So there’s been a lot of debate over the future of healthcare here in the US, the only Western power without a real, universal healthcare system.

I remember, it must be like five years ago now, when I took a class on healthcare systems from a global perspective, how much the US stood out compared to the other post-industrial countries.  While there are, as has been noted, many different ways that universal health care is delivered, there is simply no other wealthy developed nation that allows a large portion of its population to go without care, and that was shocking.

Then Sicko came out a few years later, and Michael Moore managed to brilliantly humanize this awful situation.  His stunt taking WTC survivors to Cuba for decent care and affordable drugs was amazing.  It’s also not, despite what the right wing says, a complete propaganda fabrication; Cuba’s healthcare is amongst the best outside of the post-industrial set, and their health outcomes, as we covered in that class, are often better than ours, despite crushing poverty.

(In fact, Cuba trains so many apparently excellent doctors they export them for positive press and exchange medical knowledge for resources and political influence.  So yes, their healthcare is politicized — but it’s also very real)

What the Obama administration seems to be settling on is a public-private hybrid model, an idea that, broadly speaking, has been done elsewhere… but I’m just not sure it will work here.  The American insurers, as seen in Sicko, aren’t just capitalists, they’re literally mass murderers, who have profited billions from the death of perhaps hundreds of thousands of Americans.

It has been estimated that 18k people die for lack of coverage in the United States a year.

That study was done in 2002, so we can assume that, since then, over a hundred thousand Americans have died.  For capitalism.  Hooray.

So I’m really not optimistic about how well the private insurers will behave with competition, unless they are outright viciously restrained by the feds.  If they are restrained, they’ll lose; Medicare has 2-3% overhead, Private Insurers are about ten times that wasteful.   The Public Plan being discussed would have reasonable premiums, protection from abuse, be transferrable if you lose jobs, change jobs, move from state to state, etc.  It would be stable, it would be predictable.  It would have no pre-existing conditions, no hoard of researchers looking to drop you if you ever get ill (a practise called rescission, which in a civilized country would be referred to, in many cases, as ‘murder’)

(see a great article here on the practice and how they use it to deny care to people who paid their premiums in good faith)

The official Dem party line is that you will be able to keep the private insurance you have, if you want, under this system.  The reality is that, if properly and fairly constructed, there is no earthly way this system can persist.  Unless hobbled, a public option will devour the market.  If it’s hobbled, I fail to see the point.

(For example, in Germany, where you are free to buy private or public, something like 12.5% of the population opts for private.  Ergo, 87.5% of the market belongs to a ‘public option’. )

Still, the current idea, floating around in the HELP bill, is not exactly perfect.   It would create state-level (wtf) ‘exchanges’ where anyone could offer plans that meet certain standards, the appealing stuff mentioned above, no pre-existing conditions, guarantees on care, price, etc.  They seem to want to cap the amount you pay at 12.5% of your income; if you get insurance from your large employer and it’s costlier than that, or you don’t get any at all, you can go to the exchange and get real care. (The state level seems like a pointless effort to punish people who move out of state, and make the exchanges a bit less attractive)

That seems to be the crux to me; you’re not allowed into the exchanges unless you’re uninsured or you have bad health insurance.  But.. who defines ‘bad’?  I forsee a situation where there is, oddly, a privileged class of people who work for lousier employers get into the exchanges, lacking insurance entirely, most of whom will buy the public plan (if they’re sane).  Insurance companies are going to fight to prevent any real number of people from getting into the exchanges; they want the public option to be available to… basically people they would never cover now.

Which would of course minimize their losses.

There is an employer mandate to provide insurance, and if a large employer doesn’t, they pay a fee per employee – 750 dollars  for a  full time employee, 375  for a part timer.   Quite frankly I doubt that will encourage any new employers to ADD insurance (apparently a decent middle of the road plan is worth 13k for a family of four per year, so far, far costlier).  The CBO thinks that will prevent most employers from dropping the people they cover now, however.

In turn there would be an individual mandate, which would force everyone to have insurance.   In theory, there will be subsidies and an expansion of Medicare, to avoid over-penalizing people or forcing those who can’t afford it into the private insurance market.

The insurance companies LOVE that mandate.  Without a public option, it would guarantee them untold billions of dollars.  It scares me more than a little (not personally – I get great insurance, but unlike conservatives, I have empathy).

The individual mandate: If you have affordable coverage available to you — and I don’t know exactly how, or if, “affordable” is defined — and you don’t purchase it, HELP envisions a penalty of not less than half the price of the coverage.

(from Ezra Klein)

So in the end, the HELP bill comes down to some vague definitions; it could be very good or very bad. First you’d have the standard set to let you into the exchange; to determine if your current healthcare is bad, that is to say fails to meet ‘minimum standards’. Me, I would define bad healthcare plans as any that have ANY pre-existing condtions, that ever practice recission, that charge more than, oh, 5% overhead, pay their CEO more than 7 figures, etc.   I’m crazy that way.

My definition would make, err, everyone not already in Medicare eligible for the Exchanges though.  Not what the politicians are looking for.

Then you have the definition of ‘affordable’.  If they define that improperly, a lot of people will fall into a sort of pit-trap, too ‘wealthy’ for Medicare, but too poor to actually afford even care on the Exchange.  That class of doubly unlucky folks would pay half the value of an Exchange plan and get absolutely nothing for it.  You have to love the idea of wealthy Senators deciding how much a guy working two jobs earning 30k a year has to cut out of his grocery budget before he can no longer ‘afford’ a health insurance plan.

I always get nervous when grand ideals like these are packaged without firm details; it seems like we’re being set up for a nasty fall.

PS: There has been a lot of talk back and forth on costs, with misleading statements based on early versions of the HELP bill, or, to be fair, the liberal blogosphere running around saying that the newer bill costs dramatically less than the earlier (meaningless) estimate because of the public option (ignoring the cost of the Medicare expansion, and comparing it to the previous estimate which was bad to begin with).

Though it does appear that the earlier, worthless estimate was for 1 trillion, and the new estimate, with employer mandate, individual mandate, etc, is 600 billion.  Which… only means something if you accept that the earlier estimate had value.  In addition, at least part of the savings is from… slashing subsidies to poor people who will now be required to get insurance. Remember that poor guy having to cut his grocery budget? Yeah.  We’ll have more of them to save cash.

Precise details on the final bill will determine everything.

P.P.S. Something that I don’t think gets noted nearly enough: these changes will take time, even if the HELP bill is enacted full of shiny goodness and a strong public option.  The estimates are that coverage will reach 97% of eligible Americans — by 2019.  That’s another full decade before things settle down, optimistically.  America still has a long, arduous way to go on health care, even in the best case scenario.

Various Useful Links:

Actual costs of HELP Bill, including Medicare Expansion (around 1.3 trillion) over ten years

Public Option and Employer Mandate in New HELP Bill

18k Americans Die Per Year from Lack of Insurance

Health Insurance Exchanges in Principle

Details from HELP bill on Exchanges, questions on ‘affordable’ care and ‘minimum insurance’

Brief Glance at Other Systems Around the World

Employer Tax-Exclusion Benefits Upper Classes Disproportionately

Max Baucus and Plans to Tax Benefits (old hat now)

Old CBO Estimate

New CBO Estimate