I agree that the health care sector is not a “free market”, which is why attempting to nibble around the edges to stimulate “competition” won’t work in the long run. Without real systemic change, it’s the same ole, same ole.

Looking at the contents and impact of the legislation passed last night, I can only say that it’s slightly better than a stick in the eye.

It’s not so much that it’s a weak bill, although it is. And if that’s the only issue, then one could rationalize that it’s at least a start. But it’s worse than that.

There are no real cost containment provisions in the bill. As such, any projections of the possible number of uninsured/underinsured is speculative at best. The positive impact of this bill on the deficit by 2019, according the the CBO, is speculative.

There’s no particular “competition” in the marketplace. Competition is an illusory concept relative to the inelasticity of the good/service provided in the health field. To pretend that this bill addresses that issue is pure fantasy.

Without real cost controls, the impact on premium will be negligible. Thus, businesses, especially small businesses, inspite of the credits offered will over time have problems being able to afford its co-share of premium.

Additionally, individuals will have difficulty paying their share of health costs. One estimate holds that middle-class folks will need to pay 15-18% of their income on premiums and co-pays.

Not to mention the restrictive abortion language that makes the Hyde Amendment look like it was pro-choice legislation.

There are some good things in this bill, such as preexisting condition language and addressing the Medicare Part D donut hole issues. But unless legislation addresses the real economic impact of health costs on individuals/families, businesses and the overall economy, nothing much changes. And that’s worrisome because I fear that in ten years, as the health care situation predictably gets worse, people will point to this as a failed experiment in “socialized” medicine and reject needed reforms that should have been included in the first place.

And this could be the best bill to emerge this year. This bill will not be considered by the Senate. Rather the Senate has its own bill (the combined Finance/HELP committees’ bills) currently being scored by CBO. We don’t know much about that bill as Leader Reid has kept the details to himself. But we do know, because he stated as much just prior to submission for review, that it contains an optional public option.

One thing to watch as the process goes forward: the medical loss ratio. That’s the amount of premium spent on medical treatment/services versus administrative costs, overhead and profits. The House Bill had it at 85/15 – the Senate Finance bill (before combination w/ the HELP bill) had it at 74/26. This is part of the discussion of a “government takeover” of the health insurance industry. Compare that ratio with the more public medical programs (Medicare, etc.) currently.

In any event, the Senate will pass its version and then it’s on to the Conference committee where anything can happen.

So, if a journey of a 1000 miles begins with but a single step, last night we began a journey. Let’s hope that last night’s step is not the best step we take on this journey.

There will be a revolt, one way or another.

Best Regards
PoliticalPen