Robert Reich: How a Few Private Health Insurers Are on the Way to Controlling Health Care

[marmar]

Thursday, December 10, 2009
How a Few Private Health Insurers Are on the Way to Controlling Health Care


The public option is dead, killed by a handful of senators from small states who are mostly bought off by Big Insurance and Big Pharma or intimidated by these industries' deep pockets and power to run political ads against them. Some might say it's no great loss at this point because the Senate bill Harry Reid came up with contained a public option available only to 4 million people, which would have been far too small to exert any competitive pressure on private insurers anyway.

To provide political cover to senators who want to tell their constituents that the intent behind a robust public option lives on, the emerging Senate bill makes Medicare available to younger folk (age 55), and lets people who aren't covered by their employers buy in to a system that's similar to the plan that federal employees now have, where the federal government's Office of Personnel Management selects from among private insurers.

But we still end up with a system that's based on private insurers that have no incentive whatsoever to control their costs or the costs of pharmaceutical companies and medical providers. If you think the federal employee benefit plan is an answer to this, think again. Its premiums increased nearly 9 percent this year. And if you think an expanded Medicare is the answer, you're smoking medical marijuana. The Senate bill allows an independent commission to hold back Medicare costs only if Medicare spending is rising faster than total health spending. So if health spending is soaring because private insurers have no incentive to control it, we're all out of luck. Medicare explodes as well. ............(more)

The complete piece is at: http://robertreich.blogspot.com/2009/12/how-few-private-health-insurers-are-on.html

[Dinger]

1. He's Right, And He Knows What The real Deal Is Here. K & R

[SHRED]

2. And the Senate version exempts them from AntiTrust Law

~snippet from the article~

"In light of all this, you'd think the insurance industry would be subject to the antitrust laws, so the Justice Department and the Federal Trade Commission could prevent it from combining into one or two national behemoths that suck every health dollar out of our pockets (as well as the pockets of companies paying part of the cost of their employees' health insurance). But no. Remarkably, the Senate bill still keeps Big Insurance safe from competition by preserving its privileged exemption from the antitrust laws.

From the start, opponents of the public option have wanted to portray it as big government preying upon the market, and private insurers as the embodiment of the market. But it's just the reverse. Private insurers are exempt from competition. As a result, they are becoming ever more powerful. And it's not just their economic power that's worrying. It's also their political power, as we've learned over the last ten months. Economic and political power is a potent combination. Without some mechanism forcing private insurers to compete, we're going to end up with a national health care system that's controlled by a handful of very large corporations accountable neither to American voters nor to the market."

[HughMoran]

5. Heh, let them combine into one

...then have the government take over the combined entity using anti-trust laws :evilgrin:

[HughMoran]

3. While it is pitiful that we're boosting the criminal ins. co's, the rates are 2-3x higher for small

businesses like the one I work for. Just being able to buy into a large-pool plan will save me (& my company) about $25,000/year in premiums. I despise that the insurance companies will get my business, but when I moved from a large company to a small one, my premiums went from about $10k/year (unsubsidized) to $36k/year (unsubsidized) using the identical insurer and coverage (BCBS). As bad as this plan is, it will save & create many jobs at smaller businesses who just can't afford to provide coverage any more. We screen potential applicants based on their insurance needs and the insurance premiums (company portion) can easily be equal to their salary!

[54anickel]

4. The final paragraph sent chills up my spine. What will be the next industry to climb the

antitrust laws exemption ladder? Had the image of a pie getting sliced up and doled out to the highest bidders - only so much to go around ya know.

[Kablooie]

6. And Obama and Dems will get ALL the blame for family destroying medical payments now.

The GOP will point out that they had nothing to do with the new medical plan's soaring costs.

We are likely to see a huge conservative swell as a result even though they were actually the ones responsible for killing a cost controlling plan.

[Shagbark Hickory]

7. Repeat after me... Medicare you have to pay for is not medicare!

[cilla4progress]

8. I love Reich

I've been saying; Obama should replace Emmanuel with him (or someone...). Do we know - does Obama listen to Reich?

[WeCanWorkItOut]

9. Love Rob Reich? Maybe he deserves a little pity. But I believe that he contributes to our problems

He seems to be a decent fellow, but too much in bed
with the people of privilege. Not willing to criticize
doctors or hospitals, for instance. Just insurance companies.
Certainly they are blame-worthy, and more anti-trust laws
would be helpful. But the hospital chains are
a problem too. And a variety of abuses by doctors.
And universities.

[cilla4progress]

10. I don't see that in him, but

I don't know all his position. To the extent of those I do - he is always very left-leaning in his position on the economy and financial recovery, labor, health care reform.