A Bad Bill Is Worse Than No Bill At All

Commentary By Ron Beasley

I remain convinced that there was never any possibility of a health care reform bill that actually reformed anything.  Obama just wants a bill - he really doesn't care what's in it.  This is not only wrong but politically stupid, more about that later.  As lawmakers do they just want it to look like they did something without pissing off any of their sugar daddies.  They first thing that made any possibility of meaningful reform impossible was the concentration on the insurance side while ignoring The Medical Industrial Complex. The reality is the only way to reduce costs is to do one of the things that the insurance industry is criticized for doing - not approving procedures, tests and medications that don't have any real value to the patient. 

And the center of attention has been on the so called public option.  Well this is no surprise, Ezra Klein reports that the public option in Pelosi's bill will actually end up costing more than private insurance.

...the public plan will pay prices equivalent to those of private insurers and may save a bit of money on administrative efficiencies. But because the public option is, well, public, it won't want to do the unpopular things that insurers do to save money, like manage care or aggressively review treatments. It also, presumably, won't try to drive out the sick or the unhealthy. That means the public option will spend more, and could, over time, develop a reputation as a good home for bad health risks, which would mean its average premium will increase because its average member will cost more. The public option will be a good deal for these relatively sick people, but the presence of sick people will make it look like a bad deal to everyone else, which could in turn make it a bad deal for everyone else.

The nightmare scenario, then, is that private insurers cotton onto this and accelerate the process, implicitly or explicitly guiding bad risks to the public option. In theory, the exchanges are risk-adjusted, and the public option will be given more money if it ends up with bad risks, but it's hard to say how that will function in practice.

John pointed out below that there are some positive things in the bills being discussed but they don't address the real problems.  In other words they don't reform.  Additional government spending on health care at this time may actually make the problem worse and result in escalating the costs even more.  This will be a political disaster for the Democrats and Obama.  If nothing is done employers will continue to drop health insurance all together or force their employees to pay a bigger and bigger share.  A bad reform bill will do the same thing even faster.  This would appear to be a no win for the Democrats.  The only way to mitigate the damage is let the bought and paid for Republicans and blue dogs filibuster.  When the system implodes the Democrats can say we tried but they blocked it.