonpost.com/ezra-klein/2009/09/obamas_trigger_an_interview_wi.html


But the bill doesn't go so far as, say, capitation payments for providers, rather than fee-for-service.

As we develop a stronger health IT system so we know exactly what's being delivered and the consequences, we can move towards something more like a capitation system because we'd have the evidence to do it right. Capitation done blindly doesn't necessarily give you more efficient care, but less care, just as fee-for-service doesn't give you better care, but more care.

So the idea is the bill lays the groundwork for these approaches?

Exactly. The value of the failsafe in backstopping this movement is that if we move now, the savings will be there in 10 years. And it has another consequence: Since stakeholders don't like the failsafe measures, it gives them an incentive to move in the right direction. The beauty of the failsafe is it should never have to be used.



edited to add more detail about moving from "fee for service"




http://www.acr.org/HomePageCategories/News/ACRNewsCenter/SenateHCRPlan.aspx


CMS Innovation Center

The Finance Committee also added a provision for the creation of a CMS Innovation Center funded at $10 billion over ten years. The Center would be required to test and evaluate patient-centered delivery and payment models. One of the models to be tested is one that varies “payment to physicians ordering advanced diagnostic imaging services according to the physician‘s adherence to appropriateness criteria for the ordering of such services, as determined in consultation with physician specialty groups and other relevant stakeholders.”