House Light Hits Predatory Insurers and Complicit GOP
Published November 05, 2009 @ 06:00AM PT

Well at least one of the two manager’s amendments to the final version of HR 3962 could be useful. It addresses the “Wall Street Effect”, most obviously in a section entitled Sunshine on Price Gouging by Health Insurance Issuers. The Wall Street Effect was observed when banks and credit card companies were told regulations would be tightened the beginning of 2010 – they promptly raised rates and found all sorts of fees and penalties they could assess customers prior to that. Expecting private insurers to do the same thing when faced with health reform legislation, John Dingell created preemptive strikes to ward off predatory rate spikes.
His amendment also gives states more insurance oversight power, including up to $1 billion in regulatory grants. Insurers can also be kicked out of Exchanges for bad behavior, similar to non-profit BlueShield of California losing its risk pool participation rights next year for deliberately overcharging members. While risk pools and overcharging go together like peanut butter and jelly, Blue Shield was charging 1.5 to 3 times what the other two insurers in the pool were. This was in direct opposition to state law that premiums be no more than 125% of regular market rates. Worse, it was getting reimbursed similar to the other insurers for its supposed losses.
This sort of bad behavior has a ripple effect. You see, Blue Shield also conveniently used its inflated risk pool rates as the basis for HIPAA insurance rates (an option for those whose COBRA benefits have run out.) Since California law caps HIPAA rates at the average of risk pool rates, Blue Shield was able to milk yet more profit (oops, I mean surplus) from people with no other insurance options. Speaking of having no options, perhaps the most amusing inclusion in Dingell’s amendment is the explicit exclusion of illegal immigrants from participating in the temporary national risk pool. Like they could afford it anyway?
Of course, we have John Boehner to look to on the affordability front. His amendment is called the Common Sense Health Care Reform and Affordability Act. The only problem is it contains no common sense answers or affordability solutions within it. The media and healthcare economists have gone to town on Boehner’s removal of the recission ban, continued tolerance of policy denials based on pre-existing conditions, and risk pool “solution”. I’ve already hammered on his reliance on tort reform, insurance pools and inter-state policy purchases. For those that think Pelosi’s bill is a gift to the insurance industry, take a look at this offering.
Both Dingell and Boehner offer some very reactive solutions to our healthcare crisis. Those are the only two manager’s amendments published and it looks like that's it. Despite protests and arrests, proactive solutions like Kucinich’s state single-payer, which would remove loopholes preventing states from trying the Medicare for All strategy, are still in purgatory. So we’re still focused on keeping the predators at bay.
UPDATE: Okay, this is funny. The CBO just scored the Republican plan, and it isn't pretty. Over 10 years, it increases the number of insured by ... zero (meaning it only makes up for the 3 million more expected to lose their coverage.) Meanwhile, it saves $68 billion compared to HR 3962's $104 billion. So HR 3962 covers 12 times as many people and saves 53% more than Boehner's masterpiece. That's got to hurt! As the bumper sticker says, "There are 3 types of people: those who can do math, and those who can't."
Photo http://farm1.static.flickr.com/47/148665503_cf21216ecd.jpg // CC BY 2.0
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Comments (8)
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This is not surprising with how much they are opposing the public option! Still, we really need to consider exactly how much care is needed! More is not always better! http://cli.gs/qQsdzm/
Posted by Stephanie Hunter on 11/05/2009 @ 11:22AM PT
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Wake up! Congress is using the coverage thing and helping the poor as a diversion to fund their last bankrupt health care idea, Medicare! It is costing too much! That is the only reason health care has been brought up!
They don't care about us and the diversion is souring!
They can't run businesses like GM or Amtrak, the post office is in fail mode, social security won't be around soon and they want to tackle 1/6th of the US economy? Look out America!
Posted by James Turner on 11/05/2009 @ 02:14PM PT
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I received an email from Rep. Scott Garrett concerning his objections to H.R. 3962. In his statements, he misrepresents many aspects of the proposed health care reform legislation. Moreover, he asks through an email link if I would participate in his survey. The only question:
"Do you support the health care bill, H.R. 3962, the Affordable Health Care for America Act?" and leaves only a "Yes" or "No" option.
Now, to be clear, I will not support the alternatives that Mr. Garrett supports, nor do I support H.R. 3962. That is because I support a single payer solution with health care as a human right and Mr. Garrett, along with most other members of Congress refuse to allow that solution to be considered, evaluated, and placed before the people. So, the honest answer is "No" but I refuse to be part of the Republican spin.
Mr. Garrett's objections:
"Page 94-Section 202(c) prohibits the sale of private individual health insurance policies, beginning in 2013, forcing individuals to purchase coverage through the federal government"
False. He is objecting to the formation of the insurance exchange created under Title III. This exchange does not facilitate purchase through the federal government. It defines the coverage that may be sold by private entities that chose to participate in providing health insurance. The purchase is between the consumer and member of the exchange.
"Page 110-Section 222(e) requires the use of federal dollars to fund abortions through the government-run health plan-and, if the Hyde Amendment were ever not renewed, would require the plan to fund elective abortions"
Correct. But, no one is required to buy into the public plan under this bill.
"Page 111-Section 223 establishes a new board of federal bureaucrats (the "Health Benefits Advisory Committee") to dictate the health plans that all individuals must purchase-and would likely require all Americans to subsidize and purchase plans that cover any abortion"
There is no evidence in this or any nation to support less regulation of insurers as a means to better and universal coverage. Premiums collected by private insurers are fungible and, if anyone believes that a private insurer has moral high ground in not providing funding for abortions if a particular consumer opts not to pay for this coverage, that person is misinformed. Mr. Garrett contributes to the misinformation.
"Page 211-Section 321 establishes a new government-run health plan that, according to non-partisan actuaries at the Lewin Group, would cause as many as 114 million Americans to lose their existing coverage"
The Lewin Group is a partisan organization representing private insurance. It cannot be cited as an objective source. The CBO does not agree with the Lewin Group on this issue. Stating this as a definite with "would cause" indicates that Mr. Garrett and the Lewin Group have the kind of crystal ball that ought to have prevented the current financial crisis.
"Page 225-Section 330 permits-but does not require-Members of Congress to enroll in government-run health care"
We pay dearly to insure them now. What is the difference? Does he want to be required? Perhaps if they were served by the VA, our service men and women would receive better treatment and facilities. They can always buy private coverage, they earn enough.
"Page 255-Section 345 includes language requiring verification of income for individuals wishing to receive federal health care subsidies under the bill-while the bill includes a requirement for applicants to verify their citizenship, it does not include a similar requirement to verify applicants' identity, thus encouraging identity fraud for undocumented immigrants and others wishing to receive taxpayer-subsidized health benefits"
Makes a great single payer argument, cuts the red tape. A person in need of care ought to receive care based on his humanity, alone. Dithering over how to divide us in our common needs plays on our deepest fears, bigotries, and basest instincts.
"Page 297 - Section 501 imposes a 2.5 percent tax on all individuals who do not purchase "bureaucrat-approved" health insurance - the tax would apply on individuals with incomes under $250,000"
I agree but for different reasons. That the policy is approved by the exchange is a good thing. That we are given the option of a tax and no coverage or buying an insurance policy is not good. Single payer does away with this issue.
"Page 313-Section 512 imposes an 8 percent "tax on jobs" for firms that cannot afford to purchase "bureaucrat-approved" health coverage; according to an analysis by Harvard Professor Kate Baicker, such a tax would place millions "at substantial risk of unemployment"-with minority workers losing their jobs at twice the rate of their white counterparts
Page 336-Section 551 imposes additional job-killing taxes, in the form of a half-trillion dollar "surcharge," more than half of which will hit small businesses; according to a model developed by President Obama's senior economic advisor, such taxes could cost up to 5.5 million jobs"
If one looks at this situation, one finds that workers with employer-provided insurance are receiving a far higher wage. In NJ, we've grown to see this as the norm. This situation, I am sure, results in the migration of jobs to lower wage areas where employers prey on people with lower expectations concerning their compensation. Desiring to lower or allow the lowering of his constituents' wages is disturbing. Looking at this in the aggregate, we find that nations with greater regulation and public funding of medical care are able to compete quite well against American workers and American businesses.
Again, single payer addresses this.
"Page 520-Section 1161 cuts more than $150 billion from Medicare Advantage plans, potentially jeopardizing millions of seniors' existing coverage"
The "existing coverage" at stake is not the availability, affordability, or entitlement to services that seniors currently enjoy. It is a reduction of the excess given to Medicare Advantage insurers in amounts over and above that granted to traditional Medicare subscribers. It is a more equitable and efficient allocation of tax dollars.
Seniors will retain their extensive single payer benefits at the expense of working families not permitted to consider the option.
"Page 733-Section 1401 establishes a new Center for Comparative Effectiveness Research; the bill includes no provisions preventing the government-run health plan from using such research to deny access to life-saving treatments on cost grounds, similar to Britain's National Health Service, which denies patient treatments costing more than £35,000"
There's nothing in the bill to require unlimited coverage from any insurer and part of satisfying conservatives in Congress was agreeing to a "level playing field" with private insurers. Some form of cost containment must be implemented if we are to decrease the aggregate cost of health care. We need to examine the real cost of treatment and not simply rely on the desired price of the provider as our gauge. We need to measure the efficacy of treatments and not simply accept that everything done by a provider is something significant to the patient.
"Page 1174 - Section 1802(b) includes provisions entitled "TAXES ON CERTAIN INSURANCE POLICIES" to fund comparative effectiveness research, breaking Speaker Pelosi's promise that "We will not be taxing [health] benefits in any bill that passes the House.""
The debate is not over and Ms. Pelosi is only one member of the House and the tax is a whopping $2 per capita enrolled in the plan in 2013. I think the beneficiaries of the plans targeted can handle it.
Posted by Harold Lewis on 11/06/2009 @ 09:53AM PT
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My objection to H.R. 3962 is that it turns the Public Option into "a cost and quality benchmark."
Leave it to Ezra Klein to console me... or not.
http://voices.washingtonpost.com/ezra-klein/2009/11/a_more_modest_vision_for_the_p.html
But we'll still have the most costly health care system in the world!
Posted by Martin Bring on 11/08/2009 @ 09:57PM PT
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And look at the timeframe. If this passes, they'll be telling us to wait a few years and quietly let the system unfold. In the meantime, we'll be no closer to justice.
There are no concrete cost controls, we will still be paying more for less, and the insurers have ample time to game the system even as increased profits are guaranteed.
Posted by Harold Lewis on 11/09/2009 @ 05:27AM PT
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Hey Martin and Harold, pretty dissappointing, huh? I will go to jail before I buy private health insurance without being able to choose the public option. There cannot be a mandate without a PO for all. What do they think they are trying to pull, anyways?
Posted by CherokeeGirl for Change on 11/12/2009 @ 04:19PM PT
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One thing that bothers me about the bill. President swore the bill had to be deficit neutral. I was under the impression that 800 billion was maxing things out with taxes, cuts,etc. This bill goes way over that high water mark.
Posted by M Arnest on 11/06/2009 @ 01:17PM PT
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Ya, now it's about 1/10th our military's budget!
Posted by Martin Bring on 11/08/2009 @ 09:52PM PT
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