HELP! This is Unbelievable

Key members of the Senate Health, Education, Labor, and Pensions Committee announced on Thursday what they claimed were dramatically improved cost and coverage estimates for the latest version of their health care reform bill.

Headed by Democratic Senator Christopher Dodd, HELP members (in a Muzak-marred conference call with reporters) stated that the revised bill would cost only $611 billion over ten years, a figure apparently computed by the CBO, and that with a further expansion of Medicaid would provide coverage for 97 percent of Americans.

Key features of the bill provided during the conference call included a public plan option, subsidies for lower-income individuals buying insurance through an exchange mechanism, and a play-or-pay employer mandate.

Sounds good? We’ll have to wait for details, but two big problems are already apparent.

The first BIG problem is that the ten-year cost estimate of $611 billion excludes the cost of Medicaid expansion. With Senator Dodd’s admission that the HELP Committee expects this to provide coverage for 7 percent of Americans (the difference between the 97 percent coverage with Medicaid expansion and 90 percent without it), the total cost balloons to far more than a trillion dollars. A rough calculation of Medicaid costs for 20 million Americans at present funding levels gives a total of $80 billion a year – or $800 billion just for Medicaid expansion, presumably to be shared with state governments already on the verge of bankruptcy.

Even assuming that Senator Dodd misspoke, and the at he intended his percentages to apply only to under-65 Americans, the ten-year estimate for Medicaid expansion is still over $700 billion—with no provision for medical inflation. And, given the financial condition of most states, most of this cost would have to be borne by the federal government.

The second BIG problem is the absurdly modest levy—$750 for businesses with more than 25 workers and $375 for businesses with fewer than 25—to be imposed on employers not providing employee coverage. It’s hard to believe, in the middle of a deepening recession, that many employers will not choose to pay the $375 or $750 levy rather than buy insurance at $3,000 or more (just for the employee, with no family coverage), with additional government subsidies needed to bridge the funding gap.

The CBO has apparently assumed in its estimates that there will not be a big change in the extent of employer-sponsored coverage over the ten-year period, but this seems unrealistic. While we have not seen a “rush to the exits” in Massachusetts so far, the longer-term experience of Hawaii may be more meaningful. Immediately after Hawaii passed its mandated coverage law, the uninsured rate was below 5 percent, but as a series of recessions hit Hawaii’s economy, the rate increased to 8 percent in 1998, and close to 10 percent today. Only the truly naïve can believe that numerous US employers won’t either choose the far cheaper levy option or—as in Hawaii—find other ways of ducking the employer mandate.

Roger Collier was formerly CEO of a national health care consulting firm. His experience includes the design and implementation of innovative health care programs for HMOs, health insurers, and state and federal agencies.  He is editor of Health Care REFORM UPDATE [reformupdate.blogspot.com].

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  1. Obama and the Liberal Democrats want to control every aspect of your life, including your health care. That is their whole game. Obama tells you that you will be able to keep your current health insurance plan. He should have said you can stay in your current plan if you (or your employer, or the combination) want to pay 50% more than what the government will charge in what they are making available through their new health insurance exchange. The balance of funding for the health care exchange plan options is nothing but government deficit financing (oh yes, once again). The health insurance exchange plan options are all government controlled, government dictated benefits and insurance contract provisions, no matter which insurance carrier’s name is on any of those options. That is why it is estimated by The Lewin Group that within the first year there will be 108 Million people enrolled in the exchange plan options (one-third of the US population). If you doubt any of this, simply read the legislation (HR 3200 is available online), and run some simple math comparing the premium cost of your current medical plan, to the 8% payroll tax (in the legislation) multiplied by the typical salary of the average employee where you work. For example, the 2008 average annual cost of family health insurance was right around $12,700 (according to The Kaiser Family Foundation HRET, a non-biased, non-profit source of this type of information). So if an employee has a salary of say $40k, the employer can simply pay an 8% payroll tax as under the legislation (or $3200 in this case) and tell the employee to go to the new government exchange for coverage, where he will be able to get coverage without any cost in this case, due to his income level. Therefore, the Obama/Democrats Plan will automatically suck in everyone over time (except federal employees and union employees who are exempt), simply due to the huge cost differences, which is in turn funded by deficit govenment financing (as usual). So what’s wrong with this picture? I leave it to you to make your list.

  2. “What exactly do you expect them to do?”
    ask for generics at the doctors office
    take better care of themselves
    use care more efficiently
    push their providers to be more efficient
    mainly just respect the cost, consumers today act like spoiled kids spending mommy and daddy’s money.
    What Barry said is the main issue, if they don’t know the true cost nothing will happen, transparency can only help. If they know and choose to ignore it so be, but to not know you can’t expect any beneficial action.

  3. “What exactly do you expect them to do? Turn down the employer plan and go without, or look for something cheaper on the individual market?”
    Margalit – If employees had a clear understanding of the cost of their health insurance including their own contribution toward the premium as well as what the employer pays on their behalf, there might be more interest in less expensive alternatives. Many employers only offer on health plan choice. Millions of employees in both the public and private sector are represented by unions. Many non-union employers routinely solicit their employees regarding how they value their benefits and what changes or improvements they might be interested in. There should be ample opportunity for employees to communicate benefit preferences to management.
    If, for example, offering a higher deductible plan with a meaningfully lower premium as an option might find plenty of takers if the savings were given to employees in the form of either higher wages or an improvement in other benefits like disability insurance, paid time off, higher 401-K match, etc. Like so much else in healthcare and health insurance, incentives matter. However, before we can rationally respond to incentives, we need clear and transparent information in order to make wise choices.

  4. “Maybe if employees realized high insurance premiums
    are really a HUGE tax on their earnings they would be
    more engaged.”
    How so, Nate? What exactly do you expect them to do? Turn down the employer plan and go without, or look for something cheaper on the individual market?

  5. Nate says:
    > Ideally I would like to see the full cost of
    > insurance put into employees pay then deducted out.
    > Maybe if employees realized high insurance premiums
    > are really a HUGE tax on their earnings they would be
    > more engaged.
    Lots of companies do this or something like it. Even almost 30 years ago a company I worked for did that once a year in an “annual compensation report”. ADP (the big payroll processor) will do it for any company that wants it.
    I really think most people look at taxes as unavoidable and many don’t think about them as having been in any way “paid by them” as in “this is a loss to me”. I have known people who say they just put their thumb over the gross and focus on the take-home. My bet is the insurance premium deduction would be seen as “just another tax”. They know about it in the abstract but they can’t do much of anything about and they’d enjoy life less trying to fight it. This psychological mechanism is, after all, why payroll deduction was started in the first place.
    t

  6. Barry, what I meant was that law enforcement IS paid from taxes. Fraud in any system will escalate costs. I can agree on the pain and suffering limits as that is usually what pays the lawyer fees and gives the plaintiff extra spending money, although someone needs to pay the lawyer, if it’s not the looser. But how much of litigation costs from minor injuries accounted for high insurance rates, unless it was an accepted way to game the system in NJ? We certainly have lots of lawyers here advertising to sue for accidents and I don’t know of any limitations on P&S awards.

  7. Peter,
    The fraud wasn’t covered by taxpayers. It was sharply reduced by more aggressive and effective law enforcement using some of the strategies pioneered by NYC in the early 1990’s. Property damage and medical costs were always covered by insurance. The savings came from eliminating non-economic damages (pain and suffering) for relatively minor injuries as well as the associated litigation costs.

  8. Barry,
    Sounds like the taxpayer covered ending the fraud, while government made sure people’s medical/property damages were paid for. Single-pay would already cover medical damages by definition, but no one has shown me yet where there has been substantial reduction in premiums in states where tort reform has been passed (McAllen Tx, in healthcare it only seems to relieve the docs of some overhead.

  9. “Here in NC, as is probably true in other states, car insurance is mandatory (I agree by the way) AND REGULATED by the insurance commissioner. Our commissioner has done a great job in overseeing rates and keeps them in line.”
    Peter,
    Since you brought up auto insurance, I would like to provide some history regarding my state of NJ’s experience. Back in the mid to late 1990’s, NJ was one of the two most expensive states (MA was the other) in the country for car insurance. The auto insurance industry was extremely tightly regulated to the point where profits were hard to come by, some companies, including GEICO, refused to do business in the state while others gave up their license to do business here. At one point, over 40% of the state’s drivers were in the assigned risk pool. The liberals constantly blamed insurance company greed and profiteering for the problem which was ludicrous on its face given the actual circumstances.
    Then, the state embarked on a series of reforms. First, regulation was loosened to give insurers greater ability to raise rates on a timely basis to properly reflect claims costs. Second, NJ got serious about cracking down on fraud including organized rings that would steal cars to order and stage accidents to collect damages including non-economic damages. Finally, the legislature passed tort reform which included no fault compensation for medical costs and property damage in exchange for waiving the right to sue for non-economic damages except for a limited list of defined very serious injuries. Drivers could maintain an unlimited right to sue in exchange for a higher premium but over 90% of the state’s drivers are on the no fault system, I believe. The upshot is that I and many other drivers are now paying less for car insurance (in nominal dollars) than we were ten years ago, while there is plenty of competition in the marketplace.
    I think there might be some lessons here for health insurance on the national level, especially with respect to tort reform and fighting fraud. Regulation, by the way, is still more than adequate to keep insurers in line without any need for a public option.

  10. “By the way, in response to your next comment, don’t forget that there will be some relief on private premiums by cutting down on uncompensated care that has to be recouped by private payers.”
    jd, who’s going to be looking over the insurance industry’s shoulder to see whether this happens. Here in NC, as is probably true in other states, car insurance is mandatory (I agree by the way) AND REGULATED by the insurance commissioner. Our commissioner has done a great job in overseeing rates and keeps them in line. I’d feel more comfortable if some mechanism was in place to do the same for health insurance. That’s another reason why I support a public option, don’t like your private plan or company, then you can CHOOSE the private plan.

  11. “I thought there was general agreement ( I guess not by you), especially for small business, that it is poor policy to rely on employers for health insurance.”
    The left side of pro reform is in strong agreement on this point, it’s agreement out of ignorance then sound theory though.
    Consider both unemployment and Medicare premium are collected through employers. As is workers comp, I haven’t heard anyone claim employers should not be providing these coverages. The issue is not who collects the premium but what politicians have done to what once was insurance. If employers could buy true insurance policies and detach themselves from the delivery of healthcare and other social ideals the system would work again.
    There are 340 million people in the county. I hope it is obvious to all that administering 340 million individual policies is far more expensive then 57+ public and 5 million or so employer plans. HIPAA eliminates ALL concerns about changing jobs or starting your own business. As long as people either pay for COBRA or purchase another policy right away they are guaranteed to be able to buy one. The issue then becomes cost of insurance which is not negatively impacted by employers collecting premium. If Democrats would stop blocking AHP bills, Public plans stopped shifting cost to private plans, and finally Congress passes an individual mandate premiums would be affordable for almost everyone in the private sector. A few million would need subsidies but that would cost far less then 1.6 trillion or even 1 trillion. The major downside is public plans forced to pay providers a living wage for their work would bankrupt both the federal government and almost every state.
    Combined employer and individual mandates outside this exchange BS is the most efficient way to finance insurance in a sustainable way. I think the penalties need to be considerably higher then jd suggested, if everyone is required to have insurance then the combined employer and employee penalty should be at least 60-70% of the average price of insurance for that rating area. This should be a catastrophic policy, insuring co-pays and low deductibles is inefficient. Replace FSAs with HSAs and force employees to learn where there money is going. With direct deposit I bet most people have no clue what they pay in premium.
    Ideally I would like to see the full cost of insurance put into employees pay then deducted out. Maybe if employees realized high insurance premiums are really a HUGE tax on their earnings they would be more engaged.

  12. Peter, I’ve pretty much stopped talking about first-best solutions and now mostly look at what will be more or less effective within options in play or that seem plausibly in play for this round of reform. My ideal would either be something like the Dutch system for multi-payer or the French system for (quasi) single-payer. But as the Germans show, keeping employers involved doesn’t have to be a big problem.
    There is no chance this round of reforms will fix our system. What it can do is bring nearly everyone into the system in a more, er, systematic way and set the stage for big delivery system reforms down the road a bit.
    By the way, in response to your next comment, don’t forget that there will be some relief on private premiums by cutting down on uncompensated care that has to be recouped by private payers.

  13. “subsidies for lower-income individuals buying insurance through an exchange mechanism…”
    Roger, is there anything in there for premium/co-pay/deductible relief for the poor sods (businesses included) who presently pay for private insurance. Are they going to continue to be stuck with paying the insurance/hospital piper while others get the discounts?

  14. “A small employer penalty will be particularly powerful (and fair!) if it is coupled with a small individual penalty for not getting insurance. $750 for the employer and $250 for the individual would be a nice combination, not too onerous for either but in conjunction able to move a huge number of people into coverage.”
    jd, I thought there was general agreement ( I guess not by you), especially for small business, that it is poor policy to rely on employers for health innsurance. I for one (individual) will not blink at paying the $250 penalty if forced into the existing expensive and wasteful system because congress can’t bring itself to legislate the necessary cost cutting pain needed to really bring health inflation under control. I have yet to see a proposed yearly premium proposal with co-pays and deductibles put forward. Has any premium target been considered by HELP?
    P.S. The above post by Peter is not mine.

  15. Roger, thanks for responding. $3K per recipient of expanded medicare per year sounds reasonable, though I really don’t think the proportion of disabled in the expanded population could be as high as it is in the Medicaid population on which that estimate is based. Also note that the current population of Medicaid recipients is disproportionately women of child-bearing age and children. The new enrollees would have a significantly higher proportion of men, particularly men in their 20s and 30s (young invincibles). Actuaries can figure out how that should impact the estimate.
    Your major point is of course dead-on that the new number for the HELP bill is just as misleading as the old number, though in the opposite direction. In neither case are we looking at a full estimate of the 10 year cost of reform.
    One more issue I’d take with your post, though: I do think a $750 levy on businesses that don’t insure their employees would make a difference. A smaller penalty is having some effect in Massachusetts, and in general penalties have a greater impact in changing behavior on a dollar for dollar basis than subsidies do. There is a huge literature on the phenomenon of Loss Aversion stemming from the work of Thaler, Kahneman and Tversky.
    A small employer penalty will be particularly powerful (and fair!) if it is coupled with a small individual penalty for not getting insurance. $750 for the employer and $250 for the individual would be a nice combination, not too onerous for either but in conjunction able to move a huge number of people into coverage. Those employers who don’t offer insurance will help fund the subsidies for those left to use the Exchange.
    And yes, you’re right that some employers will look for ways to game the system, and sooner or later loopholes will be exploited. That, of course, is what one has to expect with regulation in general, and the only solution is to start with something as tightly-constructed as you can, then keep looking for holes and plug them before too much water runs out. Politics–power protecting its interests–may prevent that, but then that is true whatever regulatory scheme you present.

  16. Would doctors take a “haircut” if third-party claims were paid at time of service?
    Billing and collections costs alone range from 3% – 7% of total collections and I bet providers of all types might live with decreased reimbursement if their AR Days turned into AR Hours or AR Minutes..
    My Minutes in AR are 53 – imagine that..!
    Real time adjudication is here – why not just drop the payment after.?
    Savings??

  17. Anthem Wellpoint, the largest health insurer in my state (CT) just announced it would seek up to a 32% increase in individual premiums starting Oct. 1. On the cost side, Anthem will provide no increase at all in their take-it-or-leave-it fee schedule for physicians effective July 1, 2009. This means that Anthem’s physician fees will be flat for two years straight. Many of Anthem’s fees are lower in 2009 than they were in 2000. But let’s not make the private sector have to compete with a government plan in any health reform.
    Medicare announced on July 1 their physician fee schedule for 2010 which contains a 21.5% reduction in the national conversion factor used to set physician fees. This is the continuing saga of the flawed SGR formula in the law. I’ve just spent the morning today crunching the numbers. Unless changed by Congress there will be major fee cuts for all physicians in Medicare (some examples: 12-15% less for office visits billed by all docs even primary care, 40-50% less for cardiology including EKGs billed by primary care, 30-60% less in radiology, 40-50% less for GI, some ortho fees down by over 60%).
    If these cuts are allowed to stand, I predict thousands of docs will drop out of Medicare and thousands more will close their practices to new Medicare patients, leaving potentially millions of Medicare members with no docs to care for them, all while tons of baby boomers are hoping to get coverage under Medicare in the next few years. Who do you think these seniors will blame for this mess come the Nov. 2010 elections? Democrats?? This will be the start of the “nuclear winter” predicted by Jeff Goldsmith in his “no country for old men” great post of earlier in the week.

  18. How about only catastrophic hospitalization coverage all other pay as you go? That takes some of the control away from the insurance companies and the government. I feel we need much much less interference in our daily lives and much less taxes. Big brother is not our friend ever.

  19. The Most Affordable Health Coverage is Prevention
    Americans believe the most affordable health overage is prevention, according to a poll released by the Trust for America’s Health and the Robert Wood Johnson Foundation. Seventy percent of respondents to the poll support investing in community and nation-wide prevention plans as the best form of affordable healthcare Americans could find. As the debate over healthcare reform continues, more and more people agree that the best possible health care is preventing disease and injury in the first place. Lowering health problems will lead to lower health coverage costs. BesthHealthcareRates.com offers these tips for preventing health problems and keeping affordable health coverage a priority for individuals and families.
    1. Don’t smoke. The most important thing you can do for your health is to stop smoking. It’s also a great way to reduce your medical insurance costs. Although the number of smokers has reduced dramatically over recent years, smoking remains the number one preventable cause of death in the country. Smoking affects virtually every organ in your body, from your lungs to your heart to your circulation. Because smoking constricts your blood vessels, it severely limits the amount of oxygen your body receives, including your brain. Medical professionals agree unequivocally that quitting smoking is the best thing you can do to prevent disease and death. Because of the many health problems smoking causes, medical insurance premiums increase dramatically for smokers. Providing funding to smoking cessation programs is a preventative measure that will help make affordable health coverage possible.
    2. Closely following smoking as a health threat, obesity is a national epidemic in America, making affordable health coverage difficult to provide. Obesity is one of the fastest growing health threats, leading to heart problems, diabetes and a host of other medical problems. Tackling obesity is a two-fold proposition including healthy eating habits and increasing physical activity. Rather than following fad diets or pre-packaged diet programs, funding programs to teach real-life nutritional meal preparation and eating habits can prevent and reverse obesity. Incorporating physical activity into your daily lifestyle is another terrific way to prevent and reduce obesity, which will help lead to affordable health coverage for American families.
    3. Make use of free health screenings and services. Nearly every community has some health screening tools available for very low or no cost. It is especially important for people without medical insurance to take advantage of these resources. You can find free blood pressure screening machines in many pharmacies, grocery stores or even discount department stores. Keeping a regular eye on your blood pressure can help spot developing medical problems early, which can significantly decrease medical expenses and help you maintain affordable health coverage. You can also take advantage of vision and hearing screenings in many communities, as well as diabetes screenings. These tests can all help you detect problems at their earliest possible stages and save your health as well as your money.
    We all need affordable medical insurance, but it is even more important to have good health. The best way to attain and maintain good health is to prevent disease and poor health habits every way we can. By not smoking, eating properly, incorporating regular exercise into our lives and keeping an eye on our health through free screenings, we can make affordable medical insurance a reality for our families.

  20. healthcare reform proposed by the Federal Government may actually eliminate affordable medical insurance from the private sector entirely. While publicly funded healthcare may seem to create affordable medical insurance for more Americans, it may actually create a bigger problem.
    Private medical insurance is not the enemy of affordable healthcare in the US. In fact, if the federal government creates another public healthcare program, it will ultimately raise the costs of private medical insurance to exorbitant levels. While the idea of expanded public healthcare may seem to be the answer to affordable medical insurance, it could be the end of private insurance altogether. Medicare and Medicaid, the two public health programs currently in effect, cost private insurance companies – and by extension, Americans paying premiums for private insurance- $88 billion in 2007, according to the consulting group Milliman, Inc. In fact, the average family of four with private medical insurance saw their premiums increase $1500 because of public programs. In California alone, that represents nearly 10% of every premium dollar paid.
    The problem comes because Medicare and Medicaid pay as much as 15% to 30% less than private insurance companies on every doctor and hospital bill. Because the doctors and hospitals aren’t willing or able to accept this much loss, they push those losses onto private insurance companies, who, in turn, shift the loss to the consumer through higher premiums.

  21. Several different market-based solutions could help low and modest-income individuals and families find affordable health coverage. Tax credits, tax deductions, health savings accounts and high-risk pools are all market-based options to make affordable medical insurance a reality for uninsured people who are working, but cannot afford medical insurance.
    Tax credits allow people to keep more of their income on a monthly basis in their pay so the can purchase coverage. Because tax credits enable people to make their own choices of providers, plans and doctors, they are considered to be a preferred market-based solution for affordable health coverage. Tax credits enable working people to pay for their own health insurance without having to fall back on Medicare or other government health programs. Because a tax credit would cost only half the amount of Medicare per individual, the burden on all taxpayers is also reduced, saving everyone money.
    Private health insurance can be affordable health coverage for every working American. By working with market-based solutions, health care reform can be a workable solution to the millions of Americans living in fear of a medical crisis because they have no medical insurance.

  22. Market-based insurance would not only be more affordable health coverage, it would also provide consumers with more choice. Because savings come from a tax credit, the option to choose insurance companies, policies and doctors is left to the person who purchases the insurance, not a group of politicians. Health insurance needs vary widely from one individual to the next and having the ability to choose the options that work best for an individual’s circumstances is fundamental to quality health care.

  23. Market-based policies are more cost effective for the government – and therefore the taxpayers- than publicly funded healthcare. According to the Kaiser Commission on Medicaid and the Uninsured, January 2005, if every uninsured individual was covered by a government program such as Medicaid, the cost to the federal and state governments is approximately $2000 each. If, however, low-income and modest-income Americans could purchase their own health insurance by utilizing a $1000 tax credit, the federal government would save 50% of that money. With over 45 million uninsured Americans, that savings would be substantial indeed.

  24. Nobody is free of cancer, hopefully soon find a cure and to fight this disease now, because it is tedious to go to therapy all the time and drugs to treat the disease are very strong opiates as vicodin, Oxycodone, Lortab, Norco medicines too high in codeine and acetaminophen considered hallucinogenic drugs, as indicated in findrxonline then imagine how much pain, really hope there will be a solution as quickly as possible for this …..

  25. jd — The per capita Medicaid cost estimate came from the Health Affairs web article “Covering the Uninsured in 2008” by Jack Hadley et al. Hadley estimated average per capita Medicaid costs at $3880 for 2008, excluding dual eligibles.
    If we assume that most of the new Medicaid eligibles are adults, and that this group includes a smaller percentage of aged and disabled than the current Medicaid population, we might get a per capita cost of closer to $3,000 — in other words, a ten-year cost of $600 billion, excluding medical inflation. However, if and until the Medicaid expansion legislation is passed, we won’t know how many additional aged and disabled will be covered. Note also that there are current proposals to make Medicaid coverage more consistent across states and therefore more generous on average.

  26. As history indicates, governments and their people will always revisit health care and every other social issue until they are willing to confront the root causes and to solve them based on global highest ideals. Mankind is ready for a long-term, intelligent and futuristic plan such that all global citizens win.
    http://www.humanitytest.org/blog/2009/06/04/true-universal-health-care-solution-and-philosophy/
    http://www.humanitytest.org/Free-Global-Health-Care.php

  27. My plan is to liquidate all personal belongings and leave the country with my guns. They have now created a police state. I am a quite confused older citizen of the complete downward spiral of our government into a stalinistic state without eve a wimper from our citizens. The Government is the worst managment and organization I have seen in sixty years on this earth. Stand up and clean house soon or get what you have asked for it’s almost over right now……get of the grid.

  28. We’ve got to be really careful with the choice we make this time around. If the financial crises didn’t open our eyes, i don’t know what will. Budget spending must be controlled at the same time there has to be a balance in trying to restore the economy and improve the health care situation.

  29. Where is this $80 billion annual cost for Medicaid expansion coming from? If it is just based on the average current per recipient expenditure, that’s wrong. Excluding dual eligibles and the disabled, who are already pretty much fully covered, the average cost per recipient is close to $2,000 per person per year. If you use that number, you get a total annual cost of around $40 billion to expand Medicaid to 20 million people.

  30. Good job, Roger. So what’s going on here is simple to explain: HELP wants to clear a bill with an acceptable price tag to CBO, and hand the smoking hot potato to Finance. States will in fact go bonkers (then broke) if they are asked to pay their share of Medicaid expansion. How is California going to finance a dime of additional Medicaid expense? Finance will have to reconcile reform’s coverage objectives with available funds.
    The penalties in the HELP bill for employers evading the mandate will not compel a significant increase in coverage. Those will be dramatically increased at the 11th hour when it is too late to stop them. If Finance can sneak THEIR draft by CBO, the Senate can pass a bill with gaping holes in coverage and then try to fix it in Conference at 2:30AM.
    There is a HUGE resource shortage, and no-one wants to back away from the political goal of universal coverage this early in the process.

  31. ravi – Did you say that we can conservatively shave $520 billion off insurance administration costs and $208 billion from hospital administration? Wow!! Good luck with that!

  32. The cost is a number game. The key is access to 100%. Let us keep the math simple. We are spending 2.2 trillion for about 85% of the population. So it would cost close to 2.6 trillion to cover all. This is not counting the underinsured.
    Now, what we need to do is foigure out where to cut cost. 30% cost is insurance administration. So let us say we can bring them down to 10% (compare to 3% or so people claim medicare and medicaid costs). That brings the cost down to 2.08 trillion. Next is hospital administration. I do not have the number, but if you look at the waste, is is alot more than insurance companies. Let us be conservative and take only 10% reduction. That brings it down to 1.82 tillion. We have about 1 million injuries and about 100 thousand death every year. If you assume the cost of this to be about 1000$. It is just noise.
    Next is malpractise insurance. While every wrongful act need to be punnished, the reward should be limited to providing a equivalent life to those who has been harmed. I do not have number to put on that.
    Next one is controversial. The healthcare staff in general is overpaid compared to others by about 10%. Let us say we cut that down.
    Now I do not want to do math anymore…BUt you get the point. And I have not yet gotten into drugs, equiments, etc.
    We wrote a paper on how to save tons of money by eliminating the problem associated with docs license cancellation (we have offered it to THCB to share if they chose to). The business case for that type of work could run into billions.
    So there are ways to cut the cost. BUt shall not confuse coverage issue with cost.
    rgds
    ravi
    blogs.biproinc.com/healthcare
    http://www.biproinc.com

  33. Donald please be quite, asking those sorts of questions prior to the bill being passed and law is inappropriate. You don’t see the media hounding the hard working and well intentioned politicians like that do you.

  34. We are about to make history on US health care reform
    The corporate monied interests known this reality.
    They are desperately manuevering to get a seat on this long stalled train which is now pulling out of the station.
    We will see US health care reform in 2009 and it WILL include a public health insurance option.
    This latest revision by the Senate HELP committee of the Senate bill will indeed help and accelerate the inevitable.
    Dr. Rick Lippin
    S0uthampton, Pa
    http://medicalcrises.blogspot.com

  35. Will this proposal make the public option, or Government HMO, idea more or less attractive to Democrats who oppose it because they oppose a single-payer plan? Why or why not?
    Does the plan require community rating or allow medical risk rating?
    Does the plan still included Kennedy’s onerous restrictions on access to care?
    What would keep politicians from mandating new benefits be offered by employers and the Government HMO?
    And wouldn’t this inflate spending dramatically?
    What senators and special interest groups will be more likely to support this version of HELP’s bill than they were before it was announced?
    Which would be less likely to support the new version of the bill?

  36. This looks like yet another example of a classic liberal failure. They present us with a set of well intentioned proposals that they suggest will greatly improve fairness and social justice in the society, with respect to healthcare and health insurance in this case, but they never squarely face up to how much it will cost and who is supposed to pay for it. They know they can’t pay for it just by soaking the rich ad infinitum. The broad middle class will have to pay, for the most part, to insure the broad middle class as well as the poor, but the honesty and integrity needed from our politicians to make that fact clear and transparent is lacking as usual.

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