Guest Column (11/12/09)


Government’s role in health care

Nov. 12, 2009

By James T. Rude

The debate over health care reform is not just a debate about the best way to provide health insurance coverage; rather, at the most basic level, it is about the role of government and the extent to which it should compete in decisions between an individual and his or her medical providers.

I do not know of anyone on either side of the political spectrum who believes that reform of the health care system is not needed. The growing cost of health care has been well documented and is likely to continue to be driven by the following: Increases in utilization of services brought about by an aging population; growth in new diagnostic and therapeutic advances in medicine; increases in procedures to safeguard against claims of malpractice; ever increasing government mandated benefits; and, finally, growth in the public’s expectation that most, if not all, of hospital, office visit and treatments should be covered by health insurance. All of these factors contribute to consumption, which has greatly increased the aggregate cost of health care.

If one of the goals of health care reform is to reduce health care utilization, then no matter which side ultimately wins this debate, health care spending will continue to grow unless someone or some entity says, “NO, YOU CANNOT HAVE IT.” Who decides what health care services should be purchased or rationed is at the heart of this debate.

One key driver for health care reform appears to be that “47 million people are without health insurance.” This “uninsured” population represents less than 10 percent of the U.S. population when netting out non-U.S. citizens and those who are currently eligible for Medicaid and other programs. The number actually falls much further when you subtract people between jobs and those who could afford it, but choose not to spend money on health care insurance premiums.

But I don’t even think insurance coverage or being able to buy affordable health insurance is central to the debate. If it were, then the fix would be relatively easy.

For example, I recently separated from my employer and I am now on COBRA. My wife and I are in our early 60s and our COBRA premium for a high deductible plan for the both of us is $264 per month before any federal COBRA subsidy. My monthly premium is highly affordable because my ex-employer is located in Illinois.

The Illinois BlueCross BlueShield plan is accepted by most Vermont health care practitioners and hospitals and is priced far lower than what a comparable plan would cost if I purchased the same level of coverage from the Vermont Blues. This is not the fault of the Vermont insurance company; rather, the difference in premium is due to the fact that Vermont state government regulations stipulate to insurance companies that if they want to sell health insurance products in Vermont, they must set their premiums to cover all state mandated benefits and set the price of the premium similar for all purchasers regardless of age and health status.

Once my COBRA benefits run out 18 months from now, I will be forced to buy my insurance in Vermont and pay a significantly higher premium for basically the same coverage I now receive. This problem would be solved if I were allowed to buy health insurance from across state lines.

A government controlled and centrally planned health care solution has been the dream of some for many years, but there are costs and consequences associated with this approach that are more problematic than the suggested benefits.

The first major cost is that government run programs are always more expensive than promised. Take Medicare and Medicaid, where the costs have grown significantly beyond what was projected when the legislation was proposed. Medicare alone has grown 10 times more expensive than even the most pessimistic assessment of ultimate cost — and it continues to climb. These programs are currently unaffordable and are perilously close to default, and yet we want to add a significantly larger program to an already over taxed system? Unfunded and poorly funded mandates are pathways to financial ruin that only fools would follow.

The second cost is actually a consequence, and that is to our freedom to decide among the best options that fit our needs. For example, I like a high deductible plan, but under the House and Senate bills, these options would be outlawed.

What government can do, to fix what government messes up, is to get out of the way. The appropriate role of government is to clear away obstacles and let consumers effectively exercise choice at price points they can afford. Legislators are not to be trusted when they are intent on building systems that chip away our freedoms and significantly increase taxes for current and future generations, particularly when elected officials are hell-bent on leading the unwilling to do the unnecessary.

 

James T. Rude is a Williston resident.