PO or No!

Public Option now!

Today I heard people say that the secret new Senate health insurance merged bill will declare teabaggers as having a “pre-existing condition” and unqualified to participate in either a public OR a private plan…I guess, since they are nuts, there doesn’t have to be legislation to disqualify teabaggers from private plans, so maybe that part is redundant.

Conversely, because the public option would end up attracting many of the least healthy individuals, it would also drive down premiums for private insurance plans.

It would drive down costs to insurers, not premiums. Whether that translates into lower premiums or higher profits depends on whether the insurers have to compete for customers. They might have them handed to them via a legislative mandate for insurance that omits to provide a public option.

This is what HMOs are afraid of…that a public option will drive down the price of private health insurance and reduce the profit made at the expense of the unwell.

The one ephelant in the room is the time for implementation of any PO. That’s a killer.

this is good news. i look forward to reading the report to see if the assumptions make sense (and even more i look forward to review by policy experts). i have some question on the issue of administration costs. but still, without knowing more, this is v encouraging… is there any chance that this will be the bill the house reports out of committee? i didn’t think that was the case, but i hope it is because it is also the bill with the kucinich amendment that permits states to experiment with single payer — a very important issue for moving forward to universal healthcare.

one correction to the post. this bit is wrong:

Since the public option is cheaper it would end up attracting a less healthy costumer base.

it’s the less restrictive utilization management practices that attracts those with serious illnesses.

effective risk adjustment has always been a lynch pin to a viable public option and i wonder what assumptions the cms made. as far as i’m aware congress punted on this aspect and left the design, implementation and enforcement of this up to the hhs.

p.s. i really do wish you all would stop calling so many different pos “robust” — it’s confusing and inaccurate (none of the bills now in play has a po that meets the original robustness criteria of the cpc or of hcan) .

excellent point. also, i expect that most premiums (and/or cost sharing) will increase, possibly substantially with the introduction of obamaco as community rating and guaranteed issue are implemented. i will be interested to see if the cms report gives any comparison to current insurance costs.

I was in Washington DC the other day and met an aid specializing in health care for Maria Cantwell , one of my senators . I pointed out that the American public , when polled for over a decade wants single payer ,and that the Europeans take far better care of their people .
The health guy replied , that the Europeans have had a leg up as a result of their rebuilding from the ground up after the second world war and that in the US we have a system already firmly in place . He told me single payer was too radical and that the senators job was , in regards to our present system, merely “tweak it around the edges “.
He regretted his use of the phrase but I insisted that it was entirely accurate in regards to the American political machine ,who , on both sides of the aisle , is bought and paid for by corporations whose bottom lone is the only serious consideration .

When the American public says it wants one thing and the government seeks to do the reverse in order to keep the system that’s already there in place or merely tweak it , it is obvious who is being represented in DC and who isn’t .

i think the idea is to use the threat of the po to prevent the insurance companies from contributing to obama’s rival in the 2012 election. not saying i approve of such a strategy and i hope it doesn’t mean that any po surviving the legislative process will be used as a bargaining chip in 2012.

I have some reservations about any of the bills so far.

* Government mandate, I understand the premise but not sure I like the Government mandating it.

* 2013 bull shit, unacceptable.

*No one should be denied entry into program. OUR tax dollars and I can’t use it BS, I’ll be on medicare and broke before private insurance will come down in price.

thanks for the reality check. of course you are completely correct.

These were just the calcualtions which confirmed what was intuitively supposed about the PO yielding lower premiums because of the abscence of profit and also that it would have higher risk enrollees since they would be those that private insurers deemed too sick and costly for them to insure.

This highlights, if further proof were needed, the degree of inefficiency in the managing of risk by private insurers, that even covering healthier enrollees their premiums are still higher compared with a not for profit plan. Or said differently it shows the extent to which private plans amass profit at the expense of covering health costs.

It is a misconception however that private insurers will in fact lower their premiums just because the PO plan has lower ones, unless of course their enrolles are allowed to opt out in favor of the PO. Why should they? Their claim has been that they are entitled to their profit and have sued for that alleged right.

It may turn out that private insurers will be rejected altogether and seen to be superfluous. If they are denied monopoly rights and are unble to compete with the PO plan there will simply be no profit to be made.

One can hope anyway.

You may be piling on too many artifices that don’t bear on the main reasons for the lower rates in a not for profit scheme. The definitive reason is that without the expense of profit more of the premium goes to paying heath costs. Everything else has less of an impact in the lower rates.

The reason the PO will contain sicker enrollees is that private insurers will not insure them, all other considerations aside. Another reason that allows for lower premiums is that the PO will have apparently the proper ratio of low risk low cost enrollees to high risk high cost enrollees in its pool of enrollees. Since the premiums are determined by this cost shifting.

All the participants eligible for the PO plan are currently uninsured and they must all be included in the pool. To divide them into the separate states is counterproductive because you lose the advantage of spreading the risk.

The definitive reason is that without the expense of profit more of the premium goes to paying heath costs.

i don’t think this is right — last i looked profit is only 3-4%

Another reason that allows for lower premiums is that the PO will have apparently the proper ratio of low risk low cost enrollees to high risk high cost enrollees in its pool of enrollees

what is the proper ratio? i haven’t seen anything on this, do you have a link?

All the participants eligible for the PO plan are currently uninsured…

nope. small businesses may participate and if individuals with insurance are not permitted to switch to exchange based insurance (which would include the po), then that will be a major major weakness.

agree with your points re adverse selection / cherry picking and also about the need to avoid breaking up the po into even smaller plans.

Yes, you are right on the specifics you mention, I should have been been more thorough.

In addition to the loss from profit you also have loss from the effort devoted to non-payment and selecting out high risk applicants, to the order of around 20% of the premium dollar.

As to the proper ratio that will vary with the size of the pool and associated aggregate health cost. There does appear to be a threshold
number of low risk participants above which the premiums start to decrease. I will provide that from my notes.

Yes privately insured individuals and small businesses I believe will also be eligible. I was a bit sloppy with the wording.

My main point is that it is pretty much indifferent at this stage that you begin with a PO that offers lower premiums becuase the natural progression would be to exclude private insurers.

yes, but since we’re americans, we must vote for the more expensive option.
money being everything.
we cannot possibly deal with getting better coverage for less money. egad!

We shouldn’t discount the disgust factor.

A real public option, opened to everyone, would likely attract far more than just the sickest. There is a lot of anger against insurance companies, and even the industry’s coveted young and healthy customers are going to have sick parents whose experiences will sour them on private companies.

So either Congress gives us a public option in name only–so long delayed and so restricted as to be non-existent in practice–or private health insurance as we know it is either dead or limited to covering things like CEO hair replacement and bust repairs for aging socialites.

The politics of the former seem awfully risky given the current public mood, but I fear that it is likely to seem attractive to our pols.

The American people need the protection of law form the abuses of health insurance corporations which adapt to a “corporate form” which is most advantageous, to realize profit at state levels. This patchwork scheme is similar to how segregationists operated, or slave states existed. Protect the corporations while Americans die? Why not protect the slaveowners?

Health Insurance is predicated on discrimination. Discrimination is the basis of slavery and segregation. Discrimination is illegal, yet most insurers, many tax exempt and most exempt from anti trust laws are permitted to discriminate, at the state level, thereby rationing access to healthcare? So much for Americans and the protection of law, like Dred Scott?

“If Congress implemented a proper risk equalizer for the new exchange, the public option would have premiums on average 18 percent cheaper. The important point is that a robust public health insurance plan could provide health insurance with a large provider network at 18% less cost than private insurance.”

Any corporation that would refuse to reduce a cost by 18%, would be considered suicidal. The cost savings realized would then usually be invested to grow the business? Instead they are talking about protecting corporations who discriminate using the color of law? Why not use the tax code and law to control the behavior the tax exempt/for profit, anti trust exempt health insurance corporations, Wall Street, Banks, Energy, all bankrupting America?

What is the problem now,that there are numbers out to prove the public option is a good thing?