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To drop the ball would be to let this get through; Setting up an Obamacare state health insurance exchange; Where are all the uninsured; The need to repeal Obamacare (and the debt issue)

July 13, 2011

Drop the ball? It’s not even in play yet.

July 12, 2011  Paul Howard – The Torch

Yesterday, the New York Times accused the Republican-controlled state Senate of “dropping the ball” for failing to pass legislation setting up a state health insurance exchange in the waning days of the last legislative session. If the legislature doesn’t pass a bill soon, the Times worries, the state might lose out on millions of federal dollars in exchange support.

This isn’t likely to happen, since the state would be passing up a “free lunch” offered by federal taxpayers – and the feds have been bending over backwards, forwards, and sideways to encourage states to set up exchanges.

But assuming that a bill passes sooner rather than later, what can New Yorkers expect out of it?

Under the Affordable Care Act, states are required to set up health insurance exchanges where individuals and small businesses can shop for private health insurance. Families and individuals making up to 400% of the Federal Poverty Level are eligible for significant premium tax credits and cost sharing subsidies. Very small businesses (25 and under) will also be eligible for tax credits if they offer “meaningful” coverage.

Ideally, the exchange will operate like a for health insurance.

But the last version of the exchange bill, S.5849, pushed all of the major policy decisions to the exchange for further study, so New Yorkers won’t know what kind of exchange will be created for at least months after the legislation passes. (The legislature reserved the power to pass additional exchange legislation based on final recommendations from the exchange.)

In short, expect lots more lobbying. Consumer groups, unions, and regulators are pressing for an exchange with the power to select “winners” for inclusion in the exchange market. They hope that the exchange will put pressure on insurers to control costs and improve quality by leveraging the buying power of its members.

Others, including myself, would like to see a “clearinghouse” style exchange that includes all insurance plans that meet minimal federal standards, including consumer-friendly plans like Health Savings Accounts and other value-based insurance designs. We believe that flexibility and market competition will offer consumers and small businesses a wider range of affordable health insurance options than those likely to be chosen by regulators. (For more background on how this type of exchange might work, see my recent report, Building a Market-Based Health Insurance Exchange in New York.)

In Massachusetts, which has had the type of exchange favored by consumer groups for several years, insurance costs are still among the highest in the nation – and very few small businesses have purchased coverage through the state’s high-priced exchange. Efforts to reform the exchange continue today.

Insurers’ aren’t angels, but the idea that tamping down on insurers’ profits will significantly lower health care costs isn’t supported by the evidence. The cost of insurance is largely driven by underlying labor and technology costs; and most health care spending goes to the relatively small number of very sick people who are the most expensive to care for. In fact, if insurers have less of a financial incentive to control costs, costs could go up faster in the long run.

Here’s the ugly truth: health care spending is just as much about politics as it is about health.

Try and cut Medicaid spending and you’ll run into a buzz saw of powerful hospitals and health care unions. Try and pare minimum insurance benefits to offer cheaper policies, and consumer groups serving small sectors of the market will scream bloody murder, even if cheaper plans allowed more people to find affordable coverage. New York has had a highly politicized, highly subsidized, and highly regulated health care market for decades and it’s turned out to be a recipe for runaway health care spending and nearly strangled the individual insurance market.

Will New York’s health insurance exchange follow the current model, or offer a truly different choice?

Creating a sustainable insurance exchange is going to require willingness on the part of New York’s policymakers – and especially Governor Cuomo – to offer real choices to consumers and small businesses, not a Potemkin exchange that offers just a handful of expensive plans designed to satisfy the same interest groups that have created our current expensive and dysfunctional arrangements.

So the ball hasn’t been dropped – yet.

Where are the uninsured? by Jonathon M. Seidl –

Megan McArdle at The Atlantic has noticed something very interesting: only about 18,000 people have signed up for the high-risk insurance pools set up by Obamacare. That’s pretty incredible, considering these pools cover those who were the biggest justifications for the legislation — those with pre-existing conditions that the evil insurance companies downright hate. McArdle explains:

I‘ve predicted that lots of parts of Obamacare will not work the way they’re expected to.  But here‘s one I wouldn’t have predicted: the high-risk pools, which were meant to tide people over until 2013, have signed up just 18,000 people as of March.

There were supposed to be millions of people who were uninsurable because of pre-existing conditions.  We heard lengthy testimony about their terrible plight.  I don‘t think it’s too strong to say that this fear–that you could get sick and no one would insure you, that’s right, you, Mr. & Mrs. Middle-Class Voter–was one of the main reasons offered for the health care overhaul.  It was estimated by Medicare’s Chief Actuary that around 400,000 would sign up (the CBO estimated 200,000, but only because they assumed that HHS would use its authority to limit enrollment in order to stay within the $5 billion budgeted for the program).  So where are all the uninsurable people?
The explanations so far offered don’t sound very convincing to me.  Suzy Khimm channels Nancy Pelosi to suggest that the political controversy over Obamacare has somehow prevented people from finding out about high-risk pools.  I could certainly see how that would account for fewer-than-expected signups . . . but a 95% reduction?  It sort of strains credulity to say that only 18,000 uninsurable people in the whole country are aware that the pools exist–at least, if you believe that all the rest of the uninsurable people care about getting health insurance.
Read the rest here.


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Don’t Raise Debt Ceiling Without Repealing Obamacare

Apr 29, 2011 – Former NYS Lt Gov Dr Besty McCaughey Biography

If your shopaholic teenager maxed out on the credit card , your solution wouldn t be to increase the credit line. You d stop the spending. The same common sense applies to raising the nation’s debt ceiling. America has a spendaholic president. Don t raise the debt ceiling… 

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