December 10, 2009

(h/t Heather.)

First of all, I'd like to reiterate that yes, a bill without a public option can serve the same purpose as the public option: namely, to force efficiency and competition. So yeah, I do see this as a win - and so does Nate Silver. And I don't buy the insurance company "we won" mantra just yet, because the Medicare buy-in proposal is a real threat to them. After all, the 55+ group is very profitable for them.

It seems clear the most important component of a plan lacking a public option is a mandated medical-loss ratio. But here's the most important detail of a requirement that companies spend 90 percent of each premium dollar on care: Who will be responsible for enforcement? In order to work, it's got to be the feds.

This is the most important part of the argument, because insurance companies (and their PACs) have enormous influence in state markets - and in state legislatures. State insurance commissioners are usually (not always) hired from the ranks of the industry, and are famous not only for rubber-stamping rate increases, but for far too often turning a blind eye to insurance company abuses.

What we want to watch in the Medicare buy-in is, are they going to take premiums (subsidies, whatever form it finally takes) into the Medicare trust fund? Believe it or not, it would be a very good thing if they did. A younger, healthier population would actually lessen the strain on the Medicare system. But I'm betting Republicans will shamelessly present it as "an assault on Medicare."

We also have to look at who gets to buy in - and why. Under the current proposal, people 55+ get to pick Medicare through the new exchanges in 2014. But what do we do until then? Well, they plan to allow them in starting in 2011.

Is this only for high-risk patients? Because it would really be a drain on the Medicare system (if the premiums went into the same system) if it was. It would be a bad idea anyway, because it would be too difficult to sustain if it was all people with pre-existing conditions.

Will the new Medicare members be charged the full cost? At 65, you're heavily subsidized for most of the cost, paying about $100 a month. The real cost is closer to $500. So will there be subsidies to purchase Medicare? Definitely, in 2014.

In the meantime? Not clear. This is one of the areas on which you want to lobby Congress.

You probably already know the problems with triggers - namely, that they're usually written in such a way as to make it highly unlikely they ever kick in. (That's why Queen Olympia loves them.)

As you might expect, we'll be watching closely.

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