Health reform will save the insurance companies money...by not allowing them to deny coverage anymore?

Indeed, this is perhaps the most backhanded assist to the insurance industry I've seen yet from the Congressional Budget Office's scoring of the health care bill's costs:

"Compared with plans that would be available in the nongroup market under current law, nongroup policies under the proposal would have lower administrative costs, largely because of the new market rules," notes the CBO. "Administrative costs would be reduced by provisions that require some standardization of benefits -- for example, by limiting variation in the types of policies that could be offered and prohibiting 'riders' to insurance policies (which are amendments to a policy's terms, such as coverage exclusions for preexisting conditions); insurers incur administrative costs to implement those exclusions." (emphasis added)

So by not allowing the health insurers to deny coverage, either through rescission or through not insuring people with pre-existing conditions, the Senate health care reform bill will actually save the insurers money. This situation is similar to when the government increases tax rates, but in reverse; when tax rates are higher, more tax revenues will be received than before. But some of that additional revenue will inevitably be lost through individuals and firms hiring tax lawyers and specialists to find loopholes in the tax laws that they can exploit so as to pay less in taxes than they would otherwise. Thus, the effect of the tax increase on revenues is reduced.

In a similar vein, by disallowing rescission and non-coverage due to pre-existing conditions, the Senate bill will thereby remove the incentive of the insurers to save money through denying care. The denial of care costs the insurers money as they have employees devoted to analyzing health claims for discrepancies that can be used against the policyholders. Imagine if those employees could be employed in jobs where they actually helped make care more efficient, or user-friendly? This small item in the CBO report provides a window into the structurally anti-patient health care system we have in this country.

Kids, time to support your forebears

The original concept of this blog was to discuss the major political and social issues that face my generation, the generation which has been defined by researchers Morley Winograd and Mike Hais as the "Millenials," born between 1982 and 2003 (I don't quite fit in that category, being an '81 baby, but I'm definitely not a Gen-Xer!) While previous postings may have strayed from that theme somewhat, today is a different type of day.

Following yesterday's posting regarding health care reform, a timely article by Jim Angle at Fox News (no, not kidding) caught my eye. Probably the most underreported aspect of health care reform is that for a reform effort to be successful, it must rely in large part on the participation of the roughly 18 million young, healthy, uninsured people to buy into the health insurance market. As Angle reports

the health care reform bills in Congress require insurance companies to cover pre-existing conditions and prohibit them from charging sick people any more than others. That would force up insurance rates unless healthy young people buy insurance and in effect dilute the impact of older, less healthy people.

By having millions of previously uninsured, healthy, younger people start paying premiums while not using as much care as those who are sick or older, the insurance companies (and a public option, if it comes to fruition) would be able to mitigate the additional costs they will incur through expanding coverage.

For many years, health insurers have used certain methods to hold their costs down that were used at the expense of their customers, including denying coverage to people with "pre-existing conditions" ranging from mental illness and chronic conditions to the insurers denying coverage due to some rather more creative "conditions". Another tool of the insurance companies is called "rescission," a truly nefarious tactic of dropping a paying customer from their insurance plan when they need major or long-term treatment (think cancer, lupus, etc.) by claiming that the customer lied on their application form by not listing certain pre-existing conditions. What could those pre-existing conditions be? Some common ones are not listing occasional back pain or previous acne treatments in one's application for health insurance, although one would assume there would be some actual fraud caught once in a while...or is it? This from the Washington Post article above:

In the past 18 months, California's five largest insurers paid almost $19 million in fines for marooning policyholders who had fallen ill. That includes a $1 million fine against Health Net, which admitted offering bonuses to employees for finding reasons to cancel policies, according to company documents released in court. (emphasis added)

Rooting out pervasive fraud amongst the insurance customer base became such good business that a bonus structure was built on top of it for the most "effective" employees.

Now that the insurers will no longer be able to drop peoples' insurance coverage for pre-existing conditions and rescission will be largely curtailed under any sort of health care reform plan, the companies will need to find a new cost-saving mechanism, and it is the 18 million uninsured healthy young people they are targeting. It is the insurers who pushed hard for the universal mandate that every American must buy health insurance or be penalized; that provision ensures that the customer base will be swelled by the millions, and it also ensures that the low-cost segment of the population (younger folks) would be part of the system as well.

So why is it that young people are the ones being manipulated in this proposed new system? Naturally, it is the same as with any other political question; most younger people aren't paying attention, and furthermore, they aren't regular voters. When you have retirees threatening elected officials to "keep your government hands off my Medicare” those electeds sit up and take notice, since older folks vote in large numbers. On the other hand, federal legislators can then pull stunts like this with impunity:

"In most states, there actually isn't a limit on how much older people can be charged vs. younger people," said Anne Kim, director of Third Way Economics. "So in some states, older individuals pay six or seven times in premiums what younger people do."

But the Senate would take that down to 3-1. The House would make it 2-1.

That means older people will pay less but young people will pay more.

"If you limit the amount premiums can vary based on a person's age, that can result in premiums increasing by 50 or 60 percent for workers under the age of 30," said Robert Zirkelbach, a spokesman for America's Health Insurance Plans.

In fact, a study by the Urban Institute found that going to a 2-1 age rating would push up premium costs for the youngest adults by almost $1,100 to just under $3,000 dollars a year.

I have been without insurance a number of times in my life. I've see the premiums I could be paying under COBRA when I've left jobs that provided me with health care, and they were far beyond what I would consider affordable. It seems quite doubtful that many Americans in their 20s will be able to afford an extra $3,000 a year, but the politicians are betting that we aren't paying attention. And they are betting correctly.

Why isn't there an outcry from the younger generations that will have to pay taxes and/or premiums to support whatever reforms come out of Congress, successful or not, for the rest of their lives? Perhaps the intricacies of House/Senate committee deliberations aren't the most riveting dramas for young people to follow compared with the dramas unfolding on their Facebook pages, but this time it's personal. Perhaps there needs to be a youth lobbying organization, akin to the AARP for seniors; we have youth-oriented organizing groups like Rock the Vote, and Campus Progress (a group I must admit I'm not familiar with, but funded by the Center for American Progress, a liberal advocacy group) but seriously, we need LOBBYISTS! Until some serious campaign finance reform gets passed that creates public funding of elections, young people need to get into the Beltway and into the offices of members of Congress the same way the big players do, with issue advocacy and influence-peddling, combined with grassroots organizing. Lobbying is a four-letter word to me, but I see no other way to get our issues addressed fairly in a health care reform plan. The older generations and the insurance companies need us to keep health care affordable. Congress and the President need us to continue to vote for them. So why don't we use that leverage to get the changes we want and need in the reform bill? More to come on this later.

Reconciliation and Health Care Reform in the US Senate

The health care reform debate has taken up a lot of the country's attention over the last six months or so, and while it feels like every little step has been "momentous" (the votes of the individual committees such as Finance and the HELP committee in the Senate, the passing of the House health care reform bill a couple weekends ago) it is now, truly, game time.

The House of Representatives passed a bill that includes a bevy of essential health insurance reforms including requiring all who do not already have health insurance through either Medicare, Medicaid, employer-based health insurance, or individual private plans to purchase insurance. This is called an individual mandate, and it is a key element of reform, in that it is a central tenet of economics that in order to get people to do anything in large numbers, you must either offer negative incentives (the stick) or positive incentives (the carrot). So if all of those who are uninsured are going to be required to buy health insurance, how can we ensure that health insurance is affordable? Here is where the political/ideological sticking point that has held up reform for so long is located. One initial plan pushed by the progressive Democrats in Congress was for a single-payer plan, which is defined by Physicians for a National Health Program as "a system in which a single public or quasi-public agency organizes health financing, but delivery of care remains largely private." This maximizes the government's leverage in negotiating reimbursement rates with insurers so that efficiency is given priority and administrative costs are kept low (with executive compensation hopefully kept low too). Needless to say, the single-payer option was given a quick shove out the door by the Democratic leadership and those who receive large amounts of campaign contributions from the health care and health insurance industry.

So the compromise option for Democrats became what is called the "public option," perhaps you've heard of it? While there are many variations on what the public option would be, the main elements of the public option is to create a government-administered competitor to the health insurers, many of whom operate with virtual monopolies in many states. The public option would create a government-run insurance exchange where those who are currently uninsured (i.e. those who earn too much to qualify for Medicaid, those who are unable to purchase insurance currently due to "pre-existing conditions," or young people who are healthy) could purchase their newly-mandated insurance coverage. the most robust version (i.e. most cost-cutting version) would have what's called "Medicare plus 5," where reimbursement rates to health care providers would be set at Medicare rates plus 5% on top of that. The advantage of the public option compared to our current system is that it pools people together to have stronger leverage in negotiating rates with providers, as well as having lower administrative and executive compensation costs (compensation costs are significant, truly.) Without the Medicare plus-5 option, the public plan would be forced to negotiate its reimbursement rates separately from the much-larger Medicare pool, and therefore would not be able to save as much money, resulting in higher premiums for those under the program and more government subsidies to help people buy insurance, thus costing the taxpayers more money.

Sadly, yet predictably, the weaker public option passed the House, due to the entirely inconsistent arguments of "fiscally conservative" Democrats that the most robust public option would cost taxpayers too much money. To add insult to injury, a last-minute legislative offensive by anti-abortion Democrats inserted an abhorrent amendment adding major restrictions on abortion provisions to the health care bill, but that's a whole other topic. Suffice it to say that the amendment authored by Rep. Bart Stupak (D-MI) will hurt poor women the most, as if they don't have enough on their plates already.

So now it comes to the Senate, led by Harry Reid of Nevada, to debate health care reform. While the majority of Senate Democrats support the public option, there is a bloc of 4 who are holding things up by hemming an hawing about filibustering the health care bill if a public option is included. The filibuster (for those who haven't taken civics classes in a while) is a parliamentary tactic used by Senators to hold up votes on a bill, and indeed, all work in the Senate, indefinitely. The filibuster is a major obstacle to getting bills passed generally, and the way to end debate in the Senate is by 60 senators voting to invoke cloture of the debate. Despite the Democrats having 60 votes in the Senate (in truth it's 58 plus Joe Lieberman of Connecticut and Bernie Sanders of Vermont who normally caucus with the Democrats) the 4 holdouts mentioned before may not vote to pass healthcare unless the bill is heavily watered-down and/or the public option stripped out entirely. To prevent the from filibuster from killing the bill, Sen. Reid can use another parliamentary tactic to combat the filibuster called reconciliation, which is essentially to vote only on the parts of the bill that directly involve the federal budget. Reconciliation limits debate (i.e. filibustering is not allowed) and requires only 51 votes to pass, versus the 60 to end a filibuster. Using reconciliation would allow a much stronger bill to pass the Senate, as Sen. Reid can round up a group of strong Democrats to pass a robust public option without having to kowtow to the wishes of those senators who are bought and paid for by the insurance industry. The downside to reconciliation is that those parts of the bill that do not directly affect the budget could not be included in the health care bill and would need to be voted on separately, and that it would create an open war with the Republicans, who would accuse the Democrats and President Obama of violating their pledge of seeking greater bipartisanship.

That being said, we're at a major point of decision here; we've never been this close to comprehensive health care reform for all, and for the good of the country and our nation's future, if it takes reconciliation to pass the best bill possible, then I'm all for it. The Republicans have offered no serious reform bill of their own and have made it clear that they will stand united against anything that alters the status quo and/or is one of President Obama's legislative priorities. If the Democrats don't pass this bill, they're going to take massive losses in the 2010 elections, as former Gov. Howard Dean of Vermont predicted recently, and they will absolutely deserve those losses, as there is major support for health care reform in this country right now, with recent polls showing 72% of Americans supporting the public option. If we can't do it now, then when? Why must our health and well-being be subject to the profits of insurance companies? What is the price of inaction? With over 45 million uninsured in this country, it is huge.

Firedoglake, a premier progressive blog, has a petition set up urging Sen. Reid to pursue reconciliation to achieve the strongest bill possible for the good of us all. While my posting here elides over many of the nuances and difficulties inherent in trying to achieve major reform, and there's no guarantee that everything will get better once health care reform is passed, it's better to try and fail than wake up in the future and wonder what could have been. Please sign the petition, for the good of our country's fiscal future and future generations.

Another case for government funding science research

This morning I came across a brilliant Newsweek article about the National Ignition Facility (NIF) in Livermore, CA, part of the Lawrence Livermore National Laboratory. I had heard about the NIF through living and working in the Bay Area, but I didn't know that the point of it was to create renewable energy. This is a game-changing experiment they're carrying out, in that if they're successful, and the model of the NIF can be scaled-up to suit commercial ventures, the utility companies could adopt this around the country to provide clean energy.

I will have to explore the topic further another time, but the possibilities of powering the fleet of battery-electric vehicles that will, in all likelihood, be transporting us in the near future, are quite exciting. Here's the key element of this project, detailed with somewhat technical language:

What Moses is talking about is controlled nuclear fusion—fusing nuclei rather than splitting a nucleus, as happens in ordinary nuclear-fission power plants. In a fission reaction, the nucleus of a uranium atom is split into two smaller atoms, releasing energy in the form of heat. The heat is used to make steam, which drives a turbine and generates electricity. In fusion energy, the second half of this process (heat makes steam makes electricity) remains the same. But instead of splitting the nucleus of an atom, you're trying to force a deuterium nucleus to merge, or fuse, with a tritium nucleus. When that happens, you produce helium and throw off energy.

The one concern of mine that they don't cover in this article is the steam-making process; where is the water to make that steam supposed to come from? The East Bay, where Livermore is located, is not exactly inundated with wellsprings in every backyard. I would hope that there is a mechanism for recapturing the steam and condensing it back into a closed-loop system, but I suppose that will take further research on my part.

In any case, if this works, it will truly change the possibilities for the future of energy. Rather than looking to manipulate or capture the "macro" elements of nature (sunlight, wind, wave energy, etc.) here we are looking to the "micro" elements to provide power (deuterium and tritium, in this case). Fascinating; I have my fingers crossed that it all works out for Mr. Moses and his team.

Has it really been a year (or 9 1/2 months?)

Because yesterday was the anniversary of President Obama's stunning victory over Senator McCain there was a lot of talk on the internet political sites attempting to sum up the state of affairs a year later. How is Obama doing? Has he kept his promises? How disappointed or thrilled in his administration are we? Chris Weigant provides a long, thoughtful article reflecting on the 9 1/2 months of Obama's presidency (remember that there was a 2 1/2 month time after the election in which Obama was not the president and Bush was still haunting dark corners of the West Wing, opening public lands for oil drilling against the popular will, extending the one-finger salute to all who care about unmolested natural spaces). At base, Weigant's argument comes down to the fact that

it really all boils down to is one of trust. Do you still trust President Obama to do the right thing in most situations? I did back when I voted for him, and I have to admit that I still do. I have reservations, I'm a bit wary at times over specific actions Obama takes, and strategies he employs (or doesn't employ); but that core of trust in Obama -- as a politician, and with eyes wide open on my part -- still exists, I have to say.

Yes Obama has let me down at times, pushing to reauthorize the PATRIOT Act's surveillance techniques, making Bagram Air Force Base in Afghanistan the new Guantanamo Bay (indefinite detentions and all), and attempting to water down health care reform to gain a sheen of "bipartisanship" despite the fact that Republicans have never attempted to negotiate in good faith. But do I still trust the man? Yes, with a heightened awareness that I should not project my dreams of ideal policy proposals onto his legislative stances.

Moreover, I have to applaud him heartily for some of the work he has done, as Weigant notes:

The second thing that Obama is trying to change is the 24-hour-news-cycle, short-sighted nature of Washington thinking (or what passes for "thinking" in the punditocracy). The jury is still largely out on this one, I have to admit. The most impressive thing about Obama, which I have noticed over and over again in the past nine months or so, is that he absolutely refuses to be drawn in to trivial subjects -- which, it must be pointed out, cause vapors, fainting, shrieking, and even (at times) heads exploding among the cable news channels. Put succinctly: Obama takes the long view. Always. Even when all around him are taking a very, very short view -- for the sake of puffing some stupid playground battle among politicians into some improved cable chat show ratings. Obama, to a very large extent, just doesn't play that game. He simply refuses to, over and over again. The only time he's really slipped up on this front was the whole "beer summit" nonsense, for which he can be forgiven (seeing as how a friend of his was involved).

The media is still the lens through which many Americans view much of the world (even in the internet age) and combating the lies that can be propagated through the television and print media, not to mention the internet, through aggressive push-back campaigns from the highest levels of the Obama Administration may offend some as overreaching on the President's part. But when you have an entire network devoted to attacking your policies and character and then calling it "news" what is one to do? Sit back and take it? Please watch this instantly-classic Jon Stewart clip to see how the Fox operation works:

Ultimately, I'm glad that Obama's in the White House and not McCain-Palin, or anyone else, for that matter. I can't think of a better politician to have at the helm, even with Obama's failings on some very important issues. I can't imagine another human being keeping his/her cool so consistently despite the multitude of problems to be confronted (have you noticed his increasingly gray hair? Although perhaps it's just natural aging...) My hope still endures for the future of our country, so here's to hoping things take a turn for the collective better.