Post by unlawflcombatnt on Sept 18, 2009 3:24:07 GMT -6
The Baucus health care reform bill has now been kicked to the curb by almost everyone who's heard anything about it. And rightly so. I'm going to kick it a little more myself, and give some specifics for doing so.
In general, the Baucus bill has nothing to offer anyone, other than the health insurance industry. Unlike HR 3200, it lacks a public option. And, unlike HR 3200, it mandates that individuals purchase coverage (or pay a fine--to a maximum of $3,800/year). Thus it mandates an increased demand for insurance, while forbidding competition from a low-cost public option competitor. If ever a bill was written by special interest groups, this bill is it. Baucus's bill is absolutely guaranteed to raise the cost of health insurance, and increase health insurers' already exorbitant profits.
It also shares many of the flaws of HR 3200. It provides premium subsidies (credits) that are based on a % of the premium itself, instead of on income alone. The language on this is somewhat tortuous in both the Baucus bill and HR 3200 on this. In both, the credit is a fraction of the income in relation to the premium. In other words, if the premium is higher, so is the amount of subsidization. This relieves most of the downward price pressure that would otherwise apply, if the subsidy was based only on a fraction of the enrollee's income. (In the latter case--which is theoretical and not part of either plan--the enrollee would be encouraged to buy the cheapest plan, since his out-of-pocket premium expenses would be directly related to the amount of the premium. For example, the enrollee with a $4,000 credit would likely choose a plan who's total cost was only $5,000--instead of one that was $10,000--since his out of pocket expenses would only be $1,000 for the $5,000 plan.)
The CO-OP plan, which supposedly takes the place of the Public Option, was designed to be a failure. It was designed with the specific intent of being unable to compete with private health insurance companies. Though the Baucus bill calls for a $6 billion start-up loan (compared to HR 3200's public option start-up of $2 billion), there is nothing else in the bill to support CO-OPs. Everything else was designed to undercut them. For example, CO-OPs cannot be sponsored by any government agency--not local, regional, or state. In other words, no government agency can even help organize them.
A CO-OP must be completely privately operated and not affiliated with any type of insurance. Thus, it will have little access to anyone with experience in health care administration. This is like trying to pick a baseball team to compete against the Los Angeles Dodgers, but forbidding the use of any persons who've ever even played baseball before. This essentially guarantees that CO-OPs will be uncompetitive, and guarantees their failure.
Employers that already offer insurance must automatically enroll current employees in one of their plans. Employees can opt out, but only if they can prove they have some other type of health insurance. From the language, it appears employers are not required to offer health insurance, if they don't already do so. (p. 31)
However, there are at least some good points, small though they may be. The bill requires that insurance plans offer an outline of coverage that is no more than 4 pages long, in 12-point print. That outline is also to contain prices, co-pays, deductibles, exemptions, etc. And it is also supposed to give amounts in dollars and cents.
The bill also increases the rebates drug companies give to states that provide drug coverage in state Medicaid programs. However, the Baucus plan also mandates prescription drug coverage for state Medicaid plans--a convenient demand-increasing handout to Big Pharma.
The bill does provide some interesting insight into current law, since it compares "current law" with the new proposals--referred to as the "Chairman's Mark." So in that respect, at least, it is worth reading if you have time.
Overall the bill will raise costs by mandating coverage and not having a competitive public option to put downward pressure on prices. Though it does reduce the prices paid for drugs in some areas, that will be more than offset by the increased demand from mandating both health insurance and drug coverage by all Medicaid plans.
The Baucus bill should be titled the "Health Insurance and Big Pharma Profit Enhancement Bill."
In general, the Baucus bill has nothing to offer anyone, other than the health insurance industry. Unlike HR 3200, it lacks a public option. And, unlike HR 3200, it mandates that individuals purchase coverage (or pay a fine--to a maximum of $3,800/year). Thus it mandates an increased demand for insurance, while forbidding competition from a low-cost public option competitor. If ever a bill was written by special interest groups, this bill is it. Baucus's bill is absolutely guaranteed to raise the cost of health insurance, and increase health insurers' already exorbitant profits.
It also shares many of the flaws of HR 3200. It provides premium subsidies (credits) that are based on a % of the premium itself, instead of on income alone. The language on this is somewhat tortuous in both the Baucus bill and HR 3200 on this. In both, the credit is a fraction of the income in relation to the premium. In other words, if the premium is higher, so is the amount of subsidization. This relieves most of the downward price pressure that would otherwise apply, if the subsidy was based only on a fraction of the enrollee's income. (In the latter case--which is theoretical and not part of either plan--the enrollee would be encouraged to buy the cheapest plan, since his out-of-pocket premium expenses would be directly related to the amount of the premium. For example, the enrollee with a $4,000 credit would likely choose a plan who's total cost was only $5,000--instead of one that was $10,000--since his out of pocket expenses would only be $1,000 for the $5,000 plan.)
The CO-OP plan, which supposedly takes the place of the Public Option, was designed to be a failure. It was designed with the specific intent of being unable to compete with private health insurance companies. Though the Baucus bill calls for a $6 billion start-up loan (compared to HR 3200's public option start-up of $2 billion), there is nothing else in the bill to support CO-OPs. Everything else was designed to undercut them. For example, CO-OPs cannot be sponsored by any government agency--not local, regional, or state. In other words, no government agency can even help organize them.
A CO-OP must be completely privately operated and not affiliated with any type of insurance. Thus, it will have little access to anyone with experience in health care administration. This is like trying to pick a baseball team to compete against the Los Angeles Dodgers, but forbidding the use of any persons who've ever even played baseball before. This essentially guarantees that CO-OPs will be uncompetitive, and guarantees their failure.
Employers that already offer insurance must automatically enroll current employees in one of their plans. Employees can opt out, but only if they can prove they have some other type of health insurance. From the language, it appears employers are not required to offer health insurance, if they don't already do so. (p. 31)
However, there are at least some good points, small though they may be. The bill requires that insurance plans offer an outline of coverage that is no more than 4 pages long, in 12-point print. That outline is also to contain prices, co-pays, deductibles, exemptions, etc. And it is also supposed to give amounts in dollars and cents.
The bill also increases the rebates drug companies give to states that provide drug coverage in state Medicaid programs. However, the Baucus plan also mandates prescription drug coverage for state Medicaid plans--a convenient demand-increasing handout to Big Pharma.
The bill does provide some interesting insight into current law, since it compares "current law" with the new proposals--referred to as the "Chairman's Mark." So in that respect, at least, it is worth reading if you have time.
Overall the bill will raise costs by mandating coverage and not having a competitive public option to put downward pressure on prices. Though it does reduce the prices paid for drugs in some areas, that will be more than offset by the increased demand from mandating both health insurance and drug coverage by all Medicaid plans.
The Baucus bill should be titled the "Health Insurance and Big Pharma Profit Enhancement Bill."