Healthcare smorgasbord
February 24, 2010Jon Brooks Comments OffSome healthcare-related content from around the Web:
Do We Need Federal Antitrust Law for Health Insurance? (John Goodman’s Health Policy Blog)
With the so-called health “reform” on life-support, Speaker Pelosi has suggested she might attempt to declare victory by crafting a bill focused on one narrow objective: eliminating health insurers’ so-called “exemption” from antitrust laws. This is already incorporated in the House’s legislation (H.R. 3962 § 262) and could easily be re-introduced as a small bill.
Although this would be a crowd-pleasing bill, ready for sound bites on the campaign trail, it would achieve nothing to control costs or raise the quality of care. Claiming that health insurers are uniquely “exempt” from antitrust laws is misleading in more than one way. In fact, federal law ensures that state antitrust and other consumer-protection laws dominate the field of insurance regulation. And this goes for all lines of insurance, not just health insurance.
The law that limits the federal government from pre-empting state antitrust laws is known as the McCarran-Ferguson Act (15 U.S.C. § § 1011-1015), which Congress passed soon after a surprising decision by the U.S. Supreme Court in 1944, which overturned precedent and determined that insurance was interstate commerce. McCarran-Ferguson immediately restored insurance to state regulation, as it had always been.
Furthermore, market concentration in health insurance is not significantly different than it is in other lines of insurance. Nor have states failed to regulate insurers’ solvency. States enthusiastically regulate — even over regulate — all aspects of insurance. A federal intrusion into insurance regulation would be redundant, adding another layer of bureaucracy to an already heavily regulated activity.
Good idea, glad I thought of it (Law Rules)
About 5 years ago, my wife and I had some friends over for dinner, and my sister-in-law from Southern California was there as well. We mentioned that our niece (the sister-in-law’s daughter) had just graduated from college and that our friends had a son who had recently moved out there to go to grad school. We thought they might make a good match and asked if they would like to be fixed up. Our friends said that if it came from his parents, their son would have nothing to do with it. So we dropped it.
About 8 or 9 months later, we found out that our niece had begun dating a guy she met through the internet. And so had our friend’s son. Sure enough, they found each other through an electronic Yenta the Matchmaker. When it became their idea, it was a good one. Last summer, we attended their wedding.
Yesterday, I heard a report on NPR reminding us that Republican opposition to health care reform in the 1990s (Hillary-care) resulted in a Republican sponsored proposal for mandatory health insurance, which the Democrats opposed. Now, Republicans oppose the Democratic health care proposals (Obama-care) because they mandate health insurance coverage for everyone. It seems that neither party thinks this is a good idea unless it is their own. Sounds familiar.
When I try a case or mediate a dispute, I try to plant seeds and let the jury or the parties think that they came up with the ultimate resolution. If the verdict is favorable or the settlement is something everyone can live with, I don’t care whose idea it was. Ego has no place in this business. It’s a shame that politicians can’t say the same thing.
The Massachussetts Health Plan: Much Pain, Little Gain (The Cato Institute)
In 2006, Massachusetts enacted a sweeping health insurance law that mirrors the legislation currently before Congress. After signing themeasure, Gov. Mitt Romney (R) wrote, “Every uninsured citizen in Massachusetts will soon have affordable health insurance and the costs of health care will be reduced.” But did the legislation achieve these goals? And what other effects has it had? This paper is the first to use Current Population Survey data for 2008 to evaluate the Massachusetts law, and the first to examine its effects on the accuracy of the CPS’s uninsured estimates, self-reported health, the extent of “crowd-out” of private insurance for both children and adults, and in-migration of new Massachusetts residents.
We find evidence that Massachusetts’ individual mandate induces uninsured residents to conceal their true insurance status. Even setting that source of bias aside, we find the official estimate reported by the Commonwealth almost certainly overstates the law’s impact on insurance coverage, likely by 45 percent. In contrast to previous studies, we find evidence of substantial crowd out of private coverage among low-income adults and children. The law appears to have compressed self-reported health outcomes, without necessarily improving overall health. Our results suggest that more than 60 percent fewer young adults are relocating to Massachusetts as a result of the law. Finally, we conclude that leading estimates understate the law’s cost by at least one third, and likely more.
Our results hold important lessons for the legislation moving through Congress. As in Massachusetts, there has been no effort to estimate the cost of the private health insurance mandates that legislation would impose on individuals and employers. The costs may therefore be far greater than legislators and voters believe, while the benefits may be smaller than the conventional wisdom about Massachusetts suggests.
Wellpoint’s wasted opportunity (The Health Care Blog)
Sometimes with something so egregious gets written that, even if it’s in the Wall Street Journal, you have to notice it. Angela Braly, the CEO of Wellpoint—compensation a hair under $10m in 2009—ought to be happy… It looks like the health reform bill which put much of Wellpoint’s highly profitable individual and small group business at risk is dead, and this week Wellpoint started putting up rates between 35% and 80% in the California market (where it’s Anthem Blue Cross).
But the WSJ quotes her as calling health reform a “wasted opportunity.” Funnily enough Wellpoint and the trade association it funds, AHIP, were on both sides of the debate. Pushing Congress to give it 30 million more customers as part of the bill, and then surreptitiously funding the Chamber of Commerce to oppose health reform (and putting pressure on the Blue Dogs, and the DINOs in the Senate) when some of the terms of the House Bill started to look less favorable (85% Med loss ratios limits among them).
I’d had some semi-decent hopes for Braly and her team.
In 2007 Braly had replaced the reprehensible Larry Glasscock as CEO and seemed to have a longer term view to establish real system value…Instead, as usual short-termism is in. Health reform that creates a stable long-term private insurance market is opposed—whether proposed by a California Republican or a moderate Democratic President. And with Wellpoint’s stock price up double from its late 2008 low, I suspect Braly is looking forward to cashing in rather more stock options when the profits from this year’s premium increases add to the stock price.
But that’s all understandable. It’s just business and who cares if, after this collapse of health reform, next time around it’s very likely to be a single payer system that does away with health insurers altogether. Braly will be long gone by then…
