“Health care reform” has been the topic du jour for months now, and with a side issue of providing insurance to those who don’t have it, it has mostly been about “bending the cost curve,” which supposedly means cost reduction, “holding the insurance companies accountable,” also supposedly about reducing cost, “making health care affordable” and “stopping the runaway increase in health care costs.”
I have been trying to find something, anything, in the discussion of proposed legislation which will actually affect the cost of health care, and so far I have found nothing. The discussion revolves entirely around insurance, and all of it involves making insurance companies pay for more, not less. An article by Ron Brownstein supposedly was the seminal work on current proposals, so much so that Obama made it required reading for White House staff, but all it said about health care delivery was that changes were being made in the way that Medicare payment would be made and that it was “hoped” that private health care would adopt similar measures.
I hope I will win the lottery, too, but the bank is not going to lend me any money with that hope as my only collateral.
Yesterday the New York Times provided a somewhat less than informative headline that there would be “No Big Rise” in insurance premiums under the proposed legislation. While I’m delighted to hear that, I thought the plan was to reduce costs. The CBO’s cost analysis is nothing to get excited about, but the results are a little hard to decipher in the Times piece, which makes them look better than they actually are (emphasis mine),
Before taking account of federal subsidies to help people buy insurance on their own, the budget office said the bill would tend to drive up premiums. But as a result of the subsidies, it said, most people in the individual insurance market would see their costs decline, compared with the costs expected under current law.
Read that again. The non-partisan Congressional Budget Office says yes, the legislation is going to drive up premiums. Part of those premiums will be paid by the government, so people with lower incomes will be paying less. That does not fulfill Obama’s promise to lower the cost of health care. The fact that somebody else is paying part of the cost for you does not mean the cost has gone down.
Paul Krugman has a brilliant post with a really neat graph purporting to show premiums from the CBO report and a rather snide remark that, “Several have already claimed that the report shows that premiums will rise.”
The graph does not show what premiums will be, it shows what portion of premiums people will pay. And the CBO report does say very specifically that the proposed legislation will “tend to drive premiums upward.” It also says that after the government pays part of those higher premiums for them, individuals will pay less. Here’s Paul’s graph.
Here’s what the graph should look like, with green representing the amount paid by the government.
Americans have the idea that government payments aren’t really money, or it’s money that comes from some amorphous place that doesn’t involve actual people. “If the government pays for it, it doesn’t cost anything.”
Meanwhile the people of this nation are perfectly happy with a president prating away about “bending the cost curve” because it sounds intelligent, and they don’t want to notice that under this “bent cost curve” the health care providers and the insurance companies continue to loot the pockets of the common people. A cost structure that was already two to three times higher than the rest of the world continues to rise unabated.