Bloomberg News
reports that:
House Democrats are weighing a new proposal in response to
Obama’s request for legislation. An outline of the plan
obtained by Bloomberg News would require Americans to have
insurance with some exceptions.
It would probably exempt those who can prove they can’t find an
affordable policy. There could be a tax penalty for those with
adequate financial resources who don’t elect to get insurance,
according to the outline.
The outline suggests consumers could elect to keep their
individual health insurance policies. Still, it says that “by
and large” the nation’s market for individually purchased
health insurance policies would move to a new federally
operated exchange. It would permit both individuals and
employees of small firms to buy policies at less expensive
group rates.
Let's set aside for a now the fact that such a proposal would
require Obama to
reverse his position on an individual mandate from the
campaign, and just focus on the matter of choice. Under the
current system, according to Kaiser Family Foundation data, only
about 6 percent of the covered population obtains their insurance
on their own. About 31 percent already have government health
care of some sort, while 63 percent obtain it through their
employers. While Democrats talk of people being able to keep the
insurance they want, it won't really be feasible under the system
they're proposing. Anybody who receives health care through their
employer is limited to whatever health plans their employer
chooses under the current flawed system, and if employers decide
to start dumping their employees on to the national insurance
exchange, then suddenly they'd be losing their plans and forced
to pick new ones from the national exchange. And as the article
states, at least under this one proposal, the remaining
individual market would "by and large" move to the national
exchange.
While the promise of the national exchange is that it will be a
giant buffet with lots of plans to choose from offering
comprehensive coverage at lower rates, without discriminating
against those with preexisting conditions, the reality will be a
lot different. Government will be running the exchange, offering
a government-run plan under Obama's vision, and regulating what
participating insurers can or can't cover. To borrow and expand
on an analogy once used by Regina Herzlinger, this would be the
equivalent of a having everybody purchase their cars at a
government auto dealer in which the government dictates what
colors cars can be, whether or not they have a leather interior,
or heated seats, or satellite radio, or any other features. This
isn't reform, it is merely doubling down on the failed system
that we already have in place, in which states mandate the type
of benefits insurance policies have to cover, driving up the cost
of insurance and restricting choice.
