cost containment

Ezra Klein today said this:

To put this a bit more sharply, if I could construct a system in which insurers spent 90 percent of every premium dollar on medical care, never discriminated against another sick applicant, began exerting real pressure for providers to bring down costs, vastly simplified their billing systems, made it easier to compare plans and access consumer ratings, and generally worked more like companies in a competitive market rather than companies in a non-functional market, I would take that deal. And if you told me that the price of that deal was that insurers would move from being the 86th most profitable industry to being the 53rd most profitable industry, I would still take that deal.

Apparently though Ezra missed this news from Sunday:

A proposal to require health insurers to provide rebates to their enrollees to the extent that their medical loss ratios are less than 90 percent would effectively force insurers to achieve a high medical loss ratio. Combining this requirement with the other provisions of the PPACA would greatly restrict flexibility related to the sale and purchase of health insurance. In CBO’s view, this further expansion of the federal government’s role in the health insurance market would make such insurance an essentially governmental program, so that all payments related to health insurance policies should be recorded as cash flows in the federal budget.

The New York Times is reporting that the Senate bill will result in much higher premiums.

One example is a family of 4 earning $54,000 in 2016. They would be elligible for a $10,100 subsidy under the new system, but if they buy into the most popular federal plan then the monthly premiums would be more than $20,000 a year. After the subsidy that would leave the family paying $825 a month for coverage.

In another example, the NYT looks at the Medicare buy in. They are reporting that it will cost about $7,600 a year for a single person, or $633 a month.

If these numbers are true then this healthcare bill needs to fail, because that’s exactly what it is – a failure. If it doesn’t then Congress must look at doing a drastic raise of the minimum wage as well as a big increase in the federal poverty levels.

The one thing I have noticed lacking from information coming out is the issue of cost containment. What is in the new bill to reduce the extremely high costs Americans suffer for health care? That’s something I would really like to see.