Josh Marshall, TPM: Ryan's Biggest Foe: Private Insurers

Ryan's Biggest Foe: Private Insurers
Josh Marshall | April 15, 2011, 12:03PM


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Basically, no one wants to provide that insurance. And frankly, why would they?

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The private insurance industry is based on getting steady premiums for as healthy as possible of population of people. That's why 'pre-existing conditions' have become such a big issue. And every person over 65 has at least one pre-existing condition: they're old.

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Will Anyone Even Insure Seniors if Paul Ryan's Medicare Plan Passes?
Benjy Sarlin | April 15, 2011, 11:00AM

At first glance, Paul Ryan's plan to send millions of seniors into the free market with dwindling vouchers in hand might seem a boon to the private insurance industry. But would companies even want to participate?

Unlike the Affordable Care Act, which mandated that millions of young and healthy Americans purchase insurance with government subsidies, the Paul Ryan plan would instead bring the oldest, sickest, and least profitable demographic to the table. And with the CBO projecting that the average senior would be on the hook for over two-thirds of their health care costs within just 10 years of the plan's adoption -- a proportion that is projected to worsen in the long run --- the government subsidies backing them up may not bring in enough profitable customers to make things worthwhile.

"If reimbursement rates are too low to provide basic benefits, they'll tell the government, 'You do it,'" one insurance lobbyist told TPM. "I don't think they can require they lose money, they'd just pull out."

Dan Boston, a veteran lobbyist for health care providers and co-owner of Health Policy Source, said in an interview with TPM that he was taking a "wait and see" approach on the GOP budget before judging its value. (The American Hospital Association opposes the plan). But he cautioned that a major concern would be whether hospitals and private insurers would be left on the hook for low-income seniors eligible for both Medicare and Medicaid, who could run up significant costs with little hope of ever paying them off.

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