At first glance, it’s not too shabby, especially if we think of it as the Senate’s bargaining position vis-a-vis the more liberal House:
- An individual mandate.
- Subsidies up to 300% of poverty. (This is bad: subsidies need to go up to 400%, or a median-income family without employer-based insurance will take a fairly heavy financial hit.)
- Medicaid up to 133% of poverty.
- Hitting the states with some of the new Medicaid cost. (A terrible idea, suitable for bargaining away in favor of a tax increase on high incomes.)
- Hitting companies that don’t insure their workers with some of the cost of the subsidies (not clear whether this includes some of the cost of Medicaid; threatening to do that would probably keep the two Senators from Wal-Mart in line).
- A minimum benefit package, community rating with an age gradient, and no exclusion of pre-existing conditions. (This is the center of the bill. The age gradient is an excellent idea; no reason younger people as a class ought to be subsidicing older people as a class since the older folks tend to have higher incomes and fewer young children.)
- A tax on Cadillac health insurance plans. (An obviously good idea.)
- Co-ops in lieu of the “public option.” No one knows what this means, and it may be b.s., but to my eye the regulations and subsidies are far more important.
Wow, it’s new, shiny, looks good, smells nice. I could see myself in that. How much does it cost?
Why would you require an employer provide an individual mandate. When I lose my job the last thing I want to worry about is shopping for health insurance. It would be nice if I could change jobs without changing doctors.
Is age adjusted pricing desired in an employer provided insurance mandate? Wouldn’t this encourage more hard to prove age based employment discrimination?
Who decides what a minimum benefit is? Does it change as new technology becomes available and "experimental treatments" become common place?
The public option is critical. When you look at Massachussetts, what's killing them is they didn't want to look at the cost structure. They started with the mandate, and said they'd deal with cost later. Let's learn from that mistake, and make sure to deal with costs up front.
Also, as a small businessowner, I agree with Bernie. I don't want to have to think about whether I can afford to insure the older more qualified worker with a family and some preexisting conditions. I want to hire the best person for the job. That is impossible as long as you rely on employers to provide the insurance.
Mark:
The problem with this is that — per the conclusions of Institute of Medicine/Natl Academy of Science and Center on Budget and Policy Priorities — using a de-centralized system of non-profit insurance plans CANNOT achieve sufficient scale or competitive clout to achieve cost savings or regulatory enforcement. ERISA constraints on state regulation of health plans remains a problem. Etc.
I'm searching for the point cite where I recently read these analyses and conclusions. If I can find them soon, I'll post them here (assuming comments are still open).
I have no idea what these are, either. Are they supposed to be non-profits, like credit unions only for health insurance? I believe Baucus mentioned that they'll get start-up help – but what about on-going help?
This almost reminds me slightly of housing reform back in the 1940s and 1950s, which was based around basically funding the capital costs of public housing.
I read the times article, this is going to cost 900 Billion??? No thank you. I'm guessing that the reason it need subsidies is because premiums will go up. I make 75K/year, I'm nowhere near the top 5% of the income scale but I'm not going to get any money to offset the price increase. If the average income in the country is 39K why are we subsidizing up to 66K?
The President was very clear as a candidate, No tax on 95%, Health care would be cheaper, and better. At this point I'll settle for 1 of 3. This is going to give me the same thing at higher cost! No Thank you.
I am assuming premium subsidies are a way to make the lack of a public option more palatable. But, as has been mentioned already, premiums will (not may) increase under this proposal. You're essentially creating an inelastic demand curve with the mandates. If mandates are enforced with tax penalties, as they are here in MA, then you've now provided the insurance companies with a captive market.
The only way you avoid these problems is with a public option, or you're willing to suspend disbelief and put your faith in magical pony coops.
Matt Taibbi's article in the Rolling Stone is a must-read; he makes an excellent case for the public option:
http://www.rollingstone.com/nationalaffairs/index…
I think age gradients are somewhat problematical. At a minimum, I don't think it's reasonable to base the steepness on actuarial calculations of expected benefits to be paid to different age groups. I fear that such calculations would make premiums go up way too sharply to be practical as we age, to the point of creating serious financial problems. Aside from this practical problem, I think there are two ways to justify mild gradients.
Bear in mind that part of the plan, almost any plan, will be to guarantee the availability of health coverage at some reasonable rate, even to the seriously ill. So the excess payment by the young can be seen as paying for a sort of option to retain coverage. The premium is partly for expected health care costs, partly for the option.
Another reason is simpler. Since we expect individuals to have coverage for their entire lives, an actuarially high premium for the young can be viewed as a way of pre-paying for coverage when they get older, so they can then pay actuarially low premiums. You are just levelling the payments, which in the abstract could have the same PV as a steeper set. Of course, there's a transitional problem with this, and I'm not sure what to do about it.