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AHIP To Dems: Mandates Are An Idea Insurance Cos Can Get Behind
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AHIP spokesperson Robert Zirkelbach went on Fox News this morning to discuss what the network has been calling his group's "bombshell" report on the Senate Finance Committee's health care reform bill. AHIP released the report just a day before the Finance Committee is expected to take its final vote on the bill, but Zirkelbach told Fox News' Bill Hemmer the timing was just luck, saying the group had a "responsibility" to put its audit out as quickly as possible.
Though the report was highly critical of the bill, Zirkelbach said there are some things his group and Finance Committee Democrats agree on when it comes to health care reform -- namely, the parts of the bill that would result in millions of more customers for insurance companies. Zirkelbach said the industry supports plans to eliminate pre-existing condition screening from insurance applications as well as plans to mandate all Americans buy coverage.
"We strongly support the insurance market reforms so that everybody has guaranteed access to coverage," he said. "To make it work, everybody needs to be required to participate."
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jimbomoron
October 12, 2009 12:54 PM
Ummm ...
If you require insurance companies to accept everyone, and forbid them from varying premiums by health status, then how do you prevent people from waiting until they get sick to purchase health insurance? Otherwise, Joe & Jane Q. policyholder, who have been responsibly buying health insurance all along, are punished in the form of higher premiums because part of their premium is no longer subsidized by Hank Healthy and Yani Young decide to wait until they get sick to purchase health insurance. So you have to have some form of penalty -- be it a tax penalty or automatic enrollment into a plan. Says even progressives such as Jonathan Cohn and Paul Krugman.
In group insurance, insurance companies must accept or reject an entire gropu of employees. The insurance company cannot pick and choose which employees it wants to cover and how much it charges each person. As a result, the insurance company requires the employer to have a certain percentage of their employees -- 75 percent for large businesses, much, much higher for small businesses -- to have health insurance.
Bottom line, if you have a community rating, you have to have an individual mandate in order for health insurance to be affordable. There's no way around this.
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mans_best_friend
October 12, 2009 1:11 PM in reply to jimbomoron
Indeed. You're absolutely correct. Except you left out one itty bitty little part of the equation. The price. How can you mandate coverage while allowing the insurance company to charge whatever they like?
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jimbomoron
October 12, 2009 2:04 PM in reply to mans_best_friend
That hasn't happened here in MA. Of the five states that have a community rating in the individual insurance market -- MA, ME, NJ, NY, and VT -- only MA has an individual mandate, and MA has by far the cheapest premiums adjusted for actuarial value. Just look for yourself on the Connector website and ehealthinsurance.com. Heck, look at the individual insurance policy prices in VT -- paying nearly $1,600/mo. for a family policy saddles you with a $7,000 deductible, 20 percent co-insurance, and $19,000 out-of-pocket cap.
I think what you need most is some form of risk-adjustment in the Exchange, a strong community rating, and a substantial minimum benefits package, and possibly a rate of increase control.
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Cal Gal
October 12, 2009 4:52 PM in reply to jimbomoron
Well, if they don't want a public option, they're just going to have to deal with this. Let the government fine people for not buying insurance. Any fine will be MUCH less, I promise you, than insurance premiums. Let everyone pay fines to the federal government until they get sick, then sic them on the insurance companies.
Bankrupting them asap is not a bad idea in my book. Then MAYBE we'll get single payer.
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highplainslawyer
October 12, 2009 2:23 PM
Progressives really have no reason to support mandates in the absence of a public option. The public option keeps the insurance companies honest. After all, they are exempt from the anti-trust laws and enjoy monopolies in many states. It's really quite simple: no public option, no mandates.
The other alternative is to adopt a public utility model as in places like the Netherlands. A government agency requires that they serve all people within their service area, sets the basic services to be provided, prohibits discrimination based on age or pre-existing condition, and sets the rates to be charged. After all, public regulation of this nature is one of the two methods of controlling monopolies. The other is nationalization.
The control of free riding can be accomplished without mandates. For example, John McCain suggested a $5,000 tax credit which can be applied for the purchase of health insurance. McCain's plain was infinitely superior to the Baccus bill.
Or, one can simply impose a limited disqualification for pre-existing conditions. Since I am diabetic, I cannot obtain private health insurance. My insurance is provided by the State of Colorado (Cover Colorado). However, this policy had a six month exclusion for pre-existing conditions. Such an exclusion would discourage people from gaming the system.
Finally, a gentle solution is simply to enroll people into a plan at the time they seek services from a hospital or doctor. If you walk into a doctor's office or hospital and don't have health insurance, you are enrolled on the spot into a public health care plan. Past due premiums are assessed retroactively (and can be subtracted from future Social Security payments).
As always, there is a nice way and a nasty way of doing things. The Baccus bill is the nasty way. The above solutions, or a combination of these solutions offers a nicer way to the same ends.
But perhaps we should simply have a trigger before imposing mandates. Wait ten years and see if a problem arises. If it does, mandates can be imposed at that time. There is no reason to do it now.
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jimbomoron
October 12, 2009 2:46 PM in reply to highplainslawyer
If you sincerely believe that John McCain's plan -- which had the same $5K subsidy for a family earning $40K/yr., no underwriting limits, and which ended the regulation of health insurance -- is better than the Baucus plan, then you obviously have values much closer to that of Jon Kyl than you do to Ted Kennedy. The subsidies at the low-income spectrum in the Baucus bill are infinitely more generous than that of the McCain bill, and the consumer protections are infinitely more protective in the Baucus bill than the McCain bill.
When you're a 27-year-old bachelor, a six-month waiting period sounds like nothing of a penalty. And more important, a six-month waiting period won't prevent medical bankruptcy for those who irresponsibly wait until they get sick. The penalty -- be it a fine or automatic enrollment -- is the way to go.
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highplainslawyer
October 12, 2009 3:43 PM in reply to jimbomoron
I still don't think you have made the case for an individual mandate. Maybe health care reform without a mandate will have a significant free rider problem. But the right wingers tell us that only a small fraction of people will benefit from this bill. If that is the case, the free rider problem may very well be overblown.
Again, there should be no mandates without a public option and/or regulation of insurers and the rates they charge. If the insurance industry does not want a public option, they should not get mandates either. The two really are linked together.
Face it, the Baccus bill is a golden diaper for the insurance industry. The insurance industry gets the gold, and the rest of us get the contents of the diaper.
There is no reason NOT to put a trigger on the individual mandates. If a free rider problem should arise, it can be dealt with down the road.
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Seafarer
October 12, 2009 2:29 PM
Oops. Until they realize their existence and ability to profit is a privilege. The government--any government, globally--can regulate whatever it needs to regulate. Our nation is the only one where a tiny sub-faction of people wield disproportionate power with their childlike "deregulation" screeds.
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Cal Gal
October 12, 2009 4:56 PM
"We strongly support socialized medicine -- socialized for the ratepayers. Laissez faire for us."
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