Reform at any cost?

Congress is in the middle of crafting legislation that will forever change how Americans obtain health insurance. Congress desires to legislate mandatory health insurance for everyone and how much providers are allowed to charge for their services. To accomplish this daunting task Congress wants to create a government-run insurance system which they say will foster competition in the health insurance industry. Congress also wants to punish individuals and companies if they decide they do not or cannot provide health care coverage by forcing them to pay a penalty tax. Additionally, Congress plans to abolish the practice of denying health care benefits to someone that has a pre-existing condition. While these might sound utopian in nature, the realization is this is anti-competitive and can lead to less choice for the American consumer.

Although Congress claims their health insurance reform plan will promote competition and allow millions of people to gain access to health care, the current state of health care reform making the rounds through Congress will hinder access to health care services, cripple innovation, and force health care providers to accept government-approved compensation. Government cannot force competition in a free market system and more often than not, government usually stifles competition and adds unnecessary complexity.

By creating a government-run health care system, Congress will add millions of new patients to the health care system. This influx of people will demand services from an already strained system. In addition to increased patient load, the health care system may suffer a decrease in health care professionals as providers are forced to accept lower compensation for services, resulting in fewer individuals willing to enter the medical profession. This will increase waiting times to see physicians and use other services. As supply decreases and demand increases, costs will begin to rise because it will take more professionals to handle the increased work load. Couple this with government regulated compensation, and current health care professionals could begin to reconsider their position.

As more people join the pool of government-sponsored insurance, insurance companies may feel forced to compensate for lost revenue by charging higher premiums to employers that continue to offer a health insurance plan. As premiums for private health insurance increase, employers will reconsider offering these plans and use the government-run health insurance system as an alternative. This will continue to add more individuals to the government-run system and increase demand further, inevitably leading to a monopoly by the government and a loss of all private health care insurance providers. This is not health care reform.

For real health care reform to happen there needs to be a fundamental change in how people view health insurance. Reform needs to start with the individual. Individuals need to take responsibility for saving money to pay for office visits to minimize the use of health insurance and instead maintain a low cost hospitalization and catastrophic plan. This is how things were done for years prior to the introduction of HMOs. How many people actually know the difference between HMO, HMO+ and PPO? It is this failure to understand how your health care insurance policy works that can lead individuals to make decisions regarding their medical care without fully understanding how their decisions will affect their pocketbook.

For Congress to properly reform health care it doesn’t take over 1500 pages. Meaningful health care reform can be done by allowing individuals to shop for insurance across state lines. This will allow for more competition by creating a larger pooled of insured. This larger pool spreads the risk to more people which can help keep prices down. It also doesn’t take 1500 or more pages to exclude pre-existing conditions. It’s possible to cover pre-existing conditions in as little as 53 words – “A health benefit provider may not deny or impose any limitation of coverage based on any medical, physical or mental condition the insured or potential insured currently has or had prior to enrollment in the a health care benefit or insurance coverage, application for benefit of coverage or renewal of benefit or coverage.” While Congress’ plan to reform health care is well-intentioned, good health care reform requires action at both the individual and government level: individuals need to take responsibility for understanding how their plan works, while the government needs to focus on creating healthy competition rather than a monopoly.