In With the Old: Healthcare’s Fake
Facelift
October 15, 2007
Unless politicians take a fresh approach to health care reform, patients
will continue to suffer, contends California physician Dr. Linda
Halderman. “Recycling old ideas and presenting them as new accomplishes
nothing meaningful for those with the highest stakes in this debate.”
By
Dr. Linda Halderman
Senator Hillary Clinton recently released her plan to reform U.S.
healthcare and ensure universal coverage. Spectators to her unsuccessful
1990s efforts to achieve the same goal may be reminded of the line from
Poltergeist II: “They’re ba-aack.”
Senator Clinton insists that her plan is anything but recycled.
“This is not government-run,” she asserts. “Don’t let them fool us
again.”
This statement is baffling, considering a concept at the heart of her
proposal.
Clinton aims to impose a government mandate on every man, woman and
child in the United States to buy or be given government-subsidized
health insurance. Except for the very rich, plans would be paid for from
taxes and employer mandates in addition to individual payments based on
ability to pay what Senator Clinton describes as a “reasonable” amount.
Despite Senator Clinton’s claim of originality, individual and employer
government mandates are nothing new.
Before supporting any plan based on this principle—that forcing people
to buy health insurance increases access to care—the track record of
mandates should be considered.
In
order for an individual government mandate to compel the purchase of
health insurance, another government requirement for something called
“Guaranteed Issue” must first be enacted.
“Guaranteed Issue” forces every insurance company to sell health
insurance to every applicant regardless of health history, lifestyle or
risk factors. This is in fact another part of Senator Clinton’s proposal
that she reports is critical to achieve universal coverage.
In
theory, this appears sound. If health insurance companies can’t “just
say no” to high-risk applicants, no one will be left without access to
coverage.
Unfortunately, the law of unintended consequences trumps this logic.
In
New Jersey and Massachusetts, unlike in California, laws were passed to
force every insurance carrier to sell plans to every individual
applicant. Individual insurance premiums in New Jersey and Massachusetts
are three times higher than those in California.
Washington State tried Guaranteed Issue. With no way to mitigate risk,
insurance carriers in the state suffered severe financial losses related
to high-risk patients. They then exited the individual market; no
individual health insurance plans were accessible to Washington
residents at any price.
Senator Clinton was not a New Yorker in 1993. But that was the year New
York State forced Guaranteed Issue on the health insurance market.
500,000 New Yorkers then cancelled their health insurance plans; rates
for a third of all those insured had skyrocketed by 20-59%.
Alternatives to Guaranteed Issue exist and have proven effective. When a
risk pool is created, the expense associated with covering high-risk
patients is spread across an entire industry instead of forcing
unsustainable losses on a few that cover a disproportionately large
number of such individuals.
Rehashing ideas that have failed in the past is not limited to Senator
Clinton or even those who share her political views.
Senator John Edwards offers a plan for universal healthcare that forces
both an individual government mandate and an employer mandate.
Aside from creating financial disaster for U.S. employers and inevitable
large-scale job losses, an employer mandate on this scale has been ruled
a violation of federal law.
In
January of 2007, ruling on a similar attempt in Maryland to compel large
employers to “pay or play,” a federal appeals court cited the 1974
Employee Retirement Income Security Act (ERISA) and declared this type
of employer mandate illegal. The Maryland Attorney General elected not
to appeal to the U.S. Supreme Court, reporting that he “could not win.”
Not to be outdone by his Democratic colleagues, Republican Governor Mitt
Romney succeeded in imposing a Senator Clinton-style individual
government mandate on the citizens of Massachusetts. Taxpayers in that
state now fund subsidies for insurance premiums that have risen 30%
since the Governor’s plan was enacted. Recycling old ideas and
presenting them as new accomplishes nothing meaningful for those with
the highest stakes in this debate: patients needing affordable, high
quality coverage.
For the sake of patients who must contend with the consequences of
politicians’ actions, however well meaning or unintended, a fresh
approach based on common sense—not spin—is needed.
This is a new article published by PajamasMedia on 10/13/07. Click here to see article.