Posted on 01/23/2006 5:07:13 AM PST by .cnI redruM
The Republican Congress can’t seem to touch health care without making America sick. While Health Savings Accounts are a recent plus, the long-feared Medicare drug benefit premiered January 1 to widespread panic. Seniors are confused and frustrated, while fiscal conservatives stand aghast as tax dollars fly from the Treasury like bats fleeing a cave.
Congress can redeem itself with a simple and cost-free cure rather than an elaborate and expensive complication. The Health Care Choice Act, sponsored by Rep. John Shadegg (R., Ariz.) and Sen. Jim DeMint (R., S.C.), would let American consumers purchase health insurance across state lines, just as they now may shop coast to coast for mortgages.
Shadegg-DeMint would let insurers licensed in one state sell to individuals in the other 49. As such, Congress would use its constitutionally enumerated powers to liberate interstate commerce and transform 50 separate, closed markets for medical coverage into one open, national market for health insurance.
“Two-thirds of the uninsured have incomes below 200 percent of the federal poverty level, and most cite unaffordability as the top reason for why they are uninsured,” said Shadegg, who hopes to succeed Rep. Tom DeLay as House majority leader. “Until consumers can purchase their health care like their auto, homeowners, or life insurance, we won’t reform health care; we will only re-regulate it.”
“Just as Delaware became a magnet for banking, some states will become magnets for health insurance,” predicts Dr. David Gratzer, a physician and Manhattan Institute senior fellow, and one of this idea’s earliest proponents. “People seem to understand intuitively that it doesn’t matter whether their checks come from Delaware or New York or California. Likewise, the issues around health insurance are cost and availability rather than state of origin.”
Location matters. A health policy for a single Pennsylvanian costs roughly $1,500 annually. Cross the Delaware into New Jersey, as George Washington did in 1776, and a similar health plan costs about $4,000, thanks to government regulations.
“When doctors worsen a patient’s condition, we call it an iatrogenic ailment,” Dr. Gratzer notes. “We lack an equivalent term for when politicians aggravate a problem.”
By mandating benefits, legislators have swelled the standing army of the uninsured. As Victoria Craig Bunce and J. P. Wieske explained in their January 2005 report for the Council for Affordable Health Insurance: “Mandating benefits is like saying to someone in the market for a new car, if you can’t afford a Lexus loaded with options, you have to walk.” Making every health policy cover acupuncturists, marriage therapists, or in vitro fertilization, as some states do, looks less compassionate when such adornments drive the humble from the market. CAHI estimates that state mandates can hike insurance prices 20 to 45 percent.
“Guaranteed issue” rules, which let people wait until they ail to purchase coverage, also boost prices. Ditto “community rating.” It slaps the same government-controlled price on insurance for everyone — young or old, fit or fat — in a given jurisdiction. This is as idiotic as charging 16-year-old boys and 60-year-old widows the same amount for auto insurance.
Economics aside, Dr. Gratzer praises Shadegg-DeMint’s clinical potential. “The more people who are covered the better,” he says. “That means fewer people hesitate to get tests or follow up with physicians. Eventually, that will lead to a healthier population.”
Critics argue that letting consumers shop for health insurance will launch a dreaded “race to the bottom” as Americans buy inexpensive plans from unscrupulous insurers in unregulated states. But which states, precisely, let health insurers operate like numbers rackets? Of course, consumers could avoid questionable plans in clueless jurisdictions by patronizing reputable, sensibly supervised providers.
So, what will this cost? Nothing. Unlike nearly every action by this Republican Congress, this legislation expends no tax dollars. Your wallet is safe. For now.
Democrats routinely complain that 45 million Americans lack health insurance. Many are between jobs, young, or more prosperous, and decide to forgo insurance. Still, Democrats correctly call this a serious concern for many Americans. The Shadegg-DeMint proposal could be a key solution to this problem. Democrats should embrace this Republican idea. If they rather would deny the uninsured an expanding array of lower-cost health-coverage options, let them stand up this election year and say so.
The ability of a state's politicians to steal money in this fashion probably has a direct bearing to what proportion of that state's low income population are uninsured.
Between the politicians and the insurance companies screwing around, socialized health care (gag!) will eventually seem "attractive" and we're getting closer to that each day.
What I have never understood (aside frrom the fact it is graft) is why a person could not buy an individual policy with benefits equal to a group policy for the same premium. Same plan different premium, yet the same person goes to work in a company and gets the group rate (same plan) for less premium. Where is the logic in that? I fail to see how the two policies are related to supply and demand.
They are not. The politicians and the insurance companies in New Jersey have made sure that the premiums on this plan will get nowhere near a low enough level to be within hailing distance of the market-clearing equilibrium.
What they don't understand, is that when the state legislatures intervene to destroy market discipline, like they have in NJ, you already essentially have socialized health care.
I'm a Democrat in most senses of the word, but I'm not ridiculous. This is a good idea. I don't think it would be out-of-line to add some regulatory oversight at the federal level to expedite complaints, my only issue being that if you have to take the insurance company to court do you then have to go to the state they're operating in to make your case? I think some (slight) federal regulation might be necessary to deal with that issue, I know that's not going to be popular here, but other than that, this would be, I think, very helpful for health care nationwide.
I want to know what happened to the old system of Blue Cross/Blue Shield. That worked great. There was no crisis. Sometimes standardization or a consumer driven "monopoly" is the best delivery system we have going.
Every time the government gets involved in some market issue, the commodity in question becomes more expensive, less available, inferior in quality, or a combination of all three. What's really needed is to get market forces at work to drive down health care costs and improve quality.
It's called "government meddling!" And plenty is done by all stripes of politicians, conservative AND liberal!
Mark
That's actually much less of a burden in the era of modern telecommunications and travel than it used to be. You would have to accept that as a potential cost of doing business. Perhaps that would limit you to maybe three or four states that you could easily travel to.
When people say that we want "govenrment health care," we should point them to the VA system. Sure, there are some pretty spectacular hospital and care facilities, but there are others that are just awful. For instance, a number of years ago, the Kansas City VA hospital was threatened with being closed down due to health code violations. There were rat and mice infestations, and a number of patients' wounds were found ot have been infected with maggots!
It was horrible!
Even with the improvements in the system, many still complain that the VA system is terribly flawed, and inferior to other medical systems. Plus, if people don't like the current hospital system, with the insurance companies in charge, I wonder how they'll feel about it once the medical facilities are run by the people who couldn't get jobs at the post office or the DMV?
Mark
Same reason that it's cheaper for you to buy a car than to build it yourself... Economy of scale. In the case of insurance, group plands are spreading the "risk" over a greater number of payers. Of course, the insurance company is betting that not everyone will be using medical services while covered.
Mark
I'm not sure I totally agree with the blanket statement (things like telephone/electricity/sewage require so much public infrastructure that I think the government has to be involved), but in regards to health care, I don't see a need for the level of government involvement we have now. It's not like you can hold a monopoly in any kind of insurance unless you're colluding with doctors and hospitals and stuff, or colluding with other companies to keep prices high, and I guess with the kind of information flow we have nowadays I'm not worried about that, so free the health care!
Yes, but only in the general case of promoting general commerce by resolving interstate court conflicts, for example.
The Federal Government doesn't have a Constitutional power to promote health care in particular. Or old age insurance.
Say bye bye to John Shadegg,"Great White Hustler of Medical Insurance".
We knew it would'nt last.
Just be quiet and let "Super Republican-from-out-of-Nowhere" crash and burn all by himself.
I'm not a Republican, but I play one on TV and sometimes at the polls. Otherwise I'm too embarrassed to admit it.
I'm worried, though, that like with banking and Delaware, all insurance ends up in the same place. But I guess that's been working okay. If you have to go to court for a credit card or something do they have to come to your state or do you have to go to Delaware? If they have to come to your state, then I guess even that's not a problem.
Risk Rating. In a group plan risk is shared between the group, the larger the group the lower the rate. If you have say a group of 250 employees on your plan, 35 are sickly, 55 are out of shape or over 40, and 160 are fit or very healthy. The sickly and borderline health costs are shared over a pool of 250 and the healthy members rarely go to the doctors further reducing costs. If one guy buys an individual policy all risks are carried by him thus increasing his costs. Thats why individual insurance tends to be out of reach for most people in the lower middle class and under.
Personally I like the idea of Association Health Plans, With this bill you could have say AAA start a national group plan for its members, giving member individuals and families low cost comprehensive group rates with no government interference or taxes.
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