What type of policies are we likely to see coming out of Congress should Democrats take over? There are plenty of areas to speculate on this, and I’m going to examine health care since that is my specialty.
Two major bills were introduced this last Congressional session, one by Senator Russ Feingold, that I examine below, and one by Representative Pete Stark, that I’ll examine on Monday. Feingold’s bill (PDF), the “State-Based Health Care Reform Act,” tries to achieve universal health care via federalism, letting State governments experiment with programs to cover the uninsured.
The “findings” portion of the bill justifies this program by claiming that despite the money the U.S. spends on care for the uninsured, “the United States ranks second to last among industrialized countries in infant mortality rates,” and that “the number of excess deaths among uninsured adults ages 25 to 64 is estimated at around 18,000.” Elsewhere I’ve explained at length why infant mortality tells us little about a health care system, most notably because it is measured far too inconsistently across nations to be a reliable measure. The 18,000 figure comes from a study by the Institute of Medicine. However, that study is a compilation of many other studies on the uninsured, from which the Institute drew the figure 18,000 deaths due to lack of insurance. Yet many of the studies the Institute relied on have some rather odd results. One study in the New England Journal of Medicine found that women with private insurance were more likely to survive breast cancer than those uninsured. However, some data in the study showed that those who were uninsured had a higher survival rate than women covered by Medicaid. Take this to its logical conclusion and it means that women are more likely to survive breast cancer being uninsured instead of being covered by Medicaid.
The legislation doesn’t get any better after that. Feingold’s bill allocates $32 billion in grants (paid for by budget offsets) for five-year pilot programs to help cover the uninsured. State governments, local governments, and Indian tribes may apply for a grant through a “Health Care Reform Task Force.” The government entity applying for the grant will also have to provide its own source of funding, much like the Medicaid program.
It is likely that the final cost would exceed $32 billion. Costs could be contained if Feingold’s bill pushed for states to adopt more consumer-oriented plans, ones with high deductibles and health savings accounts. But, the bill mandates that grant applications must contain
a list of the minimum benefits that will be provided to all individuals covered under the State program, which shall, at a minimum, provide for coverage that is comparable to the coverage provided for benefits under any of the plans offered under the Federal Employee Health Benefits Program [FEHBP].
While some FEHBP plans do offer health savings accounts, many others are generous plans with low co-pays and deductibles. (See the Aetna Open Access plan for Washington state, for instance.) Furthermore, Feingold’s bill limits the amount that low-income people would have to pay for insurance, making it even more unlikely that costs could be contained.
Rather, Feingold’s bill will probably lead to a vicious circle of higher health insurance costs. Give people previously uninsured access to relatively generous health insurance benefits, and they will overuse health care. When they overuse health care the price of health care will increase, leading to higher prices for health insurance. As the price of health insurance climbs, more employers will drop their coverage. As more employers drop their coverage, more employees will opt for the State programs established under Feingold’s bill. Wash, rinse, repeat.
If we really want to make health insurance more available, there are better ways to achieve that goal. One would be expanding the limits of health savings accounts, letting employers contribute more to the accounts of employees who have a chronic illness or are low income. Another would be passing the Health Care Choice Act that would let consumers shop for cheaper insurance policies out of state.
Greater freedom and choice is the way to reduce the number of uninsured. State governments have already made a mess of health care with another cost-sharing program, Medicaid. Feingold seems intent on letting them continue down that road.