The private insurers claim that health care costs are the major cause of high health insurance premiums. That is true. So where do we place the blame for failure to slow cost escalation?

When most of us are concerned about skyrocketing health care costs, the private insurers have concentrated on their more immediate concern: How can they maintain a market presence by making their health plans more affordable?

During the national health reform dialogue, opponents of comprehensive reform frequently attempt to reframe the problem as a lack of individual responsibility for personal health. If people would eat better, exercise, and not smoke, many of the reform proposals would not be necessary. This concept has now been co-opted by many of the nation’s large employers as they introduce wellness programs into their companies. What has been their experience?

The greatest significance of President Obama’s health care reform proposal released today is that he has now formally placed his stamp of approval on the fundamental policies already contained in the House and Senate reform bills. While remaining silent on some of the third rail issues (public option, Medicare buy-in, pregnancy termination, etc.), he and his staff merely tweaked the bills and added insurance premium rate review, whatever that’s worth, and some rhetoric on waste, fraud, and abuse.

Although the Obama administration continues to advocate for reform based on private health plans, they have seized on the current outrage over skyrocketing insurance premium increases to to demonstrate why reform is essential. Although they are attacking the private insurance industry, they continue to push for a reform model that provides this market with tens of millions of new customers.

“The County” – a hospital to which emergency patients with no money and no insurance are shipped. Most of us remember when The County was always the provider of last resort.

At what level do we say that the rate of coverage under a universal program is “close enough”? For Medicare Part A, we’ve already answered that question. Covering 95 percent of those over age 65 is “close enough,” leaving 1.6 million seniors out of the Part A program (primarily hospital care).

In perhaps the greatest irony of the reform process, President Obama has scheduled a bipartisan health care summit in which the Democrats will submit a right-wing proposal similar to that crafted by conservative economist Mark Pauly and his market-oriented colleagues. The Republicans will offer nominal proposals that would provide no significant benefit in correcting the problems that we face with our health care system.

For purposes of these ballpark calculations, revenues are assumed to be premiums paid for purchase of the private plans (ignoring investment returns on reserves). The revenues are split into 1) a fund to be used to pay for health care benefits, and 2) funds to operate the business entity that is selling insurance services. The latter portion includes all administrative expenses and other costs of running their businesses, plus profits.

Many experts touting the Congressional reform proposals have singled out the insurance exchange concept as being one of the most important avenues of reforming the private health insurance market. MIT Professor Jonathan Gruber was involved in designing the Massachusetts exchange and has been an independent-expert-on-the-dole for the administration and Congress as they move forward with the concept of private insurance exchanges.