Supportpublicoption's Blog

Have you told your senators what you want?

supportpublicoption — Sun, 18 Oct 2009 14:15:13 +0000

Click here to tell us. Have you emailed or called your 2 US senators to support the public option?

It is time to write your senator!!! The following link takes you to the US Senate website list of senators and their contact information. The list is ordered/sorted alphabetically by state. Either use the phone number to call or click the webform link to email both your senators. CLICK HERE to tell them they must support the public option and reject the trigger option!! A n individual mandate without a public option is unacceptable!!

Individual Mandate – The Ugly

supportpublicoption — Sat, 17 Oct 2009 12:00:53 +0000

The Good: Everyone must buy health insurance to promote lower premiums.
The Bad: Private Health Insurance Companies are allowed by law to engage in antitrust and collusion with their competitors to maximize their profits. No other industry is permitted by law to engage in anti-trust and collusion.
The Ugly: The absence of a public option means everyone must pay health insurance premiums to private health insurance companies or be penalized by having to pay as much as $3800/year for each year you don’t buy health insurance.

____________________________________________________________________

We have discussed the individual mandate and how it has the potential to motivate lower premiums. We have also discussed how the lack of anti-trust and anti-collusion laws remove health insurance company motivations to offer the lowest cost, best coverage product that maximizes their profit.

These two competing interests could leave you scratching your head were it not for the Ugly part of the individual mandate. First, let’s imagine an America where health insurance companies cooperate with their competitors to set the price and coverage of health insurance. Also, imagine that not only does each state have a limited number of insurance companies to choose from, but this limited choice applies across the nation. You couldn’t even move to a different state to get a better deal because Blue Cross of Illinois is in fact the same company as Blue Cross of Ohio, Wisconsin, West Virginia, etc. Additionally, imagine that a federal law requires that every person must either buy health insurance or pay a fine as much as $3,800/ year that goes toward paying for the health care of the uninsured.

Would you rather pay a minimum of $500/month in premiums to the insurance company or pay $3,800/year (approx. $317/mo) as a fine?

Well here is the answer, It isn’t a zero sum game. There is a third choice.

Imagine an America where you could choose whether to pay a minimum of $500/mo in premiums to the collusion-permitted private health insurance companies or an unspecified monthly premium for a public option. How much would you be willing to pay for insurance coverage under a public option? The obvious answer? Any amount, as long as it isn’t as expensive as the private health insurance premiums or the fine.

Now here is the hook. The presence of the public option places competition pressure on health insurance companies that otherwise does not exist. By having an alternative to the collusion-permitted health insurance product, the collusion is busted. This is the beginning of needed change to impose anti-trust anti-collusion laws for the health insurance industry.

The ugly prospect of having to pay non-competitive premiums to receive non-competitive health insurance coverage should have you shuttering in your boots. Furthermore the ugly prospect of being penalized for refusing to pay non-competitive premiums to receive non-competitive health insurance coverage should have you wondering what happened to America. Finally, the ugly prospect of not having any other choice in the matter should have you ready to scream.

Our current circumstance dictates our next move. Though the lack of anti-trust and anti-collusion laws in the health insurance industry poses a tremendous threat in the future, it’s effect is limited by the state by state regulation of the private health insurance industry. So for now, it is somewhat in check. However, the escalating cost of health care in concert with the escalating cost of health insurance is not only an immediate concern, but an imminent threat to our economy. That’s because untreated small health conditions become unavoidable expensive health conditions that most often are left to be paid by already strapped public funding sources (medicaid & medicare).

It is time to plan and budget for health care for the uninsured and underinsured in a deliberate manner. Since private health insurance companies have limited their coverage to those who are able to pay inflated premiums, its time to create competition for their products that would avail coverage to the uninsured and underinsured. In so doing, impose pressure on their industry to stem the disproportionate rise in health insurance premiums and progressive decline in covered services.

Sponsored by:
EfficientCE.com – Your source for pharmacy CE post test tools

Individual Mandate – The Bad

supportpublicoption — Sat, 17 Oct 2009 11:57:58 +0000

____________________________________________________________________

Now that we have talked about what makes the individual mandate good, let’s look at the bad.

Early we described how the individual mandate increases health insurance company revenues by increasing the number of people who buy insurance. Yet, this is no guarantee for lower premiums. The (actuarial) math may specify lower premiums can be offered when insurance companies have higher revenues, but in real life it doesn’t always translate the way the math would imply. Human nature (greed), interest rate payments on invested funds, and changes in the cost of paid claims will impact the decision about how much leftover money is made available for lower premiums. Also, since the premiums are set at the beginning of the year, the unknown factor of what’s coming in claims and interest income requires a bit of speculation on the part of the insurance companies. This unknown factor also ‘eats away’ at the amount of funds (on paper) available for offering lower premiums in the upcoming year.

The insurance companies will need motivation to keep their human nature and speculations about the ‘unknown’, reasonable. One would think that competition between health insurance companies would provide adequate motivation. If antitrust and anti-collusion laws applied to the health insurance industry, competition from other insurance companies would influence their motivations about premiums and coverage. Unfortunately, the health insurance industry is ALLOWED BY LAW to cooperate with their competitors to set the price of health insurance and the coverage provided. Yes, it is true!! By law, health insurance companies are allowed to do what no other industry can do. By cooperating with their competitors, all health insurance companies can earn maximum profits at the detriment of their customers. There is no risk of losing their customers to their competitors because they are offering virtually the same product at the same price.

Currently, the only thing that prevents worsening of the health insurance mess is the fact that insurance companies are limited by their state population. This is because health insurance companies cannot offer their product to people living in other states. Remove this barrier and all the individual “Blue’s” (Blue Cross of ______) become one BIG “Blue”. Currently, each state has 2-3 major health insurance companies. Remove the state barriers and we will have 2-3 major health insurance companies nationwide who cooperate with each other to set the price and coverage of health insurance.

Now consider the individual mandate in this context. Not only will the price and coverage of health insuance be set by an oligopoly (a few companies), but federal law dictates that every person must buy insurance. How crazy is is that?!!!

Now, that’s the Good and the Bad. Next we’ll take a look at the Ugly.

Sponsored by:
EfficientCE.com – Your source for pharmacy continuing education post test tools

Why don’t anti-trust consumer protections apply to health insurance?

supportpublicoption — Sat, 17 Oct 2009 11:55:58 +0000

The McCarran-Ferguson Act of 1945 (”the Act”) exempts the “business of insurance” from federal antitrust law. The Act permits price fixing — joint ratemaking — if permissible under state law. The Act even protected the practice of red-lining because it parallels the types of risks the company was willing to insure against.

This liberty applies to health insurance companies, Pharmacy Benefit Management companies and Group Purchasing Organization, all of which have a prominent place in health care funding and insurance.

So now you know….The rules of fair competition in the market of health insurance do not apply.

David Balto of the Center for American Progress in his testimony before the Senate Committee on Commerce, Science and Transportation in July 2009 stated,

“The fundamental elements for a competitive market are transparency and choice and in both respects, health insurance markets are clearly broken. Few markets are as concentrated, opaque and complex, and subject to rampant anticompetitive and deceptive conduct.”

The current state of unfair competition warrant immediate consumer protections. The public option provides the transparency, choice and lack of conflict of interest that would immediately reverse the current state of unfair competition in the health insurance industry. This path will protect the consumer while longer more complex processes to repeal or re-align the act take place.

____________________________________________________________________

Sponsored by:
EfficientCE.com – Your source for pharmacy CE post test tools

Individual Mandate – The Good

supportpublicoption — Sat, 17 Oct 2009 11:23:02 +0000

The Good: Everyone must buy health insurance to promote lower premiums.

Four of the 5 health care reform bills (3 congressional, 2 senate) under consideration include a concept called the “individual mandate” or “individual requirement”. These terms mean everyone must buy health insurance or pay a fine. For the insurance companies, it translates to higher monthly revenues.

This is a good thing. By increasing the total number of people paying into insurance plans, the amount of funds available to pay claims is increased. The individual mandate also means more insurance claims to pay, but the average person uses less health care , in a given year, than what they pay in premiums. Consequently, a larger insurance pool (number of covered lives) theoretically means lowers premiums. Also, a larger pool of insured lives means higher total revenue for the insurance company leading to higher interest earned on the pooled premiums. This, too, is a good thing.

This is akin to the difference between you getting paid $800/month versus $4000/month. At $800/month you have less (if any) money available after paying the bills (claims) compared to being paid $4000/month where you can pay the bills and have money left over. It’s the leftover money after paying the bills (claims) that translates to the potential for lower premiums. In this example, your monthly income is akin to the insurance companies monthly revenue(income). Just like you can decide to spend the leftover money, invest it or donate it back to charity, so can the insurance companies decide to keep the leftover money as profit, invest it, or offer lower premiums.

The Good: Everyone must buy health insurance to promote lower premiums.

Sponsored by:
EfficientCE.com – Your source for pharmacy continuing education post test tools