August 2006 Weddings
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Who wants to talk about McCain's health care plan?
I have been wanting to discuss this with normal people for a while, and it looks like we've got a critical mass of conservatives here.
What do the conservatives think of it? Do you genuinely like it on its merits, or do you just like it because it is Not Obama's Plan?
I have been trying to understand the merits of it - particularly on deregulation. I don't have a huge problem with the taxing benefits part of it, if that was coupled with more regulation of the individual market, not less.
But, to me, the biggest problem in health insurance is people with pre-existing conditions getting denied coverage or dropped from their plans. I don't understand how deregulation will help that. Am I missing something about it?
Re: Who wants to talk about McCain's health care plan?
I do have a problem with the taxation part of his plan. I'd like to hear how/why/if conservatives support the government's taxation of health care benefits.
Actually, I can answer this question from my point of view.
If you start taxing it and offering a credit, then the playing ground is leveled between people who get employer sponsored insurance and people who don't. And, most people don't need the amount of insurance that their employer provides, so if you level the playing ground, people can shop around for policies that are a better fit for them.
But, I think this only works with a highly regulated individual market, because as it stands now, most people can't buy individual plans.
Here's my own personal example. I'm on COBRA right now. It costs me $480/month just for me. That's how much my husband's old employer paid to keep me covered. I am now paying this out of pocket, and I don't get a tax credit for it.
I'd love to buy something cheaper because I don't need a zero-deductable plan and I'm paying this out of post-tax income, so I don't have an incentive to stay on the plan that is more than I need, like I did when my husband still worked for this company.
But I can't buy insurance in the individual market because it's not regulated enough. Nobody is forcing them to cover my pre-existing condition, so nobody will sell to me. I have no choice but to stay on my expensive plan.
COBRA is ridiculously expensive. You're right, there should be a way for someone with a pre-existing condition to get insurance without having to go through an employer's plan. Some employers don't offer insurance, some people aren't employed but still want insurance, etc. But don't republicans want less regulation of the insurance industry?
In the very short term, for selfish reasons only, a $2500 tax credit sure would be nice.
In the longer term, I think his plan will create or worsen conditions that are already responsible for rising health care costs. With the incentive to drop employer plans in favor of high deductible individual plans, I think more people will become un- or under-insured. This leads to more unpaid bills in the system. Doctors and hospitals inflate costs for everyone else who does have a means of paying to make up for the shortfall. Insurers will raise premiums to make up for the rising cost of claims. And everyone ends up paying more.
btw, did anyone see the PBS program that aired this week (Critical Condition)? They profiled 3 or 4 people with different health problems who ended up uninsured. It was so sad
?
I agree with the taxing thing because it helps small businesses and employees of small businesses.
As for the pre-existing conditions part - he has talked about not allowing people to be denied on those grounds, but I'm not sure I understand how he'll be able to do that... particularly without bankrupting the insurance companies...
He has also talked about being able to buy insurance from other states, getting rid of those restrictions.
Overall, he seems to be aware of the problems, but I'm not really clear about his plans to fix them.
I still like sbp's idea.
Yes. This is why I want to understand how less regulation helps.
My fear with it is that by leveling the playing ground, employers will drop insurance. Or, healthy people can buy for less in the individual market, and without them risk pooling with sick employees, costs will be too high for employers and they'll drop the plan, and sick people just won't be able to get insurance anywhere.
I haven't read any defenses of the plan, but I don't want to condemn the whole thing just yet. I'm really intrigued by the tax part of it, and think it could be a good thing if the rest of the plan makes sense. But I just want to understand the logic of deregulation to see if there is something I am missing.
I genuinely like most of it. Not all, but it's lightyears ahead of Obama's and would go a long way to solving the problem. BTW I will go on about any of the following points if you want me to. I'm trying to keep it as short as possible but I hope this answers your questions.
Backround on conservative HI reform: Our goal is to make HI cheaper b/c that's what we see as the main problem. IMO liberals (or at least Obama) tend to see "the uninsured" as the problem. But that's not the problem, it's a symptom of the real problem, namely, that HI is becoming unaffordable. We already have gov't programs for the truly needy. The middle class is not truly needy and the gov't is not needed to take care of them. But HI costs are rising faster than incomes and that is not sustainable in the long-run. If HI was priced competitively then everyone except the truly needy would be able to purchase it, and gov't HI would not need to be expanded, and our tax bills would not go up. So that's a basic summary of our goals and it's the basic premise for McCain's reforms - lowering the cost while increasing options.
On to McCain's plan.
IMO the biggest problem with our HI industry is that it's mostly based on 3rd parties (employers). It's economics 1 (not even 101, just 1) that 3rd party payers increases the costs dramatically. That's b/c individuals take less care when spending someone else's money on themselves. You can see an exact parallel in higher education, and even K-12. Rising 3rd party payments have contributed to skyrocketing college tuition costs there as well. This is the background to why we need to tax HI benefits.
The only reason HI benefits aren't taxed now is b/c way back under FDR when America had wage/price controls businesses were allowed to give away benefits in lieu of changing wages. over time that ballooned into an entire system and now we live in a society where people are scared to change jobs, scared to be entrepreneurs (that's the most effective way to get out of poverty BTW), scared to work for a small business, and employers are reluctant to hire certain people (like the obese for example) all b/c of the PITA that is dealing with HI. The reason McCain wants to tax benefits and give tax credits to individuals is b/c that is the best way to change the system from being employer-based to being individual/family-based, like most every other type of insurance. It would open up a range of job opportunities for individuals, it would let employers focus on what a potential new employee brings to the job instead of the costs it brings to the employer's HI bill. An individual system is more cost-effective b/c people take greater care when they foot their own bill. Think of how little you would care about how badly you drove and how many tickets you racked up if you never had to pay a higher car insurance premium. The same philosophy exists for HI. An employer could still reimburse an employee for HI premiums, if it wishes but a HI company wouldn't know and wouldn't be able to raise its rates 30% while still counting on the same number of customers, like it does with employers currently.
There are also privacy issues with employers controlling HI plans. At my workplace my HR manager knows exactly what each individual cost the insurance company. I'm really not comfortable with employers knowing that kind of personal information. But when they pay the bill they have the right to see the receipt. By individualizing the system that problem goes away.
Another big part of McCain's plan is encouraging more choice/options for HI plans. The way it is now there is no free trade or competition among states or nations in the HI industry. If you live in NJ you are stuck with the outrageous costs of NJ HI. Costs for HI for a family of 4 vary drastically in different states. By allowing states to compete with each other the poor people in NJ can benefit from the cheaper plans in MI, for example. The reason HI costs differ so wildly is due to state regulations. I'm sure you've heard of state mandates. Those requirements increase the cost for everyone. Not everyone needs or wants to pay a higher premium just so they can have accupuncture therapy, rehab and chiropracters covered by their plan. But they're forced to pay for those b/c the state mandates it. If individuals were given options - higher premiums for a plan that covers more, and lower premiums for plans that cover less - those individuals could choose what they want, not what their employer wants to foot the bill for and not what some bureaucrat tells them they will pay for.
Another reason HI costs so much is that most people are overinsured. This is connected to state mandates, but also b/c before the baby boomers becamed seasoned citizens health care was less expensive, so obviously HI was too and that led to HI plans where the individual paid no co-pay and literally everything was covered. That is totally unsustainable. If car insurance was anything like HI you would only pay a co-pay for gas and your windshield wipers would be covered. There is no reason a person needs a HI plan to get a physical or have blood work performed. HI costs are super high b/c they cover too much. By offering more high deductbile plans/HSA plans individuals would pay more attention to the prices of doctors and take better care of themselves (financial incentives for driving well works for car insurance like it would work for HI and eating better.) I'm not suggesting everyone go on a HSA plan, only that it should be an option for young/healthy people who don't need a platinum policy. Insurance is supposed to be for catastrophic, unforseen events. Not everyday, predictable and even low cost problems. But if someone wants to pay for platinum coverage, let them, and let them pay the high premium it requires.
McCain's website has a huge list of things we can do to lower the cost: greater transparency of the costs of medical services, which encourages people to shop around; digital medical records, tort reform, early prevention/intervention of chronic diseases, etc etc. All those are benefiical and necessary no matter what HI system we have.
McCain has a plan for people who are denied coverage. Deregulation doesn't mean no regulation! He mentions a "guaranteed access plan" which is a subordinate private plan with gov't assistance just for people who have been denied. Those who are uninsurable are a small part of the country and can be taken care of under new, more cost-efficient market system.
What I don't like about his plan is that while it aims to cut down the waste and fraud in govt programs, IMO the only good solution is getting rid of the gov't programs entirely and McCain's plan won't go that far (for obvious reasons, it's impolitic). When the private sector is forced to compete with the public sector the private sector gets screwed every time. The public programs push a lot of costs on to the private system, which raises our costs and lowers theirs at our expense. It's fundamentally unfair. If this were my campaign, people who were poor would be given a voucher or tax credit to buy a private policy. Private HI plans don't have 40% fraudulent claims like Medicaid in NY state for example. So total spending would be much, much lower without the gov't programs.
Did I miss something? I think I just wrote a book and forgot what else deserves commen!
ETA: the privacy paragraph.
Caden, can you explain how McCain's plan would help with the "pre-existing condition" problem? In the current system, most insurance companies refuse to offer individual health insurance to people who have any number of "pre-existing conditions." The only real way to get around this is to join an employer's group plan.
If employer-based plans are eliminated, will middle-class Americans with pre-existing conditions be left without insurance? Or does McCain propose government regulations that would require insurance companies to insure these people?
caden,
Thank you for your really thoughtful answer. This helps a lot.
For the most part, I agree with everything you've said up until this paragraph. This is where McCain starts to lose me.
It seems like deregulating would create a race to the bottom. There's a reason why credit card companies are all in South Dakota and Delaware - those states scrapped all consumer protections and encouraged the companies to move in to provide jobs to its residents. What would stop states from doing that?
I agree that packages should be flexible, but it seems like some basic guidelines should be there.
For example, federal law says that employer plans must cover the cost of breast reconstruction in the event of a masectomy. I believe some states have this rule for individual plans, but not all. If things are deregulated, who would force an insurer to cover reconstruction? Or would consumers be given this multiple page document and ask to check off every single little ailment that they would want to have covered if they got sick and a price calculated based on that?
I'm not sure if I"m making sense, so feel free to ask me to clarify.
This I did not know about. That's interesting and very reassuring.
But, I guess my thing is, lots of people are denied coverage for tiny things, charged exorbitant rates for tiny things, or denied coverage after the fact. Health insurance companies don't make money on sick people. If there's nothing forcing them to cover sick people, they won't. It seems like a lot of people will be put on a this guaranteed access plan. So, I guess in that respect, I'm not sure how it's any less "big government" than Obama's plan, which essentially involves something very similar - guarenteed access to private plans at subsidized rates.
No it's like car insurance. If you crash your car without any insurance, and afterwards buy a plan then that plan doesn't pay for your previous crash. But your crash is covered when you go from plan to plan with no break. So let's say the industry shifts from group plans to individual ones. If you have no break in coverage then you're covered. If you decide to go uninsured for a while you take that risk. Which reminds me, we need to stop encouraging people not to buy HI by allowing them to pass their bills off to the taxpayers. If you can afford insurance and you choose not to buy it then you need to face the consequences of that decision.
McCain basically calls for a gov't sponsored plan for the "uninsurable," mostly the super expensive people, but also some with pre-existing conditions. Those who have an ongoing medical problem (I'm one of these people), but not one that is so catastrophically expensive that it makes them lepers to the insurance companies, would be able to go from one plan to another and the lack of a break in coverage means the HI plan must cover it - by law. His deregulation is about industry competition, not eliminating the possibility of buying HI for sick individuals.
See, here's where I get lost. Right now, I'm on an employer plan. I've got a pre-existing condition and no break in coverage. Federal law says another employer's plan of 20 or more people has to cover me. But there is no law that says an individual plan has to cover me even if I have continuous coverage. Or is this something he will change?
Thanks for explaining. I am dubious that HI companies will agree to insure these people, so they may all end up on the government plan anyway. I don't understand how this would lead to less government involvement than the current system. But as long as there's a fallback plan in place for the people who HI companies refuse to insure, that would address my main concern.
I have an inherent distrust of insurance companies, so deregulation concerns me. I almost think we'd be better off without them.
This is also what I'm confused about.
Who would force an insurer to cover certain things? The customer! The way to solve this is by increasing transparency. The way it is now, with employer-based plans, the employer decides what plan you'll get and whether or not it'll pay for mastectomy coverage, instead of you deciding. In fact, many people might not even know if they have mastectomy coverage. The industry and coverage is not transparent.
The "race to the bottom" argument has been used against anything and everything related to free market capitalism. Competition isn't a race to the bottom b/c consumers actually want coverage. Business might want to provide the bottom, but its customers want the top and won't pay if the coverage isn't satisfactory. To the person who foots teh bill (and that's all that matters to a business) it's about the best price for the best coverage. So if HI company A offers a plan without mastectomy coverage and HI company B does and both are the same or similar price, then company B wins the customer. Eventually company A goes out of business and we have a nation of covered mastectomies. All competition requires is price and product transparency so people can make informed choices. Even if insurers decided not to pay for obvious things, the gov't would step in and enforce a basic plan. McCain is not a libertarian. Nothing he proposes is ever entirely free from regulation. He would loosen the market, that's all.
McCain's guaranteed access plan is for people who have been denied an insurance plan, not a particular medical service.
Medicare and Medicaid both deny coverage for very tiny things. So your concern will not be resolved by a gov't plan, if anything it would be worse b/c there would be no recourse or alternative for customers. I'm not sure what you mean by HI charging exorbitant rates for tiny things. An insurance premium is what it is and its prices should be detailed upfront. Maybe you mean medical services, but that is different from insurance.
About denying coverage- this is similar to the "race to the bottom" argument. Insurance companies that screw over their customers lose them and then go out of business. The gov't doesn't ever go out of business. What does it care if it denies someone coverage for something? The public won't care b/c it's their money (taxpayers) that would have paid for it. Whereas with private companies competing there are options and recourses, and the public does care to fight back. I don't actually think this is a huge problem - denying all payments for a certain illness altogether. What is more likely is that a HI company will choose which treatment option they will pay for. They want and will pay for A, you might want B. Unless we get rid of insurance and move to a fee-for-service system, that will always be a problem no matter what industry we live with, public or private. It's an issue in socialized counties too (at least our treatment options aren't rationed as well as chosen by someone else.)
Yup. McCain's plan addresses and promotes portability. His website says the gov't would "ensure" those with pre-existing conditions get the coverage they need.
Have you tried to get an individual plan? Because I bet you would still be able to get one. My sister was on Cobra too and is now a self-employed contractor. She has no problem getting an individual plan and she has a blood disorder. My BFF's husband had a stroke at age 30 and is very high-risk. They also have a self-employed plan (typically a different one every year b/c they shop around) and have never been turned down for coverage.
The number of people who are completely denied access to any insurance plan is not large at all. We hear horror stories about it all the time, but that is misleading people to think there's a national crisis when really we're talking about a small percentage of society.
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KateAggie- here's a relatively short article that compares the two plans. it's a little out of date (it's wrong on McCain's plan for pre-existing conditions, which is now prominently featured on McCain's website haha) but it's still pretty good.
http://money.cnn.com/2008/03/10/news/economy/tully_healthcare.fortune/
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I'm not sure what you mean by HI charging exorbitant rates for tiny things.
Here's what I meant. There's an article floating around online, where a woman sought treatment for post-partum depression. Had one therapy appointment and was prescribed some medication that she never ended up taking because she got better. Five years later, she tried to get health insurance and was blacklisted because of that appointment. The cost of her coverage was 3 or 4 times the cost of her husband's coverage simply because the insurance company listed people that had been prescribed that medication as high risk, high cost types of customers.
So, I guess my point was, it seems like there's a gray area that isn't really addressed. Healthy people are well served under this plan. Cancer patients can get on the supplemental safety net type program.
It just seems like the people with minor issues get caught in the middle. The writer can afford the $1000/month payments for her insurance, but should she really have to? I guess where we differ (and Obama and McCain differ) is that you trust that competition will fix this, and I don't.
Anyway, thank you again for being a fountain of economic wisdom.
I will be happy to discuss it with you, but I don't have the energy or focus right now. Caden wore me out. And I have to leave here soon, I am meeting mesheliu tonight for a mini debate watching GTG.
I will share my wisdom tomorrow or next week, I promise.
I have a question. Where does this "consequence" end, and at what cost? My BIL is/was a screw up, of sorts. He was in college for seven years, and at age 25, just graduated. He was covered, somehow, under his parents' plan until graduation, but now he is not. He just graduated in May. He started in August to try to get health insurance. He cannot qualify, because he has asthma and ADD, and no one will take him on. What is he supposed to do? He already has an outstanding hospital bill for an asthma attack he had. He can't afford to pay it.?
I'm all for consequences. I really am. But he's costing ME money now by not paying his hospital bills. And he's trying to get coverage, but can't.?
?I disagree with this comparison. If you have an asthma attack while uninsured, and then become insured, of course your insurance shouldn't pay for the costs associated with that prior asthma attack. But as with car insurance, one someone IS insured, even if they get in the exact same kind of accident, they will be covered.?
Am I making sense??
Deductive reasoning isn't a conservative or liberal attribute. ~epphd
Here's the article ESF was referring to (sorry I'm in FF and can't make it clicky): http://www.slate.com/id/2125233/
Pricey Therapy
The downside of making postpartum depression sexy.
As Brooke Shields testifies in her recent memoir, into many a postpartum life a little rain must fall. And evidently, a little Tom Cruise as well: someone who tops off a struggling new mother's depression with a downpour of judgment and misunderstanding. When Cruise blasted Shields on national television for using antidepressants to treat her postpartum depression, I thought, "Wow, he'd get along great with my health-insurance underwriters." They slapped me with a five-year penalty of raised premiums because I sought help for depression following the birth of my daughter.
In July 2004, my husband and I applied for personal health insurance from Anthem Blue Cross and Blue Shield of Virginia. He had left his job to start his own company, and I was self-employed, so we began looking for family coverage while the COBRA clock ticked. Because I was blessed with lifelong health, the "medical information" page of my application was relatively brief. I listed a prescription for Clomid, a fertility drug I'd taken while trying to conceive my daughter, and a single appointment I'd had with a psychiatrist after she was born, regarding the possibility of postpartum depression.
Shortly after we submitted our paperwork to Anthem's headquarters in Roanoke, the letters started arriving in our mailbox. My application was under review. More information was needed. Then another letter arrived. My husband and 9-month-old daughter had been approved for coverage at Level 1, the company's best rating. I had been rejected. The reason: the psychiatrist appointment.
I contacted Anthem. The company could not deny me coverage because, as stated on my application, I met all the criteria of the federal statute that protects health-insurance coverage for workers and their families when they change or lose their jobs. A week later Anthem approved me at Level 4, its worst rating. My husband and daughter's combined monthly premium was $237. Mine was $730.
During numerous calls to Anthem in the ensuing weeks, I learned that an indication of depression?including temporary postpartum depression?within a year of application sends a candidate down the Level 4 chute if legally she can't be rejected outright. "You were on medication for your condition," a representative noted during one of the calls. "It was a physician's sample," I explained, "and I discarded it after I learned the medication could pass into breast milk." The representative was not swayed. "I can only go on what the doctor's form says, and the form says Zoloft."
Over the next three months I appealed Anthem's decision. I argued that a single visit to a specialist should not be cause for charging an applicant the highest possible premium. Nor should taking a single pill of a medication that takes weeks to become effective be considered tantamount to receiving drug treatment. Trying to understand my low rating, I got a copy of the original form submitted to Anthem by the psychiatrist I'd seen. On the "diagnosis" line, she'd written "depression." I asked her to send a follow-up letter. In it she explained that during our one appointment, I'd had "depressive symptoms" that had subsequently been resolved.
Nonetheless, Anthem twice denied my appeal. The identical rejection letters assured me of the "thorough review" of my case. But it was hard to have faith in that when the underwriters failed even to get my name right on the letters, addressing me by my husband's last name after I'd told them in writing of the error. In the end, I had to opt for an inferior and yet more costly insurance policy, at $450 a month, than the one granted to my husband and daughter. After more calls to Anthem, I learned that the psychiatrist's appointment would bar me from a Level 1 rating for five years. I later filed a complaint with the Virginia Bureau of Insurance, but the state found no wrongdoing on Anthem's part. Insurers are free to establish their "own guidelines without regulatory interference," as long as those guidelines apply to everyone.
I couldn't believe, though, that taking an hour to meet with a professional about feeling overwhelmed and exhausted would brand me an insurance pariah. For the previous two years, I'd been singularly focused on staying healthy as I went through fertility treatments, carried my daughter in utero, endured a difficult labor that ended in an emergency Caesarean section, soothed her through three months of colic, and nursed her around the clock for nine months. While I was pregnant, I'd been bombarded with the message, "If you're depressed, seek help!" Glossy magazine articles, doctor's handouts, and childbirth classes depicted postpartum depression as both relatively common and treatable.
During the early weeks at home with my daughter, anxiety, fatigue, and loneliness defined my existence. Surely willpower could fix my sense of hopelessness, I reasoned at first. I was 35. I'd experienced hardship. But this was different. I'd never before forgotten the feeling of joy. I'd never been bereft of ideas about how to make things better.
Did I have "depression," as the psychiatrist initially wrote on the Anthem form? Or did I have "depressive symptoms," as she later clarified? In the shrouded world of insurance underwriting, these semantics seemed to determine my rating and premium. Yet I don't think many doctors realize the power of their word choice. And the pregnancy articles failed to mention that entertaining the idea that I needed help for PPD?even once?would have far-reaching repercussions. No one explained that my $250 appointment with a psychiatrist would constitute a grave risk to an insurer and cost my family thousands of dollars in raised premiums. Or that my low health-insurance rating could also adversely affect the cost and benefits of other kinds of insurance, such as life and disability. The postpartum depression awareness campaign to which Shields laudably devotes herself has worked in part. But knowledge of PPD leads to another baffling and difficult condition: being punished for advocating for your health.
This past February, I became eligible for Anthem's Level 3 coverage because a year had passed since my appointment with the psychiatrist. Still, my coverage continues to cost more than twice as much as my husband's. I won't be eligible for his Level 1 rating until 2009, and only then if no depression or other malady arises in the interim. To understand where our money is going, I Googled Larry Glasscock, Anthem's CEO, and learned that the company's "significant growth" reportedly grossed him upwards of $40 million in cash bonuses and stock awards in 2004.
Years ago, when I was in middle school, I used to draw braces on the gleaming white teeth of models in teen magazines. Since my struggle with postpartum depression, I like to conjure up my 12-year-old self, along with a splash of the late artist Jean-Michel Basquiat. In my fantasies, I swoop down on the piles of pregnancy journals in doctors' offices, sail onto the sets of talk shows, and hover above the handouts given out in childbirth classes. When I come across the line, "If you're depressed, seek help," I write, with my can of orange spray paint, "BUT PAY FOR IT IN CASH."
"As of page 2 this might be the most boring argument ever. It's making me long for Rape Day." - Mouse