Jon Walker FDL: The Senate Health Care Bill Is Built On A Foundation Of Sand

[Hissyspit]

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7280329

http://fdlaction.firedoglake.com/2009/12/20/the-senate-health-care-bill-is-built-on-a-foundation-of-sand

The Senate Health Care Bill Is Built On A Foundation Of Sand

By: Jon Walker Sunday December 20, 2009 9:48 am

Some are calling this health care bill a “good bill.” Tom Harkin is trying to sell this bill as a “starter home” with a “solid foundation.” Those who think this Senate bill is built on a strong foundation are either too invested to acknowledge its complete failings or don’t understand the many key components missing from this bill that are necessary to produce a properly working system.

If this bill were truly a smaller but better built bill, I would be applauding the Democrats in the Senate. But this bill is built on a foundation of sand. Even if it looks like a good house from a distance, it will collapse during the next storm.

I do not know a single working health care system that is as full of problems, errors, loopholes, and massive giveaways as this bill will be. The systems this bill most closely resembles (Switzerland, Netherlands, Belgium, Germany) require millions of moving parts to make them work.

All other countries with a primarily private health insurance system require all health insurance companies to sell a precisely designed, high quality, basic insurance package.

- snip -

Keeping insurance companies from gaming the system is hard enough in other countries where they all sell a single plan. In this Senate bill, with its huge design leeways for plans, it will be next to impossible.

Another tool used to prevent insurers from gaming the system is a strong risk adjustment mechanism. Again, compared to other countries like Germany or the Netherlands, the bill is woefully lacking. The CBO and CMS said the risk adjustment mechanisms in the bill will not prevent premiums from increasing due to adverse selection. Without a stronger risk adjuster, insurers will still compete by trying to dump the sick and get the most healthy people enlisted instead of trying to compete with quality and customer service.

All the other systems have a central provider reimbursement negotiator. Without this (and the repeal of the anti-trust exemption) the system will be extremely wasteful and anti-competitive. Forcing each insurer to secretly negotiate payments with the thousands of providers is a recipe for waste, fraud, and abuse. It creates a snowballing effect making it nearly impossible for new insurers to break into new markets. The Netherlands, which has the toughest regulations of any country, is the only one that allows for-profit insurance companies to provide basic coverage. All others require, by law, that basic insurance must be sold on a non-profit basis.

And the regulations in the bill are full of loopholes, perverse incentives, and passages that are open to wide legal interruption. The “community rating” age ratio is unconscionably high at 1:3. The few systems that allow insurers to charge older people more (most have one price for everyone) use a better system of age-based pricing bands. The policing apparatus needed in these other, better designed, systems is very large and their job is much easier. Regulations without strong oversight are worthless.

Where is the $40 billion needed to pay for a large federal policing force to make this system work? The bill simply tells the state insurance commissioners, which have completely failed us so far (and are often in bed with the insurance companies), to do it. It will be an enforcement nightmare.

MORE

[Hissyspit]

1. More:

I’m not some wild-eyed idealist angry that the Senate bill does not use the public option. If they offered the German, Belgium, or Dutch system I would sing its praises from the mountaintops. But what is being offered is doomed to an expensive fail, the question is only when and how.

Some have said this is a reform package that we can build on. However, it is not a starter home with a strong foundation (unless selling out women’s reproductive rights is the new definition of strong foundations). It is a house of cards built with massive corporate giveaways. I think it is a bill that further enriches, empowers, and entrenches the enemies of reform.

To use another metaphor, I hope every progressive looks under the hood before they buy this lemon. It may look ok at first glance, but I promise you the engine is rusted out completely.

[rockymountaindem]

2. Exactly. All the "good" things in this bill are a facade

For all the people on this site asking us to think of the 30 million people who will "get" (that is to say be forced to get) insurance, the question is whether it will be worth what they pay. It sounds like it won't be, and the rising cost issues have not been addressed. We may be fixing things a little bit for now, but things will only continue to get worse. We may have bought ourselves a couple of extra years of what passes for "stability" in health care, but at a huge cost. We haven't addressed any of the real problems.

[laughingliberal]

3. Rec for very understandable explanation of the problem nt

[enlightenment]

4. I agree completely.

The devil is always in the details. To believe that this poorly designed 'system' is going to work as advertised is wishful thinking in the extreme.

His suggestion that the individual mandate be withheld until the insurance companies prove they can live within the (lax) regulations imposed by the bill is a good one. It won't happen, but it's a good suggestion.

[glitch]

5. Uniquely American = thinly veiled transfer of "wealth" to corporate elite = corrupt as hell. nt

[Blue State Blues]

6. "All other countries with a primarily private health insurance system require

all health insurance companies to sell a precisely designed, high quality, basic insurance package."

Whereas the US plan will not merely allow high-deductible, high-copay, "junk insurance" plans, by taxing good insurance, it will actually encourage individuals and employers to switch to low-coverage plans.

[eridani]

7. "a precisely designed, high quality, basic insurance package. "

Exactly. None of this four-tiered crap with the basement level being useless overpriced barely catastrophic insurance.