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Health Care Reform: Republicans, Beware the Trap of ‘Limited’ Reforms

The seemingly innocuous "reform" of requiring insurers to cover all pre-existing conditions would gradually lead to a full government takeover of health care.

by
Paul Hsieh

Bio

February 25, 2010 - 12:00 am
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President Obama attempted to revive his faltering health care initiative by releasing a revised version of  his plan on Monday. But as Grace-Marie Turner of the Galen Institute noted, the president’s basic approach remains to “Tax, Spend, Regulate, Mandate — i.e., to impose massive new government controls over health care that Americans have already rejected in tea party protests across the country and in the polling booths of Massachusetts.

GOP leaders have been appropriately skeptical of the president’s demand that his plan be the basis for their “summit” negotiations, calling it a “nonstarter.” But while they’ve avoided that obvious trap, the Republicans are still in danger of falling for the subtler trap of agreeing to seemingly benign limited compromise “reforms” that would merely result in a slower government takeover of American health care.

One of the Democrats’ favorite limited proposals has been to require insurance companies to accept all customers regardless of pre-existing medical conditions — an idea supported by many Republicans.

But such a measure would merely create a huge incentive for patients to delay purchasing insurance until they got sick. It would be comparable to crashing your car into a tree, then requiring Geico to accept you as a new customer and cover your expenses.

If insurers were forced to cover all comers regardless of pre-existing conditions, premiums would skyrocket. In states with similar “guaranteed issue” laws, insurance rates are nearly double that of states without such requirements. A national law would encourage millions of Americans to forgo purchasing insurance until they got sick, further raising rates, encouraging more people to opt out, etc.

This would create a “death spiral” for the private insurance market unless the government then required all Americans to purchase insurance prior to getting sick. But this would merely bring us back to the ObamaCare plan of mandatory insurance that Americans have already resoundingly rejected. Massachusetts voters in particular already know firsthand how mandatory insurance leads to skyrocketing costs and long waits for care — a key reason they sent Scott Brown to the Senate to stop ObamaCare.

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