The health plans’ lobbying group is out with a new analysis of the Baucus bill, claiming it will dramatically increase costs.
It’s tempting to dismiss this as another industry-biased report produced by a firm bought-and-paid-for by the same industry the report helps. And while the characterization is true, there is some truth to PWC’s analysis.
The PWC report (pdf) claims health insurance costs will increase more if the Baucus bill is passed than if nothing happens – but according to PricewaterhouseCoopers, this claim is based on a review of only four components of the bill.
The components are
- excise tax on high-cost or ‘cadillac’ plans
- cuts in Medicare reimbursement that would drive up cost shifting
- taxes on health industry firms that PwC says would be passed on to consumers
- Insurance market reforms without an enforceable universal mandate
.
Sure, the PwC report misses a lot – and much of what it misses is less than favorable to the report’s funders – health insurance companies. But the central point is indeed accurate; without a tough, enforceable universal mandate, you can’t force insurers to take all comers without charging more for higher risks or excluding them altogether.
This has been proven in Massachusetts. Health plans have to take all applicants, but there is no real financial penalty for individuals who don’t sign up. Sure, there’s a fine for those who don’t have coverage (but can afford it), but it is so small as to be negligible. Not surprisingly, health plans have seen an explosion in the number of individuals who sign up for coverage, get their problems fixed, then drop out. One health plan has reported that their costs for these ‘drop-in’ insureds are six times higher than their premiums.
And now Senator Baucus et al want to foist this off on the rest of the country?
As much as I want national health reform, the Baucus bill – as currently conceived – makes no sense.
Yes, a lack of a strong individual mandate is a big problem for those whom are affected, but that should be a pretty small number. The individual market will be a mess if this bill passes as is.
But your own post about what would happen without reform paints a much darker picture than PwC’s worst-case scenario. You assumed 10% annual increases in policies. PwC’s best attempt at selling the policy price increase came in at about 7.7% annual increase.
And keep in mind this ignores all of the cost-saving mechanisms the Baucus bill put into place on the delivery side.
If you ask me, this whole report just proves that the health insurance industry has no interest in adding value. They still act like they’re a helpless bystander in the healthcare industry.
Everyone in healthcare says they’re “forced” to do these things. Mainly because they don’t want to add value, they just want the cash cow to keep giving milk.
Managed Care Matters,
My name is Barbara O’ Brien and my blogging at The Mahablog, Crooks and Liars, AlterNet, and elsewhere on the progressive political and health blogophere has earned me the notoriety of being a panelist at the Yearly Kos Convention and a featured guest blogger at the Take Back America Conference in Washington, DC.
I’m contacting you because I found your site in a health reform blog search and want to tell you about my newest blogging platform —the public concern of health care and its reform. Our shared concerns include health reform, tort reform, public health, safe workplaces, and asbestos contamination.
If you’re confused by the nation’s debate over health care reform, you are not alone. While nearly everyone agrees our health care system is in trouble, the nation is nearly at war with itself over what to do about it. Some say the entire system needs to be overhauled. Others urge caution, pointing to the costs of reform and warning of high taxes and “big government.”
To increase awareness on these important issues, my goal is to get a resource link on your site or even allow me to provide a guest posting. Please contact me back, I hope to hear from you soon. Drop by our site http://www.maacenter.org in the meantime.
Thanks,
Barbara O’ Brien
barbaraobrien@maacenter.org
My 23 year old son does not want healthcare. He will not purchase it even if he was working. Did not pourchase it when he was working. If he does not pay a parking ticket, he definetly will not pay the fine. He will just use the ER. The Baucus bill addresses this how?