As previously discussed, without intelligent and logical evaluation of a sickness, ill-conceived and hastily implemented “therapy” can only exacerbate the illness and is worse than no treatment. The current proposals for health-care reform not only fail to address our defective health-care insurance model that disconnects the consumer of health-care services from the costs of those services (the primary cause of unsustainable escalating health-care costs) but instead increases the costs by effectively placing more persons (the uninsured) into the same defective system. Similarly, these proposals do not deal with but rather add to the other key contributor to our national health-care “illness”, the over-regulation and lack of competition in the health-care insurance industry.
Obstructive regulation and lack of competition are evident on multiple fronts. Firstly, the inability to sell insurance across state lines limits the number of insurers, which in turn limits the competition, thereby increasing insurance costs. Further, individual state mandates, i.e. required covered health-care services, vary significantly from state to state compounding this problem. Only the largest insurers have the resources to comply with all the various individual state mandates and thus there are only a handful of national health-care insurance companies, again limiting competition.
The state legislated mandates in themselves significantly add to the cost of health-care insurance. The mandates are of 2 general forms. The first type requires insurers to provide coverage for particular services that may include drug/alcohol rehabilitation, smoking cessation, infertility, autism care, hair restoration, etc.; may further require coverage for provider services such as chiropractic, massage, acupuncture, etc.; and finally could require family coverage to include grandchildren, dependent family members, domestic partners, etc. The number of these types of mandates differs from state to state from as few as 20 to as many as 60. The estimated increased cost of insurance varies from 20 to 50% depending on the state and number of mandates.
http://www.cahi.org/cahi_contents/resources/pdf/HealthInsuranceMandates2008.pdf
While not intrinsically inappropriate, mandates do increase the cost of health insurance. Many individuals or families who presently can not afford health-care insurance could afford simpler and more limited coverage insurance. They could choose policies that do not include coverage for services they personally would never need to use e.g. drug or alcohol rehabilitation or perhaps infertility services, etc. while still getting essential medical care coverage. Further, more insurance companies would likely enter the market to sell simpler policies resulting in more competition and lower premiums.
One further disturbing aspect of individual state mandates: Many, in fact, are political payoffs to special interests rather than for the public well being. Not infrequently, mandates for coverage of some less traditional service are more likely a result of that service’s special interest group making a campaign contribution to a state legislator rather than as a result of an argument made to that legislator that such service benefits the insured.
“Guaranteed issue” and/or “community rating” requirements comprise the 2nd form of mandates. Guaranteed issue requires insurers to issue policies regardless of a person’s health status while community rating requires insurers to blend the utilization of services risk of a particular person with the risks of a broad group of persons. In both cases, such regulations inhibit the insurance company from pricing the policy to reflect the risk a particular individual contributes to the overall pool of risk. As a result, a healthy young person would be unable to get a health-care insurance policy premium that accurately reflects their much lower likelihood of utilizing services than that of an older or less healthy person. Further, because of that “mandated” increased premium, many younger healthier people opt out of buying health-care insurance, in turn, further driving up the cost of insurance for those persons, persons more likely to utilize services, left in the “community rating” pool.
For the healthy and young, true risk assessment would directly lower premiums. “Fair” pricing would afford many more young families and individuals with the ability to obtain health-care insurance. Those with higher risk could be part of large national pools of higher risk conditions. Some would argue that without “guaranteed issue” or “community rating”, insurance would be prohibitively expensive for those with pre-existing medical conditions or conditions e.g. older age, etc., likely to require medical services. Still, allowing premiums to be fairly priced for all risk pools would encourage more insurance providers to enter that market, encourage competition, and result in the best pricing for premiums in all risk pools. None-the-less for some in the higher risk pools, insurance may be prohibitively expensive, but allowing pricing to reflect actual risk brings more transparency to that problem. Rather than burying those costs in a “community rating” pool, effectively discouraging more healthy persons from obtaining coverage, government could instead subsidize those fewer individuals that could not afford their premiums. Clearly, such focused government assistance is much preferable to massive takeover and bureaucratic expansion of our health-care system.
Returning to wrong (bad) diagnosis can only result in wrong (bad treatment): the Democratic congressional majority intends, despite public objection, to pass some version of the Baucus bill. “Forcefully impose” more accurately describes the action than “pass” given they intend to utilize, if necessary, “reconciliation” and thereby circumvent the ability to filibuster, a mechanism that acts as a safeguard against bad legislation. Whatever the final form of the Baucus bill, it will include significant mandates including extensive required covered services, “guaranteed issue”, and the most egregious of all mandates, mandating the states to expand their Medicaid rolls to include all persons up to the 133% of the federal poverty level. This expansion of Medicaid imposes a huge unfunded liability on states already in the throes of a historic state government financial crisis. http://online.wsj.com/article/SB10001424052970203917304574414831869954664.html?mod=googlenews_wsj
Although boasting of historic healthcare reform, the Democrat-controlled Congress readies to pass a bill that will place more persons in a failed health-care insurance model; readies to pass a bill that includes more mandates and decreased competitive forces; readies to pass a bill that will impose more government intrusion and bureaucracy into our lives; readies to pass a bill that can only exacerbate our national health-care “illness”.
Indisputably, we need health care reform, but successful reform requires thoughtful and rational policy formulation, utilizing traditional American economic free market values; not hastily crafted, misconceived and intrusive government policies.
There is no problem so bad that it can’t be made worse by doing the wrong thing.
We must all fight to prevent the wrong kind of healthcare reform and the dangerous expansion of government control and debt. Every individual can make a difference. Write your congressman and senators (contact info found at http://www.conservativeusa.org/mega-cong.htm); and join and contribute your time, energy, and money as you are able to grass root organizations such as the American’s for Prosperity http://americansforprosperity.org/national-site, American Liberty Alliance http://americanlibertyalliance.com/, and other free market based grass roots organizations.
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