Factually incorrect information on insurance exchange

[autorank]

From the speech, under 'for those without insurance.'
Text from the NYT

"Insurance companies will have an incentive to participate in this exchange because it lets them compete for millions of new customers. As one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. This is how large companies and government employees get affordable insurance. It's how everyone in this Congress gets affordable insurance. And it's time to give every American the same opportunity that we've given ourselves."

The insurance exchange, as described falls in the part of the plan for those without insurance.

This is just WRONG:

"greater leverage to bargain with the insurance companies for better prices and quality coverage."

This presumes that the size of a group determines the costs of medical care. That's not the case. There's an absolute cost, which is utilization times price. Are we looking at price controls to keep costs down. Those without insurance are the poor and indigent, often. Their medical costs as a group will be high, particularly in the first two years when they get conditions treated that have worsened over time. How would this be a bargain for any company? It's a catchment for those with the worst health in the country. AND remember, if insurance companies won't participate in this exchange, then there's the public option. But that option needs to be 'revenue neutral' - the premiums must pay for the care. These people are unemployed or underemployed. Where will the money for coverage come from?

This is FACTUALLY INCORRECT:

"This is how large companies and government employees get affordable insurance."

First of all, large companies can barely afford insurance with $1000 and higher costs per employee per month. Second, the vast majority of large companies are "self insured." They don't buy insurance form Blue Cross or anybody else. They set up an amount that they'll spend based on a number of factors and then they HIRE private companies to administer the benefits package which THE COMPANIES PAY FOR. Same with government.

The claim that the exchange replicates the bargaining of large companies and governlment with private insurance companies for health care is factually wrong. They put out bids to incurnace companies to manage the benefits which they, THE LARGE COMPANIES AND GOVERNMENT ENTITIES PAY FOR THEMSELVES.

The reason employees of large companies and government pay only $200 a month, plus or minus is because the companies SUBSIDIZE the benefit - they eat the overage, $800 to $1000 or more and give it to employees as a benefit.

This exchange is based on a false premise, that private companies will somehow drive costs down (even though the administrative and profit costs are still there). It's based on incorrect information - that there's bargaining by large entities to buy health insurance. There isn't. It's that simple.

So, for those out there who can't affort private insurance, don't have it, or want real coverage, we're this question.

[sandnsea]

1. And that's why there will be subsidies

To help people pay for either the private insurance or the public plan.

[autorank]

4. "The plan will not add to our deficit"

Subsidies imply covering a shortfall. Where will the money come from? It can't incur a deficit.

But the main point is - the exchange concept simply doesn't pass muster. It's not how employees have lower rates, that's from employers covering the costs. And big companies and government don't buy insurance from the Blue Crosses of the world, they pay for it themselves. That subsidy exists.

So the argument that a big pool of clients buys you lower costs is flawed since the big pools fund the insurance through their own revenues. Blue Cross etc. just administer it. If Microsoft told Blue Cross to charge $10,000 a month, they'd do it. If they said, charge $1.00 a month, they'd do that too. It's not the insurance company money.

[sandnsea]

12. Oy. $900 Billion Dollars

Have you not been paying attention?

I understand your point about the very largest corporations like Microsoft, but that's not true of most companies. They do get better rates because of their size.

Regardless, the real cost savings is going to come from the regulatory reforms that put everybody in the pool, create benefit rules that apply to all companies, rules that require percentages of premiums go to benefits, etc.

[autorank]

14. Here's the problem

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=6506118&mesg_id=6507661

It also corrects your point on Microsoft which seems to be that "They ... get better rates because
of their size." If you're referring to insurance rates, they don't buy insurance. They're self-insured
- a whopping 55% of those insured. Microsoft pays the bill and has Blue Cross etc. manage the plans.
Blue Cross does NOT pay, it administers. The theory behind self-pay for companies is that they get
the insurance for less by paying directly and thus avoiding covering insurance company profit margins
on a larger sum, the total cost of insurance, and replacing that with payment of a management fee,
which is a much smaller sum from which the insurance companies take profits. Lots of companies do it.
It's growing every year.

In fact, self insured firms are the micro model for single payer insurance - savings and greater
benefits due to cutting out the profit margin.

Further savings can be achieved on this model, however, by adopting a self pay (by the government)
plan like Medicare. Medicare does not meddle and manage care the way the insurance companies do and
it saves huge sums.

Costs without (Insurance Co. Profits + Needless Overhead) - that's how you save money.

This plan perpetuates private health insurance companies with some as of yet implemented restrictions.

The pooling of people in one big plan is just one big pool of the least healthy people (due to an
absence of care and poverty/low income conditions). If you do that, it costs what it costs. Then
you add the insurance company profits. I saw this on the web site in the campaign and paid attention.
It's a non starter. It's probably not revenue neutral but it is savings neutral. You can't make
insurance companies participate in an exchange if it doesn't make money for them.

If Medicare were run like this, seniors would have far fewer health benefits.

[sandnsea]

17. You're doing the exact same thing republicans do

Pulling shit out of your ass that you have absolutely no way of proving.

It's as stupid as arguing with someone over death panels.

An insurance exchange is not going to create ONE pool of the least healthy people.

I don't know why you want to kill this legislation with your lies the same way the right does.

[autorank]

18. Wrong - try analyzing the speech and proposal. This is to important for slurs

You don't seem to understand how simple my points are. Go down to the reply where the user says
I'm "mostly wrong." Well I'm not.

I want the plan to work. If it can without single payer, public option, or whatever, find. But these
are valid questions. The fact that they come up is a product of the speech. If wishes were horses,
we'd all take a ride but I'll pass on the "trust" ride today. I raised valid points. Stick with
those.

[sandnsea]

19. You made it up

Maybe all the sick people will end up in one pool.

Maybe there will be death panels.

That's not serious analysis.

[autorank]

20. You raised death panels. The poor/uninsured less healthy than insured.

The poor and uninsured above poverty receive less preventative and acute care.
Less preventative and acute care means poorer health.
Therefore the poor and uninsured have poorer health than the insured.

Simple. That's why this pool will be more costly to insure.

[Statistical]

2. What makes you think the exchange won't be subsidized?

Where do you think the cost comes from?

So it may be a situation where coverage costs $800, $150 paid by the insured and $650 by the govt.

It doesn't matter if the insured picks public option or private option the govt picks up part of the tab. Now how big that part is nobody has said yet but the majority of the cost of health care form is the subsidy for those participating in the exchange.

[kiva]

3. No, Obama specifically said that whatever sort of

public option comes into play will NOT be subsidized by the government. He said it would have to be self-sustaining, without government support, or else it would be unfair to insurance companies.

[sinkingfeeling]

8. The public otion won't be subsidized, but poorer people would be.

[autorank]

16. How?

Tax credits? If you pay $15,000 a year for self pay health insurance right now, buying direct, then
there's nothing for four years so we can "get it right." Then what is there? Lets say that, in today's
dollars, costs of a similar good plan are $10,000. Is that affordable? Let's say $5,000 is affordable
by definition in 2013 (four years out). That's $12,000 to $15,000 in tax credits just for health.

So where does the subsidy come from? The exchange is not mandatory. Pricing is not mandatory.
You can only compete the price down so much because the companies won't cut their own throats.

Where does the money come from?

As for the poor, they'd just get a subsidy, lets say. That means that the pool won't pay for itself.

The Uninsured by Income

The 45.8 million uninsured are more likely to be poor and low income than higher income. Figure 2 shows that over half of the uninsured are below 200% of poverty, with 25% below the poverty line and 28% between 100% and 199% of poverty.(3) That the uninsured are concentrated among lower-income individuals is not surprising, given that low-income individuals are less likely to:

* be working, and if they do work they are less likely to be working full time,
* receive an offer of insurance, and
* be able to afford an offer of coverage.

[gailslim]

5. The exchange is a great idea

It seems that the exchange should be an easy idea to implement. The gov't would set up a website with all carriers providing coverage in your area, with their plans and fees and the consumer would pick and choose their plan. But, from my experience, the insurance companies will avoid paying claims like they do now, so there would need to be safeguards with gov't agency to review consumer complaints on that. Then, there is also the problem of how do you enforce the 20 somethings that are healthy and do not want to spend on health care they probably don't need to join in the pool to reduce costs for all? How would you identify them? And do you really punish them if they refuse to buy coverage. Your point on the added costs for those that did not fall into medicaide but now will fall into gov't paid coverage I think is valid. It seems clear that there will be added incremental costs that have to be paid for; Gail Slim

[autorank]

6. So you pay $1400 a month, family plan - self employed

You're already getting to write most of that off.

How do you get to $200 a month from a current $1400 and have the plan stay revenue neutral/'no deficit'?

And if there are subsidies, that's skating on thin ice. All that has to be shown is that the plan
operating in a deficit.

(Additionally, and not in my post, Private insurance costs four times what Medicare costs,
conservatively. How will costs go down when private carriers contribute teo lower costs with overhead, huge salaries for the top dogs, and profits for shareholders?)

Plus it's four years for the exchange: "This exchange will take effect in four years, which will give us time to do it right." (This is in part 2 of the plan. The exchange, as explained doesn't apply if you're insured).

[sinkingfeeling]

7. Mostly what you said is incorrect. I spent 30 years with one of the largest companies in the

country and they most definitely negotiated a lower premium rate than almost any other company. Because small pools of people can't negotiate the rates, most small companies cannot afford to 'subsidize' insurance their employees.

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10. "55% of covered workers are in a self-funded health plan." Kaiser Foundation

"The Employee Retirement Income Security Act (ERISA) of 1974 exempts self-funded plans from state insurance laws, including reserve requirements, mandated benefits, premium taxes, and consumer protection regulations. Over one half (55%) of covered workers are in a self-funded health plan. Because larger firms have more employees over whom to spread the risk of costly claims, self funding is more common and less risky among larger firms than among smaller ones."


http://ehbs.kff.org/pdf/7790.pdf

"Some employers do not contract with an insurance company to insure their employees, but they have enough employees to do risk pooling like an insurance company would. These employers are called "Self Insured." During the past couple decades, the number of employers who have switched to self insurance has increased dramatically, starting with employers with many employees and spreading to those with fewer employees." http://www.healthinsurance.info/HISELFI.HTM

[Me.]

9. Ooh Wee Friend

When I saw your OP I thought for sure you were going to get smacked around but I see your R's are actually on the positive side!

[autorank]

11. This is "just the facts ma'am" material.

There's way too much at stake to fiddle around.

There's not much "there there" unfortunately and what's going to be there is four years out.

Hmm...

[Me.]

13. Thank You Officer

Yours is the only taser I approve of.

[autorank]

15. Does that make you Connie Swail?

http://www.imdb.com/media/rm1773705728/nm0000575

[Me.]

22. Made Me Google

:spank:

[autorank]

24. Is that like G1H1?

Alexandra Paul: Official Site

[Joanne98]

21. This is just one reason why this is a transfer of wealth to the insurance companies.

If there is subsidies to help poor people pay it STILL goes to the insurance companies.

We needed a way to BYPASS THEM!

[autorank]

23. Oh, Canada

Or after their decriminalization of weed, "Wow Canada"

It's a fine system. So is Medicare, which has been around forever.
That's not reinventing the wheel, not at all.

[maryf]

25. K&R nt

[branders seine]

26. nothing in the plan serves

the function of a strong public option to drive costs down

despite President Obama's attempt to redefine the goals of the public option, the real rationale behind it was always to provide competitive pressure on the private insurers to lower costs

[puebloknot]

27. Obama's comparison to community colleges in his speech

From an article at www.tikkun.org:

You can view this piece on line at the blog site Tikkun Daily <http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=yuYVM52cJvSlRxBBMyv1%2B4Wt6OemvLt4>at
http://www.tikkun.org/tikkundaily/


Imagine, for instance, if Obama had started his speech with the idea of "we are all in this together" that he ended it with, and then applied that to each specific part of his program. Sadly, that was impossible precisely because his actual program is in conflict with this at several points. He won't support health care reform that raises the deficit. How can that be justified by a President who raised the deficit to help bail out the people who caused the banks and investment companies to fail all of us! He promises not to give any benefits to immigrants-but then "we" are not "all in it together!" He is willing to use government to coerce people into his plan those who would not voluntarily join, but not to force insurance companies to lower the prices (for example, by regulating their prices at the expense of lowering their profit rates or simply by creating Medicare for All. He tries to make a public option plausible by comparing it to public community and state colleges, but also assures the insurance companies that they have nothing to worry about from his plan because "the public insurance option would have to be self-sufficient and rely on the premiums it collects."

Yet the public option will not be open to those of us who already have private health care insurance. These limitations guarantee that the public option will not achieve the goal of lowering prices or obscene levels of profits. Public universities and community colleges have never been able to sustain themselves on the tuitions of those who use them. If that had been the requirement from the start, tens of millions of Americans would never have obtained the benefits of a public education that enabled them to get better jobs and go on to make valuable contributions to society in turn. If the principle had been that these colleges could not contribute to state or federal deficits, they would long ago have folded. So where is the "we" who are "all in it together"
when crippling the only part of his plan that really makes an attempt at a universal solidarity?

The public option would only be open to those too poor to buy "regular" insurance, yet "the public insurance option would have to be self-sufficient and rely on the premiums it collects."

Rather clear as mud. Perhaps I'm just intellectually challenged!

[puebloknot]

28. A little (truthful) levity (in the end)!

This whole issue is a deathly serious one, but a good chuckle is good for our mental health (if any). The last line sums it all up!

The American Medical Association has weighed in on the new Obama health care proposals.

The Allergists voted to scratch it, but the Dermatologists advised not to make any rash moves. The Gastroenterologists had sort of a gut feeling about it, but the Neurologists thought the Administration had a lot of nerve.

The Obstetricians felt they were all laboring under a misconception.
Ophthalmologists considered the idea shortsighted. Pathologists yelled, "Over my dead body!" while the Pediatricians said, "Oh, Grow up!"

The Psychiatrists thought the whole idea was madness, while the Radiologists could see right through it. Surgeons decided to wash their hands of the whole thing. The Internists thought it was a bitter pill to swallow, and the Plastic Surgeons said, "This puts a whole new face on the matter."

The Podiatrists thought it was a step forward, but the Urologists were pissed off at the whole idea.

The Anesthesiologists thought the whole idea was a gas, and the Cardiologists didn't have the heart to say no.

In the end, the Proctologists won out, leaving the entire decision up to the assholes in Washington.