WP: CBO says health care repeal would deepen deficit

[Larry]

If thinking is fundmental then you seem to have a problem.

The CBO compared two future scenarios: One in which Obamacare is left alone. One in which it is repealed. True or false?

[SnyderShrugged]

yes, (I think?)

Has no bearing on the built in doc fix assumption. In the keep it scenario, the savings is based on that potentially faulty assumption. In the repeal it assumption it is too. Regardless there likely wont be the cuts as planned so either way the assumtion is faulty if that comes to pass.

[gbear]

Ok, leaving the gov defecit alone for a min., how many think their insurance rates will rise again next year if Obamacare is repealed? How many had explained to them when they questioned this year's increase it was due to the increased coverage required by Obamacare? Will we get that increase back, or will it further line the insurance companies' bottom lines?

Doesn't a repeal at this point in time turn the entire attempt to reform our healthcare system into a giant money grab for the healthcare industry?

I care about the government debt, but I care about mine even more so.

[Larry]

yes, (I think?)

Both scenarios used the same assumption that you think is wrong. True or false?

[SnyderShrugged]

Ok, leaving the gov defecit alone for a min., how many think their insurance rates will rise again next year if Obamacare is repealed? How many had explained to them when they questioned this year's increase it was due to the increased coverage required by Obamacare? Will we get that increase back, or will it further line the insurance companies' bottom lines?

Doesn't a repeal at this point in time turn the entire attempt to reform our healthcare system into a giant money grab for the healthcare industry?

I care about the government debt, but I care about mine even more so.

bear in mind that the ins companies are planning out their economic forecasts at least 5 years out. The actions a company takes today are in antricipation of what is coming tomorrow. It would probably take at least a year to adjust premiums in my opinion. (FWIW)

Also, we need to keep in miond that the vast majority of insurance company rates are based on medicare rates in order to streamline the variation between medicare operations and commercial ones. The rates are always going to be associated together.

---------- Post added January-7th-2011 at 01:27 PM ----------

Both scenarios used the same assumption that you think is wrong. True or false?

I assume true.

I may be slow to respond to the next few posts because Im getting on a conference call. I'll answer when I can though

[Larry]

I assume true.

Then it doesn't matter how wrong said assumption is, does it?

If scenario 1 assumes that X will cost $1.

And scenario 2 assumes that X will cost $1.

And the report says "Scenario 2 will cost $200B more than scenario 1".

Then it doesn't matter if X actually costs $1T, instead of $1, does it?

Scenario 2 will still cost $200B more than scenario 1.

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If scenario 1 and scenario 2 are both wrong by the same amount, then it doesn't in any way change the difference between them.

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So, again: If you're going to ignore the CBO report because "they made false assumptions", find one that actually affects the conclusion.

[SnyderShrugged]

Then it doesn't matter how wrong said assumption is, does it?

If scenario 1 assumes that X will cost $1.

And scenario 2 assumes that X will cost $1.

And the report says "Scenario 2 will cost $200B more than scenario 1".

Then it doesn't matter if X actually costs $1T, instead of $1, does it?

Scenario 2 will still cost $200B more than scenario 1.

----------

If scenario 1 and scenario 2 are both wrong by the same amount, then it doesn't in any way change the difference between them.

----------

So, again: If you're going to ignore the CBO report because "they made false assumptions", find one that actually affects the conclusion.

no

if scenario 1 assumption "saves" $1

and

scenario 2 assumption saves $1

and the assumption is wrong.

Both scenarios fail to save the dollar

[JMS]

What you are referring to is the attempt to limit the spending done by insurance companies on such things as marketing, overhead, and administrative costs. Right now the average insurance company spends around 20% on these items and only 80% on what is referred to as the medical loss (yes that is right health insurance paying your claims is actually considered a loss). PPACA wants to raise this spending from 80% to 85%. While this is a start it is still drastically lower than the 97% most other insurance companies spend in other OECD nations.

You would need to source that for me. I've seen estimates of commerical overhead costs from insurance companies as high as 100%. Hell their profits soared by what more than 400% from 2000-2007? In 2006 the bonus from a single insurance company executive ( Dr. McGuire of United Healthcare) consumed 1.1 Billion dollars; or 1 in every $700 spent nation wide in healthcare went to pay just Mr. McGuires salary and bonus that year according to Elibeth Edwards..

http://wonkroom.thinkprogress.org/2009/05/21/elizabeth-edwards-1-of-every-700-went-to-pay-salary-of-unitedhealth-ceo/

The new law does not just " limit the spending done by insurance companies on such things as marketing, overhead, and administrative costs". I heard it capped all spending not related directly to paying for cusomers medical expenses. Which would also effect profits and dividends to stock holders as well as hiring, salaries, advertising and lobbying fees.

Indeed, as a new report by Health Care for America NOW points out, “profits at 10 of the country’s largest publicly-traded health insurance companies in 2007, rose 428 percent from 2000 to 2007, from $2.4 billion to $12.9 billion.”

http://wonkroom.thinkprogress.org/2009/05/21/elizabeth-edwards-1-of-every-700-went-to-pay-salary-of-unitedhealth-ceo/

[Predicto]

seems as though EVERY time a conservative is used as a source its part of your pet peeve here lately.

just an observation

When an editorial is posted as a news story and the underlying fact that is an unvetted editorial isn't acknowledged by the poster - yes, you are correct. The apparent fact that our conservative posters appear to do this more than our liberal ones isn't my fault.

[JMS]

If thinking is fundmental then you seem to have a problem.

Tone down the insults. Larry is a very sharp guy and is pretty much what passes on this board for moderate. You guys seem to have an honest disagreement. look for a link.

Larry is very good about considering facts, Typically.

The GOP has literally nothing to do with the plain and simple fact that some of the assumptions used in the CBO analysis are potentially wrong, depending on decisions made in congress. The Doc Fix is a big one. It cant be held seperate in this discussion because the so called savings was based in large part on the assumption that medicarfe reimbursement rates would expire as planned.

The nonpartisan independent CBO is the gold standard for cost projections. They are often wrong, but they are rarely overly optimistic in their projections. If anything they are critisized consistantly for being overly conservative in their projections by both parties.

I would also say if what you are saying is correct and the Obama care won't amount in 100's of billions in deficite reduction over 10 years; why oh why did hte GOP write in an exception to their "All new spending must be offset by cuts" policy for healthcare? If they thought the CBO was really wrong why did they cover themselves like that?

Three more question for you SnyderShrugged. Are you familiar with the cap on non medical expenses being imposed on the insurance industry? What year does it kick in and what is the percentage?

Do you think this cap will dirrectly effect your job?

[gbear]

If the insurance rates are tied to medicare, wouldn't a cut to medicare payouts to docs lower the insurance company's pay outs as well, in theory alowing for lower rates to the insurance customers? That's not what I saw. I was told they would now have to cover certain things like physicals without copay and were thus adding that charge into the rates we pay. It was for the requirement to cover the incidentals, the things found (because the checks pay off medically but not financially for the insurance co.), and the requirement for them to cover pre-existing conditions. So if the reppeal goes through, wouldn't those things I listed, that they explained as the reason for the costs increasing, go away?

As for the 5 year bit and taking at least a year to be seen in our wallets, our premiums went up, and the healthcare bill was only in place from the mid part. So is it just a faster adjustment going up (like most businesses) and a snails pace down if at all?

[shk75]

You would need to source that for me. I've seen estimates of commerical overhead costs from insurance companies as high as 100%. In 2006 the bonus from a single insurance company executive consumed Dr. McGuire United Healthcare reached 1.1 Billion dollars; or 1 in every $700 spent nation wide in healthcare went to pay just Mr. McGuires salary and bonus..

http://wonkroom.thinkprogress.org/2009/05/21/elizabeth-edwards-1-of-every-700-went-to-pay-salary-of-unitedhealth-ceo/

The new law does not just " limit the spending done by insurance companies on such things as marketing, overhead, and administrative costs". I heard it capped all spending not related directly to paying for cusomers medical expenses. Which would also effect profits and dividends to stock holders as well as hiring, salaries, advertising and lobbying fees.

The average is 20% there are companies with higher costs and companies with lower costs. As to your assertion that there will be a cap on profits, that is not entirely accurate. One way that insurance companies have been able to make large profits is by dumping subscribers, not insuring pre-existing conditions, and placing a cap on how much can be paid for chronic conditions such as cancer and heart diseases. Under PPACA, these practices will now be outlawed and thus make it harder for these companies to turn exorbitant profits. I do not have a specific source right now but this information is common knowledge and I have come across the same stats multiple times during my thesis. If you would like a good unbiased summary to what will happen I recommend you read Health Care Reform and Politics: What Every American Needs to Know.

[SnyderShrugged]

When an editorial is posted as a news story and the underlying fact that is an unvetted editorial isn't acknowledged by the poster - yes, you are correct. The apparent fact that our conservative posters appear to do this more than our liberal ones isn't my fault.

dont get huffy, its just a trend that has arisen in your posts lately that I noticed. I still luv ya like a brother man

[Predicto]

dont get huffy, its just a trend that has arisen in your posts lately that I noticed. I still luv ya like a brother man

Back atcha.

I've been trying to stay out of threads where I know I can't participate without being obnoxious (the Antonin Scalia thread, for example), but my inherent obnoxiousness still shines through sometimes.

[JMS]

As for the 5 year bit and taking at least a year to be seen in our wallets, our premiums went up, and the healthcare bill was only in place from the mid part. So is it just a faster adjustment going up (like most businesses) and a snails pace down if at all?

Actually this last year which was partially covered by the Obama care reform experienced the smallest increase in medical spending in 50 years.

Health care spending increase is smallest in 50 years

http://www.mcclatchydc.com/2011/01/05/106268/health-care-spending-declines.html.

[Kilmer17]

Back atcha.

I've been trying to stay out of threads where I know I can't participate without being obnoxious (the Antonin Scalia thread, for example), but my inherent obnoxiousness still shines through sometimes.

I missed you in that one.

This isnt Thanksgiving with family, you're allowed, in fact encouraged imo, to be obnoxious when you see fit.

[SnyderShrugged]

Tone down the insults. Larry is a very sharp guy and is pretty much what passes on this board for moderate. You guys seem to have an honest disagreement. look for a link.

Larry is very good about considering facts, Typically.

I like Larry on here, a lot actually. I just regurgitated the thinking is fundamental after he said it to me. No insult intended beyond our regular teasing here.

The nonpartisan independent CBO is the gold standard for cost projections. They are often wrong, but they are rarely overly optimistic in their projections. If anything they are critisized consistantly for being overly conservative in their projections by both parties.

I would also say if what you are saying is correct and the Obama care won't amount in 100's of billions in deficite reduction over 10 years; why oh why did hte GOP write in an exception to their "All new spending must be offset by cuts" policy for healthcare? If they thought the CBO was really wrong why did they cover themselves like that?

I couldnt answer why the GOP does anything these days, I can only go with the facts that I know for sure and that the doc fix was a big componant of the savings calculations.

Three more question for you SnyderShrugged. Are you familiar with the cap on non medical expenses being imposed on the insurance industry? What year does it kick in and what is the percentage?

I would have to look it up for sure, but I think its fairly soon, maybe 2014? Though, look for gamesmanship with how the cost categories end up redefined as their tool to skirt that one. I saw massive category redefinition last year.Do you think this cap will dirrectly effect your job?

I can say that the entire reform directly impacted my job. My facility was closed in most part due to cost cutting measures and sell offs of major lines of business as a reaction to the "fear of the future" regarding the reforms.

Though I immediately landed another career doing pretty much the same thing for another industry. Alls good except my stupid commute!

---------- Post added January-7th-2011 at 02:16 PM ----------

I missed you in that one.

This isnt Thanksgiving with family, you're allowed, in fact encouraged imo, to be obnoxious when you see fit.

ditto!

[Larry]

CBO:

A + B + C + D + E

is $200B better for the deficit than

A + B + C + D + F

Snyder: They used the wrong value for B! Ignore their conclusions!"

[JMS]

The average is 20% there are companies with higher costs and companies with lower costs. As to your assertion that there will be a cap on profits, that is not entirely accurate. One way that insurance companies have been able to make large profits is by dumping subscribers, not insuring pre-existing conditions, and placing a cap on how much can be paid for chronic conditions such as cancer and heart diseases. Under PPACA, these practices will now be outlawed and thus make it harder for these companies to turn exorbitant profits. I do not have a specific source right now but this information is common knowledge and I have come across the same stats multiple times during my thesis. If you would like a good unbiased summary to what will happen I recommend you read Health Care Reform and Politics: What Every American Needs to Know.

The new health care law adds a new Section 2718 to the Public Health Service Act setting out that health insurance companies, starting in September 2010 and through the end of 2013, will be required to refund all enrollees the amount by which premium revenue expended for non-claims costs exceeds 20% for group policies and 25% for individual policies.

http://www.medicaltourismcity.com/profiles/blogs/health-care-acts-limitation-on

[SnyderShrugged]

CBO:

A + B + C + D + E

is $200B better for the deficit than

A + B + C + D + F

Snyder: They used the wrong value for B! Ignore their conclusions!"

I swear we must speak different languages.

If the assumtion for savings used in both, the savings will be less. What you are saying ad nausiumm doesnt make a lot of sense.

Please stay within the point and we'll do a lot better.

[Predicto]

I missed you in that one.

This isnt Thanksgiving with family, you're allowed, in fact encouraged imo, to be obnoxious when you see fit.

No, you you wouldn't understand... I actually try to restrain my obnoxiousness.

[JMS]

Though I immediately landed another career doing pretty much the same thing for another industry. Alls good except my stupid commute![/color][/b]

Good for you. I'm glad to hear it.

[Kilmer17]

No, you you wouldn't understand... I actually try to restrain my obnoxiousness.

Oh I understand, I just wish you wouldnt.

The mudpit is fun. You should jump in more often.

[SnyderShrugged]

Good for you. I'm glad to hear it.

Thanks man! Thats very nice of you to say!

[shk75]

I don't understand your argument. The links you have provided me do not in any way support your claim that there is a cap placed on profits. The fact is there is no such cap. What is true is that they are lowering the amount companies are allowed to spend on overhead and administrative costs and are also limiting selective practices. These two combined are aimed at making insurance more fair for participants and may in turn limit profits of these companies. However, it is also possible that profits will increase since a "mandate" will force these companies to take on more subscribers.