Well, It Is Sort Of An Option

The Investors Business Daily tops Memeorandum with an editorial blasting the House Democrats health care bill as legislating the end of private insurance.  Their lead:

It's Not An Option

Congress: It didn't take long to run into an "uh-oh" moment when reading the House's "health care for all Americans" bill. Right there on Page 16 is a provision making individual private medical insurance illegal.

When we first saw the paragraph Tuesday, just after the 1,018-page document was released, we thought we surely must be misreading it. So we sought help from the House Ways and Means Committee.

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:

"Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day" of the year the legislation becomes law.

So we can all keep our coverage, just as promised — with, of course, exceptions: Those who currently have private individual coverage won't be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers.

I am not reading the bill (1000+ page .pdf, or 4 page summary) the same way.  The relevant section on page 16 describes the treatment of currently operating plans that will be grandfathered under the new legislation (Key hint - the section is titled "Grandfathered Health Insurnce Coverage Defined).  Rather than tear up all existing health insurance contracts, such grandfathered plans will generally be allowed to operate with their current customers until death (or other circumstances) do them part.

However, all new qualified privately offered plans must meet certain guidelines to which a grandfathered plan will not be subject; for example, a new private plan may not exclude applicants on the basis of pre-existing conditions,although a grandfathered plan may be doing just that.

Hence, the impact of the provision cited by IDB will not be to make all private insurance illegal; it will be to make sure that all newly offered private insurance complies with the new guidelines.  It may be the case that the new guidelines are so onerous that private plans can not see their way to a rational business strategy, but that is a different point than the one being made by IDB.

Let's belabor the issue of the grandfathered plans for a moment.  Imagine an existing plan that is keeping premiums low by ruthlessly excluding smokers, the overweight, and people with pre-existing conditions.  People currently in that plan should enjoy a low-cost alternative for years.  However, although it might be an appealing alternative to slim, healthy fitness buffs, that plan will be closed to new entrants.  Why?  Because it does not comply with the new guidelines, and if it is allowed to stay in business by enrolling new members it will avoid compliance forever.

So what of the IDB claim that "those who leave a company to work for themselves [will not] be free to buy individual plans from private carriers"?  Well, that is only a bit true - people won't be allowed as new entrants into grandfathered plans, but they will be free to enter any private plan that complies with the new guidelines.

The second IDB claim - "Those who currently have private individual coverage won't be able to change it" - is not strictly accurate but probably true.  There is an excellent chance that some grandfathered plans will be very financially attractive to those already enrolled in them, so some "plan-lock" may occur.  But for those intent on switching private alternatives that comply with the new guidelines ought to be available (although the price may not be desirable since, for example, pre-existing conditions are *not* excluded). 

In both cases, the public option really is just one more option, not a legislated inevitability.

I think the IDB misfired here, but they still have 1,000 pages to go.

ASKED AND ANSWERED:  Say Rule One with me - always check the InstaPundit.

Comments

[sylvia]

Well the first approach did not make the plan look good, but if it is more like the way Tom appraised it, it doesn't sound that bad to me. I really don't think that including pre-conditions and smokers will raise the poremiums that much, since we are paying for it already and it is really a small percentage all together.

I would be interested in seeing some hard numbers from the insurance agencies about how much they think their costs would go up and then how much they would have to raise their premiums to compensate.

I'm sure they have the stats like that already. The fact that the insurance companies are not loudly trumpeting those stats makes me wonder if the stats are not to their advantage in terms of pity, and that they know it would not change their bottom line that much. We can make some more informed decisions if we can get more info on how much cost increase we are talking about here.

[Neo]

Steve Benen over at Washington Monthly notes that Obama seems to have redefined "bipartisanship".

It seem now that Democrats can claim "bipartisanship" if the bill has any proposals that came from both Democrats and Republicans, even if only one party votes for the measure.

I smell "desperation in the air" when Obama is looking for CYA material.

[clarice]

sylvia, the point seems again to have sailed far over your head.

TM, I agree with althouse and Reynolds--this needs more time and srudy and the fact that they are trying to "Rahm" it thru gives me pause, makes me suspect the worst of it.

[narciso]

Why would you write a bill, this way, is pg, 16 the controlling element, pg 19, or 91, or 96 or something in between. Why would anyone vote for it, without examining it, considering the consequences

[sylvia]

Clarice, once again you have made accusations without backing them up. I suppose actually supporting your rude accusations might be too much to ask? Or maybe offer up some facts or logic once in a while, not just insults and bitching? I mean, not to trouble you or anything. I know typing is a lot of work, especially typing things that aren't fun to type, like insults and stuff.

But I have to differ with you in I think I got the point of Tom's post quite well in that he questioned the way in which Investor Daily interpreted this bill and presented a different interpretation. If you have any other point, I would love to hear it.

[Ralph L]

they will be free to enter any private plan that complies with the new guidelines.
Will any new private plan (that must accept pre-existing) be able to compete with a subsidized public option?

[glasater]

If you regularly check out Drudge--here is some encouraging news:

Hello Blue Dogs

ASHINGTON -(Dow Jones)- U.S. Rep. Mike Ross, D-Ark., a leader of fiscally conservative House Democrats, said Wednesday a House plan to overhaul the U.S. health-care system is losing support and will be stuck in committee without changes.

"Last time I checked, it takes seven Democrats to stop a bill in the Energy and Commerce Committee," Ross told reporters after a House vote. "We had seven against it last Friday; we have 10 today."

[bad]

There is no telling what carp is buried in that bill beyond the carp we know about. No one has read it and Steny said no one would vote for it if they actually read it.

Fix the problems in Medicaid and Medicare first to show government can handle the responsibility then we'll talk later.

[Mom]

How can it be constitutional for a federal law to require that I buy an insurance policy? And that if I don't buy it I can be assessed a "tax penalty"?

[Ignatz]

--Will any new private plan (that must accept pre-existing) be able to compete with a subsidized public option?--

Of course not. That is the purpose of these provisions; to incrementally transfer the country to socialized medicine.
They learned that one giant power grab to Hillarycare is a loser so they will slowly, through attrition, transfer us to the government option, all the while ridiculing private insurance for being unable to compete on the "level playing field" of the exchange. Of course a playing field in which one player can absorb as many losses as necessary to destroy the competition is only level if you're as cockeyed as a Dem.

[clarice]

sylvia--TM was just making a supposition about possible grandfathered provisions, not pointing to specifics in the bill thus this is nonsense:
"I really don't think that including pre-conditions and smokers will raise the poremiums that much, since we are paying for it already and it is really a small percentage all together. "

[Cecil Turner]

Will any new private plan (that must accept pre-existing) be able to compete with a subsidized public option?

And is a private plan that must comply with the public guidelines really "private" in any meaningful sense?

But the real question is: "can we afford it?" The CBO says "no":

Under questioning by members of the Senate Budget Committee, CBO director Douglas Elmendorf said bills crafted by House leaders and the Senate health committee do not propose "the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount."

The idea that congressional Democrats are going to craft an entitlement program that's going to reduce benefits spending is so counterintuitive that the only reasonable response is a guffaw. Yet that unbelievable premise is exactly what the program depends on. Color me skeptical.

[Ignatz]

--How can it be constitutional for a federal law to require that I buy an insurance policy?--

Because the constitution now means that the feds can do anything they please unless they are explicitly excluded from doing it by specific language in the constitution.
And even then they can do something if they really, really think they should and they have lots of empathy.

[Ignatz]

--Fix the problems in Medicaid and Medicare first to show government can handle the responsibility then we'll talk later.--

bad,
You are so behind the curve.
Barry IS fixing them. He proposes further reducing their compensation so that doctors lose even more money on them and private insurance will have to raise rates even further to make up the difference so that doctors remain solvent.

[bad]

AHA, Ignatz!! I wasn't using "fix" in the Chicago Way, but in the "repair, make free of screw-ups and errors" way.

[clarice]

When health care becomes a right, the govt can decide who gets it, when, what you pay for it and how you must live in order to get treatment it appears.

[bad]

So healthcare reform is no longer a necessity to save the economy but a HUMAN RIGHT.

Did the CBO spur this philosophical change?

[clarice]

And there's some kind of new economics. Drudge quotes Biden saying we need to spend to avoid bankruptcy. Neat notion!

[bad]

Well if BIDEN is in favor of new economics then I'm in fer shure...

What could go wrong????

[Buford Gooch]

Is Sylvia really Emily Latella?

[Extraneus]

Wouldn't it be great to spend your way out of bankruptcy? I've been trying to find a good tenant to rent a house to, and it's almost hard to believe the people acting like they can afford it, yet can't prove their income. Credit reports with tens of debts wiped off the books by bankruptcy; people with two or three family members on SSI, for such disabilities as carpel tunnel syndrome, etc. Not quite VP material, but probably 0bama voters, I'm betting.

[Jane]

I'm getting pretty confident that it is DOA - and all the stuff to the contrary is WH spin.

However I do not underestimate Obama's willingness to break legs and use extortion to get what he wants.

[Frau Skepsis]

This is plain madness. Just who is writing the bills that no one has read? Why can't we identify the authors of what is being pushed on us against our will? Who is really running the show -the aides?

[jacksmith]

THIS IS IT!

The healthcare reform bill released by the House Of Representatives is an excellent bill as I understand it. It is carefully written, and thoughtfully constructed, informed, prudent and wise. This bill will save trillions of dollars, and millions of your lives.

This is the type of bill that all Americans can feel good about. And this is the type of bill that has the potential to dramatically improve the quality of healthcare for all Americans. Rich, middle class and poor a like. Democrats, Republicans, Independents, and all other party affiliations. This bill has the potential to dramatically improve the quality of life of every American.

The house healthcare bill should be viewed as the minimum GOLD STANDARD by which all other proposed healthcare legislation should be judged. All supporters of true high quality healthcare reform should now place all your support behind this healthcare reform bill released by the United States House Of Representatives, as the minimum Gold standard for healthcare reform in America.

You should all now support this bill with all your might, and all of your unrelenting tenacity. This healthcare bill is a VERY, VERY GOOD! bill for all of the American people. Fight tooth, and nail for every bit of this bill if you have too. Be aggressive, creative, and relentless for this bill.

AND FIGHT!! like your life and the lives of your loved ones depends on it. BECAUSE IT DOES!

SPREAD THE WORD

(http://www.youtube.com/watch?v=RSM8t_cLZgk&feature=player_embedded)

God Bless You

Jack Smith — Working Class

[centralcal]

oh, good grief, jacksmith!

I can't stop laughing long enough to snark back at your absurdities.

But, I do intend to FIGHT! Against this travesty.

[bad]

I knew a family who amassed a great deal of additional debt knowing they were planning to file for bankruptcy. But they didn't seem to know they could spend their way out of bankruptcy altogether.

Poor, stupid bastards....

[markjones which is typical American name]

Me too like Jack Smith am proud citizen of United States and want to JOIN HIM in calling for concerted, passionate, educated support of this healthcare bill. With wise decisions and courageous stances, the leaders of the people deliver health and all things of prosperity. This healthcare bill by my reckoning will end the waste, resulting in sorrow only for the capitalist oppressors of the true American! As we say in the alcohol dispensation club while watching athletic competition on the big screen tv in my typical American workingclass neighborhood.
Join me in unity and support of the House of Representatives healthcare bill! We must act in support as though we were cups of an undergarment for holding up massive American breasts, which flourish due to the rich diet and favorable climate, and perhaps may one day also be found in People's Democratic Republic of Korea (would be good for them I guess, I deny all knowledge of that land besides stories from my Uncle who was drafted in Yankee Army to prop up slavedriving South Korean puppet regime).
Everyone, MAKE THE BILL YOUR HIGHEST PRIORITY. You can see in the writings of Jack Smith and also myself what kind of Americans are responsible for this effort. We must indeed be aggressive, creative, and relentless.
AND FIGHT!! like your life and the lives of your loved ones depends on it. BECAUSE IT DOES!
It really does.

[bad]

PSSSTT, CC...jacksmith is an alias of Joe Biden.

[Jane]

Smith and Jones - who would have thunk it?

[MayBee]

OMG, that markjones name is cracking me up.

[bad]

I blame Kim...

[DebinNC]

LOL, MJ

[bad]

Zell Miller has some fun thoughts.

LUN

[Stephanie]

Give em Hell, Zell!

Palin needs to beeline to Young Harris, GA and have a confab with Miller and formulate some home-cookin slogans and go out on the stump with him.

The sight of prog heads exploding from all the down home slogans would be sooo reminiscent of Mars Attacks... they ought to play some really pitchy C&W, too, just to insure success. Who needs green shoots when there will be plenty of jobs available cleaning up the green brain goo?

[PeterUK]

" CBO director Douglas Elmendorf said bills crafted by House leaders and the Senate health committee do not propose "the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount."

CRAFTED??? You mean they came back pissed after lunch and voted Yea?

This will be like the National Health Service,unhypothecated taxation to cover ever burgeoning demand,ultimately ending in rationing.
The Bill should have Do Not Resuscitate written on the bottom of it.

[DebinNC]

Judging by the comments, Zell evokes the same mindless hatred as Palin. I don't understand why, and neither do the haters.

[PeterUK]

JackSmith can't be Joe Biden,that screed is nearly seven inches long. Joe would have wandered off way before an inch and a half.

[sylvia]

"sylvia--TM was just making a supposition about possible grandfathered provisions, not pointing to specifics in the bill thus this is nonsense:"

Well Clarice, I think you missed the point of my post. I commented on the differing interpretations, "Well the first approach did not make the plan look good, but if it is more like the way Tom appraised it, it doesn't sound that bad to me" which was the main point of my post.

And then, as an interesting aside I commented on premiums and pre-existing conditions. It was an interesting aside not wholly unrelated because part of the subject of the differing interpretations was about the effect of the grandfathered conditions, and a major part of the grandfathered conditions were how the grandfathered and new plans would handle preconditions and how that may increase premiums and effect new and old health care plans. And then I stipulated that to realistically speculate on how this would effect the new and old health plans, we should have more information on what the actual rise in premiums would be if such conditions were enacted, which I speculate which be a smaller effect than we are led to believe, and hence would have less of an effect on old private plans than we think. So hardly nonsense. Very relevant. I suggest you read first, critique later. Much later.

[bad]

New White House spin:

The stimulus wasn't meant to be a stimulus.

LUN

[bad]

LOL PUK

[qrstuv]

I think IBD had it right.

The power to regulate is the power to destroy.

[maryrose]

These health care bills are a disaster. I agree with Jane that Obama will try to bully them through because I agree with Larry Kudlow that his agenda trumps the economy or anything else that is the best thing for all Americans.

[Stephanie]

bad... saw that. Disgusting and do they really think that people are gonna buy it? They are getting too cute by half and that is something that really undercuts their credibility even with the muddle. There have been too many jokes and arguments that invaded even the weekly rags so that even the muddle heard too much to make that donkey fly...

This is starting to resemble playing strip poker with a designated patsy. The smart money expects to see him lose, but no one wants to see the results...

And the emperor is sitting in his skivvies convinced the next hand is a winner...

AVERT YOUR EYES...

[centralcal]

PUK you are my favorite! (To mimic H&R) Always making me laugh!

[Extraneus]

They know this health care thing is unpopular. They know cap & trade is unpopular. They know that the "stimulus" is unpopular. They know all three of these things will piss off the American public, and that none of them are economically sound. They know that the polls are slipping big-time. So what's their strategy?

They must be prepared to lose in 2010, and maybe 2012, preferring to take one for the team in order to further the stroll along the leftist yellow brick road. Either that or they're not as smart as they look.

[Stephanie]

Extra... what elections in 2010 or 2012? Never let a good crisis go to waste...

[Ignatz Ratzkywatzky]

--They know all three of these things will piss off the American public, and that none of them are economically sound. They know that the polls are slipping big-time. So what's their strategy?--

Hate to keep harping on one book, but read The True Believer by Eric Hoffer and you'll know all you need to about their "strategy".
As an after dinner treat polish off Suicide of the West by James Burnham and you'll have their nuttiness pegged squarely in the political realm.

[Extraneus]

Thanks, Ignatz. I'll look into those.

[RichatUF]

Ignatz-

Keep harping away.

"A rising mass movement attracts and holds a following not by its doctrine and promises but by the refuge in offers from the anxieties, barrenness and meaninglessness of an individual existence."

[Ignatz Ratzkywatzky]

Great stuff, Rich.

A little background Extraneous.

Eric Hoffer was a longshoreman and autodidact who wrote one of the most perceptive and penetrating philisophical and psychological portraits of mass movements and their nutty followers and leaders. It's short and one of those rare books where you just turn the page nodding your head because every word is spot on. Tom Bethell of the American Spectator was a great friend in his latter years and interviewed him periodically.

James Burnham's book is more overtly political and was written in the context of the Cold War, but is IMO the best treatise on the difference between ideas and idealogy, the latter being the leftism which, even after the fall of communism, still has a death wish. If only it didn't intend to take the rest of us with it.

[Pofarmer]

Zell Miller and Sarah Palin together would be AWESOME.

[Ralph L]

LBJ got a working liberal majority in the 64 landslide. They passed Medicare, Medicaid, the Voting Rights Act, and all manner of Great Society horrors, before losing seats in 66. Most of their carp is still with us.

[cathyf]

Will any new private plan (that must accept pre-existing) be able to compete with a subsidized public option?

Well, to flip that around:

[cathyf]

if private-plans-which-can-accept-new-customers are not required to cover pre-existing conditions,

[cathyf]

then any public option (which must accept all applicants and must cover all of their pre-existing conditions) must be subsidized.

[Ralph L]

Or it will be higher priced and become the insurer of last resort. If they accept pre-existing, many won't buy it til they need it. If they force everyone to buy insurance, they'll have to subsidize it for the chronically ill. If they subsidize too much, there go the private insurers.

[Strawman Cometh]

the Voting Rights Act of '65 should not be conflated with horrors. Though not needed now, the recently passed extension is preposterous, and W shouldn't have signed it, but the original bill was needed at the time. We should take every opportunity to remind folks that more d's than r's, in both houses, voted against the original bill.
We should also point out that Al Gore, watching from the senate balcony, was so proud of his daddy, was inspired to enter politics hisself, as his daddy filibustered the original bill.

[sylvia]

Well I just read the 4 page summary. Some pretty strong stuff, if you read between the lines. Lots of little pinko commie inserts in there, like ensuring diversity in health care workers and expanding the health care corp.

But on the whole, besides a few details, I think I like it. It still has a private/public mix, at least for now, and I think it gets needed changes going. We can fight back later if down the road years later it starts getting too crazy and too much of a power grab.

[MayBee]

Performance artist.

[peter]

Use Gorilla glue on the first African American President's chair? That sounds ----- racist. Crazy glue works, though.

[Pofarmer]

ears later it starts getting too crazy and too much of a power grab.

No, we can't. That's the problem.

[DebinNC]

WSJ: The Grassley Test

It will be interesting to see if Baucus folds under what must be incredible pressure to ante up before the recess. Has Gibbs been asked to explain that deadline? We know the real reason for BO's haste, but they can't say it publicly. Or can it be no reporter has asked Gibbs to explain? I hope the average news viewer can instinctively sense something is wrong with the way this turkey is being rushed through, even if they know little about the details.

[bad]

Has Gibbs been asked to explain that deadline?

His answer won't matter. Dude is a true Ibamite. He'll say whatever he thinks he needs to for the moment, truth be damned.

[Cecil Turner]

We can fight back later . . .

Hah! Steve Chapman had a great column yesterday (H/T Instapundit). The 'public option' health-care scam:

Supporters of the "public option" think it can achieve efficiencies allowing it to underprice existing insurers. But efficiency is to government programs what barbecue sauce is to an ice-cream sundae: not a typical component. Nor is there any reason to think Washington can administer health insurance with appreciably lower overhead than private companies.

And sorry, but the "let's do something stupid now, because we can always fight back later" approach does not impress.

[jeanneB]

As one of the self-employed, I currently rely on an individual policy (paid for by moi). My premiums go up every year. Not much, but they do go up.

If this passes, I'm to understand my plan will be closed, no new applicants. New people will be steered to the gov't directed plan...with higher assumed cost because of pre-existings, etc.

Now. Why should I believe those higher costs won't get shifted over into my plan? And, as time goes by and there are fewer people left in my grandfathered plan, won't premiums go up faster for the few of us left? Over time, our average age will increase...seems to me the cost will have to increase as well.

[sylvia]

Some things I didn't like on the bill from the summary and things where this could be spending too much money.

I don't like how there are finacial credits to people up to 4 times the poverty level. I think twice the poverty level is plenty. We can always phase in more help later if the budget is not busted.

I don't think all preventative care should be subsidized without copayments. That would be a big budget buster. And I think preventative care is overrated anyway. You can't really "prevent" much of anything still. I think most people can afford most of that or some of that themselves. Maybe they can phase in help up to twice the poverty level again.

What is the policy on deductibles? Especially the huge ones. There could be help for that phased in, instead of the preventative care, which would be larger, but more rare, so cheaper to do.

I am a little leary of this heath exchange. It sounds a little Orwellian. Apparently that is where the benefits level are checked and where the affordability credits are administered. But it would be an easy place to control too many things.

I think some small scale expansion of community centers is okay, but again that could be a budget buster, so start small on that.

[glasater]

I have a pretty large deductible and the insurance bill went up sixty one dollars from last months to this.
Am looking at what an even larger deductible will do to get that monthly cost down.

[Ralph L]

I had a individual $2500 ded., 50% to $5000 plan in the late 90's that went from $40/mon to $160 in 5 years before they cancelled it.

[sylvia]

Here's an article on Romneycare that you all might like since it's critical. Sounds pretty similar to what we are offered now. It says that many people did not sign up for benefits. Also however, they say it's over budget but actually it's only a little over budget from the actual amounts, so I think that's overblown.

So I think to take from that, we need to enact more of a tax penalty on people or businesses without insurance to help pay off their debts from the emergency rooms since they aren't going to sign up anyway, and to keep the benefits very low on the exchange option, just catastrophic coverage, that's it. LUN

[sylvia]

"went from $40/mon to $160 in 5 years before they cancelled it."

Yeah I thought the rates seemed pretty reasonable on individuals the last time I looked, more than I remembered from before. Maybe that's because they have a bate and switch going on for new customers.

[Mom]

sylvia -
"...WE need to enact more of a tax penalty on people [THEM]...to help pay off THEIR debts...since THEY aren't going to sign up anyway...". [emphasis mine]

Whatever are WE going to do about THEM, sylvia?

Excuse me, but I do not deserve a "tax penalty" if I choose to pay directly for my health care needs.

[sylvia]

"Excuse me, but I do not deserve a "tax penalty" if I choose to pay directly for my health care needs."

Fine, if you fall off a ladder and break a bunch of stuff, then I suppose you won't mind if the rest of us don't pay for your $100,000 hospital bill. I'm sure your savings will cover that right?

[Semanticleo]

Clarice;

What is AIPAC's position on the F-22