The Health Care Reform Mystery Deepens

Thu, 27 Aug 2009 13:14:10 +0000

At least for me, it does. Earlier this month, I blogged about what I think is the key issue in the health care reform debate, pre-existing conditions, and why I think the Republicans' part in the debate should be to focus only on that issue. (In a later post, I linked to some other ideas consistent with limited but purposeful government involvement in this market that address the same problem of pre-existing conditions.) The Republicans should be the ones advocating for community rating plus a mechanism to adjust for differences in the risk pools selecting each health plan. It turns out that the political strategy for the Republicans is even easier than I thought, because such mechanisms are part of the key bills that have been proposed already.

Take a look at HR 3200, Section 206(b), for example:

COORDINATION OF RISK POOLING.—The Commissioner shall establish a mechanism whereby there is an adjustment made of the premium amounts payable among QHBP offering entities offering Exchange-participating health benefits plans of premiums collected for such plans that takes into account (in a manner specified by the Commissioner) the differences in the risk characteristics of individuals and employers enrolled under the different Exchange-participating health benefits plans offered by such entities so as to minimize the impact of adverse selection of enrollees among the plans offered by such entities.

The idea in this section of the bill is essential, along with those underlying Section 111 (Prohibiting pre-existing condition exclusions) and Section 112 (Guaranteed issue and renewal for insured plans). Those three elements constitute health insurance reform that should be acceptable across the political spectrum. They improve fairness and promote competition (by lessening the threat of adverse selection against the insurance companies). The latter should drive down costs without requiring additional public funds apart from the cost of administration. If the Republicans proposed a reform that consisted only of that, we would eventually reach a reasonable compromise.

So why not do it?