Wednesday, September 9, 2009

My (current) take on healthcare reform

Some folks on the left are saying "public option or bust" - no healthcare reform without the public option. I am not so sure this is the right way to go, or even if the public option is such a great deal. Some thoughts on current proposals:

1. Healthcare reform can include a condition of "no pre-existing conditions". This in itself would be a huge improvement over the current state of affairs.
2. #1 necessitates a universal mandate to be "fair" to the insurance companies; if they have to take the sick, they should have adequate "pay-in"s from healthy people.
3. #2 implies federal subsidies for those who can't afford to pay insurance premiums, including expansion of Medicaid.
4. #3 means the money has to come from somewhere - possibly efficiencies in Medicare, including getting rid of "Medicare Advantage" - which would be a loss for insurance companies, but better use of our tax dollars.
5. Removal of annual/lifetime caps on out-of-pocket expenses would be great (what's that about half of current bankruptcies occurring due to medical bills?)

All of these five objectives seem pretty good to me.

Now, #3 can also be taken to mean "we need a public option" to avoid insurance companies increasing premiums/denying care to increase their profits (which already happens). But how will a public option work? Say it can't deny care as freely as private for-profits. That means insurance premiums will likely rise each year (or else we get rationing of care*). Otherwise, the public option operates at a loss, which means subsidies are needed from the federal government to keep the public option solvent. Which means private companies could be driven out of business, and we eventually get to single-payer (if you are a liberal)/a government take0ver of healthcare (if you are a conservative).

* Unlike what Tom Coburn says, a non-profit public option will be less likely to ration care than a for-profit private insurance company for the same premiums.

Couple of other thoughts:
1. If you really want single-payer, say that and work for it - don't be try to force a backdoor entry with the public option.
2. One alternative I like is a universal, minimum-benefits/catastrophic insurance public option. Private companies can offer this level of service, as well as better coverage for higher premiums.
3. If I understand correctly, the public option and other reforms don't even come into effect till 2013 (coincidentally, *after* POTUS election.) So if a triggered-public-option is offered that also comes into effect in 2013 if insurance companies don't clean up their act - why not? One answer offered is that the trigger may be too hard to press (Senator Ben Nelson has already said "we don't want a hair-trigger." We don't want an inoperative trigger either.) So the devil's in the details - the language of the trigger has to be very clear - and impose stringent rules on private insurers.
4. I think the "fees on insurance companies' "Cadillac" plans" is a chicken-s*** way of raising individual taxes, and I am annoyed that liberals like Schumer/Rockefeller and Max Baucus are proposing this. These fees *will* be passed on to the consumer, and likely to *all* consumers. This is a backdoor tax, and I'd rather see a tax on individuals with these Cadillac plans; "if you want this gold-plated option, you gotta pay for it."

I'd love to hear President Obama say #2 in today's speech; it seems similar to what some proposals say, but the message coming out of DC is way too complex and doesn't state this as clearly as I think I have.
As for #3 - I'd be open to setting up non-profit co-ops *now*, and evaluating their performance in 5 years - if they don't work, amalgamate the co-ops into a public option in 2013.

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