The Senate HELP Committee Bill IS a Trojan Horse for Single-Payer Pt. 1

I've spent many hours slogging my way through the Senate Health, Education, Labor and Pensions (HELP) Committee bill released to the public. It is 615 pages long. I have gone through them all, the first 137 pages in detail. I offer my opinion that this is a bad bill, that seems to initiate the end of private health care insurance and establishes the beginnings of single-payer health care. Before you roll your eyes, stop reading, and dismiss me as an un-American corporate shill, or nazi, or racist, or whatever baseless insult you may wish to throw at me, I say now that I will cite evidence from the bill itself throughout my argument.

The beginnings of the bill, rather euphemistically named the "Affordable Health Choices Act" initially amends The Public Health Service Act (full text here), and intrusively regulates private health insurance policies for the first 30 pages (pgs 7 - 36).

Among the numerous regulations is:
1) A "guaranteed availability of coverage" As written: "each health insurance issuer that offers health insurance coverage in the individual or group market in a State must accept every employer and individual and individual in the State that applies for such coverage." (page 9, sec 2702)

2) A "guaranteed renewability of coverage" As written: "'Except as provided in this section, if a health insurance issuer offers health insurance coverage in the individual or group market, the issuer must renew or continue in force such coverage at the option of the plan sponsor of the plan, or the individual, as applicable." (page 10 sec. 2703)

3) A requirement to give premium rebates determined, not by the company, but by the presidential administration: "A health insurance issuer offering group or individual health insurance coverage shall provide an annual rebate to each enrolee under such plan or coverage on a pro rata basis in the amount by which the amount of premium revenue expended on activities described in subsection (a)(3) exceeds-- (A) [...] a percentage that the Secretary [of Health and Human Services] shall by regulation determine based on the distribution of such percentages across such issuers;" [emphasis mine] (page 11 sec 2704).

One might ask how the Secretary of Health and Human Services (currently Kathleen Sebelius) could determine the percentage of this. Well, the answer is reasonably simple. For all intents and purposes the insurers would have to open their accounting books for the Secretary (page 10 sec. 2704).

4) The government will require insurers to notify their members if the insurance plan does not meet the Medical Advisory Council's (more on MAC later-- for right now it's a council handpicked by the Secretary of Health to set standards for health insurance plans) minimum qualifying standards (page 12), which I can reasonably predict would cause the members to drop their coverage or demand their employers to switch coverage. In other words, MAC's word is law in regulating i.e. rationing medical coverage.

5) The bill forbids discriminating against the insured based on health status (page 12 sec, 2706). Among such conditions that cannot be factored in are: (1) health status (2) medical condition (3) claims experience (4) medical history (5) evidence of insurability (6) "[a]ny other health status-related factor determined by the Secretary [of Health]."

6) Okay. This one's a biggie. Sec. 2707 (page 13) of the bill is entitled "Ensuring the Quality of Care" and basically could require health plans to pay bonuses to doctors for following government standardized guidelines on care. Essentially, this suggests that insurance companies could be forced to provide "incentives" for doctors to yield to federal bureaucracies' guidelines rather than their own diagnoses.

Now I disagree with the other regulations (for reasons I'll discuss below), but this one angers me. While Obama is ridiculously claiming that doctors have financial incentives to cut the legs off of diabetics rather than treating them, this portion of the bill requires health plans, by law, to provide incentives for doctors to follow guidelines "for excellence of care," rather than a doctor's personal experience, expertise, or the individual diagnosis.

Here is the language in the bill: "A group health plan [...] shall develop and implement a reimbursement structure for making payments to health care providers that provides for-- (1) the provision of high quality health care under the plan or coverage in a manner that includes-- [...] (C) the implementation of activities to improve safety and reduce medical errors through the appropriate use of clinical practices, evidence based medicine, and health information technology under the plan or coverage; [emphasis mine]"

Okay. Now at first this might look like simply an incentive to reward excellence. A gold star on a paper... Okay fine. But who determines what is "the appropriate use of clinical practices," etc. and by what criteria? Who determines the criteria even? None of this appears to be specified in the bill, but given the intrusiveness of the government regulations and MAC in this bill, combined with Obama's own admonishments about the immoral greediness of surgeons, where would you expect all of the criteria to come from?

7) The bill goes on to define a member's children covered by health plans as being "not more than 26 years of age" (page 17), So a member's 25-year-old son or daughter would be required to be covered by their parents' health plan. Don't be too up in arms about children being 25-- I believe the cut-off age is currently 24.

8) A health plan cannot establish annual or lifetime limits on benefits (page 17 sec. 2710).

As you may have noticed, all of this happens in the first 18 pages of the bill, and the 8 points of regulation are simply points I've highlighted to demonstrate the micro-management of health providers that this bill attempts. Various other regulatory measures exist in various sections and paragraphs. I encourage you to read this bill for yourself, but definitely read the first 20 pages. It will give you a good idea of the sort of constricting regulation and powers Congress and the Secretary of Health and Human Services will have over your health care. And it's a lot.

These Government mirco-managing regulations have a long history of failure. This is hardly surprising as the governmental rules and regulations that businesses must abide by are almost never written by people who actually have experience in the field that they wish to regulate. They are almost always written by career politicians, whose primary goal is to satisfy their constituencies in the short-term and be re-elected-- not to create businesses that can remain profitable and competitive in a market. That's not even in the cards.

We are expected to believe that these men and women can tell successful businesses how to run their companies and remain profitable and viable-- even though the stated purpose of this reform bill is to provide universal coverage and not sustainable health insurers.

Let us take Obama's own Post Office analogy for example. At the Portsmouth town hall (video here) Obama said "'Now, I recognize, though, you make a legitimate -- you raise a legitimate concern. People say, well, how can a private company compete against the government? And my answer is that if the private insurance companies are providing a good bargain, and if the public option has to be self-sustaining -- meaning taxpayers aren't subsidizing it, but it has to run on charging premiums and providing good services and a good network of doctors, just like any other private insurer would do -- then I think private insurers should be able to compete. They do it all the time.' (Applause.)

"I mean, if you think about -- if you think about it, UPS and FedEx are doing just fine, right? No, they are. It's the Post Office that's always having problems."

While this comparison is nonsense (as I've asserted in another post), the assertion about the Post Office is true enough. The Post Office is on track to lose an astonishing $7 billion. From the NY Times article by Joe Nocera:

"Consider the plight of John E. Potter, the chief executive of the second-largest employer in America. On the one hand, he has a guaranteed monopoly for much of his business. On the other hand, monopoly or not, the combination of the Internet and the recession is absolutely crushing his company, just as it is for so many other companies across the country. His last quarter’s results, which were announced on Wednesday, revealed a loss of $2.4 billion. The business is on track to lose a staggering $7 billion in 2009, on around $68 billion in revenue. That’s practically General Motors territory.

"What can he do to fix the situation? Surprisingly little. His employees have clauses in their union contracts that forbid layoffs. Nor can he renegotiate their gold-plated benefits, the way, say, the auto companies did when their backs were against the wall. Political pressure makes it nearly impossible to shut down any of his company’s 34,000 facilities, no matter how outmoded or little used. He can borrow money, but under the law, he can add only $3 billion in debt a year — an amount that isn’t going to come close to covering his losses.

"Oh, and get this. Every year between now and 2016, he has to put aside over $5 billion to finance health benefits for future employees. You read that right: future employees. There isn’t another business in the country that finances benefits for employees it hasn’t even hired yet.

"Welcome to John Potter’s world. He’s the nation’s postmaster general. Yes, that’s right: for the last nine years, he has run the United States Postal Service, which, since 1970, when it stopped being a government department and started becoming self-sufficient, has been the oddest of ducks. It is expected to operate as a business, turning a profit and so on, and yet it is still subject to Congressional oversight and all sorts of legal constraints, like that ridiculous health benefit prefinancing for future employees, which was part of a big 2006 postal reorganization bill. (Its main purpose, it would seem, is government accounting: those funds get counted against the federal deficit.) [emphasis mine]"

Doesn't sound so great, does it? This merely begins to illustrate the difficulty of running a business with government micro-management. And this financial trouble comes in spite of a government enforced monopoly (the Post Office is the only entity allowed by federal law to deliver first class mail to your mailbox) and the huge advantages that the Post Office enjoys "It pays no federal tax, no state tax, and no parking tickets. Often they don't even pay rent. They don't pay to register their vehicles. Check out a license plate spot on a post office truck -- nothing there."

Yet, we are to believe that private health care insurers, burdened with these new micro-managing regulations and intrusive oversights, are going to remain viable businesses in the years to come. We are actually expected to believe that even though the federal government can mandate that a private health plan must accept every applicant for life (page 9 & 10), that the feds demands and the presidential administration determines annual rebates of premium payments (page 11), that private insurers must open their books to the administration, (page 10), that a presidential council (MAC again-- more on MAC in the next post) determines the extent of required coverage, that requires private insurers to pay incentives for doctors to follow the government band wagon on treatment (page 14), can remain viable businesses in this government-contrived market. As government programs like medicare, medicaid and social security rush toward insolvency, and the Post Office hemorrhages cash, do you think government micro-management and mandates will not do this to private health insurance?

Rather laughably, the Senate bill throws in a "no changes to existing coverage" provision (page 19). Basically it freezes a current plan as is, not allowing others to enroll in the plan except for families of existing members (natch). As medical costs increase (tests, diagnosis equipment, etc.), how can a private insurance company hope to stay in business if it cannot expand? When Obama and other politicians says these reforms will allow you to keep your insurance and doctor, it is deceptive, if not an outright lie. You can keep you insurance (provided your employer doesn't switch), but your insurance plan is doomed to fold-- probably within a year (since most insurance plans change annually).

While these changes in insurance requirements may sound good on the surface, it is extraordinarily unlikely that they are sustainable for private health companies-- even if there was no competition from a public option (as Obama has openly admitted to numerous times including in the Post Office analogy) or a government supervised health exchange (what is called the Gateway in this Senate HELP Committee health bill beginning on page 40).

Yes, health care insurance reform is doubtlessly needed, especially among people saddled with the federally funded program medicaid (whom Michelle Obama actively dumped onto other community hospitals while a senior vice president at the University of Chicago Medical Center). However, the format of this strict government oversight by both Congress and the presidency (how well will that work with a Republican Congress and Democrat president- or vice versa), contained in this bill is not the answer. This bill will create an untenable market for private insurers and will put them out of business, especially as they compete with a tax-funded public option. I have to wonder if that is not, in part, the intent of this bill...

I will have more on the Medical Advisory Council (MAC), the public option (which will lead to single payer insurance) and the American Health Benefit Gateway (the proposal for the federal government's exchange) in part 2 of this post up hopefully by Sunday.