http://online.wsj.com/article/SB10001424052702304198004575171782805022028.html?mod=rss_Today
Executive Summary:
In 2006, under Mitt Romney, Massachusetts passed a health care system overhaul similar to Obamacare (i.e. pre-existing conditions must be accepted, insurers must clear rate hikes with the state government, everyone must buy an insurance plan, rates for all people must be about the same regardless of health status).
A few of the state's largest insurers are suing the state government, which will not let them raise premiums on small group coverage. These insurers are non-profit entities and claim they will not have enough money to cover claims and/or operating costs if they do not raise rates. Until the case is resolved (hopefully this Monday), these insurers are not selling any new policies. The government has ordered them to start selling policies again, or face fines and other punishment.
Opinion:
This is our future if Obamacare is allowed to stand. The business model for health insurance cannot work when people will be allowed to buy insurance AFTER they get sick, and the government arbitrarily sets rates. This is also why Mitt Romney will never be the President.
Update:
The MA insurance companies lost their request for an injunction against the state to be able to cap their rates. They can still sue, but they have to do what the state says for however long that suit will take (possibly years). What will these non-profits do in the mean time to stay afloat? Anybody's guess. This article also says that rate caps are in the bill signed by Obama. Like I said in the comments, it's also anybody's guess what's actually in the bill. Bad law and bad process.
http://www.ama-assn.org/amednews/2010/04/19/bisc0419.htm
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I can't seem to view the entire WSJ article. Do you know if I need to register or something?
ReplyDeleteI looked around on the White House website at their explanations of the health care bill, but I was unable to find information saying that the government sets the rates of insurance plans. Is that true or false, and where can I find that information?
Hmmmm...the article does appear to be "subscriber only" now. You mean you don't subscribe to WSJ? Just kidding. :> If the article reappears, or there is another good summary article for this, I will post it.
ReplyDeleteThis is also an interesting "look back" article in light of this topic:
ReplyDeletehttp://www.opinionjournal.com/editorial/feature.html?id=110008213
Given that the bill is 2000 pages, rate caps could be in there and we just don't know it yet. :> But you are correct that there may not be explicit rate caps in Obamacare. There is an implicit cap, however, in that insurers cannot issue lifetime caps on coverage and they cannot "unfairly" cancel coverage (read: they can never cancel coverage). There would come a point for some people where an insurer can't reasonably recoup their costs from you to cover your expenses, and therefore that is a rate cap of sorts. However, it could be that not putting a cap on rates is strategically intended to move us toward single-payer just as well. When insurance companies raise rates to pay for all these ridiculous new government mandates, Obama will call them as "greedy" when they are just trying to stay afloat. When people start dropping their policies because they can't afford them anymore, Obama will blame the blowup of the industry on "greedy insurers" and will (ta-da!) roll out government health care as the solution.
ReplyDeleteEven if the Obamacare plan is not as draconian as the Mass. plan in terms of rate mandates, the requirement to cover pre-existing conditions and the mandate for everyone to buy insurance (which are explicitly in the bill) are alone offensive to freedom and liberty and will wreck the private insurance industry just as effectively.
ReplyDeleteThe mandate to buy insurance brings a lot of people into the pool, many of whom are probably a good deal for insurance companies because they are young and healthy. The other changes in the bill would be financially untenable without this change.
ReplyDeleteI don't understand this part: "There would come a point for some people where an insurer can't reasonably recoup their costs from you to cover your expenses, and therefore that is a rate cap of sorts." Why wouldn't the insurance company raise their rates?
ReplyDeleteThe mandates in the health care bill are financially untenable for the insurance companies even with a bunch of new, young customers. That is why AT&T and other large companies have forecast a huge rise in their premiums under the new system. Also, arguably the most young and healthy people (18-26 years) may now be covered on their parents' plans and will not be financially supporting this new system.
ReplyDeleteOf course an insurance company would raise your rates. However, for someone who is really ill, their health care expenses could cost in the tens of thousands per year, or thousands per month. There would come a point where the insurance company wouldn't expect you to pay your premiums anymore because they are too significant a portion of your take-home pay. If they can't drop you, they would rather get some money from you than none, so they would "cap" your premiums at some level lower than their costs.
ReplyDeleteOf course, if the young healthy people can buy their insurance after they get sick, why buy it at all? Why not pay the fine? This is what will happen, and this is why the insurance companies will eventually go under. Do you also advocate allowing people to buy car insurance after they have the wreck?
ReplyDeleteAh, I see what you're getting at about capping premiums, although that seems like you're reaching.
ReplyDeleteI looked up the fine in the bill. It is $95 in 2014, $350 in 2015, and $750 in 2016. After that it will be indexed to the cost-of-living in increments of $50 (rounded down). Those are annual amounts.
I pay more than that per month for my health insurance, so while $750 is a lot of money, it is a lot less than buying insurance (mine, anyways).
I found a neat site showing individual plans, their coverage, and prices in Oregon at: http://www.ehealthlink.com/IndivFam/Rates1.asp
There are a lot of plans in the $200 a month range, with some as low as $100 a month. So it appears that the $750 fine may provide motivation to buy a plan after all. I must have one of those "Cadallic" health plans. :(
I understand your analogy to car insurance, and I would not allow someone to buy car insurance after a wreck and require that it cover the wreck. However, health care/insurance is not the same as car insurance. You can always buy a new car and get insurance for it, but you can't buy a new body...
Maybe it is "reaching", but it is a logical example of how the private insurance business model will soon cease to be workable. At all. Doesn't that just take your breath away? Our government set out to make a private industry bankrupt. If they wanted to lower costs, they would have done a million things that aren't in this bill. They aren't doing any of those things, so they weren't interested in lowering costs. They are going to purposefully financially ruin hundreds of companies. Doesn't that disturb you? Who's next?
ReplyDeleteHealth insurance was never intended to make sure you stay healthy. You can't insure that doctors will be able to fix you like they can fix a broken car, even if you have access to the best ones. People can eat right, exercise regularly, have great preventative care, and still drop dead of a heart attack at 47. Insurance was always only intended to prevent financial ruin in case of a catastrophe. And then states started to mandate that we cover this, that and the other thing, and companies in the 70s had to offer "Cadlllac" plans when wages were frozen to attract good workers, and people started to expect those benefits because that was "normal". Health insurance needs to start looking like every other kind of insurance you buy---it protects you from catastrophe and does nothing else. Too bad our current government is interested in forcing everyone onto a public plan, so destroying the private insurance market is in their best interest.
ReplyDeleteWith $1000 deductible, health insurance for my family on your website would be at least $413/month.
ReplyDeleteGood to to talk/argue with you again. :>
Honestly, I could go either way on health insurance.
ReplyDeleteI'd be fine with a public plan ala Medicare for all, something that covers most needs but doesn't cover everything, as long as people could buy their own supplemental insurance or care as well.
I'd also be fine with a system that removed employer provided health insurance entirely. When your employer provides only 1 option for health insurance, and you can't receive a cash payout for declining their coverage, there is very little incentive for individuals to shop around for a "better" health insurance plan.
However, for any non-universal plan to work, hospitals and doctors must be allowed to refuse to provide care to individuals that cannot pay. I'm not sure our society would agree with that change.
The recently passed changes move us towards universal care, but we're still stuck in between the 2 reasonable solutions to health insurance.
What is your reasoning that doctors must be able to refuse care to those who cannot pay under a "non-universal" plan?
ReplyDeleteMy main problems (I have more, believe me) with "Medicare for all", or the single payer system we are currently on track to get:
ReplyDelete1) The government does not do ANYTHING efficiently. Why would we want them in charge of our healthcare? It is the same as believing in unicorns and pixie dust to believe that the government will actually provide the health care that people need once they have little to no private sector competition. Ask yourself why there are some private hospitals in the UK when they have NHS. Why would someone pay twice for healthcare unless the NHS stuff is intolerable?
2) Read my lips: THERE WILL BE NO PLACE TO BUY A PRIVATE PLAN ONCE WE HAVE SINGLE PAYER. Health insurance companies will simply not be able to stay afloat with the new mandates. That is the point of the new mandates. Then it will be cash only private care (if they don't outlaw that too), leaving the country for cash only care, or government care. Those will be your ONLY options. I don't think enough people realize this. They think that the heathcare bill was to cover the uninsured, and their plans will be unaffected. They will have a rude, rude awakening in a couple years if this is not reversed.
3) As I said in a previous post, isn't it wrong that the government is purposefully putting a whole industry out of business simply because they want to? Which business is next? Shouldn't our government be in favor of more choices for consumers, not less? What is more freeing about a universal plan that everyone has to participate in?
I would also be fine with a system where your employer payed you the amount they pay for your insurance and let you shop for a plan or pay cash yourself. Guess what? Your employer would like it too!! How did we get in this situation? GOVERNMENT MEDDLING! Yes, the government got us into this mess by implementing wage controls so that employers had to start offering non-cash benefits to get the best workers. The wage controls are gone, but we got used to the new system. We need to get "un-used" to it, and this would be a great start. Guess which presidential candidate supported it in 2008? That's right, kids! John McCain did! And then the media pilloried him, reporting that he wanted to tax your healthcare benefits, without reporting that this was because he wanted you to be free to shop for your own healthcare plan, or pay cash for health care. He was even willing to require that at least some of the money go in a health savings account to insure that you would have some money saved up for your health care expenses. Who hates health care spending accounts (because they are supposedly "only for the rich" and wants to abolish them! That's right, kids! Democrats and President Obama!
ReplyDeleteIf hospitals are required to care for anyone that shows up, then we already have universal health care.
ReplyDelete1. I presume folks aren't happy with the NHS care or coverage, so they pay a private doctor for more/better care. That is very similar to a lot of government programs, such as Medicare and Social Security, which only provide a base level of support. Are you suggesting that NHS should allow patients to have whatever procedures and care that they want, regardless of the cost and lack of justification?
ReplyDelete2. By definition, single payer health insurance means there is only 1 health insurance plan. If people can still get whatever extra care they want by paying out of pocket, I'll be satisfied.
3. The health insurance business provides no useful service. If their business model falters, I feel no remorse.
Regarding McCain versus Obama, I reserve the right to disagree with either of them on a specific issue. I'm still glad I voted for Obama.
As I said before, I think moving towards either single-payer OR cash-only would lower costs.
You are absolutely right that everyone in the US who needs it can get care if they show up at a hospital needing it. So Democrat talking points about people dying in the streets for lack of insurance coverage are false. The term universal health care, however, refers to who is paying the bills. It is also called "single payer" because the single payer referred to is the federal government. We do not have that system in the US, not yet, but that is the ultimate destination of the health care bill they just passed.
ReplyDelete1/2. You were saying that you would be fine with "Medicare for all", or single payer. I was just pointing out that no one is happy with that system where it exists, or there wouldn't also be cash-only hospitals as there are in the UK. As I said, why would anyone pay twice unless the first stuff you paid for (through manditory taxes) was junk? Of course NHS (or Medicare, or whatever govt. entity) should not allow every procedure. That is a straw man argument. But as I said, in the UK, everyone is on NHS, whether they want to or not. It isn't a "base level" of support. A single payer system never is. And if they didn't pay out the wazoo for it through exorbitant, unsustainable taxes, perhaps more of the "poor" would be able to pay for their own health care. But they don't have that option, do they? And you want to take it away from us. Thanks! :>
ReplyDelete3. Wow. I'm hoping you don't start thinking other things provide "no useful service" and that the government should shut them down. How about pizza parlors? How about bowling alleys? How about tatoo parlors? How about Apple? You don't really need that ipod, now, do you, and there are PCs if you want a computer... Let's all sing songs to our dear leader, Barack, instead of listening to that junky pop music! :>
ReplyDeleteSingle payer is essentially what exists in Massachusetts. It has not lowered costs. AT&T and other large companies are planning to pay much more in health insurance costs under this new bill, not less. Do you think they are making up the news stories coming out of Massachusetts and that AT&T is lying?
ReplyDeleteOkay, so you like the new health care bill (sort of). What else can you point to for why you are glad you voted for Obama? I'm curious. (And willing to take this thread off topic if you want to. :>)
ReplyDelete"no one is happy with that system where it exists, or there wouldn't also be cash-only hospitals as there are in the UK" - never use absolutes! :)
ReplyDeleteThe last time I read a comparison between the US and the UK, the UK spent less money on health care as a percent of GDP and had better outcomes (longer lifetimes). Regardless of the presence of cash-only hospitals, that seems like an improvement over the US system.
Since there are procedures that the UK system doesn't cover, yet still people want, a market for cash-only (non NHS) hospitals has emerged. I don't see that as sign that the NHS is a failure. Surely there are people unhappy with their coverage under NHS, but that's true here in the US as well.
What useful service does health insurance provide? I suppose lots of people are employed by them, but they do not provide medical care. Aren't they just middle men? Why not get rid of them? :)
ReplyDeleteI'm not opposed to some of the Republican suggestions for reducing costs either, and I'm annoyed that there were not included in the recent bill. Specifically, I have no problem allowing people to buy health insurance "across state lines", and I support improving the malpractice insurance system.
Do you have a URL for the AT&T-Mass story?
I didn't see a lot of substantive differences between McCain and Obama, except one was Republican and one was Democrat. I voted against the old white guy. Gah, gotta run now, more later!
ReplyDeleteWhat do you have against old white guys? :>
ReplyDeleteThe difference in life expectancies between the US and the UK is very small (79.4 years vs. 78.2 years) and can be explained by a lot of huge factors other than healthcare, such as demographics. Sorry, but we have a more mixed culture in the US, and some ethnicities just naturally live longer or shorter lives than others. Even if it were attributable to healthcare, the people in the UK are giving up a lot of freedom for that 1.2 years of life. No thanks.
ReplyDeleteIf you are unhappy with your coverage here in the US, you can stop paying for that plan and switch insurance companies (although, thanks to government controls, that's getting harder) or pay cash. If you are unhappy with the NHS system, you continue to pay for it, or go to jail. That's the difference.
ReplyDeleteIf everyone decided to pay cash tomorrow and stop buying insurance and that caused the bankruptcy of the insurance companies, that would be fine with me. That is the result of thousands of people making the decisions that are best for them. What is disgusting, scary and downright antithetical to the way this country was founded is how the government has just passed a bill that will do that very thing just because some people in Washington D.C. have decided that they don't want insurance companies anymore, so no one will have them.
ReplyDeleteAT&T story:
ReplyDeletehttp://www.boston.com/business/healthcare/articles/2010/03/27/att_says_health_care_law_will_cost_it_1b/
Massachusetts: (not sure if this link will come up right, since it is a powerpoint presentation---let me know if it doesn't and I will post the last slide. It is the most pertinent one, as it shows premiums shot up really fast after they passed Romneycare.)
www.mass.gov/.../2009_02_04_cost_projections_cost_containment_ committee.ppt
An explanation of the AT&T accounting charge:
ReplyDelete"Under the 2003 Medicare prescription drug program, companies that provide prescription drug benefits for retirees have been able to receive subsidies covering 28 percent of eligible costs. But they could deduct the entire amount they spent on these drug benefits — including the subsidies — from their taxable income. The new law allows companies to only deduct the 72 percent they have spent."
It seems like this change is something you would support, since it removes a deducation (for something they got for free!) anyways.
The mass.gov URL was truncated. Can you bit.ly or tinyurl.com it?
Don't change the subject! :> I brought up the AT&T story and the MA experience because Obama has been trying to sell the health care bill by claiming everyone's premiums and healthcare costs are going to go down because of the bill. AT&T's health care costs went up (yes, due to the elimination of a tax subsidy, but they went up in contradiction to what he said) and everyone's premiums in MA are going up because of their universal coverage bill. What I think of the old tax law in light of my support of the flat tax is beside the point.
ReplyDelete