Sent: Thursday, July 30, 2009 2:00 PM
Subject: What health insurance reform means for you
If you’re like most Americans, you like the health insurance you have today but think the system needs improvement. You would like things to work better, but are aware of the threats that arise from politicians who promise you something for nothing.
President Obama is correct that the underlying problem with health care is rising costs. Because of this problem, your paycheck grows more slowly, millions of Americans cannot afford to buy health insurance, and the escalating costs of Medicare and Medicaid will force enormous tax increases onto you and your children. The President wants to slow the growth of health care spending, and so do I.
Congress has gone in the opposite direction. Rather than changing incentives to reduce the cost of health insurance, they are trying to shift those costs onto someone else: you. The facts are not in dispute. The bill being developed in the House of Representatives would mean:
- No reduction in the growth of average private health insurance premiums;
- More than $1 trillion of new government spending over the next decade;
- $239 billion more debt in the short run, with ever-increasing additions to the deficit forever; and
- More than $500 billion of tax increases, including higher income tax rates on successful small businesses.
The U.S. economy is struggling to recover from a deep recession. America cannot afford a bill that imposes these extra burdens on an already weak economy. Rising health care costs are the problem, and so Congress’ solution begins by spending a trillion dollars more on health care. That doesn’t make sense.
The President is correct that it’s time to fix our unsustainable health insurance system. I disagree with the way that Congress is trying to fix it.
You will soon hear that these bills would not increase government involvement in your health care. That is incorrect. These bills give government officials authority to determine benefit packages, copayments and deductibles, relative premiums, as well as health plan expenses and profits. The government would, in effect, control health insurance. That’s the wrong way to fix a flawed health insurance system. There is a better way.
Health insurers today are partially insulated from competitive forces. If they convince the human resources manager at your employer to offer their plan, they’re all set. Your choice is secondary and therefore less important. We need a system that instead forces health insurance companies to compete for your business.
You can’t watch a televised sports event without being overwhelmed by the competition among auto insurers. They compete based on reliability and service when you have an accident and need help. They offer incentives for safe driving. Some emphasize that they can cover you even if you are a high-risk driver with a less-than-perfect driving record. They aggressively cut premiums to attract new customers. They reassure you that you’re “in good hands” if you choose to give them your premium dollars. These insurers don’t behave this way because they’re nice. They do it because it’s how they win your business, and because they know you will go elsewhere if you can get better value. Your health is both different and more important than your car, and we need to bring those same benefits to the health insurance market. We need a thoughtfully regulated market that means insurers will compete for your business by offering reliable, high quality health insurance that you can afford.
When insurers have to compete for your business, it will put you and your doctor in control, rather than your insurer or your employer. The bills moving through Congress assume that we all have the same health care needs, and they create one-size-fits-all solutions. But your situation is different from your neighbor’s, and only you can make the right decisions for you and your family, based on advice from medical professionals you trust.
This does not mean you’ll have to negotiate prices in the ambulance. Health insurance must protect you and your family when you need it most – when there is an emergency, or a severe accident or disease that threatens not only your family’s health, but your family savings. We buy insurance to protect ourselves against the small chance of a really bad situation, and that’s what health insurance must do.
More control means putting the resources in your hands while giving you both the information you need to make good decisions, and the incentives to consider whether that fourth MRI is really necessary, or whether you could save some money with a generic drug or a semi-private recovery room in the hospital, instead of a more expensive alternative. Health care and health insurance cost a lot today primarily because we’re often spending someone else’s money, so we don’t think about the cost of the care that we use. These tradeoffs and decisions about what care is worth the cost must happen. We must answer a basic question: who is more likely to make good decisions about your health insurance and health care – you and your doctor, or a government bureaucrat who doesn’t know or care about your particular situation?
The right kind of health care reform is not a free lunch. It carries obligations as well. While others offer you the hollow promise of government-provided and underfunded health care security, I’m telling you that you’re going to have to take more responsibility for decisions about your own health. A well-functioning system will offer financial incentives to keep yourself healthy, and to avoid risky behaviors that are the source of so much of the costs in today’s system. You will have to spend more time talking with your doctor and making hard choices yourself, although that’s far preferable to spending that time fighting with your insurer or with a government bureaucracy. You will have to shop intelligently for health insurance and decide what tradeoffs make sense for your family situation. You will have lower insurance premiums but more financially responsibility for relatively minor medical costs, and you can have a tax-free reserve fund that you can spend wisely on everyday non-critical medical expenses. It means more personal responsibility and control, and less dependence on the government. It means your health security comes from you buying insurance to protect your family against catastrophe, rather than hoping the government won’t ration your care when it’s needed. Others want to tell you that you have the right to have someone else pay for your health insurance. I think you have the responsibility to provide for your family’s health security, and that it’s government’s job to set rules so that you have affordable options, and to subsidize the poorest who cannot afford basic catastrophic protection.
The right kind of health care reform means your wages will grow faster as insurance premium growth slows. It means portable health insurance that you can take with you from one job to another, so you don’t get locked into your current job because you’re afraid to lose your health insurance. It means that millions more Americans will be insured because premiums are less expensive and the uninsured can better afford to buy it, not because we are shifting those costs onto other hard-working Americans and small businesses through higher taxes. It means no increase in the short-term budget deficit. It means dramatic reductions in unsustainable long-term budget deficits, rather than the explosive deficit increases contained in the current legislation.
The President is promising to guarantee your health care security by changing the way health insurance works and making someone else pay for it. If you’re reading this, you’re probably that someone else. You’ll probably pay for it through higher insurance premiums, as they do in New Jersey where these “protections” make insurance unaffordable for many. You’ll probably pay for it through higher taxes, whether you’re one of the eight million people who would remain uninsured and still pay higher taxes under the House bill, or a successful small business owner who would face higher income tax rates that kill your ability to grow your business. You and your kids will definitely pay for it through higher taxes when the massive deficit increases from this bill come due, on top of the unresolved long-term problems of Social Security, Medicare and Medicaid.
Over the next month you will hear the claim that opponents of the pending Congressional health care bills are defenders of the status quo. You are going to hear that the choice is between a broken system and these bills, and that reform is better than no reform. You will hear that the cost of doing nothing is too high, and that we must therefore enact one particular solution, no matter how flawed.
This is misleading, and there is a better way. I strongly oppose the health care bills now being advanced in Congress, and I think the status quo is a mess. There is no free lunch in health care reform, and fixing our current system without breaking the good parts will involve some hard choices. There are alternatives to the pending bills that do health care reform the right way. I have a plan you can find at KeithHennessey.com. If you’d rather see a good plan from someone who actually matters, then check out the Ryan-Coburn Patients’ Choice Act from Rep. Paul Ryan and Senator Tom Coburn.
You will soon be told that it’s time to act, and that we must therefore enact the wrong kind of reform. You can help by telling your friends, your family, and the rest of your social network that Washington needs instead to start over, and to put you, the patient/worker/taxpayer/consumer/citizen, at the center of health care decision-making, not the government. We need the right kind of health care reform, not these bills now being considered.
Washington – Please stop promising us free lunches. The country is going bankrupt – don’t make it any worse. We’re adults. We can handle the hard choices.