The Politics of Ending Private Insurance
Is the Sanders-Warren position too extreme for the general election?
Veteran political analyst Jeff Greenfield watched last night’s inaugural Democratic debate and describes “The Landmine that Just Got Laid for Elizabeth Warren.”
The moment came when the ten participants were asked, by a show of hands, who would dispense entirely with private health insurance. Only New York Mayor Bill de Blasio and Warren signaled “yes.” That’s when Rep. John Delaney, one of the least visible of the 24 announced candidates, weighed in.
After pushing back on the idea of taking something away from Americans that most are reasonably happy with, Delaney said this:
“Also it’s bad policy. If you go to every hospital in this country and you ask them one question, which is how would it have been for you last year if every one of your bills were paid at the Medicare rate? Every single hospital administrator said they would close. And the Medicare for All bill requires payments to stay at current Medicare rates. So to some extent we’re basically supporting a bill that will have every hospital closed.” And then he finished with a stinger about his electrician father on union health insurance: “He’d look at me, and he’d say ‘Good job, John, for getting healthcare for every American, but why are you taking my healthcare away?'”As an argument inside the Democratic Party, where “Medicare for All” is a rallying cry, this may not resonate. But once there’s a general election, it’s a new landscape, and if Warren—or Bernie Sanders, who shares the “no private insurance” view—makes it to that stage, it could be a much bigger deal. We know from earlier races that moments with little impact inside a primary can have a powerful impact in the final fall.
Those above a certain age can guess where he’s going:
In April, 1988, just before the New York primary, longshot contender Al Gore went after Gov. Michael Dukakis on the issue of crime. Why, he wanted to know, did Massachusetts have a program of weekend furloughs for convicted criminals? Dukakis more or less conceded that the program hadn’t worked, and that seemed to be the end of that: Within a few days, Dukakis had won the New York primary, Gore dropped out of the race, and the issue disappeared.
Only it didn’t. Over in the campaign of George H.W. Bush, aide James Pinkerton heard the debate and decided to look into the question. And what the campaign found was Willie Horton, the convicted murderer serving a life sentence who, on a weekend furlough, went on a crime spree, including assault, armed robbery, and multiple rapes. For Bush campaign manager Lee Atwater, it was a gift from the gods. “I’m going to make Willie Horton [Dukakis’] running mate,” he said.
Sure enough, Bush picked up Al Gore’s ball in the general election, raising the issue in his convention acceptance speech.
“I’m the one who believes it is a scandal to give a weekend furlough to a hardened first-degree killer who hasn’t even served enough time to be eligible for parole,” he said. The campaign put out a TV ad labeled “Revolving Door,” showing convicts literally leaving prison through a revolving door. And an independent political action committee produced a far more incendiary and racially loaded ad, featuring the mugshot of the obviously black Willie Horton.
That’s an extreme example, though, and it’s unlikely that the end of private insurance will resonate in quite the same way. Still:
So what’s the parallel? Delaney might have been talking to the very very very longshot mayor of New York. But the other person who raised her hand to essentially scrap private insurance was the much more plausible Senator Warren. And a Democratic Congressman—not some right-wing think tank or Freedom Caucus Republican—was saying, on TV, that her policy would threaten the survival of just about every hospital in the country, and yank good insurance from working people.
This raises the specter of a serious threat, should Warren or Sanders emerge as the nominee. You can call it the “your own man says so!” rule, named after schoolyard ballgame disputes, where the acknowledgment by a member of one team that his or her teammate was out settles the argument. It’s what happened when almost half the Republican Party refused to support Barry Goldwater because of his “extremist” views, giving his opponents an easy way to torpedo his candidacy. It happened when George McGovern’s opponents in his own party, including ex-Vice President Hubert Humphrey, accused him of ideas that would cut the muscle out of American defenses.
And a year from now—an eternity in campaign time, but not too long to keep the issue warm in a big oppo file—it wouldn’t be hard at all for Donald Trump, on Twitter and in ads and on a debate stage, to point out that a member of Warren’s own party, sharing the same stage, implied that her health care ideas would be dangerous for America. (The same applies in spades for self-identified socialist Sanders.)
Even I’m not old enough to remember the Goldwater and McGovern campaigns, so I can’t compare. But I agree that being able to point to Delaney’s critique makes the argument more powerful.
Matt Yglesias, though, had the opposite reaction. He came away thinking “Elizabeth Warren proved she’s ready for the big show.” He liked how she repeatedly refused to fall into Chuck Todd’s trap on gun confiscation and ducked an arcane debate on immigration. As to the issue Greenfield raises,
At another key moment in the debate, however, Warren chose the bold path, raising her hand (along with Bill de Blasio and nobody else) to stand for the principle of a single-payer health care system that would essentially eliminate private health insurance. Early in the campaign, it seemed that most Democrats were going to run on this kind of platform and call it Medicare-for-all. But once the media discovered the “abolish private insurance” framing, many candidates got skittish and backed away from the commitment in favor of some form of a public option plan instead.
Warren declined to move to the political safe ground, sticking with the high-risk, high-reward Medicare-for-all plan. That cut off at the pass the main issue differentiator that Sanders’s camp had been planning to use to halt Warren’s rise.
She also showed in the discussion that even though she doesn’t normally focus on health care that much in her stump speeches, she is adequately fluent in the issue. And, critically, she didn’t get bogged down in the technical details of Medicare-for-all, instead imitating Sanders’s ability to elevate the discussion to a higher plane of ethics and morality.
It’s not a no-brainer political stance, but it’s the right stance for her. And she also knew when it was smart not to take a stance.
I’m somewhere in between the two, mostly because Yglesias seems to be thinking of the problem differently.
Like him, I think that Medicare-for-all as a concept is not only likely necessary for a would-be Democratic nominee to embrace in the current environment but that, as a concept, it’s probably the right direction for the country.
But I agree with Greenfield and Delaney that the Sanders corollary—that giving all Americans access to taxpayer-funded healthcare requires abolishing private insurance—is not only bad politics but a bad idea.
My late mother had all manner of health problems for the last several decades of her life. Toward the beginning of that, my dad was still in the Army, which meant we could see military doctors for free and also had Tricare as a supplement for when we needed to see civilian physicians (as when she had uterine cancer in the early 1970s).
In her last decade, she was on Medicare as well as Tricare for Life. If she’d only had Medicare, she’d have lost all of her modest assets, including the house, or I’d have had to radically adjust my lifestyle to cover the shortfall. And, even though I make a pretty decent living, I’m not sure I’d have been able to cover all of it even at great sacrifice. The bills, especially in the last two or three years, were just astronomical.
I’m not absolutely sure extending the existing Medicare system to the entire population works financially but, again, I support it in the abstract. We’re the only wealthy country on the planet without universal health care. But we’re also spread out over a vast continent with huge swaths of extremely low population density and refuse to rein in coverages or payouts.
But even if we can figure out how to make Medicare-for-all work fiscally and get it through both Houses of Congress, it would be madness to eliminate private insurance to provide secondary coverage. de Blasio is right: ensuring that everyone can see a doctor doesn’t mean we have to take away superior coverage from those who have it.
Those who hope to see President Trump limited to a single term ought to root for someone other than Sanders or Warren to win the Democratic nomination—or hope Warren finesses her position considerably in the coming months.
Most nations “universal healthcare” systems though are not single government run monopsony buyers, as they are advocating here. Few nations work that way. Most have a mix of public and private insurance plus out of pocket expenses: Germany, Switzerland, Australia, Japan, Italy, Sweden, etc. And the government program components are often more synonymous with public schools in the us in that they are decentralized and run by local or state level governments, not the national level.
It’s a giant myth in this country that the rest of the world has “single payer” as it’s imagined. And the prevalence of that idea dominating the collective thought process is one of the reasons why the body politic is not willing or able to make actual reforms to our system that would be beneficial.
@EB: TNR had an excellent piece a couple years back titled “Where Are the Single-Payer Wonks?” Ezra Klein is about the only one that comes to mind, and he’s a journalist, not an academic or practitioner.
Given that current traditional medicare pays only 80% of their approved charge for a physician services (the remaining 20% coinsurance is a patient liability) would elimination of private insurers also prohibit the medicare supplement market?
I’m not sure that question has been asked of the candidates who are proposing medicare-for-all and elimination of private insurers.
The cost savings if any from implementing M4A derive from two sources: a) the presumed reduction in administrative costs and b) applying Medicare reimbursement rates to all providers. Private insurance reimbursement rates are considerably higher. Advocates of M4A need to remove private insurance from the equation. Otherwise it will be more expensive than the status quo which is not the stated objective.
Delaney said:
I don’t doubt that hospital administrators might have said this, but is the implication (that Medicare reimbursement rates) are forcing hospitals to increase hospital charges so that they can remain in business?
Is the same condition true for physician’s (Part B) and pharmacy (Part D)? With regard to physicians (who are not obligated to take on Medicare patients), why would they elect to accept medicare patients if the net result was that had to increase their fees for all patients?
@Dave Schuler:
Is there factual evidence to back this up? While limited in scope (and addressing just Part B reimbursements), I found that my commercial insurer’s “approved charge” very similar to the Medicare “approved charge” for the same CPT. This makes some sense considering that the AMA actually calculates the points for each CPT (with adjustment for geographic and locus of service).
I’ve lived most of the last 30 years in countries where the governments ran the national insurance programs with options to buy additional insurance for extras like home nursing care or private hospital rooms. It’s not single payer, but it’s not expensive either. I dread going to live in the US again now that I’m used to how well things work in other places.
My parents are in their 80s and live in Arizona. They’ve both had to change doctors fairly frequently because increasing numbers of physicians out there are transitioning to a “concierge” model, where people pay an annual fee to join a doctor collaborative. That annual fee essentially makes up the difference between what the doctors charge and the Medicare negotiated rates.
It’s becoming increasingly difficult for them to find doctors that will accept Medicare, even when supplemented by additional insurance (they both worked for the federal government/my father was military, so they do have some form of additional insurance but I can’t remember what it is right now).
As several others have mentioned, the other developed countries that have figured this out don’t abolish private insurance, they work with it. Overly simplistic answers in a primary debate absolutely will come back to haunt in the general election.
@Bob@Youngstown:
There is a marginal cost of treating a patient and then there is a fixed cost to keeping the facility running.
Assuming you have a way to pay for the fixed cost (private insurance), you will accept customers that cover just the marginal cost (Medicare). But if everyone is only paying the marginal cost, then you can’t run.
Medicare and Medicaid are currently cross subsidized by people on private plans overpaying for the average cost of their provision. I read a research paper a number of years ago that in fact attributed about 20-30% of the rise in private insurance premiums in recent decades on a larger share of the public being on Medicare and Medicaid, increasing the size of the cross subsidy.
So trying to force “Medicare for all”, even ignoring longer term problems, would require a rather large reimbursement rate hike from current levels in order to prevent a lot of facilities closing/becoming over crowded.
@James Joyner: which is part of the reason why short of the Dems winning a filibuster proof majority in the senate, something like this probably isn’t going to happen.
Even with a simple majority, and getting rid of the filibuster, there are enough democrats in the senate who aren’t nuts and actually care about how policy has to work.
So while I would expect some other kind of healthcare bill occurring. Trying to patch up the last round of patch ups, this still remains unlikely at this point.
Though a well timed recession just ahead of the 2020 election could change that.
@Bob@Youngstown:
It’s not a state secret. It’s common knowledge and has been studied extensively. Here’s one study. There are many more and they are easy to find.
Medicare pays significantly less than private and, in many cases, has not raised their fees significantly in 30 years. As noted above, they can do this because the fixed cost is paid by private insurance (it’s the same reason drug companies can sell drugs cheaper countries; the first pill is the most expensive and American pay for that. Each subsequent pill is cheap).
FWIW: a recent poll showed that the vast majority of people, including Democrats, think “Medicare for all” just means making Medicare available to people, not abolishing private insurance. Support for M4A plunges when you talk about abolishing private insurance.
One thing I’ve never seen addressed by the “ban all private insurance” crowd is how they plan to deal with the economic fall out. They’re proposing to put 2.7 million people out of work. Also, a lot of those insurance companies are blue chip stocks, so at the same time they’re throwing all those people out of work, they’re also going to be collapsing everyone’s 401ks, IRAs, pensions, and savings.
I have Medicare administered by United.
I am satisfied with that, but I am considering adding a private plan and supplemental coverage that would give more options. One problem is that Medicare will not pay one cent for oral surgery, even if it is a required procedure done as outpatient.
I would highly recommend against a required single payer plan. We need more options and more private companies involved.
I remember when the HMO’s started up. There were several companies to choose from. Prices were low.
I agree that Delaney gave the most thoughtful and sensible answer, but I also understand the realities of trying to convey a complicated message when what you really need is a bumper sticker. The Dems are in a quandary, because the Republicans can spout whatever nonsense they feel like saying that day and the MSM and their voters just think “wow, he’s talking tough!”. Here’s my crack at a politically feasible answer:
“Look, number 1 is making sure that every American has health care. Number 1. For those who don’t have it now or who are going to lose it when they get laid off or become too ill to work, that’s going to require a robust government intervention, just like in every modern country in the world except the United States. Now, my Republican colleagues are satisfied once they have ensured “access” to healthcare and they are happy to pat themselves on the back and call it a day when somebody working hard and taking home $25K per year has “access” to a family plan that would cost them $26K a year. But we are Democrats and we judge our accomplishments by whether they work, not whether they sound good sitting around drinking some billionaires scotch. Where does the private sector fit into this? Well, as in almost all modern countries, they have a place. But what will end under my administration is allowing insurance companies to take your money for years and when you get sick, yes, they bring out the experts, but they are experts in scheming you out of the coverage you paid for, not experts in helping your or your loved one survive.
@Stormy Dragon: It’s an insane and unworkable idea.
This is what drives me bonkers about some overly ardent progressives. They are so mad at the abuses they’ve seen in private insurance they want that group *punished*, preferably out of business.
That it would likely collapse a good chunk of the economy and cause a doctor shortage doesn’t seem to even enter into the equation.
@Tyrell: Yes, I remember that too. I also remember being an aide to a state senator when all of the horror stories about HMOs denying basic treatment started rolling in.
Sure, they kept costs down, but they did it by denying necessary care.
@Hal_10000: While I agree with your overall point, I want to quibble with this:
While Congress has not authorized a permanent raise, every year they pass the so called “doc fix”, which gives a one year raise in rates.
@Hal_10000:
Your point on drugs is also why the reimport from Canada idea is not a good one. Effectively that just means adopting their below average cost price controls and would have the effect of stopping new drugs from being developed of it applied to everything. The rest of the world is largely free riding off the us market in this area.
With that said, there are plenty of places in the Byzantine mix of fda approvals and patent system gaming that creates monopoly power for many medical devices and drugs that should exist.
The epi pen of fame should be $20 over the counter. Generic Insulin’s should be very cheap and not financially burdensome.
I wish there was some serious political issues efforts to really reform this area to make it more competitive. Comparatively speaking, it’s one of the low hanging fruit areas in the healthcare mess and would help a lot of people. Just think about insulin alone never mind everything else that could be commodity priced.
@Stormy Dragon: Are you saying 2.7 million people work in healthcare *insurance*? To be honest, that seems ridiculously inefficient to have close to 1% of the country working in a field that merely pushes beans around and doesn’t actually contribute anything. Train them to become nurses or something and we’d all be better off.
@Franklin:
I agree that’s too many, but it’s enough that it needs to be unwound carefully so that the larger economy can absorb such a huge change. Just deciding to end it all in a short time period seems like a recipe for disaster.
@EB:
would have the effect of stopping new drugs from being developed
False dichotomies ought to be classified as a type of logical fallacy.
Just because there’s Social Security, doesn’t mean all other pension plans are banned.
If M4A is going to cost 2.7 million jobs, there’s your proof of savings, right? What’s 2.7 million times, what, 40k each? Something around 100 billion a year? Plus the downward pressure on drug and provider prices? Seems like that could be quite a savings.
In any case, what’s the counterargument? We have to keep wasting hundreds of billions of dollars to subsidize health workers? Like we do with. . . ?
As for doctor shortages, bullshit. They’re going to quit work because their incomes drop 10 or 20%? No, they are not. Nor are hospitals going to close their doors – they’re going to pay administrators and specialists less, their new buildings will be less posh, their stockholders won’t get as rich going forward.
@Kathy:
If you allow private insurance we will continue the class difference in health care – poor folks get mediocre care, rich folks get all the bells and whistles. Wealthier voters will care less about the American ‘NHS,’ which will perpetuate political divisions going forward.
This is not the hill I’m going to die on, I’m a month away from Medicare and my wife is printing money. I’ll do fine. But I find a lot of the arguments against M4A specious, and I see a lot that attracts me to the idea.
@michael reynolds:
2.7 million jobs lost is about the size of the 2008 recession. Do you think that was a great thing because of how much more efficient it made the economy? Or did the societal disruption outweigh the short term economic benefits?
@michael reynolds:
Since employees need supervisors and those supervisors need supervisors, and everyone needs floor space and IT services and payroll and, well, and on and on, a good rule of thumb for the cost of an employee in a large company is $200-$250K per person per year. Many people cost less than this, but many people cost significantly more, so the rule of thumb holds pretty true.
@rachel: I lived 8 years in Korea, so I know what you’re talking about. If you are coming back near Medicare age, things are not too bad. (I came back at 62, so I had ACA coverage before the GOP threw it into limbo last year.) The system helps you sort through your supplemental policy options and in most places they seem to be pretty good. I know they are in Washington State, where I live, but we’re a leftist hell hole here.
If you have 10 or more years before Medicare, you may want to postpone returning if you can. At least until the GOP has finished their “health care
fuckupreform.”@Kathy: You’re in luck. When I used to teach logical fallacies in my College Comp. classes, I included false dichotomy. To the best of my knowledge, I wasn’t alone and curricula haven’t changed dramatically. If anything, the students these days know more about such things than than they used to a decade or so ago.
@Teve: I wouldn’t say it’s that bad, but it certainly is not optimal and is now light years away from “the best medical system in the world.” If you have the resources to pay for the best medical system in the world, you can still get that here, but most of us do not have access to anything beyond adequate to the needs of most people.
And the GOP seems to be angry because too many people have that much.
Continuing from my previous comment, here’s a link to the CBO report on the subject. Private insurance does, indeed, pay considerably more than Medicare.
I am always impressed by Americans ability to engage in policy debate with nary a hint of real information or comparison with other systems…. Quite impressive sometimes, your capacity for navel gazing and provincialism. @michael reynolds: Queerly enough that is actually factually not the case in European systems with mixed systems. But your love of hyperbole is well-known.
@Dave Schuler:
It may not be a state secret, however, while the Medicare approved amounts are published, it is almost impossible to have your commercial insurer tell you what their approved amount will be for a uncomplicated CPT.
The reason I have some skepticism, is because the lower physician rates have not been reflected in my actual life experience. Example: About 18 months ago my wife and I both had diagnostic colonoscopies two weeks apart by the same physician at the same facility (both negative findings and no removals).
The physician charged $1150 for each case (but his charge is irrelevant). My employer-based commercial insurance allowed 232.14 , while my wife’s traditional medicare allowed 229.93. That seems like an insignificant difference. Of course, what I paid- 80% of the allowable- means that the difference in the OOP was 68 cents.
Approximately 5 years ago, we each had a total knee replacement, (same surgeon- same facility) the difference in the allowables was 50 dollars out of approximately 2200.
@Stormy Dragon:
The 2008 recession came as a surprise, a gradual move to M4A would be anticipated and could theoretically be better managed. But what’s the point, really? We’re going to carry 2.7 million workers indefinitely? How are we ever to achieve savings if we won’t cut employees?
@michael reynolds: You’ve hit the nut about why the Sanders-like thing that fits on a bumper sticker – “M4A Starting Today!” hits up against the realities – it will take years to figure it out, implement the plan and transition into a new system and, as you point out, any meaningful reduction will absolutely mean that all or most of the 2.7M people will lose their jobs, leading to a Clinton-like reality – “Vote for me because I actually understand what this means and can manage the transition without melting down the economy and creating a backlash that will set us back another generation and a half”. Sensible reality, but hardly bumper sticker material.
@Lounsbury:
The fight over NHS in the UK rages constantly, with Labor wanting more, Tories wanting less. IOW working class people and wealthier people at odds. If NHS were the only option, Tories would support the NHS out of self-interest. That class conflict – exacerbated by race – would rage on in this country.
@Bob@Youngstown: I am impressed by you marrying your statistical control group. Adorable.
@Bob@Youngstown:
On Slide 13 of the link to the CBO report I provided above there are graphs illustrating the difference between private insurance reimbursement and Medicare reimbursement for the two procedures you mention specifically, colonoscopy and knee replacement.
On average private insurance pays substantially more for each.
@michael reynolds:
Which was precisely my “it needs to be carefully unwound” point. But M4A doesn’t gradually move, it does it quick, to hell with the consequences.
@Dave Schuler: I know enough about remimbursements to know I don’t know anything 😉 And private insurance is a bizarre mess where different plans from same insurer reimburse at radically different rates to the same doctor/hospital for the same procedure. So United Healthcare Plan 1 has done a deep analysis and concluded that X is the right amount for a compound tibia fracture and is prepared to fight to the death that they are correct. Except that United Healthcare Plan 2 reimburses at 1.4X for… reasons.
The really strange thing is how we pay for medical education in this country. First you have the doctors, nurses, radiologists, etc who pay premiums for their education and go into crippling debt. Then they do essentially work-study programs where they work almost for free at teaching hospitals. Oddly, the amount of time they are indentured for is directly (not inversely) proportional to the amount they went into debt in school. Then Medicare/Medicaid and the private insurers all reimburse the teaching hospitals at significantly higher rates then for a non-teaching hospital. Finally, the teaching hospitals endlessly fundraise as charities, especially to their own employees who are constantly bombarded with requests to deduct part of their salaries to help buy a new MRI scanner or something. Given the free labor, where the heck is all the money going to?
I’m not even condemning this insanity, as I don’t understand what is happening well enough to have an opinion.
Relevant to this discussion: a doctor on Quora recently discussed why he likes Medicare. Yes, the reimbursement rates are lower than private insurance, but they always reimburse in a timely fashion without any hassle. Not so for many private insurers.
@michael reynolds:
You can’t get away from that. The rich always get better or more of everything. Or rather those at the top of the social structure do. See how much better the nomenklatura had it compared to everyone else in communist countries.
@Just nutha ignint cracker:
They’re insidious. A bit like express slippery slopes.
I think of it that if not-A, then B, C, D, etc. all the way to anti-A or non-A; there being a finite, usually, number of alternatives. For example, if it’s not hot out, that doesn’t mean it’s cold. It may be scorching, warm, mild, temperate, cool, cold, very cold, freezing, etc.
Of course there are actual dichotomies, but not everything is a dichotomy.
People are being banned from places they make money, employees are protesting the provision of beds to a government program, Citibank is refusing to permit companies disfavored by Democrats to use their banking services. So yes, lets put health care under centralized control. Even if it is government, even if denial would be unconstitutional, will the person denied survive till the SCOTUS rules? Even a week is a long time to be in pain. Doesn’t even have to be outright denial, just a glitch in the paperwork.
Talking up that “bad” people should be banned from social media, banking, retail, then pushing centralized control of health services is as smart as having people run around doing violence and promoting violence against “bad” people and then trying to get support for gun control.
@Kathy: But that isn’t a dichotomy to begin with because there are more than two choices. Moreover “cold” is relative. What you think is cold (or hot) may not be to me. (And because I live in the PNW, when I say “it’s hot out,” by any rational standard I’m going to be mistaken–it’s a week before the 4th of July and the temperature today reached a high of 65.)
As if that already hasn’t been a problem with all the manufacturing jobs lost in this country…where was the concern for that…oh, that’s right, it paid for itself in that we can now buy cheaper stuff…
Certainly that is made easier when Congress passes laws making it illegal for the government to directly negotiate drug prices…
There’s the problem right there…how can everyone have decent health care when the above is the primary concern of companies involved in the health care industry…
“1)People are being banned from places they make money, 2)employees are protesting the provision of beds to a government program, 3)Citibank is refusing to permit companies disfavored by Democrats to use their banking services. 4)So yes, lets put health care under centralized control.” [numbering added]
1) I’ve missed something somewhere–do you have a citation?
2) I absolutely agree, that was ridiculous and they should be ashamed of themselves. (On the other hand, so should Laura Ingraham of the *summer camp* analogy, but I’ll move on because this is not about “whatabouts.”)
3) Again, I missed this, but moving on, this is a problem where a market solution will work just fine, so I’m not sure what the problem is.
4) Your conclusion is a non-sequitur. But even allowing for that, to a great extent, health care is under “centralized control.” That of the insurance industry (or have you never experienced your insurer telling you something isn’t covered–as I did just a week ago?).
ETA: BTW, I’m not persuaded that M4A is a particularly good idea, nor do many of the people commenting here, from what I can see.
@Dave Schuler: Yes, I see that, and it confirms what I suspected, and what @MarkedMan: referred to when talking about various plans within the same private insurer. It is entirely possible that my employer sponsored ( & Aetna administered) plan had an approved payment that was almost identical to what Medicare approved.
I double checked my EOBs to be sure that what I said was accurate, and it was.
So my conclusion is that my employer-sponsored commercial plan was at the lower end of the spectrum for all the private plans that CBO reported. (CBO reported over 40 bins). I am assuming that CBO’s comparison was an apples to apples (that is what they called “prices” were actually approved payments based on the same CPT without any modifiers.
Finally, one of the complications to make these comparisons is , as Marked Man reminded, is that even within the same commercial insurer, there are a variety of approved amounts, that gives rise to the spread in the bar charts on page 13 for the same CPT.
@MarkedMan:
If you understand how Medicare establishes the “right amount” it will help you understand how UHC comes up with the “right amount”: The AMA has a dedicated committee that reviews all the CPT codes and assigns to each procedure an number of points (Relative Value Units) that represents the skill, intensity, knowledge etc required for that procedure to proceed in it’s most uncomplicated form. The AMA comittee reports those RVU’s to CMS, whereupon CMS applies factors (generally small adjustments) for geographic, malpractice insurance, variations. Generally speaking the commercial insurers accept those modified RVU’s and then multiply the RVU by a dollar amount to arrive at their approved reimbursement amount. While I’m sure there are exceptions, the dollars per point are the same for each CPT within each plan that they offer. The variation in dollars/point occurs when the insurer offers “better” policies (here comes your UHC Plan1, Plan2, etc).
Bottom line is that UHC really has no need to do a deep analysis into the cost of care, because the AMA and CMS has already done that, the only analysis UHC needs to do is a balance the premiums and anticipated profit against against the dollars/point and overhead.
What I’d like to see is the ability to “buy in” to Medicare early at reasonable rates for those who lose their private insurance. Yes, this is a personal issue for me. I’m self-employed and on my husband’s insurance. He’s in his mid-50s, and although we’re both healthy, we both have pre-x conditions that would make the cost of individual policies insane, if we were even able to get it (there is an “uninsurable at any cost” category). I worry every damn day that we could lose our insurance and not be able to afford an individual policy. For the record, my pre-x conditions are ones that people don’t think about: migraine with aura, which puts me at a higher risk for stroke, dense breast tissue, which makes cancer harder to find, etc. These don’t affect my day-to-day living at all, and I’m healthy–but, these are things that throw actuarial tables off and so I’d be denied coverage or quoted something that we couldn’t afford.
The chipping away at the ACA provisions that protect pre-x conditions and more makes me think that opening the chance to have Medicare *be* the insurer would certainly help situations like ours.
@Just nutha ignint cracker:
A dichotomy implies not only two opposing parts, but that only those two parts exist. In debate, used fallaciously, the explicit claim is that if not-A then anti-A. Where most issues allow for a wide spectrum of positions and possibilities, rather than just two opposite ones.
For example, war and peace can be seen as a valid dichotomy. Two countries are either at peace or at war. But relations between the two countries can vary along a spectrum from, say, friendly to cordial to neutral to adversarial to hostile.
Consider immigration. Currently the US has a rather restrictive, complicated, lengthy immigration process. Per the fallacy of a false dichotomy, the only other option is “open borders.” the funny thing is critics on the right of the current system have an explicit third choice, which is to make it more restrictive still.
@JKB: “So yes, lets put health care under centralized control. Even if it is government, even if denial would be unconstitutional, will the person denied survive till the SCOTUS rules? Even a week is a long time to be in pain. Doesn’t even have to be outright denial, just a glitch in the paperwork.”
Fortunately that never happens under the glorious system we have now.
@Dave Schuler:
A careful reading of the CBO report you cited reveals that the data for the report was obtained from the Health Care Cost Institute, that appears to be an health insurance lobby funded by United, Aetna, and Humana.
Furthermore, as the data is based only on these three sources, it certainly seems to suggest that among those sources there were greater than 50 different plans (as there were > 50 different reimbursement rates) for one CPT code – the colonoscopy.
Lastly, using that same colonoscopy code, it seems that 20% of the private insurance plans offered by UHC, Aetna, and Humana actually paid the same or less than traditional medicare.
Assuming that the data collection and analysis presentation were completely fair (that is comparing the basic CPT code allowables and neglecting modifiers (such as surgical complications or multiple polyps removed), the other conclusion that can be drawn is that the “private health care insurance allowables are all over the map. (My suspicion is that that is due to premiums being the principle driver as to the magnitude of allowables for each CPT.