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Tilting at Windmills

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March 16, 2006
By: Kevin Drum

INSURANCE MONEY....Ezra Klein:

Senate Republicans are attempting to invalidate all state-level insurance regulations and create an anarchic system where insurers don't have to guarantee any floor of [healthcare] coverage. The GOP's insurance industry paymasters must be literally salivating at the sort of scams they're going to be able to pull now.

You want some Democratic spine? How about a party-wide pledge not to take another dime from the insurance industry and to demonize the everlasting hell out of every Republican who cravenly votes for stuff like this? Insurance money is toxic for Democrats, putting us in hock to an industry that will always fight against liberal goals. We should treat it like the poison it is.

Kevin Drum 1:27 PM Permalink | Trackbacks | Comments (39)

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Kevin: when are you going to learn? The whole system in this country SUCKS. The Rethuglicans are doing us all a favor. The quicker the system reaches final collapse, the quicker we'll have UHC. Not even crass, cynical and corrupt Rethuglicans will stand up to millions of royally pissed off middle class voters without healthcare, at least not indefinitely.

Posted by: anon on March 16, 2006 at 1:37 PM | PERMALINK

Although, I think this is a horrible idea. What about a Democratic counter proposal to do away with individual state regulations and create a system of regulations based on the state which has the gold standard?

It's just as stupid that I have to keep my job to have the best health insurance as it is that I have to live in a different state to do the same. Or have a decent system of disability insurance.

I miss California the most because I felt there was a strong safety net of regulation that I don't have on the East Coast, but my family lives here. And frankly, I couldn't find a job in California. So I moved back East.

When I lived in Chattanooga, we had people pretending to live in different states to be able to Cherry pick their benefits. (Georgia for this, Tennessee for that.)

Even in California, people (myself included) pretended to live in San Francisco County to take advantage of better benefits from that jurisdiction over the surrounding counties (like Alameda where I actually lived).

And I'm not talking just healthcare here, I mean disability coverage, auto insurance and school choices.

All these cities and counties and school districts and park districts might give a nice level of individual control. But it more effectively creates class divisions through geographic boundaries.

Posted by: DC1974 on March 16, 2006 at 1:45 PM | PERMALINK

If you have mandated coverage, can we have less complaining about why health insurance is universally so expensive?

Or do you think the cost of pregnancy insurance is any cheaper when it's not purchased separately?

Posted by: tbrosz on March 16, 2006 at 1:46 PM | PERMALINK

Senate Republicans are attempting to invalidate all state-level insurance regulations and create an anarchic system where insurers don't have to guarantee any floor of [healthcare] coverage.

How is this any different from now? In my experience, any payout that an insurance company makes on a claim is, essentially, an act of voluntary kindness, because there is nothing stopping them from finding a reason to dismiss any claim at all for any reason they choose.

And Tom, you are amazing - when we're all standing in a scorched-earth, Mad-Max style post-civilization moonscape, you'll be saying "well, but just think how bad it would be if liberals were in charge of the plutonium."

Posted by: craigie on March 16, 2006 at 1:49 PM | PERMALINK

Senate Republicans are attempting to invalidate all state-level insurance regulations

Remeber when Republicans wanted to RETURN power to the states ?

Posted by: Stephen on March 16, 2006 at 1:49 PM | PERMALINK

OK, case-in-point example of why this is a good thing:

2 friends of mine--mid-20's, lesbian, running a coffee shop. What they need, badly, is cheap basic health insurance. They don't need birth control coverage; they don't need pregnancy coverage. Why shouldn't they be able to figure out their own needs, and buy whatever suits those needs best?

Posted by: SamChevre on March 16, 2006 at 1:51 PM | PERMALINK

Typical two faced position of the republicans -- attack states rights when it does not favor their big corporate sponsors and defend states rights when it goes against the major rights guaranteed by our constitution.

By not covering maternity care in basic health insurance policies, will more of the poor and middle class be tempted to get abortions to avoid the cost of pregnancy and births when they realize they are not covered? If so, is this a prolife stance by the Republicans?

Posted by: lou on March 16, 2006 at 1:51 PM | PERMALINK

We should treat it like the poison it is.

Oh so it's 'we' now is it? Criticize Dems and it's 'you', propose something and it's 'we'.

Posted by: Matt Stoller on March 16, 2006 at 1:52 PM | PERMALINK

hm, i didn't know there was any "floor of healthcare coverage." i'm assuming that info is correct, but insurance companies already seem to have pretty arbitrary coverage. like covering viagra for men but not birth control for women. and insulin for diabetes, but not laparoscopy for endometriosis. how do the states currently decide which conditions MUST be covered and which don't?

Posted by: EM on March 16, 2006 at 1:53 PM | PERMALINK

Think Lieberman (D-Insurance Companies) will go along with this? I'm not even Dodd will, good Dem though he may be.

Posted by: paul on March 16, 2006 at 1:53 PM | PERMALINK

SamChevre wrote: "Why shouldn't they be able to figure out their own needs, and buy whatever suits those needs best?"

because how do people that need a lot of healthcare due to multiple conditions afford coverage? and how do you anticipate getting ill if you buy coverage while you're healthy?

Posted by: EM on March 16, 2006 at 1:56 PM | PERMALINK

Put this with the strike down of state level food safety regs...

Woohoo!

A complete usurpation of states' rights by...the right wing! Wait. Were they not singing about dismantling Federal control...just...what weeks ago?

>>Whiplash!

Look, I'm not per se against some level of rationalization - the Uniform Commercial Code springs to mind. But that was a REFORM. It promoted competition based on agreed upon principles for contracts and so forth.

This is nothing less than wholesale capitulation to their corporate paymasters.

Posted by: CFShep on March 16, 2006 at 1:57 PM | PERMALINK

Note the "party line vote." Sounds like filibuster time.

Posted by: Django on March 16, 2006 at 1:58 PM | PERMALINK

can we all just finally agree that "states' rights" is just expedient bullshit? nobody actually gives a crap about it in principal.

kevin, I like your idea. private health insurance is just terrible. I say bring the fight to them.

Posted by: abe on March 16, 2006 at 2:09 PM | PERMALINK

I'd say this is the perfect case for the Dems to attack, IF the dems would grow a spine. Seems they want to do only the easy thing, rather than the right thing.

Well, I for one pledge not to take their filthy money, even if they would offer me some. Go ahead, you dirty insurance companies, throw me a few million, see how soon you get it back in your face.

I dares ya.

Posted by: TomStewart on March 16, 2006 at 2:25 PM | PERMALINK

Kevin, like Ezra, doesn't even seem to be aware of an entire side of the debate: One reason that insurance is more expensive than necessary is precisely because incompetent state legislators decide to mandate that all insurance policies have to cover hair transplants or Viagra or Christian Science practitioners (yes, that's the law in at least one state that I know of), chiropractors, contraceptives (which you might as well purchase individually if you need them), etc., etc., ad nauseam.

There are lots of studies out there, showing that state mandates increase the price of health insurance considerably. This should be no surprise: Force the insurance companies to cover three dozen additional services, and they have to raise their prices. Some of the studies are funded by the insurance industry, of course, so you might want to take them with a grain of salt.

Still, if states decided to start mandating that all automobiles had to come with sunroofs, a subwoofer in the trunk, heated seats, a GPS mapping system, etc., etc., would it be any surprise that 1) this made cars more expensive, and 2) the auto industry started handing out statistics on the additional expenses? "Ooh," would the response, "You can't trust a study funded by the auto industry." Well, maybe not, but the auto industry would have a legitimate gripe if they were legally prevented from selling economy cars.

Anyway, if you still aren't convinced that state mandates increase the cost of health insurance, here's one summary by the Comptroller of the State of Texas:

In Texas, the Baylor study, referenced in Exhibit 1, estimated that mandates add slightly more than 17 percent to the cost of premiums and that wages for employees with traditional insurance coverage are 3 percent lower than they would be without mandates. The study also notes that, if national patterns hold in Texas, some 275,000 Texans are uninsured and an estimated 18 percent of Texas firms have chosen to self-insure because of mandates.
I'd also add that some insurance companies also refuse to do business in some states. Massachusetts, for example, is horrible on this score. Lots of health insurance companies simply won't sell policies to Massachusetts residents, because the state has mandated so many things that it is just not worth even trying to comply. Obvious result: Health insurance costs go even higher because of lack of competition.


Bottom line: You want insurance to cover a bunch of extra services, then it's going to cost more. And more people will be uninsured as a result.

Posted by: Niels Jackson on March 16, 2006 at 3:06 PM | PERMALINK

Matt, what are you talking about? I've been a registered Democrat since 1976. How about you?

Posted by: Kevin Drum on March 16, 2006 at 3:13 PM | PERMALINK

I am in Oklahoma( next to missouri) and evidently the Missouri legislature has no idea why public health depts exist.

For a man, the cost of sex is very low. A pack of trojans are $1.59 for 3=.53 or 12 for 6.99=.58 each. For a woman there is an obstacle course: first she has to call a doctor or clinic. I called 2 and verified it is a month wait for an appointment. Once she gets there a month later she has to pay anywhere between $47 and $220 at one clinic and $112 at the other( average those =$126.00). After she gets her birth control prescription she then goes to the pharmacy and pays $39.99 for 1 month's worth of pills. So let's see it took her a month and $156 to get birth control( $5.53 daily) . and she has to do this over and over again for approx 30 years of her reproductive life. Now I have gone to a health dept for this when I was younger and yes it is like a cattle call and impersonal but it did not cost a fortune and there was not so long a wait. If all poor women have to go to private dr.s for this the wait will only get longer.
Perhaps these legislators should be required to be educated or perhaps the people of Missouri should wake up. Men have no idea what we go thru to have a healthy life with no bad complications to our bodies. It is not so simple for us. And yes men get a twofer for their .53- contraception and std protection, women only get contraception.

Posted by: k on March 16, 2006 at 3:37 PM | PERMALINK

How about a party-wide pledge not to take another dime from the insurance industry and to demonize the everlasting hell out of every Republican who cravenly votes for stuff like this?

Go ahead... make my day.

PS: I double dare ya with sugar on top.

Posted by: koreyel on March 16, 2006 at 3:50 PM | PERMALINK

Note the "party line vote." Sounds like filibuster time.

Absolutely. An opportunity for a principled filibuster that would be good policy and should be good politics. Will the dems do it? Here, I'm not so optimistic.

Posted by: Edo on March 16, 2006 at 4:02 PM | PERMALINK

tbrosz,

Why would you need a separate insurance for pregnancy? Do you need an insurance system for women's reproductive health, to cover contraceptives, pap smear and mamographies?

Do you need separate insurance for males to cover viagra?

Would it not be more expensive with all the red tape for each gender?

Well, I have concluded, you are just hopeless, beyond any reasoning.

Posted by: Renate on March 16, 2006 at 4:16 PM | PERMALINK

Kevin Drum: Insurance money is toxic for Democrats

What source of bribery isn't toxic?

Posted by: alex on March 16, 2006 at 4:16 PM | PERMALINK

Renate,

Did you read the linked article? Ezra specifically mentions pregnancy insurance as something that could be split from health insurance, making health insurance cheaper for those (like my friends) for whom pregnancy is unlikely. For some incomprehensible reason, he thinks this would be a bad thing.

Posted by: SamChevre on March 16, 2006 at 4:18 PM | PERMALINK

Kevin:

You da man, bro !

You have just totally redeemed yourself from the charge of spinelessness leveled against you about censure yesterday.

Abso-fucking-lutely.

B-52 RUNS OVER HARTFORD, CONNECTICUT, BABY !!!!!!!!!!!!!!!!!!!

I've been preaching this for literally *decades*.

Bob

Posted by: rmck1 on March 16, 2006 at 4:38 PM | PERMALINK

1. Are there some honest conservative pols and commentators pointing out that stifling state legislative initiatives and traditional prerogatives is not conservative? (But nor is it liberal - it is moneyed interest politics, which is not a legitimate ideological position of any sort.)

2. As much as the repiglies have supposedly been damaged by Abramoff and Bush and etc., why are they still pressing to sow such hard oats? What kind of idiots would be voting for them, or do they think they'll lose anyway and are just pulling down columns?

Posted by: Neil' on March 16, 2006 at 4:42 PM | PERMALINK

Rejecting the insurance money, and making an issue of it, is a really good idea. Even if you like the idea of corporate contributions, the Dems need to make it plain that any industry giving 80% or more to the Rs is not welcome. And make an issue of it.

As for rejecting state requirements, this might actually be a good idea- if we rejected "safety standards" for cars and let a flood of 80-mpg imports in. Or it might be just one more step down the fossil path of the dinocars.

Like cars, insurance programs stop working if you don't keep all the nuts and bolts in place. Seems a little odd that the NASCAR states can't see this.

Posted by: serial catowner on March 16, 2006 at 4:45 PM | PERMALINK

Sam, I did not read the linked article, my apologies to tbrosz if i misunderstood his post.

As to your friends, I don't know of any insurance asking about sexual orientation, i may be wrong.
They need an affordable insurance, like everyone else.
A universal insurance including as many as possible would be the most economical.

Posted by: Renate on March 16, 2006 at 4:45 PM | PERMALINK

Ezra specifically mentions pregnancy insurance as something that could be split from health insurance, making health insurance cheaper for those (like my friends) for whom pregnancy is unlikely. For some incomprehensible reason, he thinks this would be a bad thing.

Since insurance is designed to spread risk-- and costs-- across the largest possible group, it would be a bad thing. I'm currently the only childbearing-age (the others are over 43, so it's possible but unlikely) female in my office; luckily, the executive director chose maternity coverage for all of us anyway, because she lacked it when she had an unexpected pregnancy years ago and had pay for a c-section out of pocket. I have also worked in an office full of twentysomething women and had management remind all of us, when a third of my department was pregnant at once, that they didn't have to offer maternity coverage at all.

It could be argued that lesbians are also very low-risk for HIV, that women who have had hysterectomies also don't need maternity coverage, and so on, but the shrinking the pool prices the coverage for those who are likely to need it out of market, meaning they're more likely to skip it and end up in a bind when the unexpected happens. Healthcare & insurance don't work well as cafeteria plans.

Posted by: latts on March 16, 2006 at 4:50 PM | PERMALINK

Sam Chevre,

Though I favor the eliminations of state and federal regulations as it applies to what types of coverage must be offered in a policy, I do understand why pregnancy cannot be separated out of "health insurance". If insurance companies started offering policies that allowed one to choose pregnancy related coverage, or not, then, eventually, those who are not pregnant, will not purchase coverage, and the market for pregnancy- covered policies would reduce down to only those who are pregnant; in which case the coverage has no benefit other than be a prepaid service.

Posted by: Yancey Ward on March 16, 2006 at 4:52 PM | PERMALINK

I agree. Dems should put themselves squarely set against Insurance money and its agenda. To do so will tend to automatically line us up for a very liberal, necessary, and sensical thing we should all be fighting for; Universal Health Care (D).

Posted by: ww on March 16, 2006 at 4:53 PM | PERMALINK

Yancey Ward: I don't agree with you about the policy requirements for insurance, but let's look at the real problem: As has been noted, the companies often don't like to pay. We at least need to enforce what has been apparently agreed to, don't you think? Do you think Republicans really want to even follow that minimal article of social hygeine agreed to by libertarians?

Posted by: Neil' on March 16, 2006 at 4:57 PM | PERMALINK

The first step to universal health care is dismantaling the state regulation system. The patchwork of state regulations is exremely costly and doesn't serve the public in most states. The barriers to entry in the insurance business are enormous due to the state system of regulation.

Once we have a nationwide system, reforming it will be much easier.

Posted by: underseige on March 16, 2006 at 5:04 PM | PERMALINK

Does anyone know of any regulations of insurance by the federal govt? Can you enlighten me? When I studied it for my degree in insurance they spent a great deal of time onthe history of state regulations which were explained as a triumph for insurance cos.

Insurance companies will oppose this federal legislation. They love state regulators whom they can control. Most state commissioners of insurance are bought and paid for by insurance co. campaign money.

Posted by: underseige on March 16, 2006 at 5:11 PM | PERMALINK

Wouldn't it be fun to see a republican Christian coalition US Senator arguing that insurance companies shouldn't have to cover pregnancies. Culture of life, indeed.

Posted by: underseige on March 16, 2006 at 5:17 PM | PERMALINK

Neil',

The government can certainly mandate that insurance companies cover every filed claim. That would be the clearest solution to prevent wrongfully denied claims.

Posted by: Yancey Ward on March 16, 2006 at 5:18 PM | PERMALINK

Federalizing insurance coverage to override state mandated coverage would not have as large an impact as you think. Most large employers self fund their health insurance and just hire an insurance company to administer the claims. ERISA has exempted these self insured employers from state mandated coverage for years. I think that it is wrong to single out insurance companies as the beneficiaries of this latest republican largesse - any business that currently can't afford to self insure will benefit by being able to cherry pick coverage and reduce their costs.

Posted by: Jane on March 16, 2006 at 5:29 PM | PERMALINK

"...a party-wide pledge not to take another dime..."

Not. Take. Money?

Aaiiiieeeee! Your words burn with the heat of a thousand suns! Run away!

Posted by: Quaker in a Basement on March 16, 2006 at 5:57 PM | PERMALINK

Sam--

You miss the purpose of health insurance. If you carve out various conditions to be bought separately, only those people that have or think they may have those conditions will buy the supplemental coverage. When that happens, there is no "insurance"--it's just prepaying for a service you think you will use in the future.

Which is fine, but have fun purchasing the pregnancy coverage for a $800/month ADDITIONAL premium. Because at a $15,000 average pregnancy cost, times an average six months to get pregnant (and then 9 months to be pregnant), times a 80% success rate in getting pregnant, that's the break even point for insurers.

Or, we can charge everybody $36 more every month, and figure the lesbians getting gypped on pregnancy costs will be offset by the fact that they are hugely disproportionately more likely to get breast cancer (no children=tripled or so risk), which will be subsidized by all of the breeders who had 2.6 kids and thus are much less likely to get a lump.

Posted by: Joe on March 16, 2006 at 9:15 PM | PERMALINK

The Democrats actually stand up to a special interest? Nahhh.

Posted by: SocraticGadfly on March 17, 2006 at 3:05 AM | PERMALINK




 

 

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