It’s been a little over a week since the new health care law was signed into law and already the process of gaming the new regulations to maximize health insurance industry profits has begun.
We first heard of the health insurance industry’s plans to the game the system when they started talking openly about not needing to cover children with pre-existing conditions under the new law. Although the insurers quickly backed down I think David Dayen is right. The insurers got what they want: a way to redirect the blame for jacking up people’s premiums on the new law and sick children.
Of course blaming rate increases on a few very sick children is ridiculous when you have top health insurance executives getting massive raises. WellPoint’s CEO’s compensation increased by 51% to $13.1 million. For those keep score at home that money could have been used to avoid dramatically increased premiums for roughly 3,000 people during these tough economic times. It’s a good thing we need not create a strong cost effective public option alternative because that competition might actually have force WellPoint to use most of that money to keep their premiums low in order to maintain customers.
Since the new law at the insistence of the health insurance companies left most of the implementation, set up of the exchanges, and enforcement to the states, insurers will have a much easier time gaming the new system and beating pro-health care reform advocates on 50 smaller battlefields. Crippling important consumer protections and regulator enforcement mechanism at state level should be easy given the strong opposition to the bill in many Republicans states and how many state insurance commissioners are already far too friendly with the people they are meant to police.
The insurers and their allies in the Chamber of Commerce have already said they are prepared to spend big money influencing the process of writing and implementing the new federal and state regulations. This is a plan to the kill as much of the good in the new law as they can, a death by a thousand paper cuts. It’s a task clearly made easier by the terrible design of the new law.
The new law did not create a national exchange to provide a standard regulator floor for the whole country, nor did it give a regulatory enforcement mechanism the full power of the federal government. The law also did not create a national public alternative that would have served as a powerful counterweight to the private insurance companies, providing real competition in the market while providing the government with a large direct financial stake to make sure the new consumer protections are not gamed. A repeal of the insurers anti-trust protection wasn’t included, which would have offered the Federal Trade Commission a bigger oversight role; not even a new National Insurance Rate Authority was established. Instead people have been left to the mercy of the large private insurance companies with the rather thin hope their state will try to use the new law to rein them insurers’ greed.
The terrible decision to enact marginal reform right on a national basis will be a mistake that will haunt us for years. Look at the relative success of Medicare as compared to Medicaid; you’ll find clear examples which demonstrate how a big mistake it was to go with a state-based system. Reform advocates will probably spend the next few decades trying to undo the damage of this foolish state-based design.
In the meantime the insurance companies are off and running and their lobbyists are going to be extremely busy. The gaming of the new system has already begun in state legislators’ and insurance commissioners’ offices, and in regulatory drafting committees far away from scrutiny by the media and the public. Let’s just hope the whole thing is not completely gutted between now and 2014 when the biggest changes to health care begin.




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:-)
otoh, a state-based system makes it easier [by probably only a tiny margin, 'tis true] for states to implement their own single payer systems.
Don’t worry, by 2014 the insurance industry will have made certain that the only enforced regulations in effect with respect to the new law are the regulations that make more money for them at cost to all of us.
Begin? Ha! That began long before the legislation was finalized. That’s the only explanation for insurance company stocks to have gone up every day since the bill was signed into law. They aren’t so much gaming as exploiting the loopholes THEY wrote into the law.
not really because the law does not let states opt out of the requirements of a private exchange system until 2017. It is the worst of all worlds. Maximum disjointed enforcement will minimum ability to try for better at a state level.
Don’t hold your breath.
What I want to know is what’s happened to the “make it better” bullshit?
After all, that was the excuse for passing this bloody stump of a bill. So what’s the make it better? My guess is that they’re saying, “gee, we can’t do anything until we have 70 Democrats in the Senate, so if you really, really care about health care reform, commit yourself to electing more Democrats for the next few decades. It’s not like we didn’t really mean it.
You just answered your own question I’m sad to say…
If they had 99 Democrats in the Senate, that one Republican/Independent would stop the whole thing cold.
There’s a yes/no issue with the state-based system. With the opt-outs delayed until 2017, three years after the states will have spent millions setting up exchanges, building momentum for change will be tough. Add to that the fact that the HHS has to approve state single payer, and the possibility of the White House being occupied by someone unsympathetic to the idea, and I’d be surprised if any state can prototype single-payer before 2024.
I think this legislation did more to stall state single payer than leaving things alone would have.
If I were an insurance company, I’d call that a win.
i did say ‘marginally’.
but the 2017 date can be changed [or even ignored, and fought later in court].
the problem with having one national exchange is that it reinforces the idea of preemption, whereas having state exchanges pulls that back somewhat. had the national exchange been made into law, that could have been used against states trying to start their own single payer systems, even before 2014. it’s not a very big loophole, and having the kucinich amendment would have been much better.
Never underestimate the power of the filibuster. Of course one might argue that we just saw the result of having 99 Rs and one sorta, kinda socialist in the Senate. Obama giving credit to the Heritage Foundation’s original authorship of the framework, after passage, being more or less a useful proof.
As for those that believed that this will be fixed from an insurance purchaser perspective, this is as close as it will get. From now on the insurance lobbyists will be vigilant. Believing that states which are nearly insolvent are going to somehow dig up the money for their own future single-payer represents a serious case of hope in the face of change we can believe in.
Thanks dems, don’t let the door hit you in the ass in November and in 2012.
Sleazy punks.
The House bill already dealt with this by allow states to leave the national exchange if they could do a much better one.
There is no way to fight the 2017 date in court. There just is not a legal case to be made for moving up the date and even if you do there is still ERISA to deal with.
OTOH Obama’s HCR legilsation allows the insurance companies to sue any state that goes for single-payer, for the next seven years.
Regardless, thanks to the SCOTUS decision on Citizens United, I don’t think anyone should be holding their breath about single payer happening anywhere.
ERISA preemption will be litigated for years to stop state based single payer – Obama did what the insurance companies wanted – and should get a boat load of money from them for the 2012 election.
Single payer will need to be a Federal decision – and this bill did not help that happen – but it did not hurt it too much.
I see Mass is finally trying to regulate ins premium levels for health – and there is a court suit that will likely stop them from doing so.
It takes a highly sophisticated eye to be able to resolve the ultra-fine threads woven into the Emperor’s garments. Some of you people obviously do not possess the necessary visual acuity. And besides, it’s only a frame onto which even more wonderful tapestries will be sewn. For those of you with the gift of being able to see the miraculous weave, help me out, doesn’t that look like some kind of a g-string or waist-band or something? Wait, I know, it’s a crotch-string for the children.
“The terrible decision to enact marginal reform”
It’s terrible reform that is anything but marginal – it’s extremely bad and it was written by the insurance industry and other corporate interests. I actually do think the insurance companies know about who is covered and why because they had one of their very own (a former VP of Wellpoint) write the legislation with the full backing of Obama.
There certainly will not be any “make it better” effort.
Could states get around the restrictions somehow. Maybe by giving free care and paying for it by raising taxes. You know-a work around. Sort of like the insurance cartel is doing now.
I do know it is unrealistic to think any state would do that.
Please stop. Now I have a picture of what Dennis Kucinich would look as a naked emperor. I really didn’t need that image.
Umm, wasn’t it really the key Democrats and LIEberman that sabotaged this bill? OR where those people just doing the administrations bidding and falling on the sword for Obama since he had already secretly finalized these horrendous deals well before the law was passed?
The specifics don’t matter. Obama sure didn’t lobby for the people or a robust public option. Look what we got.
Sure they could… if they succeed from the Union… ROTFLMAO!
I think this legislation did more to stall state single payer than leaving things alone would have.
oh, i agree 100%. make that 1000%.
but calling for a national exchange right now, when the national govt is clearly anti-single-payer and “activism” on the “left” is clearly co-opted to believe in “competition” and the “public option” is marginally worse than leaving the state-based exchanges in place. during the next 3-4 years, any state that manages to institute a single payer system before 2014 is in a position to argue that they should be exempted from having to set up an “exchange” for private insurers.
Lieberman and Baucus became irrelevent after Coakley’s loss. You can blame everyone who voted for the bill, and mainly Pelosi and Obama.
So.
Obama.
Pelosi.
The Progressive Caucus.
The ‘pro choice’ Caucus.
The Daily Kos.
The Unions.
All of them ridiculous sellout little punks.
yep, i agree. we won’t get to single payer without it going national. unfortunately, for the foreseeable future, the only nationally visible and well-funded citizen organizations, such as ofa and hcan, can’t even be counted on to work for a huge public option that might have half a chance of succeeding, so there’s no way in hell they can be counted on to work for single payer.
if a few states manage to enact single payer, it might be enough to ignite a nationwide citizen movement for single payer that would drown out hcan and ofa and their ilk. it’s an outside chance to be sure, but it’s a more worthwhile pursuit than ‘fixing’ the state exchanges ‘problem’.
several states have activists, and even legislatures, that are working hard on enacting state single payer systems, and before the 2014 date for the exchanges going into effect.
i’m not going to hold my breath, but neither am i going to advocate that people who want single payer just give up now and fall into an utter state of despair.
hey, if that’s what it takes… :D
that’s my belief too, which is why we need to start exploiting loopholes now to work on getting single payer as a replacement, either state-by-state or nationally. also, not that i expect this tactic to work either, but i do what i can to get my republican friends and neighbors to agitate for repealing the whole thing.
There is no way to fight the 2017 date in court.
i did not say this.
part 1: the 2017 date can be changed or eliminated in congress. might or might not happen if you work for it, but it sure won’t happen if you convince people that it can’t be done.
part 2: there are a number of court fights that could arise, on any number of issues, including whether a state that establishes single payer before 2014 would be able to get out of having to set up an exchange for private insurers.
I know california does. I wasn’t sure what the HCR bill did to it though.
If they had all 100 seats, they’d stop it themselves.
I agree – ERISA may fail to block in the courts – a slim chance – and then only after a long legal appeals process delay – but it – state single payer – seems the only chance for the next decade.
We appear ready to suffer a decade of economic loss in order to avoid single payer – we must not offend our insurance companies.
It will be interesting to see if the courts allow Mass to control premium price increases. They are claiming “non-actuarial” state decision – LOL – this when the company premium increase decision has only a slight nod to the actuarial data.
:)
lol! if they had all 100 seats, they’d have to invent someone to stop it.
i wonder what to make of the attorney generals efforts to contest the mandate as unconstitutional.
on one hand its a political move designed to muddy the “victory” democrats will call this “health care bill”, but on the other hand, I really don’t like the mandate either.
the comparisons that democrats are making to medicare make me cringe, but others point out we have to start somewhere (well ya, but by taking 2 steps back?!)
so i feel like many progressives we are stuck between a rock and a hard place. we can suck it up and try to see this legislation as the start of incremental change, or we can decry all of its flaws and hopelessly protest how ineffectual it will be (unless you are an insurer)
in the end I suppose I hope the mandate stands up to constitutional challenge only because if it doesn’t then this bill will have been gutted where there wasn’t much to gut in the first place.
where do we go from here? we can criticize obama, the progressives, the republicans, the blue dogs, the insurers, the media outlets, etc, but at the end of the day saying the emperor has no clothes doesn’t get him a new outfit.
all of these entities and players are part of the reality of our landscape and i wish there was dialogue out there about how we can work to change this bill into a true positive…
state single payer – seems the only chance for the next decade.
sadly, this is probably true, although if grayson [or somebody else] pushes his medicare buy-in bill in the next congress, that might also spark a national movement toward national single payer.
Well, of course. It has to be bipartisan, you know.