File this one under "Law of Unintended Consequences" and hope to God someone brings this to the attention of the relevant parties:

Where are the chips falling, so to speak, when it comes to the popular State Children’s Health Insurance Program (SCHIP)? The press ought to be finding out, and fast. Last week, the Children’s Defense Fund sent me an invitation for an informational call discussing SCHIP’s future: “If the Senate doesn’t take a stand for children in the next days or weeks, our worst fears could clearly come to pass.” The dire-sounding invite piqued my interest, especially since I had read in the House bill that SCHIP would be repealed. What was going on?

It turns out that the House indeed wants to repeal the program and require kids to get coverage via the insurance exchange, the government’s soon-to-be gigantic brokerage service. Their parents, of course, would be getting subsidies to help buy coverage, courtesy of the U.S. taxpayer. Rep. John Dingell, a Democrat no less, touted the advantages of dumping SCHIP. One advantage: the program wouldn’t be subject to the periodic and occasionally problematic Congressional reauthorizations that threaten its existence. Dingell said kids could have the same insurance as their parents—an incentive to force parents to cover their kids. (Sometimes parents, daunted by bureaucratic red tape, don’t enroll their children even if they are eligible.)

Another reason for killing SCHIP, some believe, is to force kids into the new exchange’s risk pool. Kids are usually healthy; bringing them into the pool may help spread the risk and keep premiums somewhat lower for the sick people whom insurers would have to cover.

But in return, kids would be hurt, says Alison Buist, director of child health at the Children’s Defense Fund. She told me that if the House provision were to take effect, kids might lose some valuable and comprehensive benefits now available to kids on Medicaid and SCHIP. If parents, strapped for cash, had to shop in the exchange, they might choose low-cost insurance with skimpy benefits and pay more out-of-pocket than SCHIP currently requires them to pay. SCHIP rules limit a family’s out-of-pocket costs to five percent of their income. States don’t even impose the five percent, Buist said, because they have found parents with low incomes couldn’t pay that much. So it seems that there’s a cost shift here—making poor families pay more so that sick (and most likely older) people buying in the exchange would pay less.

The more I see of this Frankenstein plan, the more I see we need single-payer universal coverage. Period.

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(h/t Heather.)

First of all, I'd like to reiterate that yes, a bill without a public option can serve the same purpose as the public option: namely, to force efficiency and competition. So yeah, I do see this as a win - and so does Nate Silver. And I don't buy the insurance company "we won" mantra just yet, because the Medicare buy-in proposal is a real threat to them. After all, the 55+ group is very profitable for them.

It seems clear the most important component of a plan lacking a public option is a mandated medical-loss ratio. But here's the most important detail of a requirement that companies spend 90 percent of each premium dollar on care: Who will be responsible for enforcement? In order to work, it's got to be the feds.

This is the most important part of the argument, because insurance companies (and their PACs) have enormous influence in state markets - and in state legislatures. State insurance commissioners are usually (not always) hired from the ranks of the industry, and are famous not only for rubber-stamping rate increases, but for far too often turning a blind eye to insurance company abuses.

What we want to watch in the Medicare buy-in is, are they going to take premiums (subsidies, whatever form it finally takes) into the Medicare trust fund? Believe it or not, it would be a very good thing if they did. A younger, healthier population would actually lessen the strain on the Medicare system. But I'm betting Republicans will shamelessly present it as "an assault on Medicare."

We also have to look at who gets to buy in - and why. Under the current proposal, people 55+ get to pick Medicare through the new exchanges in 2014. But what do we do until then? Well, they plan to allow them in starting in 2011.

Is this only for high-risk patients? Because it would really be a drain on the Medicare system (if the premiums went into the same system) if it was. It would be a bad idea anyway, because it would be too difficult to sustain if it was all people with pre-existing conditions.

Will the new Medicare members be charged the full cost? At 65, you're heavily subsidized for most of the cost, paying about $100 a month. The real cost is closer to $500. So will there be subsidies to purchase Medicare? Definitely, in 2014.

In the meantime? Not clear. This is one of the areas on which you want to lobby Congress.

You probably already know the problems with triggers - namely, that they're usually written in such a way as to make it highly unlikely they ever kick in. (That's why Queen Olympia loves them.)

As you might expect, we'll be watching closely.

Howard Dean writes at DK why he's so encouraged by the Senate healthcare reform bill. And remember, unlike us, he's actually worked on providing universal care:

Medicare is a government-run, single-payer system. What the Senate is working out could move the ball forward, if people under 65 will -- for the first time -- have the option of signing up for such a program under certain circumstances. The specifics of those circumstances matter a lot. The under-65 pool should not be limited to high-risk people only, and subsidies will ultimately be needed for those who cannot afford the premiums.

The other groundbreaking piece of the current Senate proposal is that a significant number of Americans over 55 who do not have access to health insurance today, would be able to get it within six months of the final bill being signed. Of course, more reform and access to choices are needed. However, this proposal moves us in a very good direction. The realities are Congress rarely passes reform that is not incremental and it is important that the increments they pass are headed in a direction we ultimately want to go. Expanding Medicare would do that.

The proposal to expand the Federal Employee Healthcare system could also be a step in the right direction. While I am not a fan of the private health insurance market, with the proper regulations, this could work. The OPM has done a reasonably good job of running the current plan, but Senator Rockefeller’s proposal to require insurance companies to spend 90 percent of their revenues on healthcare is absolutely essential.

This is the Medical Loss Ratio amendment that Jay Rockefeller and Al Franken are working on. It's the most important piece in this compromise. Without it, it won't work.

We must continue to work towards a system that gives Americans real choices. The truth is America already has a socialist system (the Veterans Administration with 25 million people). We already have a single-payer system (Medicare with 50 million people). And we already have a private insurance system (with almost 50 million Americans uninsured). The American people can reform healthcare by making real choices, but Congress must let us have those choices.

Both the current Senate proposal and the House bill will give us choices that Americans did not have before. The central problem will be that not enough Americans will have those choices. So while we may be able to take big steps in the right direction – the fight for healthcare reform does not end here. We must continue to pressure Congress to pass real reform.

The Politico, via email:

If the House and Senate are forced to water down the public option (to, say, negotiated rates in the House and a Senate trigger), liberals will have a much weaker negotiating position in the Senate-House conference committee. So look for liberal pressure groups to work on moderate Dems big in coming days as it becomes increasingly clear that the public option’s epilogue could be cast in the debate’s first chapters.

Progressives, start your engines! We have a lot of work ahead of us.

In the meantime, I've finally located the numbers for premium subsidies - or, as they're called in the bill, "affordability credits." Here they are, and as I thought, the numbers simply aren't realistic.

The bill provides financial assistance on a sliding scale. Premiums range from 1.5 percent of income to 12% for those at 400% of the Federal Poverty Level. The plan provides additional assistance for households up to 400% of the FPL by limiting cost-sharing to 3% of plan costs at the lowest tier, to 30% of plan costs at 350-400% of the FPL.

For instance: If your income is under 133-150% of the poverty level, your premiums will be limited to a range of 1.5 to 3%. That means you'll pay 3% of plan costs, with an annual out-of-pocket cap of $500 for individuals and $1000 for families.

And so on:

150-200% - 3-5.5% - 7% - $1000/$2000
200-250% - 5.5-8% - 15% - $2000/$4000
250-300% - 8-10% - 22% - $4000/$8000
300-350% - 10-11% - 28% - $4500/$9000
350-400% - 11-12% - 30% - $5000/$10,000

The Federal Poverty Level is:

Persons in family
1 $10,830
2 14,570
3 18,310
4 22,050
5 25,790
6 29,530
7 33,270
8 37,010

For families with more than 8 persons, add $3,740 for each additional person.

So although I've been on unemployment for the past year, I would be expected to pay approximately $4000 a year. Huh? Your individual mileage may vary, but those figures aren't very reassuring to me.

Do the math, and let me know if you think this is affordable. If it isn't, it's time to push your representatives into doing the right thing.

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(Yes, even in the future - getting sick and paying for it will be painful)

It's always amazing to hear what the future is going to look like, as viewed from the past. Invariably, all manner of convenience will be commonplace, all menial labor will vanish, all worry about getting sick will still be around.

And who is going to pay for it? Even in 1956, they were scratching their heads. The writing was on the wall - more people on the planet, and more of them getting older and well . . .sicker. The good news was the leaps on modern medicine would be greater (that's happened), but people going broke over receiving those leaps would plague us seemingly forever.

In September of 1956, on the occasion of their annual convention, NBC Radio, via their Monitor series, hosted a panel discussion with members of the American Hospital Association (Albert W. Snoke, Lowell T. Codishall and Chicago Daily News Science Editor Arthur Snider), discussing just what this thing was going to be looking like in the future.

Arthur Snider (Chicago Daily News): “ I think foremost, is and has been for some time the matter of costs. For a considerable time people . . the anger was directed towards hospitals, but now with the introduction of hospital bill . . or hospital insurance plans, we have the matter of increasing premiums. And people now are being a little bit unhappy about that. They say, when they get their bills they could have enjoyed a nice couple of weeks at a fancy hotel for that price. I’m sure that argument is fallacious, I’m sure Dr. Snoke has a thought on that.”

Albert W. Snoke (American Hospital Association): “Everybody gets irritated over having to pay any kind of money for anything. They just don’t enjoy paying out money. I don’t blame them for being concerned about hospital costs and hospital charges. The thing that I’d like to first get clear is that there are two different problems we’re talking about. One is how much does it cost to run a hospital. And next, how much does the patient have to pay when he comes into the hospital. And cost and charges are two different things.”

Bear in mind in 1956 Health Insurance was a relatively new thing, but even in 1956 costs were spiraling out of control. Of course at the time no one thought to lay some blame at the feet of the insurance companies - they were still the new kids on the block.

So now that they've become the bullies of the neighborhood . . .

Nice to see Obama taking them on like this. I just wish he talked like this more often:

WASHINGTON — President Obama mounted a frontal assault on the insurance industry on Saturday, accusing it of airing “deceptive and dishonest ads” to derail his health care legislation and threatening to strip the industry of its longstanding exemption from federal anti-trust laws.

In unusually harsh terms, Mr. Obama cast insurance companies as obstacles to change interested only in preserving their own “profits and bonuses” and willing to “bend the truth or break it” to stop his drive to remake the nation’s health care system. The president used his weekly radio and Internet address to push back against industry assertions that legislation will drive up premiums.

The transcript is much more blunt:

A new report for the Business Roundtable – a non-partisan group that represents the CEOs of major companies – found that without significant reform, health care costs for these employers and their employees will well more than double again over the next decade. The cost per person for health insurance will rise by almost $18,000. That’s a huge amount of money. That’s going to mean lower salaries and higher unemployment, lower profits and higher rolls of uninsured. It is no exaggeration to say, that unless we act, these costs will devastate the US economy.

This is the unsustainable path we’re on, and it’s the path the insurers want to keep us on. In fact, the insurance industry is rolling out the big guns and breaking open their massive war chest – to marshal their forces for one last fight to save the status quo. They’re filling the airwaves with deceptive and dishonest ads. They’re flooding Capitol Hill with lobbyists and campaign contributions. And they’re funding studies designed to mislead the American people.

Of course, like clockwork, we’ve seen folks on cable television who know better, waving these industry-funded studies in the air. We’ve seen industry insiders – and their apologists – citing these studies as proof of claims that just aren’t true. They’ll claim that premiums will go up under reform; but they know that the non-partisan Congressional Budget Office found that reforms will lower premiums in a new insurance exchange while offering consumer protections that will limit out-of-pocket costs and prevent discrimination based on pre-existing conditions. They’ll claim that you’ll have to pay more out of pocket; but they know that this is based on a study that willfully ignores whole sections of the bill, including tax credits and cost savings that will greatly benefit middle class families. Even the authors of one of these studies have now admitted publicly that the insurance companies actually asked them to do an incomplete job.

Again and again, these issues arise that could have been solved by a straightforward push for a single-payer, government-run system. But that, of course, would have required a political system that didn't have corporate sponsors. It's painful to watch them tie themselves in knots, trying to rationalize the death-for-profit system:

Any health-care overhaul that Congress and President Obama enact is likely to have as its centerpiece a fundamental reform: Insurers would not be allowed to reject individuals or charge them higher premiums based on their medical history.

But simply banning medical discrimination would not necessarily remove it from the equation, economists and health-care analysts say.

If insurers are prohibited from openly rejecting people with preexisting conditions, they could try to cherry-pick through more subtle means. For example, offering free health club memberships tends to attract people who can use the equipment, says Paul Precht, director of policy at the Medicare Rights Center.

Being uncooperative on insurance claims can chase away the chronically ill. For people who have few medical bills, it is less of a factor, said Karen Pollitz, research professor at the Georgetown University Health Policy Institute.

And to avoid patients with costly, complicated medical conditions, health plans could include in their networks relatively few doctors who specialize in treating those conditions, said Mark V. Pauly, professor of health-care management at the University of Pennsylvania's Wharton School.

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I don't know that it matters how cleverly the president sidestepped George Stephanopoulos on this question: People are still going to view it as a tax increase, and they're angry about it:

STEPHANOPOULOS: You were against the individual mandate...

OBAMA: Yes.

STEPHANOPOULOS: ...during the campaign. Under this mandate, the government is forcing people to spend money, fining you if you don’t. How is that not a tax?

OBAMA: Well, hold on a second, George. Here -- here's what's happening. You and I are both paying $900, on average -- our families -- in higher premiums because of uncompensated care. Now what I've said is that if you can't afford health insurance, you certainly shouldn't be punished for that. That's just piling on. If, on the other hand, we're giving tax credits, we've set up an exchange, you are now part of a big pool, we've driven down the costs, we've done everything we can and you actually can afford health insurance, but you've just decided, you know what, I want to take my chances. And then you get hit by a bus and you and I have to pay for the emergency room care, that's...

STEPHANOPOULOS: That may be, but it's still a tax increase.

OBAMA: No. That's not true, George. The -- for us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase. What it's saying is, is that we're not going to have other people carrying your burdens for you anymore than the fact that right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase. People say to themselves, that is a fair way to make sure that if you hit my car, that I'm not covering all the costs.

STEPHANOPOULOS: But it may be fair, it may be good public policy...

OBAMA: No, but -- but, George, you -- you can't just make up that language and decide that that's called a tax increase. Any...

STEPHANOPOULOS: Here’s the...

OBAMA: What -- what -- if I -- if I say that right now your premiums are going to be going up by 5 or 8 or 10 percent next year and you say well, that's not a tax increase; but, on the other hand, if I say that I don't want to have to pay for you not carrying coverage even after I give you tax credits that make it affordable, then...

STEPHANOPOULOS: I -- I don't think I'm making it up. Merriam Webster's Dictionary: Tax -- "a charge, usually of money, imposed by authority on persons or property for public purposes."

OBAMA: George, the fact that you looked up Merriam's Dictionary, the definition of tax increase, indicates to me that you're stretching a little bit right now. Otherwise, you wouldn't have gone to the dictionary to check on the definition. I mean what...

STEPHANOPOULOS: Well, no, but...

OBAMA: ...what you're saying is...

STEPHANOPOULOS: I wanted to check for myself. But your critics say it is a tax increase.

OBAMA: My critics say everything is a tax increase. My critics say that I'm taking over every sector of the economy. You know that. Look, we can have a legitimate debate about whether or not we're going to have an individual mandate or not, but...

STEPHANOPOULOS: But you reject that it’s a tax increase?

OBAMA: I absolutely reject that notion.

Obviously, it's useful and necessary to stop this practice. The Baucus bill isn't that tool because it simply displaces the "pre-existing condition" problem by allowing insurers to charge up to five times as much based on the applicant's age:

A proposal to make preexisting health conditions irrelevant in the sale of insurance policies could help not just the seriously ill but also people who might consider themselves healthy, documents released Friday by a California-based advocacy group illustrate.

Health insurers have issued guidelines saying they could deny coverage to people suffering from such conditions as acne, hemorrhoids and bunions.

One big insurer refused to issue individual policies to police officers and firefighters, along with people in other hazardous occupations.

Some treated pregnancy or the intention to adopt as a reason for rejection.

As Congress and President Obama work on legislation to overhaul the nation's health-care system, one of their main objectives is to stop insurers from denying coverage on the basis of health status. Proposed legislation would prohibit insurers from denying coverage to individuals with preexisting conditions or charging them higher premiums because of their medical history -- practices known as medical underwriting.

Even the insurance lobby has endorsed that goal as part of a larger reform package in which the government would extend coverage to the uninsured, greatly expanding the market for insurance.

Guidelines that insurance companies have written for professionals involved in selling policies offer a glimpse inside the underwriting process.

"What these documents show is the lengths to which insurance companies are willing to go to make a profit," said Jerry Flanagan, health-care policy director of the advocacy group Consumer Watchdog, which distributed the documents Friday. "What it shows is that insurance companies want premiums without any risk."

Consumer Watchdog argues that consumers should be given the option of enrolling in a government-run health plan. It obtained the documents from a California insurance broker, Flanagan said.

A PacifiCare "Medical Underwriting Guidelines" document from 2003 lists under "Ineligible Occupations" such risk-takers as stunt people, test pilots and circus workers -- along with police officers, firefighters and migrant workers.

Uninsurable conditions included pregnancy, and being an "expectant father" was grounds for "automatic rejection." So was having received "therapy/counseling" within six months of the application. There was also this more general disqualifier: "currently experiencing/experienced within the last 12 months symptoms for which a physician has not been consulted."

The PacifiCare document "is completely outdated and predates the acquisition of PacifiCare by United Healthcare," Cheryl J. Randolph, a spokeswoman for the parent company, said by e-mail. She declined to provide current underwriting documents.

It gets more unbelievable by the day, doesn't it?

Joe Szakos leads the Virginia Organizing Project, an almost fifteen year-old community organization that Health Care for America Now works with in Virginia to organize for health care reform. Szakos's organization employs dozens of people, and they get their health care through Anthem Blue Cross/Blue Shield.

This year, Szakos was informed that Anthem was going to increase the premiums on Virginia Organizing Project's health plan by 14.1%. Around the same time, the Virginia Organizing Project received an email from Anthem:

We strongly support reform that builds a strong, sustainable private-sector health care system - and strongly oppose creating a government-run health plan. We are urging our elected officials in Washington to take bipartisan action that will accomplish that. We are educating policymakers in Washington and working with our trade associations to encourage Congress to build on the current system and not disrupt the quality, affordable coverage on which our members depend....

As our elected officials debate health care, they need to hear directly from you.

Szakos immediately had some questions for Anthem. Chief among them, why is Anthem using its resources to lobby against health care reform with a public health insurance option while at the same time increasing rates by 14.1%?

Szakos, along with three other Virginia Organizing Project board members, went down to Anthem's offices in Richmond, VA to ask. He left in handcuffs.

Szakos, a customer, couldn't get an answer from Anthem. There was no justification for raising rates on one hand, and spending money lobbying against health care reform on the other. And instead of trying to offer Szakos an explanation, they had him arrested.

As Szakos said in the video, this is about greed and force. There is no good explanation for these rate increases, and there is no justification for Anthem to spend money it collects in premiums from customers suffering under its "health care" plans on lobbying against reform that would help these very same people. The only thing motivating Anthem - and all insurance companies - is greed. And they get and keep their money by force.

Emptywheel has crunched the numbers on the Baucus plan, and has come up with how much money it will leave families if they actually have to use the insurance for any significant health care problems. Here are her numbers for a family of four earning 300% of the poverty levels or $66,150.

Federal Taxes (estimate from this page): $8,710 (13% of income)

State Taxes (using MI rates on $30,000 of income): $1,305 (2% of income)

Food (using "low-cost USDA plan" for family of four): $9,060 (13.5% of income)

Home (assume a straight 30% of income): $20,100 (30% of income)

Bad Max Tax: $20,610 (31% of income)

Total: $59,785 (89% of income)

Remainder for all other expenses (including education, clothing, existing debt, transportation, etc.): $7,215 (or 11% of income.

Now, the House bill stops subsidies at EXACTLY the same level, 400% of poverty level. We can use Emptywheel's numbers for all of this. The difference is that the House plan limits premiums to 10% of gross income at 300% (pg 137, pdf), and out of pocket expenses to $10,000 per family.

So that makes the House Tax: $10,000 + 6,615 = 16,615 or 25% of income (as opposed to 31%).

The difference between the House plan and the Baucus plan is $4,025. Total expenses are $55,7607, or The remainder for all other expenses is $11,240 or 17% of income.

It's not a meaningless difference, $4,025 a year is $335 a month. But it's not huge, either. (Note: see update at bottom of post.)

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(Newt - Would you buy a used promise from this man?)

Gingrich:"Think about a party whose last stand is to frighten 85-year-olds, and you'll understand how totally morally bankrupt the modern Democratic Party is,"

Oh?

In case you forgot - the Republicans did try their hand at Health Care reform in 1995. Then it was Medicare and the intention was to gut it, although they (as always) offered no details. They were quick to lob fear into the monologue - as they seem so willing to do at every opportunity.

Below is a summary (h/t Jon)

G.O.P. ANNOUNCES PLAN TO OVERHAUL MEDICARE SYSTEM

By ROBERT PEAR

Published: Friday, September 15, 1995

House Republican leaders unveiled their proposal to redesign Medicare today,
but it was surprisingly short on details and had none of the expected
financial incentives for elderly people to join health maintenance
organizations or other private health plans.

The package is supposed to cut projected Medicare spending by $270 billion,
or 14 percent, over the next seven years, and Republicans had hoped to
achieve much of the savings through greater use of H.M.O.'s and other forms
of managed care.

They said affluent beneficiaries should pay much higher premiums, but they
acknowledged that they were still struggling to achieve the savings they
need to meet their self-imposed goal.

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(h/t Heather.)

Former CIGNA PR chief Wendell Potter is very, very angry over Obama's movement away from true healthcare reform:

Not only is Obama clearly ready to throw the public option overboard, he is embracing the requirement that we all be forced to buy insurance from private insurers. That means your tax dollars and mine will be used to pay subsidies to the big insurers to provide coverage to people who can't afford to buy their policies, because the big insurers charge far more than they should because Wall Street investors demand that they do.

One of the people who undoubtedly talked Obama away from the public option and into supporting this mandate is his new BFF, Aetna CEO Ron Williams. Williams, who made $65 million off of Aetna's policyholders' premiums over the past two years and who was the mastermind behind Aetna's shedding of eight million members a few years ago to meet Wall Street's demands, is the insurance industry's leading champion of requiring us all to buy insurance. And, of course, without a public option, we'll all be forced to buy coverage from Aetna or one of the other private insurers.

According to a recent article in Forbes, Williams has been to the White House a half a dozen times recently to advise the president and his staff on health care reform. That same article quoted a Wall Street analyst as saying that Aetna likely will dump about 600,000 policyholders during the coming months to satisfy its investors' unrelenting profit demands.

During his speech in Montana, Obama talked a lot of trash about the insurance industry. Don't be fooled by that tough talk. It's all part of a strategy to try get us to believe we'll get the reform he promised during the campaign. Industry leaders are in fact delighted he's denouncing their behavior, because they believe most of his supporters -- who were hopeful the stars might finally have aligned for real reform -- will be fooled into thinking the reform bill that reaches his desk will benefit them more than the special interests with their armies of lobbyists. And they know the nonprofit cooperatives Sebelius and Gibbs are now trying to sell us on don't have a prayer of succeeding. The big for-profits will never let them get off the ground in any meaningful way.

Sadly, I believe the fat cats are winning and that the bill Congress sends the president will be one that gives an industry with an unsustainable business model a new lease on life and a guarantee of unprecedented future profits.

So I hope the president's aides are buying lots of lipstick. He'll need all he can get to put on that pig of a bill.