There is considerable speculation that the Obama administration, desperate for some sort of health bill to pass, will choose to bash health insurance with an “insurance reform” bill. What is this likely to look like ? What does the Baucus bill say ?
Like other proposals in circulation, Baucus’ plan would require insurance companies to sell coverage to all seeking it, without exclusions for pre-existing medical conditions or prohibitively expensive premiums. The Maine experience should be of interest here. Maine has insurance exchanges, shall issue rules that do not allow insurance companies to turn down applicants with pre-existing conditions, and it has been in existence for six years. How did that work out ?
In 2003, the state to great fanfare enacted its own version of universal health care. Democratic Governor John Baldacci signed the plan into law with a bevy of familiar promises. By 2009, it would cover all of Maine’s approximately 128,000 uninsured citizens. System-wide controls on hospital and physician costs would hold down insurance premiums. There would be no tax increases. The program was going to provide insurance for everyone and save businesses and patients money at the same time.
After five years, fiscal realities as brutal as the waves that crash along Maine’s famous coastline have hit the insurance plan. The system that was supposed to save money has cost taxpayers $155 million and is still rising.
Hmmm
Then the state created a “public option” known as DirigoChoice. (Dirigo is the state motto, meaning “I Lead.”) This plan would compete with private plans such as Blue Cross. To entice lower income Mainers to enroll, it offered taxpayer-subsidized premiums. The plan’s original funding source was $50 million of federal stimulus money the state got in 2003. Over time, the plan was to be “paid for by savings in the health-care system.” This is precisely the promise of ObamaCare. Maine saved by squeezing payments to hospitals and physicians.
The program flew off track fast. At its peak in 2006, only about 15,000 people had enrolled in the DirigoChoice program. That number has dropped to below 10,000, according to the state’s own reporting. About two-thirds of those who enrolled already had insurance, which they dropped in favor of the public option and its subsidies. Instead of 128,000 uninsured in the program today, the actual number is just 3,400. Despite the giant expansions in Maine’s Medicaid program and the new, subsidized public choice option, the number of uninsured in the state today is only slightly lower that in 2004 when the program began.
That doesn’t sound like Obama’s promises, does it ?
The sickest, most expensive patients crowded into DirigoChoice, unbalancing its insurance pool and raising costs. That made it unattractive for healthier and lower-risk enrollees. And as a result, few low-income Mainers have been able to afford the premiums, even at subsidized rates.
This problem was exacerbated because since the early 1990s Maine has required insurers to adhere to community rating and guaranteed issue, which requires that insurers cover anyone who applies, regardless of their health condition and at a uniform premium. These rules—which are in the Obama plan—have relentlessly driven up insurance costs in Maine, especially for healthy people.
The Maine Heritage Policy Center, which has tracked the plan closely, points out that largely because of these insurance rules, a healthy male in Maine who is 30 and single pays a monthly premium of $762 in the individual market; next door in New Hampshire he pays $222 a month. The Granite State doesn’t have community rating and guaranteed issue.
So, this is an improvement ?
A program that was supposed to save money by reducing health-care waste and inefficiencies has seen a 74% increase in premiums. But even those inflated payments can’t keep the program out of the red.
This is a preview of Obamacare. These people must not read as the evidence that their plan won’t work is all around them.
Of course, the young voters who put Obama in e White House will pay through the nose. What’s not to like ?
A 2008 study by the Urban Institute found that more than 10 million young adults ages 19 to 26 lack health insurance coverage. For many of those people, health-care reform would offer the promise of relatively inexpensive individual policies, which do not exist in many states today.
The trade-off is that young people would no longer be permitted to bet on their good health: All the reform legislation before Congress would require individuals to buy at least minimal coverage.
Another bill will be introduced Wednesday by the chairman of the Senate Finance Committee. Sen. Max Baucus (D-Mont.) will offer in it a proposal to keep premiums manageable: a bare-bones catastrophic policy that would protect young people from financial calamity while providing basic preventive care.
Drafting young adults into any health-care reform package is crucial to paying for it. As low-cost additions to insurance pools, young adults would help dilute the expense of covering older, sicker people. Depending on how Congress requires insurers to price their policies, this group could even wind up paying disproportionately hefty premiums — effectively subsidizing coverage for their parents.
Hey, I’m old. It sounds good to me.
Tags: health care, Obama
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“Of course, the young voters who put Obama in e White House will pay through the nose. What’s not to like ?”
Yeah that’s the only laugh in this whole thing. But seriously, I think people should have the option to gamble..my brother lost his job with Unisys at age 51, and went bare until Medicare kicked in, while he applied for job after job, raised 2 kids and cared for a severely invalided wife. He lost all his property, kids went the Americorps/Army route to pay for college, but he made it to 65, thanks to his good genes. I gambled through my 20s as well.
Why shouldn’t people have the option to do this? Make an educated guess. Win, you save insurance premium money for basic necessities. Lose, give up your precious property and throw yourself at the mercy of the existing poverty healthcare system. I think that would be overall less expensive for *society* than this beast my senator is proposing now.
I think a very basic catastrophic coverage policy would be very cheap. I have spent thousands, maybe hundreds of thousands, of hours operating on uninsured but most of them were illegals. One thing we learned when we set up the trauma center was that most of our admissions would have some insurance coverage, much of it in auto polices that had medical coverage. Many young people with few assets will be eligible for Medicaid, too. The big problem is with illegals, in my own experience. Of course, we were in the suburbs along a major interstate highway. Inner city trauma centers have a different demographic but nobody will convince those people to buy insurance and good luck collecting the fine. Maybe if ACORN offered insurance to employees.