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October 30, 2009
WTF?
Okay, this is alarming news. RJ Eskow mentioned the possibility of this in his Huffington Post item the other day, but it looks like the CBO agrees. They're suggesting that the public option premiums from the House bill could end up becoming more expensive than the private plan premiums in the exchange.
...the public plan will pay prices equivalent to those of private insurers and may save a bit of money on administrative efficiencies. But because the public option is, well, public, it won't want to do the unpopular things that insurers do to save money, like manage care or aggressively review treatments. It also, presumably, won't try to drive out the sick or the unhealthy. That means the public option will spend more, and could, over time, develop a reputation as a good home for bad health risks, which would mean its average premium will increase because its average member will cost more.
Now, as I take a deep breath, I hasten to note that this isn't set in stone. Once the public option is passed into law, it will surely go through a variety of tweaks -- filling in loopholes and closing gaps. Actually, it'll probably go through further changes between now and final passage. I hope one of those changes is a clause to make sure the private insurers in the exchange can't use the public option as a toilet.
Also, private insurers won't be allowed to discriminate based upon pre-existing conditions, nor will they be able to engage in rescission. And there are guaranteed benefits and a risk adjustment apparatus in the exchange. It's in the law. So it seems like the private insurers in the exchange would have to zero in on a very narrow loophole through which to dump sick and at-risk customers. And a loophole that small should be easy to repair.
Filed under: CBO || Healthcare || Public Option
Posted By Bob Cesca | October 30, 2009 6:12 PM
Comments
This sounds very odd to me considering the points (as you stated) that exclusion due to pre-existing conditions, rescission and price gouging are going to be illegal.
But another point to consider is (talking point at this juncture because I haven't seen stats on this) that initially only 10 million people would be covered under the public option. If it were truly an immediate option for all, wouldn't premiums be less because of the larger pool that would be eligible?
Is this a complete CBO report? If not, until the CBO comes out with a complete report, I'll lay low. This could be another preliminary report that the Republicans will wave around as proof positive of their stance. Then a FULL report will come out a few days later showing the opposite (to the advantage of reform) and will be completely ignored.
Posted by: Broadway Carl™ ![[TypeKey Profile Page]](http://www.bobcesca.com/nav-commenters.gif)
at October 30, 2009 6:52 PM
The "dumping ground" is out there and waiting. The uninsured... for whatever reason.
This is, of course, why the dreaded "mandatory" provision must be a part of the deal. The pool must be big and must include younger and healthier people (yeah, I know...Stalin...single payer, etc.).
The health care deniers must accept a big part of the new pool at a very competitive rate. I hope the bill does this.
Side note: WTF is up with Ed Schultz?
Posted by: Hielo at October 30, 2009 8:11 PM
I hereby give up on trying to figure this whole thing out.
@Hielo: Yeah,1 Schultz has seemed a bit off lately...
Posted by: Rogect8 at October 30, 2009 8:19 PM
A public option, unlike a private insurer, isn't in the business of making money.
What would be spent on shareholders' dividends and paying obscene corporate salaries will instead go into providing care.
Posted by: Wolfe_Tone at October 30, 2009 8:19 PM
how can the public option put private insurers out of business if it's more expensive?
Posted by: eljefejeff at October 30, 2009 8:33 PM
I'm going to be patient. Medicare today is not the Medicare that LBJ signed into law. Things will be tweaked, changed, added, stirred, blah blah blah.
Plus-
Just a few short days ago we weren't sure we were even going to get this at all. Now look where we're at. We still have to get through conference and things could very well improve.
Posted by: Nanotyrannus at October 30, 2009 11:00 PM
Private corporations are regarded as 'persons' these days. They also pay taxes and have discretionary expenses. How fast can you say 'Tilt !'
Putting those able to game the system up against public facilities is a sure recipe for getting the public set up to take the fall for any problems.
Would someone kindly explain why private insurers are required for services which are not discretionary ? It isn't as if people can 'shop' from a hospital bed...which is the most likely place for them to decide they need 'insurance'.
Posted by: opit at October 31, 2009 12:03 AM
