Response to yesterday’s post

See yesterday’s post concerning a bill to create health insurance pools for Missouri.  I sent the link to the Breitbart “Big Government” webpage to Chris Molendorp and asked for his comments.  The text below is his reply.

From:  Chris Molendorp
Date:  August 22, 2011 10:35AM
To:    Mike Watson

Yes.  Thank you for the email.

The fact of the matter is this:  Health Exchanges will be forced upon us by the federal government if the brief filed by Attorney General Chris Koster-as well as the 11th Circuit ruling-holds up.  In short, the individual mandate is unconstitutional(and I believe that just like you do).  However, the balance of the bill is not unconstitutional.  Poorly written, yes.  A large tax increase, yes.  A horrible piece of legislation, yes.  But still allowed as law of the land.

IF that scenario holds, Missouri policy makers have no choice but to intervene.  Period.

My bill does several things to preserve a private marketplace.

First, we build a coverage firewall between a private health insurance policy and a standard Medicaid offering.  The federal bill expands Missouri’s eligibility from 19% of the Federal Poverty Level to 133%.  This is DEVASTATING for budget makers.  The current Medicaid budget in MO is $6.8 billion.  I must provide a reasonable private market alternative for small business owners to look into the exchange for group coverage.  If left to individual employees to find coverage themselves, the medicaid rolls will explode.  A family of four that makes $80,000 will qualify for medicaid.  I have no possible way to pay for that long term once the federal medicaid subsidy phases downward starting in 2017.

Second, an exchange designed by HHS will eliminate your insurance agent/broker relationship.  You will receive policy information and advice from a government bureaucrat, not an independent business person of your choosing.  Why?  Because HHS will promulgate an exchange that is built upon the Medicaid model-not private insurance offerings.

Third, my bill is revenue nuetral.  I extend the current per member per month fee health insurance companies pay for the MHIP(MO HIgh Risk Insurance Pool).  I couple that with some federal grant money and premium collections to make an exchange NON dependant upon state general revenue funds.  Highway patrol, state parks, public education-and on and on and on-all rely on state general tax revenue.  My exchange avoids an additional line item drawing upon these funds.  I would predict HHS will hit our general revenue for creation.  In fact, the Mass Connector in Boston, required a $25 million general revenue loan for start up.  Thanks Romney!  I cannot do that in Missouri; I will not do that in Missouri and I have created a way to keep the liability to general revenue at zero.

Fourth, a handful of insurance companies have built a large part of their business model administering Medicaid for state governments.  My exchange encourages the NON-medicaid plan administrators to stay in the marketplace.  If HHS promulgates a medicaid style exchange only people like Molina Health Care will have a reason to participate.  Not that theres anything wrong with Molina or other carriers who choose to make money in that business model.  But you could say goodbye to folks like BlueCross, Cox Health Plans of Springfield, Anthem of St. Louis, Aetna, United HealthCare and Coventry-they are all goners if there is no rational business model going forward.  They have communicated to me that its hard to conceptualize a business model long term in Missouri if a medicaid style promulgation takes place.   They have no real chance to participate when the plan administrators for these government plans are already in place and on contract.  Thousand of layoffs and tens of millions of dollars lost in premium taxes Missouri collects on insurance companies are at risk. 

Fifth, an exchange is in and of itself not liberal.  KC Livestock Exchange, a farmers market, Expedia, Travelocity, esurance.com and Progressive are all examples of commerce built in an exchange format.  In fact the Heritage Foundation has advocated for this kind of free-market concept in the health insurance marketplace.  So has Newt Gingrich and his Healthcare Transformation Group-a group I’ve had excellent discussions with over the last year.  I would respectfully argue the conservative nugget and best part of the bill is indeed the concept of shopping exchanges.  In fact, in 2007, several very conservative state senators introduced an exchange bill-I think it was SB 556-to enact an exchange in Missouri.  I’ve considered these folks’ ideas during this process.

Sixth, my bill goes away if the entire federal healthcare bill is thrown out.  I have a nullification clause built in to HB 609.    So, the only guy who wasted his time was me.  Who really cares about me?  Better to waste my time worrying about this than other more important people.  If the Supremes dump PPACA, HB 609 gets dumped too.  No harm, no foul.  Unless, of course, the Supremes keep this as the law of the land.  And I don’t have any requirement to purchase insurance.  None.  You want to be uninsured and negotiate with a hospital-great, do so.  In fact, I will introduce HB 609 again and hope to add some language that tips my cap to Prop C.  I voted for Prop C as did you.  So, why would I require you to buy insurance.  Would be inconsistent, right?

Kathleen Sebilius or Chris Molendorp?  The known or the unknown?  Excercise our sovereignty by doing the heavy lifting of designing the unfunded mandate seems preferable to waiting for the unfunded mandate to be forced upon us-without funding.

It is a Hobson’s Choice; it is the burden of governing a state in 2011.  I choose to govern wisely and prudently instead of waiting for the great unknown.  I was elected with the task of balancing a state budget; anticipating future changes to public policy and I think folks want me to protect private decisions in a private market setting.  HB 609 attempts to do that in a reasonable way. 

I’ve voted with the GOP on every single non binding  healthcare resolution in the General Assembly during my tenure.  My healthcare voting record in Jefferson City was the same as Jane Cunningham’s until HB 609’s final days.  And, I would mention, EVERY single House member voted to support my HB 609.  That’s every economic Republican, every moderate Republican, every Tea Party Republican and every movement conservative Republican.  All factions within the GOP supported my bill. 

Chris

 I responded with the text below. 

Chris, I’ll post your reply tomorrow on my blog and to the CCRCC FB page as well to give you a fair hearing.

I’ll have to think on this awhile.  I’m not against the “pool” concept—if it can provide sufficient competition and profit for the carriers.  I don’t want to end up in a single or limited carrier environment.  But it must also be available at a cost to individuals that’s not ruinous.

I have a personal interest.  My wife and I are retired but not yet eligible for Medicare.  If I had my druthers, I wouldn’t sign up for MC, but my options are limited.  I currently receive health insurance via my employer.  I built a fund, while working, to pay for two years of retirement insurance.

But, next year when we are Medicare eligible, will my employer still provide health insurance for us?  I don’t think so. If they do, the cost will be higher than my pension.

So I’m caught betwixt a rock and a hard place.  I still am unsure what I’ll do.  I suspect I’ll have no choice but to sign for Medicare.  If so, I’ll add supplemental insurance—if that is still available.

I’d really like more options and at an affordable cost. So far, I don’t see any.

Mike Watson
Raymore, MO

It’s going to be an “interesting” year.  I hope it won’t be in the form of a Chinese curse.  Medicare and Medicaid WILL change.  No one at this time can truly foresee what those changes will be. Regardless of the media and liberal hype, we have no choice.

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