Well, that's Rahm Emanuel's stance.
Scary huh?
Obama has publicly said that he would like to see a public plan that will compete with private insurance. This, depending on the structure, sounds like a good idea.
Problem is, according to my sources, Orzag and Ezekiel Emanuel are on side with a single payor plan, and Rahm has specifically said that he wants Medicare for EVERYONE.
Well, what would that mean? Good thinking. The Lewin group is a non-partisan think tank, and they took up this task.
Initially, the report indicates that reimbursements will only fall 5-7%, but that is only in 2010, as the program progresses, and more people switch to the "government" plan, and abandon private insurance, the reimbursements will fall even more. Private insurers will need to reduce their payments or raise rates dramatically to make up for the loss of volume. This will have an economic tsunami effect, and patients will suffer for it.
I understand Mr Obama's intentions, and I think they are admirable, but this is just not the right way to go about this. Cost controls need to be implemented, and those providers/institutions who are billing fraudulently, and/or providing unnecessary services SHOULD see their reimbursements cut, but this will create a blanket effect, that will affect everyone.
Basically, there are better ways to go about this.
Oh yeah, and Bob's right, what the hell is up with democrats wanting a two-tiered plan? I thought that was anathema to them?
My friend Bob Laszewski posted about this on his blog.
http://healthpolicyandmarket.blogspot.com/2009/04/public-plan-option-for-under-age-65.html
The respected and non-partisan Lewin Group recently issued a report evaluating the idea, The Cost and Coverage Impacts of a Public Plan: Alternative Design Options. It looks to me to be a credible job. They made the assumption providers would be paid at Medicare ratesa logical conclusion if the objective is lowering costs.
Among Lewins findings:
If the public plan is opened to all employers at Medicare payment levels we estimate that about 131.2 million people would enroll in the public plan. The number of people with private health insurance would decline by 119.1 million people. This would be a two-thirds reduction in the number of people with private coverage (currently 170 million people).
The study also examined what the proposed plan might do to provider reimbursement rates. Lewin says that if current Medicare payment rates were to be used for a public plan option, physicians would see their net income drop by $33 billion (-7%), and hospitals would see their revenue fall by $36 billion (-5%) in just 2010.
If Medicare payment levels are used in the public plan, premiums would be up to 30 percent less than premiums for comparable private coverage. On average, the monthly premium in the public plan for a typical benefits package would be $761 per family compared with an average of $970 per family in the private market for the same coverage.
If as the President proposed, eligibility is limited to only small employers, individuals and the self-employed, public plan enrollment would reach 42.9 million people. The number of people with private coverage would fall by 32.0 million people. If private payer reimbursement levels are used by the public plan, enrollment would be lower, with only 10.4 million people switching to the public plan from private insurance.
Medicare premiums would be lower than private premiums because of the exceptional leverage Medicare has with providers. Medicare pays hospitals about 30 percent less than private insurers pay for the same service. Physician payments are about 20 percent less than under private coverage. Also, because Medicare has no allowance for insurer profits or broker/agent commissions, administrative costs for this population are about one-third of administrative costs in private health plans.
Here's a link to the Lewin report itself, if you are so inclined.
http://www.lewin.com/content/public...ctsofPublicPlan-Alternative DesignOptions.pdf
Scary huh?
Obama has publicly said that he would like to see a public plan that will compete with private insurance. This, depending on the structure, sounds like a good idea.
Problem is, according to my sources, Orzag and Ezekiel Emanuel are on side with a single payor plan, and Rahm has specifically said that he wants Medicare for EVERYONE.
Well, what would that mean? Good thinking. The Lewin group is a non-partisan think tank, and they took up this task.
Initially, the report indicates that reimbursements will only fall 5-7%, but that is only in 2010, as the program progresses, and more people switch to the "government" plan, and abandon private insurance, the reimbursements will fall even more. Private insurers will need to reduce their payments or raise rates dramatically to make up for the loss of volume. This will have an economic tsunami effect, and patients will suffer for it.
I understand Mr Obama's intentions, and I think they are admirable, but this is just not the right way to go about this. Cost controls need to be implemented, and those providers/institutions who are billing fraudulently, and/or providing unnecessary services SHOULD see their reimbursements cut, but this will create a blanket effect, that will affect everyone.
Basically, there are better ways to go about this.
Oh yeah, and Bob's right, what the hell is up with democrats wanting a two-tiered plan? I thought that was anathema to them?
My friend Bob Laszewski posted about this on his blog.
http://healthpolicyandmarket.blogspot.com/2009/04/public-plan-option-for-under-age-65.html
The respected and non-partisan Lewin Group recently issued a report evaluating the idea, The Cost and Coverage Impacts of a Public Plan: Alternative Design Options. It looks to me to be a credible job. They made the assumption providers would be paid at Medicare ratesa logical conclusion if the objective is lowering costs.
Among Lewins findings:
If the public plan is opened to all employers at Medicare payment levels we estimate that about 131.2 million people would enroll in the public plan. The number of people with private health insurance would decline by 119.1 million people. This would be a two-thirds reduction in the number of people with private coverage (currently 170 million people).
The study also examined what the proposed plan might do to provider reimbursement rates. Lewin says that if current Medicare payment rates were to be used for a public plan option, physicians would see their net income drop by $33 billion (-7%), and hospitals would see their revenue fall by $36 billion (-5%) in just 2010.
If Medicare payment levels are used in the public plan, premiums would be up to 30 percent less than premiums for comparable private coverage. On average, the monthly premium in the public plan for a typical benefits package would be $761 per family compared with an average of $970 per family in the private market for the same coverage.
If as the President proposed, eligibility is limited to only small employers, individuals and the self-employed, public plan enrollment would reach 42.9 million people. The number of people with private coverage would fall by 32.0 million people. If private payer reimbursement levels are used by the public plan, enrollment would be lower, with only 10.4 million people switching to the public plan from private insurance.
Medicare premiums would be lower than private premiums because of the exceptional leverage Medicare has with providers. Medicare pays hospitals about 30 percent less than private insurers pay for the same service. Physician payments are about 20 percent less than under private coverage. Also, because Medicare has no allowance for insurer profits or broker/agent commissions, administrative costs for this population are about one-third of administrative costs in private health plans.
Here's a link to the Lewin report itself, if you are so inclined.
http://www.lewin.com/content/public...ctsofPublicPlan-Alternative DesignOptions.pdf