Friday, October 30, 2009

The end of private insurance

Much discussion of the House Democrats' health care bill has focused on its inclusion of the "public option," which most observers see as a Trojan Horse intended to serve, ultimately, as the vehicle for socialized medicine as private insurers are driven from the market--a process that Barry has said may take ten to twenty years.

What strikes me as I read the House bill, however, is how closely it approximates socialized medicine even without the public option. The bill is classic national socialist legislation, in that it takes ostensibly private entities, the health insurance companies, and perverts them into instruments of the state, run top-down and barred from competing among themselves.

Continued in the comments section

5 comments:

Mark R. said...

Under the House bill private health insurance companies will still exist, but to what end? They will be legally prohibited from competing in any meaningful sense. They will be required to issue substantially the same coverages at substantially the same rates, changes in which must be justified to the government. They will be prohibited from underwriting insurance risks in any rational way: they must pay all bills resulting from preexisting conditions, and they will be prohibited from charging lower-risk customers lower rates.

You can force insurance companies to "cover" preexisting conditions, but the resulting product is not insurance. You cannot insure against something that has already happened. It is merely a bill-paying mechanism. Likewise, the House bill prohibits insurance companies from charging premiums on any rational basis. Section 213, titled "Insurance Rating Rules," provides:

The premium rate charged for a qualified health benefits plan that is health insurance coverage 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.

So young people--who, remember, will now be forced to buy health insurance--will subsidize older people.

(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.

That's it. A lower premium for non-smokers or the non-obese? Forget about it. It's illegal.

Under the House bill, it is scarcely an exaggeration to say that health insurance companies are no longer in the insurance business. They can't rate and underwrite risks, which is the essence of insurance. That's illegal. They can't decide to whom they will issue policies; that's illegal, too. They can't offer novel or innovative coverages; their coverages are dictated by law. To a limited extent they can make decisions on paying claims, but under the watchful eye of government regulators. Meaningful competition among insurance companies will be, in effect, illegal. (In that context, it is a sick joke that the Pelosi bill also subjects health insurance companies to the antitrust laws, from which they had been exempted in consideration of their regulation by state, not federal, authorities.)

In the world that the House bill would create, the money we will pay to insurance companies won't really be insurance premiums. Insurance premiums are contractual payments which the parties voluntarily agree upon and which are based on a mutual assessment of risk. Rather, the checks we write to insurance companies will be taxes--legally compelled, at rates set by the federal government that are designed to punish some and subsidize others.

Isn't this socialized medicine in all but name? The only difference, perhaps, is that when things start to go badly, as they inevitably will--spiraling costs, long waits for treatment--Nancy Pelosi and her colleagues will have someone to blame: the insurance companies. Maybe old-fashioned socialized medicine would be better. Then, at least, the government would have to take responsibility for its folly.

Jim G. said...

spot on my friend.

How Rich(ie), he who professes to love capitalism can begin to stomach this sh't is beyond me.

Baxter said...

You guys operate under a lot of fear, which clouds decision making. Further, a "slippery slope" argument is usually a very poor one. It is a favorite of uber partisan's, be they abortion rights activists or gun nuts.

The opposition to health care reform is out of ideas, so it is simply throwing as much fear against the wall as possible, hoping something sticks.

Jim G. said...

Fear? You are kidding right?

Health insurance for everyone is by definition, Socialized.

No ideas? Health saving accounts, tort reform, competition, stopping illegal immigration.

What gene you liberals posses which allows you to relinquish your freedom for a free meal is beyond me. And yes, you may not be in this bunch, but you are worse, in the let's fiddle for the fun of it group.

Gun nuts are not nuts, they want to own guns, it is their right and not your business.

The government cannot run vaccinations, Medicare or mail delivery. How do you think they will get this done?

What state has this been successful?

It is pretty clear the people do not want this monstrosity, why do they keep bringing it back from the dead?

There will be hell to pay for the Liberals if they pass this thing.

Baxter said...

No - not kidding about fear.

The modern world offers many socialized services. The very popular Social security and Medicare programs are socialist by your definition. Coming soon: universal health care. At last.

Your ideas don't add up to much. Nothing was done - save for new prescription mandate absent funding - during the GOP reign. The status quo in health care is largely a consequence of Republican intransigence. As we all agree, the status quo sucks. It costs too much and it leaves too many in the cold.

The Republicans are the "free lunch" crowd, the Good Doc included. Tax cuts, tax cuts and spend as much on defense as the rest of the world combined. Then, more tax cuts. Never mind Reagan and Dubya's $10T of debt...

As has been the case since 1993, the Democrats are the adults in the room.

Gun nuts are nuts. My neighbor does not have the constitutional right to a machine gun or armor piercing bullets. The second amendment is a qualified right, pursuant to a well regulated militia. It is not an absolute right, as is often claimed by the right.

Government will not be delivering health care under the proposals. It is merely setting up new rules of the road. A public option will merely provide a choice. What is wrong with that, save for the slippery slope argument?

Polls indicate support for health care reform at 45/48 - an effective tie. Polls are very supportive - over a 10 point margin - in favor of a public option as part of reform.

Failure to deliver reform will be a huge loss for the Democrats. They need to prove they can govern. As you are well aware, passing reform will bode very well for the majority in 2010. Failure of the bill would be catastrophic at the polls. Thus - we'll have our 60 votes for cloture in the Senate.