The big controversy today is whether or not the Baucus Bill will actually be a solution to higher health insurance premiums. Politicians claim the Price Waterhouse Coopers report commissioned by America’s Health Insurance Plans (AHIP) is alarmist and self-serving in stating that insurance premiums will be higher in the proposed health insurance exchanges. However, it seems this report confirms the Congressional Budget Office’s letter to Senator Max Baucus dated September 22, 2009. It explicitly states on page 6 “…premiums in the new exchanges would tend to be higher than the average premiums in the current-law individual market – again with all other factors held equal – because the new policies would have to cover pre-existing medical conditions and could not deny coverage to people with high expected cost of healthcare. (CBO has not analyzed the magnitude of that effect.)…People with low expected costs for healthcare, however, would generally pay higher premiums.” The CBO admits it has not analyzed the effect of the no-prexisting condition policy mandate. And, it seems the CBO agrees with the PWC report.
The plan is written to fail because healthy small employer groups and individuals will go to the private sector for insurance. When they are ill, they will switch to a relatively “lower” cost co-op plan. Since pre-existing condition exclusions are outlawed, this co-op will be a magnet for the high-risk individuals or employer groups, either because of sickness or age. Since there is not a mandate for continuous coverage to be maintained, some individuals may choose to “save” money, by paying the federal fine and purchasing coverage only when they are ill. From an underwriting standpoint, there is nothing to protect the financial integrity of the Baucus plan.
Subscribe to:
Post Comments (Atom)
I wonder if they'll get to a point where a "compromise bill" is drafted at 3:00 p.m. on Thursday, and it must pass prior to the weekend recess? I'm growing concerned of the recent trend of massive omnibus bills that nobody has a chance to read. The devil is in the details. The process is very un-republic and un-democratic, as it cheats the voters from having adequate time to provide input to their elected representatives. It cheats the media from performing their legitimate role of informing the public. The making of laws, should be a long, hard process. We shouldn’t ever use “pending doom” arguments to circumvent debate (which is why I object to calls from our professional organizations for swift enactment).
ReplyDelete