The Des Moines Register on mandating private insurance
Mandating private health insurance is misguided
Taxpayer-financed health coverage is a better approach.
By the Register Editorial Board
The Des Moines Register
March 5, 2007
It sounds simple enough: Get everyone insured by requiring them to purchase health insurance. So-called “individual mandates” are part of Massachusetts’ plan to get all residents covered. They are included in a proposal by California Gov. Arnold Schwarzenegger. In a recent conversation about health reform in Iowa, state Sen. Jack Hatch said he supports individual mandates because they inject “personal responsibility” into health care.
But forcing people to purchase private-sector insurance is far from simple, especially considering the government absolutely must ensure the coverage it makes people buy is adequate.
Proceeding with this idea would be a mistake.
Just a few weeks ago, this editorial page told the story of Jan and Gary Clausen, who didn’t have the option of buying health insurance through an employer. They went out on their own and bought AARP-endorsed plans for about $700 a month. They were left with more than $200,000 in medical bills after Gary was diagnosed with cancer.
Some insurance.
If the state is going to force people to purchase insurance, it must guarantee necessary services are covered and the bills are paid when health disasters strike. It must require insurance companies to protect Iowans against catastrophic costs.
Of course, that’s where things really get complicated.
Will the state define coverage in private-sector insurance plans? Will it increase oversight of the insurance industry? Will it prohibit insurance companies from increasing prices? What is the definition of “affordable” insurance? Who will qualify for a public subsidy to purchase insurance, and how will that be paid for?
All these questions and more need to be answered.
But our greatest concern is that an individual mandate moves this country in the wrong direction by relying too heavily on the private sector to achieve universal coverage.
Private is not better than public when it comes to health insurance.
Private health-insurance companies spend a greater percentage of dollars on administrative costs than government programs such as Medicare. Private companies also use health dollars to pay outrageous CEO salaries. UnitedHealth Group Inc. paid a former CEO $8 million a year. He also had unrealized gains on company stock options totaling nearly $1.6 billion.
Try finding a government worker with a personal jet.
Private-sector insurance has been a financial failure in Medicare Advantage plans, where the government subsidizes insurance companies to take over the care of seniors rather than keeping them in less expensive traditional Medicare.
According to a study by The Commonwealth Fund, Medicare spent $922 more on each senior in private plans than it would have paid to cover those patients in traditional Medicare in 2005. That’s a total of more than 5.2 billion tax dollars that could have been saved or spent elsewhere if seniors would have remained in the basic, government plan.
Why push anyone into the more costly private sector?
A taxpayer-financed system of health care that offers basic coverage for all Americans is a better approach. It would be administered by the government, and it would save money.
According to the National Coalition on Health Care, the nation’s largest alliance working to improve care, a system like this could save 1.1 trillion health-care dollars over 10 years. Of four plans proposed by the coalition, a universal, publicly financed one was the best deal.
Of course, a national system would require those in Washington to get busy solving the problem rather than leaving states to scramble for ways to cover their residents - and pursue misguided ideas like individual mandates.
http://desmoinesregister.com/apps/pbcs.dll/article?AID=/20070305/OPINION03/703050303/1035/OPINION
Comment:
By Don McCanne, MD
This is the message that the nation must hear. The private insurers are incapable of providing us with coverage that is both affordable and effective in preventing financial hardship for those with health care needs.
When an AARP-endorsed plan with a premium of $700 a month leaves a couple with $200,000 in medical bills, we know that private insurance is not the solution. Mandating participation in a fatally flawed system represents the worst of public policy proposals.
This editorial should be downloaded and distributed widely. Everyone needs to understand what will work, and what won’t.