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Health Care: Final Appraisal

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I haven’t posted to heavily on the miserable bit of political theater we call the “health-care debate” because after Obama’s cowardly about-face on the public option it became clear this was reform designed solely in the interests of corporations. And it is interesting to examine how closely the final product (which is to be passed later today) hews to their original demands, how they slowly set the parameters for debate, killing proposal after proposal, until now the majority of our so-called “left” warmly cheers its passage.

Now, there can be no doubt that HCR will have a few benefits for the public. The bill vastly expands coverage (albeit at the barrel of a mandate), outlaws discrimination against pre-existing conditions, claims to lower costs, and supposedly provides generous subsidies for those who can’t afford insurance (still unclear on how that’s supposed to work). But I want to stress that these public benefits are incidental to the bill’s primary purpose, which was to preserve the employer-based model of health insurance, and particularly to enrich the pharmaceutical and insurance industries. As I mentioned earlier, health stocks have shot upward on news of the bill’s passage.

A short history of health-care reform, detailing its spiral into in oblivion:

First, President Obama announced that a single-payer system would be completely off the table. Britain, Canada, France, Australia, New Zealand, Sweden, Denmark and Finland, Norway, Germany, and many other “developed” countries, all use single-payer – and while one can hotly debate the efficacy from a user-standpoint, those countries all get universal coverage for a fraction of the cost – which was supposed to be the goal of this bill.

Single-Payer means the government automatically covers every citizen and negotiates directly with doctor and pharmaceutical agencies. This, naturally, gives it greater bargaining power, which is one reason Canada pays 40% less for its medicine.  President Obama even admitted that the US cannot insure all Americans – and thus, cannot claim “universal healthcare” – without single-payer. However, such a plan would have demolished the massive profits and control our health care providers enjoy, so it wasn’t even discussed.

Defeated, progressives consoled themselves with the knowledge that President Obama favors a  “public option”. This would have entailed setting up a government-run nonprofit health care provider to compete with private insurers, much in the way public universities compete with private universities or the USPS competes with Fed Ex. President Obama  campaigned strongly for a public option,  but then vacillated once in office, and finally came out against it. The bill, finally, does not contain a public option, and it should be easy to see why private insurers would be pleased with that exclusion.

Okay, a necessary loss – but can we at least buy into Medicare? Nope. Import drugs from counties where they’re cheaper? Hell no. Remove the anti-trust exemption, wherein price-fixing is legal for insurance companies? Not yet. So what, then, does the bill do?

It forces 35 million uninsured Americans to either qualify for a subsidy or reach into their pockets and fork over a few thousand dollars per year to the existing insurance monopolies, significantly increasing their power with an absence of any independent regulation.  The insurance industry got literally everything they wanted – not a single new regulation, not one control on their frankly ludicrous system of pricing – and the so-called “liberals” got precisely nothing.

A few conclusions flow:

a) Insurance companies are essentially giant regional monopolies, each sovereign over all the health-insurance sold within a swath of land. They are exempt from anti-trust law, and are free to collaborate on their prices or arbitrarily set them as high as they wish.

b) The US Government is now authorized to use state power to compel its citizens to purchase this overpriced and frankly worthless product.

c) The companies, in return, promise not to callously deny coverage to the previously-afflicted and otherwise act with some modicum of humanity.

Michael Tomasky in The New York Review of Books gives an excellent rundown on “The Money Fighting Health Care Reform”, which is an odd title since his article ends up detailing the money fighting for the bill that just passed. Anyone who still thinks that the health insurance industry considers this bill a loss would do well to read it.

Some final notes:

  1. The Health insurance sector spent over half a billion dollars lobbying to shape the final HCR bill, by June ’09, more than a million dollars per day.
  2. The biggest pharmaceutical lobbying group, PhRMA, spent $6 million in the past few weeks advertising for the final HCR bill, and this is after they already spent $150 million earlier on the same thing.
  3. Major insurance providers WellPoint, Atena, Anthem Blue and many others also support the bill.
  4. The so-called “Baucus Plan”, which formed the basis for the final bill, was authored by his aide Liz Fowler, a former VP at WellPoint.
  5. Obama’s “health czar”, Nancy-Ann Deparle, who was also instrumental in arriving at the current bill, received $5.8 million dollars in 2009 from health insurance firms.
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Written by pavanvan

March 23, 2010 at 2:57 pm

Health Care Stocks Boom on Passage of Bill

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If anyone is still wondering whose interests the recently-passed health care bill represents, I invite you to read this article on Bloomberg’s front page today:

Merck & Co. and Pfizer Inc. climbed more than 1.7 percent to help lead health-care companies to the biggest gain among 10 groups in the Standard & Poor’s 500 Index after the House approved legislation that will ensure tens of millions of uninsured Americans will get medical coverage.

Written by pavanvan

March 22, 2010 at 9:18 pm

Posted in Economy

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Health-Reform Foes Hurl Epithets at Civil Rights Icon

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John Nichols:

[Civil Rights Veteran Congressman John] Lewis was leaving the Cannon Office Building Saturday afternoon when a crowd of demonstrators descended on him, shouting obscenities and screaming, “Kill the bill, kill the bill.”

Lewis responded, “I’m for the bill, I’m for the bill, I’m voting for the bill.”

Then, according to Lewis and others who were present, the Tea Party crowd then started began shouting: “Kill the bill, n—–.”

The incident, which took place barely blocks from where King delivered his “I Have a Dream” speech, was witnessed by other members of Congress and broadly reported by media outlets, including McClatchy Newspapers and Fox News.

I know one probably shouldn’t extrapolate too much from this one data point, but damn!

Written by pavanvan

March 22, 2010 at 2:27 pm

Blanche Lincoln (Hopefully) to Be Dethroned

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I generally try not to get into the flying circus that is US domestic politics, mostly because it’s all so much political side-show (whereas un-elected, non-public figures – CEOs, The Fed, White House appointees, etc. – usually end up making the real policy), but I think this definitely deserves a mention.

Blanche Lincoln is a “Democratic” senator from Arkansas, and one of the most odious politicians ever to mar our fragile Senate. She voted YES on the Iraq War, YES on the Military Commissions Act (denying due process to anyone deemed a “terrorist”), YES on the Patriot Act (see below), NO on the Employee Free Choice Act,  was one of the major holdouts on the watered-down “health care reform” proposed by President Obama, etc., etc. She’s a bad, bad lady. Needless to say, President Obama supports her re-election.

But there’s hope! (Not, of course, from Obama, who has decidedly retired from the hope business.) No, instead, the AFL-CIO is funding an insurgent campaign on the part of Lt. Governor Bill Halter. Now, I’m sure Mr. Halter has various objects in his closets which may or may not resemble skeletons, but the fact remains that there are very few worse candidates for this seat than the incumbent Ms. Lincoln. Even one of Bill Halter’s hypothetical skeletons would be an improvement. I generally think that voting does nobody any good, but in this case, a dethroning is well in order.

Written by pavanvan

March 3, 2010 at 8:52 am

Health Insurance Anti-trust Exemption

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Matt Taibbi has one of the most lucid posts on the recent health-care scandal I’ve seen recently.

You may remember the California Anthem Blue uproar that occurred a week or so ago, wherein they arbitrarily and unilaterally jacked up their prices almost 40%. Taibbi asks the logical question – “Why can’t California customers just switch to another, cheaper provider?” – and then answers it: “Because they have no choice.”

You see, as it turns out, health insurance providers are exempt from anti-trust legislation, which means they can hold veritable monopolies over huge areas and no one can do a thing about it. This was certainly news to me.

Dating back to 1947, what was supposed to be a “temporary” exemption quickly became a permanent loophole in the Sherman Anti-Trust legislation.

As Taibbi says:

This is why insurers (especially insurers with large market shares in small states) are easily able to gouge customers and deny coverage. There’s really no legal mechanism for preventing the firms from getting together and arranging price-fixing and other outrages. In a normal market customers would be able to get better coverage and cheaper rates from a competitor, but insurance is really more like a series of competition-free fiefdoms where the customers can’t go elsewhere for a better deal.

The exemption is known as the McCarran-Ferguson amendment, and so long as it’s still on the books health-care providers will continue to have a monopoly over large swaths of land. This is yet another reason why the “individual mandate” in Obama’s health-care plan is so goddamn offensive. “Reform” is impossible without repealing McCarran-Ferguson. How many of you think that’s likely?

Health Insurance Industry to Consumers: Screw You!

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(c/o Kevin Drum)

Mr. Drum makes a nice find in today’s LA Times. The health insurance industry knows, of course, that if and when health care reform passes, they’ll see a massive new influx of customers, as America’s 45 million uninsured become required, by the stroke of a pen, to purchase a health plan from them. So what do they do with that knowledge?

They jack up their prices.

Some excellent reporting from the LA Times:

Health insurers across the country are dramatically increasing rates and slashing benefits for many of the estimated 17 million consumers with individual insurance policies, while making it almost impossible to obtain affordable alternatives.

The problems have captured national attention as President Obama steps up his campaign in Washington for a healthcare overhaul and Congress investigates rate hikes of as much as 39% by Anthem Blue Cross in California.


The money quote:

“A lot of what you see today is a product of the way the market works,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s Washington-based lobbying arm. “The market is broken. Those people who do need the coverage wind up covering the cost of everyone else.”

When the spokesman for Big Insurance tells you the market is broken, I think you had better listen to him. Maybe all those “tea party” protesters fighting against “Obamacare” and “Obamnuism” ought to take note.

Written by pavanvan

February 21, 2010 at 10:17 am

Health Care Guide

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Slate has an excellent online guide to following this health-care imbroglio – that is, assuming anyone still wants to.

Written by pavanvan

February 12, 2010 at 10:00 am

Posted in Policy

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