What is Brooks Jackson thinking?
From the August 21st On The Media, Bob Garfield interviewing Brooks Jackson of factcheck.org on healthcare, Jackson says:
Even the insurance industry itself, the lobby representing the big guys, the Aetnas, the Blue Cross/Blue Shield guys, they have formally endorsed market reforms, things like ending non-coverage of preexisting conditions and requiring insurance plans to take all comers. They also want – and this is interesting – they favor a personal mandate requiring individuals to be covered, to obtain coverage somehow.
This just in! They want the healthy twenty-somethings to be forced to be their customers! And the federal government will be providing subsidies to citizens, money that eventually goes to the insurance companies! Wow that's crazy, who'd have thunk it? It's really interesting that the insurance companies would be in favor of that!
Gosh.
If my point isn't clear yet, here's a primer from the LAT in June on why the insurance companies favor a mandate:
The customer base for private insurance has slipped since 2000, when soaring premiums began driving people out. The recession has accelerated the problem. But even after the economy recovers, the downward spiral is expected to continue for years as baby boomers become eligible for Medicare -- and stop buying private insurance.
Insurers do not embrace all of the healthcare restructuring proposals. But they are fighting hard for a purchase requirement, sweetened with taxpayer-funded subsidies for customers who can't afford to buy it on their own, and enforced with fines.
Such a so-called individual mandate amounts to a huge booster shot for health insurers, serving up millions of new customers almost overnight.
Or as Matt Yglesias put it in February: "It’s not that a mandate is such a terrible thing, but it’s primary purpose is to keep insurance companies in business once progressive stuff like community rating and guaranteed issue policies are put in place."
Oh, and I'm sure the insurance companies are out lobbying hard to make sure ending non-coverage of pre-existing conditions stays in whatever bill, as Jackson assures us that's something the industry has formally endorsed. If that part fell out of a bill (not that it will) the insurance companies would fight tooth and nail to put it back in, in Jackson's world.
Is Brooks Jackson's basic understanding of the healthcare debate really as lacking as it sounds? I do hope not.
1 Comments:
I don't agree that the primary purpose of an individual mandate in health reform proposals is to keep insurance companies in business, any more than I believe that states require every driver to have car insurance because of a sweetheart deal with Geico.
Requiring everyone to have health insurance is of course most excellent from the insurers' perspective. It's good for them for two reasons-- 1) SUPER more business; 2) it gets rid of the adverse selection problem-- people buying insurance when they're sick (or likely to get sick) and not buying insurance when they're healthy.
Adverse selection is bad for the insurers, and it's also bad for those of us lucky to have insurance, because when insurers need to pay out more per person on average, everyone's premiums go up. When the average pay out per-person is lower, premiums go down (well, they go up by less). Insurance works best for both insurers and insurees when the risk is spread across as many people as possible, and particular, across as many health people as possible, with just a few sick people (or young people with unexpected accidents or illnesses). (AHIP-- the big health insurer lobby-- supported ending the practice of excluding for pre-existing conditions, on the condition that a universal mandate is in place.)
Most uninsured don't have health insurance because they can't afford it; they need subsidies and affordable options. There are also many people who don't have insurance because they think they don't need it. They're right...until they're wrong.
I do support an individual mandate, as long as there are enough subsidies and lower-cost options so that people can afford it.
Next rant: why do Blue Dog democrats hate America?
~ SS
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