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The Idea That Could Save Health-Care Reform

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I don't want to overstate my case. I am not suggesting that Sen. Ron Wyden's Free Choice Act is the difference between a health-care reform bill passing the Senate and dying in committee. But I am arguing that it might be the difference between a bill that delivers on its promise of reforming the health-care system and a bill that merely expands health insurance coverage.

There are two major problems with the proposals being considered in Congress. The first is that they do not do enough to cut costs, because they do not do enough to change the fundamental nature of the employer-based health-care system. Earlier this morning, Congressional Budget Office Director Doug Elmendorf told the Senate Finance Committee that health-care reform will not save us money. If the problem is that our health-care system is too expensive, and reform does not change the structure of our health-care system, then it is unlikely to mitigate the expense. The flip side of trying to avoid changing what people have is that you don't change what's not working.

The second is that the bill does not offer obvious benefits to an insured worker. You can argue that it changes the system around them: There are subsidies if they lose their job and regulations to protect them from the excesses of private insurers. But though the health-care system might be different, it will not, for most people, feel different. And that has made it hard to explain to people why this is something they should pay for. You can tell the insured worker what he gets if his circumstances change. You cannot tell him what he gets if his circumstances do not change.

Enter Wyden. The Free Choice Act is not a health-care-reform bill. It is best understood as a reform of the health-care-reform bill. In particular, it reforms the nature of the Health Insurance Exchange. Under the bills being considered right now, the exchange will be limited to the uninsured, the self-employed and small businesses. Maybe it will be expanded over time. Maybe not. In addition, it is barricaded by what's called a "firewall." The firewall essentially bars individuals from entering the exchange so long as their employers offer them a basic level of health-care coverage.

The Free Choice Act starts by setting the rules for the exchange: Within five years the exchange is open to all employers. More importantly, it's open to all people. The firewall is extinguished. But as the late, great, Billy Mays would say, that's not all!

The key component of the Free Choice Act is called "cash-out." Under the Free Choice Act, if I decide that I don't like any of the health-care coverage options being offered by my employer and would prefer to choose from the many options being offered on the Health Insurance Exchange, my employer has to give me a voucher that covers 65 to 70 percent of the cost of the lowest level of exchange plan. (That is the average portion that an employer pays of his employee's health insurance premiums.) I can take that voucher and, along with whatever money I want to throw in, choose a plan on the exchange.

This does a couple of things. First, it changes the health-care system for the currently insured. It doesn't take what they have. But it gives them a choice. If the political yin of health-care reform is that you can keep what you have if you like it, the policy yang should be that you can choose something different if you don't. The Free Choice Act gives the insured something concrete: autonomy. If they don't like what they have, they are assured options. In 1994, Bill Clinton's plan was defeated because people believed it would restrict choice. Given the apparent power of the objection, it makes some sense to try to sell health-care reform atop the concrete promise that it will increase choice.

Second, it gives people an incentive to choose cost-effective plans. If your employer is paying 70 percent of your $10,000 health insurance premium, and you find a $9,000 plan on the Exchange -- maybe it's an HMO rather than a PPO -- you pocket $1,000. Currently, since I pay only 30 percent of my health-care premiums, making the same choice within the HMO and PPO offerings that The Washington Post gives me would only net me $333 dollars. Wyden's plan would put 300 percent as much money in my pocket. That changes behavior. And even the CBO thinks so. This is one of the main reasons the Congressional Budget Office scored Wyden's Healthy Americans Act -- which had a similar provision -- as saving, rather than costing, money.

Third, it begins to build a viable alternative to the employer-based health-care system. Experts think that the exchange will need at least 20 million participants to really start seeing advantages of scale. This will ensure it has much more than that. And if the exchange works? If direct competition between insurers lowers costs and increases quality, if standardized billing and administrative efficiencies save money, if the massive pool of customers helps insurers bargain for discounts with providers, then the exchange will become a progressively better deal, and more people will choose -- there's that word again -- to enter it. And if more people choose to enter it, then that cycle happens again, more people enter, and so forth. Soon, you've built the system we want rather than the one we have.

That is not to say there are no problems with this idea. The primary one is adverse selection: What's to stop all of a company's young employees from buying their way out and leaving their employer with bad health risks and high premiums? According to Wyden's office, risk adjustment. And they say they'll risk adjust back to the employer level, potentially. It's hard for me to imagine how that would work. But it's also hard for me to imagine a flood of young people who don't care much about having good health insurance going through the process of contacting HR, attaining the voucher, going to the exchange, comparing plans, and so forth.

And the potential upside of this idea is huge: It gives the currently insured a bevy of new choices, creates real incentives for cost control, and begins the hard, and necessary, work of building a better health-care system. Wyden's Free Choice Act will not decide whether a bill called "health-care reform" passes the United States Congress. But it might decide whether that bill actually is health-care reform.

For more: Read Jon Cohn's write-up of the Free Choice Act, or my interview with Ron Wyden.

Photo by Dennis Brack/Bloomberg News

By Ezra Klein  |  July 16, 2009; 6:06 PM ET
Categories:  Health Reform  
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Comments

> And they say they'll risk adjust back to the employer level, potentially.

If they can swing that, I will be mightily impressed. And pretty much sold on the merits. On adverse selection, it occurs to me that you might actually have some countervailing pressure -- you do hear of folks whose employer-based plans are not sufficiently comprehensive because they've got a chronic disease or something along those lines, and they might opt out of their employer's offering in order to pay *more* on the exchange. I doubt many would do this, but since those are the highest-cost individuals, it might make some difference.

The bigger problem is the simple political one: CBO will score this as causing X million Americans to "lose" their private employer-based coverage and move the Exchange. And just as we saw with previous go-rounds, that'll be demagogued, I fear rather effectively.

Posted by: Mike_Russo | July 16, 2009 6:22 PM | Report abuse

Why isn't something like this in there from the beginning? Who is resisting this? Someone must be against this.

Posted by: SteveCA1 | July 16, 2009 6:23 PM | Report abuse

I'm doubtful that an exchange will really do anything to control cost. Looking at Jacob Hacker's study the FEHBP has the same growth rate as the rest of the private insurance market.

My understand is the Wyden bill only really bends the cost curve for the federal government. It taxes benefits than give credits, but they do not increase at a rate tied to health insuranc prices.

Without a strong public plan I don't see it saving the system big money.

The big problem is insurers are also network creaters. That inherently produces a small ball effect of more costumers, better deal, more costumers, better deal until you are left with near monolopies.

Posted by: JonWa | July 16, 2009 6:25 PM | Report abuse

I'm doubtful that an exchange will really do anything to control cost. Looking at Jacob Hacker's study the FEHBP has the same growth rate as the rest of the private insurance market.

My understand is the Wyden bill only really bends the cost curve for the federal government. It taxes benefits than give credits, but they do not increase at a rate tied to health insurance prices.

Without a strong public plan I don't see it saving the system big money.

The big problem is insurers are also network negotiators. That inherently produces a snow ball effect of more costumers, better deal, more costumers, better deal until you are left with near monopoly. That is why in low population areas there is market domination with one or two companies. Techincally have an exchange will not fix that.

You need a strong public plan or rules not allowing insurers to privately negotiate their own prices with doctors/hospitals to make Wyden's plan reduce cost.

sorry about double post

Posted by: JonWa | July 16, 2009 6:27 PM | Report abuse

Wyden's suggestions regarding the Exchange, as you've described them, sound like good, probably excellent ones.

Unfortunately, they depend on the winds blowing in the direction of saving money and providing real choice. The trade winds currently are however blowing in the opposite direction (thanks, Blue Dog Dems, for your resolve to do nothing. And, of course, the GOP just say no crowd.)

I'd say now that real health care reform was at the stage where the Clinton plan was when the GOP trotted out the org chart, the kitchen convo ads between man and wife were starting to gain traction, and Bob Dole introduced a plan for the GOP that he wouldn't vote for). Danger ahead!

I'm convinced now that Baucus and the Blue Dogs just want a law with health care in the title, regardless of whether it does anything to broaden care, control costs, and office choice. It is sausage make out of sows ears, tails, and other icky parts - that as the old adage says you don't want to see being made. Reid swinging like a pendulum on a clock in an earthquake; Baucus sticking to the script that his contributors in the health conglomerate wrote for him; Blue Dogs in both houses whose knees are hitting each other so loudly that you are sure that they will fill their Pampers in five minutes; lobbyists swarming like fire ants or Africanized bees; and the media either lying or finding any nits to pick and blow into a plague.

And, then at the 10th hour, the AMA finally deciding that they didn't want Obama as an enemy so long as he holds the purse strings on Medicare, Medicaid, and the VA.

My verdict: it will truly be a miracle if a law finally passes both houses that isn't an embarassment that does almost nothing about the core problems. It may not even get that far, and if that's all we are going to get, let's progressively vote no and leave the problem until the government has to default on debts and people are chasing health insurance execs down the street with pitchforks (and setting IED's in their parking lots).

Posted by: JimPortlandOR | July 16, 2009 6:40 PM | Report abuse

Gotta tell ya, Ezra. You're arguing so many different angles here on health care reform over the past three months (and I read you every day, man) that it's getting to be so much about so little. I know you're kind of hyperactive intellectually. That's cool. But something's going to get crammed through in the next few weeks. In the fall it'll be settled in reconciliation. I trust that you've considered and reconsidered all of the stupid options that aren't the good solution we could have with single payer. So, focus and and try to stay focused. What outcome of the current melee is going to get us to single payer within the next few years. We all know that anything less than that will continue to make us less healthy. Focus, man, focus.

Posted by: NealB1 | July 16, 2009 6:59 PM | Report abuse

So, is Wyden planning on introducing this into the legislation the Finance Committee is debating or is he planning on this being a separate bill?

Posted by: paulrichardson82 | July 16, 2009 7:06 PM | Report abuse

As I wrote a couple of days ago, this is a great idea. Some other parts of Wyden-Bennett would be nice also, but this would be better than nothing.

The key here is that it offers a real value to all Americans. Better choice than what's provided by employers, and the potential for seamless portability. Hopefully Obama won't be too cautious on this one.

Posted by: wisewon | July 16, 2009 7:11 PM | Report abuse

Just read more info about this plan on Wikipedia...as a conservative, I have to say that I like it. It skips the public option, which has, as of today, scored as a real loser for the economy when it comes to cutting costs, as Obama had promised.

The real way to cut costs is to get people invested in their own health care. If people have to put up some of the money, potentially, they will take greater care with their health care decisions. These Cadillac insurance plans, by their very nature, encourage people to go to the doctor for every little ache and pain. That is a huge cost to the overall structure of healthcare. I'd love to see the Cadillac plans taxed generously, but that won't open happen...Obama is resistant to the idea - he says it's because it'd break a campaign pledge, but the underlying reason is that union members are the ones with the Cadillac plans.

Did I just say that? Yes, another instance where unions are bankrupting this country.

Posted by: boosterprez | July 16, 2009 8:03 PM | Report abuse

It will be a surprise if Exchanges modeled on Wyden plan would not shake the ground fundamentally. So those we argue that it would not make much change are wrong and refuse to see what is logical here.

However, the whole Health Care Debate is so depressing within our Congress; it clearly exposes one of the ugliest aspects of American Political Culture. So JimPortlandOR seems right here - there is no way in the world Congress would have any courage to think something as serious as like what Wyden is suggesting. On top of it, President is beating the drum to 'wrap' this legislation fast. So it will be another Stimulus Bill - hardly solving the core problem (of unemployment) but in the process Congress would have irresponsibly spend trillions and would have abducted it's duty.

True, such legislations need to be fast otherwise lobbyists kill those (they know the 'life cycles' of Congressional bills best!). So one really wishes Wyden proposal was there from the start. Fear is it is late in the game and Congress is not known for the nimbleness even though superior ideas like Wyden proposal come on the table.

So frustrating to see so many good and right policies may not make in the final bill.

Posted by: umesh409 | July 16, 2009 8:12 PM | Report abuse

> It skips the public option, which has, as of today, scored as a real loser for
>the economy when it comes to cutting costs, as Obama had promised.

The Lewin Group models the public plan as saving between $800 billion and $1.8 trillion over the next decade; it decreases federal spending by between $130 and $250 billion (the range is due to the different ways of structuring the plan).

Like it or not, cutting the public health insurance option is one of the best ways to drive up the cost of the program and increse the federal deficit.

Posted by: Mike_Russo | July 16, 2009 8:57 PM | Report abuse

For the life of me I can't see why choice of insurance is desirable. Choice of physician, that I can see, but we already have that in Medicare and we do not have that in any of the private insurance choices Wyden would give us.

Why would anyone want a choice of insurance if everyone had a good plan? You could add to your good plan, but if everyone at least had the good plan, we would have a giant _effective_ insurance pool.

Furthermore how does Wyden's bill raise medical loss ratios, reduce paperwork, make private isurance companies more responsive, lower drug cost? All these would be accomplished by HR676.

Also how does Wyden's bill improve medical practice? Get physicians to join together a la Mayo, eliminate fee for service, .....

It appears to me that it will give one a lot of choices--all of them bad.

Posted by: lensch | July 16, 2009 10:06 PM | Report abuse

The only reason I can find for supporting Wyden's bill is that he expands the exchange and at this point, that would be a huge win for reform efforts. Right now that firewall is killing the efficacy of the public plan option. Since I don't see the public plan leaving the table, I'd like to see Wyden get enough traction to break up the firewall. Unfortunately, I think the firewall is the sine qua non of "reform" for the powers that be. It's what keeps the money in the insurance industry's pockets. It's a clever trick (like the trigger embedded in the House bill) and really quite a shame.

Posted by: eRobin1 | July 16, 2009 10:24 PM | Report abuse

I do have healthcare, but understand that finding and affording coverage can be a nightmare for many Americans. I do believe that there needs to be a change to the U.S. healthcare system. I support a public plan as long as it is done effectively. I think the best way to fund a public plan is through a combination of a fair or flat tax combined with government provided workers compensation insurance. Here is why. If workers comp automatically covered all workers, OSHA would know which employers to watch out for because complaints would be centralized. Additionally, if there was a fair or flat tax which replaced income tax, there would be ample funding and massive growth of small business. This would decrease unemployment. Also workers could feel free to move from job to job if it was combined with non-workplace based healthcare. This would increase enterprise. The major concern of any small business is the added cost of paperwork, workers comp and taxes. Take these concerns away, and the flood gates of employment would open up. Finally, I have had a great deal of experience with U.S. doctors. My experience has taught me that physicians are, for the most part, lackluster. If healthcare, and wages were standardized, perhaps doctors could go into the field with compassion not greed. Irregardless, the best doctors could operate outside of the system on a cash basis. This would bring down healthcare costs, keep our system in check, give incentive small business, allow for more exceptional and compassionate physicians and allow all American Citizens the opportunity to have healthcare.

Posted by: smithherman | July 16, 2009 10:29 PM | Report abuse

The health care reform battle will be won by a plan that provides the self employed with a business deduction for health insurance premiums. Self employed individuals are not currently allowed to include the cost of their healthcare premiums as a business expense. Corporations and bigger businesses can deduct the cost because it is considered group health insurance. The consequence of denying the self employed the business deduction on their business return is that the self employed have to pay self employment tax (over 15%) before they are allowed to take a deduction for health care premiums on their personal tax return. As a self employed individual I pay nearly $1,100 per month to cover myself in an HMO. I pay self employment taxes on that money before I pay the premium. My total monthly health care cost, which includes the monthly premium plus the self employment tax, will go down by an amount equal to the self employment tax if my health insurance premium is treated as a business expense. Any health reform plan that levels the playing field for the self employed by treating their health insurance premiums as a business deduction will be supported wholeheartedly by the self employed. Republicans and Blue Dog Democrats who oppose that reform will be driven out of office by the very same self employed voters that they claim to represent.

Posted by: binckeslaw | July 16, 2009 10:42 PM | Report abuse

A health care bill is likely to be enacted and signed by president Obama this year. The question is whether it will represent real reform, as House Democratic leaders seek, or only an incremental improvement, perhaps with new financial burdens on many in the middle class, as conservatives in the Senate prefer.

The main objective in a health care reform bill should be universal health care coverage, not being obsessive about controlling costs, especially financing expanded coverage on the backs of middle class, elderly and poor people in this country, as will happen if there is a mandate with inadequate subsidies, as well as significant reductions in Medicare spending.

Health care costs are going to inevitably increase, the question is by how much, in the future, probably higher than the official inflation rate. No one, to my knowledge, has suggested reducing military spending to help finance universal health care coverage. The Reagan and Bush II administrations vastly increased military spending, along with tax cuts disproportionately benefitting the rich, the two main causes of huge budget deficits.

This country spends as much on the military as the next twenty or so nations combined. This is unnecessary. Military spending could be reduced 10-20%, without compromising legitimate national security.

Conservatives in both parties speak of a trillion dollars for a health care bill. This is only one hundred billion a year in a federal budget of about three trillion.

Posted by: Aprogressiveindependent | July 16, 2009 10:58 PM | Report abuse

Since the president wants to socialize medicine as a power grab, we should certainly make sure that the new plan is not a shill game. It appears that is the case, I don't care how much money it takes, since it doesn't address the underlying reason for increasing costs, then it will continue to cost more either in money or lives. This is the problem, and he isn't even proposing a solution. Contact your Congress person and Senators. Just Google "my us senator" and "my us congressman". Good luck to us all!

Posted by: snavazio | July 16, 2009 11:23 PM | Report abuse

The only solution to reform healthcare is to eliminate all layers of insurance-they do not deliver healthcare. Doctors and hospitals and other providers do. Pay them a livable, reasonable wage for their services. Take all the coding, computerized accounting and other nonmedical tasks and eliminate them. Drug companies get money for drugs only when they actually do what they are supposed to do. If they make you sicker, the drug company has to pay for all subsequent healthcare. In short, make everyone responsible for making/keeping us all healthy. If you want free-enterprise, go into the car-making business, not healthcare. If congress is filled with people like us instead of millionaires with silver spoons up their botts, maybe this country would actually get back its soul.

Posted by: cmaexecutive | July 17, 2009 12:02 AM | Report abuse

The real cost-cutting won't come until we face the fact that Americans in total get far more health care than they need (see Kilo and Larson's article in the July 1, 2009, Journal of the American Medical Association on how we're getting many tests and treatments that are harmful). Fee-for-service medicine leads to this overuse, as doctors are compensated better for doing tests and treatments than they are for diagnosis, preventive care, and patient management (if you have diabetes and congestive heart failure, you're not a good source of dollars). Managers in many healthcare organizations are pushing doctors to do more to bring in revenue--even if it means poorer health care. Conflict of interest? Yes.

Medicare doesn't help, with its hyper-documentation requirements that turn doctors into part-time clerks.

The health care system needs to focus more on outcomes (are our citizens healthier?)and less on inputs (do we require expensive screenings that would save only one patient per 100 thousand and may harm more? Can we really afford that?).

Other industrialized countries have better outcomes for less money. Obviously, we can do better--but not on the road we're on.

Posted by: ahouchen | July 17, 2009 12:14 AM | Report abuse

Based on the statement "my employer has to give me a voucher that covers 65 to 70 percent of the cost of the lowest level of exchange plan," you misinterpreted the cash out option:

"it gives people an incentive to choose cost-effective plans. If your employer is paying 70 percent of your $10,000 health insurance premium, and you find a $9,000 plan on the Exchange -- maybe it's an HMO rather than a PPO -- you pocket $1,000. Currently, since I pay only 30 percent of my health-care premiums, making the same choice within the HMO and PPO offerings that The Washington Post gives me would only net me $333 dollars. Wyden's plan would put 300 percent as much money in my pocket."

Based on the first statement, if the lowest priced plan in the exchange is $2,000 per year, and the highest is $10,000, if you choose to upgrade to the $10,000 plan from your $2,000 plan, your employer will pay 65-70% of the $2,000. You will wind up paying $8,400.

It would not work that if you had a $10,000 plan and went down to a $9,000, you would get $1,000 in your pocket. What would happen is again, the lowest exchange plan is $2,000. Let's say you get 70%, or $1,400. Your $9,000 plan now costs you $7,600 out of pocket. Again, this is based on the first comment submitted. Either the comment is inaccurate in what is stated or the Congressman that wrote the bill is a dolt.

Adverse selection is one of the main reasons you need a Universal health care system (i.e., single payer). Let's think about it - Medicare and Medicaid take what two risk groups out of the private industry risk pool? In so doing, we are subsidizing private health insurers, and paying abnormally high rates for Medicare and Medicaid by not having any of the low risk groups in the risk pool.

Finally, EVERYONE seems to ignore that healthcare costs in 2007 equaled ALL IRS tax revenues in 2008! Sources: National Coalition on Health Care and Tax Policy Center by Urban Institute and the Brookings Institution. Do you think a single payer system will cost less than 100% of what you pay in Federal Taxes? I do!!! Remember, we already pay for the two highest risk groups with Medicare and Medicaid!!!

Posted by: Illuminating | July 17, 2009 12:43 AM | Report abuse

I think that Congress and everyone else need to take a step back, take time to review this thousand-page document and forget the deadline. They also need to give the American people time to review this bill. It seems as if Congress is trying to hide something in the bill and don't want people to take it apart and discuss the items listed. What is the rush? How do illegals in this country fit in this bill? They do run up the cost of health care. What about the shortage of family physicians? What about the reduced payments to doctors? The average debt of a medical student is $150,000. When they finish medical school they will make somewhere between $40,000 to $46,000 a year and can no longer defer loans until they complete their residency. Does Congress think the reduction is pay is going to encourage young people to go into medicine? Why is it that Congress can give billions to companies that make poor decisions and companies that everyone else knew would go into bankruptcy and cannot defer loans of doctors until they complete their residency? What is it that they have against doctors? Maybe it is because most of our lawmakers are lawyers and they get to sue?????? I have not seen anything that the government has fixed yet!!!

Posted by: Philco1 | July 17, 2009 12:55 AM | Report abuse

"If your employer is paying 70 percent of your $10,000 health insurance premium, and you find a $9,000 plan on the Exchange -- maybe it's an HMO rather than a PPO -- you pocket $1,000. Currently, since I pay only 30 percent of my health-care premiums, making the same choice within the HMO and PPO offerings that The Washington Post gives me would only net me $333 dollars."

This is not correct. If your employer pays 70% of a 10,000 premium, you are paying $3,000. If you find a policy on the exchange for $9,000 and you get a voucher from your employer for 70% ($6,300), you are still paying $2,700. So you are only saving $300, not $1,000.

Posted by: BrAdams | July 17, 2009 1:03 AM | Report abuse

The article is long but does not tell anythong new, at list on principles about the needed Health Care reform. The same goes for the proposed Bill.
What is needed is opening of the Health Care IRON CURTON and mandate FREE CHOICE of doctors and hospitals across the HMO's lines.

The HIPAA guarantees access to ones medical records and mandates implementation of privacy safe handling of those records.
After reviewing his/her own Madical Record, patient can see who did what for him; who saved his life so to speak. Wright?
Then he/she can make selection of doctors and hospitals for the futer needs. This brings us to the free market even playing field.
What is missing now is the free choice of the provider, not the HMO, as indicated in the proposed Bill.
The cost of health care services is high for many reasons. In part due to the not colledted charges for services that need to be discounted to banks and collection companies. It appears that more than 40% of the charges never get paid to the healt care providers. That is "the cut" usualy collected by the affiliates of the 3 credit reporting companies, who appear to be the real mob, they in fact controle our lives. On top of everiting wil any reader (or the journalist) help me understand how are they licensed and regulated? And yet the banks nad mortgage companies prefer the credit report over the equity of the property when calculating the risks.
Same goes for the health care. HMO's appear to be the Health Care's credit reporting company, the main collector who deals with the above collector's scheme.
Out of more than one thousand patients ( mostly cardiac surgery cases) from two of the top 100 Hospitals in the nation were given digital copy of their own medical records in a format readable by any browser, even by good cell phone.
None of these patients complained about the care they received or the doctors...
Instead they all glorified the caregivers and the Hospitals. What was common for these patients? They all made the choice of the cardiac surgeon or the hispital!
As the inventor, designer, developer and implementer of this computer based program and database described above, I propose to pass legislation to guarantee open HMO lines, guarantee payment across the HMO lines for the free selected provider, give everione FREE copy of their record (as described above).
The States do the licensing of medical providers and then HMO's, Hospitals etc do another "credentialing". This should change. Introducing primary care one year residency programs for physicians and guaranteed payments for their services across the USA (like Madicare for all) should bring improvment in the prevention area.
In addition to the above some systemic changes in the Health Care system are needed in the area of licensing (National provider's license).
I could elaborate even more...

Posted by: DrSteveBN | July 17, 2009 1:49 AM | Report abuse

I thought that individuals don't have the same buying power as large groups, so how do individuals have buying leverage in an exchange?

Posted by: ryan_heart | July 17, 2009 2:15 AM | Report abuse

I made a mistake in my earlier comment but the math still doesn't work. My mistake was that the voucher isn't 70% of the chosen plan, it is 70% of the cheapest exchange plan ("employer has to give me a voucher that covers 65 to 70 percent of the cost of the lowest level of exchange plan.")

So now let's do the math. In Ezra's example, switching to the exchange would save $1,000 in out of pocket expenses. Previously he was paying $3,000 (30% of a $10,000 premium). That means to save $1,000 his new out of pocket premium payment has to be exactly $2,000. Since the total premium for the exchange plan is $9,000, the employer voucher has to cover the remaining $7,000. The voucher represents 70% of the cheapest exchange plan and $7,000 is 70% of $10,000. But the cheapest exchange plan is obviously less than $10,000, in fact it's $9,000 or less.

Posted by: BrAdams | July 17, 2009 3:56 AM | Report abuse

Wyden is offering what? More insurance company and drug company flim flam. Public health insurance is the only thing which will lower costs by competition. Break their stranglehold or nothing will change.

Posted by: seemstome | July 17, 2009 4:48 AM | Report abuse

Don't worry the Senate Finance Committee with Sen. Baucas and Sen. Conrad will produce a bill the CBO will say reduces the cost growth of health care over the very long term, reforms the individual insurance market and covers all the uninsured with no taxes on the wealthy Senators !!!

We all await their wisdom ....

and wait ...
and wait ...
and wait ...

Posted by: cautious | July 17, 2009 4:56 AM | Report abuse

The one idea I don't see anyone addressing here is the fundamental reason for the high cost of health-care.
Many think it is the physicians and hospticals, but in reality, it's not.

Think back to when healthcare costs were half of what they are now, and think back to what was going on then, and you will arrive at a part of an answer: Insurance companies were initiating HMO and PPO plans, pooling the risk to make a profit.
What everyone failed to realize (except the insurance industry), is that while there were economies of scale by pooling risk, the economies of scale evaporate when everyone joins simply because there is a true basic cost to health-care that can't be removed (or negotiated) by pooling risk. So the industry got everyone to join, and then the medical profession had to raise the rates for everyone in order to just break even.

Effectively, they (the insurance industry) used the HMO's and PPO's to get their 'foot in the door', and then got everyone on board with the promise of lower fees by pooled risk. However, all they really accomplished was a means to extract profits from the insured while providing virtually no benefit!
The result is that we pay the same deductibles and co-pays we did without the HMO and PPO plans, and yet have higher premiums merely for the privilege of having these insurance companies 'service' our health-care plans. It's insanity people!
It's likely that a full third of the cost of health-care goes into servicing these plans with no real health-care benefit.

What we really need is a basic health insurance plan that is pure insurance (akin to term insurance, as compared to Whole Life insurance). It won't cover all the bells and whistles, but will provide basic coverage. Insurance companies should be mandated to provide this coverage at non-profit rates, and be required to make their profits from selling 'riders' to people who have higher risk because of their personal choices or lifestyle. This would reduce the cost of health-care across the board, and still provide incentives for high-quality health-care choices (doctors and hospitals).

In addition, the costs for health-care would be tied to the true risk of the individual, rather than to the pool. This would also free up health-care dollars to help cover those presently uninsured.

Once this fundamental question is addressed, then and only then does it make sense to implement legislation for comprehensive health coverage(whatever form that may be). Until that happens, the fundamental problems remain, and healthcare stays on its precipitous course towards dissaster.

Posted by: JJOhio | July 17, 2009 5:42 AM | Report abuse

Dear Ezra,

I like your stuff and this article. But is this phrase accurate: "my employer has to give me a voucher that covers 65 to 70 percent of the cost of the lowest level of exchange plan"? (It's the cost of the exchange plan, not my own?) If so, I don't see how anyone is incentivized to switch. Won't the *employer,* not me, save money under the new plan? What am I missing?

Thanks

Posted by: woodside1 | July 17, 2009 6:51 AM | Report abuse

Ezra Wrote:

But it's also hard for me to imagine a flood of young people who don't care much about having good health insurance going through the process of contacting HR, attaining the voucher, going to the exchange, comparing plans, and so forth.

Seriously? You do realize that young people now and for the last 5 years or so have dropped coverage dramatically to forgo all coverage because they think they're better off spending their money on other things. Its that fundamental belief in the 22-35 year olds of today that is one of the severe roots of the problem.

That is one reason an individual mandate is absolutely necessary.

Posted by: visionbrkr | July 17, 2009 8:09 AM | Report abuse

I understand the healthcare plan approved by the Senate Health Committee prohibits private health plans. And if it does not, it will edge out private health plans. Does having the government in charge of your health care scare you? Recently the state of Oregon told a man the state would not pay for his chemotherapy but would pay for his assisted suicide.

We know that Barack Obama favored suicide for unborn and recently born humans. Why not older humans? We know that the Obama administration has already warned that rationing would be an essential component of government health care. We know that Obama has already scaled down Medicare coverage – for example, Medicare no longer covers invetro colonoscopy. More people will die from colon cancer to save money.

The Democrats have fessed-up that old age, mental illness, and terminal illness will be criteria programmed into the software and Washington guidelines use to decide who lives and who dies. The government will soon decide how long people live and how well one must be to continue living. Isn’t that the ultimate tyranny?

But, also, recall that Joseph Stalin’s healthcare plan was similar to Barack Obama’s. In the Soviet Union government control of health was used to advantage by the Politburo. Does anyone believe for a moment that the emerging dictatorship of Barack Obama or some other future despot would not reserve special treatment for government critics and political enemies? That Obama has sent more money to states that voted him into office suggests that impartiality regarding political enemies is not part of his plan.

Posted by: rodhug | July 17, 2009 8:48 AM | Report abuse

Way back, after the Clintons' health reform had failed to pass, I read an article in the monthly publication of the American Academy of Actuaries describing the efforts of a task force of health actuaries to devise a method of risk adjustment. There wasn't such a method in existence at the time. As I remember it, the group was greatly relieved when the bill failed. Mind you, the idea of risk adjustment had been tossed around before in different plans for reform. I'd be interested to know if the actuaries ever solved the problem. Apparently, it's not as simple as it sounds.

Posted by: abycats | July 17, 2009 8:52 AM | Report abuse

Healthcare Cost have two components
Price "P"
Quantity "Q"

If you reduce price then you are paying physicians or hospitals less to do the same thing.

Reducing the quantity of test, days, visits, drugs, can reduce cost.

How do you reduce Q with the same or better outcomes? That is the very nature of reform. Changing who pays what and when does little to effect the Q. What does?
1. Tort Reform
2. EHR
3. Clinical Pathways
4. Medical Education that is delivered by physicians that are not spending 1/2 their time on research

Reform is reform, spending more is just spending more

Posted by: texastaxpayer | July 17, 2009 9:00 AM | Report abuse

Now we're seeing everyone from the President down to the Chamber of Commerce calling on the American citizens to cut healthcare spending. Easy to say. And again, we suffer. Frankly, I'm getting tired of hearing this "unnecessary" procedure rhetoric. When, Mr. Obama, are we going to address the issues of what is making us sick? IOW, *the cause*. I can assure you the cause is not sugar sweetened soda (by the way, have your crackerjack Congress Google "Splenda Toxicity" or any of the other artificial sweeteners your FDA has permitted to be added to our foods, which they seem to think is healthier than sugar. And educate them on the fact that people who drink diet sodas actually weigh more than those that don't - been plenty of studies out on it. Me - I'm still waiting for the clinical trials of those sweeteners via the Freedom of Information Act - been waiting for over a year - they're not sending them. Yet the FDA will not permit natural sweeteners like Stevia to be used as food additives, unlike European Nations. Does that make sense? Makes dollars, though, for the artificial sweetener companies that have padded the politicians pockets - Monsanto - is that a surprise? Imagine that.). How about your EPA establish some guidelines on toxic mold in the workplace? I can tell you that by the time I leave for work in the evenings, my throat is burning and my eyes are tearing - been that way every place I've worked. For those of you not aware, there are no regulations in place for toxic mold. None. So, say if the building you work at has something like a sprinkler system malfunction, and the entire floor above you gets swamped - they rip out the carpets and put in new ones - but nothing is replaced or removed between the two floors. Perfect scenario for toxic mold, and that will make you sick, and it can kill. But our EPA nicely sidesteps the issue to protect businesses and industries. After all, it would cost money to correct, and without sick people, there went 17% of our economy.

So you want us to curb healthcare spending? Get some regulations into place to keep the people from getting sick in the workplace, and teach your regulatory agencies how to enforce the standards already in place - to protect the PEOPLE, not the business. You've sidestepped those regulations for decades, again, to protect commerce and put it above our well-being. SSDD in the USofA.

-

http://community.whptv.com/forums/384/ShowForum.aspx

-

Posted by: Rosiemeow | July 17, 2009 9:06 AM | Report abuse

Obama was largely elected because of the CORPORATE media's promotion of him 24/7. The same CORPORATE media that depends on the Insurance and Pharma industries for its existence.
Obama is owned by the corporations - so don't expect much healthcare reform that would benefit taxpayers.

Posted by: angie12106 | July 17, 2009 9:30 AM | Report abuse

cmaexecutive wrote: >>>The only solution to reform healthcare is to eliminate all layers of insurance-they do not deliver healthcare

Exactly! but there are a zillion lobbyists in DC representing the Insurance and Pharma industries that donate to the Re-election campaigns of Congress members.

Basically, ANY healthcare "reform" bill is focused on protecting and maintaining the Insurance companies while APPEARING to give taxpayers a modicum of "reform."

Posted by: angie12106 | July 17, 2009 9:38 AM | Report abuse

This bill (like all the rest so far) sounds like a good way to keep insurance companies and pharmaceutical companies in the money and employers on the hook. Your comment, "If your employer is paying 70 percent of your $10,000 health insurance premium, and you find a $9,000 plan on the Exchange -- maybe it's an HMO rather than a PPO -- you pocket $1,000," does not really address the problem. The fact is that I should not be paying $10,000 in the first place! It also continues to make it so that the employer is on the hook for health care forcing people to be tied to a job. It does nothing to address the real issues, i.e., the American populace is over-paying for medicine and health care while being bamboozled into thinking that we're getting the best deal around. I used to work for doctors in the early 1980s. Then, paperwork handling for Medicaid was labor intensive. Medicare for the elderly was easy and so was private insurance. Now, private insurance paperwork is the most labor intensive - more so than either Medicaid or Medicare. Also, back then, the doctor decided what health care you needed. Now, the insurance company decides what health care you receive. As for maintaining the free market (you know, the one for which we just paid $700 billion because they were too big to fail) I'm interested to know why I should be concerned that a free health care plan for the citizenry would put the free market insurance companies out of business. After all, they brag about their free market ingenuity. Let them sink or swim in the dog eat dog environment that their corporate greed created. Free health care for everyone, now. Period.

Posted by: now4one | July 17, 2009 9:42 AM | Report abuse

Now we know why Ezra got a job while Froomkin was fired -- Ezra is happy to parrot the Post's owners pro-corporate agenda for the cash he is getting paid.

The fact is that the Wyden bill does NOTHING to cut costs -- and Ezra knows this. He knows that Wyden is giving away the store to the lobbyists from whom he's already pocketed A QUARTER OF A MILLION DOLLARS for a 2010 re-election in which he faces no serious opposition. (Like the rest of the DC media crew, Ezra never mentions how much insurance/lobbyist cash the politicians are on the hook for.)

We don't need "exchanges" -- what we need is single payer. Failing single payer, what Wyden should be fighting for is a system where the "public option" takes the place of his "exchanges" -- employers who don't provide coverage have to contribute to the public plan, and employees can "opt out" of an employer based plan and get any employer contribution "vouchered" to the public plan.

Posted by: Paul_Lukasiak1 | July 17, 2009 10:00 AM | Report abuse

I concur with NealB1 (July 16, 2009 6:59 PM) that all this cr** needs to get us to single-payer in an expeditious and orderly fashion. We need to pull away from the insurance companies quicker than we're pulling out of Iraq and Afghanistan.

Posted by: perhapsnot | July 17, 2009 10:27 AM | Report abuse

The only reason this isn't being seriously discussed in committee, well up until the CBO chief spoke yesterday, is that the proposal has Wyden's name at the top and not "Baucus."

Posted by: AnnandaleAnnie | July 17, 2009 10:32 AM | Report abuse

Look, this, just like all the other "plans" under discussion, is complete BS. There is ONE, precisely one, known way to seriously cut the cost of the system by eliminating administrative bloat (and administrative bloat is why "choice of insurance plans" really means.) That way is called SINGLE PAYER. It has successfully cut costs, often dramatically, in EVERY country in which it has been implemented.

Yet it's off the table here. Despite the rhetoric, one can only conclude that NOBODY in the Administration or Congress is sincerely interested in cutting the health care costs that are slowly strangling our economy. That's a travesty.

Posted by: labonnes | July 17, 2009 10:50 AM | Report abuse

If anybody thinks that only the rich will pay for the Democrat healthcare plan, consider the following:

The House Ways and Means Committee passed a proposal to pay for it by levying a 5 percent surtax on the top 1 percent of the rich. But facts show the surtax will be incredibly insufficient.

The relevant numbers are:

Before tax income of the top 1 percent is $3 trillion. 5 percent of that is $0.159 trillion. But the national healthcare cost is about $2 trillion, or about 1/7th of the $15 trillion gdp.
0.159 is only 1/12th of 2.

A 5 percent surtax on the top 1 percent of income earners would cover only 1/12th of the cost of the Democrat healthcare plan.

A 70 percent surtax would be necessary to pay for the Democrat plan. Surely members of the committee know the difference between 5 percent and 70 percent. What are they not telling us?

Posted by: rodhug | July 17, 2009 11:00 AM | Report abuse

JJOhio, something you said may actually have made me change my mind a bit. While I am a raging capitalist, I can see your basic point. Medical costs are out of control, and eliminating the profit margin realized by insurance companies (the middle man) represent a relatively easy way to reduce those costs.

Unfortunately, all the current proposals still sound like a bad thing for me personally (upper middle class with good insurance). I have a really hard time seeing how reform that includes a public plan won't kill my insurance while it saves money on the aggregate. I also have a hard seeing how a public plan won't lead to resource constraints as a result of saving money (i.e. the consumer experience for a public plan will be poorer than what I see today with good employer-funded insurance).

Is there a way to save the "better than average" experience I currently receive (even if I have to pay extra)? I see the path of reform eventually leading to "Canada", whereby almost everybody has the baseline experience, and if you want better, you go outside the country and pay out of pocket. Paying out of pocket, though, is far worse than my current experience financially (its really only an option if you are very rich or are willing to bankrupt yourself).

I would feel a lot more comfortable with an single-payer system if there could be some kind of private insurance overlay that mitigated future public resource constraints (but still allowed pooled risk within that universe to keep the private insurance overlay's costs down). Otherwise advocates of a single payer system are telling me "Your experience is going to get worse, but its for the greater good, so too bad."

Posted by: WEW72 | July 17, 2009 11:00 AM | Report abuse

"I see the path of reform eventually leading to "Canada", whereby almost everybody has the baseline experience, and if you want better, you go outside the country and pay out of pocket."

This is a right-wing lie. Maybe you should actually find out something about Canada instead of just swallowing propaganda. There's a reason why Canadian Medicare is wildly popular and why Tommy Douglas, its creator, was recently voted in a poll as the most admired Canadian in history. There might be 100 people in the whole country who would be willing to trade their system for ours.

Posted by: labonnes | July 17, 2009 11:13 AM | Report abuse

THIS IS IT!

The healthcare reform bill released by the House Of Representatives is an excellent bill as I understand it. It's a bill with a strong, robust, government-run public option, and an intelligent, reasonable initial funding plan to cover almost all of the American people. It is carefully written, and thoughtfully constructed, informed, prudent and wise. This bill will save trillions of dollars, and millions of your lives.

This is the type of bill that all Americans can feel good about. And this is the type of bill that has the potential to dramatically improve the quality of healthcare for all Americans. Rich, middle class and poor a like. Democrats, Republicans, Independents, and all other party affiliations. This bill has the potential to dramatically improve the quality of life of every American.

The house healthcare bill should be viewed as the minimum GOLD STANDARD by which all other proposed healthcare legislation should be judged. All supporters of true high quality healthcare reform should now place all your support behind this healthcare reform bill released by the United States House Of Representatives, as the minimum Gold standard for healthcare reform in America.

You should all now support this bill with all your might, and all of your unrelenting tenacity. This healthcare bill is a VERY, VERY GOOD! bill for all of the American people. Fight tooth, and nail for every bit of this bill if you have too. Be aggressive, creative, and relentless for this bill.

From this time forward, go BIGGER and DEEPER with the American people every day until passage of healthcare reform with a robust, government-run public option.

FIGHT!! like your life and the lives of your loved ones depends on it. BECAUSE IT DOES!

SPREAD THE WORD

(http://www.youtube.com/watch?v=RSM8t_cLZgk&feature=player_embedded)

God Bless You

Jack Smith — Working Class

Posted by: JackSmith1 | July 17, 2009 11:14 AM | Report abuse

One of the keys to making healthcare affordable - I did not say reduce healtcare costs - is to sign up younger workers. The Obama plan is to fine them. This is the tyranny approach. It would not work because it would not be voluntary. It would require a large police burocracy to enforce. Many would escape detection. It would engender even more hatred and non-coopertion with the government.

The other way is to give young workers an economic incentive to purchase healhcare insurance. Give them a $2500 individual or $5000 family reduction of taxable income for purchasing insurance.

Posted by: rodhug | July 17, 2009 11:16 AM | Report abuse

Its interesting to watch this so-called health care reform. It does NOTHING to help get insurance off the backs of employers. When people say they don't want their insurance to change they mean they want to be able to go to the same doctors, etc. and not pay more. But the insurance companies interpreted that as keeping the employers on the ball and chain.

The more time that goes by, the more it becomes obvious that single payer is the only thing that will be affordable and sustainable.

The so-called "reforms" just bolster the insurance industry's entrenchment into our lives. The money saved will go in their pockets. Care will be further rationed in the name of "paying for it".

And a "public option" is no more than another insurance company. That is how some of these started out to begin with, as "reforms". Remember Blue Cross? They started out this way in response to complaints back in the 80's I believe. Now they have morphed into a death-dealing, corrupt, for-profit beast, which, if it is successful at all, is what the public option will eventually become. If it fails, then we are back to square one with more rationing.

Posted by: tropicgirl | July 17, 2009 11:17 AM | Report abuse

labonnes, cut the vitriol. My insurance is very good. I, and my family, love it. Are you saying that the Canadian experience is better than ALL private health insurance plans in the US, regardless of cost? If you are, then I can't take anything you say seriously, because its just not true. If it was, the Canadian government couldn't afford it, even with the savings that a single-payer plan can create. I don't really dispute that the Canadian experience may be better for most, or even the large majority of people. But to says its better for everyone is unthinking hyperbole.

Posted by: WEW72 | July 17, 2009 11:18 AM | Report abuse

Of course the real solution is to reduce the percapita cost of healtcare in America.

How can that be done? The Democrat and Republican plan do not address it, other than to talk about hoped for efficiency gains. What is more efficient, private enterprise of government? The answer to this demonstrates how hoped for efficiency gains are hoped for.

The key to reduction of healthcare costs it to reduce the incidence of disease. Consider: in parts of the world where the staple diet is starch (grains, potatoes, beans, rice) and where little meat and dairy is consumed, the western diseases of affluence, heart disease, cancers, diabetes, etc do not occur. This fact has been well documented and is available for the reading. For example, read the China Study.

The key to healthcare cost reduction, not to mention reduction of suffering, is education. The US population needs to start hearing about how to obtain better health via a better life style.

Posted by: rodhug | July 17, 2009 11:31 AM | Report abuse

This is just more overly complicated legalistic babble. There are some simple actual reforms that would improve our healthcare system but if you worded them plainly then no politician would be able to hide behind the legalese during election season.

In order for this to qualify as reform and not merely an entitlement expansion they need to separate health insurance from employment by extending the tax preference to individually purchased plans, they need to reform the system of State regulations that limit the number of plans available to individuals and they need to reform the required content of plans that drives up the cost of all plans. If they don't do these things then they aren't actually doing anything remotely related to reform or intelligence.

Why doesn't anyone seem to care about the impact a "public option" would have on one of the few growth sectors in our economy? Private insurers and providers directly and indirectly employ more people then GM and Chrysler combined. This will have devastating impacts on our employment numbers as well as destroying what little freedom is left in our healthcare system. Reforms are supposed to increase freedom. Including a public option is like trying to cure cancer with more cancer.

Posted by: fallsmeadjc | July 17, 2009 12:08 PM | Report abuse

How do you perform micro-level risk adjustment analyses without adding huge administrative expenses to the system? Great idea in theory, but any plan that creates more administrative expense moves in the wrong direction.

Posted by: dcinsider1 | July 17, 2009 1:05 PM | Report abuse

Both. Both. Both.

Open exchange gives choice to everyone. Public plan offers 1)cost reductions due to scale and negotiating power, and 2)2-3% admin costs versus 30% for current insurance industry.

End result: Private insurers radically reform to cut admin costs, or die. Their growth industry is supplemental (cadillac) coverage. Everyone gets coverage. Tie between employment and health care subsidy is made real and monetized, so that it can be broken.

10 years from now, curve is bent 25% and employers no longer pay employees' coverage. US is more competitive, economy is healthier.

Both. Now. Ezra, don't deal with today's political necessity, deal with the 10 year necessity to lower costs dramatically or our private sector will simply not be competitive world wide.

Posted by: Dollared | July 17, 2009 1:09 PM | Report abuse

"labonnes, cut the vitriol."

Stop recyling right-wing propaganda and it's a deal.

And you don't KNOW how good your insurance is until you or someone in your family has a catastrophic illness. VERY FEW if any people in this country have insurance that would save them from financial catastrophe in such a case. Only, they find that out too late.

Yes, I'm saying it's better in Canada. I'm saying that because it's the truth- and people and even conservative politicians in Canada know it. If you have a serious illness you don't have to worry about declaring bankruptcy, only about getting better.

Get your head out of your butt and start questioning the propaganda you're fed by shills for our parasitic health insurance industry.

Posted by: labonnes | July 17, 2009 1:27 PM | Report abuse

labonnes,

Either you are wrong, or I am one of the VERY FEW you mention. I work for a company of about 150 people. I have been here for 10 years. I have seen several employees have catastrophic illnesses. Some survived, some did not. None of them (or their families), suffered significant economic hardship. The maximum out of pocket was not unreasonable (a few thousand dollars), and no one lost coverage.

A question for you, how many people who have a catastrophic illness, and have employer provided health insurance, go bankrupt (or near bankrupt)? Any statistics? While it does happen too often (rules regarding pre-existing conditions are often ridiculous, and god help you if you have a gap in coverage or lose your job), I bet the statistics are no where near as bad as you believe. In fact, I think you have your exceptions and your rules mixed up.

Posted by: WEW72 | July 17, 2009 2:51 PM | Report abuse

Great ideas!

If you're goal is to shuffle deck chairs on the Titanic, that is.

Lowering health care costs is actually pretty simple:

- Provide incentives for more people to enter the medical profession (more doctors = more competition = lower costs)

- Tort reform (loser pays)

- Attach catastrophic health insurance to unemployment benefits.

Why does this need to be so hard?

Posted by: paulthiel1 | July 17, 2009 2:55 PM | Report abuse

WEW72 - You seem to have a lot to say about Candian health care, but you give no sign you have ever looked up the actual data. For example, you say, "I see the path of reform eventually leading to "Canada", whereby almost everybody has the baseline experience, and if you want better, you go outside the country and pay out of pocket."

150,000 Canadians come to the US for treatment each year. That 0.6% of their population. But wait, half of these are sent here and PAID for by the Candian Health Care system because they have a rare disease that we see more frequently because we are 13 times larger. The rest probably want cosmetic surgery or gourmet food in the hospital.

The bottom line is they prefer their system to ours by over 90%. A Globe & Mail - Canadian Broadcasting poll in 08/2008 showed that 91% preferred their health care system to ours.

Posted by: lensch | July 17, 2009 4:02 PM | Report abuse

You are completely missing the point. I said above that for most people, the Canadian system would be better. I merely also pointed out that, as Canada, or any single payer system, isn't perfect, very good private insurance can lead to a better experience. At an admittedly higher cost (but a lower cost than out-of-pocket). I am concerned that, for those with very good private insurance, they may be worse off under a single payer system. That may only be 10% of the population. Unfortunately I think I'm in that 10%.

Posted by: WEW72 | July 17, 2009 4:24 PM | Report abuse

WEW72,

Pardon if I butt in. I do not know about other US cities that border Canada, but in Bellingham WA the hospital set aside almost half the hospital for Canadians comming to the US for medical treatment.

Posted by: rodhug | July 17, 2009 5:24 PM | Report abuse

The House Ways and Means Committee today proposed that the Democrat healthcare plan would be entirely paid for by a 5 percent surtax on the top 1 percent of earners.

What does that say about the magnitude of rationing we should expect? Follow me.

The top 1 percent earn $3 trillion. 5 percent of $3 trillion is 0.159 trillion. But the national healthcare cost is 1/7 th of gdp, or about $2 trillion. 0.159 trillion is 1/12th of 2 trillion.

Does that not suggest that rationing will represent 11/12ths of the existing national cost?

Unless the House Ways and Means Committee members were lying. Would they do that? No!!!!!

Posted by: rodhug | July 17, 2009 5:36 PM | Report abuse

By the way, all California residents should send an email to Madam Boxer asking her to vote __________ on the Senate version of the healthcare bill.

Posted by: rodhug | July 17, 2009 5:42 PM | Report abuse

The CBO states that health care reform will increase medical costs by no surprise. Our government is the one that needs reform. This is the same government that runs Social Security, Medicare, Medicaid, VA Hospitals,Amtrak, Us Post office, and buys $400 hammers, $800 toilet seats, and bridges to nowhere. Nobody in his right mind could think they could reform anything. They need the reform, starting with a shrink. We end up paying the tab for all of it including the shrink.

Posted by: rrdn96 | July 17, 2009 5:44 PM | Report abuse

rrdn96, Medicare is FAR more efficient than the rest of the health care system, Its administrative costs are extreme lean. The same is true of the VA system. And single-payer has lowered costs in every one of the many countries in which it has been implemented.

More credulous swallowing of right-wing propaganda.

Posted by: labonnes | July 17, 2009 7:38 PM | Report abuse

The House Health Care Bill, 1,018-page document, released this week (July 14th, 2009) reveals some concerns as noted by http://www.benefitsmanager.net and http://www.selecthealth.biz Mike Oliphant serves as health care consultant with these two popular websites in Utah. He also is a serving board member with Utah Association of Health Underwriters. A provision within this bill would indeed outlaw individual private coverage. Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:

"Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day" of the year the legislation becomes law.
This translates into those who currently have private individual coverage won't be able to change it. It is likely that those same people will suffer abnormally high rate increases over time which would force them out of coverage. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers.
From the beginning, www.benefitsmanager.net and www.dentalinsuranceutah.net warned that if the government gets into the business of offering subsidized health insurance coverage, the private insurance market will wither. Drawn by a public option that will be 30% to 40% cheaper than their current premiums because taxpayers will be funding it, employers will gladly scrap their private plans and go with Washington's coverage. The nonpartisan Lewin Group estimated in April that 120 million or more Americans could lose their group coverage at work and end up in such a program. That would leave private carriers with 50 million or fewer customers. This could cause the market to, as Lewin Vice President John Sheils put it, "fizzle out altogether."
What wasn't known until now is that the bill itself will kill the market for private individual coverage by not letting any new policies be written after the public option becomes law. The legislation is also likely to finish off health savings accounts, a goal that Democrats have had for years. They want to crush that alternative because nothing gives individuals more control over their medical care, and the government less, than HSAs. With HSAs out of the way, a key obstacle to the left's expansion of the welfare state will be removed.
http://www.SelectHealth.biz states that the public option won't be an option for many, but rather a mandate for buying government care. A free people should be outraged at this advance of soft tyranny. Washington does not have the constitutional or moral authority to outlaw private markets in which parties voluntarily participate. It shouldn't be killing business opportunities, or limiting choices, or legislating major changes in Americans' lives.

Posted by: mikeoliphant1 | July 18, 2009 12:47 AM | Report abuse

If Medicare and Medicaid and the VA are "lean" and well-run, we're all horse's patooties.

If this health plan is so great, why won't all the congressman choose this over their health plan?

Until they do, it's ridiculous to kill the care of 275 million people who are overwhelmingly happy with their insurance in order to include 40 million who don't have insurance. (80% percent of those with coverage are "very happy" or "happy" with their health insurance.)

Why not expand Medicaid? Oh, right, it's going bust. How about including the uninsured in the VA plan? Oh, it's in trouble, too. If all the government plans are going bust and the private ones aren't, why on earth would we try ANOTHER government-run health plan?

And back we come to the definition of insanity -- keep doing the same thing over and over and expect a different outcome.

Sorry, not falling for this one. I'm Scottish -- fool me once, shame on you; fool me twice, shame on me.

Posted by: hecowe | July 18, 2009 2:13 AM | Report abuse

rrdn96,struck a nerve.

Immediately labonnes defender of the traitorous party of criminal frauds is on the attack.

"More credulous swallowing of right-wing propaganda.

Posted by: labonnes"

Shut up you commie loving loser. The only propaganda possible in this Country is ENEMY PROPAGANDA AND DEMOCRAT PROPAGANDA which where virtually Indistinguishable as democrats betrayed the Country , emboldened the enemy and falsely claimed the war was lost.

This the same party who currently has employed what is it? 5 or 6 tax cheats?

We should be lynching these lying criminal rats not buying or even listening to their *((& *&^ BS.

Posted by: RobLACa | July 18, 2009 3:36 AM | Report abuse

Sounds like its just allowing insurance companies to compete with one another, right? Well, that's what they're doing now and premiums just keep going up. No way would I want a fix that simply allows the insurance industry to "do what's right for the consumer". We are just kidding ourselves if we think they have anything but the bottom line (profits) in mind. We need a public option!

Posted by: spify79 | July 18, 2009 1:49 PM | Report abuse

Chris Eldred of Letters to the Editors writes that "despite disappointing poll numbers, there isn’t yet any call for alarm—Obama still has a path to health care triumph. Right now the American people are both anxious about reform, and, I suspect, frustrated that Congress looks like it’s about to squeeze out another huge initiative that doesn’t do much for the better. They’re also frustrated with the president for letting this happen without any strong advocacy of any kind. But Obama doesn’t need to show his hand, yet.", based on the Post/ABC's poll of Obama's approval ratings.

Read more at http://letterstotheeditors.wordpress.com

Posted by: KanakoKashima | July 23, 2009 2:13 PM | Report abuse

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