Can you explain the "create competition" claim of the public option?

[WhaTHellsgoingonhere]

This remains an elusive concept that has yet to be explained fully as far as I can discern. The public option will be available to those who currently don't have insurance, be they healthy or otherwise. For them, this is great news. But those who have employer based insurance were never competing against those without. How, then, does creating a new pool that doesn't compete with the existing pool put downword pressure on private insures? Simply, apples don't compete with tennis balls.

There's a disconnect. I just haven't found anything that will explain this.

[liberalpragmatist]

1. The idea is that private plans in the insurance exchange will have to compete

... for customers, against the public option.

But you're right that so long as the exchanges and, by extension, the public plan are limited to a small pool, the competitive pressure on insurance costs will be fairly limited.

If everyone is eventually on the exchange, it could make a difference. But that isn't going to be the case for now.

[Warpy]

2. I can

Insurance companies have been exempt from antitrust laws too long. They have been essentially fixing prices at every level. They have had absolutely no incentive to rein in their own costs and they have, instead of offering bids in a market, told the hospitals and other providers their propositions on a take it or leave it basis. All the power at every single level of our system resides with them.

The public option would give them the first clear competition they've had to face in decades, which is why they're spending billions of dollars to fight it, hobble it, restrict it, and generally render it incapable of being an option for most of us.

A well run public option, accountable to Congress, the GAO, HHS, and a dozen other agencies, would have the incentive to hold down administrative costs, would not need to produce profits, would not need to support mini Sultanates within upper management, and would accept legitimate bidding for service delivery. Those would all combine to make it substantially cheaper.

And that is what the insurance giants are most terrified of: competition that would derail their gravy train.

[MNDemNY]

3. Problem is that ONLY uninsured can buy it.

It will have as it's "group" only those who otherwise are not eligible to buy private insurance, thus dooming it to actuary hell. Only a public option, that is truly a PUBLIC OPTION can have that desired effect. Anything short of that is simply, "The Insurance Industry Profit Protection Act of 2009"

[Warpy]

5. The first challenge will come from people enrolled in group plans

but who are having treatment for significant pre existing illness denied.

This is the foot in the door. They are terrified of even that much.

If they're running scared, we're on the right track.

It's just going to need a lot of pushing and a lot of work.

Oh, and getting rid of any bought and paid for Democrat or Republican in the primary season and elections.

[MNDemNY]

7. Yes, but as I said the actuaryreality is that the "public option" will be unfundable as it is now co

It will cost so much that the whiny public will bring it down.

[Egnever]

13. Not true

Anyone alowed to purchase from the Exchange will be able to chose it. Which includes millions of small business Employess, with that number expanding each year.

[MNDemNY]

17. Unless they are in any other way eligible to purchase private coverage.

Only low wage employees who can not afford private coverage. And for the young and healthy, there will be cheap, lousy private coverage that covers little . You may well be FORCED to purchase that. Read what it say's about WHO is eligible to purchase from "the exchange"

[Egnever]

21. You dont know what you are talking about.

Read the bill before you keep making yourself look more ignorant.

[MNDemNY]

24. Read more than the White House blurbs.

Have you any idea how insurance works? You do know that the "PO" must sustain itself, right? With such a "select" pool, how do you foresee this "PO" being feasible? Are you just assuming HUGE subsidies?

[Egnever]

31. I read the bill. You really should do the same

Cause its crystal clear you dont have a clue whats in it.

[quaker bill]

61. That is incorrect

It is available to those who do not have employer provided insurance as well. These folks are quite qualified to buy insurance but do not have the money or employer support to do so. There are plenty of perfectly healthy, young, and employed people in this boat.

[WhaTHellsgoingonhere]

10. True, the health care industry (hospitals, etc..)...

...would prefer the public option bids and prices, but they won't be available when it comes to those who currently have insurance. So we've come full circle. BIG WIN for the 50 million uninsured! And under the public option, the health care industry will get fair prices for the additional 50 million Americans. But with respect to the 280 million already insured, no competition, no downward pressure.


Full disclosure: I have a chronic, uninsurable illness for which I will need medication ($200-300/mo) till the day I die, and I'm young; i.e., I'm a big winner.

[MNDemNY]

12. I wish you the best.

But this legislation is as a whole, a loser. If this passes health care reform is done for decades. the "public option" will be (excuse the verbiage) nothing but a "dumping ground " for the industry, insuring it's failure. Your big win may be short lived.

[WhaTHellsgoingonhere]

25. I'm back on the fence. Yesterday, I was saying it's "designed to fail," but...

...today I'm being told by health care advocates that that's not so because competition will drive down prices. You can read that everywhere. I just don't understand the mechanics.

[MNDemNY]

27. Under this bill any "competition is so minimal, as to be for naught. And it is years away.

[earthboundmisfit]

4. The only "competition" there is right now is which insurance co. can make the most obscene profits.

n/t

[YOY]

6. You know how they say "The Government can't do anything right"?

Well...this is them putting their money and product where their mouth is.

If they can make a better product for the money then so be it. If the government is nothing but a money pit and cannot do anything right then the Public Option will be a laughing stock that everyone avoids and few use. Let the free market decide.

Why do Republicans hate "free market"?

[sandnsea]

8. If sick people with the public option pay HALF

of what business is paying private insurance - don't you think private business will notice??

[MNDemNY]

9. How , will you fund that??

"sick people with public option pay half..." But their costs are 10X, or 20X, how in hell do you keep that afloat??? Don't you see, the "PO" as it is set up now, is set up to fail! Only by making it a true option, for the healthy and the sick, across a wide demographic can it succeed. Do not buy the hype. Just 'cause it's called a "public option" does not make it so. This bill is a piece of shit that will set back any real reform for decades.

[Egnever]

15. It is an option for millions, And it will be available to more each year as we move forward.

I dont know where Sandsea is getting the half number from though as initialy at least the PO is expected to be more costly.

[MNDemNY]

18. It is set up to fail.

You are a fool to buy the hype.

[Egnever]

20. Why cause you say so?

when you dont even know what the bill says I find that hard to swallow.

[MNDemNY]

23. As it is contemplated...

only those who can not otherwise get, or afford private coverage can "opt" for the PO, thus making it's actuarial "group" disproportionately high in it's number of sick, high usage "costumers" This will make the price of coverage, (because under the bill, the plan must pay for itself) extremely high, the "subsidies" will , therefore also be through the roof, making it unsustainable. It will make the problems of funding Medicare seem like a cake walk. It will not last long enough to "insure more and more each year"

[Egnever]

29. Again wrong

Read the bill

[MNDemNY]

30. I have, you, obviously have only read blurbs.

[Egnever]

32. So then find me the section that comes close to what your saying

I wont hold my breath cause it aint in there.

[MNDemNY]

34. Prove me wrong or STFU

[Egnever]

36. LOL what a joke you are. Here ya go tough guy

(a) ACCESS TO COVERAGE.—In accordance with this
12 section, all individuals are eligible to obtain coverage
13 through enrollment in an Exchange-participating health
14 benefits plan offered through the Health Insurance Ex15
change unless such individuals are enrolled in another
16 qualified health benefits plan or other acceptable coverage.

[MNDemNY]

But the mandate to but insuance starts NOW, the exchange starts in 2013.

Do ya see a problem there , sweety??

[Egnever]

45. LOL so now you want to change the argument

No admission that you were full of shit to begin with. Well unfortunately you are still full of shit.

Anyone without insurance will have an otion to join the catastrophic plan designed to carry people over till the exchange begins immediately. So once again your fear mongering is just more ignorance.

Educate yourself by reading the bill!

Stop buying into whatever you read on some poutraged blog.

[MNDemNY]

52. No, Anyone inelegible for private insurance, NOT anyone "without insurance"

You are the fool.

[Egnever]

65. Still digging I see

And still cant support any of your claims with relevant text from the bill, So heres some more for you to hopefully help quell some of your rampant ignorance. Note that near the bottom any individual who has not had health coverage in the last 6 months is eligable.

This is all from the first couple of pages of the bill by the way which you would know had you ACTUALY READ THE THING!



TITLE I—IMMEDIATE REFORMS
SEC. 101. NATIONAL HIGH-RISK POOL PROGRAM.
(a) IN GENERAL.—The Secretary of Health and
Human Services (in this section referred to as the ‘‘Sec25
retary’’) shall establish a temporary national high-risk

pool program (in this section referred to as the ‘‘pro2
gram’’) to provide health benefits to eligible individuals
during the period beginning on January 1, 2010, and, sub4
ject to subsection (h)(3)(B), ending on the date on which
the Health Insurance Exchange is established.


(c) ELIGIBILITY.—For purposes of this section, the
term ‘‘eligible individual’’ means an individual—
(1) who—
(A) is not eligible for—
(i) benefits under title XVIII, XIX, or
XXI of the Social Security Act; or(ii) coverage under an employment18
based health plan (not including coverage
under a COBRA continuation provision, as
defined in section 107(d)(1)); and
B) who—(i) is an eligible individual under sec23
tion 2741(b) of the Public Health Service
Act; or

(ii) is medically eligible for the pro2
gram by virtue of being an individual de3
scribed in subsection (d) at any time dur4
ing the 6-month period ending on the date
the individual applies for high-risk pool
coverage under this section;
who is the spouse or dependent of an indi8
vidual who is described in paragraph (1); or
who has not had health insurance coverage
or coverage under an employment-based health plan
for at least the 6-month period immediately pre12
ceding the date of the individual’s application for
13 high-risk pool coverage under this section.

[MNDemNY]

56. You know that this bill is shit, how dare you twist random paragrphs to convince

people that it is not? Which insurance company do you or yours work for??? Really!

[Egnever]

62. LOL you are laughable

You still havent pointed to a single provision in the bill to support any of your wild claims.

[MNDemNY]

63. read it all, not just select bits.

[Egnever]

66. Funny from someone who clearly hasnt read any of it

and cant support any of their wild claims with text from the bill.

You continue to make yourself look more and more foolish.

[MNDemNY]

68. you must work in the industry.

[Egnever]

70. You must have an aversion to reading THE BILL

or you would quote me even one relevant passage to prove even just one of the wild ass claims you have made but you havent nor can you clearly.

Here I'll help you heres a link where you can download itand actually read it!
http://edlabor.house.gov/blog/2009/10/affordable-health-care.shtml

I understand poutrage is fun but you are making yourself look like an imbecile.

[Egnever]

37. And heres the part that alows them to chose the public option

EMPLOYEE CHOICE.—Any employee
4 offered Exchange-participating health benefits
5 plans by the employer of such employee under
6 subparagraph (A) may choose coverage under
7 any such plan<\b>. That choice includes, with re8
spect to family coverage, coverage of the de9
pendents of such employee.


Guess its time for you to STFU eh?

[Egnever]

42. Imagine that crickets.

:rofl:

[MNDemNY]

44. Read more than blurbs and unconnected paragraphs fool!!

:rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl:

[Egnever]

46. Right thats what I thought you got nothing.

I qoute the bill and all you got is rediculous claims.

Way to make yourself look like a tool.

[MNDemNY]

43. And that little clause is for employeers who are offering insurance!!!

Fuck you and you "crickets, "tough guy"

[Egnever]

47. LOL well no wonder, You cant even read.

individuals without insurance are already eligible for the exchange.

[WhaTHellsgoingonhere]

49. Egnever, why don't you talk to me? lol

:rofl:

I'm the one trying to learn.

[Egnever]

51. I would love to I Have to go pick up my son at the moment

But if you are still arround when I get back I willo be happy to try to answer any questions I can.

The bill isnt that hard to read though and is freely available for download, If you really want to know whats in it you should give it a shot.

[WhaTHellsgoingonhere]

54. Ugh... Is that a pre-requisite?

:)

[MNDemNY]

58. YES read it in it's entirety! do not attempt to piece together select blurbs.

[Egnever]

67. Not at all

I just dont want you to have to take my word for it.

However theres some great info here http://edlabor.house.gov/blog/2009/10/affordable-health-care.shtml

the links at the bottom of the page are chock full of easy to understand info.

[WhaTHellsgoingonhere]

77. I'll read through this. Part of the reason...

...I started this thread was to find out if everyone was as confused as I am. I've now got a better idea of where others are. :)

upshot: I don't think the PO advocates have done a good job selling this bill. They'd be wise to address our concerns, upload it YouTube, and let it go viral.

[Egnever]

78. I agree

They could be doing a much better job of educating the public on this. They will have to do much better going forward, resistance to this bill is building. One need only look at recent posts here to see that.

[MNDemNY]

53. No , individuals INELIGIBLE for private coverage.

you are in for a rude awakening!!

[Egnever]

69. again complete fiction from you

anyone that hasnt had employer based coverage in the last 6 months is eligable.

That you Rush? Cause you couldnt have your facts any more screwed up if it were.

[MNDemNY]

57. in 2013 after the Industry has "cherry picked" the populace.

This "PO " Is destined for failure. Also how do you think it will set with the majority of voters,(remember voters elected GWB) when they feel the cost of this bill, with no benefit for 3 years? And the "catastrophic" plan of which you speak covers NO PREVENTIVE CARE. NO OFFICE VISITS, you practical;y will be bankrupted before it kicks in. Any Democrat who tries to pawn this turd off as health care reform ought be ashamed. Again do you work for BC/BS? Aetna? Who?? :puke:

[Egnever]

71. And yet again you are wrong, you are like 0 for 10 now

It must be hell to be so outraged especialy when its ignorance that is making you so.

The high risk pool covers everything a normal plan would cover and does so with caps for out of pocket expenses.

The real question is are you a republican? Cause the next thing you are gonna spew is that there are death panels.

[MNDemNY]

74. Tell folks what the caps are miss insurance worker.

And those caps are in addition to the premiums. out of reach for the vast majority of the uninsured. This plan is shit, you know it is, you are a shill of some kind. Either an insurance co. employee or worse, an obamabot.

[Egnever]

76. Do I have to walk you through the whole bill?

You seem to be capable of reading yourself. Is it wilful ignorance that keeps you going?

Still you have not provided one single piece of text from the bill to support your claims. You seem to be great at throwing insults but an EPIC FAIL at proving any of your positions.

[MNDemNY]

75. Yes, a republican that wants single payer . The only plan that can work.

Nut-job.But that would put you out of work, wouldn't it.

[WhaTHellsgoingonhere]

22. I have had this explained

Healthy people are part of the uninsured pool, i.e., healthy people who are mandated to get insurance will pick the public option and healthy people who work for small employers which don't offer their employees health insurance.

[MNDemNY]

26. ONLY IF THEY ARE NOT ELIGIBLE FOR PRIVATE COVERAGE

Do you really think that the insurance industry will not insure the healthy??????Thus lies the problem. And remember, the Industry has 2-3 years to "cherry pick" the population before anyone can "Choose" any public option.

[Egnever]

33. Sigh you are wrong.

READ THE BILL!

[WhaTHellsgoingonhere]

38. I'm not sure HC advocates understand this!

I'm discussing this right now and here's where I've left it.

PO advocate: If you ask 50 million people - 1/6th of the US population - to buy insurance when they now have none, and private competes with public for that new business, that's competition, no?


Me: No. Why should they compete? They've built their empire without the 50 million and don't need them now. Besides, they won't compete with the PO because they don't have to offer lower rates.


PO advocate: The insurance industry was the first to propose the individual mandate because they wanted that market.



So, according to him, the healthy people currently uninsured will be mandated to purchase health insurance, and when they do, they will purchase the cheaper PO.

[WhaTHellsgoingonhere]

28. That explanation doesn't float.

Unless you can expound upon it.

Insurance companies don't care what rate the new pool is offered. They can't compete with the rates offered by the PO. But more importantly, they don't have to offer lower rates to the hundreds of millions they currently cover.


This is pretty much the crux of my disconnect.

[sandnsea]

41. Business will negotiate the prices down

First of all, I don't believe the public option will be half, frankly I don't think it's going to do all that much good.

But using the argument that's been given to me, the public option will cost half. That will give business a basis for insurance negotiations. That will drive premiums down.

And there are new regulations for private insurance too, which include a requirement to pay out 85% of premiums, which means they can't raise rates indefinitely.

[AllentownJake]

11. because it was a stupid marketing strategy of the democratic party

and it makes no sense.

The better thing for them to have said, was the private sector has failed to deliver adequate coverage and the government must intervene.

[MNDemNY]

14. But how then do you protect the industry's profits?

Afterall, that is the point, right?

[AllentownJake]

16. I forgot

The democrats have moved to the right of Herbert Hoover.

[MNDemNY]

19. The only solution is to remove the profit motive from basic health care.

You know, like most of the civilized world. You can either do that slowly, with a REAL public option, are (my preferred method) all at once with universal single payer! This bill will do neither.

[blues90]

35. I have no idea, this entire health care deal makes my head spin

Why they insist on making it so complicated tells me they have no answers themselves. It seems to me that the admin does not want to tamper with 1/6th of the economy that is making a profit off death while supplying jobs. yet it's part of the stock market.

[WhaTHellsgoingonhere]

39. Me either and I'm just trying to figure out if I should be celebrating.

The organizations I'm a member of started celebrating the day Pelosi introduced the House bill. I was like, huh...? And I'm still not sure if I'm can celebrate.

[Recursion]

40. The harsh truth is, employers will start dropping coverage even more

Basically, they've set the employer fines such that many will be better off not offering insurance (especially with premiums rising like they are) and just paying the fine; the public option is to catch those that get cut loose in this process. Essentially it's a game of chicken with the insurance industry: get premiums down below the statutory fine, or lose your customers to a public plan.

[WhaTHellsgoingonhere]

48. So why do the Dems/HC advocates only repeat the same mantra?

If this is what insurance companies plan to do, it would behoove the Dems/HC advocates to expose them.

[CreekDog]

50. Health insurance companies have an anti-trust exemption, they can collude

they can collude to charge you whatever they want.

a public option would in theory charge you what was actually needed (no profits). the only way a private insurance policy could beat that is to offer more coverage for the same money or the same coverage for less money.

without a public option, there is no incentive for private insurance to do anything but jack up rates, except perhaps to offer cheap policies to healthy people and/or policies that don't cover very much for lower rates --neither of which expands health care access. and combined with a mandate that people carry insurance, it would force people to choose one of these companies and perhaps lousy plans to meet that mandate.

to some extent the problems in the second paragraph may be addressed in legislation, although that is no guarantee unless provisions are included that keep insurance companies from doing that. however, if there are loopholes (and insurance company legal counsel will be looking for *any*), the public option would be a backstop against them, and without the public option, such a backstop wouldn't exist.

[MNDemNY]

60. And with NO "exchange" or "PO" available until 2013 , they will collude

like it's nobody's business. (The MANDATE to purchase starts right away)

[CreekDog]

79. but they will have to take preexisting conditions

and end their lifetime caps.

i frankly hope they choke on that after the way they have treated people. :grr:

[rucky]

55. They pretty much took the "create competition" part out of the bill.

are they still using that to sell it?

[MNDemNY]

59. Competition??

Nope, the mandate starts right away, the "PO" not until 2013!Good luck. The "Industry" will have "cherry picked " the population rendering any "PO" doomed.

[WhaTHellsgoingonhere]

64. A lot rides on "eventually"...

and if we don't have a sympathetic president and congress, eventually will never come. Also, I can see the insurance industry kill the PO before eventually ever comes. They can offer lower than PO rates to new enrollees so that the PO does not grow. Then it will become incredibly unpopular, and because it was designed to fail, it will become an expansion of Medicade. At that point, the insurance industry can return to business as usual.

[Egnever]

73. Not at all

Initialy the PO will be more expensive. It is also possible that it will remain that way. However there will still be the exchange where anyone can pick whatever plan they want ensuring competition between the private insurers inside the exchange.

The higher cost of the exchange initialy is why the CBO estimates only 2% will chose it.

[Egnever]

72. Yes I can

It is called the Exchange.

Inside the Exchange will be any private company that wants to participate and the PO. This Exchange will be available to any individual without insurance or who has been denied insurance as well as any person who has insurance through their work(starting with small business and ramping up to all business after three years of the exchange being available)

This will be a large pool of individuals and there will be plenty of INS CO's clamoring for that business. The PO willinitialy likely be the most expensive option inside the pool as it will have to compete without government subsidies and it will initialy have to take on mostly high risk cases as they pick up all the uninsured by default once this legislation goes into effect.

So because they will pick up most of the high risk patients and the PO is required to pay for itself, Their costs will be higher.

Having said that any echange eligable person will be able to pick from any of the plans inside the exchange, this in and of itself creates competition. As the company with the cheapest plan wiull obviously be the most attractive and will pick up the most individual subscribers.

All plans in the exchange must offer a minimum of benefits so that you cant just charge nothing and provide nothing. Also costs are limited by forcing the companies to spend at least 85% of every dolar they recieve on benefits or else they must refund any premiums to the end user that were collected in excess of that pre deternmined ammount.