Friday, September 18, 2009

Column in today's News and Observer

is a comment on the provisions of the Senate Finance Committee aka Baucus Bill. I suspect alot of the discussion will be about no public option v. public option. I would support public option but don't think it can pass the Senate. A more fruitful line of amedments would be to focus on actually increasing competition in the bill. In North Carolina and in some other states, it will be hard to get competition because we have one dominant insurer, Blue Cross and Blue Shield (96.8% of the individual market; 72.5% of the group market). However, opening up the exchanges to more persons, and even to larger employers might actually shake things up in the group purchase market, in addition to insuring more of the uninsured.

The status quo is bad. Costs are unsustainable. Health insurance premiums are rising 3-4 times faster than wages, and there is evidence this process is accelerating. Do nothing and the next 10 years of wage growth will likely be totally consumed by health insurance costs. And the baby boomers are coming to Medicare. There is nothing we can do about that, but we have got to slow the rate of cost inflation in the health care system. All of this money being spent and we still have Millions of uninsured persons and under-insured persons (and also over insured persons). And we aren't getting our money's worth from our high level of spending.

We could go with a goverment insurance approach of everyone having Medicare. I would prefer this, but it seems clear that a majority of folks don't want gov't insurance (until they turn 65, of course). Instead, we are saying we want market forces to reign in health care costs. OK. We can try that and it might even be able to work, but we have actually got to TRY IT.

The Baucus bill is a useful vehicle to move ahead. It sets up a reasonable structure for private insurance markets for the individual purchase market. The subsidies are likely too low for many between 133%-300% of poverty, especially if only the uninsured and those in small businesses are allowed in. And the CBO says that the provisions of the bill actually reduce the deficit by $49 Billion over the next 10 years. So, as it is amended, holding the fiscal line (meaning balance spending with cuts or new revenue) can lead to a responsible way forward.

So, what we need to do if we are going to go this (market) way, is to let more people into these health insurance markets.

The status quo is unsustainable. We have got to shake things up.


  1. Mr. Taylor,
    At the risk of over simplification, historically Republicans in Congress have resisted upsetting the status quo in regards to healthcare reform. Since much of their base is either socioeconomically trending somewhat upscale or elderly this is understandable. The dems on the other hand have mounted multiple attempts at reform only to have their efforts bogged down in endless committee debates and attacted by Republican and conservative media "Chicken Little" scenarios. Since the most economical and encompassing plan is the single payer system which even many independents view as an overreach of the country's current mindset; why not have our cake and eat it too? One of the single largest contributing factors to the cost of helthcare group plans is the size of the group. GE employess pay less than CREE's per person. So here is my suggestion. Take the consensus reforms that are included in all the current congressional bills (no preexisting conditions exemptions, increased reimbursement caps, plan portability etc.)and add the following. The Democratic National Party engages the insurance companies for a Democratic Party Healthcare group plan available to all who sign up for it. 52 million Americans voted for Barak Obama; that number would be a good start. If the insurance companies are being honest about their competitveness surely their best price scenario would be revealed in a plan which included these numbers. BCBS, United Healthcare, Etna, and any other insurance company would be invited to participate. All the current plans in Congress, as I read them, allow for interstate commerce with regards to the portability reform so this could be the "Public Option" provided by the private sector. Let's see the Republican leadership shoot holes in a windfall profit scenario for the insurance companies that provides genuine cost savings for millions of Americans. Note to Republicans: You can keep what you have now or could purchase this plan without switching party affiliation but don't forget to put Democratic Party Health Insurance on the memo line of your check.
    Cary, NC

  2. What you suggest would be simpler if you just let the ones who wanted to do so to buy into Medicare. You could have the underwriting be done as proposed in Baucus (no pre-existing, premium setting being mostly done based on age), with the 'younger' part of the new Medicare population having to balance year to year (meaning premiums would rise if expenses outpaced premiums; otherwise they would fall). We could repeal all insurance regulations, and the tax exclusion for employer paid premiums to get a truly free market and have everyone buying with after tax dollars to get rid of distotions and you would have a very interesting natural experiment. Caveat emptor.