In a world with too many
wildly expensive treatments and few cures for expensive conditions, many
consumers will be looking for catastrophic only with no frills and no first
dollar coverage. This would be medically necessary major medical and would
return healthcare to “rescue and restore”.
Home care would be the preferred option in many cases.
Post-surgical infections and
hospital related bacterial exposure are part of the collateral damage we
receive with current procedures. Third party payment schemes subject to
Congressional whims doesn’t work because prices are not controlled by demand. To
eliminate third party payers, medical savings accounts should replace medical
insurance and the cost of services should be disclosed fully in advance. Consumers should be in charge of their own
preventive practices and should be able to refuse treatment that is too
expensive and doesn’t work. The FDA/Big Pharma/Malpractice scam cabal needs to
be dismantled. See the article below for
half-measures that won’t work.
Norb Leahy, Dunwoody GA Tea
Party Leader
Obamacare's Public Option Is
No Longer Defensible
Since I last wrote
about it, Aetna’s withdrawal from the
Obamacare exchanges has ginned up even more drama.
Jeff Young and Jonathan Cohn of the
Huffington Post published a letter in which Aetna told the Justice Department that it
would reduce its exchange participation unless Justice allowed the merger with
Humana to go through. This has naturally triggered a firestorm of accusations
about “extortion” and renewed calls for a public option that can protect
people against the threat of insurance-less insurance exchanges.
Could a "public option"
fix the problems on the exchanges? More precisely, the question is: What
problem would a public option solve?
Way back in 2010, when the idea of a
government-run nonprofit health insurance option was hotly debated, supporters
gave three answers to that question:
A public option does not need
profits, so it can sell insurance cheaper than an insurer that wants to markup
coverage for profit margin.
A public option will have lower
administrative costs than a private insurer.
A public option can force providers
to accept below-market reimbursements for their services.
The first argument turns out to be
irrelevant, because with the exception of Medicaid managed-care plans, few
insurers seem to be taking sizeable profits out of the exchanges. Indeed, since
the public option was conceived as self-funding (meaning it covers its costs
out of premiums, with no subsidies), there’s a high risk that the public option
would prove as doomed
as the co-ops, because it would have neither the
experience in caseload management to make money nor the other lines of business
to subsidize losses on the exchanges.
However, supporters argue that a
public option would have competitive advantages that would allow it to break
even where others are currently losing money. One of those competitive
advantages is lower administrative overhead -- in theory, at least. I’ve
already outlined, however, why I’m skeptical of this: While Medicare does have lower administrative
costs than insurers, a lot of that benefit lies either in outsourcing normal
administrative costs to other parts of the government (where they are still
costly, but not on Medicare’s books) or in not doing things that insurers have
to do, like all the boring customer service and billing that comes with selling
to the public, rather than enrolling every citizen over the age of 65.
And then there are provider prices.
Medicare pays providers less than private insurers. The idea is that the public
option could pay more than Medicare, but less than private insurers (say,
Medicare rates plus 5 to 10 percent), and thereby offer a cheaper product than
private insurance.
In some sense, it’s hard to argue
with this: A public option could do this. In theory. But … if this idea is so
clever, why haven’t insurers done it? Probably because they will have
difficulty finding enough providers who will accept those reimbursements.
Now, the public option could, with
legal support, perhaps force providers to take those rates -- say “If you don’t
accept public option patients, you can’t see Medicare patients either.” The
problem is that if you try that, all the groups who would be affected:
hospitals, doctors, auxiliary service providers, health-care workers’ unions
and so forth -- will descend upon their legislators with the white-hot fury of
a thousand suns. These folks are well organized. They are extremely mediagenic.
No lawmaker wants to be seen cutting the salaries of nurses in the neonatal
intensive care unit.
But let’s assume that somehow the
government manages to get past this massive political obstacle and force a pay
cut on our nation’s health-care providers. It’s not clear to me that the public
insurer would be able to make money even then; given the risks of gaming and
adverse selection, there may be no price at which insurance can be sold to the
middle class on the exchanges. But even assuming that it works, what
happens to those providers?
At the moment, their cost structure
is covered by a mix of public insurance paying lower reimbursement rates and
private insurance offering higher reimbursements. Hospitals and medical
practices manage that balance quite carefully to ensure that they
can cover salaries and overhead. If
the individual market is taken over by a public insurer paying less than
they’re currently getting, how many hospitals go into the red? How many doctors
decide that they can no longer afford to take any public insurance?
In short, while a public option
might appear to fix one problem, that's a mirage: The "problem" it
would fix does not exist, and worse yet, it would create new problems.
Health care regulation often has
this problem, which is why much-heralded reforms so often fail to live up to
their promise. Keeping costs down turns into a giant game of whack-a-mole : You knock them down in one area, and they just show up
somewhere else. Or they show up as politically toxic shortages that have to be
fixed by … spending more money.
There are two unavoidable realities
of making the American health-care system less costly: Americans must use less
care, and our nation’s legion of well-paying,
stable jobs in the health-care sector need
to be both less numerous and less well paid. What no one can figure out is how
to generate the political will to make this happen. The public option doesn’t
fix that political problem.
The public option was best sold as a
way to keep insurers from taking excess profits off of a customer base that was
required to buy their product. But as it turns out, that’s the exact opposite
of the problem we actually have. Which makes it a little mystifying that the
public option is still seen as the solution. Somehow in supporters' minds, it
has become a harmless homeopathic remedy that will cure any disease that ails
you. In medicine, when we see such claims, most of us know that we’re looking
at a useless quack nostrum. In policy, we should be similarly skeptical of
miracle cures.
https://www.bloomberg.com/view/articles/2016-08-19/obamacare-s-public-option-is-no-longer-defensible
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