Each day brings another twist to the health-care-reform saga. Should the president heed the braying of his hard-left allies, manipulate Senate procedural rules, and push through a massive overhaul of our entire health-care system? Or should he scale back the ambition of the proposals already approved by four congressional committees and settle for a “modest” set of reforms to protect consumers from the predations of those sinister health-insurance companies? And, of course, there’s that nettlesome “public plan” option: Should it stay, or should it go?
On some days the prognosticators see less health reform in our future. According to the Washington Post, “the outpouring of anger at town hall meetings this month has fundamentally altered the nature of the debate” and convinced lawmakers such as Iowa senator Chuck Grassley to “consider drastically scaling back the scope of the effort.”
Even if this should prove true, and the reform effort ultimately gives way to a set of insurance-market reforms spun as minor tweaks to enhance our health “security,” it will be crucial for Americans to understand the slippery slope of liberal health-care reform and why liberals cannot ratchet back their reform ambitions.
Those seemingly modest changes urged by the White House, you see, would fundamentally alter the terms and conditions under which Americans purchase their health insurance. Worse, those changes cannot stand alone. They would necessitate a series of additional changes, each building upon the others so as ultimately to produce reform every bit as “robust” — and every bit as lethal — as the $2-trillion government takeover now being so loudly denounced in town halls throughout the nation.
Let me explain.
Start with the three “common-sense consumer protections” trumpeted by President Obama:
‐Guaranteed issue: Require health insurers to issue a policy to everyone who walks in the door, no questions asked, and to guarantee that coverage for life.
‐Pre-existing conditions: Bar insurers from screening prospective customers for any “pre-existing” and potentially costly medical conditions.
‐Community rating: Require insurers to charge all consumers the same premium for their coverage, regardless of relevant factors such as age, gender, occupation, and, of course, health status.
Combined with other items on the White House insurance-reform wish list, such as a ban on “excessive” out-of-pocket expenses and on yearly or lifetime limits on benefits paid, these mandates would effectively socialize the market for health insurance. Everyone could get insurance whenever he decided to sign up for it, and at one guaranteed price. Insurers would become regulated utilities, answering to government-appointed boards and rate commissions.
Not only would such a system drive up the cost of insurance, it would create classes of winners and losers. For example, the 55-year-old cholesterol-challenged smoker would benefit at the expense of the 27-year-old non-smoking vegetarian.
That’s bad enough, but the reforms can’t just stop there. So long as the issuance of insurance is guaranteed but purchase remains voluntary, many won’t buy coverage until they absolutely need it. Why, after all, spend hundreds of hard-earned dollars each month on a product you don’t need right now, when you could be spending that money on a new car, an upgraded wardrobe, or a nice vacation? Why not wait until the morning before your surgery to walk through the front door of your local health insurer, demand a policy, and then run up your medical tab, which your insurer will be required to cover?
Many will try to game the “reformed” system this way. Even liberal reformers admit it. Otherwise, they would have to deny still-fresh and fully documented history.
After all, several states tried these reforms in the 1990s. And the results were nothing short of catastrophic. One review of New Jersey’s experience with community rating and guaranteed issue found “a precipitous decline in enrollment, a corresponding increase in premiums, and a change in enrollment composition toward older and potentially more expensive enrollees.”
New York’s community-rating experiment flopped as well. “In the first year,” National Review’s Ed Rubenstein wrote over a decade ago, “25-year-old males were hit with premium hikes of over $500, while 55-year-olds paid about $415 less than under the risk-rated system. Not surprisingly many young people decided to drop their coverage. With fewer young, healthy policyholders available to subsidize older ones, insurance premiums skyrocketed . . . ”
Despite these horrible examples, Maine enacted these same insurance rules in 2003. They have been in effect now for five years and have wrought such havoc that a healthy 30-year-old male faces a monthly premium of $762 in the individual market. In neighboring New Hampshire, which shuns community rating and guaranteed issue, similar coverage costs only $222 a month.
This specter of market meltdown and price spikes will cause the health-insurance lobby to demand that everyone — everyone — be required to purchase a health plan. They’ll insist that all those young, healthy consumers must pay premiums into the insurance pool each month to subsidize the exorbitant bills incurred by us older, paunchier geezers.
Liberal lawmakers are just fine with that. Mandates on individuals and their employers are the second stage on the liberals’ slope to government-run health care.
But there’s more they must do. You see, some Americans will find the monthly premiums of their mandated coverage downright unaffordable, eating up a fifth or more of their take-home pay. A problem, yes, but the libs have a ready answer: government subsidies.
That’s their preferred way of bringing the cost of these plans down to earth for literally tens of million of consumers who live from paycheck to paycheck. Is it fiscally responsible? No. But what Speaker Nancy Pelosi disingenuously said with respect to another government power grab — the global-warming cap-and-trade bill — aptly describes the liberal’s view of health-care reform: “There should be no cost to the consumer. . . . whatever the cost is, the consumer must be held harmless.”
That’s the third stage on our descent down the slippery slope: hundreds of billions of dollars in subsidies to hold consumers harmless. Of course, many of those consumers are rooted firmly in the middle class. To “offset” subsidies for the middle class, liberals have another ready answer: massive, job-destroying tax increases on “the rich” and on small-business owners.
But we’ve still more downhill terrain to cover. What constitutes an “acceptable” health plan (to use the paternalistic language contained in the House bill)? Which providers, health facilities, treatments, and drugs will be covered? What about coverage for certain diseases and medical conditions? With so much at stake, every interest group in Washington will spare no expense to get its treatment, medical technology, or pharmaceutical product included in the laundry list of benefits that insurers will be required to offer.
Of course, Congress will succumb to the Washington lobbying community and add dozens of mandated benefits to any government-sanctioned plan. Each mandate, of course, adds to the cost of coverage, putting further pressure on consumers and on the taxpayers who will be asked to pony up in order to “offset” these higher costs.
Ultimately, the Left’s “scaled back” version of health-care reform will sprout other ominous features. For starters, we’ll need armies of federal bureaucrats to draw up and enforce thousands of pages of new insurance regulations. And then we’ll need some government muscle to enforce the individual and employer mandates — everything from penalties, fees, and fines to the use of collection agencies and garnishment of wages. As candidate Obama himself said: “Without an enforcement mechanism, there is no mandate. It’s just a political talking point.”
So there we have it: the slippery slope of health reform. Drop the controversial notion of a public plan. Ask for the voters’ forgiveness. Scale back the ambition, and tone down the rhetoric. Return with a “constrained” package limited to a few “consumer-friendly” regulations on insurers. And, before you know it, Mr. Liberal Reformer, you’re back where you always wanted to be, the proud proponent of a massive legislative and regulatory overhaul that registers 9.5 on the political Richter Scale.
Beware the modest proposals of extreme leftists.
– Michael G. Franc is vice president of government relations for the Heritage Foundation.