Krugman: How to Keep The Insurance Companies Honest
By Susie Madrak Saturday Jun 06, 2009 3:00pm
Good Krugman column on healthcare reform, but I really wish he'd dig a little deeper into one particular myth: that most people want to keep the insurance they have. Like anything else, it all depends on how you ask the question. Do they want to keep their insurance because they don't want to be swamped with paperwork, like Medicare's Part D? Are they afraid of higher out-of-pocket costs? It's a dumb thing to make public policy based on what might be a false notion:
Health reform will fail unless we get serious cost control — and we won’t get that kind of control unless we fundamentally change the way the insurance industry, in particular, behaves. So let me offer Congress two pieces of advice:
1) Don’t trust the insurance industry.
2) Don’t trust the insurance industry.
The Democratic strategy for health reform is based on a political judgment: the belief that the public will be more willing to accept reform, less easily Harry-and-Louised, if those who already have health coverage from private insurers are allowed to keep it.
But how can we have fundamental reform of what Mr. Obama calls a “broken system” if the current players stay in place? The answer is supposed to lie in a combination of regulation and competition.
[...] Now nobody is proposing that Americans be forced to get their insurance from the government. The “public option,” if it materializes, will be just that — an option Americans can choose. And the reason for providing this option was clearly laid out in Mr. Obama’s letter: It will give Americans “a better range of choices, make the health care market more competitive, and keep the insurance companies honest.”
Those last five words are crucial because history shows that the insurance companies will do nothing to reform themselves unless forced to do so.
[...] How could the industry spend 15 years failing to make even the most obvious reforms? The answer is simple: Americans seeking health coverage had nowhere else to go. And the purpose of the public option is to make sure that the industry doesn’t waste another 15 years — by giving Americans an alternative if private insurers fall down on the job.
Be warned, however. The insurance industry will do everything it can to avoid being held accountable.
At first the insurance lobby’s foot soldiers in Congress tried to shout down the public option with the old slogans: private enterprise good, government bad.
At this point, however, they’re trying to kill the public option in more subtle ways. The most recent ruse is the proposal for a “trigger” — the public option will only become available if private insurers fail to meet certain performance criteria. The idea, of course, is to choose those criteria to ensure that the trigger is never pulled.
And here’s the thing. Without an effective public option, the Obama health care reform will be simply a national version of the health care reform in Massachusetts: a system that is a lot better than nothing but has done little to address the fundamental problem of a fragmented system, and as a result has done little to control rising health care costs.
Right now the health insurers are promising to deliver major cost savings. But history shows that such promises can’t be trusted. As President Obama said in his letter, we need a serious, real public option to keep the insurance companies honest.
The last thing we want is something resembling the Massachusetts plan, which is a frickin' disaster. (For instance, if you're making $31,213, the cheapest plan is $9,872 in premiums and out-of-pocket payments - and that's the good news.
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The reason people answer the question that they like their health insurance coverage is more because of the coverage and the fake fear of a government run plan. Ask the question if they like the price of their premiums and I bet you get different result. Show them the results of the best run insurance plan, Medicare, and I bet you get a different result. Chances are, part of the reason people answer the way they do is because it's been drummed into their head that a government health care plan will be full of red tape and ineffective. that would be so much different than what we are dealing with now? Come on people, how much more ineffective could a government plan be than what we have to put up with now.
just as good as private insurance. Definitely cheaper. Every one should watch "Sicko" and then fact check it. It's true, but prove it to yourself. Then demand single-payer. Once that is established, let the insurance companies offer whatever they want. Private insurance should be optional. But the insurance companies and Big Pharma have spend so much money lobbying Washington, they absolutely expect a major return on their investment. Everyone has been disappointed sometime in their lives. Seems like these businesses should get what they deserve finally. Did you ever notice that on a bill for hospital treatment, your doctors get the least amount? Since when does a small box of scratchy tissues cost $65.00?
People always assume that the doctor is some rich fat cat living in some multi million dollar mansion. This is a myth. Doctors make a great living but they are by no means in the top two percent. In my job I see doctors salary. IF you're not a specialist you're not rich. By specialist I mean plastic surgeon or such. The people getting rich on health care is big Pharma and the insurance industry. This may sound contrite but the average family physician in my area is below $250,000. But you compare that with the CEO's of Highmark and Phizer it's nothing. The true criminals in health care is Pharma and the people providing us insurance.
The family doctors in our town live in regular neighborhoods, drive old cars and work LONG hours.
As for insurance. I spend 35% of my paycheck to insure my 2 kids and my spouse. Insurance companies are sucking the life out of healthcare.
...$8.00?
proof in the pudding. They will not be honest unless there is a public option and heavy regulating. Even then I have a lot of doubt.
and the problem with regulation is it only works when there is an honest administration. Get another Bush in office and the regulating agency is instantly corrupted. Instead of regulating as it should be done, they ends being the guys who are handing keys to the candy shop. Best way to avoid the issue for industries that are pathologically dishonest and predatory is to write them out of the entire process.
HR-676
one from Kennedy's committee, one from Baucus'.
The kennedy plan looks like the MASS plan, plus some kind of nebulous 'public option.' IOW, giveaway to the HIP (Health Insurance parasites).
We already know that that's what anything Baucus designsw with the connivance of the HI and the HMO, etc, will e a give-away to private insurance...
The determining factor will probably which program makes the HIP richer without incurring more expenses.
satisfied with the current system.
http://www.consortiumnews.com/2009/060509.html
"they" = you & me, brudda...
and to Congress, maybe that will make a difference. whitehouse.gov and you are on your own with your Senators and Representatives. Do it every day until they listen.
That is the truth right there.
I was living in MA when that passed, I was a private consultant that had insurance for my daughter because that was all we could afford.
Once the bill went through we found ourselves quickly flat broke having used our savings to meet the laws requirements that the whole family be insured.
I moved to the UK shortly after at the urging my wife who said she'd had enough of the US and wanted to go home. Now we live and London and I have excellent coverage that I've had to use a couple of times here already. Good service, great doctors and what do you know I am not being turned into a homeless pauper over it.
This is what the Republicans push. The fear of a government controlled health care plan. That it would be full of red tape. It's simply not true. The fact is, their corporate base stands to lose billions if the government took over health care. But they have to realize even with the millions their base will spend in propaganda, that base is becoming smaller because people, even the hardest conservatives, cannot afford this system. When a third of your income goes to health care coverage it's just not feasible anymore. Who wouldn't be willing to give 2% of their income to make sure we are all covered. that would cut my health care cost by 8%. God forbid my neighbor with three kids who makes less than me is covered in the greatest country on earth. Health care is a right not a privilege.
Sorry, it's not the greatest country on Earth if you can't even provide health coverage that doesn't leave your citizens destitute just paying the state mandated monthly premium.
Not even close.
...equal or exceed your mortgage or rent expenses, there's something really, really wrong. Speaking for myself, I would be willing to pay up to 10% of my pay as a healthcare payroll tax for universal, single-payer healthcare. It would still be cheaper than what we've got. Canada funds their system with a 6% payroll tax. I don't know of any Canadians who would trade their system for ours.
You're right.. healthcare is a right, even a Human Right.
I suspect that the politicians are going to be in for a rude surprise. If they end up creating a welfare program for the insurance companies, for-profit HMO's and Big Pharma or create a public option that is no better than what we've got now, they will each, in their turn, be voted out of office and replaced with somebody who is sincere about looking after the interests of the People. It strikes me as inevitable that we are going to have universal, single payer healthcare. It's just a matter of time; the politicians can either do it the easy way or the hard way, but they are eventually going to be compelled to do it.
I recently went to a barber I hadn't gone to in years. I explained that I work too far away and he should expand or cghange his hours, and did he have help? Turns out his daughter used to work there but a divorce meant she had to find a job that paid benefits, he'd never be able to afford benefits. His back and arthritis keep him from working convenient hours. Just an example of how the Insurance business robs us blind, decimates family businesses, and leaves us all poor.
eff that, how do we get rid of those making a profit based on denial of care?
Give me SINGLE PAYER or Give me_____......*
* fill in the blank contest....
cause that's the bottom line. That or dying destitute.
A twinkie?
give me european union citizen ship, alex?
Revolution!
Just exactly how does the health insurance industry contribute to the quality of health care in the USA?
THEY DON'T !! They in fact, are directly resposible for its being the most expensive in the world and somewhere like 37th in the WHO rankings.
With the best plan available at the small corporation I work for, a fellow worker ended up hospitalized for a week. After the insurance company did all it was obligated to, my co worker still owes a few thousand. We get paid around $30k/year. That is a big dent in the budget. It would be a severe hit for me. In light of this instance, I do belive that it is prudent that I look for some sort of supplemental health insurance. So, the health insurance via my empoloyer, the standaard US model, has provided inadequate coverage, resembling catastrophic coverage. Who do I turn to for supplemental plan? The #@)&*^%$+@# health insurance industry!
Hey Senator Baccus you destestable dishonorable man, (and all you other senators) how is your health care? I know, the best for free.
We have to pay for theirs and we cannot afford it for our own families? No, no, no!
Baucus isn't a senator, he's a prostitute. His constituents should vote him out of office and prosecute him for accepting bribes. The average jury would probably find that what he's doing constitutes quid pro quo.
Get A Rope.....
From what I've seen of the questions in the polls and what I've heard talking to people it's not that they "want" to keep the insurance they have. Rather they don't want to loss the insurance. They equate loss of insurance with being uninsured and this is not the same thing as wanting to keep things as they are. As happened when the health care debate with the Clintons they polls are asking the question to get the answer they want. The big 3, Insurance, Pharmaceuticals, and Medical are attempting to control how we talk about the issue. Last time we didn't have the internet and blogging and they won. This time we do and I hope a chance to challenge their attempt to control the language of the debate.
And that's one thing we never see when these poll results are published - exactly how was the question worded, and what were the options given for answers?
It's the same thing for the poll we're being fed lately saying that Americans are becoming more "pro life". Exactly what are the questions being asked, and what are the options that people are being given?
The corporate capitalist health scam in USA is great!
It guarantees that Canadian automotive and industrial jobs will rebound while the US rustbelt remains rusty and impoverished.
This is due to the 12% advantage in cost for employee healthcare because Canada has a single payer and non-profit system.
The health insurance robber barons are playing you for fools, and they will win.
Keep it up, suckers!
:)
...is also at fault, is equally complicit with the wrongdoings of the insurance industry. They made the choice to be the principal source or means through which Americans would gain access to healthcare. By doing so, they have turned healthcare into a rationed commodity and created classes of have's and have-not's. By their thinking, the most insecure state of living would be not to have any access to healthcare, where any medical event would threaten ruin. That automatically makes a job that includes medical benefits a thing to be desired. If you have such a job with benefits, lucky you. If not, well, tough luck.
they have collectively coverted a basic human right into a privilege that not all are permitted to enjoy and and created a national culture that makes for reliably docile and obedient
chattelsworkers. Better, they structured their benefit such that they never cover the entire costs, so, any medical event means debts that will further indenture the worker to the employer. Partial coverage creates debts that have to be paid, which means theindentured servantemployee must keep working. What's not to like?Big Business has consistantly fought against changing this arrangement. The captains of business and industry know very well that footing the bill for their worker's healthcare access makes them less competitive in the global marketplace, but they apparently value control more than being competitively viable. If the
slavesworkers had universal access to healthcare, independent of what they did for a living, very few would choose to work in jobs that they hate for employers they despise. And that would never do.1. You are right
2. You have to be an asshole abbout it.
and Medicare/Medicaid should merge to take care of health care for the general population. It's in the best interests of the people.
Health Insurers could be reborn as a boutique industry -- for wealthy people who want private care. Those laid off from the health care industry could be hired by the govt to handle the new influx of people into the public health care system.
about five percent of them anyway miss_kitty. One one the nice things about single payer health care is you don't need a lot of people working hard to deny people health care. On the administrative side the provincial health care systems of every province in Canada employs less people than Blue Cross.
We could replace the insurance industry beuracrats with nurses and medical staff. What a positive that would be.
There's always a need for competent clerical workers - and to be honest, that's the majority of jobs in the health insurance industry. With the burden of private insurance taken off other industries, they could expand, and would have new jobs for those lost in private health insurance.
Ultimately , we will continue to be taken advantage of if we do not first initiate a new type of regulation . Washington lobbyists influence our elected officials with gifts and promises , not only from the health care industry but from all industries . ( oil , tobacco , weapons , pharmaceuticals , banks , and anything else that generates revenue ) . If these actions are not disallowed , we will never have a truly representative government . Our elected officials and big business lobbyists are allowed to steal at will , again and again . Let me say this plainly : lobbying is bribery . Current regulators such as the SEC are either horribly incompetent or horribly corrupt . How can a hedge fund post huge profits for years , and be lying the entire time without getting caught ? If the SEC did not catch the corporate thieves with the billion dollar ponzi schemes how could we hope that any federal organization would be willing to regulate the multi-billion dollar insurance companies that control our nation's health care system ? Without dismantling the current corrupt lobbying system active on capitol hill today we will never have true change or progress .
It represents corporations. What in God's name do lobbyists do besides bribe politicians? Let's call it what it is--criminal. It's buying politicians. There is no other purpose, and yet it is talked about as if it was all above-board. Is it beneficial for taxpayers? Not one bit. And I think the SEC is incompetent and corrupt.
declare "Open Season"....and hunt them down w/ helicopters!....$1000 per each 'paw'
You can't force people to be honest if they don't have it within themselves in the first place. No offense Krugman i would say (1) Don't trust the government to do the right thing and (2) I wouldn't trust a politician with my money let alone my health or health care. If the government would get out of the way and let the "true free market" system work the way it should have been we would of never gotten ourselves into this mess,with their grubby hands on the switch. People use to be able to get decent health care at a fraction of the cost but no they had to include so much bureaucratic nonsense and red tape that it has become a monster with too many tentacles.
But you WOULD trust your money with a private corporation? Oh, yeah, the forces of the great mysterious Holy Ghost of the "market" will assure their honesty.
We see how well that worked out.
The bottom line is that the Government CAN do a better job--and as citizens we can have a greater input into that. Corporations have become bloated, enormous, "too big to fail" and utterly indifferent to anything but profit and the conation of Wall Street parasites.
In our osciety, there's no such thing as a free market. The whole idea is nothing but a manipulative myth, that is continually perpetrated by those who, to my eyes, seem intent on making the People believe that their government can't work.
As for too big to fail, if you're too big to fail, you're too big to rationally be allowed to exist in the first place.
I don't trust anybody with my money but me..because only i the individual can figure out how it would best suit me since i know what my needs are. Since you failed to read the first part I'll state it again you can't trust other people to be honest if they never were from the jump. If you truly believe government can do better than i gold a pot of gold and leprechaun to hand it to you. "Corporatism" now a days should called by it's real name fascism, merger of government and business that are too big to fail. And Last time i checked the people are the government, they work on our behalf not the other way around because if we don't function they don't function.
the 'true' free market only exists in your truely ignorant and confused mind....
It stopped existing with Brentton woods bill of 1957....that's when real capitalism disappeared, and we have corporatism called "capitalism" mix in with Keynesian economics today. With everything too big to fail, i guess it is all in my mind. Once again i would never listen to people who don't trust themselves with their own lively hood but willing to hand it over to thieves assuming that they are smarter than himself with his own money and needs. Learn to trust yourself "Gus" in knowing what's good for you and not politicians.
Looks to me like we're going with the "Demoplan", as described by Krugman in 2007.
“But there are very good political reasons for going with the Demoplan: basically, it looks like something that could actually happen early in the next administration, while enacting a single-payer plan like the Conyers plan or the PNHP plan, excellent though those plans are, might take a very long time.
The public-private competition in the Demoplan is crucial, by the way, because it means that the Demoplan isn’t locked into the inefficiency of the private insurance system – it could evolve into single-payer over time.”
http://krugman.blogs.nytimes.com/2007/10/07/w...
===============
Obama's letter:
“I strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans. This will give them a better range of choices, make the health care market more competitive, and keep insurance companies honest.”
http://www.whitehouse.gov/the_press_office/Le...
=======
I don't think we'll get our costs in parity with Europe until we copy a system from abroad. They pay about 11% of GDP whereas we pay about 16%. The single payer aspect saves around 3%, so I hear. Their approach for reimbursements and Dr's fees save the other 3% of GDP.
However, if you look at health care as a windshield, enacting single payer is like smashing the windshield. Adding a public option is like putting a crack in the windshield, which, over time might take out the windshield.
One thing for sure. Obama has studied carefully the failure of Hillary's initiative in the 1990s.
One argument against single-payer is that it eliminates choice. But, with the "public option", people have all the choice, plus one more. So, now, the same interests that railed against eliminating choice, want to eliminate the choice of a public option that many people want.
Of course, they have a fiduciary duty to maximize shareholder value, and will say anything in furtherance of that objective. Quite the charade.
the issue is scam, it involves workmens comp, personal injury, disability, and they are all denying benefits for people that deserve it by the very definition.
if it is about normal health care as well, you can see the only job is to deny claims to make money.
Health care for everyone is not about making money.
check this out:
http://www.calnurses.org/research/pdfs/ihsp_s...
Susie, dear, did you miss the rules? What Krugman suggests is that given Obama's refusal to consider single payer (which he made clear in his campaign) the only option on the table is to establish some form of competition to the insurance companies. Obama's pragmatic approach has always been less broad that say, Hillary's, (mandated coverage for all)and what Krugman said then is what he's saying now: the public option is far less good than single payer but the best one can do now.
The public option is the pragmatic solution to a less than perfect situation.
Krugman, Obama, Hillary and all the others who are saying that it can't be done are wrong. Saying that it can't be done now is to accept a defective premise that ignores that, depending on which polls you look at, 66-73% (and growing) of the People want universal single-payer healthcare. It is rare in our history that there has been such a popular consensus. If the overwhelming majority of the People want something done then there is no impediment to getting it done. Citing the "impracticality" of it reduces down to just so much excuse making that greases the way for ignoring the will of the People.
Already, the NY Times editorial posits Democrats having to kowtow to the will of the repugnican thugs, and altogether beholden to insurance and pharma interests and payola. We have to let them know that their cushy jobs (if not their PUBLIC FUNDED HEALTHCARE) is ON THE LINE. We will kick them out. Meantime, look for "reform" that keeps the status quo. That being profits over life, and us suffering and dying at the hands of the corporate oligarch's and their insatiable greed.
Beware...healthcare may turn out to be the same old failed, broken and dangerous "system" we have now. Profit should not trump life.
Time to demand HR 676--and REJECT the vile alternatives big business wants. We still can threaten to kick the bums out if they fail to pay attention!!!
****
http://www.politico.com/arena/perm/Robert_B__...
Open Mic June 6 2009
"Big Pharma and Big Insurance are gaining ground in their campaign to kill the public option in the emerging health care bill" Robert Reich
Obama included, that they will lose my votes if they screw this up.
plans are not terribly sick. No one who is really ill will be "happy" with his plan for long.
My wife has Medicare-Medigap and I have Cadillac private corporate retiree coverage; hers is a vastly superior user experience.
...to allow the insurance companies and the for-profit HMO's to have any roll at all in the process. They are going to skim 30-35% right off the top for profits and administrative costs, much of those administrative costs going into their own internal organizations whose only purpose is to deny care. That's tax payer money down the toilet. People who have insurance think they are safe only because they have not yet been denied care, even though they think they are covered. The polls don't reflect that reality.
If the insurance companies promise savings, it only proves that they have been taking us to the cleaners all along. They could have initiated cost savings mesures decades ago. In any event, notice that they are saying cost savings (a move from which they are already back-pedaling). No mention of curtailing avaricious levels of profit.
They need to be totally excluded from the process. They are nothing but criminal parasites.
On the subject of wasted money, I am also extremely suspicious of the move to computerize all medical records. Aside from the fact that that was one of the objectives of the Total Information Awareness program that now exists under a different name at NSA instead of the pentagon, the only thing that I see coming out of it is that it provides a convenient means for the insurance industry to data mine customers for information that can be used to deny care. By the time it's done, the only thing it is going to accomplish is further violations of privacy and further rip-off of the American public by the insurance companies.
The promise they made wasn't lowering costs from where they are now - they actually only promised a lower rate of increase.
That's not really doing much to help.
Being a resident of Massachusetts, I was appalled to see that someone from Crook & Liars would provide links to two totally bogus and outdated (2007)articles regarding healthcare in Massachusetts. The Boston Globe article did not have one link to those outrageous numbers from the nurse in the Berkshire Mountains who wrote the op-ed.
I am 57 years old and have been unemployed on and off since 2004 when I lost my full time job that paid for my medical benefits. Since then I have only been able to find part time work or none at all.
Blue Cross of MA and the State have a plan that while you are collecting unemployment insurance in MA you and your family will be covered by Blue Cross of MA.
Because my income has fallen way below poverty level, my premium has been waived until economic conditions improve in the US and Massachusetts.
I consider myself one of the lucky citizens in this country today. I shudder to think where I would be today if I lived somewhere other than Massachusetts.
I could go on and on, but my purpose in writing is to please please beg you to CHECK YOUR FACTS on this all important issue that effects this entire nation, not just a few.
So what, if you are employed you are gouged.
I lived there too and I know.
BCBSMA gouged me for $1280 per month for a family of 3 when I kept them as Cobra so don't go pretending you know what is up with them given that you are a below poverty level retiree eligible for Medicare.
The cheapest I could find (that cleaned out my savings) was $650 per month so that I could have a $10,000 deductible before they even paid out.
Too bad nobody listens to him!
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