Health Reform: How Much Help Will People Need?

“Cutting subsidies too much could jeopardize the whole underlying idea behind health reform, which is that you can’t really bring down costs unless everyone (or nearly everyone) is in the system.”

Sigh. That’s precisely the point of the public option, and precisely the reason why there actually seems to be some danger that we’ll end up with “reform” that takes one half of the equation (getting everyone into the insurance pool) and leaves out the other half (REAL affordable insurance from a government-supported public option).

The thought of people like Patrick Gilbert being forced to buy something he can’t afford — and which rewards the damn insurance company vultures to boot — makes me so mad I could spit.

(Besides, those subsidies not only won’t help a lot of people who need it, and not only are they in danger of getting cut even more NOW, but we all know they’ll remain static and promptly fall behind the cost of living in the future.)

What I want to know is, why aren’t we debating THAT point, instead of red herrings such as deathers and birthers and whether or not health care reform is treasonous?

Public option doesn’t entirely settle this question, because people would still have to pay premiums to buy into the public option. And depending how the public option is structured, those premiums could be as expensive, or almost as expensive, as buying private insurance.

I’m posting this link to an article about how other industrialized nations handle healthcare. The story was originally in WaPo, and just republished in my local rag last week, so may have gotten some discussion on this blog already, but it points out the real tragedy of this debate, which is the extent to which there hasn’t been any meaningful debate.

In my mind the most significant story today is how Pelosi and Sherrod Brown are digging in about the public option (which I acknowledge doesn’t entirely settle the issue, but it’s better than a giveaway to the insurance industry). Even with a robust public option, we will still have a vastly inferior health care delivery system in comparison to the countries discussed in the article. That’s the other tragedy of the situation.

http://www.post-gazette.com/pg/09242/993976-109.stm

So, KT, why don’t ye be givin’ us some examples o’ “how th’ public option” mi’ ” be structured” so we be seein’ some o’ th’ possible costs/benefits???
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Ye know – give us some clear, concise, actual, factual information t’ be basin’ our speculatin’ upon…li’ who (be proposin’ an option), wha’ (th’ partic’lar option be containin’) when’ (would th’ option kick in) where (be th’ money comin’ fr’m) an’ why (th’ partic’lar option mi’ ‘r mi’ not work)…th’ basic questions a “journalist” ought t’ be able t’ be answerin in order t’ inform th’ public?

Anthem Blue Cross in California has notified about 80% of its 800,000 individual policyholders of double-digit increases, many above 30%.
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Oh, but let’s all worry about how expensive a public option is going to be.

Ahh…bu’ if we be successful’ distracted into a rabid lather ’bout non-issues, we probably won’t be noticin’ th’ “reform” be nothin’ bu’ a giveaway t’ health corporations ’til it be all passes an’ we all be mandated t’ be givin’ ‘em even more profits!
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It be th’ strategy, mate – th’ strategy – t’ NOT be havin’ a meanin’ful debate!
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YARR.

We only be concerned wi’ givin’ money t’ th’ socialist government. Givin’ money t’ private corporations be th’ American Way, don’t ye be knowin’, an’ thar be nothin’ wrong wi’ wha’ever corporations be demandin’ in th’ way o’ ransom – tha’ be GOOD spendin’!

PW: The question is whether a public option would have to be self-sustaining — in other words, financed entirely through the premiums that people pay into it–or whether it would have rates that were somehow tied to what Medicare pays. That sounds technical, but it could have a huge impact on the cost of premiums for those who would be covered under a public plan.

The former option would be less expensive to the government; the latter would be less expensive to the consumer.

Karen, one more point that is not being discussed is if we do not have the public option that should be designed to hold down costs, what will be in place to assure this?

How does Switzerland which is all insurance companies hold down costs? Will the senate, blue dogs and insurance companies be willing for the insurance companies to be tightly regulated, including CEO pay to do this.

Is there another way to do this?

Details, KT – comparative details be wha’ we be needin’ t’ see. Show us th’ details o’ th’ difference. Surely thar be spreadsheets/cost comparisons about ye could be referencin’?

So it seems that someone who has no money to pay for their share of the “deductible” would not be able to participate in any program, public option or private. Unless we make it one big Universal Insurance Plan for All. At least that is what we hope will happen, but that is not assured.

Doesn’t it come down to whether or not healthcare is a right of citizenship in the United States. Is healthcare something that we give each and every citizen regardless of their ability to pay or not? If that is the case, then our Tax system should be what is reformed, not healthcare. A fair Tax system that will tax everyone equally, no more deductions, just a flat tax. From those tax proceeds, our Government will provide everyone with the same health insurance, provide funding for the military, schools and other various things the government does with our tax dollars.

If we do not pass Tax Reform, and we go with the current proposals from the Democrats for Healthcare Reform I do not need to worry, “someone else will pay my insurance for me out of their tax dollars”.

So, if I go spend all my savings on some frivilous thing I really do not need, then I can be exempted under the Democrat “Public Option Plan”, and I will still get my health insurance paid for out of other tax payers pockets. Is that fair?

Again, with most all entitlement programs in this country we are rewarding behavior that promotes irresponsibility. That is the real question to be defined. Do we give and give and give so others can do what they want without any negative consequences for their bad or poor choices.

We be no’ allowed t’ be talkin’ ’bout any other way t’ do this – th’ best, highest quality, most cost-efficient way t’ do this be “off th’ table.” So we don’t be seein’ it, don’t be hearin’ ’bout it, an’ special’ don’t be tellin’ ’bout it, don’t ye know.

KT:

there’s a good policy argument that consumers should be on the hook for a non-trivial share of their medical expenses; it’s probably the best way to make sure they are shopping wisely for care

Who is making that argument, and why is it good?
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Could you provide links and/or quotes to those arguments, please?
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Why would “shopping wisely for care” on the part of individual consumers (who may or may not be in the midst of a medical tragedy) be necessary?
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In the WaPo piece linked to by superterrificdelegate ( http://www.post-gazette.com/pg/09242/993976-109.stm ) above, it is revealed that:

The world champion at controlling medical costs is Japan, even though its aging population is a profligate consumer of medical care. On average, the Japanese go to the doctor 15 times a year, three times the U.S. rate. They have twice as many MRI scans and X-rays. Quality is high; life expectancy and recovery rates for major diseases are better than in the United States. And yet Japan spends about $3,400 per person annually on health care; the United States spends more than $7,000.

, doesn’t that strongly suggest that “shopping wisely for care”, i.e. self-rationing, isn’t really related to the problem of health care costs in the US?
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Actually, I may as well ask again (since I and the majority of the American people don’t know the answer):
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Why is health care twice as expensive in the US as it is in Japan, even though the Japanese are getting better health care than Americans, KT?

Strategy, tragedy… They are almost anagrams, just like HCR without a robust public option is almost reform.

It’s an argument that a number of health economists have made. I know Jon Gruber at MIT has argued that, but I don’t have links at hand. Let me hunt around for some.

It’s amazing that we cannot do what most of the civilized world does – provide coverage for their citizens, It’s also interesting what’s missing from our discourse – The fact that citizens of other countries have better coverage – for less money per persons.

Why don’t we just cut out the B.S. parsing and language?
Let’s call a spade a spade.

Our government is trying to devise a way to cover people, while at the same time trying to preserve the insurance industries ability to skim money out of the system for profits.

Karen, wouldn’t a public option be cheaper (even if it’s self-sustaining through premiums) simply by the virtue of the fact that it’s non-profit? and presumably will have lower overhead?

Hmmm. Think about it.

[T]he Senate Finance Committee may also lower the maximum annual income a family could earn to qualify for subsidies, from four times the federal poverty level (about $88,000 for a family of four) to three times of poverty ($66,000 for that family). That would mean millions of Americans would have no possibility of being eligible for subsidies.

Seeing as how the MEDIAN household income (roughly equivalent to family income, not quite) is around $51,000/ann that means that going with 300% FPL will subsidize more than half of all families, and going with 400% will subsidize (back of the envelope estimate) around three-quarters of all families.

That’s a helluva lot of subsidy, folks.

The another money quote from the same article is:

“Germans can sign up for any of the nation’s 200 private health-insurance plans — a broader choice than any American has. If a German doesn’t like her insurance company, she can switch to another, with no increase in premium. The Swiss, too, can choose any insurance plan in the country.”

Who is actually shopping for health insurance in this country?

Here you go:
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http://www.kff.org/insurance/upload/7566.pdf

This is a relatively cogent, ideological argument that needs to be had, and to which –as far as I know– an opposing argument hasn’t been clearly articulated by establishment Democrats.
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This is, by the way, roughly (“Tax Reform” = “Anti-Progressive Income Tax Rates” ) the same debate that was had about Social Security decades ago.

As the Rethugs love tell us, Obama was elected on a platform of “redistributing the weath”.

It’s time to do exactly that. Eat the rich!

Another point be, we be no’ subsidizin’ “families” under this plan, we be subsidizin’ insurance corporations. Th’ money no’ be goin’ t’ “families” – th’ money be goin’ t’ th’ insurance corporations.
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If th’ public option were truly strong, an’ really open t’ any person ‘r business tha’ be wantin’ t’ make tha’ choice, th’ pool would be wide enough, an’ th’ lack o’ needin’ t’ make a profit would make it th’ most affordable option.
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Oh – wait – we don’t be wantin’ tha’ – we really be wantin’ “new ideas” fer how t’ be funnelin’ more money t’ those poor insurance corporations! Th’ senate health care “reform” effort be just th’ ticket!
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YARR.

Thanks. There needs to be more stories written about how health care reform isn’t about helping the old or the poor. As I’ve been saying consistently, it is about helping middle class people who either work for dead beat employers that don’t offer benefits or people who are trying run their own micro/small businesses or are self-employed (basically the same thing).
The tea baggers are out there saying that the “lazy” people who don’t work hard are the ones trying to horn in on free health care. They are wrong and they just say this because it is their old race-baiting line from the Nixon/Reagan/Bush days.
I am of the opinion that a family who has to juggle 4 different 25 hours a week jobs along with child care and all that stuff work harder than anyone. And people might whine that they should have stayed in school or went to college or something (no one ever explains to me who is supposed to clean the bathrooms or run the cash registers if everyone has a college degree, but I digress); how many of those 70 year old teabaggers didn’t even make it through high school yet found gainful employment for the good part of their lives. Some of them for unions (the horrors!)? A whole lot of them I imagine.
Glass houses and all that.

The seriously underreported analysis done by the CBO of the Sentate HELP committee’s bill (the final version including the public option, not the original one which is the source of the $1 trillion figure) shows that inclusion of the public option reduces the cost by 30-40%.

http://yglesias.thinkprogress.org/archives/2009/07/cbo-scores-complete-help-bill-and-the-news-is-good.php

If the goal is to cover the most people and provide the greatest cost savings to the government (i.e., taxpayers), a robust public option is not an “option”, but a necessity.

KT:
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I can’t tell you how much I appreciate you having taken the time and effort to source your claims. Sadly, doing so really takes your journalism to an elite level.
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I’ll examine the linked argument, thank you so very much.

The subsidies are on a sliding scale. I don’t have the figures right in front of me, but people at the upper end of that bracket get a much slimmer amount, a relatively small fraction of the premium cost.

“Who is actually shopping for health insurance in this country?”
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We have. That might be easier because we’ve moved around a bit. But our premiums and deductibles are higher than what Gilbert is already paying and we haven’t had lymphoma, or any other disease or condition. The effect is, unless something really bad happens, we pay for all our medical care out of pocket and a hefty car payment every month to protect ourselves from bankruptcy if we get really sick.
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I’m not looking for subsidies but the cost of premiums for that sort of coverage, when compared to what other countries pay for health care, is outrageous and amounts to little more than an insurance-industry-controlled protection racket.

stuart:
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Did you go look at the OECD link I provided the other day. What I read from it is Japan as a country subsidizes their citizens healthcare needs. This is why their “costs” are so much lower than what we have here in the United States.
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Under the “Public expenditure on health, % total expenditure on health”, how I intrepret that to mean, the cost to the governments. The definintion given say “Public expenditure on health care: health expenditure incurred by public funds. Public funds are state, regional and local Government bodies and social security schemes. Public capital formation on health includes publicly financed investment in health facilities plus capital transfers to the private sector for hospital construction and equipment.
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Japan spends 81.3% of GDP is allocated for “Health and “Health related” expenses. Whereas the US spends 45.2% of GDP on “Health” and “Health related” expenses.
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This is a great difference, and my question to you is that why we see such a difference in the out of pocket expenses between Japan and the US? If so, it is very possible that the Japanese are out-spending us 2 to 1, instead of what you suggest.
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http://stats.oecd.org/Index.aspx?DataSetCode=CSP2009
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To access the spreadsheet you go to “Health” on the left side of the screen, click on the + for “Health Statistics”, then click on the + for “OECD Health Data – 2009-Selected”, then click on the “Health Expenditure”.

“Patrick Gilbert, an uninsured lumber company worker in upstate New York, is in a predicament that President Barack Obama and congressional Democrats believe they can solve. Gilbert and his wife have two children, but he says that on his family’s $50,000 annual income, he can’t afford the $600 monthly premiums for his employer’s coverage.

“If I could find some reasonable insurance for about $100 a month, then I would do that,” says Gilbert, 38, a lymphoma survivor who lives near Lake Placid. “Something reasonable, not with high deductibles. Something fair”

Here is the essence of the problem in KT’s example. Here is someone who wants complete family coverage for $100 and he thinks that fair (2.4% his of annual income). The term fair gets tossed about with regularity and the definition will vary across the political spectrum. The key is it is not the government’s duty to determine how much of one’s hard earned money to confiscate to provide “fairness” to someone else. This is also not about compassion.

Some quick math to the example of someone earning $50,000 in upstate New York. This family can purchase a house (median in Albany, NY of $189,000 as a proxy) with mortgage rates of 4.25% to pay a monthly payment of $940/month or 22% of gross income. Well below the 30-33% of gross income which has been the typical benchmark. It begs the questions if he cannot afford health care, why? Or does he think he shouldn’t have to pay for it?

There seems to be a fair cushion of disposable income or are the overall taxes in the state of NY so onerous even at the $50,000 level of income. If not what is the disposable income being used for instead of buying health insurance. Yes, folks will ask its none of your business and I agree. But if you are going to pry into taxpayers pockets, it is a legitimate question. There is the difference between the truly needy and those who don’t think what they need t pay is “fair”.

Since Bill Clinton thought $75,000 was rich it is hard to fathom that this example will make a case for trillions more in debt, higher taxes and lower service

SZ: My main source is conversations with him and others, but Gruber seems to make this point in this article, as he looks at the consequences of deductibles for drugs. There’s a real debate among economist types, however, as to what share of costs is the right one for consumers to bear. I also know that the people who run the program where my brother gets his kidney treatment also feel that it is very important that it not be entirely free. That people approach health care differently if they are paying for it.

You assume that other people in other countries have better insurance at a much lower cost than we do.
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But in reality, taxes in those countries are much much higher. The subsidies to pay for health care by the government is also much higher, and thereby reduces the cost to its citizens.
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I believe that free enterprise, opening up ALL states and insurance companies to offer their plans will reduce the cost. As one “town hall” participant said, “in California, as a small business person, she has 6 insurance companies to choose from”. Overall in the US there are over 1300 health insurance companies / plans. Why do the democrats restrict competition between insurance companies?
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Spade to spade, what you are asking for is another entitlement program, paid out of tax payer dollars to fund cheaper health insurance to the individual.
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That is spade to spade.

That’s still a lot of subsidy, Karen. If there are (rough, ballpark estimate) 100,000,000 households in the US (proxy for families) then the 50 millionth family is the median family. If you even subsidize them $5.00 per month — a paltry amount which would do little (as in, nothing) to alleviate the problem, that is, what, $250,000,000 per month.

Sure, it’s not as much as we spend on the war in Iraq, but nobody inside the Beltway freaked out about the cost of the war in Iraq. They ARE freaking out about the cost of expanded access to health care for Americans.

KT:
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As stuart said, thank you for providing further links to other opinions. I did take the time to read, and it basically says in conclusion, “having people pay something towards their healthcare costs does make them more responsible”.
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In a nutshell. So anyone who is advocating for a “free ride in healthcare” are also advocating for a system which will be out of control cost-wise.
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We are a throw away society. Many people do not even separate their garbage because it “just takes too much time to be eco-friendly, and recycle”.
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Now we want to also give everyone a pass on healthcare costs? No way, no how. I do not want my tax dollars spent on someone that will not be frugal, and Americans are not frugal people in general. It will be a healthcare free for all passing a public option or whatever other name you want to give it.
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The tax payer will yet again be screwed in the process.

Rustydog:
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I’ll repost my response to your…interesting notion that, because the Japanese government pays for twice as much of their citizens’ health care, their price of health care ($3,400 per person annually) is actually the same as ours ($7,000+ per person annually).
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http://swampland.blogs.time.com/2009/09/03/how-to-pay-for-health-care/comment-page-1/#comment-92438
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post start
stuartzechman September 3, 2009 at 2:50 pm
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Rustydog:
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This is…OK, in the interests of healthy debate, I’m going to refrain from characterizations of your argument.
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Just think about what you’re saying for one second, though:

Japan has as you say lower cost per person for their healthcare of a little over 2 to 1…

So, Japan buys an apple per person at a cost of $1 per apple, and we buy an apple per person at a cost of $2 per apple.
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Got it. What’s the other difference?

but the amount of money the government subsidizes is 100% higher than what it is in the US.

Alright, so in Japan, when they buy an apple per person, 81.3 cents of that $1 per apple per person is paid for by the government.
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Here, on the other hand, 86.40 cents (43.2 times two) out of our $2 per apple per person is paid for by the government.
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Moving on…

So how I figure it, the “cost” of healthcare is the same. The difference is where the money comes from.

So…the way it adds up to you is that one dollar per apple in Japan is the same as two dollars per apple here? …Because their government picks up twice as much of their $1/per apple tab? And ours picks up half as much of our $2/per apple tab?
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That’s really how you’re thinking? $1 really equals $2 –it just depends on who’s paying? How does that work, again?

Out of pocket from individuals, or as a “collective” in the form of more taxes to an already over burden tax system. More big government programs as opposed to allowing free enterprise to continue running healthcare. You are simply replacing a system we already have in place, and replacing it with one big government will run. It is that simple stuart.

I see.
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Out of pocket individual expenses of $2 an apple are less costly than taxes paying $2 per apple, which are too much.
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More big government paying $2 per apple, as opposed to free enterprise charging us $2 an apple.
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If we had the system they had in Japan –where, coincidentally enough, they don’t have a public option, and it’s all private insurers– we would be replacing the system we already have of paying $2 per apple with a government-run system of paying $1 per apple, which would totally be the same cost.
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It’s just that simple, Rustydog?
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post end
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Rustydog:
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I know that you don’t like the role of government in markets and lives as a matter of ideology. You and I have different values that we prioritize, and so we think differently about what’s good and whats bad.
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But $1 an apple is never $2 an apple just because the government pays for it.
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We can agree on that basic fact, right, Rustydog? One never equals two? Even if the one is an aircraft carrier paid for by the government, and the two is a pair of llamas purchased by a private citizen? That’s, like, the basis for Western Civilization and the Enlightenment, and all that?
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If you can get past one not equaling two, then maybe you can also see something remarkable about that data you highlighted, Rustydog:
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In Japan, the government pays 81.3 percent of their cost, or, in other words, 81.3 cents of that $1 per apple.
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In the US, the government pays 43.2 percent, or 86.40 cents (43.2 times two) out of our $2 per apple.
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Don’t you get it, Rustydog?
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Even though the US government pays half the percentage of our health care cost, it still pays more than the Japanese government does for half the health care.
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We’re getting robbed, Rustydog. You and me are getting ripped off like nowhere else in the developed world –and the government is paying half of it!
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Where is all of that money going? Why do we pay twice as much for half the f*cking product?
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Really, truly try to think about this for a bit, Rustydog. I’m not trying to win an argument for its own sake. I don’t know why we’re paying so much, I don’t have all the answers, and I don’t trust anybody in power now to do right by all Americans instead of their industry campaign donors.
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But I can see that 2 dollars an apple is twice as expensive as 1 dollar an apple, Rustydog, and so should you. Let’s really try to get our press corps to find out and tell us why our American wealth is being looted like this, OK, Rustydog?

A spade a spade? Not quite.

So other countries pay higher taxes – We pay higher insurance premiums, Premiums, which are increasing at a much higher rate than inflation.

In the UK it breaks down like this:

Total spending on health care, per person, 2007:
United States: $7290
United Kingdom: $2992

In the UK everyone is covered, In the US, over 44 million are not covered.

One reason our costs are so much higher has to do with drug prices. In other countries, they can negotiate with drug companies on pricing.

In our wonderful American free market system, we cannot negotiate drug prices and we cannot even import cheaper drugs from other countries like Canada. The pharmaceutical lobbies have a “protection racket” in operation. So much for the free market!

/sighs

Anyone can do a side-by-side comparison of the various Congressional plans here.

Related to this post, you can do a ‘Select All’ proposals and choose ‘Premium subsidies to individuals’ to see the various numbers, like the one for HB3200:

133-150% FPL: 1.5 – 3% of income
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150-200% FPL: 3 – 5.5% of income
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200-250% FPL: 5.5 – 8% of income
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250-300% FPL: 8 – 10% of income
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300-350% FPL: 10 – 11% of income
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350-400% FPL: 11 – 12% of income

I understand that one bone of contention is the provision of subsidies at the 400% level; this represents additional expense, but makes purchasing insurance feasible for most people.

Thanks Karen for your honesty, hard work and (in general) your willingness to avoid the horse race coverage on health care.

We really do need to keep our eye on the top line:

We spend double what Japan, and we get less care and worse results. To fix that:

-we have to cut 60-80% of admin costs.
-we have to pay specialists less
-we need more doctors
-we have to make smarter decisions about what care is needed.

The House plan does 1, 3 and 4. No other plan does anything other than 3.

If we don’t fix this, we will continue to lose jobs – and world economic leadership in innovation) to global competition from countries that spend half what we do (and who have healthier workers). And we will not be able to balance the budget, because of the cost of healthcare. And those two things greatly undermine our economy and our national security.

And people who oppose that? I guess they don’t want us to be healthy, economically competitive, or safe. And they don’t want to balance the budget.

Unfortunately stuart, the “apples” cost the same. I did enjoy your attempt at trying to make it out to be something different however.
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Your figures of 7000 dollars roughly for the cost of healthcare, the “$2.00 apple” is what we pay for healthcare, correct?
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Your figures of 3400 dollars roughly for the cost of healthcare in Japan, the “$1.00 apple”.
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But unfortunately you fail to disclose that subsizdized healthcare by governments, in specific the Japanese, allow Japanese insurance companies to charge $1.00 for their apples because of the subsidies. We subsidize 100% less than the Japanese, right stuart?
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What is 100% of a 1 dollar apple stuart?
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Oh my, it is $1.00 dollar. So 1 + 1 = 2, right stuart?
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The real $2.00 Japanese apple breaksdown as;
$1.00 apple that the Japanese pay out of pocket, PLUS the $1.00 in subsidies from the Japanese Government.
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Amazing, the “apple” truly does cost $2.00 whether you are here in the US or subsidized in Japan!

KT, I don’t know what you mean by “shopping for care”.

My firm makes the decision on what insurance its employees will have. We are not consulted. Now, I work for a great company and they do their best but cost is one of the primary things they look at. Our premiums went up $50 last year and are expected to go up another $100 this year. So, in the last two years I will have gone from paying $50 a month to $200.00 a month for my insurance. Plus, I have a $2000 deductable. And that’s just for ME. My firm offers a family discount but we don’t have a “plus 1″ deal which means couple without children or whose children are grown really get socked. To cover my husband I would have to pay another $550 a month. He found a Blue Cross/Blue Shield policy for $500 a month, with a $2000 deductable. As you can guess, we don’t have much left over to help stimulate the economy.

The current system is not friendly to consumers. We don’t have a of options when it comes to private insurance. And shopping for health care isn’t like looking for a good used car.

Do you think it would be possible to allow Japanese, Swiss, French, Australian, etc companies to compete in the US nationwide? Until there is more competition, I don’t think insurance is going to get cheaper for Americans. Isn’t one reason the MA system ended up costing so much is because even though more people go enrolled, “supply and demand” didn’t lower the premium price?

15% of his income for healthcare, in the worst case. Why is that unaffordable? Don’t we pay 16% of GDP for healthcare right now? That’s definitely on the high end of what we could expect people to pay but it doesn’t sound totally unreasonable to me.

By the way, I’ve never understood why nobody proposes keeping insurance companies honest by penalizing them when they screw their customers. For example, I had a relative who recently had a flagrant insurance decision overturned by the state. So the insurance company had to pay up. We know that the insurance companies are businesses and that the smart business decision is to always deny coverage to a sick customer and make the patient fight for it. The insurance company has nothing to lose but an unprofitable customer.

Why shouldn’t the insurance company pay triple damages or something to that effect when a decision is reversed on appeal? That would reallocate the incentives in the right direction.

Well this was obvious. First take single-payer off the table. Then ditch the public option. Now get rid of the subsidies. Next they will kill the co-ops. But keep the mandates, because that benefits the corporations who are the actual constituents of Congress.

Because about three quarters of the states have enacted tort reform. And the rightwing whackjobs are crying for MORE tort reform. Legal accountability for a tort — a bad, harmful, or negligent practice or business decision — is what has been capped by the bamboozle the Republicans call “tort reform.” In reality, it holds insurance companies harmless for the kinds of decisions you describe.
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I’ve never understood why nobody proposes keeping insurance companies honest by penalizing them when they screw their customers.
Tort reform does just the opposite. The rightwing lunatics are screaming for MORE “tort reform.” They are screaming to hold insurance companies LESS honest by penalizing them LESS when they screw their customers.

Not to mention the absolute clusterf**k we’d have if we relied on the court system to save peoples’ lives. I doubt that every one of the thousands of sick people who’ve been denied care have the money to hire lawyers, or even the time left to them to waot through a year or two of appeals. Fat lot of good it would do anyone to “win” if they were already dead or more seriously ill than before because of lack of care.

Shopping for care isn’t the same as shopping for insurance.

Take this example – imagine you injured your wrist. You go to your doctor’s office, and the MD orders an MRI. The full bill is actually $2000, but under your insurance, you only pay $500. If you shopped for care, i.e., asked your MD for the most cose effective way of diagnosing your injury, perhaps the order would have been for an x-ray, which costs $500 of which you only pay $100. The MRI is hyper-accurate, but for your injury an x-ray is sufficient.

Insurance is how you pay for medical care, it’s not the cost of medical care.

There are non-profit insurance companies today, including Blue Cross plans, but that doesn’t mean they are cheaper. Salary & operational costs still apply and don’t vary much from for-profit companies, but non-profits are typically required by state regulation to not turn away high-risk customers in order to maintain their tax status. These customers are higher cost (adverse selection), so the premium savings due to overhead are lost by what is paid in legitimate claims. With a public option this likely wouldn’t change; even if you lower the cost of salaries, they are likely to be unionized with significant benefit costs.

Rustydog:

Unfortunately stuart, the “apples” cost the same. I did enjoy your attempt at trying to make it out to be something different however.

Sigh…at least you were entertained.

Your figures of 7000 dollars roughly for the cost of healthcare, the “$2.00 apple” is what we pay for healthcare, correct?

Correct.

Your figures of 3400 dollars roughly for the cost of healthcare in Japan, the “$1.00 apple”.

Again, correct.

But unfortunately you fail to disclose…

I believe that posting the figures on Japan’s percentage of government expenditure on health care (“in Japan, when they buy an apple per person, 81.3 cents of that $1 per apple per person is paid for by the government“) isn’t really a failure to disclose that information, but, lest you think it’s some nefarious rhetorical trick, here’s that figure again, from a different source:

http://tinyurl.com/yyhuov
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In 2005, Japan spent 8.2% of GDP on health care, or US$2,908 per capita. Of that, approximately 83% was government expenditure.

…so, as you were saying?

that subsizdized healthcare by governments, in specific the Japanese

…so stipulated, correct…

, allow Japanese insurance companies to charge $1.00 for their apples because of the subsidies.

No, that’s incorrect.
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That’s part of your problem, right there.
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The Japanese cost figure of $3400/ per person per year is not the price that health insurers charge. This number is the cost to the country per person, period. It is right there in black and white, Rustydog: “Total expenditure on health, Per capita US$ PPP” at the dataset you linked: http://stats.oecd.org/Index.aspx?DataSetCode=CSP2009
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It’s not that there’s some kind of hidden cost that the $3400 isn’t showing because government is picking up 80 percent of the tab, Rustydog –that’s the cost.
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You’re just reading the data wrong, I’m afraid. It’s a mistake you’ve made somehow.

We subsidize 100% less than the Japanese, right stuart?

Yes, that’s completely correct, Rustydog, but that fact doesn’t mean what you think it means.
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It doesn’t mean that the Japanese would really be paying $7800 per person if we took away their government subsidies…it means that the nation of Japan pays $3400 per person, roughly $2822 of which (83 percent) is government subsidized.
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It’s the whole cost…I don’t know how much more plainly I can put this…
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I think you got screwed up when you first misread the OECD data, and mistakenly said:

Japan spends 81.3% of GDP is allocated for “Health and “Health related” expenses. Whereas the US spends 45.2% of GDP on “Health” and “Health related” expenses.

Japan does not spend 80 percent of its wealth on health care –that would be insane.
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They spend a tiny fraction of GDP on their health care, as your OECD data set specifies:

OECD Factbook 2009: Economic, Environmental and Social Statistics – ISBN 92-64-05604-1 – © OECD 2009
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Public finance – Public expenditure – Health expenditure: As a percentage of GDP
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Japan: 2006: Total expenditure: 8.1 percent of GDP
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United States Total expenditure: 15.3 percent of GDP:

Got that? Japan spends 8.1 percent of the wealth their nation produces, we spend almost double that.
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Why, you intelligently ask?
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Because the cost of health care in the US is roughly double the cost in Japan, just like if apples cost $1 in Japan, but $2 here.
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Now that you have the correct information, Rustydog, you cannot possibly fail to understand the reality that we’re getting ripped off in this country, that there’s no hidden this or that because the government does this or that, it’s just that we pay too much for some inexplicable reason.
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Thanks for working through this with me, Rustydog, I hope that this helps.

The MRI is hyper-accurate, but for your injury an x-ray is sufficient.
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How could patients be reasonably expected to know this?
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Isn’t that the physician’s call?

Speaking of MRIs and the above discussion of HC costs in J-town, focusing on subsidies alone is insufficient to understanding why things work as they do here:
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“Well, in 2002, the government says that the MRIs, we are paying too much. So in order to be within the total budget, we will cut them by 35 percent,” Ikegami says.
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This is how Japan keeps cost so low. The Japanese Health Ministry tightly controls the price of health care down to the smallest detail. Every two years, the health care industry and the health ministry negotiate a fixed price for every procedure and every drug.
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That helps keep premiums to around $280 a month for the average Japanese family, a lot less than Americans pay. And Japan’s employers pick up at least half of that. If you lose your job, you keep your health insurance.”
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http://www.npr.org/templates/story/story.php?storyId=89626309
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Key to understanding this is the fact that J-ministry carries a great deal more power than an American equivalent. As many scholars say, it’s the bureaucracy here that carries the biggest stick. But as the above quote makes clear, the gov’t and the people share the same interests, keeping reasonable or reducing the costs of medical care. Whereas the US gov’t and the citizens it ostensibly represents…

The other thing I don’t understand why the Democrats allow the word “cost” to mean “cost to the federal government”. If we reduce medical spending from 16% of GDP to, say 13% of GDP by shifting costs *to* the government … that would be a very good thing. Our taxes would go up but we’d still have more money.

I don’t know why Obama isn’t making this case.

That is a good point. I’ve always worked for small companies so I get NO CHOICE AT ALL in my medical coverage.

I am hoping for a public option so I get a choice. In fact, if I could buy into Medicare I’d pay triple what I pay now, and be grateful for it.

stuart:
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I am wrong, and you are absolutely correct. Thank you for taking the time to explain in such great detail.
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I also found this article that you and others may find interesting.
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http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=13899647
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While I do abhor insurance companies, and I do believe we are being RIPPED off with our healthcare in the US, I believe the article above I cite does lend some reasoning as to why. This article I think points out all the reasons, and it is not just insurance alone.
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While it is in part, greedy insurance companies, it is also that we OVER use our healthcare for the most part. Other parts are individuals who do not pay their share of the cost, ie: going to the ER for treatment rather than paying insurance, and passing those costs off to those of us with insurance. So in essence, the high costs that I pay, in some respect I am paying also for someone else without insurance. Rather, the company I work for is paying it.
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But, I still go back to Tort reform. Opening up the insurance industry State by State so that people in California can buy insurance offered in Pennsylvania, and vice versa. I firmly believe competition will drive down the cost alone.
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Also in this article it describes how all of the consolidation of hospitals and treatment centers has occurred over the past few decades. I remember once upon a time when a small town near me had 3 hospitals all running and competing. Now, those three buildings are owned by one conglomerate. Perhaps it is time to do an AT&T breakup of big Hospitals.
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Just saying.

That’s because they have no choice: Obama has promised that the bill be deficit neutral, and the Dems are living under “pay-as-you-go” rules–which they reinstated after they retook control of Congress–requiring the bill to be deficit-neutral over 10 years, or five years if they used reconciliation. As I’ve written before, this doesn’t necessarily make for the best policy choices:.
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http://www.time.com/time/politics/article/0,8599,1894939,00.html

So the Democrats chose to have no choice?

AP: Um, yeah.

this atlantic piece is great on that score:
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http://www.theatlantic.com/doc/200909/health-care
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Society’s excess cost from health insurance’s administrative expense pales next to the damage caused by “moral hazard”—the tendency we all have to change our behavior, becoming spendthrifts and otherwise taking less care with our decisions, when someone else is covering the costs. Needless to say, much medical care is unavoidable; we don’t choose to become sick, nor do we seek more treatment than we think we need. Still, hospitals, drug companies, health insurers, and medical-device manufacturers now spend roughly $6 billion a year on advertising. If the demand for health care is purely a response to unavoidable medical need, why do these companies do so much advertising?

Every time you walk into a doctor’s office, it’s implicit that someone else will be paying most or all of your bill; for most of us, that means we give less attention to prices for medical services than we do to prices for anything else. Most physicians, meanwhile, benefit financially from ordering diagnostic tests, doing procedures, and scheduling follow-up appointments. Combine these two features of the system with a third—the informational advantage that extensive training has given physicians over their patients, and the authority that advantage confers—and you have a system where physicians can, to some extent, generate demand at will.

If the costs are shifted to the government then the government has to raise taxes. Then it’s revenue neutral.

The case has to be made that our taxes will be lower than our insurance premiums.

So the word “tax” is radioactive. Use the Republican’s trick and change the wording. It’s a fee … or a social insurance premium .. or …

KT: Thanks for responding to the commentariat as always. Have a great holiday.

Rustydog:
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I truly appreciate the time and effort you’ve put into this conversation of ours.
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The intellectual honesty you’ve shown could well be emulated by some others here with whom I am nominally politically or ideologically allied.
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Now I’ll go and read your linked article, since you’ve been good enough to add more factual information into the public debate.
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We live in a great country. It’s good to be an American –where we have the freedom to engage in arguments like this one without fear– isn’t it, Rustydog?

[...] is "affordable"? We we noted yesterday, that is a key question underpinning the entire health reform effort. Here, from yesterday's NYT, [...]