The insurance industry did itself no favors last week when it released a report purporting to show that health care reform would cause insurance premiums to skyrocket. The report focused on only a few specific changes contained in the various reform bills, rather than the bills in their entirety. And the report came out just a day before the Senate Finance Committee, the last of five congressional panels with jurisdiction, was scheduled to vote on a bill. Most of Washington interpreted the report as an effort to delay, if not derail, the reform debate--which it almost surely was. The industry quickly found itself on the defensive. And the Senate Finance Committee pressed ahead, passing a bill just as it was expected to do.
But buried inside the insurers' new piece of propaganda were two perfectly valid arguments--arguments that advocates of reform would be foolish to ignore.
The first of these arguments is about what's come to be known as the individual mandate. A central element of every reform bill that's gone through committee is a requirement that everybody obtain insurance.
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.
Trouble is, individual mandates are not necessarily popular. Just ask President Obama, who exploited that fact during his presidential campaign. Remember, Hillary Clinton was the Democrat proposing a mandate; Obama attacked her for it. As the Senate Finance Committee deliberated over its version of reform, it decided to weaken its version of the mandate. It made it easier for people to opt out of the requirement, by demonstrating that buying insurance would be a hardship. It also reduced the penalty that people would face if they didn't comply.
Neither effort was particularly controversial, although both should have been. At some point, if the mandate becomes too weak, it ceases to be effective. People ignore it and then we're back to the problem of young, healthy people opting out of the system. It's not clear whether the reductions the Senate Finance Committee proposed went that far; experts offer different opinions. But the weakening of the mandate is, at the very least, risky.
Print
COMMENTS (5)
"the insurers rightly cited in their flawed report: The bills in Congress don't do enough about the cost of coverage".
The best thing we could do about cost of coverage is to eliminate for profit health insurance. Plenty of other countries cover everyone, with better outcomes and for much less money. None of them rely on private, for profit insurance (maybe for extras, but not for the majority of care). They do it with single payer, or intelligent, strong government regulation of private, not-for-profit insurance.
Would that the bills in Congress are doing enough about the cost of coverage.
"the insurers rightly cited in their flawed report: The bills in Congress don't do enough about the cost of coverage".
The best thing we could do about cost of coverage is to eliminate for profit health insurance. Plenty of other countries cover everyone, with better outcomes and for much less money. None of them rely on private, for profit insurance (maybe for extras, but not for the majority of care). They do it with single payer, or intelligent, strong government regulation of private, not-for-profit insurance.
Would that the bills in Congress are doing enough about the cost of coverage.
One can make a rather convincing argument that the "free market" should be where folks go to buy stereos, recliners, pet supplies, sex toys and stocks and bonds. Hell, even Congressmen, right?
But one can also make a rather convincing argument that when the "free market" interpolates itself in the transactions that revolve around the consumption of health care those who create the policies know full well the less money they dispense to pay for it the more money they make. They manipulate supply and demand to weed out those who need the most care and then they go to church on Sunday to worship and adore thir loving, just and merciful God.
And they sure as hell don't give a fuck about those who ... view full comment
One can make a rather convincing argument that the "free market" should be where folks go to buy stereos, recliners, pet supplies, sex toys and stocks and bonds. Hell, even Congressmen, right?
But one can also make a rather convincing argument that when the "free market" interpolates itself in the transactions that revolve around the consumption of health care those who create the policies know full well the less money they dispense to pay for it the more money they make. They manipulate supply and demand to weed out those who need the most care and then they go to church on Sunday to worship and adore thir loving, just and merciful God.
And they sure as hell don't give a fuck about those who can't afford it, right? Unless of course the government can require them to purchase policies whether they can afford to or not. The genius behind the Baucus plan, right?
Again, as a "moral issue" this all comes down to how one views the relationship between a civilized government and its citizens. Every other nation we recognize as part of the civilized world refuses to allow its citizens to go through what so many millions of Americans endure year in and year out. How many horror stories did Obama and Clinton and McCain hear along the campaign trail? How many horror stories do we encounter in the media still today?
This whole farce is not about numbers on an insurance industry report. It's about the bank accounts of those who rent the government every couple of years to do their bidding.
george walton
j
During the campaign I believed Obama's strategy, in opposing the individual mandate, was to force the insurers to come up with a plan for universal coverage; there's no incentive like having to insure the old and sick to get the insurers to the bargaining table. The insurers say that we can't have health insurance reform (no cherry picking, denial of coverage for pre-exising conditions, termination of coverage due to illness, or charging higher premiums based on health) without universal coverage. Phooey! Pass reform without the mandate and the insurers will figure out a way to bring in the young and healthy. Their marketing budgets are larger than the GNP of many countries. If America ... view full comment
During the campaign I believed Obama's strategy, in opposing the individual mandate, was to force the insurers to come up with a plan for universal coverage; there's no incentive like having to insure the old and sick to get the insurers to the bargaining table. The insurers say that we can't have health insurance reform (no cherry picking, denial of coverage for pre-exising conditions, termination of coverage due to illness, or charging higher premiums based on health) without universal coverage. Phooey! Pass reform without the mandate and the insurers will figure out a way to bring in the young and healthy. Their marketing budgets are larger than the GNP of many countries. If Americans can be convinced to buy poorly made cars, they can be convinced by the insurers to buy health insurance.
One huge development that has emerged in the last week as a result of the insurance companies' failed attempt to kill reform in the eleventh hour: Congress is now on the fast track to eliminate the anti-trust exemptions they have enjoyed since the 40s. This alone could advance us light years ahead to restoring real competition in the health insurance markets. Sometimes, you need to let sleeping dogs lie.
They overplayed their hand, got caught in a bluff, and screwed themselves in the end. We need to make sure all our Congresspersons understand how important this single item will be to reforming the system and how firmly the people are in favor of it.
One huge development that has emerged in the last week as a result of the insurance companies' failed attempt to kill reform in the eleventh hour: Congress is now on the fast track to eliminate the anti-trust exemptions they have enjoyed since the 40s. This alone could advance us light years ahead to restoring real competition in the health insurance markets. Sometimes, you need to let sleeping dogs lie.
They overplayed their hand, got caught in a bluff, and screwed themselves in the end. We need to make sure all our Congresspersons understand how important this single item will be to reforming the system and how firmly the people are in favor of it.
BSemple: "The best thing we could do about cost of coverage is to eliminate for profit health insurance. "
That would reduce our health insurance costs by 10%. That is about 1.5 years of growth. In other words, make insurance providers work for free forever, and in 2011 we are back in the exact same place we are right now.
Read more. It'll help.
BSemple: "The best thing we could do about cost of coverage is to eliminate for profit health insurance. "
That would reduce our health insurance costs by 10%. That is about 1.5 years of growth. In other words, make insurance providers work for free forever, and in 2011 we are back in the exact same place we are right now.
Read more. It'll help.