The Individual Mandate
The fight over the public option has obscured other parts of the bill. Right now the individual mandate is getting a lot of attention. Ezra Klein explains the purpose of the individual mandate and the consequences if it’s removed:
Right now, the insurer sets the rules. It collects background information on applicants and then varies the price and availability of insurance to discriminate against those who are likely to use it. Health-care reform is going to render those practices illegal. An insurer will have to offer insurance at the same price to a diabetic and a triathlete.
But if you remove the individual mandate, you’re caught in the reverse of our current problem: The triathlete doesn’t buy insurance. Fine, you might say. Let the insurer get gamed. They deserve it.
The insurers, however, are not the ones who will be gamed. The sick are. Imagine the triathlete’s expected medical cost for a year is $200 and the diabetic’s cost is $20,000. And imagine we have three more people who are normal risks, and their expected cost in $6,000. If they all purchase coverage, the cost of insurance is $7,640. Let the triathlete walk away and the cost is $9,500. Now, one of the younger folks at normal cost just can’t afford that. He drops out. Now the average cost is $10,600. This prices out the diabetic, so now she’s uninsured. Or maybe it prices out the next normal-cost person, so costs jump to $13,000.
This is called an insurance death spiral. If the people who think they’re healthy now decide to wait until they need insurance to purchase it, the cost increases, which means the next healthiest group leaves, which jacks up costs again, and so forth.
Jonathan Cohn on the argument for the individual mandate:
There’s a moral argument for the mandate: We want a system that includes everybody, and that means everybody paying what they can for coverage. There’s also a more practical rationale. Without a mandate, young and relatively healthy people might decide not to buy insurance, because they figure they’re unlikely to have high medical expenses. (Insurance only works when there’s a large number of people paying in, so there are enough contributions from the majority who are healthy to offset the costs of those who are sick.) Besides, even young and healthy people can end up with high medical expenses, from an accident or a serious disease. Forcing them to get insurance is actually in their own interest.
Cost control:
In theory, reform can reduce insurance premiums in a number of ways. It can wring out waste, by creating standard methods of billing and creating electronic medical records to reduce duplication of services. It can focus payment on treatments–and methods of care–that actually make people better. It can change the tax treatment of health insurance, a move most economists believe will encourage people to seek out more efficient policies. And it can leverage government pricing power, by setting hard caps on premiums or creating a public insurance plan that could help drive down prices.
Most of the bills in Congress take some of these steps. But they don’t take all of them. And even the cost-cutting reforms the bills do include could stand to be stronger. The Finance Committee, for example, cut a deal with both the drug industry and the hospitals under which the industries agreed to put up with relatively modest cuts in exchange for a promise to face no further reductions. Those industries, and other sectors of the health care system, could stand to give up a lot more. The House and Senate Health, Education, Labor and Pensions Committee bills both include a public insurance option. But even the House version–the stronger of the two–wouldn’t save as much money as possible. To be sure, there’s reason to think that the cost-cutting measures still in the bills will do at least some good. But it’s clear they could go a lot farther.
Kevin Drum has a good summary of what’s in the bill:
But if it passes, here’s what we get:
■Insurers have to take all comers. They can’t turn you down for a preexisting condition or cut you off after you get sick.
■Community rating. Within a few broad classes, everyone gets charged the same amount for insurance.
■Individual mandate. I know a lot of liberals hate this, but how is it different from a tax? And its purpose is sound: it keeps the insurance pool broad and insurance rates down.
■A significant expansion of Medicaid.
■Subsidies for low and middle income workers that keeps premium costs under 10% of income.
■Limits on ER charges to low-income uninsured emergency patients.
■Caps on out-of-pocket expenses.
■A broad range of cost-containment measures.
■A dedicated revenue stream to support all this.What’s more, for the first time we get a national commitment to providing healthcare coverage for everyone. It won’t be universal to start, unfortunately, but it’s going to be a lot easier to get there once the marker is laid down. That’s how every other country has done it, and that’s how we did it with Social Security and Medicare, both of which had big gaps in coverage when they were first passed.
Tags: Health Care Reform
I like the Kevin Drum summary. That could make me change my mind. But, it sounds too good to be true. I think it is oversimplified and overstated.
Individual mandate. I know a lot of liberals hate this, but how is it different from a tax?
Simple. Medicare tax is a flat 2.9% on both the employer and the employee. There is no income cap so it is a flat tax – same rate for rich and poor. But the individual mandate is a regressive tax. The rich will pay a tiny percentage of their income for health care compared with the middle class.
Flat tax (Medicare) is at least better than regressive tax (Senate bill).
On economic grounds alone, the Senate bill pushes the economy and society in the wrong direction.
I must worried traitorous bastards like Carper and Leiberman will help the insurance companies find a way to use the mandate against us…. again, while i know it can prove helpful, the mandate still rewards the greedy jerk-wads that are the insurance-ponsis with 30 million new customers who HAVE to buy their snake oil.
And im not totally convinced they can be forced to take everyone, or not drop anyone. I see them crying about their rights to business and how they may have to lay people off if they are forced to provide…. sorry…. allow care for cancer patients. They are slick evil bastards who dont care about helping sick people. They profit off of illness and death of other human beings. that is an insurance company. It is why i wont trust this mandate without a public option until i actually see it working.
Since a lot of this is half-truths or simply wrong (like “A broad range of cost-containment measures” and “Within a few broad classes, everyone gets charged the same amount for insurance”) just read Kos here for a reasonable response:
http://kos.dailykos.com/
For example, from Americablog:
“On Keith Olbermann last night, former insurance company exec Wendell Potter of CIGNA explained how the insurance company will get around restrictions:
[T]hey would be enabled to charge people who have certain “health factors,” as it’s called in this bill, up to 50% more, if you’ve got high blood pressure, or high cholesterol really. So that is just one way to get around doing that.”
see? unless they are totally neutered, they will find a way to exploit people’s basic need for health. They are killers and should be treated as such.
Individual mandate. I know a lot of liberals hate this, but how is it different from a tax?
Um, taxes actually go to governments to pay for government services, not directly to private company profits.
I think we should focus on making the bill as strong as possible. That includes removing the anti-trust exemption and removing any loopholes that are there. I hope that we make the subsidies as a % of income, so that means as prices for health care move up and wages don’t move with it, the government will kick in more and more. At some point it will just be cheaper to go to a single payer.
Also, the fight isn’t over. There is still the House-Senate conference.
is there any chance this is all just a ploy? Im not sure how the conference works, so if someone could explain it i would be most happy… but could they throw the public option in, in conference once it cant be fillibustered anymore?
a.,
I will have to research before I know for sure. I think the conference bill can be filibustered but I’m not certain.
Ezra Klein answered this a few days ago. Answer is, “Yes”.
At this point the best thing to hope for is a miracle in reconciliation.
But if that doesn’t happen, the Progressive Caucus should kill the bill, loudly. The reason being, from then on Rahm, Obama, and Reid will have to work to win over progressives instead of Conservadems.
In its current form, the individual mandate stinks. All I see is another 30 million customers for the insurance companies while they give up little or nothing. As was mentioned above, they are already finding ways to charge up to 50% more for people with pre-existing conditions. Is there a mandate in this bill that insurance companies pay for anything deemed medically necessary by a doctor? Can they no longer deny a claim, as is the case in virtually every other industrialized nation?
The more I hear about the Senate bill, the less I like it. It has been picked apart so much all that’s left are a few bones and some hair. I’m sure Tom Carper and Joe Lieberman will find a way to give even that back to the insurance and pharmaceutical companies before they’re done.
When are the Democrats going to address tort reform in a meaningful way? That would be a huge step in controlling costs and would show they are truly dedicated to fixing the system.
Until they do, this whole fiasco shows me that they are much more concerned about themselves and their agendas, their images and getting reelected than they are about fixing our healthcare system and helping their constituents.
No, it would not. How often does this have to be explained to you? The cost of insurance and related expenses total less than $60 billion a year, about 1.5% of the amount spent on health care. IF you want help, try doing some fucking research beyond listening to right-wing propagandists.
No, it would not. How often does this have to be explained to you? The cost of insurance and related expenses total less than $60 billion a year, about 1.5% of the amount spent on health care. If you want help, try doing some fucking research beyond listening to right-wing propagandists.
And please don’t bring up the “cost of unnecessary testing.” The mammography flap revealed that for the bogus bullshit that it is. For every 1,000 mammograms, there are 480 false positives and only 4 actual positives. In other words, for 996 people, that’s an unnecessary test. But the conservative bobbleheads showed they won’t put their money where their mouths are.
Since the right has been so successful, and the Dems so impotent, here’s my prediction:
The next thing the right is going after is the benefits package: within a few weeks, the Republicans will say that psychiatric, drug and alcohol coverage doesn’t belong in this bill. They will move for a “carve out” of these coverages and drug coverage, making them either unaffordable or removing them from the umbrella of guaranteed issue.
Then, they’ll create a “doughnut” hole-type solution when the CBO rates this monstrosity as unaffordable over time. You know, when you hit a certain amount of used benefit, you get to pay the next $5000 or whatever out of pocket annually, before coverage kicks back in.
I know this sounds impossible. But both these are coming. The Republicans are not finished watering down this bill for Americans and making it better for insurers.
And Carper will be with them. It’ll be interesting to see what smokin’ Joe does.
the problem is that we elected a bunch of spineless leaders.
No Individual Mandate without removing the Anti-trust Exemption. Otherwise, there is no cost control for the average consumer.
Candidate Obomba in 2008:
“OBAMA: Let’s break down what she [Clinton] really means by a mandate. What’s meant by a mandate is that the government is forcing people to buy health insurance and so she’s suggesting a parent is not going to buy health insurance for themselves if they can afford it. Now, my belief is that most parents will choose to get health care for themselves and we make it affordable.
Here’s the concern. If you haven’t made it affordable, how are you going to enforce a mandate. I mean, if a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house. The reason they don’t buy a house is they don’t have the money. And so, our focus has been on reducing costs, making it available. I am confident if people have a chance to buy high-quality health care that is affordable, they will do so. That’s what our plan does and nobody disputes that.”
Which is exactly why the current bill – mandates for lousy coverage and without cost controls – is such a farce.
http://news.firedoglake.com/2009/12/17/video-of-obama-making-the-case-against-mandates/
I completely agree with Howard Dean. This Senate bill is now an embarassment for the Democratic Party and for the President. This bill was neutered by Joe Leiberman, Tom Carper, Landrieu, Nelson, Stupak, Nelson (Fl), and Max Baucaus. The corrupt insurance companies new exactly what they were doing, buy off a few senators and write the bill for them. Hopefully a couple of progressive Senators will take a hard stand to change the bill, if not the House liberals should refuse to vote for it unless it contains a viable public option, medicare for all, permit importation of drugs, and price fixing priveleges now grated to the insurance companies.
Senator Sanders says he will not vote for this bill. If a couple of more take that position, it will force them back to the drawing board.
I am still shocked Obama and Gibbs would attack Howard Dean rather than attack the killer of the bill Joe bought and paid for Leiberman. Its obvious the bad blood between Dean and Emmaneul is behind the latest attacks on Howard. Still waiting for the Ex. Committee of the AFL CIO and the SEIU to decide who they will stand with: Dean and the citizens, or the Senate and the for profit insurance companies.
Progressive Mom: the right is already doing their best to further undermine the workers. They are now demanding the minimum wage be reduced. Right, lets continue to destroy what is left of the american workers. This is blatantly kill any reform that help the average american, and destroy any hope of the US economy returning and then blame the democrats. If Obama and his regime dont start understanding we “dont need the republicans for anything”, we should “not concern ourselves with the party of No’, and start enacting legislation that benefits the middle class. If the democrats dont do this, forget progressive ideas or ideals. The USA Inc, will become the bankrupted USA, Inc.
Even more compelling, expert health courts would eliminate the need for “defensive medicine,” thereby helping to save enough money for America to afford universal health coverage.
Defensive medicine — the practice of ordering tests and procedures that aren’t needed to protect a doctor from the remote possibility of a lawsuit — is ubiquitous. A 2005 survey in the Journal of the American Medical Association related that 93 percent of high-risk specialists in Pennsylvania admitted to the practice, and 83 percent of Massachusetts physicians did the same in a 2008 survey. The same Massachusetts survey showed that 25 percent of all imaging tests were ordered for defensive purposes, and 28 percent and 38 percent, respectively, of those surveyed admitted reducing the number of high-risk patients they saw and limiting the number of high-risk procedures or services they performed.
“A 2005 survey in the Journal of the American Medical Association related that 93 percent of high-risk specialists in Pennsylvania admitted to the practice of defensive medicine, and 83 percent of Massachusetts physicians did the same in a 2008 survey. The same Massachusetts survey showed that 25 percent of all imaging tests were ordered for defensive purposes, and 28 percent and 38 percent, respectively, of those surveyed admitted reducing the number of high-risk patients they saw and limiting the number of high-risk procedures or services they performed.
Defensive medicine is notoriously hard to quantify, but some estimates place the annual cost at $100 billion to $200 billion or more.”
93 percent of high-risk specialists in Pennsylvania
So where’s the bill specifically addressing “high-risk specialists? Why should we all have to give up our legal rights to help out a handful of high-dollar physicians? And where’s the bill pulling the anti-trust exemption for vendors of malpractice insurance?
Every profession would like to have its very own get-out-of-jail card. Nice try.
So the argument is that under the Senate bill, more people will be “covered.”
Except that having insurance is not the same as having health care.
I suspect the newly covered will have junk insurance with high deductibles and recissions or worse. I’m not going to research this because the onus is on the bill supporters to prove this won’t happen. The past performance of the insurance industry is enough to convince me it will.
Um… okay. I’ll start researching, and I don’t necessarily think you’re wrong.
That said, would it be fair if I put the onus on you to prove that if we kill this bill we would simply start again, or that there’s no way to build on this bill to make it better?
That said, would it be fair if I put the onus on you to prove that if we kill this bill we would simply start again
No, because I don’t think “proving you can start again” is a pre-requisite for killing a bad bill. The bill should be killed on its merits, unless it is detoxified by removing the individual mandate, the anti-trust exemption, or both.
or that there’s no way to build on this bill to make it better?
That’s probably a fair question. But to make it better, we would have to reverse some of the things in the bill. Why start in the hole?
If we kill the bill we get nothing. That’s the reasoning behind fix what you can, improve it later.
A country whose government extorts the wages of its citizens for the unfettered profits of private corporations is no longer a free country.
fix what you can
I’m not seeing the fix in the Senate bill.
Like I said, every time Dems help people, corporations get a tighter grip on the public, and they don’t let go. They are like a boa constrictor. It started with Medicare Part C and D and almost happened to Social Security.
We need a bill that reduces their power, not increases it. Otherwise in five years there will be people arguing we need to increase the subsidy to the insurance industry to “help more people.”
Here is one argument for why we won’t fix it later: We went along with Medicare Part D and its failure to negotiate drug prices and its doughnut hole because it would “help more people.”
Now here we are with the WH, House, and Senate, and are we talking about fixing drug negotiation? No – we are talking about filling the doughnut hole with more money for pharma.
The point is, for a while now we have been surrendering to the conservative dream of undoing the New Deal. Ever since Medicare, the concept of social insurance has been abandoned in favor of private subsidies. They are boiling the frog.
Private subsidies are the domain of corporatists and the rightmost fringe Dems. Small government Repubs are properly against subsidies. Democratic centrists and progressives should be fighting for any opportunity to complete the New Deal with social insurance for medical care – or at the very least, not opposing it.
Subverting the New Deal with subsidies to private companies is in my view a sellout by progressives and centrists and frankly, is a surrender of the idealism that gives progressives their strength.
Ever since Medicare, the concept of social insurance has been abandoned in favor of private subsidies.
(With the arguable exception of SCHIP, but that is a bit of a hybrid).
I think Dems could do well with a straightforward expansion of Medicare to include more age brackets. I don’t see why that couldn’t be introduced. 55year olds would eat it up, and they vote. Everybody loves Medicare, it is a third rail. The only argument would be over cost, and we’d need to do our homework and work that out in detail and work that out before introducing the bill.
That said, would it be fair if I put the onus on you to prove that if we kill this bill we would simply start again, or that there’s no way to build on this bill to make it better?
Case in point: After losing HCR in 1993, Clinton “started again” with SCHIP in 1997, even with a Repub Congress.
“If we kill the bill we get nothing. That’s the reasoning behind fix what you can, improve it later.”
UI, that is assuming the Dems don’t lose more seats to the GOTea or greedy insurance company whores DemoRats like Carper and LIEberman. Im worried that unless there is a system in place so strong it can survive another Bush with his rubber stamp congress, this whole thing can REALLY be turned against the American people.