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protection money and health insurance
Oct. 18th, 2009 10:56 pmWell, I was going to call it "protection money", but Robert Reich calls it "hush money" at this post about the way the Obama administration is dealing with health insurers, pharma companies, and doctors. Either way, it comes down to "we'll give you hundreds of billions of taxpayer dollars if you call off your lobbyists and don't shoot down our attempts to somewhat reduce the number of uninsured people."
After making that sweetheart deal, a bunch of insurance companies are still complaining that the Baucus bill doesn't give them quite as much profit growth at taxpayer expense as they were hoping: they've put out a bunch of ads in the past week claiming that the bill will increase individual premiums. (Well of course it will, because it doesn't include a public option or any other serious measures to contain costs.) But what they mean (see a previous Reich post) is that the proposal doesn't force young, healthy people into private insurance as fast as the insurance companies hoped, so they're going to throw a snit-fit and raise everybody's premiums. Which will of course stay high even after the young, healthy people are forced into private insurance, because in many regions there is no competitive health insurance marketplace and hence no reason to lower the premiums on customers who have to buy from you.
And why doesn't the proposal force young, healthy people into private insurance immediately? Because health insurance premiums are too expensive, and people will squawk if they're forced to pay them. Why are health insurance premiums too expensive? Because in many regions there is no competitive health insurance marketplace, and because the proposal doesn't have a public option to create competition and drive down costs. I think this is where we came in....
I sometimes wonder what would have happened if Obama had opened with single-payer. The insurance industry would have spent even more money killing it than (in our reality) they have spent killing the public option. Obama could then have shown his willingness to compromise by settling for "just" a public option. If the insurance and pharma industries continued to whine about this, they would have looked petty and greedy in the court of public opinion. Psychological research shows that when people are given a one-dimensional spectrum of non-trivial choices, they tend to favor a "moderate" one, i.e. one near the middle of the spectrum they were given (no matter how wacky or extreme that spectrum may be). Starting the discussion by taking single-payer off the table moved the spectrum in the wrong direction. You don't compromise to start a negotiation; you compromise to end a negotiation.
On the other hand, if he had started by taking a public option off the table, the insurance and pharma industries would have found something else to whine about, and the resulting "compromise" would be an even bigger taxpayer giveaway to them than we're headed for now.
After making that sweetheart deal, a bunch of insurance companies are still complaining that the Baucus bill doesn't give them quite as much profit growth at taxpayer expense as they were hoping: they've put out a bunch of ads in the past week claiming that the bill will increase individual premiums. (Well of course it will, because it doesn't include a public option or any other serious measures to contain costs.) But what they mean (see a previous Reich post) is that the proposal doesn't force young, healthy people into private insurance as fast as the insurance companies hoped, so they're going to throw a snit-fit and raise everybody's premiums. Which will of course stay high even after the young, healthy people are forced into private insurance, because in many regions there is no competitive health insurance marketplace and hence no reason to lower the premiums on customers who have to buy from you.
And why doesn't the proposal force young, healthy people into private insurance immediately? Because health insurance premiums are too expensive, and people will squawk if they're forced to pay them. Why are health insurance premiums too expensive? Because in many regions there is no competitive health insurance marketplace, and because the proposal doesn't have a public option to create competition and drive down costs. I think this is where we came in....
I sometimes wonder what would have happened if Obama had opened with single-payer. The insurance industry would have spent even more money killing it than (in our reality) they have spent killing the public option. Obama could then have shown his willingness to compromise by settling for "just" a public option. If the insurance and pharma industries continued to whine about this, they would have looked petty and greedy in the court of public opinion. Psychological research shows that when people are given a one-dimensional spectrum of non-trivial choices, they tend to favor a "moderate" one, i.e. one near the middle of the spectrum they were given (no matter how wacky or extreme that spectrum may be). Starting the discussion by taking single-payer off the table moved the spectrum in the wrong direction. You don't compromise to start a negotiation; you compromise to end a negotiation.
On the other hand, if he had started by taking a public option off the table, the insurance and pharma industries would have found something else to whine about, and the resulting "compromise" would be an even bigger taxpayer giveaway to them than we're headed for now.
