How to Get Less Health Care for More Money
If our government ends up deregulating health care nationally (even in mire of the financial meltdown), middle class families will be plain out of luck on getting health insurance. Here's why:
A national survey of employer health benefits released today finds that the average premium cost for a family of four has risen to $12,680 dollars, a 5% increase from last year. More employees are being pushed into high-deductible plans, making care ever more unaffordable, and their other copays keep rising.
Those stats alone are bad enough, and employer-based health care keeps diminishing. Combine these costs with proposals to weaken employer coverage and deregulate health insurance, and the whole idea of universal health care runs in reverse.
The vaguely worded health reform plan by Senator McCain has strong similarities to a measure proposed in 2006 by Sen. Mike Enzi of Wyoming, to strip the states of their right to regulate health insurance and lift the "state regulatory burden" from for-profit health insurance corporations to let them compete across state lines. McCain was an Enzi ally on this proposal, which Consumer Watchdog fought tooth and nail. The bill failed to pass but Enzi and others have kept the idea alive, now inserting it into the McCain plan.
A major plank of the McCain health care proposal is reducing costs by offering "innovative" forms of insurance. For what that means, we can go to the Enzi proposal. Here's a Consumer Watchdog OpEd that paints what the deregulated Enzi-McCain insurance market would mean to consumers:
Sherry Orestuk of Ashburn, Va., and her husband fell for a great sales pitch three years ago and bought health insurance aimed at the self-employed. It left them nearly $20,000 in debt after her breast cancer.
They had to abandon their small business and start over in New York in order to buy any health insurance afterward.
Dana Christensen of Los Angeles and her husband, Doug, bought a similar plan. For them, the ending was far worse: Mr. Christensen died of cancer, helplessly bedridden as astronomical medical debt became his bequest to his wife. The final total was nearly half a million dollars.
In these cases and hundreds like them, individuals who couldn't get group insurance bought what are called association health plans, pitched as affordable health coverage for entrepreneurs.
Consumers can pay hundreds of dollars a month for policies with no coverage for preventive care and no maximum on their out-of-pocket costs.
Currently, this kind of "junk insurance" is fairly rare, because most people get credible insurance through their employers and states require group health policies to offer a base level of coverage. But Senator McCain's plan would entice the young and the healthy out of employer coverage with a $2,500-$5,000 yearly tax credit if they instead bought individual coverage, and they would gravitate to the cheapest premium. Employer plans would be left with older and sicker employees, making the plans ever more unaffordable.
Step 2, stripping states of the power to regulate insurance and letting for-profit insurers develop cheap-premium policies, paves the way for widespread junk insurance. It looks cheap until you get sick and find out how little is covered. And although states would have no power to regulate insurers, they would still be stuck with the costs of all the people that insurance companies refuse to cover because they have asthma or acne or were treated for a bad back a decade ago.
Senator McCain no doubt sincerely thinks that free markets, competition and deregulation will make a thousand competitive flowers bloom in the health insurance market. That's what so many legislators recently thought about financial and energy markets. But health care is even less suited to for-profit competition, because insurers compete only for the cheapest patients, not to provide the best health care. No good political intention can change that.