The simple but ugly fact is that those who benefit most from the inherent distortion of markets have no interest in any real, market-based solution that would alter the status quo or erode their unfair purchasing advantages.

If the defenders of free markets were seriously committed to their principles they would support something along the lines envisioned in the proposal by Sens. Ron Wyden , D-Ore., and Robert F. Bennett , R-Utah. Under their plan, insurance exchanges would be opened up for nearly all persons, including those currently insured through their employers.

Instead, every modification of the public option is deliberately calculated to do just the opposite. Every compromise is meant to appease the corporate critics of change by watering down the competitive consequences of anything being proposed.

There should be health insurance choices offered to everyone
By Lanny Davis - 10/28/09 05:18 PM ET

I remain surprised at the almost total silence by liberals about a common, uncomfortable fact of all the plans Democrats have introduced in both houses: that so few people will have true choices in purchasing a health insurance plan, and if there is a public option, that more than 150 million insured workers will not have access to it.

Only three categories of people under any of the Democratic plans — the eligible uninsured, the self-employed and small businesses — will have access to state insurance exchanges, and therefore, if there is one, a public option. That is estimated to be about 25 million people or less.

And why is this the case? Democratic Sen. Charles Schumer of New York, a strong supporter of a “level playing field” version of the public option, was asked on a Sunday talk show why so few people will have any access to the public exchanges or a public option. His answer was unclear — something about the public option leading to greater competition and a reduction of health insurance costs by employers.

Huh? How does that explain why 150 million insured workers shouldn’t have the same multiple choices for insurance as everyone else?

Democratic Sen. Ron Wyden of Oregon has a simple answer and, for the life of me, I do not understand why Democrats have not embraced it — as well as Republicans who value maximizing individual choices (and who oppose a public option).

Wyden’s Free Choice Amendment could be attractive with or without the public option. He would require employers either to offer their employees a lower-cost, high-value policy along with the current policy in place, or allow them to “cash out” on the value of their employer-provided policy and go to the state public exchange and buy a policy of their choosing. If that policy is less expensive than the one the employer had been providing, the employee gets to pocket the difference.

This is a good idea whether or not there is a public option. If there is one, then insured employees will be guaranteed a lower-cost choice offered by their employers or could go to the exchange and purchase the public option. (Thus it would create incentives for employers to shop for lower-cost insurance as a second choice for all employees.) But if the public option doesn’t succeed in getting 60 votes in the Senate to end the filibuster, it seems to me that the Wyden Free Choice Amendment becomes even more important, because it guarantees that employees lacking a lower-cost choice that meets their particular individual or family needs from their employers could go to the exchanges to purchase a better plan of their choosing. And one of those choices could be a requirement that every state exchange offer the equivalent of the lower-cost, higher-value Blue Cross health insurance plan available to all members of Congress and federal employees.

For reasons that have never been fully explained, when Wyden introduced his Free Choice Amendment, which he wasn’t able to do until 1 a.m. on the morning after the day of the markup of Sen. Max Baucus’s (D-Mont.) Finance Committee bill, Baucus ruled it “out of order” and would not let a vote to occur. He was under the erroneous conclusion that Wyden’s proposal had not been “scored” by the Congressional Budget Office. In fact, it had — on Sept. 22, the CBO had issued a scoring that found Wyden’s Free Choice Amendment would have the effect of reducing the federal deficit by $1 billion over 10 years.

Assuming an honest mistake was made thwarting a vote on Wyden’s amendment, it is not too late for Senate leaders to include his proposal in the merged bill to be debated on the Senate floor — assuming there are 60 votes allowing that to happen — or at least allow Wyden to get an up-or-down vote on the Senate floor.

The only explanation I’ve read so far as to why Wyden’s proposal has received so little support is that, as Jay Stevens wrote on Oct. 7 in his Left in the West blog, “the proposal was doomed by the joint opposition of businesses and labor. Businesses didn’t like it because they lose control over their employees’ health benefits. Labor groups didn’t like it because they lose control over their members’ health benefits.”

If both business and labor don’t want their workers to have multiple choices for health insurance, then that may be one reason why this is a good idea. At the very least, Wyden’s Free Choice proposal should be debated and voted on, and not shunted aside as “out of order.” Who could disagree with that?

Davis, a Washington lawyer and former special counsel to President Clinton from 1996-98, served as a member of President George W. Bush’s Privacy and Civil Liberties Oversight Board in 2005-06. He is the author of Scandal: How ‘Gotcha’ Politics is Destroying America.

The Huffington Post October 29, 2009

Charles Kolb and Alain Enthoven
Posted: October 28, 2009 10:08 AM
Our Health Future: The Business Case for Wyden-Bennett

Recent action on health-care legislation is headed for a strategic disaster -- rising health-costs and a fiscal explosion. Business leaders need to recognize this, and work to change course before it is too late.

Health care and insurance are complex systems with interacting parts. The consensus wants coverage to be available to everyone (except illegal immigrants), with no penalties for pre-existing conditions. The insurance companies want everyone to buy insurance, so that the cost of covering the sick will be offset by premiums from today's healthy. Legislators want to limit the premium cost to low-income households, and to allow those with incomes too high for Medicaid coverage but too low to purchase their own insurance to have a relatively painless exemption from buying coverage. Business leadership organizations want to maintain control of the health plans of their employees. And everyone wants the total cost of the initiative to be limited, and to be fully paid for by savings elsewhere and by taxes.

These demands cannot all be met at once. The price of insurance cannot be set by law; it is determined by the cost of health care for the population to be covered. Legislators are unable or unwilling to enact effective measures to mitigate health expenditure growth. To cover the health care risk for everyone, everyone must buy coverage. If modest-income families are to buy insurance, they must be subsidized. Those subsidies have costs, and those costs drove the total cost of the health care bills in Congress higher than the target. To save money, the subsidies were cut. For political appeal, more low-income families were excused from purchasing insurance, and penalties for refusing insurance were reduced. With fewer healthy people in the risk pool to share the cost of covering the sick, the price of insurance inevitably will rise.

This process will feed on itself. As insurance becomes more costly, those who see themselves as healthy will refuse insurance in increasing numbers, even if they must pay the now-reduced penalties. After all, if they do become sick later, they will be able to buy insurance virtually on the way to the emergency room - because discrimination against pre-existing conditions will be banned. As more healthy people drop insurance, the price per person will rise - inducing still more healthy people to decline coverage, in an ever-worsening spiral.

This legislative process appears preordained to fail. Democratic leaders in the Senate and the House are working to combine their five bills without violating the President's cost constraint. The House and the Senate reject each other's cost offsets. Every additional feature will have to be paid for. Legislators will not want to burden poor people with higher costs, and likely will reduce, rather than increase, the penalties for not having insurance.

The final bill certainly will raise funds by imposing various taxes on firms and especially insurers. These taxes will be passed on to customers through higher insurance premiums. (It is ironic that the taxes in the Finance Committee bill will be on insurers, whether for-profit or nonprofit, but not on self-insuring employers. This will tilt the playing field in favor of self insurance, which is almost always costly fee-for-service, and against efficient prepaid plans like the Group Health Cooperatives and Kaiser Permanente, which compete for members in employment groups.)

The standards for an acceptable policy under the mandate will probably increase premiums too. So people will increasingly go without insurance until they need it, and thanks to guaranteed issue, they will then enroll when they anticipate medical needs. When they foresee no more medical needs, they will drop insurance because $4000+ per year in premiums is a lot more than $200-750 of penalties for going without insurance.

This vicious cycle will become a "death spiral" as more and more healthy people drop out of the insurance pool. So finally, insurance companies - quite possibly including the nonprofit integrated delivery systems like Group Health Cooperative and Kaiser Permanente, which have been commended for driving competition and innovation - will have to withdraw from the individual market.

As the insurance companies withdraw, the advocates of the "public option" will say, "We told you so." So access to the public option will be expanded and it will grow rapidly. Its premiums will have to be high by today's standards - unless it is able to draw on open-ended public subsidies the way Medicare does. So, to provide "competition" and "challenge the private insurers," it will be subsidized - either explicitly with cash, or implicitly with the right to compel doctors and hospitals to participate at artificially low reimbursement rates. Private insurance companies cannot survive against a subsidized public insurance company backed by the full faith and credit of the federal government, with the power of law to extract below-market services from providers. There will be a government "single payer" for people not in self-insured employment groups. But a government insurance company will be no more able to bring health expenditure growth to sustainable rates than Medicare has been. Just look at the politics of the Sustainable Growth Rate formula for physician fees in Medicare for an example of what will happen.

Rising costs will overwhelm the subsidies to cover low-income people. Those subsidies will have to rise to keep pace with costs. The Federal budget deficit, already far too high, will continue to grow unsustainably as health expenditures continue to outpace revenues (and the GDP out of which those revenues are collected).

The end of the story is a sequel to the economic thriller of the last two years. The foreign investors who have been our nation's lenders of last resort - and even American investors - will be increasingly reluctant to buy the torrent of US Treasury securities needed to finance our health-cost-driven deficits. The Treasury will have to pay higher and higher interest rates, sending deficits still higher, stoking inflation, and stifling investment and economic growth.

Only market forces - insurers, providers and consumers, all with aligned incentives to seek and deliver the highest-quality care at the lowest possible price - can stop our health-care industry from piling onto the already outsized budget deficit. The Wyden-Bennett bill introduced in Senate Finance, based on the principle of cost conscious individual choice of health plan, is the only proposal that gets health care costs under control and avoids a government single-payer system in the long run. The legislation now under consideration heads in the opposite direction, and its momentum is strong. Business leaders, with their interests grounded in the long-term health of the economy, need to stop this march into madness and work to get the Wyden-Bennett bill enacted.

big business should be taxed, not get incentives

and unions should not be penalized

UNIONS ARE AMERICA

E.D. Kain
American Tory

Oct. 21 2009 - 10:57 am | 283 views | 1 recommendations | 14 comments
Wyden-Bennett is dead, long live Wyden-Bennett


As readers of my other blog know, I’ve been a long-time proponent of the excellent health care reform bill introduced by Senator Ron Wyden of Oregon and Senator Bob Bennett of Utah, the Healthy Americans Act. It’s a smart, fiscally sound bill with bi-partisan support. Estimates place the total number of citizens covered under the bill at over 99% which is better than anything being discussed in Congress today.

In Congress, however, we get bad compromises, not good ones, which is why we have the Baucus bill, which is neither as cost-effective, as close to universal coverage, or as fundamentally game-changing as Wyden-Bennett. Indeed, there is little to be enthusiastic about in the Baucus plan, which jealously protects the anti-competitive status-quo from any real changes, and thus – despite any analysis the CBO might put forth – does very little to challenge the fundamental problems which have led to such staggering health care cost increases in the United States.

There was, however, still a chance that the Baucus bill could be amended to bring more competition and cost-savings on board, and once again it’s the incorrigible Senator from Oregon, Ron Wyden, who introduced the Free Choice Act in the Senate Finance Committee. Basically Wyden’s proposal would open up the new health care exchanges to everybody no matter their employer’s coverage and no matter the size of their business.

This follows two very basic rules of insurance and markets: first, the larger the cost sharing pool the cheaper the coverage; and second, more competition leads to better quality with a lower price-tag. The entire concept centers around choice, which is in short order under the current Senate proposal, as illustrated by Ezra Klein:

Under the Free Choice Act, there would only be one column. Everyone would have a choice – something the President has been promising, but which Congress seems hell-bent on opposing.

And, since both big labor and big business opposed this amendment, and since the chair of the Finance Committee, Max Baucus, is deeply in the pockets of both those constituencies as well as the health insurance lobby, Wyden’s proposal wasn’t even given the chance to go up for a vote. It was ruled out of order on a technicality and scrapped.

It doesn’t look like Wyden is down for the count just yet, though. According to ABC, the Democratic leadership sent a memo out to their Caucus members which stated, in part:

Under our plan, if you like what you have you can keep it, but if you don’t there will be affordable choices for you that can’t be taken away.

Wyden’s communication director Jen Hoelzer shot back, making sure to hit “Reply to all”:

I just wanted to flag for colleagues that their bosses should be careful using the talking point that under the Dem bill, Americans who don’t like the coverage they have, will be able to choose something else.

As CBO Director Elmendorf indicated last week, under the current legislation, seven years after implementation, more than 90 percent of Americans will remain barred from shopping for insurance in the exchange. This means that not only will MOST Americans be stuck with the coverage they have – whether they like it or not – if reform establishes a public option, more than 90 percent of Americans won’t be able to choose it. As many of you know, this is why Senator Wyden has been fighting so hard to get his Free Choose proposal into the bill, so that we can tell our constituents that if you don’t like the coverage they have, they can choose something better. But right now, that’s not the case.

Let me know if you have any questions.
Jen

This may not make too many Democrats happy, of course. But what it does show is that Ron Wyden is more concerned about the American people than he is about loyalty to his party – a good, if rare, quality in any politician. More people need to understand why the free choice he’s proposing will be good for them, give them more choice and better health coverage, and ultimately save a great deal of money.

I remain cautiously optimistic.

Update.

Looks like Rich Ungar beat me to the punch on this one. While Rick and I obviously don’t share a lot of politics in common – he’d prefer single-payer, I’d prefer a more market-oriented approach – we both like the Free Choice Act. That’s the remarkable thing about both this act and the Wyden-Bennett bill that came before it. Wonks and policy types from across the political spectrum loved it, or at least liked it a lot more than anything else on the table.

Health care: Most wouldn't have public option
Carolyn Lochhead, Chronicle Washington Bureau

Thursday, October 29, 2009

(10-29) 04:00 PDT Washington - --

Senate Majority Leader Harry Reid's gambit to include a government-run insurance option in health care legislation has given a fresh tailwind to the idea despite opposition from conservatives.

But lost amid the ideological battle for or against a public option is a key overlooked fact: The vast majority of Americans would have no access to a public option even under its most expansive versions.

House and Senate bills limit the option to the smallest businesses and to individuals who cannot get insurance, or whose health care costs exceed 12.5 percent of their income. Even seven years into an overhaul, an estimated 90 percent of Americans, including nearly everyone who has employer-based coverage now, would be shut out of a public option.

Those currently in other government programs, such as Medicare and the Veterans Administration, also would be excluded.

The public option under all bills would be offered through insurance exchanges, a Web-based market for health plans. But most people who are unhappy with the insurance they have now would be locked out of these exchanges, leaving many Americans who are watching the debate in for a big surprise.

Only a handful of senators, such as Ron Wyden, D-Ore., and Mary Landrieu, D-La., have focused on widening the exchanges where a public option might be available. Wyden wants everyone who now has employer-based coverage to have access to the exchange if they don't like their insurance companies, but his efforts have been lost amid the narrower fixation on the public option itself.

"When you ask people in a poll, 'Are you in favor of a public option that would be available to everybody,' they say, 'Yes,' " Wyden said. "I don't think they're going to feel the same way about a public option available to only 10 percent of the population."

Wyden, an iconoclastic liberal, questioned the basic assumption by his fellow Democrats that such a limited public option will provide adequate competition to private insurers.

"People are going to want choices, public choices and private choices, available to everybody, because that's how you're going to hold the insurance companies accountable," he said. "You can't expect that having 10 percent of the American people getting the public option will force major changes with the other 90 percent who aren't subjected to choices, public or private."

He pointed to another surprise that awaits the public: Even those who would have access to a public option may not be able to afford it.

Citing estimates that a family of four earning $66,000 could pay an estimated 19 percent of its income on health care under some bill versions, Wyden said, "I can tell you, Americans are not going to consider 19 percent of their income affordable coverage."

Many health care experts agree. "I'm afraid rude surprises could be around a lot of different corners in this debate," said Marian Mulkey, senior program officer for the California Health Care Foundation, an independent philanthropy group based in Oakland.

Mulkey said the public option has been "dominating the discussion to an extreme extent" and that its importance as a principle to liberals and conservatives may outweigh its actual effect, at least in the short run.

A public program might face the difficulties private insurers have in holding down costs. "It's not entirely clear that just because it's a public program, it will be able to negotiate lower payments to providers or somehow develop more efficient benefits in a way that will yield a more affordable plan," she said.

No business = no jobs - or unions!

Corporations are amoral profit-maximizing entities. They will pass the cost of any new taxes onto consumers.

And insurance companies aren't.......

WE pay for healthcare in the end... no matter how you label it... taxes, premiums, whatever.

So... the question is... is the system we have now equitable ? NO

AND... we get to pay a 30% premium to the fat cats of the financial industry that run the insurance companies.

Yep... sounds like a plan we need to keep.

One further thing...

Trickle-down, supply-side, Reaganomics has been a failure for everyone but America's wealthiest.

Tax cuts and deregulation have benefited the rich immensely with their tax rates being cut in half and being cut by 80% on dividend income.

All the while, the taxes on the working class were NOT cut by anywhere near that amount.

Then deregulation wiped out many of the checks and balances that kept corporate power under control.

Consequently the top 5% of the people have accumulated 90% of the wealth. THINK ABOUT THAT.

That means that ALL the average American families and individuals only own 10% of the wealth/assets of this country.


And then these bozos don't want to have to open their pocketbooks to give a few measly percentage points of what they have scammed, conned and ripped off the public for.... and Congress will keep coming up with lamebrained ideas to make sure that their corporate benefactors keep the system that they have so carefully cultured in place... and keep the sheeple blinded from reality.