So why not simply push a basic bill regulating the insurance industry WITHOUT a mandate?

[brentspeak]

Too difficult a concept for Obama and the corporate Dems, it seems.

[leftstreet]

1. Yeah, why not?

K&R

[Pirate Smile]

2. OMG - do people really not understand how pulling in non-sick people is necessary

if you are going to pull in a lot of sick people into the system?

You lose the mandate then you lose the pre-existing conditions exclusions OR if you keep the pre-existing conditions exclusion then you send insurance into a death spiral.

I'll find an explanation.


Here is one:

Wrong, Keith
Olbermann's prescription for protesting the insurance mandate -- don't buy insurance -- is nuts

-snip-
Most of us don't have that luxury, though. Take me, for instance. Even if I was persuaded by his argument, I couldn't join Olbermann's boycott; I've had insulin-dependent, or type 1, diabetes for 22 years. There was nothing I could do to avoid it -- it's genetic. But more important, it's expensive to treat. The insulin infusion pump I wear cost $5,000, which was covered by insurance. The continuous glucose monitor transmitter I also wear was another $2,000, also covered. I check my blood sugar six to eight times a day, using test strips that cost a little more than $1 each; my insurance also pays the full cost of those, because the company realizes it's cheaper to pay for me to check my blood sugar a lot now than to pay for the complications of uncontrolled diabetes later. The insulin I use in the pump would cost between $90 and $110 a vial without insurance, and I go through two or three vials each month. Add in a month's worth of pump infusion sets ($116), reservoirs ($33) and glucose monitoring sensors ($350), and the costs just for managing my diabetes add up to more than $1,000. Then there's the quarterly visits to an endocrinologist, twice-yearly dental checkups, an annual eye exam and a few other prescriptions. Pretty soon, I'm looking at taking on a second mortgage payment each month just to stand on Olbermann's idea of principle. Sure, my insurance premiums and co-pays come to several thousand dollars a year. But even buying insurance on the open market would be cheaper for me than paying for all that stuff out of pocket if I wasn't covered through my wife's employer. Though of course, if the healthcare bill fails, and its insurance industry regulations don't become law, I couldn't buy insurance on the open market anyway, because I have a pre-existing condition.

So the only people, really, who could afford to "use the only weapon left" to protest the healthcare bill along with Olbermann would be healthy people, who don't need insurance to begin with. And those healthy people are also where the argument against the individual mandate begins to fall apart. The reason it's worth swallowing the individual mandate is because that's the only way to make insurance affordable for anyone who might actually get sick and need it. Insurance providers -- whether it's Blue Cross or a federal public option -- need to have some healthy people in their risk pool to offset the costs of the sick people. Otherwise, if they've got to shell out $1,000 a month to keep me alive and more or less healthy, they'd have to charge me at least that much just to stay in business. (Unfortunately, as we all know, they also like to tack a little extra on to pay their CEOs extravagantly.) That's why large employers can afford to insure their workers, and why many small businesses can't -- the risk pools aren't big enough.

One part of the healthcare legislation that pretty much everyone likes is the new regulation forcing insurers to cover everyone, no matter what kind of pre-existing conditions they might have. But without an individual mandate, there won't be enough healthy customers, who are cheap to insure, to balance out all the sick people who would be newly eligible for coverage. Premiums would rise even faster for the people who most need insurance than they already are. In what's known as an insurance death spiral, only the most expensive, sickest patients would remain in the risk pool.

What's galling about the mandate in a bill with no public option, of course, is that it essentially guarantees the insurance industry a steady revenue stream and millions of new customers. That's frustrating -- infuriating, even. But it shouldn't be a deal-breaker. Would there be people, under the reform legislation, who can't afford insurance premiums? Unfortunately, there probably would -- but the answer to that is to increase the federal subsidies, not kill the bill or remove the individual mandate. After all, anyone who might not be able to afford insurance in the future already can't afford it now. It's hard to imagine that there are people who don't have insurance but are holding out only because they don't want to become customers of the private insurance business.

The point of this reform legislation -- as I wrote the other day, and as White House communications director Dan Pfeiffer wrote Wednesday -- should be to expand access to healthcare, which every industrial nation except ours considers a basic human right, not to punish insurance companies for the many, many sins they've committed in the past. Plenty of those other industrial nations require people to buy insurance, the same way this bill would do. Is this the ideal answer to the healthcare system's flaws? No. But is it a decent place to start? Yes. Olbermann should keep that in mind, and push to fix -- not kill -- the healthcare bill. Most of us can't afford to do it his way.

http://www.salon.com/news/politics/war_room/

[dkf]

4. Problem is you are mandating coverage with predatory unreformed and unrepentant monopolies.

That is why a public option is needed.

[Cant trust em]

6. THat depends on what other kind of regulations would come with the mandates. nt

[snot]

22. Not quite: it also depends on what kind of ENFORCEMENT comes with any

new regulation -- and I've heard nothing about establishing and funding the kind of enforcement agency that would be required.

[Cant trust em]

34. Agreed. Enforcement and regulation are two sides of the same coin. nt

[Pirate Smile]

7. We'd all like a PO. The Senate is the problem. Killing the bill isn't the answer.

Pass it and improve on it like we always do.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=433x70653

[brentspeak]

8. Like we "improved" on NAFTA?

And yes, killing the bill IS the answer. Klein's article conveniently neglected to mention that things like Social Security have never included a penalty or forced people to purchase an unaffordable commercial product. His piece is a terrible analogy that falls flat right out of the starting gate.

[Pirate Smile]

24. NAFTA is harder for Congress to correct because of how it is tangled up with foreign

policy. Congress tinkers around with Social Security, Medicare or Medicaid more easily and frequently. The connection is more direct and the response to political pressure tends to be also.

There is a penalty for Tax Evasion if you don't pay your Social Security or Medicare: "The total amount of social security and Medicare taxes that are paid on income is 15.3%: 12.4% for SS, 2.9% for Medicare. You have to pay this on income up to a certain ceiling amount, $102,000 in 2008. (It goes up every year.) Normally, your employer pays half this amount, which is why you’ll only see 7.65% taken out for this on your paycheck. "

[pnwmom]

13. No, a lot of people don't seem to be able to understand this. n/t

[Pirate Smile]

16. That makes reasonable discussions hard. I found another explanation which I'm going to post here so

more can see it.

The importance of the individual mandate

Markos Moulitsas explains his opposition to the Senate bill, and says it all comes down to the individual mandate. "Strip out the mandate," he says, "and the rest of the bill is palatable. It's not reform, but it's progress in the right direction. And you can still go back and tinker with it at a later time."

I'm sympathetic to his thinking. This was, of course, Barack Obama's position during the 2008 campaign, and it led to arguably the most bitter policy dispute in the race. But after winning the presidency, the Obama administration flipped on it, and they were right to do so. Here's why.

Pick your favorite system. Socialized medicine in Britain. Single-payer in Canada. Multi-payer with a government floor in France. Private plans with heavy public regulation in Sweden, Germany and elsewhere. None of these plans are "voluntary." In some, there's an individual mandate forcing you to pay premiums to insurance companies. In some, there's a system of taxation forcing you to pay premiums to the government. In all of them, at least so far as I know, participation is required except in very limited and uncommon circumstances. And there's a reason for that: No universal system can work without it.

Holding the price of insurance equal, insurance is gamble on both sides. From the insurer's perspective, it's a better deal to insure people who won't need to use their insurance. From the customer's perspective, it's precisely the reverse.

Right now, the insurer sets the rules. It collects background information on applicants and then varies the price and availability of insurance to discriminate against those who are likely to use it. Health-care reform is going to render those practices illegal. An insurer will have to offer insurance at the same price to a diabetic and a triathlete.

But if you remove the individual mandate, you're caught in the reverse of our current problem: The triathlete doesn't buy insurance. Fine, you might say. Let the insurer get gamed. They deserve it.

The insurers, however, are not the ones who will be gamed. The sick are. Imagine the triathlete's expected medical cost for a year is $200 and the diabetic's cost is $20,000. And imagine we have three more people who are normal risks, and their expected cost in $6,000. If they all purchase coverage, the cost of insurance is $7,640. Let the triathlete walk away and the cost is $9,500. Now, one of the younger folks at normal cost just can't afford that. He drops out. Now the average cost is $10,600. This prices out the diabetic, so now she's uninsured. Or maybe it prices out the next normal-cost person, so costs jump to $13,000.

This is called an insurance death spiral. If the people who think they're healthy now decide to wait until they need insurance to purchase it, the cost increases, which means the next healthiest group leaves, which jacks up costs again, and so forth.

Kill the individual mandate and you're probably killing the bill, too. The mandate is what keeps average premium costs low, because it keeps healthy people in the insurance pool. It's why costs have dropped in Massachusetts, not jumped. It's why every other country with a universal health-care system -- be it public or private -- uses either a mandate or the tax code. It's why the Obama administration flip-flopped.

But maybe you're willing to ditch universality. Add some subsidies, leave the mandate, and it's a step forward, right? At least until the project is consumed by an insurance death spiral? And Congress will surely do something to stop that, right? Well, maybe.

Kill the individual mandate and you make it easy for Congress to let the country backslide to its current condition. In a world with an individual mandate, insurance has to be affordable. If it's not, there's a huge political backlash. That gives Congress a direct incentive to focus on cost. Remove the individual mandate and ... eh. If insurance isn't affordable, people simply go uninsured. It's exactly what happens now. Same incentives, or lack thereof, to make the system better.

In his post, Markos says the bill lacks "mechanisms to control costs." I'd disagree with that, pointing to the bundling, MedPAC, the excise tax, the possibilities of a competitive insurance market, and more. The bill doesn't do enough, but it does more than anything we have ever done before. But put that aside for a moment. As Atul Gawande argues, there's no Big Bang of cost control. The public option wouldn't have done it, and nor would Medicare buy-in. It's a process. And this bill, in large part through the individual mandate, creates that process.

The key to cost control is a politics that forces Congress to make the hard decisions that lead to cost control. Right now, the ranks of the uninsured grow, the cost of insurance rises, and Congress can pretty much ignore the whole thing. The individual mandate controls average premium costs, but more than that, it is the political mechanism for cost control. Kill it, and you've killed our best hope of making the next reform better than this one.

http://voices.washingtonpost.com/ezra-klein/2009/12/draft_1.html

[truedelphi]

25. But this bit of writing starts in with the wrong premise and also

starts in at the wrong point.

When Obama said that it was important that the legislation be deficit neutral, I thought he meant that someone somewhere (Possibly Congress?) would be seriously looking at the hugely inflated costs of medical necessities.

How can you get the costs down - if they are exorbitant? Why, first of all by examining the costs and seeing where they are out of sight and how to rein them in.

Should someone's insulin even cost $ 90?

Probably not - that is one reason why France, Germany, Britain, Canada the Scandanavian countries et al can afford healh care - they have nationalized it.

The other nations don't let these government assisted research labs called Big Pharma force consumers to pay 5200 to 82,000 percent more thaa the cost to manufacture. Insulin costs a little bit more in those countries than its cost to manufacture.

But here in the USA - insulin costs are sky high. Same with every other damn procdure treatment surgery etc.

And we never had this discussion about the inflated costs.

Instead Obama's "cost containment" came to mean the factor to consider in terms of how much in the way of service sthat you and I use.

[eridani]

26. That is ridiculous when applied to insurance

Makes perfecctly good sense if you are just paying the goverment to provide health care, though.

Why don't you just put all of us 50-65 year olds on ice floes or in concentration camps?

[DCBob]

29. First decent explanation I have seen so far on this issue..

Many who oppose this bill because of the mandate simply do not understand the underlying financial mechanics.

[Pirate Smile]

30. I know and we are supposed to be the reality based community. We aren't looking like it now.

[BlueIdaho]

35. My solution - bankrupt the insurance cartel.

Pass a bill the MANDATES the insurance companies accept everyone, mandate their policy costs and benefits, CEO salaries, acceptance with preexisting conditions, and no age based discrimination. Allow anyone to opt in and opt out based on need. Limit corporate profits to no more than 5% above operating costs.

If the insurance companies can figure out how to stay in business, fine. If not - let them all go bankrupt.

Then introduce Medicare for All.

[Pirate Smile]

41. I think Insurance Co's will eventually be extremely regulated-like utilities. It wont come in one

fell swoop though.

[Cronus Protagonist]

42. Any mandate is political POISON and will result in REVOLT

There's no justification that will make the sting any easier to take. I'm not going to be tithing to insurance companies. I'm just NOT. And neither is a large segment of the population.

I will, however, hound any bastards that vote for such a thing until they wish they had never got into politics. And so will a large segment of the population.

A mandate is POLITICAL POISON. And the Republicans are already wringing their hands with glee over it.

[Odin2005]

48. I don't care. The ends do not justify FASCIST means.

The government has no right to make me buy a product from a corporation. Sometimes MY LIBERTY is more important that Utilitarian calculation when it comes to what is RIGHT and WRONG!

[napi21]

3. My guess is that it would keeo too many people still using

the ER as their only HC facility thus change the benefit to cost reduction and the CBO rating would probably put it over the $900,000 limit of the Prez.

[brentspeak]

9. Considering that they'll be millions more who won't be able to purchase mandatory insurance

there won't be a reduction in the number of non-emergency emergency room visits.

[napi21]

17. Why do you say that? As I understand it, the subsidy is based

on you AGI, and if someone really doesn't have the money to pay for ins, with the subsidy, it could cost as little as $100 a year!

[Oregone]

12. The only problem is that any cost reduction (estimated to be 8%) will be offset...

by guaranteeing market activity via a mandate, and subsidizing it. This will augment to "free market" and ensure business at higher premiums. Just look at Mass, with the highest average family premiums in the nation. Where was their dramatic costs savings from mandating?

[napi21]

15. EVERYTHING is expensive in Mass! nt

[Oregone]

18. So it costs that much more to set a broken bone there?

Do they inlay gold into the casts?

That argument only works if the health expenses (doctor pay, facilities, power used, materials) are significantly above average. Otherwise, additional cash is being burnt at the insurance end..

[Cronus Protagonist]

43. lol Stop being so sensible!

The astroturfers don't want to work so hard!

[Cant trust em]

5. Because getting additional people into the system requires a mandate to increase the pool

The argument goes that if you require insurance companies to take on sick people, the cost of insurance goes up for everyone. However, if you have a larger amount of people buying into the system (forced by law to buy with the mandate), you have expanded the risk pool.

[Oregone]

11. Thats absurd. You wanna increase the risk pool, reduce it to a single pool

That is NOT the basis of the mandate, as the easiest method of increasing the size of the pool isn't even considered. If all the benefits of doing so are ignored, it suggests ulterior motivations for the mandate

[Armstead]

33. And hyou really trust the insurance companies to factor that into rates?

I've got a bridge in Brooklyn to sell you.

[jberryhill]

44. You mean like, MEDICARE?

I perfectly understand the mandate.

As applied to a completely private market, I thoroughly do not agree there should be a mandate.

Take out the pre-existing condition coverage, then. That's fine with me, and leave me no worse off with my pre-existing condition.

But there is no medical cost control in this - there is an incentive to increase medical costs, since "profit" will be a direct function of costs, and I've written on the perniciousness of that elsewhere.

The government can effectively tax me for government services - I am FINE with that. But I will not be told to pay a private company for health insurance. Those fuckers have screwed me at every turn for two decades.

[Oregone]

10. Because every corrupt politician wont vote for it unless their special interests are given a BJ

So you gotta heap on tons of crap to get the votes. Its the greatest democracy in the world, or some shit like that

[pnwmom]

14. Switzerland and the Netherlands have excellent systems involving a MANDATE

and private insurers.

It can be done well, if properly regulated. That's what we should be pushing for now.

[Oregone]

19. "It can be done well, if properly regulated" -- In America?

Uh, seriously? Here?

You can't even fill political seats without corrupt bought off whores.

[readmoreoften]

23. This ain't Switzerland and this ain't the Netherlands.

Just like Walmart is unionized in Germany--that doesn't mean they'll allow it here. Why? Well, the right wing of the Democratic Party is always there to let them off the hook and they know it.

[Blasphemer]

38. "If Properly Regulated"

And what are the chances of that happening here in the U.S.? They could have gone that route from the BEGINNING and the NEVER considered it. They have no interest in regulating the Insurance industry in the way it needs to be regulated in order to make sure quality health care is provided for everyone.

[tomm2thumbs]

20. it sure don't take 2000 pages to do that either

when someone says '2000 pages', I hear '20,000 loopholes'

[grantcart]

21. Not possible repeatedly explained

Now here are two explanations - please advise which one you prefer:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7260389


http://journals.democraticunderground.com/grantcart/229


All economists accept that adverse selection, in this case adverse regulatory selection will collapse any insurance system.

Once you command insurance companies to accept all without preexisting conditions then you have to have mandatory insurance.

This is true for private or public firms. The details are explained above.

All single payer systems are, for example, mandated.

[eomer]

28. Agreed.

Some form of universal mandate is an essential element. Because you've got to have a way to get well people and, in particular young people, to share in the cost. Otherwise the cost is shared just among the seriously ill and will be too high for any but the richest to afford. There are only two ways to accomplish this broad cost sharing and one of them has an unacceptable social consequence.

The way that has an unacceptable social consequence is the pre-existing condition exclusion. This approach tells people, "fine - don't buy insurance if you don't want to but then don't come crying to me expecting treatment when you get cancer". The socially unacceptable consequence of this approach is that we then have to watch people die without treatment. Even if it serves them right in some sense, it is still something we don't want to suffer -- for our own conscience, karma, and sensibilities if for no other reason.

The only other way to get well and young people to share the costs is to just make them by some form of universal mandate.

So a universal mandate is essential and that means that some reasonable form of a public option is essential. There's really no way around it.

[Dragonfli]

27. They Can't Do that! - An Honest Politician Stays Bought!!!

I'd like to think our new bosses are honest, this legislation is being crafted for those that purchased it.
If we want legislation written for us, we have to buy our own politicians.
No shortcuts, business is business and you shouldn't take it personally just because of a few couple of hundred year old quaint documents.

What are you a hater or something?

[Teaser]

31. How do you stop people from signing up for insurance only *after* they get sick?

that would raise everyone's premiums to unforeseen heights.

[Armstead]

32. You start by making sure it is AFFORDABLE!

[freddie mertz]

36. I could support that. nt.

[Blasphemer]

37. Indeed. nt

[Armstead]

39. Kick for common sense

[polichick]

40. How would corporate Dems be serving their masters then? nt

[TwilightGardener]

45. I'd like to see them stop short of a mandate, and instead do a

big campaign to get people who otherwise wouldn't sign on, to sign on--use carrots (subsidies, one year discount on premiums, tax incentives, free preventive care or screening for the first year, etc.) And then if that fails to greatly increase the pool, THEN consider mandates--and sticks. Edit--restrictive enrollment periods would help prevent just signing on when one is sick.

[andym]

46. What happened to the employer mandate?

At least it would not put the burden on individuals. And for the unemployed create a govt insurance plan-- ok Lieberman won't agree, so have govt pay for their insurance), for the self-employed or small businesses there should be rewards (tax credit) not punishments if they get insurance. Probably wouldn't get 94%, but it would be a big improvement.

Anyway none of this solves the fundamental problems which are 1) greedy insurance companies, 2) greedy Pharma and Medical device companies, 3) greedy Hospitals (who strongly lobbied against the Medicare expansion), and 4) greedy physicians (esp Specialists) (Physicians' lobby strongly lobbied against Medicare expansion.)

[marlakay]

47. Thats what i think should be done to

just regulate the crap out of them and forget the rest.

[Odin2005]

49. Because The insurance industry needs the payoff for their bribes.