Insurance industry support for “health care reform” apparently has a big price tag: forcing 46 million Americans to become potential customers. An individual mandate to purchase insurance could help to offset looming cuts to Medicare Advantage plans, writes Melissa Davis.
Companies like Cigna, which have lost some big accounts as cash-strapped employers dropped expensive health plans, also stand to gain, she notes (TheStreet.com 11/24/08).
The Kennedy plan is likely to be the Massachusetts plan for all. He’d prefer Medicare for all, but Republicans are expected to reject a totally government-run program, compromising on a public/private partnership instead.
Single-payer supporter Rose Ann DeMoro, who directs the California Nurses Association, says that an individual mandate would be a “massive bail-out for one of the most merciless industries in America”—one that, she complains is “already rolling in cash.” The 18 biggest insurers reportedly made $16 billion in profit last year (Philadelphia Inquirer 12/8/08).
Massachusetts supposedly assures that mandatory insurance will be “affordable.” Checking premiums for a husband and wife in their mid forties, an AAPS member got premium quotes of $612.22/mon in Massachusetts for a policy comparable to one that cost only $186.90 in Illinois.
Reformers demand that insurers accept all comers regardless of health status or previous illness, and charge everybody the same premium (guaranteed issue/community rating). They also demand all kinds of coverage mandates. America’s Health Insurance Plans, the industry trade group, has recently said it would accept this—but only if the government forces everyone to buy the product (Wall St J 12/9/08). Otherwise, low-risk persons will opt out, driving exorbitant premiums still higher.
The Massachusetts plan is being showcased as a great success, having decreased the uninsured rate for adults with incomes below 300% of poverty by 11%, and the rate for those with incomes below 100% of poverty by two-thirds. However, the cost of premiums continues to rise at twice the rate of general inflation; there is a 4% surcharge on the cost of each policy to cover the cost of running the Commonwealth Connector; and the cost of the program, expected to reach $1.35 billion by 2011, greatly exceeds original estimates (Neurology Today 11/20/08).
The level of public support for an individual mandate is said to have increased to 57% in 2007 and 58% in 2008. However, the people most supportive of the mandate are the most affluent, and the least affected by it. Of those who make more than $75,000 a year, 69% are supportive, but only 49% of those making between $25,000 and $50,000 are. Only 37% of those directly affected support the mandate, compared to 62% of those not affected. Only 22% of those affected say the law is helping them, while 60% say it is hurting (Greg Scandlen, Consumer Power Report #154, 11/19/08, quoting Robert Blendon in Health Affairs).
A public backlash against the plan is likely—probably resulting in a single payer system. In 10 Massachusetts districts, 72% of voters on Nov 4 supported a ballot question instructing their representatives to support legislation creating “a cost-effective single payer health insurance system that is available to all residents, and oppose laws penalizing those who fail to obtain health insurance” (Neurology Today, op. cit.).
Thus the insurance company bailout could be an example of saving the village in order to wreck it—except, of course, for the carriers chosen to administer the public program.
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