Expect less, pay more. It’s not the slogan for some “Bizarro World” Target store in a comic book; it’s an accurate slogan for congressional Democrats’ health care “reform” proposals. They include a new government-run insurance plan, mandatory insurance, new political controls on insurance, and new taxes.
Government-run health plan
You should expect less choice with a new government-run health plan, known as the “public option.” As economics professor Scott Harrington has noted, the public option would be the only option. It would unfairly compete with non-government insurers, which must comply with burdensome political controls that increase premiums. Millions of people would be herded to the government plan who did not choose it as an “option.”
It’s fitting that some House Democrats want to call the government program “Medicare Part E,” where “E” is for “everyone.” Before Medicare, retirees bought voluntary insurance in increasing numbers. Medicare killed this trend and soon monopolized the market.
More and more of my fellow doctors are turning away Medicare patients because of the diminished reimbursements and the growing delay in payments. … The problem is even worse with Medicaid.
But do expect to pay more with a new government insurance plan. Since Medicare and Medicaid underpay doctors and hospitals, they recoup the loss by increasing your premiums — by almost $2,000 annually for a family of four. To make things worse, proposed Medicaid expansion would further increase your premiums.
Mandatory insurance is a second path towards complete government-controlled insurance. Massachusetts has imposed this on its citizens, and they are learning to expect less. “Long wait times for appointments for new patients continue to be a problem, resulting in delayed access and care,” reports the Massachusetts Medical Society. “With our state health reform initiative,” said the society’s president, “we quickly learned that universal coverage doesn’t equate to universal access.”
With mandatory insurance, also expect less value from your insurance policy because politicians can make your current plan illegal. But you’ll pay more. A Cato Institute study concludes that “any politically plausible mandate could … compel close to 100 million Americans to switch to a more comprehensive health plan with higher premiums, whether they value the added coverage or not.”
Affordable plans become illegal because politicians cave to interest groups who want to force everyone to buy insurance with costly benefits that they may not want. In Massachusetts, such “mandates are helping to drive up costs, making coverage unaffordable as many businesses and workers struggle,” reports the Boston Globe. Premium rates in Massachusetts are increasing at almost twice the average national rate. With nationwide mandatory insurance, we’ll all be paying more.
New controls on insurance
Politicians are also pushing for new controls on insurance companies: guaranteed issue and community rating. Guaranteed issue requires insurers to issue policies to anyone, and community rating forces them to charge the same price regardless of the applicant’s health risk. With these political controls in place, prepare to expect less from your insurance but pay more.
You can expect less from your policy with these political controls. Insurers will strive to make their products unattractive to those who need insurance most: those with high expected medical costs. After all, why would insurers want to attract the sick if politicians prohibit them from charging them higher premiums? Expect insurers to skimp on what’s most important to those who make insurance claims: comprehensive coverage, clear explanation of benefits, and minimal bureaucratic obstacles to doctor-recommended treatments.
But expect to pay more. Community rating laws increase premiums by more than 20 percent, according to William Congdon of the left-leaning Brookings Institution. States with guaranteed issue and community rating have seen huge increases in premiums, deterioration of insurance markets, and more uninsured.
Indeed, politicians are pushing new political controls on insurance that will make you pay more for less value. These are effectively hidden taxes. But do not forget the explicit taxes. Americans for Tax Reform points out thirteen new tax increases in the House bill (HR 3962). Taken together, several studies conclude that new taxes and political controls will increase insurance premiums. The Wall Street Journal reports that for the young and healthy, “premiums would more than triple in some states.”
The Democrats’ “Bizarro World” proposals will be a disaster. It will provide them phony justification for incrementally imposing their end goal: a monopolistic government-run health plan.
“Expect more and pay less” — you only get that in a free market. That is, a market free from political controls where a firm’s revenue depends on satisfying customers. But the Democrats’ proposals entrench an increasingly unfree market in health care. They limit competition and prevent insurers and doctors from competing directly for a patient’s business. The patient is rarely the customer. Instead, insurance companies have employers as customers, and doctors’ customers are insurers or government programs.
It’s time for free-market health care reforms. These include restoring the patient as the customer by changing the tax treatment of insurance. Government would no longer penalize people for buying insurance directly from insurers or medical treatment directly from providers. This would also increase competition among insurers, as it would allow consumers to buy affordable policies available in different states — introducing competition and choice into Medicaid and Medicare, which would decrease waste, fraud, and spending, benefit patients, and help avert their pending insolvency. Other free-market reforms include freeing pharmaceutical companies and doctors from meddlesome political controls.
A free market in medicine and insurance is the only way patients can truly expect more and pay less. Can patients be treated like customers while not actually being customers? Only in the backwards Bizarro World of comic books.