Republican Ideas on Health Care

The main strategy of Republicans is to block any meaningful health care reform. Their overall plans would do little if anything to help the uninsured, increase the ability of insurance companies to avoid consumer protection laws by operating out of the states with the weakest regulations, and would increase out of pocket expenses for most people. However, when Republicans have made suggestions which could be considered as part of an overall health care reform measure many Republican ideas have already been included.

Newt Gingrich and John C. Goodman list several suggestions in an op-ed in The Wall Street Journal. This hardly represents a meaningful health care reform proposal but many of the Republican ideas are already included in the current health care legislation. The Wonk Room goes through many of these suggestions noting how many are now in the bill. I’ll just add comments on a few of the topics.

The Republicans are trying to portray themselves as the defenders of Medicare  after years of trying to destroy the program. The Medicare cuts being proposed are not serious cuts to the program. Most of the cuts would be to Medicare Advantage programs which use the bulk of the subsidies they receive to increase profits for insurance companies and sometimes use a small amount to provide extra benefits to entice customers. In addition, if there is near-universal health care it will not be necessary to fund as much money for Medicare to pay for added expenses due to cost shifting because of the uninsured.

The article is misleading when it says Medicare pays doctors by the task but  doctors “do not get paid to advise patients on how to lower their drug costs.” No, there is not a CPT code for advising patients on lowering drug costs but Medicare does pay for office calls in which such matters can be discussed, and does pay more when more time is spent counseling patients.

They also write that “Under Medicare, doctors are not paid if they communicate with their patients by phone or e-mail.” True, but the same is true of most private payers. This is an area which is just starting to be considered. It could either be added to health care reform legislation or could be added in the future.

Gingrich and Goodman advocate meeting the needs of the chronically ill but one of their key recommendations for doing this will not have this result. They write that “Having the ability to obtain and manage more health dollars in Health Savings Accounts is a start.” The problem is that when people with chronic diseases have to pay for more expenses out of money in their own account they tend to avoid many necessary tests and office visits to save money. In the long run this leads to poorer outcomes and higher costs. There is also the danger of these accounts being depleted leaving patients with chronic medical conditions without sufficient coverage.

They also advocate eliminating junk lawsuits. I agree, but Republicans tend to greatly exaggerate the effect of this. Malpractice suits and the resultant defensive medicine do result in wasted money we should attempt to recover but this is a small part of overall health care costs. The health care legislation does provide for state demonstration tests regarding tort reform. I would be happy to see some actual solutions included in the bill. Perhaps if the Republicans took an attitude of compromising to get their ideas included, as opposed to all deciding early on to vote against health care reform, they might have been successful in having more concrete solutions for tort reform included.

White House Responds To Howard Dean’s Criticism of Health Care Plan

The White House has been responding to yesterday’s attacks on the watered-down Senate health care reform bill from the left which I also discussed here. David Axelrod appeared on MSNBC:

Axelrod, responding on MSNBC, said: “I have a lot of respect for Governor Dean but he got on the phone with Nancy-Ann DeParle, our point person on the health care issue, went through point by point. She explained why he was wrong. And he simply didn’t want to hear that critique. I saw his piece in The Post this morning, and it is predicated on a bunch of erroneous conclusions.”

Asked his response to progressives who say “kill this bill now,” Axelrod replied: “I think that would be a tragic, tragic outcome. … I guess if you’re hale and hearty and have insurance, it’s fine to say, ‘Kill this bill.'”

Peggy Noonan, the columnist and former Reagan speechwriter, told Axelrod: “On the issue of health care, you are losing the left, you are losing the right, you are losing the center. That looks to me like a political disaster.”

“When you describe what’s in the bill, there’s strong support for it,” Axelrod replied. “We don’t think of the world in terms of left, right and center. We think of the world in terms of small business people, … senior citizens, … Americans who are looking for help on a problem that we’ve been trying to solve for a century.”

The White House Blog has been busy responding, starting with White House Communication Director Dan Pfeiffer:

Recently, a somewhat perplexing new line of argument has emerged about health insurance reform, with some folks suggesting the Senate bill is a “dream” for insurance companies.

If that’s the case, though, it must be news to them. The insurance industry has been leveraging its considerable resources in a ferocious effort to defeat this bill, including producing a report the day before the Senate Finance Committee vote that was so misleading the firm behind it had to walk away from it. And that’s not surprising, because this bill will finally wrest power away from the insurance industry and put it in the hands of American consumers.

  • Among the many provisions to end insurer abuses, lower premiums, and hold insurance companies accountable:
  • Insurance market reforms will prohibit abuses such as denying coverage for pre-existing conditions, charging exorbitant premiums based on gender, age, or health status, dropping coverage when people are sick, and imposing lifetime limits on benefits.
  • Consumer rights will be enhanced by requiring all insurers to provide effective appeals procedures including outside, independent review of appeals
  • New insurance exchanges will reduce premium increases by lowering administrative costs and increasing the leverage of individuals and small businesses in this insurance market.
  • Competition will also be enhanced by providing consumers comparative information on available insurance options giving them the tools to make more informed decisions and drive competition based on value and service.
  • Insurers will be held accountable for excessive overhead costs fueled by unreasonable executive compensation and profits.
  • Insurers will also be required to compete against cost-effective national plans selected by the federal Office of Personnel Management.
  • Wasteful taxpayer overpayments to insurance companies through private Medicare Advantage plans will be eliminated.

Jason Furman, Deputy Director of the National Economic Council, added:

As we move into the final stage of the historic push for health reform, opponents of reform are testing the age old adage that if you only say something enough times you can somehow make it true.  Yesterday, we heard a new version of the old, tired refrain that the health reform bills in Congress would raise taxes on the middle class.

So let’s set the record straight:

  • First, the health insurance reform bill being considered in the Senate does not raise taxes on families making less than $250,000 – in fact it is a substantial net tax cut for American families. The bill being considered represents a substantial net tax cut for middle income families. According to the independent Joint Committee on Taxation, the bill will provide nearly $450 billion in individual income tax cuts over the next 10 years.
  • Second, the excise tax levied on insurance companies for high-premium plans, the so-called “Cadillac tax,” will affect only a small portion of the very highest cost health plans – a total of 3% of premiums in 2013. The vast majority of health plans fall below the thresholds set in the Senate plan and would be completely unaffected by the provision. And those that are above the threshold would only face an excise tax on the generally small portion of the plan that exceeds the threshold. As a result, based on analyses by the Joint Committee on Taxation, only about 3% of premiums will be affected by this provision in 2013. In addition, the Senate plan provides special protections to plans held by workers in high-risk professions – like police and firefighters – as well as by those over 55.
  • Third, for the small sub-set of plans that are affected, the primary impact of this provision will be to increase workers’ wages. Getting a pay raise is not what most people would call a tax increase. Economists agree by taxing the highest cost plans this provision will lead insurance companies to be more efficient and provide quality care to consumers at lower prices (see this endorsement in a letter from a group of prominent economists – including three Nobel laureates and previous members of both Democratic and Republican administrations and this analysis by CBO 2009). Even a report commissioned by the insurance industry’s trade association acknowledged that: “[w]e expect employers to respond to the tax by restructuring their benefits to avoid it.” [PWC, 2009].  As a result, employers will be in a position to increase workers’ take home pay.

Nancy-Ann DeParle, Director of the Office of Health Reform, described the benefits of the measure and the blog also quoted Bill Clinton:

At last, we are close to making real health insurance reform a reality.  We face one critical, final choice, between action and inaction.  We know where the path of inaction leads to: more uninsured Americans, more families struggling to keep up with skyrocketing premiums, higher federal budget deficits, and health costs so much higher than any other country’s they will cripple us economically.  Our only responsible choice is the path of action.

Does this bill read exactly how I would write it? No. Does it contain everything everyone wants?  Of course not. But America can’t afford to let the perfect be the enemy of the good.  And this is a good bill: it increases the security of those who already have insurance and gives every American access to affordable coverage, and contains comprehensive efforts to control costs and improve quality, with more information on best practices, and comparative costs and results. The bill will shift the power away from the insurance companies and into the hands of consumers.

Take it from someone who knows: these chances don’t come around every day.  Allowing this effort to fall short now would be a colossal blunder — both politically for our party and, far more important, for the physical, fiscal, and economic health of our country.”

Ezra Klein also disagrees with Howard Dean’s evaluation of the Senate bill:

What’s so strange about Dean’s objection is that the exchanges in the Senate bill (pdf) do act as “prudent purchasers,” that is to say, they set limits on the plans that can enter in the exchange to ensure that people are getting good choices. The relevant section begins on page 131 of the Senate bill. “The Secretary shall, by regulation, establish criteria for the certification of health plans as qualified health plans.” A couple of pages of relevant criteria follow, including marketing requirements (plans can be disqualified for focusing their marketing in outlets that would bring them uncommonly healthy enrollees), broad provider networks, coverage of options used by low-income folks (community health centers, say), quality measures, quality improvement strategies, consumer ratings, standardized benefit packages, etc.

And then, a couple of pages later, the language gets stronger. On page 143, the exchanges are given power to certify insurance plans based on whether “the Exchange determines that making available such health plan through such Exchange is in the interests of qualified individuals and qualified employers in the State.” On 144, premiums, and premium increases, enter explicitly into the discussion. Any insurance plan that wants to increase premiums has to submit a written justification for their decision. It will have to post that information on its Web site. And if the exchange is not convinced, it can decertify the plan.

Don’t believe me? In his op-ed, Dean names John Kerry as the senator who has been working hardest on this question. This morning, I spoke to Kerry’s staff, who got me a statement from Kerry himself. “The prudent purchasing provisions in the Senate health bill will lower costs and increase affordable options for consumers,” Kerry says. “It’s strong language that will allow the exchange to deliver competitive prices and offer high quality care, and I’m thrilled to see national reform honor the best innovations already succeeding in Massachusetts.”

John Podesta has also made a case similar to the arguments above.

Update: Richard Eskow disagrees with some of the claims from the White House.

Deal Reportedly Reached on Health Care

It sounds like a deal has been made on health care reform in the Senate after a busy day. The reports are contradictory with some saying that the public option is dead while Reuters reports that Harry Reid denies the public option will be dropped. The proposal is being sent to the Congressional Budget Office for scoring before the details are released.

Earlier there were reports that Olympia Snowe opposed the Medicare buy-in plan which I discussed yesterday but Joe Lieberman was willing to consider it. Both reportedly opposed an expansion of Medicaid. In addition there is more talk of offering further choices modeled along the Federal Employee Health Benefits Program which covers members of Congress and government employees.

As I discussed previously, allowing those between the ages of 55 and 64 to buy into Medicare would be beneficial for an age group which has the most difficulty purchasing insurance on the individual market. It might be better to have such a plan which offers true benefits at age 55 as opposed to a watered-down public option. Once the Medicare age is lowered to 55 there is also likely to be increased pressure to lower the age further if many people find that buying into Medicare is a better deal than purchasing private insurance. I have also seen mention today of the possibility of a trigger to lower the age based upon future costs of health insurance.

Another benefit of this proposal is that it can begin helping those who are unable to obtain insurance as early as 2010. There is talk that those who qualify for high-risk insurance pools will be able to buy into Medicare in 2010 with this to be offered to everyone at age 55 once the insurance exchanges are established in 2014.

Republicans who previously were arguing against cuts in Medicare are now taking the opposite approach and arguing against Medicare expansion. I guess they are channeling George H.W. Bush in arguing to “stay the course,” opposing both cuts and expansions. Actually the Medicare cuts which the Republicans oppose are cuts in subsidies to insurance companies in Medicare Advantage plans.

If Lieberman is aboard, it might be possible to pass a compromise without any Republican support but there is danger of losing the support of one conservative Democrat. Ben Nelson’s attempt to place restrictions on abortion was tabled in a 54-45 vote. Nelson said this makes it harder for him to support the bill. Nelson is one of the handful of Democratic members of The Family, a conservative religious group which believes they were chosen by God to lead.

Hidden Costs of Medicare Advantage Plans

The Medicare Advantage plans were set up by George Bush to reward the insurance companies for their contributions. The plans pay large subsidies to care for Medicare patients. As a result, it takes from 13 percent to 19 percent more to care for patients in Medicare Advantage plans than in the government Medicare program. Most of this extra money goes to increase profits for the insurance companies. Some  plans use a portion of the money to provide benefits such as health club memberships.

These extra benefits often don’t turn out to be a good deal for patients. Many don’t use the exercise programs, and often patients in Medicare plans do have access to exercise facilities. I’ve had patients who signed up for Medicare Advantage plans which promised dental benefits only to find that there weren’t any dentists in the area who actually accepted the plan.

Health insurance plans should be judged primarily on their health care benefits, but often the extra benefits are offset by higher out of pocket expenses for routine health care. For example, Medicare patients who do not have a secondary insurance pay 20 percent of  Medicare allowed amounts for office calls. Many Medicare Advantage plans have copays of $15 to $30 which exceed the 20 percent Medicare copay. There is no copay for laboratory testing in the government Medicare program but some Medicare Advantage plans do have a copy for lab work.

The Washington Post has an article on the hidden costs of the “free” perks from Medicare Advantage plans:

The trouble is, the extra benefits are not exactly free; they are subsidized by the government. And some of the plans pass their costs on to seniors, who pay higher co-pays and additional fees to get care.

“It’s a wasteful, inefficient program and always has been,” Sen. John D. Rockefeller IV (D-W.Va.) said at a recent hearing. At its core, Rockefeller added, Medicare Advantage is “stuffing money into the pockets of private insurers, and it doesn’t provide any better benefits to anybody.”

President Obama has proposed cutting more than $100 billion in subsidies over 10 years, a contentious component of health-care reform that will be fought in earnest as the bills move through Congress. But unlike some issues that touch off partisan sparring, Medicare Advantage has an unlikely band of bipartisan defenders who have already battled to restore $10 billion of the proposed reductions.

In a health-care debate defined by big numbers and confusing details, the prospect of losing benefits such as a free gym membership through the Silver Sneakers program is tangible, and it has spooked some seniors, who are the nation’s most reliable voters and have been most skeptical about reform.

Medicare Advantage was established in the 1970s (under a different name) when private insurers convinced Congress that they could deliver care at lower costs than Medicare. The program blossomed in the late 1990s when Congress bolstered it with millions in additional federal subsidies to for-profit HMOs. It has proven popular among younger, active seniors who had managed-care plans as workers, and about a quarter of Medicare’s 45 million beneficiaries are enrolled.

Many private plans require no additional monthly premiums, yet the government pays an average of $849.90 in monthly subsidies to insurance companies for a person on Medicare Advantage, according to the Kaiser Family Foundation. That is about 14 percent more than the government spends on people with standard Medicare, according to the nonpartisan Medicare Payment Advisory Commission.

“The promise of Medicare Advantage and Medicare HMOs was to save the government money, to save consumers money, all the while providing additional benefits and coordinating care,” said Joseph Baker, president of the Medicare Rights Center. “That promise has been unfulfilled overall because the plans are overpaid by the federal government at this point.”

Hardly A Big Change For A Government Take Over of Health Care

Opponents of health care reform claim that the current plans represent a government take over of heath care. Ezra Klein looks at the Congressional Budget Office’s evaluation of the Senate Finance Committee proposal:

The verdict? It will look a lot like our old health-care system.

Unless you’re uninsured, or on the individual market, this bill is not expected to affect you. CBO estimates that 29 million Americans who would’ve otherwise been uninsured will be covered. That’s a very big deal. Five million Americans who would otherwise have been left to the individual market will find a better option. And 3 million Americans who would’ve otherwise been in employer-based health insurance will be on the exchanges or, in some cases, on Medicaid. The insurance exchanges are projected to serve 23 million people come 2019, and 18 million of the members will be low-income and on subsidies.

That leaves 245 million non-elderly Americans who will pretty much be in the exact place they would’ve been otherwise. As for the elderly, the CBO doesn’t include them because they’re on Medicare. They, too, will be where they otherwise would’ve been.

This is hardly the radical change that opponents claim. As an owner of a small business this matters more to me than it does to the vast majority of people who are protesting against health care reform. I sure hope that they go beyond the current proposal and also give us the choice of a public option.

The key finding in the Congressional Budget Office report is that this would reduce the deficit by $81 billion over the next decade. While reducing the deficit is a good thing (most recently only seen under a Democratic president), I hope we don’t place this over doing health care reform right. Eliminating wasteful government spending (like the subsidies given by George Bush to the insurance companies in Medicare Advantage plans) is a good thing, but sometimes we really do benefit by spending more government money. I’d prefer that the deficit not be reduced as much so that greater assistance can be given to individuals to purchase health care coverage, and to avoid needing to expand coverage by placing people in Medicaid as opposed to real insurance plans.

Doctors Support a Public Plan Because Our Chances of Actually Getting Paid Are Better Than From Private Insurance

Big Government claims that, in supporting a public plan, doctors are endorsing the largest denier of health care claims. The selected data they cite is misleading and the blog’s argument is contrary to our actual experience. The chances of getting paid is far better from Medicare than most private insurance companies assuming Medicare was correctly billed as primary insurance. Such personal experience is what is going to influence physician support for a public plan–not selective quoting of statistics by conservative blogs.

The post lists a column on percentage of claim lines denied but doesn’t account for the reason. In real world experience, the number of denials is a small fraction of this. Another number which is far more consistent with my real world experience is percentage of claim lines reduced to zero. By this measurement Medicare is far more likely to actually send payment.

When my office does have Medicare claims rejected, by far the most common reason is that the patient was enrolled in a Medicare Advantage plan but is unaware that their coverage was changed. When physicians support a public plan we are supporting a plan based upon the original government Medicare program before it was screwed up by George Bush and the Republicans. I have also seen far more incorrect rejections of claims from Medicare Advantage plans, often taking multiple phone calls and faxes to fix, than I see from the government Medicare plan.

The second most common reason for denials I see is when a patient has Medicare but the patient or a spouse are working and another policy is actually primary. Medicare for All would fix that problem.

There are also situations where Medicare is pickier than other insurances on technical matters, but these rejections are easy to fix. The most common rejection of this type I experience is when an employee makes a mistake in typing in the Medicare number.

When a claim does need to be corrected, it is generally a simple matter to correct and resubmit the claim electronically. In contrast, if many private insurance plans initially reject a claim they will then reject fixed claims as duplicates, making it more difficult (and time consuming for physician offices) to actually get payment.

Medicare also has a number of rules by which they pay for certain services but their rules are all posted on line. It is generally easy to figure out what it takes to get a claim paid, but I’m sure that some physicians fail to pay attention to this and might be responsible for a larger number of rejections. In contrast, private insurance plans often reject claims without providing any good explanation. Often private plans will require prior authorization, taking up more staff time and increasing office overhead.

Private plans reject claims due to preexisting conditions. Medicare never does this. Private plans sometimes also find ways to drop a patient when they become too expensive, but this is not a problem with Medicare. Once a patient is dropped by private insurance plans, no more claims are submitted and this is not reflected in their percentage.

The bottom line is that in general Medicare pays us more reliably than private plans. It is also less expensive to bill Medicare as they don’t play the types of games private insurance plans often do in order to get payment. It is no surprise that so many doctors support a public plan as part of health care reform, with many also supporting Medicare for All.

Update: Another important factor is that there is a fair system of appeals and due process when Medicare claims are rejected. On rare cases where I have had rejections because of Medicare claiming that something was not necessary I have been successful in appealing their decision and receiving payment. If an appeal is not successful it can be taken to an administrative law judge. This is far less likely to be successful with private insurance.

GOP Chair Michael Steele Attacks Credibility of AMA on Health Care Reform

Obama Doctors

It must have really frustrated the Republicans to see Barack Obama have a photo op to remind everyone that, unlike in past years, doctors are supporting health care reform. Unlike in past years when organized medicine even opposed the formation of Medicare, the American Medical Association has endorsed the House proposal. Over seven out of ten doctors even support the public option.

If doctors could simply write a prescription to fix the health care system, we’d probably already have Medicare for All and have avoided all the political nonsense this year. Of course there are variations in opinion between doctors, such as seen in the case of the doctor cited in the linked article opposing health care reform due to believing the Republican misinformation claiming Obama would cut Medicare. In reality the proposed cuts are to the subsidies paid to insurance companies in Medicare Advantage plans.

The considerable amount of support for health care reform among physicians has prompted a response from Republican National Committee Chairman Michael Steele. Speaking on Fox (of course) Steele said, “The AMA is–does not have the credibility on this health care issue, as they would like to project.” This division between physicians and the Republican Party is a welcome change.

Who do you trust on health care issues–doctors or the Republican Party? We report, you decide.

Sarah Palin’s Lack of Understanding of Health Care

Sarah Palin was an “expert” on foreign policy because she can see Russia from parts of Alaska. She is now an “expert” on health care policy–perhaps because she once saw a hospital or a sick person. Palin has an op-ed in The Wall Street Journal which is nothing more than a long string of empty talking points from the far right. If Republicans had any actual arguments against health care reform, the last thing they need is to have Sarah Palin once again show her lack of understanding of national issues.

Palin writes, “Common sense also tells us that a top-down, one-size-fits-all plan will not improve the workings of a nationwide health-care system that accounts for one-sixth of our economy.” Perhaps, but that is not what is being proposed at all, and from reading the op-ed it becomes clear that Palin, like most conservative critics of health care reform, hasn’t the slightest idea of what is actually being proposed.

Palin next shows her ignorance of the problems in the Medicare program:

In his Times op-ed, the president argues that the Democrats’ proposals “will finally bring skyrocketing health-care costs under control” by “cutting . . . waste and inefficiency in federal health programs like Medicare and Medicaid and in unwarranted subsidies to insurance companies . . . .”

First, ask yourself whether the government that brought us such “waste and inefficiency” and “unwarranted subsidies” in the first place can be believed when it says that this time it will get things right.

Palin apparently does not realize that the waste and unwarranted subsidies which Obama referred to come from George Bush’s Medicare Advantage plans. This is yet one more example of Republicans governing incompetently and then using this history to make their argument that government is always incompetent.

The problem is not “the government that brought us” this waste but the Republican Party which brought us this waste. Without these Republican policies Medicare is far more efficient than private insurance at providing health care. The Republican policy of paying subsidies to private insurance companies costs 13% to 19% more to care for Medicare patients through private companies than it costs to care for them thorough the government Medicare program.

Palin then proceeds to distort the meaning of the report of the Congressional Budget Office on potential cost savings, ignoring the fact that the methodology used by the CBO prevents them from even considering most of the future cost savings. Note that conservatives rely upon the CBO here, even if distorting the meaning of the report, while ignoring the CBO’s report that show that the public plan would not be a threat to private insurance companies or that tort reform would not significantly reduce health care costs. They certainly had no regard for the CBO when they warned about the costs of the Iraq war.

Palin distorts the idea of an Independet Medicare Advisory Council despite the fact that Republicans have supported this in the past. Palin calls this “an unelected, largely unaccountable group of experts charged with containing Medicare costs” but their recommendations would still be voted upon by Congress. In contrast, many medical decisions are now being made by unelected insurance company executives whose decisions are based upon maximizing their profits. The Mayo Clinic’s blog has a different view on this proposal than Palin:

Late yesterday, Mayo Clinic became aware of the concept of development of an Independent Medicare Advisory Council. We applaud the direction of this proposal. We view favorably the concept of an independent body that can move Medicare to a “value- based payment” model.  An independent Medicare advisory commission focused on defining value, measuring it, and finding ways to pay for value could have significant, positive impact on health care for the long term.  While we think the proposal’s timeline of 2014 is too long to wait to see value-based reforms, we look forward to working with the administration on refining and strengthening their new proposal. This, and other, bold concepts have the potential to “bend the cost curve” in U.S. health spending without compromising health.

Palin moves from her misinterpretation of the Independent Medicare Advisory Council to repeat her totally untrue scare stories about “death panels.” Some fact checking of Palin’s misinformation has previously been posted here, here, and here. Palin’s false statements about “death panels” originally came from provisions to fund voluntary counseling for patients regarding end of life care–an idea which Sarah Palin has supported in the past.

Palin provides more warnings:

“A new study for Watson Wyatt Worldwide by Steven Nyce and Syl Schieber concludes that if the government expands health-care coverage while health-care inflation continues…”

Yet it is Palin and the Republicans who object to any measures which would actually reduce health-care inflation such as the public option and the Independent Medicare Advisory Council.

Palin ends by providing meaningless solutions:

As the Cato Institute’s Michael Cannon and others have argued, such policies include giving all individuals the same tax benefits received by those who get coverage through their employers; providing Medicare recipients with vouchers that allow them to purchase their own coverage; reforming tort laws to potentially save billions each year in wasteful spending; and changing costly state regulations to allow people to buy insurance across state lines.

Providing more tax benefits or vouchers will not help when the private market has collapsed due to insurance companies finding it more profitable to deny coverage and drop the sick than to cover health care expenses. Tort reform would provide some minor savings, but I’ve already noted that the Congressional Budget Office, which Palin loves to cite when she can distort their reports to appear that they are supporting her arguments, has already contradicted Palin on this. Allowing people to buy insurance across state lines will not help when there is no longer a meaningful individual market. Besides, giving the insurance industry yet another way to evade regulation is the last thing we need.

Republicans such as Palin repeatedly respond to health care reform by distorting what is being proposed. They neither offer any serious proposals of their own or respond to what is actually being proposed. Their lack of response to the actual proposals suggest that they are unable to come up with any meaningful objections to what is actually being proposed.

Update: The White House has responded to Palin’s claims.

Update II: My response to Obama’s speech.

CBO Report Disputes Conservative Scare Tactics Regarding Public Option

Conservatives have been showing a strange lack of confidence in the free market. They generally take the line that private business is always far more efficient than anything done by government but they now claim that private insurance would not be able to survive if forced to compete with a public insurance option. We see examples that their arguments are wrong every day. George Bush set up Medicare Advantage plans to compete with the government-run Medicare program (although he also did give them large subsidies in return for their past campaign contributions). Federal Express, UPS, and other companies are doing well despite competition form the Post Office. A new Congressional Budget Office report also disputes conservative claims that the public option would force out private insurance:

A separate budget office report made public Monday found that a health care reform bill that includes a public option sought by Democrats would result in 3 million more people enrolled in employer-sponsored coverage by 2016, compared with what would happen under current laws. The report, responding to questions from Rep. Dave Camp, R-Michigan, was not a final review, the office said.

Pelosi seized on its findings, declaring: “The CBO has … disputed claims made by the Republicans about what our legislation will do.”

Hoyer said the Republican claim that a public option would reduce health insurance choices also is wrong, according to the budget office analysis.

“Republicans are making ridiculous claims, frankly, about reform because they know that the status quo cannot be defended,” Hoyer said.

Glancing through the blogosphere I note a pattern with regards to conservatives paying attention to CBO reports. Many Republicans are ignoring this report as they also ignored the CBO reports before the Iraq war which showed that the war would cost far more than the Bush administration predicted.

Conservative blogs did heavily cover two recent reports which showed little in the way of cost savings in the Democratic health reform plans. There is certainly a strong argument, which I have made in the past, that the Obama administration has been overly optimistic about cutting costs. This is a bipartisan problem. George Bush went as far as to threaten Medicare officials with being fired if they testified before Congress about the real cost of his Medicare Part D plan.

The CBO reports are not really good measure of potential cost savings due to the way that their studies are conducted. The CBO can only include hard savings which are included in current legislation. They cannot include estimated savings from various restructuring of the health care system which are likely to result in savings  but which cannot be measured. They also cannot include savings which are promised by the insurance and pharmaceutical industries but which are not firmly written into law.

Profitability And Private Insurance

Medicare Advantage programs receive 13% to 19% more to take care of Medicare patients than is paid through the government program. I just had a patient come in saying that their Medicare Advantage plan will stop operating as of January as they no longer find it profitable despite these higher payments. There was also another plan which I had patients in which stopped operating as of January of this year. I’m glad to hear that they are going away as a few times they have refused to pay for lab tests which were needed, and which Medicare would pay for. Most likely their denials were motivated  purely by financial considerations as opposed to medical need.

So much for the greater efficiency of the free market, alon g with the idea that it is government, and not private plans, which “ration” health care.