Healthcare Reform Thread

[Dinner]

The GOP needs to make sure that it kills the public option for good before it starts devoting serious effort toward passing a more responsible healthcare reform bill.

The public option is the only way to keep insurance companies honest and seriously contain health care costs. Which, of course, is why Republicans as a party (along with those Dems who are also owned by insurance companies) oppose it so much.

[Dinner]

The tide of public opinion seems to be swinging in that direction. The final deathknell will probably come when it fails to pass before the recess.

That is the goal of those people who want to stop reform. Just delay, delay, delay... "We need to slow down and review this"; yeah, because having 17 years or so of studying the health care issue has just not been enough. Everyone knows what needs to be done but some politicians have been bribed off and just don't want it to happen so the public option needs to be passed now before the obstructionists kill it.

[Drake Tungsten]

The public option is the only way to keep insurance companies honest

and seriously contain health care costs.

[Dinner]

Funny how the public option massively contains costs in every country where it is allowed. The reality is publicly sponsored/funded/run (however you would like to put it) is EXTREMELY cost effective virtually every where it is tried simply because it has economies of scale which can batter down prices on just about everything. Plus it doesn't have to worry about costs such as marketing/advertising or a whole host of things private companies do. Call it the Walmart effect or economies of scale but the big guys can force prices down.

The funny thing is how Republicans are trying to play this both ways. In Congress they're claiming a public option would be such a strong competitor it would put all the private insurance companies out of business while in public they claim it would be horrible and would ruin health care. Yeah, tell that to the people in every other 1st world country who gets better health care then us for around 1/4 what we pay. It really does drive down costs.

[DinoDoc]

It really does drive down costs.

Post #177

[Drake Tungsten]

Oerdin's last post

[Dinner]

Ignoring the typically stupid Drake post...

Post #177

Right now the proposal is revenue neutral from a government standpoint but would put a lot of pressure on private insurers to keep costs down in order to compete. Of course, if they really want to get costs down then they'd need to do what no law maker has been willing to do yet; namely, take on big pharma. The current proposal cow tows to big pharma and says that the government cannot buy any generic drugs only buying high priced name brand drugs. Just one change right there would amount to huge savings but then politicians would have to stand up to the biggest lobby in Washington, big pharma.

[DinoDoc]

Right now the proposal is revenue neutral from a government standpoint but would put a lot of pressure on private insurers to keep costs down in order to compete.

Did you even read the post I referenced? I ask because the tone of this post doesn't seem to jive with the articles reporting of the CBO's assessment showing no cost savings for the Federal government under the Dem plans. Feel free to block out anything written by Drake in there if it would make it easier to process.

[Ramo]

EXCLUSIVE: Early CBO Score on Public Plan. It's Good!

A lot of conservative Democrats, not to mention Republicans, express two big concerns about health reform. They're worried that reform will cost too much. And they don't want a government-run insurance plan.

It's about to get a lot harder to make those two arguments simultaneously.

According to a pair of Capitol Hill sources, preliminary estimates from the Congressional Budget Office suggest that a strong public option--the kind that the House of Representatives is putting in its reform bill--should net somewhere in the neighborhood of $150 billion in savings over ten years.

The sources cautioned that these were only the preliminary estimates, based on previous discussions--that CBO had not yet issued final scoring on language in the actual bill. But the sources felt the final estimate would likely be close.

Exactly how the plan produces those savings is, obviously, a key question. The reason--well, a reason--centrists and conservatives don't like a public plan is that they fear it will use the government's bargaining leverage to force doctors, hospitals, and drugmakers to accept unfairly low reimbursements. Private insurance would go out of business, since they couldn't compete; meanwhile, providers and producers of medical care would struggle to stay afloat.

Advocates of a public plan (myself included) think those fears are overblown--and that there are ways to make sure a public plan doesn't have that effect. But if the CBO is scoring significant savings, then chances are the House version gives the public plan the kinds of power conservatives and centrists fear.

But, for now, the bigger story is the number. At a time when finding the $1 trillion it will take to finance coverage expansions remains the major challenge of reform, the discovery of $150 billion in potential savings is an important--and encouraging--piece of news.

Update: Ezra Klein with a very important caveat:

It's important to remember, though, that this really is preliminary. As I understand it, this is an expected score of the public option on its own. The final score will go up or down depending on the interactions between the public option and other elements of the final bill. If the Health Insurance Exchange is open to only the uninsured and small businesses, for instance, then fewer people will have access to the public option, and so there will be less savings. Conversely, if the exchange is large, and dominated by the public option, then CBO might decide to put all dollars spent in the exchange on the federal budget. That could increase the "cost" of health-care reform by trillions of dollars, making it look like the public insurance option is expensive, even as it's actually saving $150 billion. Thus does budgetary accounting rule our world.

Also, it's worth remembering this is actually less savings than some other, outside projections had shown--most likely because the House bill wouldn't let the public plan reimburse at the same rates as Medicare. (Most likely, it will be Medicare rates plus some fixed increment.)

http://blogs.tnr.com/tnr/blogs/the_treatment/archive/2009/07/10/exclusive-early-cbo-score-on-public-plan-it-s-good.aspx?cid=xrs_rss-nd

[Drake Tungsten]

You do know that the head of the CBO said the House healthcare reform won't save the government any money less than a week after that was posted, right? I don't understand why you'd post something that's been superseded by events...

[Ramo]

What has been superseded by recent events?

Please show me where the CBO says that a public option available to everyone (which the House is NOT) saves less than $150 billion/ten years. That number, BTW, is despite the handicap of paying service providers higher than Medicare rates (+10%, IIRC), i.e. not using the full leverage of the government.

[Drake Tungsten]

which the House is NOT

According to a pair of Capitol Hill sources, preliminary estimates from the Congressional Budget Office suggest that a strong public option--the kind that the House of Representatives is putting in its reform bill--should net somewhere in the neighborhood of $150 billion in savings over ten years.

It seems you're being deliberately obtuse again.

[Ramo]

Cohn mischaracterized the public plan (because the House plan wasn't fully released), as Klein's quote implies:

As I understand it, this is an expected score of the public option on its own. The final score will go up or down depending on the interactions between the public option and other elements of the final bill. If the Health Insurance Exchange is open to only the uninsured and small businesses, for instance, then fewer people will have access to the public option, and so there will be less savings.

Specifically:

BREAKING: House Bill Looks Good (So Far)

The three House committees writing health care legislation have just released the full text of their bill. And my immediate, admittedly tentative reaction is strongly positive. Once fully implemented, this reform plan will accomplish most of the goals on my mental checklist:

* Generous subisidies, available to people making up to 400 percent of the poverty line
* Expansion of Medicaid to cover people making less than 133 percent of the poverty line
* Guarantees of solid benefits for everybody, with limits on out-of-pocket spending
* Strong regulation of insurers, including requirements that insurers provide insurance to people with pre-existing conditions without higher rates
* An individual mandate, so that everybody (or what passes for everybody in these discussions) gets into the system and assumes some financial responsibility
* A public plan, one that appears to be strong, although I'll reserve judgment on that until I hear from the experts
* Choice of public and private plan, at first just for individuals and small businesses, but later for larger businesses and--possibly--eventually for everybody
* Efforts at payment reform, if not necessarily as strong as they could be
* Investment in primary care and prevention, which is not sexy but potentially important for general health .

The Congressional Budget Office score? Their initial estimates have it covering 94 percent of people living here and 97 percent of legal immigrants, for net outlays of just over $1 trillion over ten years. That figure includes the offsetting effect of the employer mandate, which--at a healthy 8 percent of payroll for larger companies that don't insure workers--would generate $30 billion a year by the end of the decade-long planning window. (Smaller businesses would be exempt.)

I've not yet seen assessments for the new revenue and offsetting savings; I believe everybody is still waiting on numbers from the Joint Committee on Taxation, which does official estimates for revenue. But my House sources say they expect that between savings and a new surtax on the wealthy, the bill pays for itself. In other words, it won't inflate the deficit.*
I do have one, not minor concern: It will be a while before people see the best stuff. Most of the major elements--the insurance exchange, the subsidies, the insurance regulations, the public plan--won't come online until 2013 or later. This is, I believe, also true of counterpart bills in the Senate.

There's a sound policy rationale for going slow; it takes a lot of work to set up exchanges, regulations, and the like. But four years is a long time. And I suspect money has a lot to do with the pace. Slower implementation makes it possible to keep the price tag to around $1 trillion.

On the bright side, some provisions--filling in the Medicare drug donut hole, bolsteirng the primary care workforce, among others--would start in the next two years.

And at least one key insurer regulation would kick in right away: Come 2010, insurers could no longer yank coverage from people retroactively because they've uncovered new evidence of pre-existing conditions. This practice, known as "rescission," is among the most patently unjust features of our health care system.

So, no, it's not perfect. I gave up on perfect quite a while ago. And I'm sure more flaws will emerge as we all have time to give this more scrutiny. (Expect more analysis, here and elsewhere, in the next day.) But within the existing political constraints, it's hard to do imagine a much better bill than this.

An implementation timeline, along with those initial CBO assessments, appear below.

*Update: A source just passed along the revenue estimates from the Joint Committee on Taxation. As expected, JCT projects that the reforms would raise $580 billion in new revenue over ten years, the vast majority from an income tax surcharge affecting wealthy Americans.

http://blogs.tnr.com/tnr/blogs/the_treatment/archive/2009/07/14/breaking-house-bill-good-wish-it-could-happen-quicker.aspx#comments

Just saw the most recent posting. I'm guessing your Hill staffer is on the Senate side, the House side takes care of this!

In the Tri-Committee draft proposal, after one year the exchange will be open to individuals with employer-sponsored insurance [ESI], but whose ESI is "unaffordable" (as determined by the regulations issued by the exchange). After four years the exchange will be open to all individuals who want to get their coverage there.

And even in the first years, once you're eligible for the exchange and buy coverage, you can maintain that coverage as long as you'd like even if you get another job that offers affordable ESI. So the scenario your other Hill staffer envisions wouldn't happen under the House plan!

http://voices.washingtonpost.com/ezra-klein/2009/06/more_thoughts_on_the_health_in.html

2020-2013-4 = 3
That's 30% of the period under which the plan is scored. Cost savings wouldn't necessarily scale linearly, but that's a large hole.

Like I keep reiterating, it helps to actually know what the hell you're talking about.

[Drake Tungsten]

The three House committees writing health care legislation have just released the full text of their bill. And my immediate, admittedly tentative reaction is strongly positive. Once fully implemented, this reform plan will accomplish most of the goals on my mental checklist:

A public plan, one that appears to be strong, although I'll reserve judgment on that until I hear from the experts

I fail to see the change you claim took place between the 10th and the 14th.

[Ramo]

The full text of the plan was released. Hence the "breaking" and the date 7/14. The big news that day was that implementation of major parts (including the public option) would be delayed longer than expected. I'll say it again to emphasize the point. The impact of the public option latest CBO score of the House bill doesn't include 30% of the next ten years - because the public option wouldn't exist. It is crippled in terms of access for another 40% of the period. And it's crippled in terms of cost to a tune of 5% (not 10%, as I said earlier) in perpetuity.