Health Care Hardball II

Robert Waldmann

(who deeply respects our nations senior citizens) has probably written this post already but he forgot.

I had a concern about the proposal to split health care in the Senate into 2 bills one to be passed as budget reconciliation (the 50 votes bill) and one not about the budget (the 60 votes bill). The problem is that regulatory reform (the less controversial and not budgetary part of the bill) alone would be terrible policy. Then I thought that is the very best feature of splitting the bill. I explain after the jump.

The Obama campaign made a terrible health care reform proposal in what might have been brilliant 11 dimensional chess but probably was one dimensional positioning Obama slightly to the right of Edwards. I think this proposal would make an excellent 60 votes bill *to be passed first* because it sounds wonderful and because once it is passed, the health insurance companies will support the second bill even if it includes a public option.

The 60 votes bill would basically be the 8 fold way of regulatory reform — health insurance must pay for treatment of pre-existing conditions, no rescision for non material errors in filling out forms, a limit on out of pocket expenses etc. This includes premia are a function of age and residence only.

The bill can be very brief (most of the pages of the current bills modify the taxe code and are clearly budgetary). It sounds great. The only problem is that the new reformed system would both depend on private health insurance companies and bankrupt the private health insurance companies.

With regulatory reform, it would become optimal for young healthy people to buy insurance only after they got sick. That’s not buying insurance, that’s legalized theft from the insurance companies.

I would add 4 provisions to the 8

9) Handicapped access. Insurance companies can’t screen out applicants by making it physically different for them to apply. One example of a banned practice is having an office on the 2nd floor of a building with no elevator. To prevent this, insurance companies would be required to send a representative to a prospective client if a physician certified (orally on the phone) that the prospective client not be able to go to the companies office.

Sounds good. The part I like best is that a large fraction of such calls from physicians which would be made from emergency rooms.

10) The 8 fold way includes a description of minimal allowed health insurance coverage. I would add a clause saying something along the lines of — nothing in this bill is to be construed as banning sumplementary automobile insurance or firearms injury insurance. It would be legal to sell insurance which will make the policy maker whole following automobile accidents in which the policy holder is responsible for the accident or in which the responsible person is uninsured or unavailable (hit and run). It would be legal to sell insurance covering fire arms injuries whether or not they are the policy holder’s own damn fault.

The point of clause 10 is that covers two reasons young healthy people might want health insurance. 2 things that can give you a huge medical bill during the period that the insurance company representative is coming to the emergency room are covered separately from health insurance. That makes it more attractive to only buy health insurance after you are diagnosed with cancer.

11) premia can only increase proportionally to per capita health care spending.

12) Recission is allowed only if the client has given false information on age and residence. Voter registration will be considered proof of residence. Recision is not allowed if the client is a registered voter and documents that fact when applying for health insurance.

The purpose of 1-11 is to make a bill which sounds great but would drive health insurance companies bankrupt if the senate doesn’t pass another bill with mandates (budgetary as the fines for not getting insurance go to the treasury) subsidies, medicaid expansion oh and now we’re at it a public plan.

The purpose of 12 is to force young people to register to vote. I’d say there are quite a few Republicans who wouldn’t mind a public option so much if the alternative is a provision which forces young people to register to vote.