Friday, February 26, 2010

The Healthcare Summit

Political theater for sure.

There is no earthly reason for serious legislative work to be televised. Posturing, yes, that should be televised. Otherwise, why do it? So this summit was an excellent opportunity for Dems to appear reasonable and Republicans to act like populists. It was, in some ways, a reversal of the usual rap that the left and right throw at each other. Usually, liberals say that conservatives are mean, and conservative say that liberals are stupid. Yesterday, the liberals were accused of tyranny and the conservatives of “not getting it.”

On one score, the liberals were surely right: affordable insurance cannot cover pre-existing conditions if you can wait until you’re sick to buy it. So, everyone must be required to buy insurance (or someone must buy it for them), so that there won’t be any pre-existing conditions. And the insurance everyone must buy has to cover the conditions that would be excluded as pre-existing if the insurance were purchased later. If you can buy a policy now that costs $5 a month because it only covers bunions, you can’t expect to buy one later that covers everything for a reasonable price. No, the policy that qualifies you to avoid a pre-existing condition exclusion has to cover all the conditions to which that condition might apply. Otherwise, the opportunity to game the system remains.

The result, of course, is that we need a one-size fits-all “basic” coverage that people must buy and insurers must sell. Beyond that, individuals might be offered additional benefits, but insurers must be permitted to deny the extra benefits with respect to conditions existing at the time the policy was upgraded. Open enrollment at a give age might be used to enable people to get full expanded coverage – that’s for the actuaries to figure out – but in general, the coverage that cannot be denied on the grounds of pre-existing conditions must match the coverage that individuals are required to buy at an early age.

This analysis is obvious, and yet the Republicans whine on about “Washington deciding what everyone must have,” and how “people don’t want to be told they have to buy insurance,” all the while joining the mob that wants to stone the insurance companies for, as Jay Rockefeller (not a Republican, maybe not even a Rockefeller) said, “putting profits ahead of people.” As if Wellpoint were a charity. But I digress – my point is that the Republicans were singing the same tune as Democrats about pre-existing condition exclusions “going straight to the insurance company’s bottom line,” but without the logical consistency of mandatory coverage to make a solution work. When BHO said that he had campaigned against mandatory coverage, one of the moronic Republicans shouted out “Bless you!” The President was making the point (true or false) that he “had to be dragged kicking and screaming” to the conclusion that mandatory coverage was necessary.

Of course, in Washington, you can’t tell who’s dumb and who’s pretending to be dumb. Somewhere in the Republican ranks is someone who gets this stuff. I mean, this same sort of domino logic applied when ERISA was passed in 1974. That law sought to provide insurance for workers pensions, but to do it, it had to establish rules about participation waiting periods, benefit accrual rates, vesting schedules and investment management. Otherwise, the system could be gamed or moral hazard would infect fund management. So this pre-existing condition thing ain’t rocket science.

Maybe politics-watching has always been an exercise in telling the knaves from the fools. But if wasn’t always, it sure is now.

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