AHIP: experience that states have had who have done guarantee issue, who have done community rating, and have found that there have been significant unintended consequences in states that have done that. They've had some prices increase, individuals have actually had a reduction in coverage in their market.

I'm amazed that you didn't respond with a bullsh*t exclamation.

If they don't like community or state rating, how would they like a mouthful of national rating.

They've produced no data and want us to take their word that making it affordable for everyone while avoiding cherry picking (by prices rather than refusal, with preexisting ,conditions or genetic profile, soon) isn't in their interest. F them.

These health insurance guys sound just like GM saying they can't produce high mileage cars and make them affordable. But this time we can't wait for them to sink in their own swill, so they must be overpowered.

I'm getting itchy. Any plan that Congress adopts that doesn't have a publicly run, single payer, universal coverage, community rated option to compete with private plans will be useless. Private electric utilities have to compete with publicly owned producers (Bonneville, TVA, etc.) and it keeps them honest. We should demand no less for health care.

Well, that may not have been very illuminating in terms of policy questions, but it did make it clear that the insurers have NOT had a revolutionary, road-to-Damascus moment and decided to put people before profits. Nor should anyone expect them to -- which is why I sure hope the new administration won't rely on private industry to drive the plan.

Still, it would be nice if guys like Zirkelbach did not feel the need to insult everyone's intelligence with mounds of bullshit and obfuscation like this. All it boils down to is that they would really love to have tons of new business thrown their way, and are willing to accept the most basic possible regulations in return, and that the government had better not try anything more ambitious because then scary things might happen.

Ezra, I think you did a good job with this interview. Zirkelbach was not a very responsive subject, but you managed to keep the issues in sight and made it clear what he was not saying. I'd be interested to see you do more of this kind of thing.

Jim, I actually think that community ratings WOULD and do lead to higher premiums for most people based on the economics of the system. Repub's here in VT like to point that out, but the counter argument should not be "Does Not!", it needs to be a more comprehensive (and harder to fit on a bumpersticker), systematic argument that CR is the only way to include everyone and share the risk of health costs.

GreenVTster: I won't argue that the average policy won't be higher with some form of community rating. I'd prefer this be done on a regional basis rather than national or state. If a insurer wants to insure in the Portland Metro area (3 counties), then they should insure everyone at that cost (perhaps with some very reasonable differential for age (ONLY).

The fact is that things cost what they do (even after efforts at cost control through standardized procedures, preventive care, etc.). My neighbor shouldn't have to pay a higher fee than I (or vice versa) because of some coverage quirk erected by each of 10 different insurers in different ways, in the obscurist way they can come up with to deny payment (or authorization) when treatment is necessary.

I pay for schools, but I have no children. That's my cost for being in a livable, humane society. Health is no less valuable than education or less required.

This is the insurance industry's gambit just to have a seat at the table when real reform is discussed. They see the direction and know that if they are viewed as completely obstructionist then they don't get to play when the real decisions are made. Yes, community rating can increase the costs for some, but that isn't that the price we are willing to pay as a society?

Guaranteed issue is not valid as a stand-alone concept and it has to be linked to affordability of coverage. Mandates can eliminate moral hazard for the insurance companies, but without a mechanism to ensure that access is affordable we are no further along our way to a comprehensive and compassionate solution.

And note the blather surrounding a public insurance option; the industry (where I spent over 15 years before regaining my sanity)is terrified of having to compete with a true public health plan that provides access and coverage without skimming of 20% for administration.

You know the running gag in The Onion, "Ask a ______", where they give an advice column to some person, inanimate object, or force of nature, that is entirely obsessed with one thing and keeps saying that thing regardless of the question?

The headline "A Conversation with America's Health Insurance Plans" reminded me of that, and unfortunately their spokesman does too.

The one single objective of health insurance reform -- the sine qua non -- is to eliminate for every American the gut fear of complete financial disaster from a health problem. You do that by having society collectively take on all the exposure to massive, unpredictable claims. The question is where that has to be set, i.e., how far down towards the first dollar of cost in, say, any year the umbrella of catastrophic coverage needs to extend down? The rich can afford a $10,000 deductible, with either a policy or a medical savings account -- or nothing for that matter -- operating underneath the umbrella. But in any case, that policy underneath the umbrella will be hugely less expensive than today because there is a cap on exposure for every insured person or family. In the process of doing that, we bring massive efficiencies into the whole system, because now healthcare providers know they will get paid most of it if the cost is high, will be able to stop padding their bills (and tacking on 18% interest) for delinquencies, collection agencies and delayed payment; and the army needed to deal with finding and fighting over pre-existing conditions will disappear. Meanwhile, a massive albatross will have been lifted off the backs of American business, which will immediately be more competitive and will be able to hire real employees again instead of either nobody or no-benefit temps.

Maybe someday in the future when the country is flush again, the people will say, hey, let's bring the deductible on that Federal umbrella coverage down to $100 per year. Presto, you've got single payer.

Why not accept their mandate+guaranteed issue without community rating and pair it to high-risk pools that accept everyone offered a rate exceeding 150% standard risk rate and then subsidize the pool premiums so they can be capped at 150 (the SRR level is negotiable).

It accomplishes a bit of the same as community rating...it shares the burden of the high-risk individuals. However, instead of doing this within a single pool, it does it within the entire tax base of the high risk pool (state-level presently). I suspect this non-community rating approach could minimize the cost increase for the unhealthy without overly punishing the healthy.

There is a big problem the AHIP spokesman's logic:

1. The problem with community rating paired with guaranteed-issue is that sicker people get coverage, which drives up costs for those with insurance and makes it less affordable.

2. AHIP endorses an individual mandate, which will eliminate the problem of self-selection by sicker people getting coverage.

3. AHIP does not endorse community rating paired with guaranteed-issue and an individual mandate, because it will raise premiums.

Hunh?!?! It's actually even more of a contradiction than I've indicated. This is the actual exchange on point #3:

Ezra: So let me ask you specifically. In a lot of the plans out now – Baucus, Clinton, Edwards, Wyden -- they tend to pair guarantee and an individual mandate with community rating. Why specifically did you decide not to have community rating in this proposal, which would have put you sort of right in the center of all that?

AHIP: Well, because we have, looking at the experience that states have had who have done guarantee issue, who have done community rating, and have found that there have been significant unintended consequences in states that have done that. They've had some prices increase, individuals have actually had a reduction in coverage in their market. So we are taking a broad look, based on the experience we had, and said, "ok, how best can we ensure that healthcare coverage is affordable for everybody. And that's why we did the comprehensive proposal that we released earlier this summer looking at what is driving up the cost of coverage and what can we do to bring that cost down to ensure that coverage is affordable for as many people as possible.

In other words, he is saying that he doesn't want community rating and guaranteed issue WITH an individual mandate, because in the past having community rating and guaranteed issue WITHOUT an individual mandate caused rate increases and actuarial death-spirals. He says that an individual mandate is intended to solve this very problem, and then a few questions later he says it doesn't solve the problem at all.

My guess: this guy is confused and got off track on his talking points. Who wants to bet that AHIP is careful to simply say "that is not part of the present proposal" going forward? I do.

jd,

I enjoy your comments, but you're off on this one.

Nowhere does he say your #2. Its a reasonable assumption, but he doesn't say it. Its also reasonable that AHIP is willing to take the potential losses associated with guaranteed issue in exchange for a guaranteed increase in their revenue base. I understand the theory of the "actuarial death spiral" as you call it, but have not seen any convincing evidence that in practice this is a real concern. I think its much more likely this is more simple as I suggested, AHIP's willing to play ball if they are going to get another 30-40 million covered lives under their belt. The fact that a theoretical actuarial concern is also mitigated is merely a bonus.

I think his overall point is pretty simple- AHIP doesn't support community rating because it will raises premiums for the average consumer. That's almost certainly the case with an individual mandate or without. So I'm not sure why you're making such a big distinction between the two.

I have to partially take back what I just wrote. The spokesman never explicitly says that the point of an individual mandate is to solve the problem of adverse selection. Of course, we all know that an enforceable mandate with subsidies WILL solve that problem, but he at least doesn't explicitly contradict himself on that.

In fact, the AHIP proposal does propose a mechanism that would function much like community rating:

"Ensure premium stability for those with existing coverage through a broadly funded reimbursement mechanism that spreads costs for the highest-risk individuals."

The devil is in the details, but this proposal need not be very far, practically speaking, from community rating.

"Ensure premium stability for those with existing coverage through a broadly funded reimbursement mechanism that spreads costs for the highest-risk individuals."

The devil is in the details, but this proposal need not be very far, practically speaking, from community rating.

I read that too-- and took that to mean the following: government should cap the total annual costs for high-risk patients and pay for the rest. So you don't need community rating, as long as our policy said that no one pays more than $12K in premiums per year. So if the insurance company charged more than that because of their risk profile, government would pick up the tab-- i.e. spread the cost for high risk individuals. Its an interesting alternative to community rating, and gives the left most of what they want-- protecting those most vulnerable.

I actually found the interview pretty interesting, but the nuances like the quote above required some careful reading and thinking. But they've clearly thought about they best approach to reform that protects their business model and addresses the concerns of those pushing reform. Ifthe proposal, as I've described above it correct-- that's a hard one to beat-- they'll be on the right side politically of the issue from a substantive perspective. This proposal would offer lower premiums to most consumers than a community rating proposal, while still providing protection for the sick with a government guarantee of maximum out of pocket spending. If this isn't their plan, it probably should be.

Wisewon,

I was writing my first correction as you replied, hence my non-mention of your first response to me.

I think we're on the same page about the meaning and significance of the AHIP proposal re: community rating.

Regarding your first response, I disagree with you that there is no evidence the death spiral exists or is a practical concern.

Here in NY, we have guaranteed issue and community rating in the individual market, and we have exactly the problem AHIP describes. At first rates were reasonable (not too far different from commercial rates), but of course insurance is still expensive so a disproportionate number of sick people purchased it and after a lag of a year, it resulted in higher rates. The process kept repeating until now mostly sick people and a few of the worried-well buy in the individual market, and rates are quite high. They would be even higher and the market would have collapsed by now, but NY State steps in and subsidizes part of the costs.

Regarding whether this AHIP proposal would result in lower costs to the average individual than community-rating would: the more the subsidy for high cost cases, the closer the cost for the average individual will be to community rating, and vice versa. Of course, the subsidy will be paid in "taxes" not "premium," and so costs will be distributed according to how progressive/regressive the tax system is.

One more point on experience-rating in the individual market vs. community rating.

Doing experience-rating well requires a fair amount of effort. If the solution is to bring the uninsured population into the individual market and experience rate them all, how does that not become an administrative nightmare?

Experience-rating a group of 50 people is easier than experience-rating 50 people individually. And experience-rating for an entire population (AKA community rating) is of course far simpler and less-expensive administratively than either of those options.

Agreed, so to clarify a few semantics....

Here in NY, we have guaranteed issue and community rating in the individual market, and we have exactly the problem AHIP describes. At first rates were reasonable (not too far different from commercial rates), but of course insurance is still expensive so a disproportionate number of sick people purchased it and after a lag of a year, it resulted in higher rates. The process kept repeating until now mostly sick people and a few of the worried-well buy in the individual market, and rates are quite high. They would be even higher and the market would have collapsed by now, but NY State steps in and subsidizes part of the costs.

This is the difference between a "problem" and a "death spiral." The former is an actuarial creep that will become unsustainable in 10-25 years depending on the rate of erosion, the latter is an imminent collapse of the insurance industry. This really relates back to the Clinton/Obama debates on mandates-- when the Ezra/Krugmans of the world were claiming that mandates were an absolute requirementin2009, whereas Obama's approach "not now, but maybe later" was more in syn with the actual reality of what would happen with guarateed issue without mandates. What you described in New York. Which is something that, as Obama rightly suggested at the time, could be fixed down the road if the problem grew unsustainable. But the sky isn't falling without a mandate immediately, which you clearly understand, but the "death spiral" comment gave me pause.

Regarding whether this AHIP proposal would result in lower costs to the average individual than community-rating would: the more the subsidy for high cost cases, the closer the cost for the average individual will be to community rating, and vice versa. Of course, the subsidy will be paid in "taxes" not "premium," and so costs will be distributed according to how progressive/regressive the tax system is.

Read my comment again-- we're on the same page-- I said that "premiums" would be lower for consumers, not costs. What you suggest is clearly correct. Of course, taxes are a relatively hidden cost to the average consumer, where as premium increases are not-- that's the beauty of AHIP's approach. They've got a fine line to balance given their political standing, but on the substance, they appear to be a step ahead of the HCANs of the world.

HSA plans offer affordable health insurance for all Americans.

I have an HSA with BCBS and it covers my whole family for $180 a month. I've never had any problems with it and my out-of-pockets have been consistently lower than I expected.

For a single working person, an HSA plan would cost about $85/month.

I don't understand why people think this doesn't exist!

RE: HSA plans affordable

Some people do know that this type of plan exists. The problems are (1) having the money to contribute to the HSA after paying the insurance premium, and (2) getting the insurance coverage to start with (pre-existing conditions).

doc, what's your deductible $5,000, $10,000? Your maximum out-of-pockets $20,000- $40,000? I don't know where you get that for a single working person premiums would be $85 per month. I'm an insurance agent and that's not how things work. Is it age and step rated, group insurance? Sounds pretty pie in the sky. How old is your insured 21? 22? No pre-ex? Insurance companies love HSA's. You get to pay premiums and they never have to pay benefits unless you meet the very high deductibles. So, in essence you are buying a VERY EXPENSIVE DISCOUNT PROGRAM. Are you sure you don't work for an insurance company? Your post sounds like an advertisement for HSA's. BCBS, BTW is now in the medical discount business (not to be confused with their health insurance business) here in Florida. The medical discount program is not insurance, you get a discount of between 5%-30% for services from physicians who are signed up for the plan. The insurance company's plan is to have the public buy plans and the plans are designed so you can never use the benefits (they want health insurance plans to work like car insurance (i.e. you never make a claim - I pay car insurance every year and haven't had a claim in at least 10 years) - their exact words - they must be insane, we're not cars and can't control whether we get sick or hurt most times). Oh, if we're lucky, they'll allow us 1-4 doctor vists a year (because they found out that people wouldn't sign up for those HSA plans or dropped them because they never could get to use the benefits because of the high deductibles).

Both reps from United Healthcare and BCBS have told me this. That the game plan is to design plans that you never get to use unless you're critically ill and at that point you'll only be able to use them if you CAN AFFORD THE HIGH DEDUCTIBLES, WHICH RESET EVERY YEAR. This is the game plan.

Does anyone remember where our HMO system came from? It originated in Richard M. Nixon's office in a conversation with Mr. Kaiser - as in Kaiser Permanente health centers - you know, the ones that killed all those people with poor care. He proposed it to Nixon as a system for health care that would cost us almost nothing, and Nixon told him to go for it. He went for it. And we're still paying for that greedy-gut Republican decision.

I don't know much about the Bible, so my husband teases me by saying that original sin is actually insurance. Maybe he's right?

ACK! Sorry to post right away again, but I just saw Doc's post re: inexpensive ins. He wrote: "I have an HSA with BCBS and it covers my whole family for $180 a month."

REALLY? You're not kidding us?
We have insurance w/BCBS thru my hubby's ofc - our premium is nearly $800 per month, for just us 2. He works for one of the biggest school districts in the country, so it's not because they have a small firm. The deductibles & copays are painful. I wonder why the difference?

Sorry 'bout that, the parenthesized point is my personal observation, not the insurance company's. I had omitted the parenthesis by mistake in my haste!

Both reps from United Healthcare and BCBS have told me this. That the game plan is to design plans that you never get use unless you're critically ill (and at that point you'll only be able to use them if you CAN AFFORD THE HIGH DEDUCTIBLES, WHICH RESET EVERY YEAR). This is the game plan.

It's very simple, really. As long as for-profit companies dictate our healthcare needs/policy, people in need of coverage/hospital care, that's us, will continue to get screwed and pay for it. A single payer system, run by a responsible government agency, will cut out the GREED.We must demand change.

I see nothing but a field of crazed commie whiners who think they are smarter and more ethical than everyone else.

Why don't you assholes just go to Cuba and take advantage of Uncle Fidel's health care system?

With the break down of the unions fighting for cost of living increases and health care that is affordable. The health care buisness has become what we called in the 80's top heavy. No room for ideas and cost decreases. The hospitals do not even employ good cleaning services.

I am very sceptical of the profit making organization determining the rules. Since I have been in the health field and have had to use the health field numerous times, I have learned people do not get what they need for their health ESPECIALLY if it is a new treatment or drug. For one now common drug treatment, it took 2 years of fighting to get what did help and that was with the aid of an Insurance Commisioner.
States have had to mandate that certain services get covered by the health insurance coverage. Two examples are mammograms and keeping infants and their mothers in the hospital until it is safer for them after certain types of lab work. It will get worse when everyone gets health insurance because of their profit motive.
I am conviced that appeals to the health insurance companies are not read. My daughter who worked for one group was told to deny any appeal that had mispelling or punctuation incorrect. This is the way they work now when it really is a profit making group. What will we have later when they call the shots.
A concerned health care person
Leona

I am very sceptical of the profit making organization determining the rules. Since I have been in the health field and have had to use the health field numerous times, I have learned people do not get what they need for their health ESPECIALLY if it is a new treatment or drug. States have had to mandate that certain services get covered by the health insurance coverage. Two examples; mammograms and maternal/newborn infant care.
I am conviced that appeals to the health insurance companies are not read. My daughter who worked for one group was told to deny any appeal that had mispelling or punctuation incorrect. This is the way insurance companies work now and make a profit. What will we have later when they call the shots.
A concerned health care person
Leona

Sees nothing but BS here

I am sincerely curious about who you are because you made such angry statements in response to all of these comments.

Do you have health insurance? Are you young/and or healthy and always have been?
Do you have a family, also healthy? Are you well off?

My assumption is that health insurance is working just fine for you, hence the “whiners” comment. Also perhaps you only appreciate for- profit companies and see any other form of “business” un-American?

My family and I have had pretty good health insurance coverage over the years. It covered even some major events adequately.. But we’ve been fortunate enough to be covered through our jobs and have only had to deal with increasing co-pays and RX costs. Our employers ate the increasing premiums. I’d say for-profit health insurance has worked ok for us over the years—possibly like for you.

That is—until our 19 year -old daughter was diagnosed with Type 1 diabetes. (Sorry, she can’t be blamed—it isn’t the type caused by obesity or poor eating habits—type 2). It came out of the blue! Ask me about our experience with for-profit health insurance coverage now.

I’m curious to know if you have a suggestion on how the self-employed and their families can access affordable health coverage?

Pamela