If you have "no place to go," come here!

Insurance companies will still game the system under "health" "care" "reform." Who knew?

And [a|the] public [health insurance]? [plan|option] won't make a damn bit of difference. Even WaPo's figured this out (and do click through and read to the end for a totally buried quote-of-the-decade from Baucus):

Any health-care overhaul that Congress and President Obama enact is likely to have as its centerpiece a fundamental reform: Insurers would not be allowed to reject individuals or charge them higher premiums based on their medical history.

But simply banning medical discrimination would not necessarily remove it from the equation, economists and health-care analysts say.

If insurers are prohibited from openly rejecting people with preexisting conditions, they could try to cherry-pick through more subtle means. For example, offering free health club memberships tends to attract people who can use the equipment, says Paul Precht, director of policy at the Medicare Rights Center.

In fact, there's an entire consulting industry devoted to helping insurance companies figure out cherrypicking techniques, and train employees how to use them. Like:

Being uncooperative on insurance claims can chase away the chronically ill....

And to avoid patients with costly, complicated medical conditions, health plans could include in their networks relatively few doctors who specialize in treating those conditions, said Mark V. Pauly, professor of health-care management at the University of Pennsylvania's Wharton School.

By itself, a ban on discrimination would not eliminate the economic pressure to discriminate.

"It would probably increase the incentive for cherry-picking," Pauly said. "I'm strongly motivated to try to avoid you if I'm not allowed to charge you extra."

A straightforward way to reduce gamesmanship is to standardize benefit packages, Precht wrote in a July report.

In other words, plain vanilla policies. Exactly what the Dems rejected in financial reform. Na ga happen.

Unless lawmakers tackle the problem effectively [for a constituency other than the insurance companies], a reformed [sic] health-care system could continue to reward insurers for avoiding rather than treating illness. It also could perpetuate existing economic penalties for health plans that do a better job of covering the sickest patients. They tend to attract costlier members, which can force them to raise premiums, fueling a cycle that can make it harder for the severely ill to get affordable coverage.

AHIP has been trying to shape the legislation in ways that could help insurers attract the healthy and avoid the sick, though it has given other reasons for advancing those positions. In a recent letter to Baucus, AHIP President Karen Ignagni said benefit packages "should give consumers flexible options to meet diverse needs."

Ah. "Flexible options" means cherrypicking. Good to have that translated. The story ends with this tremendous quote from Baucus:

"These regulations are the first step to a market where consumers can be confident in the coverage they purchase," he said.

Only "the first step"? Bwa-ha-ha-ha-ha! Baucus the excrementalist! He's not saying consumers [not patients, mind you] will be confident; he's saying that at some undetermined point in the future they might be confident.


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vastleft's picture
Submitted by vastleft on

... we'll have the first step toward health-care reform?

That's awesome. Right up there with Nixon's "secret plan" to end the Vietnam War. Well if less-than 5% of the troops came home in his second term, that is.

selise's picture
Submitted by selise on

here's the thing: a po can't work unless there is excellent and very very strong regulation/enforcement including, as lambert points out above, risk adjustment because it will end up with the sickest people to insure and that will raise costs. but if there is excellent regulation and enforcement a po isn't needed to "keep the insurance companies honest."

isn't it obvious that it's the strong regulations, not the po, that is the necessary condition for a multi payer system to work at all?

and fighting for strong regulations puts the fight in back rooms even more than a legislative fight -- where industry is strongest and the public can't see what's happening.

i have no idea why would anyone choose the elitist technocratic approach of a po (with the battles out of sight of the public) over the populist/movement approach for single payer (with the public a necessary participant in ending private insurance control of healthcare). especially when single payer saves more money and is universal.


sorry, i'm just extra pissed off tonight because it feels like forever i've been arguing the issue of risk adjustment with jason (and trying to with jane). ignoring it doesn't make it go away.

Submitted by lambert on

... you're not really having an argument. Right? Keep putting the points out there for the benefit of the readers, though.

Submitted by hipparchia on

the insurance companies don't stay honest. we can look at switzerland and the netherlands to see that.

isn't it obvious that it's the strong regulations, not the po, that is the necessary condition for a multi payer system to work at all?

yes and no. there are two groups for whom this is not obvious.

the first [and largest] group is the american public, who have been told for 30 years or more that competition is the solution to all problems and that regulation actually hinders the solving of problems. this group can be forgiven because most people haven't got the time or knowledge to study up on how insurance markets work.

the second group is small and consists of people like jason, who is paid to keep people from understanding the truth about the po and regulation, and people like jane [and many at ol], for whom political victory is more imperative than policy implementation.

you can't usually change the minds of people in the second group, but by countering their arguments as often as possible, you can reach people in the first group, and that's where the important work is -- educating the wider audience.

dblhelix's picture
Submitted by dblhelix on

it will end up with the sickest people to insure and that will raise costs

It will raise costs ... for them.

75% of the uninsured are below 200% FPL.

Even the CBO acknowledges that the "public option" in HELP will likely have higher premiums, even after risk-adjustment, and concludes that it will help bring costs down in the *private* market.

selise's picture
Submitted by selise on

Even the CBO acknowledges that the "public option" in HELP will likely have higher premiums, even after risk-adjustment, and concludes that it will help bring costs down in the *private* market.

i missed that, thanks for the info. my bad for not paying better attention.

Submitted by hipparchia on

this was pointed out to him in comments on his 'public option, what, how, why' post.

letsgetitdone and i both pointed out that the cbo thinks the lower private insurance premiums will come from the expensive sick people moving to the public plan, leaving the healthy inexpensive people in the private plans, which will then be able to lower their premiums. two paragraphs from the cbo letter:

First, a public plan as structured in the introduced bill would probably attract a substantial minority of enrollees (in part because it would include a relatively broad network of providers and would be likely to engage in only limited management of its health care benefits). As a result, it would add some competitive pressure in many insurance markets that are currently served by a limited number of private insurers. That competitive pressure would probably lower private premiums in the insurance exchanges to a small degree.

Second, a public plan is also apt to attract enrollees who, overall, are less healthy than average (again, because it would include a relatively broad network of providers and would probably engage in limited management of benefits). Although the payments that all plans in the exchanges receive would be adjusted to account for differences in the health of their enrollees, the methods used to make such adjustments are imperfect. As a result, the higher costs of those less healthy enrollees in the public plan would probably be offset partially but not entirely; the rest of the added costs would have to be reflected in the public plan’s premiums. Correspondingly, the costs and premiums of competing private plans would, on average, be slightly lower than if no public plan was available.

jason [apparently preferring to read only the first paragraph and ignore the second] continues to frame this as proof that competition will lower prices.

CBO does say that the PO will begin to lower premiums of people without PO insurance in the exchange. It says that effect will be small within the first 10 years, but that it will in fact start, which to me is evidence of competition.

it's not really your fault for 'not paying attention' when the people with big megaphones are actively obfuscating.

Submitted by lambert on

but I don't have time personally, alas.

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It's unfortunate, but at some point it's going to bleed over and affect the good work that FDL does. A house divided against itself cannot stand...