Friday, April 09, 2010

The Healthcare Follies Continue

Maybe I'm missing something here, but the explanations of Democrats for why the health care bill will actually cut the deficit ring more and more hollow over time.  But I'm also stunned with the seeming lack of understanding of basic economics...
Shea-Porter said the bill will improve the public's health and save money by providing care to 32 million uninsured people, many of whom would otherwise seek expensive care in emergency rooms.

"So how are we going to pay for this?' she asked, rhetorically.

The question sparked laughter and hoots from the bill's opponents at the town-hall-style forum.

Members of the capacity crowd hammered away at her point, saying the bill would incur huge debt.

Johanna Hayes, a doctor from Londonderry, said the bill has too many costs yet to be determined.

Hayes also claimed preventative care would raise overall costs.

"You are wrong about preventative care," Shea-Porter said.

"I am not," Hayes said. "I do it. I'm an epidemiologist."

On several occasions, people in the crowd laughed at Shea-Porter's remarks or spoke spontaneously from their seats.

This inspired responses from her supporters.

The congresswoman told the audience she shared their frustration over jobs lost and economic hardships.

She also asked for civility and drew a parallel between outbursts on the floor of Congress and in the meeting at Londonderry Town Hall.

"It is disappointing," she said. "Can we disagree without personal attacks?"

Ultimately, Shea-Porter didn't shy away from the confrontational tenor of the meeting, and said in an interview later that she enjoyed the give and take.

"I love it," she said. "I like trying to explain."

At the meeting, Rep. Al Baldasaro, R-Londonderry, said the New Hampshire Budget Office estimated the health care bill would cost the state $1.2 billion in Medicaid expenses over the next 10 years.

Shea-Porter said the bill would be funded, in part, by savings from the preventative care and by taxing the top 2 percent of income earners.

Also, it would be funded by curbing waste and fraud, and by a 14 percent savings on the Medicare Advantage program, she said.

Audience members wanted to know what would stop insurance companies from raising rates exorbitantly.

Shea-Porter said the companies could do that before the bill was passed.

But, ultimately, with more people entering the marketplace for insurance, the companies need to be competitive to gain customers, she said.
I'm trying to figure out what that last sentence means. Shea-Porter acknowledges that insurance companies could still raise premiums under this bill, but claims that increasing the number of people they have to cover (effectively expanding the demand for insurance) will force companies to be more "competitive" and reduce prices.

I am reasonably certain the bill has mechanisms to limit premium increases, but the way she described it, she's expecting a market mechanism to handle the issue. She's essentially saying that if you increase demand, you're going to reduce prices. I'm not sure how that would work -- I know there's an argument to be made that by requiring everyone to sign up, you will reduce the risk to the entire pool, but I don't think this translates into lower premiums. So I'm lost as to what she means.

In other words, Nancy Pelosi was wrong. Even after they passed the bill, Democrats can't explain it.

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