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.

This bit of bad news reflects what we have been seeing all along – a continued removal of cost containment items in HCR. Now couple it with the graph Nate Silver presented yesterday to sell the “it’s better than nothing” argument:

Without cost containment measures in the bill there is nothing stopping the insurance companies from really jacking up premiums once it goes into effect. Now couple that with the “cadillac tax” and we have 2 disastrous scenarios:

• An employer decides to offer a cheaper plan that falls below the cadillac tax threshold. In turn this results in more limited coverage and much higher co-pays.
• The employer keeps the expensive plan and passes the cost onto the employees

Either situation is a no-win for HCR.

Add to all that the fact that the mandates are still included and this bill becomes exactly what Marcy Wheeler describes – an industry bailout.

To get this bill to any point that I can say I am fine with they must at a minimum remove the mandate and increase the threshold for the cadillac tax.