Special Report

Mandate Nation

The medical insurance industry's health care reform proposal is hardly market-friendly.

By 12.9.08

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After being sent home over Thanksgiving to revise their pitches for a multi-billion-dollar, taxpayer-funded "bridge loan" to keep them a float through the end of the year, Michigan's "Big Three" automakers returned to Capitol Hill this week to renew their respective cases.

The retooled bailout plan included requests from automotive manufacturers that Congress pass legislation requiring every individual to purchase a vehicle (whether or not the definition of "everybody" includes Americans who are under the age of 16 or resident aliens is expected to be worked out at a later time) and mandating the price of gas be cut by 30%.

The preceding paragraph is, of course, not true. However, if it sounds more than a bit over the top to you (as it should), then consider this: America's Health Insurance Plans (AHIP), a national trade association representing over 1,000 insurance providers covering an aggregate 200 million Americans, has made a series of recommendations to Congress for health care "reform" that is identical to the aforementioned example in every way except one: it's real.

Last week, AHIP unveiled its eleven page proposal for overhauling the health care system. The plan included a call for Congress to implement "an enforceable individual coverage mandate" -- quite simply, a law requiring that every individual in America purchase and maintain health insurance -- and to legislate the cost of health care down by 30% over the next five years.

Further, the proposal calls for expanding the State Children's Health Insurance Program (SCHIP) and Medicaid, and making "advanceable and refundable tax credits" available to Americans whose income is at or below 400 percent of the federal poverty line.

Imagine that: a "reform" plan, released by a service provider, that proposes that the government (a) require every American (all 300 million plus of them) to purchase what they're selling, often with taxpayer dollars, and (b) declare by law that those insurers must be charged less by providers and hospitals for the services their policyholders require.

With the ushering into office of a new regime that is supportive of a version of health care reform based on increased regulation and government control, it is no surprise that AHIP has offered up a plan that both provides for its self-interest and adheres to a form of the ideal overhaul result put forward by the Democratic Congressional majority and the incoming Obama administration.

Unfortunately, while AHIP's proposal will likely appeal to many now in power in Washington --≠ which is almost certainly why it took the direction it did -- it is far from an actual solution to America's many health care problems.

A far better proposal than the one submitted by AHIP would have been built around reducing the factors that cause health care to cost as much as it does in the first place, and removing the barriers that cause many people to choose not to purchase insurance.

Simply including in the proposal a recommendation that states allow mandate-free or mandate-lite policies to be sold to those who desire less than full "Cadillac" coverage replete with required cost-increasers like coverage for birthmark removal, hair transplant, and alcoholism (these must be included in every policy sold in the states that require them, and paid for by consumers, even if the policyholder has no birthmarks, has a full head of healthy hair, and/or is a teetotaler), as well as a recommendation that Congress knock down barriers to interstate purchase of health insurance policies, would have made at least a portion of AHIP's plan realistically workable and effective.

Unfortunately for the millions of us who are consumers of health insurance -- and for the millions more who would likely purchase insurance if the state and federal governments would stop attempting to "reform" the industry by increasing regulation and, as a result, increasing the product's cost -- AHIP likely had little choice in the matter, as putting a market- and reality-based proposal in front of the incoming Congress would likely have resulted in its being laughed off of Capitol Hill.

The result of that is what we see in the 11-pager released on Wednesday: a proposal that works within the unfortunate existing political framework to salvage what America's insurance companies can from the coming disastrous overhaul of health care, while leaving consumers and patients out in the cold altogether.

Until America embraces real reform to its health care system, which can only take place when competition is allowed to re-enter the marketplace and when people control their own health care dollars and medical futures, rather than simply trusting to third parties to decide (and fund) the treatment that is best of them, consumers and patients are going to continue being slighted, while insurers and Congress work together to enact and enforce policies which look great on paper (and on the insurers' balance sheets).

The effect of the health care "reform" policy coming down the pipe will be to allow congressional Democrats to pat themselves on their collective back over a job well done, while the working men and women who actually have a need for insurers' and providers' products continue to be stiffed.

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About the Author

Jeff Emanuel, a special operations military veteran, is a columnist, a combat journalist, and a director emeritus of conservative weblog RedState.com.