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cos ([personal profile] cos) wrote2009-09-10 09:47 am
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Letter to the Editor

Last night, I submitted this as a letter to the editor to USA Today:
    For decades, private for-profit insurance companies have been spreading fear about "government run health insurance". Despite the fact that people on Medicare - run by the government - are more satisfied with their insurance than people on private insurance, the private insurance companies have been telling us that national health care wouldn't work, because the government can't run a good insurance system, and we're all better off with private insurance. Obama's plan puts their claims to the test, and it's time to put up or shut up.

    Obama proposes a compromise between a national single payer system, and the private insurance we have now: he wants to put a public health insurance option in the same market as private companies, to let people choose and see what works better.

    Insurance companies' complaints about "unfair competition" are a smokescreen. They want to mislead us into a conversation about how to be fair to insurance companies, while they continue being unfair to the American people.

    What the for-profit insurance companies are really saying is that they fear the government can run a better health insurance - that satisfies people more, and leaves us healthier, at a lower cost. They may be right. Congress owes it to us to create a public option so we can try it and find out. Stop worrying about the health of the insurance companies, and care for the health of the American people for a change.

[identity profile] daniel-t-miles.livejournal.com 2009-09-10 03:08 pm (UTC)(link)
While I agree that I don't care what's fair to the insurance companies, I think you've missed the point about what they mean by fair.

The funding models for public insurance are very different because, like all our progressive taxes (where progressive means the shape of the tax curve, not the name of a political movement), public health care is redistributive. That is to say that the wealthy pay more for it than the poor do but everyone has equal access. Since an insurance company can't manage its funds that way or even manage its risk-pool that way, it isn't fair.

But I think THAT'S the smoke-screen. It's a GOOD thing that it isn't fair, not being fair is how we get better coverage.

[identity profile] gwillen.livejournal.com 2009-09-10 05:09 pm (UTC)(link)
This is actually a pernicious falsehood, and since you don't seem to oppose the public option, you should probably not be spreading it. The public option is NOT redistributive. At least as of the version of the bill I read, it was clearly spelled out that it would be funded ONLY by premiums, and in no way by taxes or subsidies.

There _is_ a provision in the bill for people under 3x the poverty line to get subsidized care, but this is effectively a voucher program -- it applies whether they get public or private insurance.

For the most part, the public option is no more redistributive than any private plan. Both redistribute money from those who happen not to make claims, to those who happen to make claims -- this is the purpose of insurance.

There is one sense in which the bill could be said to be redistributive; it requires everyone to have insurance, even if they are healthy, and in that sense it _does_ redistribute wealth from the healthy to the sick. But that provision is _independent_ of the public option. It applies even if the public option does not pass.

[identity profile] radioactiverich.livejournal.com 2009-09-10 06:34 pm (UTC)(link)
I would like to add here that private insurance companies do their damnedness to keep from paying out to those who make claims, because although the purpose of insurance is to pay out monies from those who do not make claims to those who do, the purpose of private insurance companies is TO MAKE MONEY.
In this way one would hope a public insurance option would be MORE redistributive of monies from those who do not make claims to those who do.

[identity profile] lil-brown-bat.livejournal.com 2009-09-11 03:14 pm (UTC)(link)
Yeahwell...insurance companies have gradually been redefining the meaning of "insurance" from being a business in which they took some risks (as in any industry), made some profit if they were smart and lost money if they were stupid or very unlucky, to one in which they are insulated from the downside through any means necessary, including outright breach of contract (ref. the ex post facto redefinition of homeowners' insurance terms following Hurricane Katrina, or any number of health insurance claim denials), and get to reap all the profits of the upside. Unless and until that trend is shot in the head, the only thing that private insurance companies in any solution is what any parasite contributes to its host.

[identity profile] daniel-t-miles.livejournal.com 2009-09-10 07:41 pm (UTC)(link)
Oh, THAT'S what the requirement to buy insurance is for! Suddenly the things I've been reading make much more sense.

I hypothesize that there is no reason to create a government plan that's the same as private plans, so the interesting part of the health care debate is in how the government plan is different than a private plan.

So far, I've seen two proposals for how it can be different: The one Obama promised us in the campaign that convinced me to vote for him even after he lost my buy-in on Iraq was the redistributive plan I talked about before where the thing that's different is that the costs are offset by wealthier people playing more.

The other way in which it could be different, the way it sounds like congress is thinking of going, is that the government could mandate an unnatural risk-pool with healthy people paying to offset the cost of providing care to unhealthy people.

Both of those approaches involve powers not available to private industry which means both of them constitute, "not fair." The conservatives are right about this.

I've noticed a common theme when people of different political backgrounds talk about things: each side thinks the other side is stupid and/or not listening. Maybe the conservatives are frustrated with us because they keep telling us how unfair this thing is and we don't seem to be absorbing that fact. I think the more productive approach is to concede that point because it's fairly sound; the government really does have more options than private corporations and it can make a thing they can't. It's not fair. Then we can talk about what it costs us to do a thing that isn't fair vs. what it gets us to have public health insurance and the debate can move forward again.

[identity profile] gwillen.livejournal.com 2009-09-10 08:03 pm (UTC)(link)
I hypothesize that there is no reason to create a government plan that's the same as private plans, so the interesting part of the health care debate is in how the government plan is different than a private plan.

Maybe the conservatives are frustrated with us because they keep telling us how unfair this thing is and we don't seem to be absorbing that fact. I think the more productive approach is to concede that point because it's fairly sound; the government really does have more options than private corporations and it can make a thing they can't.

I don't think you can have both "the government plan is pointless because not different" and "the government has more options". As I see it, these are both wrong. The government should _not_ have more options -- the point of the setup as presented is to put the government and private plans on equal footing. I don't see where more options come from.

It doesn't follow, for example, that the government can mandate a wacky risk-pool in its plan alone (not to make any statement on whether it would be good to mandate it for all plans); if it does that, healthy people will flee to other plans, in the same way the good drivers flee to car insurance policies with more restrictive requirements, which are thus cheaper.

One advantage I see to having a government plan is based on the following hypothesis: A health insurance organization whose goal is to make a profit, will ultimately be less efficient -- _as judged by the market_ -- at providing health insurance, when compared to an organization whose only goal is to provide health insurance. If this hypothesis is true, then the government plan will outcompete private plans on an equal footing, and the result will be a societal benefit with no economic downside. (Remember that, historically, the point of chartering corporations was not because profit is a good, even if some people seem to see it that way today; it was because offering profit was an effective incentive to get people to join together to do things ultimately benefiting the public good. If we can get the benefit without the cost, we should absolutely take it.)

Another point in favor of the public option is the following: The health insurance market is actually many markets for slightly different products. It's in the public interest to ensure that there are products to serve all segments of society, even though some of those products are less profitable than others. The public option is one way of ensuring that the less-profitable markets are still served. (C.f. the problem of rural telecommunications, which was largely solved by government compelling telecoms to provide service to less-profitable areas -- because this was seen as a public good -- in exchange for the effective monopolies they had over the more profitable urban areas.)

(EDIT: I failed at italics. Trying again.)

[identity profile] lil-brown-bat.livejournal.com 2009-09-11 03:37 pm (UTC)(link)
The reason for the mandate is this: We're going to require insurance companies to cover everyone, accept everyone, and not disqualify "pre-existing conditions". If we don't mandate insurance, that'd leave the option open for people to not pay when they are healthy, and then sign up for insurance once they discover some condition or injury that's going to need ongoing care. We're much better off spreading the risk fairly, the way we do with taxpayer-funded programs. You can't opt out of taxes for a particular service until you feel like you need it.

Sounds good on paper, but (as we've discussed before) this has been significantly botched in the case of Massachusetts, which appears to be the model for this mandate. There are a lot of reasons, but I'll confine myself to three:

  • Failure to define "affordability. The Massachusetts mandate failed to define "affordability" in any reasonable and meaningful way, with the result that some individuals are forced to come up with a significant chunk of change every month in order to comply with the mandate (or get penalized). You simply cannot drop a requirement on people to come up with $600 or more out of pocket every month -- the only effect will be to drive them into poverty. The answer that $600 is not typical is true but irrelevant and, frankly, callous: it's a lot more than one or two people (take a look at what a healthy 55-year-old is assessed), and even if it were a tiny minority, there is no provision for them.
  • Insufficient flexibility in determining income levels. The Massachusetts plan provides subsidies for people making up to 3x the (laughably low) federal poverty level: if your income level is at or below the poverty level, your premium is 100% subsidized; if it's above that, you're subsidized on a sliding scale up to the point where you're making 3x the federal poverty level, at which point you pay 100% of the premium (whatever that is, see bullet point above). 3x the federal poverty level, by the way, is below $30,000 a year, not exactly living large...but I digress. So how much does a farmer make -- or a logger, or a seasonal or temporary worker? Well, if you're a bureaucrat, you assume that they make whatever they showed on last year's taxes. If you're neither a bureaucrat or a moron, you know that what someone in one of these jobs made last year has fuck-all to do with what they'll make this year. It has nothing to do with what kind of money coming in now, and thus, what you can afford to pay now for a monthly premium. Again, these people were callously disregarded when the system was created. For people who claim that they want to move away from reliance on employer-provided health insurance, the proponents of the Massachusetts plan are blind as bats when it comes to looking outside those narrow lines now.
  • Overloading the system. With many more people suddenly insured, demand for health care services went way up. As a result, if you try to schedule a doctor's appointment in Boston, your average wait time will be 50 days. Yes, that's right -- Five. Zero. And that's Boston -- elsewhere in the state, particularly western Mass, it's worse. One physician in Williamstown reports that his patients typically wait 65 to 85 days for a routine appointment, and that colleagues of his have four month waits. What good is health insurance that you can't use? We all got told that part of the reason for this mandate was to prevent people from using emergency rooms for things that can be handled at a doctor's office, but if you've got a problem that won't wait four months, where will you end up? In the ER, that's where. Fail.


I've seen too much hand-waving and ignoring of these issues in Massachusetts. It is simply unconscionable. I want to see these issues addressed before I get behind any national plan.

[identity profile] ocschwar.livejournal.com 2009-09-11 02:45 am (UTC)(link)
All true, but not necessarily relevant (the Massachusetts public option is funded by a regressive fee structure, and a federal option may also be), and not the reason the insurers fear the public option.

Health insurers exist for the same reason all other private companies exist: to maximize shareholder value within the parameters of their niche. A public option would change those parameters and lower shareholder value.

Which non-shareholders have no reason to give a damn about.

[identity profile] awfief.livejournal.com 2009-09-11 07:45 pm (UTC)(link)
Right. Except that my mother (New Jersey Republican) made a good point. The context was that she felt she was going to be forced into using the government-provided health care option. I mentioned that she could still use her employer's insurance, and she said,

"But what if my employer says they're dropping the private health insurance and everyone will get a raise equivalent to (after taxes) the full yearly cost of the government's health insurance premiums?"

To which the answer is "well, if the health insurance companies want to stay in business, they'll have to be more competitive." Otherwise companies *will* stop spending lots more money for private health insurance, and those insurance companies *will* go out of business. So, yeah, health insurers give a damn.

That's also why it's completely fair for the government to offer an option, but only if it's paid for by premium monies -- because otherwise the government health insurance is subsidized (by the government through taxes) which private health carriers don't have the benefit of.

[identity profile] awfief.livejournal.com 2009-09-11 09:36 pm (UTC)(link)
see no reason why it would be bad to have it paid for by taxes too, if the result were better health care for everyone.

I agree with this statement. The point of my comment was to try to see things from the point of view of the people who are saying "it's unfair", and try to understand why they're saying that (beyond the motivation of setting a smokescreen).

I also agree that it's a smokescreen.