Do you support a cap on premiums?

[liberalpragmatist]

I think there are good arguments both for and against the excise tax. I lean towards the position that an excise tax should be included but that the threshold should be raised (as Andy Stern and Paul Krugman have suggested) to >$30,000, that it should account for regional variations and that it should be phased in later, in 2015; by then, most union contracts will have expired, and that gives time for unions to negotiate a different allocation of wages and benefits under a new contract.

That being said, there is some cognitive dissonance here that I find a little odd. Many DU'ers have complained that the current bills include no premium cap. A premium cap would, they believe, hold down the cost of premiums by not letting insurance companies exceed a certain price.

Yet in the same breath, many DU'ers oppose an excise tax. The excise tax is meant to tax health benefits above a certain level - $8000 for an individual policy, $23,000 for a family policy indexed to the general rate of inflation; in other words, if your policy is $25,000, the insurance company would have to pay an additional $800 tax (40% of $2000), which would get passed down to the consumer. The idea is that the insurance company will stop offering the plan that is valued over $23,000.

There are two major complaints to this; the first is that under CURRENT health care inflation, nearly 20% of households would have policies exceeding the thresholds within a decade. However, the point of the excise tax is that this rate would be slowed, and far fewer plans would exceed the threshold because insurers would not want to pay the tax.

The other complaint is that in order to drop the cost of their premiums, insurers would cost-shift, increasing co-pays and deductibles. I can understand why people - particularly older people and those in riskier pools - would dislike this, as it could be put a damper on preventive care. (However, keep in mind that the bills mandate no co-pays for preventive care, so routine checkups, screenings, etc., would not require co-pays.) Where there is a disconnect, however, is that this same phenomenon would occur with a premium cap. Insurers would do all they could to drop the cost of their plans under the threshold set by a cap.

In short, there's a disconnect: while there are good arguments for opposing an excise tax, you can't say you support a premium cap but don't support an excise tax. They work exactly the same way.

[rockymountaindem]

1. What if we had a cap on premiums, co-pays and deductables

Like they have in the Dutch system that the bill defenders are always talking about.

[levander]

2. The Dutch system is nothing like the Reid or House bill...

People are using the Dutch system to defend the bills D.C. is looking at right now? Those bills are nothing like the Dutch system.

The Dutch system is built around individuals whereas the bills being looked at in D.C. are largely based around the employer system.

There is a bill in D.C. built around the Dutch system that has bipartisan support, covers more of the population, and has better fiscal scores than the Reid or House bills. It's called the Healthy Americans Act. But, it's not being looked at right now by Washington, at all.

[rockymountaindem]

3. No argument there

I realize this Reid/Pelosi bill that we're going to get is nothing like the Dutch or the Swiss systems, which are both called in as examples of where we might be headed if we pass the current legislation. The problem is that some people on the left think they can make analogies to Europe regardless of the facts and that simply saying "it's like Europe" will make it okay. It's much like the proclivities of some on the right to decry all sorts of thing as being "like France" and hoping that will bury whatever it is they're trying to stop.

Saying this bill is like the Dutch or Swiss systems is like saying that my old high school football team is like the Indianapolis Colts. They're both football teams, but the truth is that they are two totally different things.

[liberalpragmatist]

4. The argument about the Netherlands and Switzerland...

... is that these bills plausibly would lead to something like that in the future, especially if the employer mandates are eventually phased out and everyone buys coverage from the exchange(s). Which I imagine will happen, since the employer-system is slowly falling apart anyway.

But you're right that the bills don't create a system that is anywhere near as well-regulated or well-integrated as those systems. The U.S. health care system under this will still remain quite fragmented and have high costs because care isn't integrated and medical costs remain high. I favor passage because these bills are far better than the status quo and they create a foundation that can be built on. (Recall again that even most European systems weren't passed in one fell go, but were phased in over several decades and several bills.)

[levander]

6. Depends on what you think is wrong with the status quo...

I think the main problem is those charts you see that compare how much America pays for health care vs. what other countries pay. And, the fact that our health care costs are going up faster than theirs. Those charts don't just effect the uninsured, they effect everyone.

This bill does some shuffling around of money, using taxes to put more people on Medicaid and offering some subsidies. But, if they just reined in costs, this would go a long way towards the affordability issue. And, wouldn't just be a smokescreen over what our medical costs do to our economy, with many people still having to scrape to pay for health insurance.

But, this bill is so concerned with protecting industry, that it has next to no cost controls in it. In fact, the Center for Medicare Services said this bill makes our costs go up even faster with this bill than without it.

I just don't see making the main problem worse as a good point for starting the reform process.

[LiberalFighter]

5. Only for those making over $250,000