THE INCREMENTAL ASSAULT ON HEALTH CARE
The following editorial appears in the May, 1996, issue of THE INTELLECTUAL ACTIVIST.
by Paul Blair
Ever since the Clinton health plan's failure, liberals have been wringing their hands at the dismal prospects for health-care "reform." Now the Republicans are coming to their rescue by endorsing "incremental" changes to health insurance regulations. A Senate bill sponsored by Democrat Edward Kennedy and Republican Nancy Landon Kassebaum (along with a similar "bipartisan" bill in the House) promises to "increase access to health insurance" by "making insurance portable." Such phrases are euphemisms for plain coercion. The bill forces insurers to guarantee coverage to workers who change jobs regardless of any pre-existing medical condition. The bill forbids employer-sponsored plans from denying individuals coverage or raising their premiums because of medical problems, and requires insurers to offer group coverage to all employers in their region. The bill passed the Senate unanimously.
Republicans generally back the bill as a modest positive step. Even those who should know better seem at a loss as to how to oppose such a "moderate," "public-spirited" resort to force. The only obstacle to the bill has been the prospect of controversial Republican amendments lowering the chance of passage. "Why can't you keep it simple?" the bill's backers complain. "When we finally have a reform we all agree on, why add divisive provisions that may sink it?" Though some Republicans may secretly hope the bill will die, none are willing to attack the proposal publicly and risk being labeled opponents of "sensible reform."
If our lawmakers really wanted sensible reform, they would focus on the major obstacle to portable insurance: the taxation of income devoted to medical expenses. As things stand, employer-sponsored health insurance coverage is not counted as taxable income. But if you purchase an individual (and thus portable) policy for yourself, the expense comes out of your taxable income. Thus people are driven into non-portable, employer-sponsored plans.
Medical savings accounts (MSAs) would rectify this situation by letting individuals put aside money, tax-exempt, to pay medical expenses and to buy insurance. But MSAs are the chief controversial proposal that the "bipartisan" legislators want to exclude from the Kennedy-Kassebaum bill.
Liberals oppose MSAs because, they say, such accounts would favor only the "healthy" (and the "wealthy," who allegedly are the only ones who benefit from tax exemptions). MSAs would let healthy individuals purchase catastrophic coverage and pay their low routine medical bills out of pocket with tax-exempt income. But those with medical problems would be better off financially under current prepaid plans like HMOs, which will cover their higher routine medical expenses for a set premium. To allow healthier individuals to leave these prepaid plans, liberals say, would "drain the insurance pool." And they are right: the plans could no longer use premiums from healthier people to cover those who need more care-so premiums would rise, driving more and more people out of prepaid plans. Medical savings accounts would undermine the whole prepaid "managed care" system.
It is a measure of the conservatives' ideological bankruptcy that they cannot identify and attack the premise behind the liberals' objections: that the healthy should be sacrificed to the sick. The liberals view insurance--particularly HMOs--as a way of collectivizing medicine and making the well-off pay for the care of the needy. This is not the rationale for conventional insurance plans, under which your premium reflects your own risks of a claim.
On a free market, individuals--even most unhealthy ones--could afford routine medical bills; the principal role of health insurance would be to cover unpredictable catastrophic expenses. But (as explained in our January issue) Medicare, Medicaid, and their associated price controls have forced medical costs so high that even routine expenses have become forbidding. This is the predictable outcome of programs intended to sacrifice the well-off to the old and the poor.
In response, the government has encouraged the rise of prepaid plans to force down the expenses of those who have high bills--both through limiting care and through subsidizing those expenses with the premiums of those who need less care. The result, predictably, is to pressure insurers to dump bad risks and costly patients--which is why it is so difficult to obtain health insurance if one has a pre-existing condition. Thus the motive for the Kennedy-Kassebaum bill: to force insurers to cover such individuals.
The effects of the proposal are just as predictable: if insurers are prohibited from shedding bad risks or charging them more, premiums will have to rise across the board--or prepaid plans will have to limit even more the care they provide. The new law will serve only to increase the pressure by "managed care" administrators for physicians to withhold care wherever possible, to gamble with their patients' lives.
The government's response is already in the cards: to dictate to insurers the terms of coverage. For example, under one amendment (approved by the Senate) to the Kennedy-Kassebaum, bill coverage for mental illness would have to be on a par with that for physical illness. Under another bill co-sponsored by Senator Kassebaum and approved by a Senate committee, health plans would be forced to cover a hospital stay of at least 48 hours for childbirth. (If this seems generous, recall that in freer days the average was three to five days.)
Such mandated coverage will only serve to raise premiums yet higher. So, after giving health plans a list of the care they are mandated to provide, the next step will be to set their rates. And when insurers helplessly protest that they cannot deliver that care at those rates, the state will take over medicine.
This is the pattern: first, the government imposes controls to sacrifice one group to another. Then the government's victims find ways to avoid sacrifice. In response, the government slaps on more controls, either to enforce the sacrifice, or to sacrifice yet another group to the current victims to allow the latter to go on sacrificing. Then the new victims try to escape, so the government--unwilling to abandon sacrifice--imposes even more controls. Controls breed controls. The only solution is: no more sacrifices, of anyone to anyone.
When lawmakers speak of "incremental" reform, they wish to appear reasonable: "We don't want total state control," they say, "we just intend to fix problems with the present system as they arise." But their pragmatism is just a cover for their failed ideals; what they are trying to "fix" is the fact that there are not enough controls--under altruism, there are never enough controls. What they really mean by "incremental" reform is tiny steps toward what they really want: total state control. We ignore such gradualism at our peril.
Copyright © 1996, by TIA Publications, Inc. Permission to distribute this article in electronic form is hereby granted provided that the article is reproduced whole and without modification and is accompanied by this notice. This editorial originally appeared in the May, 1996, issue of The Intellectual Activist and is posted in the TIA web pages at www.nationweb.com/t/TIA/tia-1.html. The Intellectual Activist is published six times per year; for a one-year U.S. subscription, send $24 to: TIA Publications, Inc., PO Box 262, Lincroft, NJ 07738. (Student, foreign and multi-year rates may be obtained from the TIA web pages or from the preceding address.)
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