Jay Rockefeller’s Good Idea
Jay Rockefeller (D-WV)
As I said below I like what Jay Rockefeller is proposing in terms of a robust public plan with reimbursement rates based on Medicare. But Ezra Klein points out that Rockefeller also has another good idea in his Consumer Health Choices Act, namely to create something he calls America’s Health Insurance Trust. The idea here is to help get around the fact that when you start a new job and are picking your insurance options, there’s generally very little available information to help you make an informed choice:
The trust would be a nonprofit corporation staffed by experts chosen by the well-respected Government Accountability Office. The trust would conduct surveys, pore over claims data, and rate plans on administrative expenditures, affordability, adequacy of coverage, consumer claims processing (including timeliness), consumer complaint systems, grievance and appeals processes, transparency and customer satisfaction. The ratings would be as simple as possible, with letter grades. All the information would be available online, on the same sites where people would choose their insurer.
It is, in other words, a good and obvious idea responding to a real need in the marketplace. I’d guess that it’ll be overshadowed by the public plan portion of Rockefeller’s bill. But whatever happens with the public plan, both parties should be able to agree on the inclusion of something like this consumer-oriented trust. The health insurance market will never work unless people have access to the information and choices that would allow them to identify and reward high-performing companies.
I’m not sure I’m really as excited about this as Ezra, since I’m pretty sure that even if there were great information available most people would mostly ignore it and the market would remain pretty dysfunctional. Still, I could be wrong! I don’t see how this could possibly make things worse, and it could make things much better.
On a loosely related note, part of what’s wrong with the world is that the very same people who spend a lot of time cheerleading for free markets and donating money to institutions that cheerlead for free markets—businessmen, in other words—are the very people who have the most to gain from markets being totally dysfunctional. The absolute worst place on earth you can find yourself as a businessman is in the kind of free market you find in an Economics 101 textbook. As a market approaches textbook conditions—perfect competition, perfect information, etc.—real profits trend toward zero. You make your money by ensuring that textbook conditions don’t apply; that there are huge barriers to entry, massive problems with inattention, monopolistic corners to exploit, etc. So when it comes to something like health insurance, you have people on the left who want public policy to aim at replacing the market with publicly run entities and you have people in the business community who want public policy to aim at making the market as dysfunctional as possible. So you get what we have, which sucks.
Rockefeller is, basically, trying to get us out of that bind and make a better-informed, more-competitive market. And good for him.
15 Responses to “Jay Rockefeller’s Good Idea”
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June 11th, 2009 at 10:14 am
I don’t see how this could possibly make things work, and it could make things much better.
“Worse”
/ObTypoComment
June 11th, 2009 at 10:32 am
I don’t believe it.
Rocky is putting up a empty fallback program that will take the place of the public option when the Masters of the Healthcare Universe defeat the latter. Maybe he can pair it with Kent Conrad’s empty plan to kill the public plan and replace it with a bunch of non-profits. The deficit concern troll meme that is now emerging is right is Conrad’s pilot house, BTW.
You seriously trust Rocky after what he accomplished on FISA reauthorization??? The guy’s a wholly owned subsidiary.
See Bob Reich at TPM on the strange timing of the increased concern about the deficit from the left-liberal side, just when the costs of the public option are being discussed. And see the NYT on the AMA’s opposition to the public option. All the stops are out to kill the public option. I can hardly wait to hear Summers, Geithner, and Bernake weigh in on how additional unfunded deficit expenditures would be an “unwise” economic drag on the economy at this time.
Sure we can bail out the banks and AIG for trillions. And wars, no problem. Single payer, public option and universal health care, however, are stampeding socialism that will destroy America, put us all in the poorhouse and usher in the rule of satan.
The Kabuki master rules. Watch Rahm on this one.
June 11th, 2009 at 10:33 am
I don’t see how this could possibly make things work, and it could make things much better.
If you don’t think it will make things any better, that would be a good reason to oppose spending money on it as spending money on programs that do not do anything is I think the definition of wasteful spending. (As opposed to spending money on programs that do actively bad spending, which I would call Bad Spending, not Wasteful Spending.)
June 11th, 2009 at 10:37 am
The absolute worst place on earth you can find yourself as a businessman is in the kind of free market you find in an Economics 101 textbook.
I thought Matt said Eco101 was all about making the rich richer? Which one is it?
June 11th, 2009 at 10:41 am
Ha! So when you start your new job and you get to choose between four plans ranked between D+ and D-, you’ll know you had a choice. This idea is pure window dressing.
June 11th, 2009 at 10:50 am
There are several concerns. State health insurance boards are supposed to provide the kind of consumer information as the proposed new nonprofit.
Here’s where it gets interesting. The information is available online, where people would chose their insurer. That’s not sign up for new employer sponsored health insurance, sign up for expanded Medicaid or CHIP, or sign up for better Medicare.
It’s for the individual to buy health insurance, which is the back door intent of reform. Corporations want to dump health insurance to the worker.
America has a problem with health literacy, which likely extends to health insurance terms and coverage.
As for “identifying and rewarding” high performance companies, I think its known as a purchase decision. You get the performance after you sign.
Now what in Rockefeller’s bill addresses lack of competition in local health insurance markets?
June 11th, 2009 at 10:54 am
I am a pretty simple dude. I don’t like complex things. I especially fear the incrementally creep of the complex into the asset I consider most valuable, time.
I don’t want to spend a spend a fraction of my life poring over health care options. I would rather sit in a traffic jam on a blazing hot day with no available AC. Endless paperwork is for the immortals. They can spare the time.
Give me single payer. Keep it clean, keep it simple. Use my body parts for research when I’m done and burn whats left in a communal fire.
June 11th, 2009 at 11:11 am
I’m concerned about how insurance companies will make a profit. Right now this is done by denying claims, not covering pre-existing conditions, setting lifetime policy limits and raising rates on the sick consumers until they can’t afford it and just go away.
My question is why would they stop these practices? Even if they have to cover pre-existing conditions and they can’t reject customers, will they not be allowed to continue their other harassing ways of getting rid of bad customers? With a public plan, they just have to raise rates so high on the sick that they effectively get rid of the costs, but they can now market to the young and healthy.
June 11th, 2009 at 11:43 am
“The absolute worst place on earth you can find yourself as a businessman is in the kind of free market you find in an Economics 101 textbook.”
Which is why the market for economics textbooks looks more like the market for health care than it does like the market for corn. The decision about what to buy is made by Person A (the faculty member) and often paid for by Institution C (Office of Financial Aid), but used (or not used) by Person B (the student).
June 11th, 2009 at 12:06 pm
The absolute worst place on earth you can find yourself as a businessman is in the kind of free market you find in an Economics 101 textbook. As a market approaches textbook conditions—perfect competition, perfect information, etc.—real profits trend toward zero.
Just to be clear, “profits” as defined by economists and not the common understanding of profits. They would still be making money.
June 11th, 2009 at 12:38 pm
Adams is right. Jello Jay has never missed an opportunity to sabotage the progressives in his party. This smells like a scam.
June 11th, 2009 at 12:52 pm
What is it with all the tinkering with the private insurance market that so many progressives are obsessed with?
How much clout does this industry have over people that they don’t even mouth the words single payer?
June 11th, 2009 at 3:29 pm
“I’m pretty sure that even if there were great information available most people would mostly ignore it and the market would remain pretty dysfunctional. Still, I could be wrong! I don’t see how this could possibly make things worse, and it could make things much better.”
I think the first sentence is right. There is all kinds of information out there about diet, health, financial planning and people ignore it. There is not enough time in the day to inform ourselves about everything we should theoretically care about.
Because I agree with your first sentence, I disagree with your second sentence. It “can’t make things worse” is not a high enough standard for a public expenditure. Waste per se makes things worse and spending money on something that goes largely unused is waste. If I pay 20 people to screw in a light bulb, it doesn’t make the light in the room worse but it wastes resources for other activiites. That , of course, is the whole problem with healthcare costs in the US, that money is spent for things of no real value. This would be another example. Let’s stop the waste and find out what we can really afford.
June 12th, 2009 at 10:13 am
[...] Think about it – the free market is effective because it prevents any small set of individuals from monopolizing decision-making. Especially in the world today with so much information available and events moving so quickly, the “right” business choices to make aren’t always clear. A free market – by allowing each business to make its own choice – prevents decision-making from falling victim to individual follies. But our current economic system – with it’s enormous corporations – ends up recreating the feudal system in which power is not centered in a single place, but in a handful of powerful “princes.” While these “princes” push for free market reforms, it is not in their interest to actually achieve this ideal free market – as Yglesias points out: [...]
June 12th, 2009 at 12:23 pm
[...] a later post about health care, Yglesias makes a related point: [P]art of what’s wrong with the world is that the very same [...]