Paul Starr and I have been agreeing a lot lately. Not that Paul knows or cares what I think or say, but a while back we both expressed fear that private health plans will end up channeling bad risks into the public option. That time I beat him to the punch (but I happen to know his piece was on the way before I hit “publish” on mine).
This time he was out first. Last Saturday he reminded Democrats that the big deal is not what happens with the public option, but instead what matters is how aggressive and effective Federal regulation of insurance (via the exchanges) will be.
For these reforms to succeed, there needs to be effective regulatory authority to prevent insurers from engaging in abusive practices and subverting the new rules. The bill passed by the House would provide for that authority and lodges it in the federal government, though states could take over the exchanges if they met federal requirements. The Senate bill would leave most of the enforcement as well as the running of the exchanges to the states. Yet many states have a poor record of regulating health insurance, and some would resist passing legislation to conform with the new federal law.
Of course Paul was a major author/player of the Clinton plan in 1993–4, which had it been enacted would have been way more extensive and impactful than the current legislation—and in a good way. I fear that this time his influence will be equally lacking in terms of the end result. Which is a big pity.
Yes, i agree, with you that there needs an effective regularatory authrority preventing it from abuse practices to some because after all this reform bill is too long,and deserved to be enforced especially in some states that has poor records on regulating insurance.
Creation of a public plan is nothing more than an admission that government cannot regulate the private insurance market.
As I said here numerous times, all is needed is a basic plan ala FEHBP that all insurers are forced to offer with no restrictions. The premiums for this basic plan should be capped and subsidized accordingly. Insurers can compete on offering more extensive plans, but not be allowed to offer anything less than the government mandated basic. This should be a federal mandate.
I’m sure everybody will find a way to operate and be profitable. Necessity is the mother of invention and these very large and very stable companies will find a way, even if some players will need to sport fresh haircuts for a while.
I agree with Margalit.
Switzerland (where I live now) has this system. There is a basic package of health insurance which is highly regulated for both prices and services. All insurance companies must offer this insurance. All residents must have insurance. Insurance companies can also offer more expensive add-on policies.
This system works very well. Basic coverage is very affordable and everyone is covered.