Thursday, November 12, 2009

Why Should I Support This Health Care Reform Bill?

(Note: I occasionally write political pieces, like this, this, this, thisthis, and this. Here’s another one. 

Can someone please explain why I should support the health care reform bill that seems to be taking shape? This is a genuine plea for answers.

In the last presidential election I was an early supporter of John Edwards because of his advocacy of Medicare-for-all. I wound up supporting Barack Obama in large measure because of his promise to reform health care, including a “robust public option.” Although it seemed a lot like re-inventing the Medicare wheel, I always took “public option” to mean a government run health insurance program that anyone could buy into.

This makes sense to me mostly because private health insurance companies are very inefficient in that they need to take about 30 percent off the top to pay incredible executive compensation, profits, and marketing/advertising (no small potatoes). In many respects they’ve become this way because, inexplicably, it is the only industry other than Major League Baseball that enjoys an exemption from anti-trust laws. In other words, it’s legal for insurance companies to collude with one another and do things like fix pricing based on things other than the laws of supply and demand. This has lead to what are essentially bloated health insurance monopolies, with nothing better to do with their money than pay executive salaries and stockholder dividends. In most parts of the country, people only have 1-2 legitimate choices. A robust public option as I envisioned it would offer real competition which is the free market antidote to monopolies.

Medicare runs on about 5 percent overhead because it pays modest salaries, doesn’t need to earn a profit, and has no marketing expenses to speak of, which means that 95 percent of the money it takes in goes to actually paying for healthcare. I’d always assumed that a public option could be run on a similar model, which would pose a formidable competitor to private health insurance. I can see how this would require private companies to get lean in order to compete. It would force the break-up of these monopolies. That’s how capitalism in a democracy should work – competition should be making things increasingly better for we the people, not the capitalists. When that isn’t happening, something is out of whack.

This does not mean that I'm not a supporter of real capitalism. In fact, I have no doubt I that there’s an entrepreneur out there right now who will figure out a way “beat” the public option in spite of its built-in advantages. That is something I’d like to see. That will be American ingenuity at its finest. One of the reasons I support a robust public health care option that is available to everyone is because I’m convinced we can produce an entrepreneur who can do it even better and more efficiently. And if current health insurance behemoths can’t compete, they’ll have to change, shrink, or die, which is what would have happened long ago if they had had real competition.

But the House bill does not propose a public option that will create competition. According the Congressional Budget Office, only 2 percent of us will wind up using the public option as proposed by the House bill. That’s because, as I understand it, only people who are currently uninsurable will qualify for “the exchange,” which will be the only place the public option is available. Largely, these will be the sickest people; those who aren’t profitable anyway. How does that provide competition to private insurers? I simply don’t understand how this version of the “public option” will work to keep down costs unless we can all buy into it. I suppose it will insure a few more people, which is a good thing, but as proposed, it seems anemic at best. Some studies have concluded that the pubic option will actually cost more than private sector policies, which means it will really just become the health insurance of last resort.

But what strikes me as most outrageous is that the House bill will require most of us to enter into contractual relationships with private health insurance companies. We will all be compelled under penalty of federal law (via what is referred to as the “health insurance mandate”) to enter into contractual relationships with companies that have already demonstrated their willingness to place profits over our well-being. As for-profit enterprises, our courts have held that they can, in fact, be sued by stockholders if they don’t do everything in their power to maximize profits. One of the easiest ways to maximize profits is to deny or delay health care. If I’m diagnosed with cancer, for instance, it doesn’t take a genius to understand that the best way to bolster profits would be for me to die quickly so it minimizes payouts. I do not trust these people, yet I’m going to be mandated to enter into a contractual relationship with them. (As far as I’m concerned this is the equivalent of being coerced into signing a contract, which should automatically invalidate it.)

This is particularly heinous because the House bill offers only mild regulations on the behavior of private health insurance companies. Yes, it will curb some of their most heinous abuses, but without a real public option there’s nothing in this bill that will lead to cost control, which leaves affordability at the hands of their profit margin. In other words, our health care – our lives and the lives of our children – is going to be in the hands of corporations that stand to profit from providing as little heath care as they possibly can. I repeat, I do not trust these people. What they do can legitimately be called “murder by spreadsheet,” but if this bill becomes law, we'll all be required to go into business with them.

Then there’s the so-call Stupack Amendment, which essentially makes abortion only available to wealthy women. This disgusting amendment amounts to the greatest impingement on a woman’s right to choose since the Hyde Amendment passed in 1976, and this in an era during which the Democrats control two of the three branches of government. I pray that this is the kind of thing that will be stripped out of the final bill the president signs.

And the cherry on top of this mud and pickle sundae is that most of it won’t go into effect until 2013, which means that even if the final law will taste better than it looks, we’re going to be at the mercy of these unregulated corporations who have already announced their intention to jack their prices into the stratosphere if health care reform legislation passes. 

As it now stands, I’m going to be urging my congressman to vote against this bill. I believe it contains a public option that is designed to fail because it will not provide real competition. I’m deeply troubled by the fact that we will be compelled by law to sign contracts with untrustworthy business partners. Not to mention the anti-choice amendment and the long delay before the key components of the bill are implemented.

I’ve spent the last couple days reading the bill passed by the House, which I understand won’t differ greatly from the one the Senate will pass. These are my conclusions. As much as I hate to write this, I think we ought to scrap the whole thing and start over with Medicare-for-all as our starting point. We might have to wait until we’ve elected more and better Democrats.

Now, I know that there are a number of readers of this blog who are strong supporters of this legislation, which I was until I really got a look at what it’s going to do. I’m hoping that I’m somehow missing the hidden beauty of this bill. Please point them out to me. I really don’t want us to miss this opportunity for real reform, but I fear that we already have missed it with this weak, weak bill. I will be moderating comments to avoid having to publish flames, cursing, and name-calling, but I promise to publish your comment as long it’s civil.

I hope I just misunderstand. Please help me.

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Floor Pie said...

My support for this legislation is partly symbolic. Yes, it's weak in the ways you point out, and hopefully some of these details will get smoothed out before it's finalized.

But I'm afraid "no" simply means "no" and would not result in a tweaking of the details. If this legislation doesn't succeed, I think the "Health Care = Nazi Socialism" folks are going to declare victory, dance on its grave, use it to win more seats in 2010, and that's the last we'll see of health care reform until one of our Pre-3's graduates runs for office in 20whatever.

This legislation is imperfect, yes. But let's get its damn foot in the door first and work hard to improve the details as we go. Support it for the same reason we voted for 71. It's ridiculously unfair that an "everything but marriage" referendum ever had to come to a vote in the first place and not win by a landslide. But that's where we're at right now, so we have to take the march toward equal rights in small steps.

That's my $.02. Gotta go be a mom now...

MOM #1 said...

Well, I'm a raging hippie-leftist-liberal and I'm not even remotely impressed by the current version of the bill . . . so if anyone can convince you . . . then go ahead and convince me too.

Monkey's Mama said...

Very thoughtful post. I want to vote for change but not anemic, possibly harmful, change. I hope that the bill has some changes in the meantime.

Anonymous said...

Well, I agree with your general sentiment that if single-payer was the full loaf, and a robust public option was half a loaf, then we're down to somewhere around one third of a loaf now. However, as always in politics, the alternative is no loaf at all, and a) the votes simply aren't going to be found for single-payer or "Medicare for All," no matter how much urging we provide, and b) if health care reform is dropped in order to re-start it, the momentum will not be there to re-start it, and Democrats will take a bath next year as Republicans are revved up and Democrats are left disappointed, resulting in fewer, rather than "more and better" Democrats to take it up again later.

The public option, unfortunately, was never intended for people who already have group coverage through their jobs but want to opt out of it -- which I think most liberals would agree was a mistake from the get-go. But that's not the part that got watered down. (The part that got watered down is the reimbursement rates, from a Medicare-pegged level (which is what people in the know say when they mean a "robust" public option) to "negotiated rates" -- which makes it less efficient, but is pretty technical and doesn't really affect who can get into it.)

But let me clear up some misapprehensions about the exchange. It's not (only) for the uninsurable for medical reasons; it's for people who don't have coverage through their employer. That includes people who lose their job or quit their job who would currently be stuck with COBRA for a while and then nothing. That also includes people who are self-employed, or who work for a small business that can't afford to insure its employees because they can't get a good group rate because there aren't enough employees. It would even help people like, well, me, as I work for a small enough company (20-ish) that, although we have insurance, the size is too small to get sustainable rates on high-quality coverage and instead we're left with an adequate but highly irritating plan with an HSA. My company, instead, would be able to participate in the exchange, jump into pools with more companies (because insurance is all about the law of big numbers), and get better rates. The public option is really just a tool to force more competitiveness upon the exchange, by offering a more efficient option than private insurers in the exchange, forcing them to become more efficient and drop prices to compete -- it's not designed to actually become the insurer for hundreds of millions of people (although you point to the fundamental chicken-and-egg problem: how does a public option force insurers to be more efficient when it, itself, is kind of small and inefficient, compared with what it could be if it were larger and pegged to Medicare rates?).

Perhaps the single most important thing the bill does, though -- and why we need to pass it even if everything else about it sucks -- is that it prevents private insurers from turning down people with pre-existing conditions, or from rescinding policies that aren't working out for them (because people up and got sick on them). Not only is this a basic fairness issue, and one that will stop the trend toward medical bankruptcy as the nation's insurance backstop, but it also levels the playing field by forcing insurers to take on riskier, more expensive patients, instead of kicking them out and basically foisting them onto Medicaid (or the public option, in the future). One other important component is that the bill brings about the largest ever expansion of Medicaid: eligibility is being expanded to 150% of the poverty line, so Medicaid (which is single-payer coverage) in the future will include not the really, really poor but also the working poor, people with retail or service industry jobs with companies that either shirk their insurance duties (Wal-Mart) or can't afford it (small businesses).

Anonymous said...

Part 2 of previous comment...

The mandates are irritating, yes, but the personal mandate is combined with an employer mandate, so employers of all but the smallest sizes will have to provide insurance to their employees -- and the people who fall through the cracks on that, like the unemployed, self-employed, and very small businesses, they go to the exchange instead. Personal mandates (combined with subsidies, Medicaid expansion, etc.) were part of the series of "universal" health care reforms they passed in Massachusetts a few years ago, and while the jury is very much still out there, they don't seem to have driven too many people around the bend.

Also, this isn't over; it's unclear what will happen a) in the Senate and b) in conference, where the House and Senate bills get merged. The bad part is that the public option may get a state opt-out provision attached to it in the Senate (bad if you live in Oklahoma, but I can't see Washington opting out), but good news is that a) the Stupak amendment is likely to get stripped out, b) the insurance companies' anti-trust exemption may be revoked, and c) the Wyden amendments may be added opening the exchange to truly anyone, i.e. anyone who has crappy employer-based insurance and wants to test the waters in the market. So if you want something proactive to do, contact our Senators and let them know about those items.

In the end, though, if you're middle-class, receive (and plan on continuing to receive) health insurance through a large corporate or governmental employer, and not planning on getting catastrophically sick before you turn 65 (good luck on that!), the health care reform bill won't change things much for you one way or the other. Maybe your rates will drift down to from competition from the public option, maybe they won't. But the overall benefits are still extremely important.

(Mr. Floor Pie)

Pumpkin Delight (Kimberly) said...

It's so confusing! I am so disappointed in how this has all turned out; going from "big change" to this. I know that's politics, but it's frustrating when it always comes back to government supporting big business and not the average citizen. That was supposed to change with "our" guy and, so far, that has not been the case.
I also wonder about whether to support it (not that my support matters)and your points seem valid. Then I read the above comment and that makes sense as well, to a point. But even a lot of us with insurance through our jobs don't have good insurance.
This is one area, I believe, where capitalism shouldn't play a part. This is not about how much money someone makes on saving or not saving a life. This should just be about saving lives. That's it. To me, this bill is more about saving insurance companies.

Floor Pie said...

Thanks for weighing in, sweetie ... I mean ... Anonymous. I hope everyone takes the time to read the whole thing, but I just want to highlight this point in case anyone missed it:

"Perhaps the single most important thing the bill does, though -- and why we need to pass it even if everything else about it sucks -- is that it prevents private insurers from turning down people with pre-existing conditions, or from rescinding policies that aren't working out for them (because people up and got sick on them)."

And, as you've said before, it's worth noting that Social Security, Medicare, and Medicaid all started out pretty weak at first and were gradually built into something stronger.

Folks, call your senators and keep pushing for improvements to this legislation. But don't give up on it. Weak and politicky as it is, it's the best start we've seen and are likely to see in a while. Gotta start somewhere.

Teacher Tom said...

Thanks everyone for weighing in and trying to talk me down.

I was aware that this bill will prevent people from being dropped for pre-existing conditions, but even most Republicans say they're in favor of banning this practice, so I'm reluctant to support this bill just because of that. We could easily get this passed in a regular, focused piece of legislation.

I was not aware that this strengthens Medicaid. To me, that's actually a bit of real reform.

Mr. Floor Pie, you've convinced me that this teeny tiny public option might create a teeny tiny bit of downward pressure on prices, but only if the anti-trust exemption gets passed.

The mandate, however, is more than irritating, it's absolutely vile. It's just going to make insurance companies bigger, wealthier and more capable of distorting our political system. Without competition or heavy-duty regulation, I'm afraid we're going to get screwed big time -- I don't see either of those things in this bill.

The political considerations seem too much like crystal ball gazing to be honest. We may or may not be able to re-start momentum. We may or may not be able to win more seats. I think it all comes down to how much pressure people place on their representatives one way or another, which is, I suppose how it is supposed to work.

That said, I guess my only choice is to keep calling my representatives and insist that they try to get as much out of this as they can. Maybe we can put enough pressure on them that they strip out some bad stuff and include some new things (like the Wyden amendment which I totally forgot about).

I guess the answer is to keep working this right up until it's time to vote. I never said I was ready to give up. I'm just not sure that this bill will get us there, but I guess it's the only horse we have right now, so we'd better ride it.


Unknown said...

I don't know how I feel about it. I was so thankful to read this today though. I like to learn about these pressing issues.