Fix Health Care Policy

‘Consumer Protections’ Means More Mandates on the Way

Democrats have promised Americans an extensive health insurance benefit package—one as good as that held by members of Congress. They also want to move much of the regulatory power over health insurance markets from the state level, where it currently lies, to the national level.

To see what this would mean in practice, let’s turn to the states. Among the regulations states enact are benefit mandates, which outline the specific treatments that must be covered in all plans offered in a state.

As researchers at the Council for Affordable Health Insurance write:

“While mandates make health insurance more comprehensive, they also make it more expensive because mandates require insurers to pay for care consumers previously funded out of their own pockets. We estimate that mandated benefits currently increase the cost of basic health coverage from a little less than 20% to perhaps 50%…”

The “consumer protection” of a rich benefit package mandated nationwide would actually drive up insurance costs. Moreover, our political system creates pressures for politicians to enact mandates:

“Elected representatives find it difficult to oppose any legislation that promises enhanced care to potentially motivated voters. The sponsors of mandates know this fact of political life…By the late 1960s, state legislatures had passed only a handful of mandated benefits; today, the Council for Affordable Health Insurance (CAHI) has identified 2,133 mandated benefits and providers. And more are on their way.”

It is likely that the federal one-size-fits all benefit package, as proposed in the bills moving through Congress, will end up resembling a state like Massachusetts (with 52 total mandates) rather than one like Utah (with only 23 mandates). The Democrats’ reforms would mean more mandates and higher—not lower—health insurance costs.

Tags: consumer protection, employer mandates, Massachusetts, Utah

Is Government a Health Hazard?

Washington likes to style itself as the center of the political universe, but this summer, the real action is in the states. At town-hall meetings, voters are giving their elected representatives plenty to think about.

Many lawmakers and the Obama administration have made it clear they want to pass massive health care legislation that includes a contentious option for a government-run health insurance plan.

Americans are smart to be nervous. This attempt for the government to enter the insurance market directly to “keep insurance companies honest” and “increase competition” may sound benign. It’s not. It will erode competition and change how anyone with some form of health insurance gets and pays for health care services.

If, for example, Congress passed and the president signed America’s Affordable Health Choices Act of 2009 (H.R. 3200), the law would have devastating effects. According to the Lewin Group, a highly respected health care policy and management consulting firm, by the law’s third year:

• Forty-eight percent of privately insured Americans would transition out of private insurance. Out of an estimated 172.5 million people with private health insurance, there would be a decline of 83.4 million people.
• Fifty-six percent of Americans with employer-based coverage would lose their current insurance. Of the estimated 158.1 million Americans with employer-based coverage, 88.1 million people would be shifted out of their current employer-based plan.
• An estimated 34 percent of the uninsured in America would still lack coverage. Of about 49.1 million people without health insurance, the legislation would only reduce the uninsured by 32.6 million people, leaving 16.5 million people without coverage. (more…)

Tags: congress, HR 3200, Lewin Group, public plan, townhall meetings

Consumer Protections or Just More Government?

The President and fellow Democrats seem to be switching their message on health care – pushing for reforming health insurance rather than overhauling the entire health care system.

The White House is proposing heavy new regulations on private health insurance market under the guise of so—called “consumer protections.” Many of the policies suggested by the Administration and Congress would result in sweeping, complex and highly discretionary new federal regulation of the health care system.

Consumers need protections not just from insurers but from the government as well. Americans should beware.

Here are few studies that shed some light on the real impact these proposals would have on the marketplace as well as a Heritage Foundation piece on better ways to help consumers:

– Health Insurance Mandates in the States, 2009

– The Effect of State Community Rating Regulations on Premiums and Coverage in the Individual Health Insurance

– Individual Health Insurance 2006-2007: A Comprehensive Survey of Premiums, Availability, and Benefits

– Health Care Reform: Design Principles for a Patient-Centered, Consumer-Based Market

Tags: consumer protections, health insurance, reform, regulations

How Harmful Is a Public Plan?

What is the best estimate of how a public plan for health insurance, as outlined in the health bill Democrats are moving through the House, would impact American health care

In seeking an answer to this question, The Heritage Foundation commissioned The Lewin Group, a highly respected health care policy and management consulting firm, to examine the national impact of the bill (H.R. 3200, the “American Affordable Health Choices Act of 2009”).

Lewin projected:

– 48% of privately insured Americans would transition out of private insurance.

– 56% of Americans with employer-based coverage would lose their current insurance.

– 34% of the uninsured in America would still lack coverage.

– Physicians would see their payment levels decline by $31.7 billion as a consequence of the new public plan.

– Hospitals could see their net annual income fall by $61.9 billion, which roughly eliminates hospital total margins.

With estimates from Lewin, the Congressional Budget Office and other groups projecting that millions would lose their private care coverage, it’s important for Congress to slow down the speedy process of pushing through a massive overhaul to our health care system and examine what would and wouldn’t really work.

Tags: Lewin Group, private coverage, public health plan

Public Plan: Bad Option No Matter What Version

Different versions of a “public plan” for health insurance have been proposed. In “Why a New Public Plan Will Not Improve American Health Care,” Walton J. Francis dissects the most prominent proposals and explains the pitfalls in each.

Two especially troubling elements of many proposals are government price controls—which are payment rates set by law rather than emerging from a competitive market—and mandatory provider participation requirements—which demand that doctors accept patients with public plan coverage. If a public plan included these regulations, it would not be on a level playing field with private plans.

A public plan proposal by Dr. Jacob Hacker of the University of California-Berkley includes these two elements, calling for “expanding a benefit-enriched variant of Original Medicare to Americans of all ages.” A similar plan from Dr. Karen Davis and colleagues of The Commonwealth Fund also preserves “government-dictated payment rates.”

Dr. John Holahan and Dr. Linda Blumberg of the Urban Institute have designed a public plan while remaining vague on whether it includes price controls and mandatory provider participation. However, “implicit in [Holahan and Blumberg’s] proposal is that the core requirements for a public plan are the ability of the government to compel provider participation and to dictate the prices of medical goods and services provided.”

Although these three plans are put forth with the goals of boosting choice and competition, they would actually undermine these important values. They would “displace most private sector health plan enrollment,” and their enactment would lead America towards a “single-payer system with private plans tolerated as second-rate alternatives.”

Arguments that these plans could contain costs or boost quality by modeling themselves on Medicare overlook the fraud and lack of managed care in traditional Medicare and the quality deficiencies in an existing public health insurance program— Medicaid.

Francis concluded, “No governmental entity in the United States actually administers a true health insurance plan,” so there is little preparation for this type of program. Finally, “Congress will not let the public plan fail,” so “competition and choice” in health care markets would become a memory.

Tags: Medicaid, Medicare, pitfalls, public plan, single-payer system

The Real Impact of a Public Plan

Tags: public plan

Cutting Through the Public Plan Rhetoric

Tags: public plan

Fact Checking the White House

Rather than debate the substance, the White House is in full campaign mode in order to label any opposition to its government-heavy health reform agenda as “misinformation” or “myths you’ve heard.”

Case in point: The White House now has a taxpayer-funded Web site to “reality check” credible criticisms and arguments. Problem is the videos “debunking” each “myth” are low on facts.

We’ve responded with fact-based critiques by offering the White House a dose of reality.

Tags: reality check