Ezra Klein on the 'upside of health-care reform'

I'd go a step further than Tomasky: The upside of health-care reform is not that it's a defeat for the reactionaries. Rather, the upside of health-care reform is health-care reform. Four years ago, when the public option didn't exist as a popular policy concept, liberals would have been thrilled with the legislation we're seeing today. It's better than anything the major Democrats proposed in the primary, much less anything that passed four committees in Congress.

I keep recommending this Families USA brief (pdf, but worth it!) outlining the 10 most important elements of health-care reform. The public option is one of them, to be sure, and I think there's a substantial chance it will be present in the final legislation. But what about the expansion of Medicaid to 133 percent of the poverty line? That's a solid 20 million poor Americans who don't have coverage now, and will soon. What about the out-of-pocket caps, so no one goes medically bankrupt ever again? Or the assurance that no insurer can ever discriminate based on a preexisting condition? Or the subsidies for working Americans who can't quite afford coverage? Or the requirements that insurers spend more money on medical care and less money on premiums? Or the guarantee that the gruesome practice of rescission will finally end?

Obviously, there are a hundred ways that reform is going to fall short of not only perfection, but sufficiency. And the political compromises required to pass anything will dispiriting and inane. But it's worth keeping in mind that this bill is going to help a lot of people. Tens of millions. Hundreds of millions over the course of a few decades. It will mean that some of the very worst things that can happen to someone -- medical bankruptcy, or a cancer that strikes when someone is uninsured -- will, by and large, simply stop happening. That's worth being excited about.

By Ezra Klein
August 24, 2009

http://voices.washingtonpost.com/ezra-klein/2009/08/be_excited.html

'Or the requirements that insurers spend more money on medical care and less money on premiums'

Wendell Potter, former Cigna executive, head of corporate communications, on Bill Moyers:

BILL MOYERS: You told Congress that the industry has hijacked our health care system and turned it into a giant ATM for Wall Street. You said, "I saw how they confuse their customers and dump the sick, all so they can satisfy their Wall Street investors." How do they satisfy their Wall Street investors?

WENDELL POTTER: Well, there's a measure of profitability that investors look to, and it's called a medical loss ratio. And it's unique to the health insurance industry. And by medical loss ratio, I mean that it's a measure that tells investors or anyone else how much of a premium dollar is used by the insurance company to actually pay medical claims. And that has been shrinking, over the years, since the industry's been dominated by, or become dominated by for-profit insurance companies. Back in the early '90s, or back during the time that the Clinton plan was being debated, 95 cents out of every dollar was sent, you know, on average was used by the insurance companies to pay claims. Last year, it was down to just slightly above 80 percent.

So, investors want that to keep shrinking. And if they see that an insurance company has not done what they think meets their expectations with the medical loss ratio, they'll punish them. Investors will start leaving in droves.

I've seen a company stock price fall 20 percent in a single day, when it did not meet Wall Street's expectations with this medical loss ratio.

For example, if one company's medical loss ratio was 77.9 percent, for example, in one quarter, and the next quarter, it was 78.2 percent. It seems like a small movement. But investors will think that's ridiculous. And it's horrible.

BILL MOYERS: That they're spending more money for medical claims.

WENDELL POTTER: Yeah.

BILL MOYERS: And less money on profits?

WENDELL POTTER: Exactly. And they think that this company has not done a good job of managing medical expenses. It has not denied enough claims. It has not kicked enough people off the rolls. And that's what-- that is what happens, what these companies do, to make sure that they satisfy Wall Street's expectations with the medical loss ratio.

http://www.pbs.org/moyers/journal/07102009/transcript2.html

What we’ll get from health reform:

1. A major expansion of Medicaid coverage—fully federally funded—for millions of low-income
working families who currently fall through the cracks

2. A regulated marketplace that clamps down on insurance company abuses so people can
no longer be denied coverage

3. Requirements that insurance companies spend more of the premium dollars they collect
on patient care

4. Sliding-scale subsidies so middle-class, working families can afford the coverage they need
to keep their families healthy

5. A strong public plan option that will provide choice, stability, and an honest yardstick to
keep costs down

6. Limits on out-of-pocket spending, giving Americans real health security and peace of mind

7. Much-needed relief for small businesses so they can afford to offer coverage to their
employees

8. Improvements to Medicare that will help seniors and people with disabilities afford their
drugs and their cost-sharing

9. Better access to coverage for uninsured children so they can get the care they need

10. Long overdue steps to modernize the system, improve the quality of care provided, and curb
unnecessary spending so our American health care system delivers the best possible care

http://www.familiesusa.org/assets/pdfs/health-reform/10-reasons-to-support-reform.pdf