My question is: what does "negotiated rates" mean?

[Alhena]

I think that's pretty much where the rubber hits the road on the house bill. There is going to be a government-run insurance entity as one option to those who don't have coverage from their employer. That's good.

But here's the rub: that entity will "negotiate" rates for our health care. That doesn't tell me a whole lot. I suppose we will have to wait until 2013 to see just how good a deal the public health plan "negotiator" gets for us. And call me a hard-boiled cynic, but I worry that the American Medical Association, hospital lobbyists, pharmaceutical companies, and insurance companies will spend a lot of money between now and 2013 to make sure that whoever is negotiating on behalf of the public plan doesn't drive too hard a bargain.

The whole point of this legislation was supposed to be that the costs savings would make it worthwhile. Yet now we don't know upfront exactly what those cost savings will be- it will be "negotiated" at a later date. And this is assuming that we can get Olympia Snowe or Joe Lieberman on board at all. At this point is looks like we only have a chance to get Snowe, by inserting a trigger in the already weak public option.

In his op-ed today, Kunicich said he thought the endgame of this would be the insertion of a trigger during negotiations between the House and Senate. The trigger will presumably extend the 2013 deadline back a few more years while we wait to see just how hard insurers work to change their money-grubbing ways.

If that's the case, we get to wait until 2015-16 or so to see just how much costs savings we are going to get if this plan ever does kick into effect. And this assumes Republicans don't exploit Congress' incompetent handling of this issue enough to gain Congressional seats and skuttle the whole thing.

I'm starting to wonder if Obama shouldn't have used his political capital on simple tax fairness. Just raising taxes on millionaires is much simpler legislation that is harder to torpedo with poison pill provisions.

[sinkingfeeling]

1. They will be negotiated just like Medicare/Medicaid/Tricare rates are. Some wanted to lock them as

'Medicare +5%, but it was shot down.

[librechik]

2. This means, unfortunately that rates will not be "locked" by feds to be within 5% of Medicare

Instead rates are set by the market. (negotiated between the buyer and the insurance company. )

[damntexdem]

4. And how the negotiations go depends on the size of the insurer.

Medicare is the big negotiator, so gets the best rates. So Medicare + 5% was undoubtedly the best way to go. It depends on how big the "entity" becomes as to how much negotiating power it has.

But the rates WILL NOT BE set by the market -- those days are long gone. Now, the healthcare and pharmaceutical industries are so concentrated that they have major sellers' power that can generally outweigh the buyers' power (except Medicare and the VA).

[notesdev]

3. It means....

an amateur (or complicit) government negotiator giving industry 200% of their initial offer and claiming it's a "great deal for taxpayers"

That's how these negotiations typically go.