An example of what is wrong with our health-insurance/health-care system(s) can be found in a humane and well-intentioned bill in the Texas legislature what would require Texas insurance companies to cover the cost of hearing aids for children.
The case for the bill is exactly what you would expect, presented in exactly the way you would expect: A public-radio story on the subject earlier this week focused on a mother describing her feelings of grief and helplessness (melancholy piano music played behind her voice, like that Sarah McLachlan song in those horrible SPCA commercials) after she discovered that her daughter was born with a severe hearing problem. For newborn children who can benefit from hearing aids, sooner is better: The sooner the hearing aids are in use, the better the child’s chances of normal language development.
The case against the bill is exactly what you would expect, presented in exactly the way you would expect: Business groups oppose the mandate, as they oppose all additional mandates, arguing that such mandates increase the cost of health insurance for all Texans and for employers who provide insurance. This is true, and so the argument is met not with counter-argument but with boos and hisses. The mother in the public-radio story pronounced herself “offended” by the situation.
Here is the thing: Hearing aids for children are expensive, but they are not outrageously expensive — they run about $5,000 at the higher end. According to the National Institute on Deafness and Other Communication Disorders, the number of children born with detectable hearing loss in one or both ears is about 0.2 percent. Texas has about 400,000 births a year. Assuming that all of the children born with hearing problems required $5,000 hearing aids and that none of their families had the means to pay for them, that would imply any annual outlay of $4 million for state-purchased hearing aids, i.e. roughly the municipal budget of Muleshoe, Texas. Using a more realistic estimate — that 30 percent of those children both need those hearing aids and have families that cannot pay for them — then the outlay would be something on the order of $1.2 million, which is less money than the four best-paid employees of the San Antonio city government make among them annually.
Question: Who really believes that the most efficient way for the state of Texas to provide a benefit of $1.2 million to $4 million per annum to the families of 0.2 percent of the state’s newborns is . . . laundering that money through insurance companies?
If you want to provide the benefit, then, for Pete’s sake, write the damned check.
The alternative is not — no matter what our Democratic friends insist — getting insurance companies to pay for children’s hearing aids out of their profits and the bonuses of their fat-cat executives. For one thing, insurance companies’ profits are not looking so great in the age of Obamacare, and plans are being canceled from sea to shining sea, with the result that in many areas there are only a few insurers, and sometimes only one, offering plans in the ACA exchanges.
For another thing, that simply is not how business actually works in the real world.
Insurers might simply try to pass those costs along to subscribers in the form of higher premiums, but, contrary to the economic model that exists in the head of Bernie Sanders, companies do not have the power to unilaterally set prices. Companies in very competitive and price-sensitive businesses (think McDonald’s or Walmart) cannot simply raise consumer prices. They are more likely to find savings elsewhere, such as squeezing their suppliers and business partners — or their employees. In the case of an insurance company, the expense of a new mandate might be passed along in the form of higher monthly premiums, or it might be passed along in the form of less generous coverage for other expenses. It might be passed along in the form of internal work-force reductions that mean the paperwork that used to take weeks to get done will take months instead, or that that 20 minutes on hold you’re used to becomes 40 minutes.
There is no way to know.
But we do know this: There is no such thing as a free lunch, free birth-control pills, or free hearing aids for children, no matter how sympathetic the children are. Somebody pays.
The problem is that politicians would rather not have the paper trail. If the state of Texas were to package the hearing-aid benefit as what it is — a straightforward social-welfare program — then that would mean accounting for expenditures on the state’s budget, and levying taxes to pay for them. Because politicians are cowardly creatures, they would rather have the insurance companies tax you on their behalf rather than do the thing themselves. After all, it does not end with hearing aids: Free false teeth come in all sorts of configurations.
We are a very, very rich country. We can afford all sorts of things: food for the hungry, health care for the indigent, education for children, and hearing aids for families that for whatever reason cannot manage to scrape together $1,000 a year to invest in the well-being of their own children. (Those $5,000 hearing aids last for about five years, meaning that their real cost over time is less than the $1,200 a year typical American family spends on cable television.) I myself am all for doing many of those things, though I do not think that government very often is the best instrument for getting them done. But if we are going to use government, then, by all means, let’s use government in the most honest, transparent, and straightforward way we can. Forget the insurance mandate and just write the check.
We can afford the hearing aids. We cannot afford the stupidity.