Back in the 1980s, an insurance company successfully avoided paying for my brother’s medical care; he died at age 18 of a heart defect (my father changed jobs, the insurance company managed to avoid paying by claiming an improperly reported pre-existing condition). All the college savings for the younger kids gone, my proud father having to turn to Medicaid … he sunk into a depression that lasted the rest of his life.

Public option or no bill.

Both the record and car industries (well, the US car industry, anyway) sell a product that is inherently, up front, not subject to modeling on the assumption that purchasers are rational actors. People buy these things for reasons other than objectively measurable necessity, or with any way to balance costs against services. These industries do perform marketing research, but because imponderables weigh so heavily, they can get into a lot of trouble projecting their models beyond curretn conditions. Detroit, for example, not once, but twice, was lured into ignoring how the market for fuel-efficient cars would take off given high enough and sustained enough rises in gas process, by research that projected from consumer behavior during milder and less sustained such increaes in gas prices.

But with the decision between buying health insurance and paying out of pocket, with Medicaid as your catastrophic coverage, you’re comparing apples to apples, money costs to money costs, not money costs to some nebulous benefit conferred by owning a car with more horses under the hood than you’ll ever need, or 4WD that you’ll never use, or a haul space that will never see a single load of the hay or manure it was intended for. Toting up the costs of the two strategies exactly is not simple for the consumer, but, unlike the consumer, this is exactly the way the insurance industry has to think on an ongoing basis, and it does have the figures at hand that need to go into the calculation.

if so, i don’t think that’s true.

That definition was drawn up to explicitly to get people to commit to vote against the Conrad plan. Available day one (no triggers), nationwide (no state balkanization), answerable to Congress and the voters (as opposed to answerable to states that lack bargaining power at the federal level).

Everywhere for Everyone Now!

I see no way to wiggle out of this pledge. Very good, no very damn good!

absolutely – its like gambling: “I bet $190 I will get so sick or injured this month that I will need my insurance to pay more than that for me . . . oh well no broken leg this month, I lose.”

its truly a bet that the young and healthy are increasingly declining to take, because everyone is hearing about what scammers the insurance companies are, they are the punch line to many jokes.

slight question as to whether the industry is aware of this – the record industry and the car industry were not very alert to the changes that ended up doing them in.

The more important thing is to organize the 40 (and hopefully 60 and 80) around the principle that progressives will stand together to oppose the current push to screw us, and that having done so they can use that bargaining power to strengthen the bill as it moves through the committees and markup and onto the floor, and then into conference. With 76% of America at their backs and those in their communities watching, that’s a powerful chip to have.

Good Plan now if only we could get invites to Washington Posts dinners and plead our case to reporters to lazy to research anything that isn’t spoon fed to them.
Funny how only Corporate Lobbyists get that invite no Unions, consumer advocates or bloggers Funny how readership at the Washington Post and Newspapers nationwide are declining.
Cause and effect?

Yes, part of the reason that enough people are worried enough about the way we finance health care in this country that reform is on the table this year, is the very real problem that more and more people are going without insurance. This is so partly because they can no longer afford it, and partly because the private insurers have been allowed to become more and more aggressive at rescinding insurance for their customers who are so uncooperative as to actually need medical services. Our side cares about these two groups, and therefore there is pressure on our side to get something, anything, passed that will give at least some relief to people in these groups.

But, frankly, neither of these two factors is really particularly a crisis particularly right now. What is new, and what has the industry frightened enough that they have decided at this juncture that they need perestroika in health care financing, is a third factor. People who could pay are choosing to go naked, without health insurance, because health insurance is no longer a good bet. Indemnity health insurance is at the tipping point where it isn’t worth what they’re selling it for.

The private plans, in competing against each other, have relied so heavily on spending for the huge admin costs of screening out the risky before they sign them on, then trying to deny them benefits if they break bad by actually getting sick, that the industry standard is a plan so expensive, with so many holes in coverage, that anybody but those with serious pre-existing problems (i.e., the people who aren’t allowed into the private plans anyway) is better off self-insuring. You could set aside every month a fraction of what you pay for your private health insurance, and have enough to pay your expected medical expenses, and still accumulate a fairly hefty emergency fund big enough to cover all but the truly catastrophic contingencies. But, guess what? The private insurers have been so successful at building holes into their coverage designed precisely to protect them from taking huge losses on any one customer, that a truly catastrophic medical condition will bankrupt you into Medicaid no matter whether you have insurance or not.

The portent of doom for the mortgage industry is how many people are “underwater” on what they owe on their homes, folks who owe more than their homes are worth. The equivalent for the health insurance industry is how many people are underwater on their premiums, how many people would clearly do better by relying on a combination of out-of-pocket payment and Medicaid, how many people pay more in premiums than their plans are worth. This tipping point is not as simple to understand as being underwater on your mortgage, both because the insurers do their best to gloss over the holes in their coverage, and because it requires the individual to think like an actuary, but the disparity is so huge for the best risks the industry has, the 20-somethings with no existing conditions, that you don’t need to calcualte with any exactness — they would clearly be better off jumping ship on the industry.

But if ordinary people don’t think like an actuary, the actuaries who work for the industry sure think like actuaries, and they know that rational actors would no longer purchase their products. The industry knows that it is doomed unless it can close this hole, unless it can rewrite the ground rules so that purchasing or foregoing its products is no longer a matter of choice based on rational calculation.

Health care reform is usually viewed as something that our side wants and the other side can take or leave, and would prefer to leave because the status quo is good for them. This is absolutely not the case. Health care reform, as long as that includes mandatory universal coverage on their terms, is the only way that the industry will survive. And the industry needs this to happen this year, before the death spiral they are in now — more good risks defecting means higher premiums means more good risks defect, and so on until no one can afford their premiums — makes it clear that almost all of us are already “underwater”, already pay more in premiums than what our plans are worth. Once that truth is widely acknowledged, the industry is dead, and the only two reform options that we will be arguing over will be National Health Insurance vs National Health System.