I thought I might take a moment to provide some more reasoned points of view than my own on the upcoming health care crisis (masquerading as an overhaul). I read a summary of Max Baucus’s recently released plan and, after careful consideration, if something like this passes, we might as well just email our bank account numbers to the insurance industry and live on what they decide we can keep. Sorry, I was going to be more reasoned. Here goes…
My first problem is that the insurance industry likes this plan a little too much. In fact, they’ve been completely unabashed in stating that any attempt to cut into their profits will immediately be passed on to all of us in premium increases. If they like Baucus’ plan, then they must believe that it will be nothing but beneficial for them. Another interesting tidbit is how Wall Street reacted to this proposal. Investors don’t often start throwing money behind corporations who’s bottom lines are going to be hurt by government regulation. The fact that almost all health insurance industry stocks spiked after release of this bill seems to indicate that investors expect industry profits will actually increase. Not a good sign. Of course, why shouldn’t they like it? They paid for it.
It seems as though there are little or no price controls here at all. And just about everyone, including the insurance industry, knows it. I searched in vain for a medical loss ratio standard in Baucus’ proposal, just curious to see if one was there and what it would be. It seems like it’s assumed to be in there, but no one has actually quoted one that I could find. The medical loss ratio, if you don’t know, is a standard figure for what percentage of revenue an insurance company must spend directly on medical care and services or be forced to refund money to its customers. Several of the other proposals have one listed at 85%. But that’s neither here nor there. There are no controls in place to stop the insurance industry from just jacking up everyone’s premiums to cover any potential loss from the higher mandated percentage. After all, they would be gift wrapped about 30 million new customers to gouge, many of whom are low income whose bills would ultimately get paid on the taxpayer’s dime.
Maryland, by the way, has a rather pitiful 60% medical loss ratio for individual policies, meaning insurance companies selling individual policies here in Maryland can currently feel free to pocket 40% of our insurance premiums. An effort was made to correct that earlier this year in the State legislature, but was shot down by, you guessed it, insurance industry intervention.
And I’m not alone in my thinking. Here’s a former insurance company executive who has turned sides and now fights against the industry. According to him, this particular plan is “an absolute joke.” One of his primary criticisms is that Baucus’ plan allows so much latitude for the insurers to craft limited plans that we would, in effect, be adding more people to the ranks of the uninsured, even while they’re paying for it.
Baucus wants to mandate a 4-tiered approach to insurance, with Bronze, Silver, Gold and Platinum benefits packages. Initially, I thought he must have gotten this idea from a porn site. But the genuine concern is that low income people, the very ones most affected by any government mandate, would be steered toward high deductible, low coverage Bronze packages, priced high enough to guarantee payment through government subsidies, but offering very little in terms of actual coverage. Plus, it seems like Baucus himself knows that any mandate would create a large gray area of individuals who’s budgets don’t allow them to pay for insurance premiums but who’s income is too high to get any assistance. This proposal actually expects to collect $20 million per year in fines. It sure looks like he’s creating a squeezed class of people to help pay for some of his proposal.
Perhaps the most disturbing thing to me is that the mandate to buy coverage is called the “Personal Responsibility in Health Care” provision. So, because I can’t afford to buy over-priced insurance, despite working two essentially full time jobs, I’m irresponsible? When I started my magazine two years ago, we purchased insurance through the company. I didn’t really need it or want it, but my partner had some medical issues and had a young daughter. We needed two people to qualify for a company rate, so I bought in. Over the course of the next year or so, I paid over $4,000 in premiums for my coverage alone, something I never once used; an outlay of money that ate up any savings I may have had and helped contribute to the financial mess I ended up with. This didn’t happen because I got sick, and it wasn’t from medical bills; it was from simply buying insurance. And even though I didn’t have to, I paid for it anyway because I felt a responsibility to my partner and her daughter. That’s what personal responsibility is, Mr. Baucus, not your garbage insurance industry giveaway, you arrogant, elitist, son of a… Whoops, rational discourse, rational discourse, deep breaths.
Apparently, I’m not the only one concerned about strong language, though. I do find it a little appalling that someone would compare opposition to health care reform to opposition to gay rights that led to actual murders, no matter how strong the language. But after seemingly blowing off any opposition to these plans as staged rhetoric for months now, it doesn’t surprise me that supporters would paint those against as irrational and uncivilized. But trust me on this, if Nancy Pelosi thinks people are irrationally pissed now, pass a bill like Baucus’ here and see how people react. People will be rational as long as we are heard, but if you ignore us and do it anyway, that’s when we start to get loud, especially when the laws you pass end up taking money out of our pocket and we get nothing in return for it. That’s why these town halls have been so rambunctious.
Hopefully, everyone will just calm down, and we can go about the business of laughing the incredibly one-sided, insurance industry-friendly bills like Baucus’ out of the building and find a way that might actually work. If this is a starting point for negotiations, as I’ve heard Baucus’ plan described, then we are in for some long arguements.