Karl Rove on Health Insurance
I’ve had a few posts on healthcare in the past, such as looking at how costs increased across various presidential administrations to my own run-ins with insurance companies. So I was kind of interested in this piece on healthcare on the WSJ by Karl Rove. Let me pick a few passages and comment…
The first is it’s unnecessary. Advocates say a government-run insurance program is needed to provide competition for private health insurance. But 1,300 companies sell health insurance plans. That’s competition enough.
Translation: Because competition is the best of all of scenarios, if we have competition enough, we can conclude that all is well with the current health insurance market. Kinda sounds like we don’t want any more insurance companies.
Second, a public option will undercut private insurers and pass the tab to taxpayers and health providers just as it does in existing government-run programs. For example, Medicare pays hospitals 71% and doctors 81% of what private insurers pay.
Who covers the rest? Government passes the bill for the outstanding balance to providers and families not covered by government programs.
But those who have neither Medicare nor private health insurance pay even more. Which means that a private insurance companies pass the bill for the outstanding balance to providers and families not covered by private insurance programs. And since Rove makes it clear that’s bad when the gubmint does it… its not entirely clear why its not bad when the private insurers do the same thing.
But be that as it may, even if everyone had private health insurance, and all private health insurance companies were equally efficient, by bargaining prices down they would be passing “the bill for the outstanding balance to providers.” Unless, of course, th power of the market is such that savings materialize out of thin air and nobody gets hurt.
Fixing prices at less than market rates will continue under any public option.
What prices qualify as less than market rates? As noted above, non-insured people pay more for healthcare. Does that mean insurance companies pay less than market rates? What about the private insurance company that squeezes healthcare providers the most – it pays less than all other health insurance companies. Is it paying below market rates? Well, here’s the thing – market rates are what prices agreed on by willing buyers and willing sellers. Nobody is forced to provide health care… except emergency rooms, and even they can simply shut down if they choose.
Third, government-run health insurance would crater the private insurance market, forcing most Americans onto the government plan. The Lewin Group estimates 70% of people with private insurance — 120 million Americans — will quickly lose what they now get from private companies and be forced onto the government-run rolls as businesses decide it is more cost-effective for them to drop coverage.
Why? If private insurance companies are more efficient, why would this happen? On the other hand, if private insurance companies are less efficient, who needs them?
And BTW, allow me to restate one of these sentences…
The Lewin GroupA division of United Healthcare Group estimates 70% of people with private insurance — 120 million Americans — will quickly lose what they now get from private companies and be forced onto the government-run rolls as businesses decide it is more cost-effective for them to drop coverage.
Somehow that sentence reads a bit less convincing now, doesn’t it?
Fourth, the public option is far too expensive. The cost of Medicare — the purest form of a government-run “public choice” for seniors — will start exceeding its payroll-tax “trust fund” in 2017.
This just adds to the earlier question – if the gov’t run option is far too expensive, how would it manage to crater the far more efficient private insurance companies? By passing “the bill for the outstanding balance to providers?” But we’ve already seen that the private insurance companies do that too.
Medicare and Medicaid cost much more than estimated when they were adopted.
Yeah, and that was 1965. Even Walmart’s costs are much bigger than they anticipated in 1965.
One reason is there’s no competition for these government-run insurance programs.
So now we’ve come full circle – there’s no competition for government-run insurance programs because government-run insurance would crater private insurance programs. And because there’s no competition, costs are higher. Shorter Karl Rove: costs are higher because they’re lower. And costs are lower because they’re higher.
Fifth, the public option puts government firmly in the middle of the relationship between patients and their doctors. If you think insurance companies are bad, imagine what happens when government is the insurance carrier, with little or no competition and no concern you’ll change to another company.
Let’s see… a few months ago, my wife spent a few hours on the phone trying to explain to our insurance carrier that they had been defrauded by a medical provider who charged them for services which were never provided to me… including being billed for the time of a doctor I never saw. The insurance company happily paid anyway – why should they care if they’re being blatantly defrauded when they can just pass on the cost to their customers? But I can top that – about fifteen years ago, my insurance company paid for almost all the costs I incurred while delivering a child. My co-pay was small – its been a long time so I don’t remember how much, but maybe it amounted to a couple hundred bucks. That a) I hadn’t been in a hospital within months of the supposed delivery date, b) I don’t have any kids, and c) I’m a guy apparently apparently wasn’t enough to throw a monkey wrench in the proceedings. I got news for Karl Rove – if your choices when it comes to keeping down costs are preventing fraud by doctors or refusing to approve procedures your customers want, if you go with the latter you really don’t have any concern those customers will change to another company. None.
Health care desperately needs far-reaching reforms that put patients and their doctors in charge, bring the benefits of competition and market forces to bear, and ensure access to affordable and portable health care for every American. Republicans have plans to achieve this, and they must make their case for reform in every available forum.
Hence, those proposals enacted while GW was in office and Republicans controlled the Congress.
He ends with this:
Defeating the public option should be a top priority for the GOP this year. Otherwise, our nation will be changed in damaging ways almost impossible to reverse.