Comments on: Ten Small-Scale Reforms For Pre-existing (Chronic) Conditions

By: John Goodman

John Goodman — Thu, 28 Jan 2010 22:18:51 +0000

Ng: Perhaps Mark Pauly didn’t explain the concept to you very well. See my review of the Cochrane study where I provide a reasonably clear explanation of health status insurance and why you need it. Large pools do not solve this problem.

By: Devon Herrick

Devon Herrick — Thu, 28 Jan 2010 21:53:00 +0000

In response to Weiwen Ng, the first CBO cite basically says the broader scope of benefits required in the health reform legislation would only increase premiums by 3%. AHIP and others dispute that figure.

The second CBO figure (2% to 3%) is based on John Gruber. However, the page cited in the same CBO report references a study for Maryland that claims mandates are 15% of covered claims — but then discounts the study because Maryland has more mandates than most states.

Going back a couple decades, there are several studies that have found similar results. John C. Goodman and Gerald L. Musgrave, “Freedom of Choice in Health Insurance,” Nation Center for Policy Analysis, Policy Report 134, 1988; Gail A. Jensen and Michael A. Morrisey, “Mandated Benefit Laws and Employer-Sponsored Health Insurance,” Health Insurance Association of America, January 1999; Frank A. Sloan and Christopher J. Conover, “Effects of State Reforms on Health Insurance Coverage of Adults,” Inquiry, Vol. 35, 1998, pp. 280-293; and Stephen T. Parente et al., ” Consumer Response to a National Marketplace for Individual Insurance,” University of Minnesota, June 28, 2008. Also see: Gail A. Jensen and Jon R. Gabel. “The Price of State Mandated Benefits,” Inquiry, Vol. 26, 1989, pp. 419-431.

The Council for Affordable Health Insurance list the costs for mandated benefits. Some benefit’s costs are very small — adding only a fraction of 1% to the cost of premiums. But when taken together, they all add up.
http://www.cahi.org/cahi_contents/resources/pdf/HealthInsuranceMandates2009.pdf

Gail Jensen and Jon Gabel (1989) found that about two-thirds of employers, who decided to self-insurance, did so to avoid the expense of state regulations.

Goodman and Musgrave (1988) found that state mandates increased the cost of coverage, pricing about one-fifth to one-quarter of the uninsured out of the market. A study by Sloan and Conover (1998) found eliminating mandates would reduce the number of uninsured 18% to 14% of the non-elderly population. That estimate is relatively consistent with Jensen and Morrissey (1999).

I believe Parente’ estimated that a national market would reduce the uninsured by around one-quarter.

By: LizL

LizL — Thu, 28 Jan 2010 15:16:34 +0000

Goodman is brilliant. These 10 ideas are exactly what our health care system needs. The NCPA is right on!

By: Weiwen Ng

Weiwen Ng — Thu, 28 Jan 2010 03:59:33 +0000

And as to point #8, NCPA’s math is poor. CBO says that the benefits mandated by states, when averaged across the country as a whole, raise individual and small market premiums by 2-3%. Many of the mandated benefits are already covered by employer-sponsored plans – because they are good benefits to cover. Goodman’s discussion of naturopathy, IVF or marriage counseling is just blowing smoke. The NCPA analysis he cited doesn’t even say which alleged studies find that 25% of people get priced out of the market by these mysterious, expensive state-mandated benefits.

See page 10 of this CBO document: http://www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf

and page 61 of this one: http://www.cbo.gov/ftpdocs/99xx/doc9924/12-18-KeyIssues.pdf

By: Health Affairs Blog Health just to Me

Health Affairs Blog Health just to Me — Thu, 28 Jan 2010 02:41:19 +0000

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By: uberVU - social comments

uberVU - social comments — Thu, 28 Jan 2010 00:35:04 +0000

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By: Devon Herrick

Devon Herrick — Wed, 27 Jan 2010 17:18:07 +0000

For most people, health costs are quite low (and rise very slowly) until they are well into their 50s. Many would-be reformers believe the solution is to gouge young people (i.e. community rating) so health insurance premiums for older people with greater health needs are subsidized. I’ve heard this many times… “health insurance will only be affordable when everyone has coverage.” This doesn’t actually make any sense. A cross-subsidy does not make anything more affordable; it shifts costs from one group to the next. Attempts to force young people to cross-subsidize older (and often wealthier) individuals is also counterproductive when it results in adverse selection death spirals that drive up the cost of coverage.
Families should be able to spread their health risk across their own working lives. Similar to the lifecycle theory of investing for retirement, this is a way to pool risk over time rather than across multitudes of people. Personal and portable insurance, coupled with HSAs, would allow families to set aside money while young and healthy that they spend down once they reach late middle age. An added bonus is that families would benefit from being prudent medical consumers.

By: Catherine

Catherine — Wed, 27 Jan 2010 15:51:15 +0000

John Goodman writes: “In a reformed health care system, the chronically ill along with their doctors, their employers and their insurers should all find lower-cost, higher-quality, more-accessible care in their economic self-interest.” This is a worthwhile health reform goal for everyone’s economic self-interest and well-being. The 1st step of portable health insurance is long overdue for serious consideration.

By: Brian R Williams

Brian R Williams — Wed, 27 Jan 2010 15:37:51 +0000

Democrats and Republicans alike seem trapped in the notion that Congress (and ONLY Congress) can solve the problems faced by people with chronic illnesses — cost, quality, access, etc. That by ignoring regular market forces, incentives and so forth, Congress can somehow legislate away the problems of chronic illness.

However, as John Goodman shows in this post, there are at least 10 great ideas that would allow the power of markets and capitalism to work in favor of people with chronic illnesses. I’m struck by how many of John Goodman’s ideas are related to freedom (the word “allow” is used repeatedly throughout his post). In contrast, the approach taken by Congress uses regulations, mandates and taxes to surpress the free market.

By: Ten Small-Scale Reform Ideas for Obama, Man Dies from Computer Error, and Why Welfare Recipients Get Free Cell Phones | John Goodman | NCPA

Wed, 27 Jan 2010 15:28:44 +0000

[...] Small-scale reform ideas for Obama/Democrats. Plus, I solve pre-existing condition problems at the same time. [...]