Senate committee approves health care plan

[crazy canuck]

But if you mandate coverage, you can have real reform. This bill seems to have that, only it also seems to have watered down the penalties to the point they aren't effective (or so says the insurance lobby).

Mandating tax payor subsidized coverage without doing anything to control cost is a recipe for huge dificits - even by American standards.

Mandating tax payers buy coverage that they can afford is reform that doesn't add to deficits.

Supplying subsidies to get health insurance to those that can't afford it may marginally add to government debt as more people get access to primary care, but won't blow up deficits because those people are already being treated for illnesses in emergency rooms with bills being footed largely by state and local governments.

In the short run you might be right, although given the cost of this program you may have some rose coloured glasses on.  But assuming you are right in the short term, what happens when the insurance companies start racheting up rates to keep their profit margins?  Is the government going to sit back and let even more people become uninsured because they cant afford the higher premiums or is the government going to start paying even more toward the bottom line of the insurance companies?

[crazy canuck]

Also, I like that everything is historic now. Such heady days, indeed.

I had the same reaction when I read the rationale for switching her vote.

[Darth Wagtaros]

Why? In Canada we have Gov. healthcare (which I pay the exact same rate as anyone else in my province (I have to pay or pay US prices for shit) making far more than me. I could have all the Private Insurance I wanted to. (I don't because I'm poor) Big Insurance does just fine not competing with gov. healthcare but complimenting it in Canada. But I gues that could never work in the US because...?

You both are saying the same thing.  Niche market private health insurance.

Quick poll: do you say "neesh" or "nitch?"

Nitch.

[DontSayBanana]

Other: nish.

[alfred russel]

In the short run you might be right, although given the cost of this program you may have some rose coloured glasses on.  But assuming you are right in the short term, what happens when the insurance companies start racheting up rates to keep their profit margins?  Is the government going to sit back and let even more people become uninsured because they cant afford the higher premiums or is the government going to start paying even more toward the bottom line of the insurance companies?

There is the problem of soaring health care costs--that isn't solved by the types of reform we are discussing and is a big problem--but it is also a problem somewhat independent of insurance companies.

I think there are two reasons that what you are worried about won't happen:
a) insurance companies are regulated, so they can't set prices as they please even if they could get away with it competitively, and
b) insurance regulations are state matters in the US, which as you can imagine makes it incredibly byzantine. Each state not only has its own regulators, but also its own reporting requirements, reserve requirements, asset requirements, and often their own twists on accounting standards (and often the same state will have different twists for accounting rules depending on the type of insurance). This is a significant barrier to entry, and many insurance companies are not in all states reducing competition and logically increasing premiums. The proposed bill apparently takes a step toward reducing this situation.

[The Minsky Moment]

What would be even more illustrative is a list of industry profitability by sector from last quarter.

Kinda weird that your first instinct would be to look up the profit margin of a single company.

My first instinct is to look at facts that can easily be verified, instead of a chart with no citation or explanation of what it is measuring and how it is measured.

My second instinct would be to look for something reporting multi-year or at least one years data rather than a single quarter. 

[Razgovory]

What would be even more illustrative is a list of industry profitability by sector from last quarter.

Kinda weird that your first instinct would be to look up the profit margin of a single company.

My first instinct is to look at facts that can easily be verified, instead of a chart with no citation or explanation of what it is measuring and how it is measured.

My second instinct would be to look for something reporting multi-year or at least one years data rather than a single quarter.

Your instincts would make you a poor Republican.

[Agelastus]

Other: nish.

Seconded.

[KRonn]

The Obama admin is going after the insurance companies with threats of legislation because they had the temerity to put out their own studies that disagreed with the govt estimates on the health care bills. Is this Chicago politics at its worst? That is actually kind of scary power to be wielding by the admin? Punitive legislation, if it comes to that, or at least threats of it. Seems no one can criticize this admin without becoming a public enemy. What a bunch of whiners this admin is. Apparently, even The Nation, a very left magazine, has been critical of Obama's handlers for allowing him to become a whiner in chief.

[BuddhaRhubarb]

Why? In Canada we have Gov. healthcare (which I pay the exact same rate as anyone else in my province (I have to pay or pay US prices for shit) making far more than me. I could have all the Private Insurance I wanted to. (I don't because I'm poor) Big Insurance does just fine not competing with gov. healthcare but complimenting it in Canada. But I gues that could never work in the US because...?

You both are saying the same thing.  Niche market private health insurance.

Quick poll: do you say "neesh" or "nitch?"

Neesh. most Canadians I believe say neesh, or the other mentioned "nish". influence.

[jimmy olsen]

The Obama admin is going after the insurance companies with threats of legislation because they had the temerity to put out their own studies that disagreed with the govt estimates on the health care bills. Is this Chicago politics at its worst? That is actually kind of scary power to be wielding by the admin? Punitive legislation, if it comes to that, or at least threats of it. Seems no one can criticize this admin without becoming a public enemy. What a bunch of whiners this admin is. Apparently, even The Nation, a very left magazine, has been critical of Obama's handlers for allowing him to become a whiner in chief.

Link?

[citizen k]

The Obama admin is going after the insurance companies with threats of legislation because they had the temerity to put out their own studies that disagreed with the govt estimates on the health care bills. Is this Chicago politics at its worst? That is actually kind of scary power to be wielding by the admin? Punitive legislation, if it comes to that, or at least threats of it. Seems no one can criticize this admin without becoming a public enemy. What a bunch of whiners this admin is. Apparently, even The Nation, a very left magazine, has been critical of Obama's handlers for allowing him to become a whiner in chief.

Link?

http://www.nydailynews.com/blogs/dc/2009/10/senate-takes-aim-at-insurance.html

Senate Takes Aim At Insurance 'Monopoly'

By Michael McAuliff

Democrats declared war on the health insurance industry this morning, opening hearings on a bill that would strip its anti-trust exemption.

"It's something that should have been done a long time ago," said Majority Leader Harry Reid, who argued that insurance companies have gotten so large, "they dominate entire regions of the country."

"They make more money than any business in America today," he said. "What a sweet deal they have."

The entire insurance industry got the exemption in 1945's McCarran-Ferguson Act on the grounds that it was not engaged in interstate commerce, and, federal anti-trust probes would interfere with state rules.

Unlike other industries, insurance companies are allowed to discuss pricing, territories and other practices that would be considered collusion if not for the exemption.

The hearing comes just three days after a health insurance industry trade group warned its members would raise rates even higher than the 6% a year they are expected to go up already if the Senate Finance committee bill passed yesterday becomes law.

Many lawmakers and the White House saw that as a threat.

Although today's hearing had been scheduled before, lawmakers used it as a chance to fire back, arguing that ending the exemption would immediately open up competition, and curb rate-setting collusion.

New York Sen. Chuck Schumer cited Justice Department statistics that found 94% of the nation's insurance markets are "highly concentrated" and that in nearly 40 states, two firms control over half the market.

"That's not acceptable," Schumer said, adding that the anti-trust bill should be added to health care legislation. "We need more competition."

A representative of the insurance industry argued competitors need to be able to share data because they are pricing things that have not happened, and it's extremely difficult to predict costs and losses.

The senators were skeptical, however, and pointed to testimony by Assistant Attorney General Christine Varney, who argued insurers could still share such "pro-competitive" data.

She suggested strongly the Obama administration favors yanking the anti-trust exemption.

"Repealing the McCarran-Ferguson Act would allow competition to have a greater role in reforming health and medical malpractice insurance markets than would otherwise be the case," she said.

The insurance industry is taking none of this lying down, and today is firing back with a tough ad in several swing states, charging that the bill passed by the Senate Finance Committee yesterday will hurt seniors.

"Most people agree we need to reform health care, but is it right to ask 10 million seniors on Medicare Advantage for more than their fair share?" the spot says. "Congress has proposed more than $100 billion in cuts to Medicare Advantage."

It advises people to call their senators and complain.

One witness in the hearing, Robert Hunter, the Consumer Federation of America's insurance director, noted that since the industry can collude on prices, it could simply pass along the cost of that ad to consumers.

http://www.mainjustice.com/2009/10/14/antitrust-division-wades-into-health-care-battle/

Antitrust Division Wades Into Health Care Battle

Posted By Steve Bagley On October 14, 2009

Democrats have opened a new front on the health care reform battle: antitrust exemptions for insurance companies.

The Senate Judiciary Committee on Wednesday held a hearing on a measure to repeal the 1946 McCarran-Ferguson Act, which put regulation of  the health insurance industry in the hands of individual states.

Democrats complain that lax oversight has allowed the insurers to concentrate their market power. They argue that more competition in the health-insurance market would lower prices for consumers.

Now, the Department of Justice has thrown its support behind a bill sponsored by the Sen. Patrick Leahy (D-Vt.) to repeal the 1945 antitrust exemptions.

Assistant Attorney General for the Antitrust Division Christine Varney at the hearing called the McCarran-Ferguson act a product of a different age in American business. The 1945 legislation reversed a 1944 Supreme Court decision that said health insurance should be regulated on the federal level.

McCarran-Ferguson created a broad antitrust exemption for insurance companies regulated by state law, rendering them immune from challenge as long as they're not engaged in an activity deemed "boycott, coercion, or intimidation," Varney said.

The justifications that led to McCarran-Ferguson's passage "are no longer valid today," she said. "It's no longer necessary."

She added: "The antitrust laws reflect our society's belief that competition enhances consumer welfare and promotes our economic and political freedoms," Varney said.

"Nobody's above the law," Leahy said. "I don't know anyone who can say with a straight face that they shouldn't be subject to the same antitrust laws."

Sen. Orrin Hatch (R-Utah) argued against making insurance agencies subject to antitrust laws, saying he saw "little evidence to justify a complete repeal."

Democrats, by contrast, saw much evidence to repeal McCarran-Ferguson.

Sen. Dick Durbin (D-Ill.) said, Monday's threats by insurance companies that if health reform passed, insurance rates would go up, was evidence that health insurance companies could do just that. "When insurance agencies said on Monday night 'we're raising rates, they're going up," Durbin said, "they could get together, and fix prices; they wouldn't be able to do that if they were subject to prosecution, would they?"

"They would not," Varney responded.

"The health insurance agencies have thrown down the gauntlet," Durbin replied.

Democrats say the the health insurance markets are generally dominated by one or two providers, sometimes with a single insurance provider controlling up to 90 percent of the market. With these kinds of monopolies or duopolies, the Democrats said, the insurance companies have been free to charge whatever they could.

Sen. Dianne Feinstein (D-Calif.) said: "Healthcare and medical insurance should be nonprofits." She said insurers' profits rose 428 percent from 2000 to 2007, while "premiums have escalated dramatically."She called Leahy's bill "one small step to a very loud signal" to the insurance companies.

Sens. Sheldon Whitehouse (D-R.I.) and Al Franken (D-Minn.) painted a picture of the kind of market domination insurance agencies have. Whitehouse noted that in 39 states, two health insurers cover 50 percent of the market, and in nine states, only one company covers 75 percent of the market.

In Maine, Franken noted, an insurance company took the unprecedented move of suing a state to guarantee they make enough money. Anthem Blue Cross/Blue Shield sued the state, in what Franken called a "brazen" move, to guarantee a 3 percent profit margin that would raise insurance costs on subscribers 18.5 percent.

Hatch was not the only one to argue for keeping McCarran-Ferguson in place. Panelist Lawrence Powell, who represented the Physician Insurers of Association of America, said repealing the law would make little difference, leading to at best, the "status quo."

"Market concentration is not always indicative of competition," Powell said. "Another company controls 10 percent."

[garbon]

I can't wait until they fuck up my healthcare!

[DontSayBanana]

Wait, wait, wait.  Repealing the antitrust exemption makes sense; why didn't they start with this in the first place?  Not enough glitz, glamor, and HOPE?

[DGuller]

Ugh, Robert Hunter.  There is a name I could go without seeing.  The guy should really have his actuarial designation stripped for professional malpractice.