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?

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?

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.

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.

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.

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.

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.