Candace

Talmadge

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November 17, 2008

Skip the Intermediate Steps and Just Do It: Single-Payer Health Care

Health care reform is in the offing once more, now that elections are mostly complete. All the wrangling really boils down to this: Do we leave the profit component in the health care financing equation, or do we surgically eliminate it?

Eventually we will have to decide this very question, because in the case of health care financing, we cannot be just “a little bit” profitable. Either the health insurance industry will still be able to rake in what it determines is sufficient lucre, or it will quit the field altogether.

It would be so much easier and less costly to perform the aforesaid removal procedure sooner rather than later. Apparently, however, we must still pay lip service to the “free” market – even after the free-market prescription has doomed the U.S. financial sector and threatens the health of the entire U.S. and world economies, too.

The latest serious health care reform plan comes from the chairman of the U.S. Senate Finance Committee, Montana Democrat Max Baucus. The good senator proposes unprecedented federal regulation of health insurance, something the deep-pocketed industry has successfully fought off tooth and claw for decades, no doubt helped by endless buckets of cash. To date, insurance regulation has existed only at the state level, rendering it largely ineffective. That, of course, was precisely the idea.

Now Baucus proposes to establish a Health Insurance Exchange overseen by an Independent Health Coverage Council. The exchange is simply a national mechanism for matching individuals and businesses with private health insurance plans or with a public insurance option. The council will set premium levels only for the public health insurance coverage.

Here’s where it gets really interesting. Any private insurance carrier offering health care coverage through the exchange will not be allowed to pull stunts like denying coverage for existing conditions or rescinding coverage when policy-holders become sick. Carriers selling through the exchange will also have to meet minimum coverage levels that are determined by the council, not the insurance company underwriters.

So what profit-loving health care carrier would agree to join this exchange? Denying coverage for pre-existing conditions and rescinding it when policy-holders contract major illnesses is precisely how the industry turns a profit in the first place. Insurance companies simply do not want to insure sick people, and if they make that mistake, they get out of it as quickly as possible.

If this proposed exchange prohibits them from such practices, the insurance carriers simply won’t operate there – unless they are required to do so. And if they are legally mandated to operate within the exchange, will taxpayers be liable for private carriers’ losses?

By default, the exchange could very well end up with only the public health insurance option available. That choice would probably cost a lot less and be a lot more comprehensive than anything that private carriers would be willing to sell. Such a situation eventually would spell the end of private health insurance because consumers will abandon the private sector in droves for the best possible deal in health care coverage.

And we end with a single-payer health care financing that is more complex and thus more costly than it really has to be.

The senator’s plan also kind of, sort of, calls for a health insurance mandate, but only after the exchange supposedly makes it possible to purchase quality health insurance at affordable rates. Affordable, however, is yet to be defined.

Democrats will run headlong into a wall of public resistance if they pursue health insurance mandates. For starters, mandates lose their allure once people realize they will have to pay for their premiums if their employer does not or they do not qualify for government subsidies.

According to a January 2008 survey of 600 likely California voters that was sponsored by the Campaign for Consumer Rights, just 16 percent of respondents favored health insurance mandates if there were no limits placed on how much insurers could charge for premiums. Even when the hypothetical mandate included premium price limits, support rose only to 32 percent.

A spokeswoman for Baucus says the senator sees no widespread public support in this country for single-payer health care financing. Perhaps he’s just not looking in the right direction.

© 2008 North Star Writers Group. May not be republished without permission.

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