“Cut me, Mick.”
-Rocky Balboa, Rocky
Other deadlines have kept me from writing about recent efforts by members of the Senate Finance Committee to squeeze more money out of the managed care industry in the form of additional fees (read: taxes) to help pay for healthcare reform. Luckily, managed care analyst Carl McDonald of Oppenheimer once again has it covered.
The health insurance industry really hasn’t objected all that much to the proposed Medicare Advantage cuts that will range from approximately $110-175 billion. That’s a much bigger number than the cuts the pharma industry agreed to ($80 billion) and it is in the ballpark of the $155 billion in proposed hospital cuts.
So it’s not clear to us why the health insurers are being singled out for an additional $75-100 billion in fees, particularly since it will be very difficult for the Senate Finance Committee to structure the fees in a way that they won’t be immediately passed onto customers in the form of higher premiums.
As drug industry consultant Boas Gonen pointed out in a prior post on this blog, pharma is also likely to offset any cuts by raising prices elsewhere, as well as from prescriptions written to newly insured patients.
So it’s important in all this to remember Newton’s Third Law of Motion: Every action has an equal and opposite reaction — which brings us to another point made by McDonald (and others):
If the Democrats really want to move to a single-payer system, or something close to it, that’s fine; but let’s have that discussion, rather than talking about setting up a government run health care plan with huge competitive advantages over the existing insurers that will result in a big migration of people to the government plan and essentially put the existing insurers out of business.
I agree, as I’ve written before (see prior post), that single-payer should be seriously included in any discussion about healthcare reform – even if it’s only to help us better frame the pros, cons and consequences of current reform proposals.
Btw, I have nothing against single-payer, and if you believe the Jared Bernsteins of the world (see prior post) we’re going to go there eventually anyway. So let’s talk.
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