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10/19/2009
WI on the leading edge - in the wrong direction
Insurance mandates add huge costs Health insurance mandates cost money. Big money. Contrast what Wisconsin is doing – adding mandates – with what Florida has made available – no mandates.
Wisconsin
A new state law allowing adults up to age 27 to keep medical coverage under their parents’ policies will cost governments, including Milwaukee Public Schools and the state of Wisconsin, millions of dollars annually.
Imagine. A controversial bill, that “would incresase costs significantly” was stalled in the legislature. Miraculously it ended up buried in the state budget. I could scream.
The new law originated in the Senate in February, but was stalled in committee when a fiscal estimate showed the expansion of health care coverage would increase costs significantly.
For the state employee plan, the increase would be $10 million to $10.9 million annually and would cover about 20,500 individuals between the ages of 19 and 27.
For local government plans, the annual cost is estimated to range from $1.5 million to $1.8 million, according to a state fiscal estimate.
Despite being stalled in the Senate, the measure was folded into the state budget and will begin in January.
Florida (May 29, 2008)
The Sunshine State has about 3.8 million people without insurance, or about 21% of the population, the fourth-highest rate in the country. The "Cover Florida" plan hopes to improve those numbers by offering access to more affordable policies. As even Barack Obama says, the main reason people are uninsured isn't because they don't want to be; it's because coverage is too expensive.
But the Florida reform, which both houses of the legislature approved unanimously, renounces Mr. Obama's favored remedy: It nudges the government out of the health-care marketplace. Insurance companies will be permitted to sell stripped-down, no-frills policies exempted from the more than 50 mandates that Florida otherwise imposes, including for acupuncture and chiropractics. The new plans will be designed to cost as little as $150 a month, or less.
Mr. Crist observed that state regulations increase the cost of health coverage, and thus rightly decided to do away with at least some of them. It's hard to believe, but this qualifies as a revelation in the policy world of health insurance. The new benefit packages will be introduced sometime next year and include minimum coverage for primary care and catastrophic expenses for major illness.
Critics are already saying that, without mandates, the plan won't guarantee quality of care. That's purportedly why the states have imposed more than 1,900 specific-coverage obligations. But invariably mandates are the product of special-interest lobbying. Health-care providers – not consumers – are always asking for tighter regulation, because they profit from making everyone subsidize generous plans that cover, say, podiatry or infertility treatment. Given the choice, consumers might choose policies that cover some services but not others.
These government rules are imposed without regard for how much they will cost and who will bear the burden. In practice, the costs are disproportionately carried by lower- and middle-income workers, who already on average have more limited insurance coverage as part of their compensation, or none at all. When prices rise because of mandates, the less affluent are often forced to make an all-or-nothing choice between "Cadillac coverage," which involves just about everything, or going uninsured. In other words, they're prohibited from buying the lower-cost options that might be better suited to their needs.
One solution to our health care challenges. And from a Republican. Imagine.
Jo Egelhoff, FoxPolitics.net
COMMENTS
Jo, Ah, yes. Just let the private market magically provide acceptable coverage levels for people with no money. The problem of course is that stubborn saying "you don't get Something for Nothing". The Nothing here is the much touted $150 per month cost you refer to. The Florida plan provides coverage with so many holes in it as to be almost worthless and since there are no subsidies for people who can't pay the premium very few people low income people can afford it. It is obvious that if there is a $150 plan that is half the price of a $350 plan and no huge buying group then the plan will cut something of real cost out (for example those pesky in-patient costs). If you want to determine what program (Florida or Wisconsin)is better then do the math. How many people extra will be covered by the WI plan, what is the average cost per person, what is the average quality of coverage. By the way, if you think Florida should increase the coverage level for its plan and force the insurers to take a loss where will they get the money? From all the other policy holders in the state of course. You seem to always miss the fact that there isn't a single example of private health insurance covering any group of people at a cost less than an equivalent group in a government plan. Find one for me please and I'll do the math on it.
dave allen (Mon Oct 19 07:07:31 2009)
Yea, and from a republican... let's do ANYTHING but the right thing. If FL politicians were smart, if WISCONSIN politicians were smart, they'd expand BadgerCare to every citizen and attract companies and jobs to the state.
But not even Democrats are smart, because they also pocket cash from the insurance industry that wants things to remain broken.
Jack Lohman (Mon Oct 19 07:36:23 2009)
Yeah, Dave, these people "can't afford" to pay even a $2 copay, but they can afford cigarettes ($75/carton), tattoos, jewelry, beer, cell phones...This is an actual example of a recent ER patient. When anything is considered "free", the demand/usage goes way up. It's the "I'm going to get mine before someone else" mentality.
And it's the "I don't have to be responsible as YOU have to pay" mentality. My sis-in-law, also an RN was told by a welfare bum--(YES BUM! y'hear?)--"We can have as many babies as we want and YOU have to pay for us"!!!
What we need is MAJOR MEDICAL insurance only, and paying out-of-pocket for the rest, just the same as we pay out-of-pocket for plumbers, electricians, carpenters, etc. If you paid your repairmen THROUGH A MIDDLEMAN, would their price be lower, or HIGHER?
Consider this: some plastic surgeries cost only about $800 more than some recent labwork done for my spouse! The labs were so high because all the middlemen have to get their cut. It doesn't natter whether the middleman is private insurance or gov't--a middleman is a middleman.
Consider utilities, housing, food--hey, isn't FOOD even more crucial to health than insurance for a petty sore throat? What about heat? You have to stay warm to keep from freezing to death!
So why not give everyone food, heat, clothes, housing, transportation...after all, these are essential, too! Oh, wait--that's what a SLAVE'S master was supposed to do (and they still do in places like India; I know, as we know folks there).
The bigger problem is not our provincial little WI--it is world-wide. The dollar has fallen from its throne, and that means other countries will not be funding America's narcissism anymore. Why would a company do business in a state (or even country) with multitudes of regulations, high taxes, etc. when they could go elsewhere, say to China?
China doesn't have emissions standards, so they can be as dirty as they please. They don't have much in the way of food inspections, so that's good (for the large corporation.) And they won't be bound by Cap-and-Trade. Why wouldn't any giant company want to leave and go there?
And don't forget, these giants became so with the help of GOVERNMENT, by getting govt to pass all kinds of regulations, with the effect of closing down small competitors. Read "The Untold Story of Milk", or just look at all the small, CLEAN, family butchers that have closed, while huge slaughterhouses that have guts mixing in with meat are allowed to stay open--read "Chew on This".
There's a lot more wrong with WI than merely health insurance or lack thereof. We have the highest per capita deficit in the whole US, thanks to Diamond Jim. And you think offering health--not major medical--insurance to all would get rid of this behemoth!?
emily matthews (Mon Oct 19 08:41:23 2009)
Well it's very EASY for Insurance Companies to do business in a place where they have less regulation. And I would be in FAVOR of less regulation if the insurers did what was necessary to relieve themselves of all that regulation. But they won't. Actually they can't.
Insurance companies, by design, are beholden to two masters ... the people that pay them premiums, and the people that invest in them. Even "Mutual" companies are stuck in this position.
When push comes to shove, their loyalty will always be to the investor, because they want to KEEP the money from the market which is invested. As for the policyholder with a claim - there's no guarantee that money will come in again next month or next year. So when it comes to paying a claim or paying investors the investors win that coin toss disproportionately.
As a result, the policyholder finds themselves in the undesirable place of having to pay for their loss (because their "insurer" weaseled out through fine print) THEN pay again if they want to secure an attorney to sue the insurance company and TRY to recoup what they should have received in the first place.
I don't know about you, but I don't have that kind of money.
So where does the public turn when they feel they have no other recourse? The government. Yes - some go running to the Feds or the State at the drop of a hat, but even those who believe in less government will "go there" if they are harmed severely enough or often enough.
So what should the insurance industry do to avoid all the government regulation? Simple - do the right thing by your policyholders. Ouch.
Yes, this even means that your beloved investors might actually have to take a hit once in a while when something like Katrina happens.
Sadly, I do not believe we'll ever see the day when the insurance industry changes their way. So the government regulations, intervention, and ultimate takeover (no matter how anti-free-market it may be) is inevitable.
Jeff Riedl (Mon Oct 19 08:53:30 2009)
Oh come on, Emily. I am not a Doyle supporter but our problems began way before his term. It's called "politicians corrupted by campaign cash," and it will continue until we clean up our electoral system. And the D's are as corrupt as the R's. It is bipartisan corruption, and no society can sustain it.
Jack Lohman (Mon Oct 19 09:01:16 2009)
DAve
And you can not find a single government plan that is not in some way subsidized, or pays less in benefits than private insurers. So you are not comparing apples to apples. We DO NOT have a free market, and that is the problem. Competition would provide more and cheaper care than the highly regulated and subsidized system we have now. Government fouls up everything it touches.
Ken Van Doren (Mon Oct 19 11:43:59 2009)
Thanks Emily and Ken, for bringing sanity and reality to this discussion. You naysayers (in particular, Dave and Jack), you show me how government-funded health care reduces costs. NOT shifts costs but reduces costs.
Jeff, why are insurers any different from other publicly held companies in the U.S? IF consumers can know enough to make wise choices (therein lies a role for government - standardization, transparency, regulation), why wouldn't health insurers have to be competitive? Why do you think they're not competitive now? Well, lack of transparency in many markets doesn't provide competitive private rates, that's true. But why do you think group rates don't have to be competitive? Are the buyers of group insurance ignoring prospects of lower costs? Important also to remember that health insurers base their premiums on provider costs and their ability to negotiate competitive rates.
Jo (Mon Oct 19 13:09:09 2009)
Emily,
Shame on you. "There but for the grace of God go I..." Have you every heard of that saying? For you to discuss a policy issue about health care and denigrate the real suffering going on out there by referring to an ER patient that is a smoker and has tattoos is disgraceful. Your other comments may be worthy of discussion but you seem to think that you can play God with their lives because you seem to know deep inside their soul or pocketbook.If you and all your friends and all your relatives and everyone you care deeply about are so healthful and pure that you aren't an undue burden on the health care system that's great! I think you ought to buy a major medical policy and give up all coverage that could possibly be connected to lifestyle or bad decisions. Then you'd be practicing what you preach. Then when one of you has a heart attack the insurance company can refuse to cover you because you had a little too much fried dough at the county fair.
dave allen (Mon Oct 19 13:52:57 2009)
Jo, let's start with the fact that the single-payer system was left off the table at the demand of the insurance industry, which should instinctively tell you that it would have eliminated industry waste. And if that isn't enough add the fact that Medicare Advantage plans cost taxpayers 17% more that the traditional government-run Medicare system. And if that isn't enough either, add that the US pays 16.5% of GDP for our private system compared to 10% and less in Canada, France, Germany, Switzerland and etc for their government-run systems. And if that isn't enough add all of the insurance bureaucracy costs that are NOT in government-run programs: high expenses for CEO salaries, bonuses, stock options, shareholder profits, broker commissions, gatekeeper costs (denials), rescission costs, and their political costs (lobbyists and campaign contributions) because, don'cha know, the politicians get a share of the health care dollars.
Any more questions?
Jack Lohman (Mon Oct 19 17:54:14 2009)
As well, Jo, if private was indeed more efficient than public, the unsubsidized public option would not stand a chance competing. If the insurance industry itself believed that, they'd not so violently oppose the competition. But remember that it is an opt-in, and those opposed can opt-out.
Jack Lohman (Tue Oct 20 04:38:25 2009)
Jack says: "Any more questions?"
Yes Jack, this one. When are you going to acknowledge that unless we address the REASONS for the differences in health care costs in our country and other countries, that cost differences will persist, despite government paying the whole bill? I have repeatedly brought these up to you, and you do not address them in a meaningful way, only using my argument as a reason to insult me.
When are you going to acknowledge that the history of government run enterprises is a poor one? That government often does things for political effect, rather than real resulsts? That government involvement in the health care industry is one of the major drivers of costs? And that if you replace a private bureaucrat with a government one, third party payment will ALWAYS mean more bureaucracy than if we pay most of the bills ourselves?
Fact and logic, Jack, fact and logic. PLus a little history. That is all your arguments lack.
Ken Van Doren (Tue Oct 20 10:06:21 2009)
Jack says:
"As well, Jo, if private was indeed more efficient than public, the unsubsidized public option would not stand a chance competing. If the insurance industry itself believed that, they'd not so violently oppose the competition. But remember that it is an opt-in, and those opposed can opt-out."
Did you not see that the Baucus plan proposes to pay for itself by taxing insurance companies, and companies that make medical devices? HOW is this NOT subsidizing. I guess it makes perfect sense to some. Health care is too expensive, therefore let us increase the costs of those who actually pay for it, so that we can pay for others. Can you not see that this will drive down the private sector? HARDLY fair and even competition. But exemplary of what we can expect when the public option is made available.
Ken Van Doren (Tue Oct 20 10:14:29 2009)
Yes, yes and yes. Thank you Ken! You hit the nails on the head. Public health care is not unsubsidized; that's a ridiculous statement Jack makes. Comparing the costs of "Public" vs. private care is apples vs. oranges. Ridiculous. Jack makes just the point public option foes are making: A public option in an artificial, subsidized market will be an artificial choice for many.
Jo (Tue Oct 20 10:22:12 2009)
Yes, Ken, you have constantly tried to educate me... to YOUR way of thinking. Sorry that I have been so dense and not very responsive. I tend to have a mind of my own and suspect that my 40 years in the healthcare industry gives me a different perspective when compared to your idealism.
Yes there are some poorly run government departments, and private industries too. The post office and privatized mercenaries and bankers come immediately to mind.
But if the government were *really* inept I think we should allow an unsubsidized public option to compete with the private industry. By your calculation they will fail and they'd go belly up, and of course, you could opt out in the process. But all of the low-levels could opt in, at least until their lack of healthcare kills them off, then we can move to a totally for-profit system.
Yea, right!
Jack Lohman (Tue Oct 20 10:30:47 2009)
And for the record I do not support the Baucus plan or ANY that is currently being considered in the Senate or House, and have asked Kohl and Feingold to vote ALL plans down. Period. (I don't have to worry about Sensenbrenner, he'll vote obstructionist all the way.)
BUT THEN, they should let the 15% uninsured opt into Medicare, and then work on a Medicare-for-all bill (but let the right wingers opt OUT, or better, don't let them opt IN.)
Jack Lohman (Tue Oct 20 10:39:52 2009)
Jo, you really should listen to your own posts before you rally to someone who you happen to agree with.
Jack Lohman (Tue Oct 20 11:01:49 2009)
Oh my gosh Jack. My news links are news and opinion links from Wisconsin and the U.S. I work to be objective - you know that. Your mention of the Potter article is below the belt! As you also know, I certainly don't agree with all of the opinion pieces posted on FoxPolitics News. And certainly not with Mr. Potter's viewpoint on the solution to health care coverage in the U.S. But I try to present all sides of an issue to FP News readers.
Jo (Tue Oct 20 11:06:18 2009)
I know that, Jo, nor do I necessarily agree with all articles in my newsletter. But I suggested it because you really should hear it from a former insider. You (and others) are steadfast against anything government and place complete faith in CEOs. I think that's foolish.
Potter does not express a "solution" (unless I missed it) but he does expose the inner workings of the insurance industry. Actually equates them to Big Tobacco.
Perhaps it is because of who we chose to read and who we ignore, but there are truly some insurance industry tragedies that you should review before giving away your lifeline. You can see some on my site at "Health Care - Tragedies".
Jack Lohman (Tue Oct 20 11:23:45 2009)
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