Thursday, June 18, 2009

Oh The Silliness

That's what I sighed after reading about the new bipartisan health care proposal:

In an attempt at bipartisanship, three former majority leaders of the U.S. Senate, Tom Daschle, Howard Baker, and Bob Dole, offered their solution today to the biggest obstacle to achieving health care reform -- a public option.

"While I feel very strongly that consumers should have the choice of a national, Medicare-like plan, my colleagues do not. . . But we were concerned that the ongoing health reform debate is beginning to show signs of fracture on the public plan issue, so in order to advance the process of developing bipartisan legislation and to move it forward, it's time to find consensus here," Daschle said.

"We've come too far and gained too much momentum for our efforts to fail over disagreements on one single issue," he said.

Let's rewind this movie. Let's go back to the starting point which is a country with nearly fifty million people without health insurance and the highest percentage of Gross Domestic Product spent on health care in any country (of any size) in this world. THESE are the two major problems to be grappled with. How does the bipartisan proposal work this?

Well, we get some ideas from this:

Daschle, Dole, and Republican Howard Baker released a bipartisan plan yesterday that would tax some employer-provided health insurance premiums, require individuals and large employers to buy health insurance, and create public insurance pools run by states instead of the federal government.


In a bid to blunt Republican opposition to setting up a government-run insurance plan for those without coverage, Dole, Baker, and Daschle suggest giving states, instead of the federal government, the option of establishing insurance-purchasing pools. These pools would extend coverage to everyone regardless of their health status or ability to pay, Daschle said.

Under the group's plan, taxes on employer-provided insurance premiums would vary according to regional differences in healthcare costs.

The tax on benefits would generally start when annual premiums exceed about $15,000, using as a model the benefits packages of federal employees.

What this version of the public option guarantees is that all the 'bad apples', the high cost cases, will end up in those state funds. That makes the average premia in them rise and that, in turn, makes the public option unattractive to most individuals. Also, the public option will look like it's a failing one, because it will have gathered all the expensive cases and so it will cost a lot.

Add to that the tendency of some states to cover such programs much less well than other states (just think of Medicaid), and you can be assured that the public option will fail to gain any popularity.

I haven't done the work to find out if this proposal requires private insurance companies to take on some percentage of high-cost cases, but I doubt that very much. Indeed, the whole proposal sounds less bipartisan than it sounds Republican, because it includes all their major points: taxing health insurance benefits and not demanding anything at all from the insurance industry.