South Dakota Politics: Health Care Reform: what we are losing

Proponents of the "public option" in health care reform (i.e. expanding the role of government as a direct provider of health insurance) frequently point to polls showing that a majority of Americans support it. But in every poll I have seen, the public option is mentioned along with the word "competition." It is easy to get a majority behind a public option that would compete with private health insurance.

What does the Senate healthcare bill do to competition in the health insurance industry? Here is Scott Gottlieb in the New York Post:

The plan before the Senate creates a set of 50 state-based insurance "exchanges" that are established as markets for health plans. Consumers must buy policies from their employers or through the exchanges — but, either way, their choice of coverage is limited to one of four basic insurance plans that the government sanctions.

Private insurers will still compete to offer policies but must model their coverage on one of these four templates. In short, the Senate bill explicitly standardizes health benefits and then establishes elaborate mechanisms (including subsidies and penalties) to pay for them.

Under the Senate bill, consumers will be able to choose between higher co-pays and higher premiums. That's it. For all practical purposes, only one insurance policy will be available. The terms of that policy will be decided by the new "health care czar," who will effectively control not only the health insurance industry but the health care industry. "Czar" might be too gentle a title. "Overlord" would come nearer.

My guess is that most Americans have as yet no idea what is really in this bill. The legislation is very unpopular because everyone can sense that it is represents a massive expansion of government power and government spending. When they find out that it virtually eliminates competition in the health insurance industry, well, that might not increase its popularity.

In losing competition, all but the very rich will lose access to any health care not blessed by the new Czar. If you don't believe me, ask Bob Herbert at the New York Times.

There is a middle-class tax time bomb ticking in the Senate's version of President Obama's effort to reform health care.

The bill that passed the Senate with such fanfare on Christmas Eve would impose a confiscatory 40 percent excise tax on so-called Cadillac health plans, which are popularly viewed as over-the-top plans held only by the very wealthy. In fact, it's a tax that in a few years will hammer millions of middle-class policyholders, forcing them to scale back their access to medical care. Which is exactly what the tax is designed to do.

Now, I do not agree with Bob Herbert often. He loathes pretty much everyone I like. But he is right on this one. What is the purpose of this design?

These lower-value plans would have higher out-of-pocket costs, thus increasing the very things that are so maddening to so many policyholders right now: higher and higher co-payments, soaring deductibles and so forth. Some of the benefits of higher-end policies can be expected in many cases to go by the boards: dental and vision care, for example, and expensive mental health coverage.

Proponents say this is a terrific way to hold down health care costs. If policyholders have to pay more out of their own pockets, they will be more careful — that is to say, more reluctant — to access health services. On the other hand, people with very serious illnesses will be saddled with much higher out-of-pocket costs. And a reluctance to seek treatment for something that might seem relatively minor at first could well have terrible (and terribly expensive) consequences in the long run.

The Democrats in Congress can't say no to the tort lawyers, or the doctors, and they aren't' willing to force open the health insurance market to sales across state borders. The only way to hold down medical costs is to discourage access to healthcare.

The President said that no one would be forced to give up his or her healthcare insurance. He was lying. Eventually it will be clear to a lot of someones just how much they are losing.