No Public Option, No Mandate
Over at Fire Dog Lake, Jon Walker challenges those with the “we can fix it later” mentality (which may or may not include enough senators to pass this bill) to hold the individual mandate out of the bill as a hostage to ensure that Congress will have leverage to come back and replace all the things they have compromised away in this bill already.
Progressives should make the rallying cry of “no public option, no mandate” an unmovable demand, now and in the future. Progressives in Congress should refuse to support the individual mandate until it is accompanied by the government guarantee of a decent, cost-effective public health insurance option.
To me that sounds like killing two birds with one stone – we could get a bill without a public option as the Republicans have worked so hard to remove already and we could get a bill without an individual mandate which is the most serious infraction contained in the bill (more serious than the public option ever was).
I would be perfectly content, if the bill passes now without either of those provisions, to never come back and “fix the bill” (at least the way he is thinking of it). But I’d rather gain a temporary victory against the individual mandate and have to come fight against it again in the future, than have the individual mandate pass and face the prospect of having to try and reverse it later.
Originally published at Pursuit of Liberty.
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Dec 18th 2009 • 01:12
by Ronald D. Hunt
Without the Mandate you lose guarantee issue and guarantee renewal. They are a packaged set.
Without guarantee issue and guarantee renewal(basically these ban rescission and and end pre-existing condition insurance denial).
I don’t like this bill but I can see where this is going, The democrats want to start working the discussion of the nation towards the acceptance that health care is a basic human right and from this perspective I can support even the crappy senate bill.
Really public option was about cost control not part of the reason for the mandates. Without some sort of public option in the bill the insurance industry won’t have any reason to rein in the costs. So the 6% yearly health care inflation in the private industry will eventually leave us where we are now with people being unable to afford coverage even with the subsidies, around 2020 average health plan(for a family of 4) is going to be over $26,000 per year.
The median income in the united states is around $40,000 so you can be assured that sometime in the next half dozen or so years we will be forced to revisit this issue.
The Multi-payer fee for service based model of private health care is fundamentally broken, sooner or later this nation is going to be forced to accept this fact.
Dec 18th 2009 • 09:12
by David
Ron,
I don’t see why Congress cannot pass rules about guaranteed issue and guaranteed renewal without offering the insurance companies an individual mandate as compensation. Last I checked the insurance companies are not allowed to opt out of federal regulations.
I was not suggesting that the public option was a reason for the individual mandate and neither was Jon Walker. The logic of his demand was the if we give the insurance companies an individual mandate they will have no reason to negotiate in the future, they will simply lobby for no change (it’s not in their interest to have a public option, but it is in their interest to have individual mandates). Jon was suggesting that by keeping the insurance companies’ ultimate prize out of the bill they will have incentive to not oppose future reform efforts.
Of course my position is that future reform efforts should also reject the individual mandate.
Dec 18th 2009 • 11:12
by craig41
david if they have to accept everyone, and there isn’t a mandate for everyone to buy insurance, adverse selection becomes a big problem. what’s to stop someone from purchasing insurance on the drive over to the hospital if there’s no mandate? that chainsaw induced flesh wound may be a preexisting condition, but the insurance company can’t turn you down, so why not save yourself the money on premiums and not get insurance until you really need it?
the problem with the mandate is that without the public option then there’s nothing to induce competition, so we’re basically just driving people into the insurance companies revenue stream. now i know you will disagree with the public option, and seem to be with the mandate as well, but really these things have to come in a package to get the maximum affect. without the public option there’s no guarantee of price reduction, without the mandate there’s no protection against adverse selection and moral hazard, and without the guarantee issue/renewal then what are we really achieving in providing more access to health care?
one more side note here, health insurance industry profit margins aren’t that high, health provider industry margins are pretty huge. if you really want to make the system more efficient you’ll enact a guarantee issue/renewal, individual mandate, public option, plus you’ll tie that public option to medicare rates, since medicare rates squeeze the providers, which is really where the obscene profit from the misfortune of the ill/injured comes in. of course that would be the government effectively limiting an industries profit, so the right is up in arms against it with their typical “free market my tea bag” rally cry, but the status quo (aka where the free market left us) is the health care industry bankrupting people as they get sick, and eventually even if they don’t (costs are growing twice as fast as income after all), so i don’t see where the free market is going to step in and magically fix this. it seems that, at least with health care, the invisible hand is giving us the invisible finger.
Dec 18th 2009 • 14:12
by MichaelR
So Craig, why is it okay with you to force this on everyone?
Dec 18th 2009 • 16:12
by craig41
well there isn’t a reason that you’ll agree with, but you don’t think we should force fire departments on people, so frankly if you’re not on board with taxation in general i don’t see how it’s any more relevant on this post than it would be on any other. that being said market failures that cause adverse effects to the public at large are something that the government should address (i believe there was a problem with the banking industry along these lines recently). i’m open to other ideas, but doing nothing doesn’t seem to be working for us, assuming anarchy isn’t the end goal.
Dec 18th 2009 • 17:12
by David
I can’t speak for Michael here, but I manage to disagree with forcing people to buy insurance and yet you’ll never see any place where I argue that we should do away with publicly funded fire departments. You are making the mistake of lumping all government together. Have you ever noticed that nobody is suggesting that the federal government should run our fire departments? Besides there being fundamental differences between fire departments and health insurance there is also a fundamental difference between what is appropriate for the federal government and what is appropriate for state or city governments.
Dec 21st 2009 • 09:12
by MichaelR
So your argument is “Sometimes the market is better, sometimes government is better”?
By what principles to do arrive at that conclusion?
Dec 21st 2009 • 11:12
by craig41
i realized that you would make the distinction david, it was more directed at mike. though if you look at the role of government what is the difference between say health care and national defense in the 90′s? the point is that the fire/police you can agree with because they’re more immediate threats, but aren’t the geared toward improving the quality of lives by reducing risk? so i agree with mike’s response, from the exact opposite side, my argument would be that if we can collectively reduce the risk or impact of negative events (war, fire, crime, illness) then we should, and will be better off for it. now you mention a federal fire department, but in the same vein no one is suggesting a state by state national defense, so i think we have examples of things falling to the right level of government, which if you apply to the health care debate you’d now be having a co op vs public option debate, which isn’t what we’re having now (my opinion: co ops won’t work, you can’t draw enough people state by state or region by region fast enough to make them competitive, but that’s a tangent)
Dec 21st 2009 • 11:12
by David
No individual, and very few states have any chance at conducting a war to defend themselves against a foreign power – that’s why that belongs at the national level. Communities are able to reduce the risks and otherwise deal with the problems associated with crime and fire so those belong at the local level. What about illness? To a large degree it is within the power of the individual to deal with their health or illness. That’s the level it should be dealt with. I know that sometimes people cannot cope financially with the effects of illness, but that’s what insurance is for and individuals should be free to make their own choices about purchasing insurance. Of course that’s all theory, but your desire to send this local/individual issue up to the federal level does not make sense.
Dec 21st 2009 • 09:12
by MichaelR
- “well there isn’t a reason that you’ll agree with, but you don’t think we should force fire departments on people, so frankly if you’re not on board with taxation in general i don’t see how it’s any more relevant on this post than it would be on any other.”
Right, so since I hold a principled stance on taxation, the question isn’t worth addressing. Nice.
– “market failures that cause adverse effects to the public at large are something that the government should address”
What about government failures that cause adverse effects to the public at large? Who should address those (i believe there was a problem with the banking industry along these lines recently).
– “i’m open to other ideas, but doing nothing doesn’t seem to be working for us”
Oh totally, you seem REAL open.
The reality is “doing nothing” is the option we haven’t tried, and it’s the only option that even allows for mutual success for everyone.
It’s literally disgusting to me that so many people who think like you refuse to take the responsibility for how immoral their political punditry is. You seem to care less about what anyone wants but yourself, and when I give you the opportunity to explain your justification for utilizing force, you ignore it out of hand because you disagree with my beliefs on taxation.
Let me restate the question more directly, in a few different parts. A) What gives you the right to decide how I have to live my life? B) If you believe you’re justified in doing so, does that mean that you’d be perfectly willing to have me decide how you get to live your life? C) Do you see any correlation between the bigotry and injustices of the past and the legislation that you advocate?
Dec 21st 2009 • 10:12
by craig41
well, mike, we’ve had this taxation conversation before, so i think we know where we stand on it. i doubt anything’s changed to bring either of us towards the other’s position, so why don’t we stick to the subject at hand.
and the government failure was under regulation of an industry that lies behind everything in our economy, so if by that you mean that the government should address it’s failure and apply more regulation i agree completely. yet that’s not what you mean. i suppose the answer to your question would be that we do at the ballot booth during the next election (though in fairness we could do the same thing against a private business by not being customers anymore, i doubt those answers will satisfy either of us, but they were the first thing that popped into my head).
and i am open to other ideas, but the reality is we’ve been doing nothing for some time now, and we see where this is heading. health care costs are rising faster than income, so not only is the problem how expensive it is today, it’s how much more expensive it will be next year. it’s not about caring about what i want more, its that i don’t see how what you want (no government, no taxes) will ever work. so it doesn’t seem like a viable option at this point. if you can convince me of otherwise, well, i’m open to you trying to explain how it will work. until that happens though, health care is something that needs to be addressed, i’ve stated what i think is a good solution, but remain open to other options (it’s just that some options need more back story explaining, since your underlying premise to me seems like anarchy).
now your questions a- nothing, but i’m not the person that would be doing it, our elected officials will, and i have as much sway over them as you do, just one vote. policywise what gives you the right to decide what others do with their life, those that support the public option won’t be getting it because others are telling them what they can and can’t have right? the fact of the matter is in our society we have laws that are intended to direct us toward the betterment of the lives of the members of the society. people will have disagreements over where that path leads, as we are having here, so the best thing you can do to support your ideology is get more people to have it, then you’ll have more representation in government, and can enact the ideology in legislation. realistically that’s what we both should do, neither of us are getting what we want here, david’s coming the closest, but the mandate is still intact for the time being.
b- see answer to a
c- uh, well, no, though i’m sure you’ll find some way to correlate the two, but arguably you could make a bigotry/injust argument against pretty much anything that’s ever happened in history if you were inspired to do so. which in this case you are because you’re anti government and the policies i advocate involve the government doing something.
b-
Dec 18th 2009 • 11:12
by David
The status quo is not a free market. Until people understand they they will consistently misunderstand what the free market has done.
The argument that without a public option prices will not fall implies that insurance companies form a cartel. If you believe that please come out and say so directly.
If Health Insurance profits are low and the real problem is health provider profits then why are we so busy trying to reform the insurance industry?
The fact is that you are right, health insurance margins are low. Health provider margins are high because for some reason providers are able to charge $5 for one ibuprofin tablet (that’s 80 times as expensive as the same drug on the open market). No individual would stand for that, but because individuals are not paying for their care they allow their insurance company to pay $5 per tablet and fail to recognize that the 8000% markup just got passed on to them in their premiums. I honestly don’t know whether it’s the hospital charging $5 for a pill they bought for a pill they bought for $0.06 or if the hospital is paying $4 for the pill wasting $3.94 through their inefficient suppliers. Regardless, it’s not in the insurance industry – we are trying to reform the system by poking the more healthy part of it rather than dealing with the gangrenous side.
Why am I opposed to an individual mandate? Because as soon as the government passes that mandate it becomes their job to define what constitutes insurance. Regardless of how they define it today the possibility hangs over our heads that what is perfectly acceptable insurance for my needs may on day be defined as unacceptable by the government.
As to your hypothetical situation where people purchase insurance as they head to the hospital – is it even possible to get insurance that quick? No, insurance companies do some checking before they issue a policy. Even if they were required to accept people they would still do checking to set their prices. A person won’t be able to purchase insurance on the way to the hospital – they would have to purchase insurance before they knew they were ill or else the insurance would check their records and price the policy accordingly. Besides, don’t you think the insurance companies could figure out a way to create policies that specified that they would not cover any procedures performed before the second or even third monthly payment was due and paid? They would find ways to protect themselves.
Dec 18th 2009 • 12:12
by craig41
ok, you took the example to literal, lets say someone gets diagnosed with a disease, they have no insurance, but they have a few months to wait to get treatment, can’t they then get insurance just in time for when they need it. the example was directed at adverse selection, which becomes a problem with a mandate to cover everyone without a mandate requiring everyone to get coverage.
yes, you are right, it’s not an entirely free market, but realistically what is in this day and age, and what will be? the fact of the matter is it won’t ever be a free market, so you can sit and say that the free market will fix it, and i can sit and say single payer will fix it, and neither of us will ever get what we want (well, i stand more of a chance than you do). so you can continue to claim that the free market would fix all of this, but how do you make that happen? and how does that help? other than, ‘free markets fix all’.
and you target the insurance industry even though they have lower profit margins because they are the ones that negotiate with the providers. what good does allowing insurance to be sold across state lines if insurance isn’t the way to bring down prices? i mean if you’re right and this can’t be fixed via the insurance market, then everyone’s missed the boat on this one. but if people on the left and the right are correct then increased competition in the insurance market would have cost reduction benefits throughout the system (the hospital would either lose some of it’s profit on the advil, or they’d find better suppliers).
and finally, no, the insurance industry isn’t a cartel, they just don’t have any reason to reduce costs since people will continue to pay, and since there’s no viable alternative for those not wealthy enough to pay for medical expenses out of pocket. the lack of competition stems from the barrier to entry into the insurance market. sure you could start an insurance company tomorrow if you’d like, you can’t make it beneficial to yourself or your customers until you are able to competitively negotiate with providers, which requires quite a few customers (i believe the number i heard when co ops were in discussion was a quarter million). a federal government run public option would instantly have bargaining power with providers. and no, selling across state lines wouldn’t help this to the same level as a public option, it might help some, but not much. it would add to administrative costs overall (government run insurance is more efficient already, so this would only put the private market further behind), and in most cases the interstate companies wouldn’t be able to get a good enough deal with local providers to make them competitive with the already established insurance market. so no, not a cartel, i just don’t see where you are even going to slow the rate of increase in insurance costs (still greatly outpacing income growth, did i mention that), let alone make prices drop with the invisible hand alone.
Dec 18th 2009 • 13:12
by David
Yes, someone can find out they have a disease that is serious but where they can put off treatment for a few months – I addressed that. When they try to buy insurance the insurance company evaluates their medical history, that turns up the fact that they have this disease. The insurance companies are not allowed to deny them coverage, but they set their prices based on their findings from the person’s medical history and the disease they have already been diagnosed with.
I concede that you are more likely to get government run single-payer than I am to get a free market, but my claim was not that the free market will fix all as it was that if we don’t recognize how not-free the market is we can’t make educated decisions about the actual causes for our current dilemma nor can we accurately arrive at effective solutions.
That is precisely my argument. We have missed the boat on this one. We need to look at what’s actually happening, not what the insurance companies, or the politicians, or the drug manufacturers are telling us is happening. When we do that we find that most of the health care proposals we have heard rarely even brush up against the causes of our systemic failure.
The problem is that virtually every actor in the system has outsourced their responsibility to other actors. Individuals accept whatever costs their doctor or hospital charge because the insurance company pays the bulk of the bill. Individuals simply choose their insurance policy – except they don’t in most cases. Individuals only pick among the policies offered by their employer. Insurance companies outsource their decisions about what care merits coverage and payments to governments and outside experts rather than to individual patients and doctors. Doctors outsource part of their decisions about what treatments to prescribe to pharmaceutical reps, government and insurance industry bureaucrats, and patients who have only the expertise of the most recent drug commercial they have seen.
The system is out of joint at every turn due to inappropriate outsourcing of decision making by all parties and our solution is to outsource the definition of what is insurance and whether to buy it to the federal government.
Dec 18th 2009 • 14:12
by Tim Carter
http://www.thismodernworld.com/arc/2009/TMW2009-07-29colorlowrescopy.jpg
Dec 18th 2009 • 15:12
by Ronald D. Hunt
“but they set their prices based on their findings from the person’s medical history and the disease they have already been diagnosed with.”
This is only party the case, In order to prevent insurance company’s from pricing people with pre-existing conditions out of insurance another part of the reform is Community rating. The most an insurance company can charge for a policy is 3 times more(house bill) or 5 times more(senate bill) for the same plan.
Both community ratings are way way to high, and the senate bill is slowly being loaded down with loop holes and other nonsense. Ole Joe Libermann(I-Aetna) is basically pushing democrats into a position where their only option is going to be reconciliation.
Dec 18th 2009 • 15:12
by David
Community rating and the individual mandate do not depend on each other (except as a compromise to the insurance companies). I don’t believe I’ve ever argued against the idea of a community rating of any level and Congress has the option of implementing that without foisting the individual mandate upon us.
Dec 18th 2009 • 16:12
by craig41
ok, so you still aren’t addressing the adverse selection problem, if a company can only charge someone who they know is sick and will incur a lot more medical expenses up to 5 times more than they can a healthy person, and yet they still have to offer me the plan, then they can either take a huge loss on me, or charge the healthy person more. but if there’s no mandate to purchase, why would the healthy person pay more when they could just wait until they need it?
overall you’re saying the individual mandate is bad, but without it the rest of the bill won’t work. and the argument you’re hearing from the left right now (myself included) is without a public option the mandate won’t work. it’s the same reason auto insurance is required, insurance industries will only work if the pool is big enough to cover expenses being paid out industry wide. discouraging people by allowing them to choose when they get in (ie not denying preexisting conditions, hence no reason to maintain coverage, along with possibly increased costs for healthy people if the pool shrinks, which without a mandate it most likely will, or at least the insurance companies will assume it will when they determine their pricing) shrinks the pool. how else do you address that other than throwing the bulk of this bill our, or an individual mandate?
Dec 18th 2009 • 17:12
by David
You paint a nice catch-22 on the cost of insurance however government manipulation based on an individual mandate will not address the fact that insurance companies will still price their mandated policies high enough to cover the ever rising cost of care.
I’ve made it clear that I think the individual mandate is bad (we all agree on what I believe about that) but I also believe that the rest of the bill still won’t work with the individual mandate. This whole bill aims at the wrong target in many ways, not the least of which is that it does not actually address the reasons that the cost of care is rising at multiples of the rate of inflation.
Dec 21st 2009 • 11:12
by craig41
well, then how do you address the providers? the problem is that the majority of people aren’t directly paying the providers, as you stated above, but that also isn’t going to change. so pragmatically what do we do?
to the mandate, no, i don’t like it either, but with the goal of providing more access to, and lower costing health care, it does play a role. if no one can be denied via outright denial or over priced denial due to existing conditions then there is clearly more access to insurance which provides greater access to health care (this is just an assumption based on comparing the times in my own life that i’ve been insured and uninsured). i also agree there will be price manipulation, without a mandate it will lead to more uninsured people as those with low premiums drop out as they see the premiums go up), with a mandate prices stand to rise if there isn’t a threat of competition, be it interstate exchanges, co ops, public options, or single payer, the threat of increased competition will remain so long as insurance companies continue to increase price.
if the remainder of the bill won’t work with or without the mandate, i don’t see the reasoning behind taking it out, since it seems the health industry at large will be put at risk by removing it and leaving the preexisting condition portions in the bill, without which we don’t expand coverage in any meaningful way.