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May 29, 2007

A Final Point

The Obama folks called back to further clarify their position on the Health Insurance Exchange Markets. Larger businesses could, if they chose, put their employees into the exchange market, at which point the employees would be able to pick from the menu of private and public options offered therein. There wouldn't be incentives to do this, but if a company so chose, they could sign up with the exchange market of a risk-adjusted basis (risk-adjusted because you don't just want companies with older, sicker workforces taking advantage of the system). That's significantly better than barring larger companies from using the public options, though somewhat less audacious than the Edwards' plan, which actually encourages companies to switch over to the public option.

May 29, 2007 | Permalink

Comments

I don't know... sounds like a lot of pushing people out of a plan they know and are comfortable with for confusion and possibly less coverage. If companies are actually biting at this option - and that, unfortunately, seems many steps removed from where we are considering this, because I think this proposal is all pie in the sky - I'd wonder if there really is an incentive here, one that would hurt workers.

Overall, though, I think the problem with Obama's proposal is one that's been going on for a while with his campiagn - in the vague abstract, he seems inpiring; in actual proposals, he seems overly cautious, playing very safe politics. Somehow, and I'm not saying this well, I'd feel better were Obama's rhetoric more cautious/realistic, and his proposals were more brave and out there. That place seems better for a bold newcomer, whereas where he is now seems like a neophyte campaigner whose promise is bigger than his reality... which makes it hard to feel enthusiastic about him. I'm not decided yet, but this proposal didn't move the meter for me.

Posted by: weboy | May 29, 2007 5:53:46 PM

Good info, Ezra.

Posted by: Sanpete | May 29, 2007 6:05:51 PM

I never know what I am supposed to get out of the proposals of the various candidates.

In the end, Presidents propose and Congress disposes. Can this proposal be seen as anything, but a campaign tactic?

Whoever is elected President in 2008, that person will be expected to get us out of Iraq, do something about health care, and reverse a whole bunch of Republican policies.

Am I suppose to divine subtle differences between the candidates from subtle differences in their health care plans? Gain confidence that one will be more committed or more effective than another? Or, are the candidates signalling other players? Is Obama saying, "health insurers should fear Edwards, not me"?

Help me out here.

Posted by: Bruce Wilder | May 29, 2007 6:15:56 PM

"less audacious than the Edwards' plan, which actually encourages companies to switch over to the public option."

Barack Obama: The Audacity of Centrism.

Posted by: Petey | May 29, 2007 6:56:46 PM

Ezra, good job clarifying a number of key points.

Nice work.

Posted by: wisewon | May 29, 2007 7:04:57 PM

Bruce,

I actually think this tells us a lot about Obama. His campaign rhetoric is focused on less polarization, finding common ground, etc.-- which without details, could be a good or bad thing, depending on the implementation.

I would suggest that after reading through his first substantive proposal-- its a bad thing. Obama's approach to health care demonstrates considerable political naivete.

What is the aspiration, the vision, according to his speech today? Universal health care, and more affordable care than today.

His proposal, however, seeks the common ground to propose a "feasible pla" rather than seek his vision-- build on the existing system, no government mandate for individuals to have coverage but incentives instead, etc. He implictly acknowledges the power of special interests by ensuring sufficient meat for them-- insurance companies (remain entrenched), physicians (quality improvements based on "physician-driven outcomes"), pharma (standard Dem boilerplate ideas). Where Obama fails is in not fully appreciating that all consituents are not going to play nice-- if this much has been conceded right at the start, the final bill will be a far cry from the vision that has captured the imagination of Obama supporters.

This, in a nutshell, is my concern with Obama. If everone was playing the game of politics fairly-- seek the common ground for the good of America-- his approach to politics and as President would be great. However, as we've seen from the Republican party over the last 15 years and have seen from DC special interests even longer, that isn't the game they play.

Posted by: wisewon | May 29, 2007 7:21:16 PM

I wonder if I should even get emotionally involved in the race for the Dem. candidate, since Oregon is at the rear of a chain of states such that my vote won't contribute much if anything to whether Hillary, Edwards or Obama is chosen.

But, health care is a major interest to me, and so I'll pretend I'm an Iowan caucaser or CA voter and say that Obama just took himself out of the running on this issue as viewed by a progressive. Edwards now has my attention and will get my bucks.

In the world before the rightward shift of the last 30 years, Obama's plan wouldn't qualify as a Rockefeller Republican plan because it is too cautious and will likely result in a ghetto of poor risks in the public pool - with resulting high premiums that keep even more people from insurance coverage and will make the program a huge target of wasted money by the right if enacted.

It's a shame, because I don't sense that Obama is this timid in his 'real' beliefs. The Dem. consultants on his team will therefore bear my anger as a proxy - but then I remember that he picked them.

So much for his different candidacy. Same old, same old.

Posted by: JimPortlandOR | May 29, 2007 10:29:27 PM

This sounds better than the status quo but the segmentation it creates in the insurance market is absolutely baffling from a policy perspective, and can only possibly be explained by political considerations. First, there is the inscrutable decision not to merge with medicare the buy-in program available to the uninsured and small businesses with medicare/HCFA. I can understand, I guess, a desire to preserve a different package available only to seniors, but why not have the single (or at least the largest) agency acting as a public insurer at least administer the program? I can understand this only as an incredibly nimble or overthought dog whistle to the right -- as if the right had decided that expansion of medicare would be equated with single payer. Its the opposite of Richardson's plan. Second, the plan preserves some barrier between the regulated insurance market and the public plan. This basic differentiation tracks Edwards plan, and there is, I guess something to be said for allowing the systems to compete. I dont see any reason to restrict access to the public plan, which exaggerates the bureaucratic segmentation of Obama's plan, and minimizes the sense of competition between public and private models. Third, the plan also preserves a distinction between the well-regulated insurance market, to which large businesses may buy in, and the wild and wooly private sector, which is restricted only by the long-overdue ban on the use of pre-existing conditions.
So we have got, in effect, five systems under Obama:
1. The British analog, the VA and other government providers
2. The Canadian analog -- HCFA/Medicare/Medicaid
3. A second indistinct Canadian analog managed by another agency (for no reason) -- the new public system to which the uninsured and small businesses may apply
4. A system of managed competition that employers could voluntarily join, with robust community rating practices, and
5. The wild wild west, where anything goes except pre-existing limitations.
The segmentation is not necesaarily a bad thing, but it is a puzzling things. I suppose you could argue that, again, that it allows us to test different models in the American context. Personally, I think the world has given us enough diversity in health care finance to allow us to rationally evaluate our options. I see more politics than policy here. Which isnt to say that it wouldn't be an improvement...

Posted by: RW | May 30, 2007 12:30:20 AM

And another thing:
You can tell where a politician's loyalties lie by looking at who he or she lies to -- unless the base is enough to win an election (or the politician thinks it is) rhetoric is directed outside the natural constituency, while policy is directed at the natural constituency. What troubles me most about Obama's plan is not that it doesn't go the full way on universal health insurance, a uniform national system, or mandatory community rating, its that he said it was universal:

Democrat Barack Obama is offering a sweeping plan that would provide every citizen a means to have health coverage and calls on government, businesses and consumers to share the costs of the program.

Obama said his plan could save the average consumer $2,500 a year and bring health care to all.

"The time has come for universal, affordable health care in America," Obama said in remarks prepared for delivery Tuesday in Iowa City.

He bills it as more favorable to the left than it really is. That tells me his loyalty is to the center.

Posted by: RW | May 30, 2007 12:42:04 AM

will likely result in a ghetto of poor risks in the public pool

How? It forbids cherry-picking.

He bills it as more favorable to the left than it really is. That tells me his loyalty is to the center.

Curious theory. Hew promises universal access to coverage. He just isn't going to force people to get it.

Posted by: Sanpete | May 30, 2007 1:47:29 AM

Larger businesses could...put their employees into the exchange market...There wouldn't be incentives to do this, but if a company so chose, they could sign up with the exchange market of a risk-adjusted basis....

My sister is COO of a large non-profit and she has invested huge amounts of time researching what health care plan is best for her employees, the relative costs, the menu of options, etcetera. All of this time has nothing to do with the mission of the non-profit and is solely an adminstrative task that she chooses to pursue in order to attract better employees. She's rather NOT deal with health care insurance but she's forced to as a responsible employer. If she had an option not to run her own program and participate in the HIEM I think she and many other employers would take it without any financial incentive. The incentive is a massive time savings on the part of HR departments across America.

Isn't the 'incentive' in Obama's plan that employers like my sister's non-profit could just kick their employees into the pool (if they choose) and be fairly confident that the employees would get solid coverage at a fair cost. If I was a small employer I'd rather focus on my core business of manufacturing product X or providing service Y rather than researching health care plans for my employee.

I guess what I'm saying is why are fiscal incentives necessary to push people into the insurance pool? I think lots of good small businesses would be happy to kick their employees into the Health Insurance Exchange Market and just pay the fee rather than administer their own health care program. I think the mere existence of a goverment regulated HIEM is incentive enough to for small employers to sign up with the exchange rather than administer their own program.

Posted by: joejoejoe | May 30, 2007 1:53:55 AM

What I think people are skipping over is there can be benefits to have private policies, but efficiency is going to be one of them. I remember reading an article about the differences in medical systems between the US and the other industrialized nations and one point brought up was that in the Netherlands, the standard is four patients to a hospital room. The article quotes someone saying that middle class Americans complain loudly about even sharing a room. So, I could see having a public health care policy that provides good health care, but in a bare bones, cost effective way - 4 patients to a room, waiting lists for many procedures, mail order prescriptions for maintenance meds, etc. Then private health care policies would provide more user friendly services at a premium price. Companies would probably be willing to pay more than the public policy as a recruiting tool.

To me, that's the only way having public and private medical insurance in competition will work. If the government provides the same coverage as a private insurer, it will be at a lower price because the private company has to make a profit and the government doesn't.

Posted by: Dennis_D | May 30, 2007 11:12:41 AM

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Posted by: judy | Oct 6, 2007 4:44:30 AM

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