- A health insurance exchange so that Americans can select from comparable health care plans from private providers
- A public option, based on Medicare, so that private providers have to compete against a plan that does not have an incentive to reduce its "medical loss ratio"
- Subsidies for people to buy insurance, for those with incomes up to 400 percent of the federal poverty level
- Regulation that ensures people can get coverage even if they have "preexisting conditions" like pregnancy.
- "Keep your government hands off my Medicare" (note: government runs Medicare)
- It will "pull the plug on Grandma" (referencing made-up death panels that are in fact end-of-life counseling provisions introduced by a Republican)
- "Socialized medicine" (note: not only inaccurate, but deliberately glosses over that the *American* VA medical system is...socialized medicine and that Medicare is socialized insurance. Oh, and where do you think Social Security comes from?)
- "You'll lose your private insurance, even if you don't want to." (note: a lie)
But maybe I expect too much from a party represented by hysterical talk radio men and the Alaskan coming of McCarthy...
2 comments:
Funny, I thought the reincarnation of McCarthy was the MN 6th District Congresswoman...
Generally, I appreciate your point regarding the exaggerated claims made in opposition to the reform proposals.
I have comments regarding two specific points you raise.
Re: "'You'll lose you're private insurance, even if you don't want to.' (note: a lie)"
Obama says you get to keep your health care, Critics say you'll lose it. I think the truth is probably something in between.
You can't require that insurance companies cover people with pre-existing conditions unless you also require everyone to purchase insurance. If you require everyone to purchase insurance (or pay a penalty) some employers will decide not to provider insurance to their employees, even though the employees are perfectly happy with their coverage.
Re: Medical Loss Ratios
If the public option is truly "competing" against the private insurers (i.e. it is self-supporting with the same premiums and low-income subsidies as the private insurers, and not simply making up losses by sucking money out of the treasury), it absolutely will have to keep its "Medical Loss Ratio" low.
The term "Medical Loss Ratio" has a specific meaning in the insurance industry, and it is used universally. In particular, in order to stay out of bankruptcy, a public option would also need to keep down its Medical Loss Ratio. Colloquially, the term makes more sense for, say, fire insurance than for health insurance, but the meaning is the same.
The way the price for insurance is determined is to (1) Estimate the cost of future benefits and (2) Add margins for administrative costs and (in the case of for-profit insurance) profit. The sum of these three pieces (benefits, admin, and profit) is the amount the insurance company collects in premium. This premium amount will not change until the next renewal date, so if "losses" (whether payment for property losses due to fire or payment for medical bills) are higher than expected, then the loss ratio is higher.
If a public option is competing against the private plans, the public plan would set rates in the same way, except the profit margin would be 0%. If the loss ratio (medical bill) is higher than expected, the public option will lose money. Presumably the "admin" piece includes a provision for a rainy day fund, but if the loss ratio is high enough, this rainy day fund could be exhausted, and the public option could become bankrupt.
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