Tuesday, December 22, 2009

Eight rebuttals to "10 reasons to kill the Senate bill"

Responses in italics to Jane Hamsher's  10 Reasons to Kill the Senate Bill. I concede the points about giveaways to pharma, but they're hardly dealbreakers.
  1. Forces you to pay up to 8% of your income to private insurance corporations — whether you want to or not. "Up to" is marketing language. It's true that the relatively small sliver of Americans who make upwards of $80,000 and have no access to insurance outside the exchanges will be "forced" to spend 8% of their income on insurance. But right now, their option is to have no insurance -- and therefore risk bankruptcy or death if they get seriously ill -- or pay about 22% more than they will pay on the exchanges -- if they have no preexisting conditions or other budget-busting characteristics, like middle age. The mandated insurance will also have fewer coverage loopholes than individual market policies now offer.  Other "mandated" buyers will pay much less; those under 150% of the poverty line will pay less than $2000 for a family of four.
  2. If you refuse to buy the insurance, you’ll have to pay penalties of up to 2% of your annual income to the IRS. A mandate is the necessary cost of ending discrimination on the basis of pre-existing conditions.

    Many will be forced to buy poor-quality insurance they can’t afford to use, with $11,900 in annual out-of-pocket expenses over and above their annual premiums. That's "up to" $11,900 in annual out-of-pocket expenses if you max out.  Not ideal, not Europe, but better than "up to" everything you own and/or no care.

  3. Massive restriction on a woman’s right to choose, designed to trigger a challenge to Roe v. Wade in the Supreme Court. Women will have the same right to choose they do now. In some states, they won't be able to use insurance bought on the exchanges to pay for an abortion (average price: $400).  States can opt to segregate premiums paid by policyholders (as opposed to subsidies) and allow those premiums to cover abortion.
  4. Paid for by taxes on the middle class insurance plan you have right now through your employer, causing them to cut back benefits and increase co-pays. Or: cut back on access to wasteful care. The hard reality is that the cap on expensive plans is one of the most potentially powerful measures for reducing overall health care costs.
  5. Many of the taxes to pay for the bill start now, but most Americans won’t see any benefits — like an end to discrimination against those with preexisting conditions — until 2014 when the program begins. A pity, and a political risk -- but 2014 is not the end of time.  And those taxes are on insurers,  health care providers, and perhaps very wealthy Americans.
  6. Allows insurance companies to charge people who are older 300% more than others. As opposed to, say, 1200% more as they do now. And the bill prohibits differential pricing for women, who now pay up to (sorry...) 48% more than men.
  7. Grants monopolies to drug companies that will keep generic versions of expensive biotech drugs from ever coming to market. A bit overstated: the bills  provide patent protection for 12 years, with "evergreen" provisions allowing fresh patents if the drug is redesigned. It's true: this is an unfortunate giveaway. But is it a dealbreaker?  Can this battle not be fought another day?
  8. No re-importation of prescription drugs, which would save consumers $100 billion over 10 years. See number 8 - agreed that the pharmaceutical industry got a sweetheart deal.
  9. The cost of medical care will continue to rise, and insurance premiums for a family of four will rise an average of $1,000 a year — meaning in 10 years, your family’s insurance premium will be $10,000 more annually than it is right now. Yes, and snow will continue to fall, and there will still be war. The cost of medical care will rise a lot faster if the Democrats fail to pass a bill.
    More globally, Jacob S. Hacker, a primary architect of the public option, has a concise counterpoint to the intransigence of Hamsher and other disappointed progressives:

    As weak as it is in numerous areas, the Senate bill contains three vital reforms. First, it creates a new framework, the “exchange,” through which people who lack secure workplace coverage can obtain the same kind of group health insurance that workers in large companies take for granted. Second, it makes available hundreds of billions in federal help to allow people to buy coverage through the exchanges and through an expanded Medicaid program. Third, it places new regulations on private insurers that, if properly enforced, will reduce insurers’ ability to discriminate against the sick and to undermine the health security of Americans.
    Hacker, when read in concert with Atul Gawande and other fans of the cost control measures in the Senate bill, also shows progressives where they should concentrate fire when it comes time to mesh the House and Senate bills.


    1. Thanks, phoneranger - definitely the wrong word. Changed to "intransigence."

    2. Regarding points 1 and 2 above, I'm an American expatriate living in Southeast Asia. I don't have insurance because the cost of an appendectomy here is about the same as the cost of one month of insurance in America.

      I wonder if expatriate Americans will be required to purchase prohibitively-expensive American health insurance which probably doesn't even have doctors in our area, or whether we'll be able to purchase the $100-per-year local health insurance in order to get the IRS off our backs?

    3. This was a pathetic attempt at a rebuttal. Your basic argument is "this bill is bad, but so are a lot of things".

      This bill does nothing to prevent escalation of health care premiums, which are what are driving the crisis in the first place. Without the public option to force competition, these mandates, subsidies and removal of pre-existing conditions will encourage insurers to accelerate the already double-digit inflation in premiums.

      The end result will be the middle class, unqualified for the subsidies, will be forced to shell out more and more for health care, or downgrade their plans, exposing them to more financial risk due to health crises. Employers will face the same pressures to downgrade or drop coverage, especially if we tax their policies. The result is a crushing blow for the middle class, and may bring down our entire private health insurance system.

    4. To summarize:

      "Not ideal... poor women in red states can use coathangers... we can't afford to let anyone have Cadillac (read: "adequate") coverage... a pity... an unfortunate giveaway... a sweetheart deal for Big Pharm... doesn't contain costs"

      Why don't you run a TV ad with that information so people can have the appropriate degree of enthusiasm?

    5. AxelDC:

      1) health care inflation is driven above all by rising payments to providers. The Senate bill has a host of cost control measures designed to move Medicare away from fee-for-service over time, including an empowered MedPAC. It's true that a strong public option would have increased the power of those savings by imposing them on another large chunk of the system. But the impact of Medicare/Medicaid practices on pricing is still huge.

      2) The Reid bill mandates insurers' loss ratios no lower than 85% for large groups, 80% for small groups. Some states currently allow minimums as low as 55-65%.

      3) Per Jacob Hacker (cited above), focus on fighting for the stricter exchange rules in the House bill rather than on killing the whole effort, which will leave costs skyrocketing.

    6. I think you could improve your response to #1 by removing the quotes around the words "forced" and "mandated" and then capitalizing them.