Relevant and even prescient commentary on news, politics and the economy.

Read the Bill! (3.3 MB)

The House Bill is out. It’s different, at a minimum in its numbering, ‘Sec 113′ and ‘Sec 116′ don’t mean what they did yesterday. I’m going to take some time to read through the naughty bits, maybe some of you could too. Discussion/updates later.

Update one. (Sec 102) Medical Loss Ratios set at a minimum of 85% but could be set higher. Cue the squealing from AHIP.

Two (Sec 105) Group plans required to offer optional coverage of kids up to the age of 26.

Three (Sec 107). In (I think) 22 states it was legal to treat a history of Domestic Violence as a pre-existing condition that could be denied coverage. This bill would eliminate that particular barbarity.

(Sec 110). Sweet!! No longer can you screw over retirees after the fact. If you retire with health care coverage you keep it. (Corporations are infamous for pulling this particular chair out from under former employees.)

(Sec 202) is the new Sec 102, the one certain wingnuts insisted banned individual private insurance altogether. Wingnut 102: How HR3200 Outlaws Private Health Insurance. Ah! Good times! To recap: if you got shitty individual insurance now you can keep it, but after Jan 1, 2013 new individual plans have to be offered through the Exchange and so be QHBPs (Qualified Health Benefit Plans)

(Sec 213) is the new Sec 113, Insurance Rating Rules. As in the original the premium ratio due to age can’t be higher than 2:1 (insurance companies were pushing for 5:1 or even 7:1),

(Sec 262) Anti-trust exemption repealed.

Tags: , Comments (0) | |

Are the Health Care Exchanges and Public Option Walled Off?

by Bruce Webb (Update. A tech problem currently prevents me from responding to comments, though not from updating the post. Keep those questions coming and maybe I can address them in a later post.)

With the release of the Baucus Chairman’s Mark it became apparent that there are some profound misconceptions floating around the existing legislation represented by HR3200 and the HELP Bill in relation to the scope of the Exchanges and the Public Option. So profound that some people are claiming the Baucus Markup, no matter egregious its faults is at least on this front an advance. Well not on my reading.

One misconception out there is that the Public Option is only available to those without insurance. The other which got highlighted Wednesday by Ezra Klein was that the Exchanges themelves, within which the Public Option resides are only open to individuals and employers with less than 20 employees. Either if true would eliminate the ability of the PO to develop in the direction of Universal Coverage.

Starting with Ezra. He put up the following on Wednesday The Baucus Plan and the Exchanges he starts off with:

Color me impressed. I’ve argued before that the Health Insurance Exchanges are the most important piece of health-care reform, and they’re being unacceptably weakened and constrained. The House bill, for instance, specifically allows businesses with only 20 or fewer people to join.

Baucus goes quite a bit further. He begins by mandating that businesses with up to 50 employees be allowed to buy into the exchanges. If states want, they can expand that to businesses with 100 employees.

After a couple of sentences about risk adjustment he closes with this:

So far, so good. This, however, is where the Baucus plan takes that crucial next step: “In 2017, states must develop and submit to the Secretary a phase-in schedule (not to exceed five years), including applicable rating rules, for incorporating firms with 50 or more (or 100 or more for those states that already included firms with 51-100 employees) into the state exchanges.”

In other words, by 2022, the Health Insurance Exchanges will be open to all businesses of all sizes. That’s a huge deal. And the first place where I’ve seen the Baucus bill go substantially further than the other bills

Well I can only draw three possible conclusions from this. One Ezra just biffed in his reading of Sec 202 of the bill. Or I did. Or that it was inexplicably changed in all three House Committee markups.

I’ll let you all be the judge. Relevant text under the fold.

The following is a direct cut and paste from my comment to Ezra, with some formatting that the WaPo site strips out.

“The House bill, for instance, specifically allows businesses with only 20 or fewer people to join.”

It does? Where? I am working from the Ed&Labor version, which I believe represents the Tri-Committee Bill PRIOR to markup. So maybe something got taken out. I don’t see why that would be, but on a plain reading the above assertion is simply a misreading.

The relevant section is: SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS. starting on pg. 73. ‘Employers’ are categorized in 202 (e)(1-3) starting on pg. 79 into ‘Smallest’ or 10 employees or fewer, ‘Smaller’ or 20 employees or fewer, and “Larger’. The rules for these latter are spelled out in 202 (e) (3) as follows:

(A) IN GENERAL.—Beginning with Y3, the Commissioner may permit employers not described in paragraph (1) or (2) to be Exchange eligible employers.
(B) PHASE-IN.—In applying subparagraph (A), the Commissioner may phase-in the application of such subparagraph based on the number of full-time employees of an employer and such other considerations as the Commissioner deems appropriate.

This last bit seems to mean that mega-employers can’t dump all their workers on Exchange Plans all at once.

The confusion may come from Sec 202 (c) starting on pg. 74
(c) TRANSITION.—Individuals and employers shall only be eligible to enroll or participate in the Health Insurance Exchange in accordance with the following transition schedule:
(1) FIRSTYEAR.—In Y1 (as defined in section 100(c))— {i.e. 2013}
(A) individuals described in subsection (d)(1), including individuals described in paragraphs (3) and (4) of subsection (d); and
(B) smallest employers described in subsection (e)(1).
(2) SECOND YEAR.—In Y2— {2014}
(A) individuals and employers described in paragraph (1); and
(B) smaller employers described in subsection (e)(2).
(3) THIRD AND SUBSEQUENT YEARS.—In Y3 {2015} and subsequent years—
(A) individuals and employers described in paragraph (2); and
(B) larger employers as permitted by the Commissioner under subsection (e)(3).

Unless 202 (c)(3) and 202 (e)(3) were deleted during markup in all three Committees it would appear that all employers will become Exchange Eligible starting on Jan 1, 2015 subject only to phasing requirements for the largest companies. A process that surely would be accomplished well before the 2022 in the Baucus markup.

What did I miss?

A plain reading (or as plain as you can get reading legislative language) is that the Exchanges will be open to employers of all sizes starting on Jan 1, 2015 or seven years EARLIER than the date touted by Ezra as a “huge deal”.

The related assertion that only people who are uninsured are eligible for the Public Option is similarly misguided. There are fairly strict limits on who can opt out of an employer paid plan, and for good reason (a discussion for another time) but there are no barriers for someone currently in the individual market cancelling their private plan or letting it expire and signing up in the PO. In fairness there is a tiny bit of ambiguity in the language.


(a) ACCESS TO COVERAGE.—In accordance with this section, all individuals are eligible to obtain coverage through enrollment in an Exchange-participating health benefits plan offered through the Health Insurance Exchange unless such individuals are enrolled in another qualified health benefits plan or other acceptable coverage.

‘acceptable coverage’ mostly means another government run and paid for plan such as Medicare, Medicaid, VA, Tri-Care. And almost everyone in ‘another qualified health benefits plan’ would be in one offered by an employer. I don’t read this to mean that individuals dissatisfied with current private insurance cannot shift to another insurer in the exchange which includes the Public Option. But in general I am going with “all individuals are eligible to obtain coverage”.

Getting this right is crucially important. If the Exchanges and the Public Option were in fact crippled in the way Ezra and others on the Left think they are there is no wonder that they think the whole thing is a sham and a simple give-away to the insurers rather than the Public Option being a very real alternative and potential replacement to private insurance for individuals and most medium to small employers.

So to repeat my question to Ezra. What did I miss?

Tags: , , Comments (0) | |

The Myth vs Numeric Reality: HR3200 v Medicare

by Bruce Webb

The current line of attack on Health Care reform from Republicans is that it proposes to Rob Gramma to Pay Pedro. I am not going to address the care for illegals canard today but do want to probe just what HR3200 does for Medicare on net. Starting from the following two charts from the Kaiser Family Foundation.

Summary of Key Medicare Provisions in HR3200
The first chart reports the number proposed to be saved by changes in Medicare and displays the only number you are likely to see cited by opponents: $538.5 billion in cuts. But the second chart shows something interesting, these cuts are offset by an additional $320.4 billion in spending. Meaning that the net cut to Medicare overall is $218.1 billion over ten years. Which matches closely with the one shown in CBO’s $219 bn score shown here:

Still $218 billion over ten years is still something. But lets look at the breakdown. Of the $538.5 billion in cuts $172 billion of it is the result of removing the 15% extra payment per enrollee granted to the private insurance companies offering Medicare Advantage. This extra payment, which made a mockery of the idea that private companies could provide a better product for the same price, was originally designed to subvert traditional Medicare and is no real loss. If we subtract that $172 billion from $218 billion we get a net spending cut to traditional Medicare of $46 billion over ten years representing only a small fraction of the cost to extend coverage to 97% of legal non-elderly Americas.

So why are Republicans pushing this point so hard? Are they really concerned about the specific tradeoffs represented by the above two charts (because wihin Medicare there are winners and losers)? I think not, instead all their crocodile tears about Gramma are disguising real tears at the prospect of the outcome shown in the third row of the CBO table: the $583 billion in extra taxes on the top 1.5% over the next ten years.

Rule no 1 in evaluating Republican proposals and counter-proposals: it’s about the taxes first and foremost. They don’t like paying for services for the working class. Period.

Tags: , , Comments (0) | |

Triggers and Secs 111-116 of HR3200

by Bruce Webb

DC and the blogosphere are all over the resurrection of the Public Option Trigger, the idea that with the right legislation the insurance companies would just straighten up and fly right. Most of the Left is pretty cynical about the idea and rightly so given the insurance companies several decade pattern on driving down what they call their ‘medical cost ratio’, i.e. the amount of your premium dollar actually spent on paying providers for medical care. Where that ratio used to be 95% now it is down to 80%, meaning that insurance companies are taking four times the share of your premium dollar than in the past. The question is whether you could craft legislation that would control overall premium costs in a way that would not pull the trigger? Well I think you can and in fact it has already been done. If you excised the public option what would be left in the bill to control costs? To start with Secs 111-116.

Subtitle B—Standards Guaranteeing Access to Affordable Coverage

A qualified health benefits plan may not impose any pre-existing condition exclusion (as defined in section 2701(b)(1)(A) of the Public Health Service Act) or otherwise impose any limit or condition on the coverage under the plan with respect to an individual or dependent based on any health status-related factors (as defined in section 2791(d)(9) of the Public Health Service Act) in relation to the individual or dependent.
(snip-the title of Sec 112 tells the story. Plus no recision except for fraud, as defined by the govt and not the insurance co.)
(a) IN GENERAL.—The premium rate charged for an insured qualified health benefits plan may not vary except as follows:
(1) LIMITED AGE VARIATION PERMITTED.—By age (within such age categories as the Commissioner shall specify) so long as the ratio of the highest such premium to the lowest such premium does not exceed the ratio of 2 to 1.
(2) BY AREA.—By premium rating area (as permitted by State insurance regulators or, in the case of Exchange-participating health benefits plans, as specified by the Commissioner in consultation with such regulators).
(3) BY FAMILY ENROLLMENT.—By family enrollment (such as variations within categories and compositions of families) so long as the ratio of the premium for family enrollment (or enrollments) to the premium for individual enrollment is uniform, as
specified under State law and consistent with rules of the Commissioner.
(snip-rest of section calls for a study)
(a) IN GENERAL.—A qualified health benefits plan shall meet a medical loss ratio as defined by the Commissioner. For any plan year in which the qualified health benefits plan does not meet such medical loss ratio, QHBP offering entity shall provide in a manner specified by the Commissioner for rebates to enrollees of payment sufficient to meet such loss ratio.
(b) BUILDING ON INTERIM RULES.—In implementing subsection (a), the Commissioner shall build on the definition and methodology developed by the Secretary of Health and Human Services under the amendments made by section 161 for determining how to calculate the medical loss ratio. Such methodology shall be set at the highest level medical loss ratio possible that is designed to ensure adequate participation by QHBP offering entities, competition in the health insurance market in and out of the Health Insurance Exchange, and value for consumers so that their premiums are used for services.

This if enforced as a pretty strong combination, insurance companies have to take all comers without regard to physical or mental condition, charge each individual or family in the area the same rate, with a small exception of a 2-1 ratio between young and old. Additionally they can’t rescind the policy for any reason except non-payment or fraud as defined by statute, nor can they refuse to renew it. And most importantly they have to stay within a set medical-loss ratio.

Now clearly the weak point here is that medical loss ratio. Companies will have an interest in making the case that it just HAS to be set lower in each future year, and you can hear the stories now from both directions, companies crying poor while critics point out not so poor that they can’t afford First Class air travel. So what would a Trigger look like in this mix? Well it seems that it would have to be tied to a certain irreducible medical loss ratio. So we could imagine that the typical acceptable medical loss ratio was set at 95% for Year 1 with a Trigger set at 85%. Each year the companies could try to argue that they need to get a lower ratio and maybe make their case. But each step down gets them closer to Triggering the Public Option and so forces them to strive for efficiencies on the business side not related to denying care outright.

The model works. On paper anyway. The devil is in getting the initial Medical Loss Ratio right and not letting the trigger point get too low. I would still push for a Public Option which allows direct inspection of and competition between Medical Loss Ratios between public and private plans rather than some process of renegotiating them each contract renewal period. But it is not crazy to entertain the idea of a Trigger mechanism.

Tags: , Comments (0) | |

Why are we still paying Insurance Companies for HealthCare?

by Bruce Webb

The above was the title to a blog post on TPM whose body read as follows:

if 77% of americans want an alternative to paying insurance companies for medical care,

why is more than 77% of the televised debate time being given to industry mouthpieces that oppose it, and the screaming stooges that dont understand it?

i have yet to see a convincing argument for having insurance companies in the healthcare equation. the costs to our economy and the public health are now well known. so what is their value added?

My answer there is below the fold here.

i have yet to see a convincing argument for having insurance companies in the healthcare equation.

I don’t know about convincing but the argument is simple enough. It is drawn from F. Hayek and can be seen in this review of his 1944 Book The Road to Serfdom

What F.A. Hayek saw, and what most all his contemporaries missed, was that every step away from the free market and toward government planning represented a compromise of human freedom generally and a step toward a form of dictatorship–and this is true in all times and places. He demonstrated this against every claim that government control was really only a means of increasing social well-being. Hayek said that government planning would make society less livable, more brutal, more despotic. Socialism in all its forms is contrary to freedom.

Once you adopt this argument, which is really a faith-based belief system, every demonstration that a government program would deliver a service in a better more cost efficient way is just in the end a trick to induce you to take just one more step down the Road to Serfdom. That private insurance systems do not add value is no reason not to have them, they serve a conservative purpose all of their own.
Hayek is said to have abandoned the strong form of this argument by the sixties, the proof of the success of the Social Democracies of post-war Austria and the Scandinavian countries made the Socialism=Gulag equation obsolete. But his U.S. followers are still trapped in that worldview, something that is assisted by their near complete ignorance about conditions outside U.S. borders.

Insurance companies represent the American Way. And only a DFH commie intent on leading us down the Road to Serfdom will tell you any different. Pointing to examples where governmental planning and intervention worked, say Hoover Dam, the Interstate Highway System, and Social Security only hardens the resistance. Why believe what your eyes see when you know the Devil is out and about doing his works?

In fact you can best see this in a religious context. It doesn’t take any time at all to point out the deep inconsistencies between the four accounts of Jesus’ Passion in Matthew, Mark, Luke, and John and between those of the conventional understanding as seen in Mel Gibson’s version. The differences are not just those of perspective, the stories are totally different. None of that matters to a true believer, he knows what he knows and he does not need some snotty nosed atheist doing his reading for him.

The Health Care battle is no different, the varioius High Priests and Priestesses have given the faithful the Word and they don’t want to hear any heathenish babble about “value added”.

Capitalism=Freedom. So saith Rand, Hayek and Friedman. And if that Credo is good enough for Limbaugh Palin and Gingrich it is good enough for anyone.

Only a fool gets angry and frustrated that he can’t convert a Fundamentalist, instead you just have to work around them. As here.
I have made this argument before, in fact as recently as yesterday in an exchange on an AB thread.

Free market fundamentalism is a faith based religion. This is not to say that its theorists including Hayek and Friedmen were not brilliant men. But you can say the same and more about some of the greats who built the intellectual superstructure that underpins Catholicism: St. Augustine, St. Anselm, St. Thomas Aquinas were in their various eras intellectual giants fully equal to such figures as Aristotle and Newton and Einstein. It is just that where the latter three were interested in breaking boundaries the first three were intent on fortifying the region between the barriers. Barrier breakers are by nature open to challenge, that is what they themselves are doing. Fortifiers take challenges into account but only to build the defense even stronger.

St. Anselm presented us with one of the earliest Ontological Proof of the Existence of God. But it was not like he needed it for himself. There is a reason the call Freshwater Economics ‘Orthodox’ and it is not just because it established its position first. Questions like “Why private insurance?” are more akin to challenges to the catechism.

Tags: Comments (0) | |

Cost Controls and the Public Option: Why Losing the PO Would be Terrible-but Not Fatal

by Bruce Webb

The part of the blogosphere that caters to the Progressive Left is hardening its position around the Public Option, it has become a non-negotiable point, the line in the sand, the “are you with us? or against us?” line. And I don’t have any problems with that position as a matter of strategy and tactics, the Public Option is much better policy than any proposal that would leave it out, and I don’t think it has the political risks that the appeasers believe it does. So ‘Fight, Fight, Fight for Old PO!’ can be our fight song.

But this does not mean that everyone who argues that life would be worth living even without a Public Option is some treasonous Quisling intent on selling us all out to the insurance companies, as the risk of introducting French into the discussion I suggest the situation is more nuanced than that.

Ultimately I don’t think we will ever get overall cost-controls in Health Care in place without the PO because only it allows you to attack both of the cost centers, that which comes from the providers and that which comes from the insurers. Now these two sectors of health care are both natural allies and mortal enemies. They are allies in that insurers would be glad to sell coverage to everyone, and providers would be happy to charge for giving care to everyone, meaning each has a lot to gain from mandated insurance coverage. But at that point their interests diverge, under current business models doctors and hospitals gain most when they can supply ever more and ever more expensive treatment, while the financial incentives of insurance companies work in exactly the opposite direction.

Which largely explains the current state of confusion with insurers and providers sometimes pulling in unison, as often in opposition and sometimes at cross purposes. What the Public Option provides is a place to pull from against the providers or from the insurers, and from time to time with one or the other.

Ultimately the Public Option will be bargaining with providers either directly or by accepting some sort of industry wide average itself decided by a bargaining process. too much is at stake to simply allow providers to declare a unilateral pricing monopoly. however large or small its market share may get and no matter how much latitude it is given to bargain as an independent agent the PO will add some pull against providers. On the other hand depending on that latitude it will equally have a smaller or greater pull against the other insurers on the basis of price of insurance.

So depending on how much freedom it is given the Public Option has the potential to help control cost growth in both sectors that of providing health care and that of insuring that families can pay for that care as needed. Without it the situation is a lot more dicey. But as my title suggests not fatal. And the reason why is something I blogged back on July 28th under the title HR3200 Sed 116: Golden Bullet? or Smoking Gun?

In the bluntest terms Sec 116 imposes profit controls on the insurance companies and would do so even in the absence of the Public Option. Its existence explains why Republican leadership are signalling, nay shouting, that they will not accept Health Care reform period even if reformers surrendered the Public Option, even if they abandoned the very weak beer that is Co-Ops. The Left by and large is convinced that giving up the PO simply hands the keys to the castle over to the insurance companies with the rest of us tied up in chains at their mercy, that they can just merrily raise rates at their whim. Well no and that control is hidden in plain view in the first two sentences of the Section.


(a) IN GENERAL.—A qualified health benefits plan shall meet a medical loss ratio as defined by the Commissioner. For any plan year in which the qualified health benefits plan does not meet such medical loss ratio, QHBP offering entity shall provide in a manner specified by the Commissioner for rebates to enrollees of payment sufficient to meet such loss ratio.

(b) BUILDING ON INTERIM RULES.—In implementing subsection (a), the Commissioner shall build on the definition and methodology developed by the Secretary of Health and Human Services under the amendments made by section 161 for determining how to calculate the medical loss ratio. Such methodology shall be set at the highest level medical loss ratio possible that is designed to ensure adequate participation by QHBP offering entities, competition in the health insurance market in and out of the Health Insurance Exchange, and value for consumers so that their premiums are used for services.

Insurance companies and their allies/lackies in Congress insist that the House Bill is simply designed to force private health care insurers out of business. Well this claim is not the truth, the whole truth and nothing but the truth, but there is no question that it has some truthiness floating around it. Sec 116 guts the old business model which was based on insuring care to people who may not ever need it and denying it to those who had a proven need for it. Instead under this rule no care provision means no profits instead you have to rebate them to the insurees.

The CBO analysis of HR3200 that showed that it would only cover 10 million people by 2019 implicitly assumed that insurance companies would play fair and just go along with these profit controls. I am not so convinced on this point, and figure that many companies will just abandon those market components that become this profit constrained. Which is why we will need a Public Option to pick up those abandoned market sectors. And sooner is better than later. But ultimately a bill WITHOUT a PO but WITH Sec 116 and the other protections of Sec 111-115 puts us on a path that starts by controlling profits.

So by all means “Fight, fight, fight for Old PO!”, that doesn’t mean that people who suggest losing a battle means losing the war are traitors to their Alma Mater.

Tags: , Comments (0) | |

Watch out! We have been tweetered on Health Care

by Bruce Webb

No not ‘tweeted’, this is a whole new verb.

In a post yesterday Ken directed us to a debunking by Milt Shook of a list of talking points by Alan Caruba. Milt’s piece at his blog Please… Cut the Crap is here: Deconstructing Right Wing Lies. Important stuff and I’ll get back to it. But even more important was my discovery right in my local paper that this list wasn’t the product of Caruba’s source, but instead was the compilation of a series of tweets put out by someone named Peter Fleckenstein aka Fleckman. The article originated in the Denver Post: Tweeter’s talking points echo nationwide When you combine this with some new polling reported by MSNBC last night showing a very wide fact gap between those who rely on Fox News and those who look to CNN/MSNBC, which parallels that of cross tabs by party, race and region. In short it looks like Southern white males who identify themselves with the Republican Party cumulatively don’t believe a word that comes out of Obama’s mouth on anything and the result is so profound as to skew the polling.

For example MSNBC led off in their online version with this headline: Americans still skeptical about Obama’s plans Well no wonder, because a substantial part of the American population has been conditioned in such a way that they will and mostly have accept each and everyone of the talking points below the fold as pure, unadulterated truth.

Because ohmigosh, I heard it on Twitter, it must be true. I don’t know what we can so about this, starting with Shook’s takedown is a good start, but in the end there seems no way to cut through the tweet, it’s gone viral. List below the fold (hopefully, my browser doesn’t show the break, if yours doesn’t sorry for all the screen room).

Page after Page of Reasons to Hate ObamaCare What follows careens between claims that are simply ridiculous to ones that are just false to ones that are somewhat plausible but wrong to misreadings to half-truths. Some of the claims may actually be true, just seen through a lens that hates anything which hints at Socialism. But be that as it may the next wingnut you run into will have heard some or all of these on Rush or the Dori Monson show and will believe every word of it. In light of this it is follow to try to craft any kind of bargain with the Repubicans, their constituents would see any ‘Yes’ vote on anything as a treasonous betryal.

Here are just a few very good reasons to hate ObamaCare:

• Page 22: Mandates audits of all employers that self-insure!
• Page 29: Admission: your health care will be rationed!
• Page 30: A government committee will decide what treatments and benefits you get (and, unlike an insurer, there will be no appeals process)
• Page 42: The “Health Choices Commissioner” will decide health benefits for you. You will have no choice. None.
• Page 50: All non-U.S. citizens, illegal or not, will be provided with free healthcare services.
• Page 58: Every person will be issued a National ID Healthcard.
• Page 59: The federal government will have direct, real-time access to all individual bank accounts for electronic funds transfer.
• Page 65: Taxpayers will subsidize all union retiree and community organizer health plans (read: SEIU, UAW and ACORN)
• Page 72: All private healthcare plans must conform to government rules to participate in a Healthcare Exchange.
• Page 84: All private healthcare plans must participate in the Healthcare Exchange (i.e., total government control of private plans)
• Page 91: Government mandates linguistic infrastructure for services; translation: illegal aliens
• Page 95: The Government will pay ACORN and Americorps to sign up individuals for Government-run Health Care plan.
• Page 102: Those eligible for Medicaid will be automatically enrolled: you have no choice in the matter.
• Page 124: No company can sue the government for price-fixing. No “judicial review” is permitted against the government monopoly. Put simply, private insurers will be crushed.
• Page 127: The AMA sold doctors out: the government will set wages.
• Page 145: An employer MUST auto-enroll employees into the government-run public plan. No alternatives.
• Page 126: Employers MUST pay healthcare bills for part-time employees AND their families.
• Page 149: Any employer with a payroll of $400K or more, who does not offer the public option, pays an 8% tax on payroll.
• Page 150: Any employer with a payroll of $250K-400K or more, who does not offer the public option, pays a 2 to 6% tax on payroll.
• Page 167: Any individual who doesn’t have acceptable healthcare (according to the government) will be taxed 2.5% of income.
• Page 170: Any NON-RESIDENT alien is exempt from individual taxes (Americans will pay for them).
• Page 195: Officers and employees of Government Healthcare Bureaucracy will have access to ALL American financial and personal records.
• Page 203: “The tax imposed under this section shall not be treated as tax.” Yes, it really says that.• Page 239: Bill will reduce physician services for Medicaid. Seniors and the poor most affected.”
• Page 241: Doctors: no matter what speciality you have, you’ll all be paid the same (thanks, AMA!)
• Page 253: Government sets value of doctors’ time, their professional judgment, etc.
• Page 265: Government mandates and controls productivity for private healthcare industries.
• Page 268: Government regulates rental and purchase of power-driven wheelchairs.
• Page 272: Cancer patients: welcome to the wonderful world of rationing!
• Page 280: Hospitals will be penalized for what the government deems preventable re-admissions.
• Page 298: Doctors: if you treat a patient during an initial admission that results in a readmission, you will be penalized by the government.
• Page 317: Doctors: you are now prohibited for owning and investing in healthcare companies!
• Page 318: Prohibition on hospital expansion. Hospitals cannot expand without government approval.
• Page 321: Hospital expansion hinges on “community” input: in other words, yet another payoff for ACORN.
• Page 335: Government mandates establishment of outcome-based measures: i.e., rationing.
• Page 341: Government has authority to disqualify Medicare Advantage Plans, HMOs, etc.
• Page 354: Government will restrict enrollment of SPECIAL NEEDS individuals.
• Page 379: More bureaucracy: Telehealth Advisory Committee (healthcare by phone).
• Page 425: More bureaucracy: Advance Care Planning Consult: Senior Citizens, assisted suicide, euthanasia?
• Page 425: Government will instruct and consult regarding living wills, durable powers of attorney, etc. Mandatory. Appears to lock in estate taxes ahead of time.
• Page 425: Government provides approved list of end-of-life resources, guiding you in death.
• Page 427: Government mandates program that orders end-of-life treatment; government dictates how your life ends.
• Page 429: Advance Care Planning Consult will be used to dictate treatment as patient’s health deteriorates. This can include an ORDER for end-of-life plans. An ORDER from the GOVERNMENT.
• Page 430: Government will decide what level of treatments you may have at end-of-life.
• Page 469: Community-based Home Medical Services: more payoffs for ACORN.
• Page 472: Payments to Community-based organizations: more payoffs for ACORN.
• Page 489: Government will cover marriage and family therapy. Government intervenes in your marriage.
• Page 494: Government will cover mental health services: defining, creating and rationing those services.

Note they are just under halfway through the bill here. I am assuming the page numbers correspond to the original Tri-Committee bill, a version of which is here: (1.8 MB file). Please address individual claims from either the pro or con perspective in comments, but personally I am thinking it is like pushing back the tide of crazy. A tide coming our way at a 140 characters at a time.

Tags: Comments (0) | |

Energy & Commerce version of HR3200: a treat for the Read the Billers

by Bruce Webb

How many people in the “Read the Bill” movement will in fact read the bill? Well here is their chance.
HR3200: Energy and Commerce passed version

I would be interested in knowing how this bill saves $100 billion over the version reported out by Education and Labor House Tri-Committee Health Care Bill. First thing of note is that the new Energy and Commerce version is the exact same page length as the older version suggesting that the changes were mostly in the formulas and not so much the structure.

CBO has not released a score, when it does I will update.

(Update: in comments Movie Guy suggest using some file path information that this is not in fact the final form of the bill. Well maybe, but it is the only one linked from the Energy and Commerce page that shows the activity undertaken on Friday the 31st. Which leaves the question of why all the amendments and the results of their votes are listed and not the bill as approved.
Anyone who can shed light on this please put something in comments.)

Tags: , Comments (0) | |

The ‘Read the Bill’ Movement

by Bruce Webb

Republican obstructionists to Obama’s agenda have developed a new tactic. Seemingly forgetful of how Republican majorties jammed through huge bills without letting Dems actually read them, they now insist that every Dem has to read every bit of every bill and more specifically the Health Care Bill. Well in reality that is not that much of a challenge. Behold a typical page of legislation:

If you click on the image to expand it you will see that is is is quite large print, is double spaced, and much indented. Moreover large parts of it are clear boiler plate, necessary to get the exact language in the subsequent U.S. Code correct, but mostly not necessary to get the sense correct. I don’t mean that you don’t need to read bill language carefully, but it is not like reading a 1000 page bill is the equivalent of reading War and Peace.

This sample is from the Senate HELP bill which is 175 pages long. Why is it so much shorter than the House version? Because it only covers the policy components of establishing the benefits package and administering the Exchange, the bulk of the bill is taken up with various tax provisions, important yes but not so much so that you cannot evaluate the policy options without them. Lets look at the text of HR3200 as introduced.
On page 2 we see that the bill is divided into Division A – Affordable Health Care Choices and Division B – Medicare and Medicaid Improments. Division A takes up the first 215 pages while Division B takes up the remaining 803.

I am not saying that Division B is not important or that it doesn’t have some controversial pieces, but mostly it is tinkering with programs that already exist, the real policy innovations are in Division A. And if we look at that we see that it is divided into four Titles. Title 1 – Protections and Standards for Qualified Benefit Plans, Title 2 – Health Insurance Exchange and Related Provisions, Title 3 – Shared Responsibility, and Title 4 -Amendments to the Internal Revenue Code. Of the 215 pages Title 1 takes up pg. 5-71, Title 2 pg. 72-143, Title 3 pg. 143-167. Even at that much of the material is administrative or spelling out specific language changes to current existing code.

The Republicans are going to try to make hay out of this ‘Have you read the bill’ message and to laugh at Obama’s offer to take people through the bill “line by line” but there is nothing that laughable about it. Because most of the meat is concentrated in just a small number of sections in Division A, a couple of hours of briefing or browsing is probably enough to get the average Congressman up to speed on this legislation. In fact the biggest frustration is that while the pages are numbered there are no page keys to translated Section numbers to pages, but except for that this is not that difficult a read.

When people make the claim that no one can really understand a 1018 page bill realize that mostly you don’t need to deeply engage with more than maybe seventy or eighty double spaced, highly indented pages to get a pretty solid grasp of what the bill proposes.

Tags: , Comments (0) | |

HR3200 Sec 116: Golden Bullet? or Smoking Gun?

by Bruce Webb

On Sunday the CBO released a letter addressed to Rep. Dave Camp, the Ranking Member on Ways and Means, which among other things measured the impact of HR3200 (the House Tri-Committee Health Care Affordability bill) and a public option on employer covered insurance. On net it turns out that they project more people on employer paid insurance than current law. Additional Information Regarding the Effects of Specifications in the America’s Affordable Health Choices Act Pertaining to Health Insurance Coverage

I provide the link for anyone who wants to explore some of those issues. But in this post I want to explore one provision that seems to have contributed to this outcome. Now there has been much wailing and gnashing of teeth among the Single Payer Now! contingent that HR3200 with or without a public option just is a huge windfall to the private insurance companies by providing them with a individual mandate that delivers millions of new customers without cost controls with the end result that insurance companies will just cherry pick their way to billions in profits. Now if they would have paused for a second to wonder why people like Kennedy and Waxman would just sell them out this way they might have been tempted to examine the bill language. But since there was no such pause I guess I will have to step in. So in re-examining the bill yesterday I came across this section whose import I had kind of missed before. pg. 24-25


(a) IN GENERAL.—A qualified health benefits plan shall meet a medical loss ratio as defined by the Commissioner. For any plan year in which the qualified health benefits plan does not meet such medical loss ratio, QHBP offering entity shall provide in a manner specified by the Commissioner for rebates to enrollees of payment sufficient to meet such loss ratio.

(b) BUILDING ON INTERIM RULES.—In implementing subsection (a), the Commissioner shall build on the definition and methodology developed by the Secretary of Health and Human Services under the amendments made by section 161 for determining how to calculate the medical loss ratio. Such methodology shall be set at the highest level medical loss ratio possible that is designed to ensure adequate participation by QHBP offering entities, competition in the health insurance market in and out of the Health Insurance Exchange, and value for consumers so that their premiums are used for services.

Why is this the Golden Bullet for those of us pushing the Public Option? And why contrawise is it reason for the insurance companies to go ballistic? Well a little discussion of that under the fold.

This provision, if implemented correctly, almost totally strips the ability of insurance companies to combine cherry picking and premium increases to continue the huge profits they garner today. What it does is to establish a minimum ‘medical loss ratio’ which in simpler terms means a set ratio of care actually paid for to premiums collected. If by whatever means whether that be gaming the risk pool so an to only insure people unlikely to make claims or by denying coverage to insurees on a case by case basis your medical loss ratio drops below an established level the insurance company has to rebate the difference. In practice this prevents insurance companies from just arbitrarily jacking up rates and simultaneously takes the profit out of cherry-picking the risk pool. In a word this Sec automatically limits profits by establishing indirect price controls. Which is not going to make the insurance industry happy.

To see how this works. Under HR3200 Sec 111 bans limitations based on pre-existing conditions, Sec 114 mandates equal coverage for mental health and substance abuse treatment (p. 23), Sec 113 establishes strict limits on varying premiums across the risk pool (p.21), while section 112 guarantees enrollment and renewal, i.e. no more canceling people who actually dare to claim coverage for getting seriously ill. Now cynics can and do argue that insurance companies are extraordinarily skilled in working their way around these kind of restrictions and this is true enough. On the other hand the better they are at ducking the requirements of Secs 111-114 the more exposed they are to our Sec 116.

Lets say you have a company that against all law and regulation manages to have a plan that only in practice enrolls healthy adults aged 25-35 who rarely if ever use much health care. Under the current system this result yields ideal profits with collections but no payouts. Under Sec 116 your profits would be limited to the medical loss ratio. The answer for the insurance companies is to make up the difference with volume, the incentives are there to provide insurance as opposed to denying it.

Sec 116 would not eliminate all gaming as companies would still have an advantage if they shift their very high cost insurees over to the public option. But from the perspective of the government these are exactly the pool of people likely to end up on medicaid or qualifying for Medicare under Social Security disability anyway, for them the Public Option may just be a way station while they wait to qualify for DI.

What does this have to do with the CBO Report cited? Well Sec 116 prevents the Public Option from drawing too much of the overall pool away from the private plans not because it doesn’t have the ability to undercut them on cost, but because it forces them to compete for their share of the overall pool or risk seeing their gross profits squeezed.

I am still trying to work out in my head where the limits are here, and where the sweet spot for balancing the size of your coverage pool vs level of care the company ends up having to pay, but on a top down look it seems like insurance companies under something close to HR3200 end up making money by insuring people and not by denying coverage in whole or in part. It transforms the industry into a straight service industry from its current predatory model.

Sec 116: Golden Bullet for coverage, Smoking Gun for profits. It just depends which side of the divide you come down on.

Tags: , Comments (0) | |