Posts

Reviewing the Bidding on Health Care “Reform”

BY MPI PRESIDENT

Carl Graham

As ideas turn into proposals with Senator Max Baucus’s “Chairman’s Mark,” now is a good time to review the bidding on how well current congressional health care reform plans address their stated goals of increasing access and decreasing costs.  We’ve all been inundated with data lately, so let’s just step back and take a common sense look at the main proposals:

Single-payer system: Turns out most Americans don’t want nationalized health care with the government deciding who gets treated, for what, and at what price; at least not now.  So to kick the can down the road we have…

The Public Option: Government becomes an insurance company to “keep it fair,” but nobody could really explain how they would provide cheaper insurance without killing the private sector.  And what’s the point if the government insurance isn’t cheaper?  So we next had…

Co-ops:  Except that there already are co-ops and there’s nothing stopping more from being created tomorrow.  But wait, this one is better because it will start with billions of taxpayer dollars, receive billions more in taxpayer subsidies, and be run by government appointees.  Or was that the Public Option?  Whoa, just what’s the difference between these two?  Turns out pretty much nothing, which leads us to…

Exchanges: Gee, if only there were some magical technology that would link people with insurers and allow them to compare rates, evaluate terms, and buy policies with just the click of a few buttons.  We could call it the “internet.”  But insurance is very complicated and people make mistakes. So let’s protect them by having government decide which insurance companies can be included and by dictating what they must cover, what they can charge, and what products (like health savings accounts, for example) they can make available.   But wait, if companies have to offer pretty much the same thing at the same price, isn’t that like the Public Option or Co-op, which means there’s not much difference between that and government-run plans?  Hmm, how about if we try…

Mandates: If only everybody had to buy insurance then we’d all share the costs, from each according to his ability and to each according to his needs.  Big insurance and health industry companies love mandates because they effectively lock out competition and lock in profits, which explains why Senator Baucus has received nearly $3 million in campaign contributions from them, according to OpenSecrets.org.  But do mandates hold down prices? Massachusetts reached a 97% coverage rate through mandates of various types and has subsequently seen their health care costs rise as much as 42% faster than the national average.1 They’re expected to rise another 10% in 2010, compared to 5%-7% nationally.2 Hmm, so much for mandates controlling costs.

And mandates kill jobs.  If employers are forced to either insure or pay a fine on their low wage employees, how much incentive do they have to retain those employees or hire more?  Low wage earners are the people most easily replaced through outsourcing and mechanization, and the ones who will be most hurt by mandates.

And finally, since the government decides what coverage satisfies the mandate, they effectively control the market, as we saw with exchanges.  Say goodbye to your Health Savings Account, limited coverage, or any other option that lets you control your premium and deductible.  Say hello to paying for mandatory coverage on every ailment, drug, treatment, provider, and everything else with a good Washington lobby and a congressman’s ear.

All of these options kill jobs, explode the deficit, and inevitably lead to a government-run system as private players are squeezed out of the marketplace.  And government programs typically don’t reduce costs or improve services, especially once they achieve a monopoly.

Rather than overhaul one-sixth of the economy with a risky and inevitably wasteful government takeover, let’s do some simple things that promise measurable results and broad bipartisan support.  We can increase competition by allowing people to buy insurance across state lines.  We can reform tort laws to reduce wasteful defensive medicine.  We can provide tax credits and vouchers to individuals rather than companies to provide a safety net and give them a personal stake in controlling costs.  We can reward healthy lifestyles.  These are just a few ideas that address the real problems of cost and access without making a naked power grab.  Why not give some of them a try before committing ourselves and our children to massive debt and complete government control over our health and well being?

 

1 Cathy Schoen, Jennifer L. Nicholson, and Sheila D. Rustgi, “Paying the Price: How Health Insurance Premiums Are Eating Up Middle-Class Incomes,” The Commonwealth Fund, August 2009, p. 8, http://www.commonwealthfund.org/~/media/Files/11Publications/ Data%20Brief/2009/Aug/1313_Schoen_paying_the_price_db_v3_resorted_tables.pdf,  in Cannon, Michael F, “All the President’s Mandates: Compulsory Health Insurance Is a Government Takeover,” CATO Institute, September 23, 2009.

2 Robert Weisman, “Health Costs to Rise Again,” Boston Globe, September 16, 2009, http://www.boston.com/business/healthcare/articles/2009/09/16/heath_insurers_plan_10_rise_in_rates/.

####

FOR IMMEDIATE RELEASE

746 Words

Contact MPI President Carl Graham at 406.219.0508, or email info@montanapolicy.org.

The Montana Policy is an, independent, nonprofit, nonpartisan policy research center based in Bozeman.  It provides analysis and information to encourage individual freedom, personal responsibility, and market oriented policy solutions in Montana.

Montana Policy Institute

67 W Kagy Blvd, Ste. B

Bozeman,MT59715

406-219-0508

 

www.montanapolicy.org