HlthConsult

HlthConsult

17p

13 comments posted · 0 followers · following 0

14 years ago @ KeithHennessey.com - Why you can’t do... · 0 replies · +1 points

Guaranteed issue only works if ALL insurers have to do it. If only one does it, that insurer would incur significant adverse selection.

14 years ago @ KeithHennessey.com - Why you can’t do... · 0 replies · +1 points

I think this would work a little better than no mandate. One could legislate an even more stringent rule (e.g., subscribers must pick their plan 60 days before the start of the new year, and commit to the year unless subscriber leaves the state, etc) and it would significantly decrease the number of folks who elect not to insure. Massachusetts has no such limitation (as I understand it) so folks can subscribe and unsubscribe whenever they get sick.

I like the standard 12/12 pre-existing condition provision too. It would certainly stop those with pre-existing conditions from dropping insurance (since they would incur the exclusion again) but I don't think the problem has been to get those with conditions to subscribe. The intent is to get those without conditions to subscribe.

I do think that allowing high deductible policies (versus the low-deductible comprehensive coverage in the federal bills) will generate more subscribers as well.

14 years ago @ KeithHennessey.com - The House-passed bill&... · 4 replies · +1 points

Keith-

I am frankly a little confused/surprised by this analysis. Two points:

1) I would expect a net loss in employer sponsored insurance, since many employers would see the penalty for not paying insurance as cheaper than providing it.

2) The authors point out that the "18M" people who willingly pay the tax in place of buying insurance are those "with relatively low health care expenses for whom the individual or family insurance premium would be significantly in excess of the penalty". But as people move out of employer-sponsored insurance, more folks will experience their true insurance bill, unsibsidized by the government. I think among those folks that earn too much to get significant governmental subsidy, they will figure out (over a relatively short window) that it is FAR cheaper to remain uninsured that to buy an unsubsidized policy. Do recall that about 20% of the folks in the US consume about 80-85% of the care costs each year. This means that about 80% of subscribers would do better each year by being insured. They could buy insurance when they need it (as they do in MA) and drop it immediately thereafter.

It is reasonable to expect that over a short window, many folks will figure out the implications of #2. And I would expect that the thousands of financial advisers in the country (and a long list of pundits) will be quick to figure this out, and to publicize the rationale.

Isn't there a credible argument that the net uninsured will actually rise (and significantly) and that the remaining uninsured will see premiums rise (significantly) as a result?

TSB

14 years ago @ KeithHennessey.com - Higher premiums and lo... · 0 replies · +1 points

I think you are absolutely correct, Marty.

14 years ago @ KeithHennessey.com - Numbers matter · 0 replies · +1 points

Freddy-

I am a little confused. The Feldstein plan did nothing to the payer market at all. IN THE PLAN, The Feds just provide vouchers to cover a portion of private insurance. Why did you think this is single payer?

TSB

14 years ago @ KeithHennessey.com - Numbers matter · 2 replies · +1 points

Goodness. Did y'all read the proposal from Martin Feldstein in the Post today?

<a href="http://www.washingtonpost.com/wp-dyn/content/arti..." target="_blank">http://www.washingtonpost.com/wp-dyn/content/arti...

He suggests that the feds should

1) issue a voucher for the actuarial cost of insurance for costs greater than 15% of income. Ergo, the voucher phases out to zero as income rises. The voucher could be used for any policy from any private insurer.
2) Issue a "credit card" from the govt for folks that cannot cover the potential cost of care within the 15%-of-income amount (in case the low income incur costs that exceed their ability to pay)
3) pay for all of this by eliminating the employer deduction for insurance

This is a remarkably clean reform plan, and would drive many toward cost-containing higher-deductible policies. Thoughts anyone?

14 years ago @ KeithHennessey.com - Numbers matter · 0 replies · +1 points

I think the decision to put a cap on out-of-pocket expenses is the element that raises aggregate costs the most. If the mandate permitted (or even better, encouraged) acquisition of (or transition to) high-deductible plans (say, $10,000), aggregate health costs would probably fall. But forcing more folks to have low-deductible plans is grossly counterproductive.

14 years ago @ KeithHennessey.com - Wall Street Journal op-ed · 0 replies · +1 points

I have debated this on a couple other sites, including Keith Hennesey's. If the guaranteed issue framework uses modified community rating and includes adjustments for both age and geography, we would eradicate the subsidy of young to old. It is true that the bills in Congress limit the ratios of young-to-old premiums, and this should be adjusted to true rating based on age and geography (probably county).

I also agree that the guaranteed-issue framework establishes some bad incentives, such as the house-on-fire example above. However, I think that if insurers were allowed to charge 2 years premiums for individuals who were previously uninsured, it would not only drive folks toward buying insurance, but it would drive folks toward higher-deducitble policies (since both the premium and then penalty would be lower).

Now all we have to do is get federal legislation that does not outlaw high-deductible policies (as most of the bills in Congress do) and does not skew community rating to damage the young folks.

14 years ago @ KeithHennessey.com - Incorrect conventional... · 0 replies · +1 points

Incidentally, as a reminder, "bundling" inpatient costs into DRGs in the '80s did actually decrease costs, and certainly decreased inpatient days. Effective new care service bundles would do the same thing. It might be the only approach to "bend the curve".

14 years ago @ KeithHennessey.com - Incorrect conventional... · 0 replies · +1 points

Re CW#4- It is not only "guidelines" that become defacto standards over time. Even more importantly, the specifics of what the government pays for (and how it pays) become defacto standards. Look at the transition to DRGs in the early '80s. Most payers began to pay on DRGs (the first real "bundling" experiment) soon thereafter. The vast majority of private insurance payments to providers in the US system are for the the same items that Medicare pays, albeit at different prices. The immense difficulty in shaping a different "product" (i.e. a specific bundle of services) --and getting payers to pay for it-- is the largest obstruction to price competition (OK, OK, second largest- after the fact that few pay for their own care).