Friday, November 25, 2005

Vilsack's small business insurance: You have cancer? The state will pay.

Our outgoing Governor is working the IPTV Iowa Press show this holiday weekend. The logic must be something like...young potential voters home for the holidays, captive and bored, hurling snide comments at the relative mentioning one too many facts about the Hawks/Clones, hmm, time for some new family topics for the weekend.

So, we get the guy whose almost out of Terrace Hill spewing policy with this week's emphasis on health care. Last legislative session, we "solved" the health care access crisis for the poor and underserved, and this year, according to Vilsack, we're going to "solve" the insurance crisis among small businesses and school districts. As reported by the AP from the Gazette Online.
Gov. Tom Vilsack said Tuesday he'll ask the Legislature to create a pool of up to $40 million to help small businesses and local schools pay the cost of health care for workers. ...
...Vilsack's plan would use money from a boost in the state's tax on cigarettes to create a reinsurance program to subsidize insurance coverage. The coverage could be used to cover catastrophic illnesses or could be targeted to diseases that are driving health costs. ...
... He would raise the tax on cigarettes by 80 cents per pack.
The new health fund would serve small businesses with 25 or fewer workers as well as schools. ...
... The governor, who spoke during a taping of Iowa Public Television's "Iowa Press" program airing next weekend, said his proposal is modeled after programs in Arizona and New York. ...
What's wrong with subsidizing small business and school district health insurance costs? Nothing, if you don't mind tax dollars subsidizing Iowa health insurance companies. Instead of allowing businesses and schools to pool together to gain leverage in contract negotiations with the insurance industry, Vilsack wants to give small businesses and school districts help by skimming the most expensive cases into a reinsurance pool, which, in effect, acts as a pass through subsidy to the industry. The Commonwealth Fund, a well respected health policy foundation, has a succinct definition of the concept of reinsurance, which is, presumably, the type of policy Governor Vilsack is interested in pursuing.

...[R]einsurance is an indirect way to reduce the price of premiums, thereby providing a more affordable option for uninsured workers. Reinsurance means that the state covers a portion of private insurers' claims; this "stop-loss" mechanism may cover catastrophic claims above a certain dollar amount, or it may cover claims within a designated corridor.
And this craziness isn't without cause, the health insurance industry has always made defeating small business and association purchasing pools one of their top priorities in the legislature. And the language they use to describe their objection to purchasing pools currently reads:

Support efforts to preserve state-based regulation of the health insurance market. Resist efforts to exempt AHPs (Association Health Plans) from state regulation or similar initiatives that seek to avoid broad risk sharing and impede state regulatory oversight of private health insurance.
It's hard to sort the bureaucratic language of the Wellmark policy statement (link is down), so, for additional edification, check out this
August 2004 Des Moines Business Record article on the business issues surrounding the push for large scale health insurance purchasing pools.

It isn't just the business crowd supporting these initiatives. The SEIU's Iowa for Health Care also supports the use of purchasing pools to bring down the cost of health care to small businesses.

Insurance premiums are frequently the highest for small business and the self-employed. State governments can utilize existing large purchasing pools to secure coverage for these employers and their employees.
Moreover, bipartisan coalitions have sponsored legislation to develop health insurance purchasing pools, but purchasing pool legislation seems to go nowhere.

Part of the problem, our Governor is not particularly interested in signing anything that might remotely offend his good friend John Forsyth; a deep pocket Democratic contributor, the current CEO of Wellmark and former President of the Iowa Board of Regents. (Just imagine, John Forsyth chatting up Vilsack about his concerns over the Uof I Hospital and Clinics recent Wellmark contract negotiations, while slipping in the soft sell on reinsurance as just another U of I Hospital and Clinics' subsidy that will help keep Wellmark's costs down and, in turn, all Iowa premiums. Meanwhile, all the Blues seem to be on a march out of the non-profit woods.)

It's good Vilsack wants to tackle the problem of escalating health insurance for small businesses and school districts, but Vilsack's proposal on this week's Iowa Press ought to be DOA, unless there's room to look at the bipartisan effort on health insurance purchasing pools.

ASIDE --

What is with Tom Vilsack and the Senior Living Trust Fund? First he raids the Fund and then he wants to repay the Fund.

"Repaying the Senior Living Trust and making sure that's viable ought to be a priority of all the legislators," the governor said.

Back in August, when it was clear the state had a surplus in the Medicaid Program, a program that routinely raids the Senior Living Trust Fund, Vilsack sent that cash to his lawyer pals defending indigent clients, think Roger Bentley and Pierre Pierce, instead of back to the Senior Living Trust Fund.

I'll say it again, Whatever.

Comments:
I'm curious about the Patty Judge connection. Seeing as how something similar to this was her proposal for the values fund, is this Vilsack's attempt to take the issue away from her? And if so, is it to protect Blouin or the values fund? :-O Things to ponder.
 
Drew,

You make a very good point. It is something to consider, particularly given Vilsack's heavy-handed endorsement in the Ag race.
 
Great post, ie. Vilsack's looking for another feather for his 'presidential' campaign. This is one of those things that might sound good to out of state people who don't know he's pissed away the tobacco settlement, the money that should have gone to initiatives like this one.
 
Great blog I hope we can work to build a better health care system. Health insurance is a major aspect to many.
 
You know health insurance is in trouble when insurance agents start to use blog spam to attract customers.
 
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