Health Care Reform: Diagnose, Then Prescribe

Following the latest Census Bureau report that 47 million Americans are without health insurance, the talking heads and newspaper editorial boards are renewing their call for “something to be done.” Too often, that “something” implies more government spending on health insurance. Unfortunately, that solution fails to address the real problems in health care costs and access.

Those who think that expanding government insurance programs is the yellow brick road to the Emerald City should take off their green-tinted glasses. Higher taxes and putting wealthy families on the government dole will not lower costs or improve quality—and will do little to actually increase insurance coverage. A recent study by Jonathan Gruber and Kosali Simon found that for every 100 individuals added to a government health care plan—Medicare, Medicaid, or SCHIP—60 had been insured by private coverage. This isn’t expanding coverage, it is merely shifting the costs from individuals to the taxpayers.

Furthermore, health insurance should not be confused with health care. As an examination of universal, single-payer systems in Canada, UK, and other nations demonstrates, having insurance does not equate to obtaining care. These countries often have long waiting lists for basic but necessary procedures and provide a lower quality of care. Even in this country, we have longer wait times and lower quality of care among Medicaid recipients than among those privately insured. A universal, government-run health insurance system is not a goal worthy of pursuit.

Some rudimentary questions still need to be better answered before proper solutions can be applied. First, why are many Americans are uninsured? The “47 million” figure represents those without insurance at a given time—only a small fraction of those are what can be called “chronically uninsured.” The 47 million uninsured also includes a large number of illegal aliens and non-citizen immigrants.

Many of the uninsured are already eligible for government insurance—primarily Medicaid—but are not enrolled. Perhaps they are unaware they are eligible, or maybe they choose not to enroll because of the stigma, or even the poor quality of care provided by Medicaid.

Additionally, many of the uninsured are non-poor. Over 14 million of the uninsured are from families earning over $50,000 per year. These persons often choose not to carry insurance, even though they could afford it. Often the high price of insurance—driven primarily by government mandates—makes insurance coverage undesirable, particularly for healthy individuals.

This is not to suggest we do “nothing” about health care reform. But government intervention is the problem, not the solution. To improve the quality of care and lower the costs, we must instead give patients and employers more choices.

Among the most critical reforms is to allow insurance to be sold across state lines. State mandates often drive up the cost of insurance. Many states have more expensive mandates than Pennsylvania, but many states have more affordable insurance. For instance, I recently discovered on eHealthInsurance.com that I could buy the same plan from the same insurance company for half the price if I lived in Ohio as I could in Pennsylvania. Individuals should be able to find the most affordable plan for them regardless of state borders, just as large, multi-state businesses are able to do.

Another simple reform would be to permit list billing. This would allow individuals and families to get their own insurance, and their employer(s) would get a bill. Employers could thus contribute to an employee’s health care without offering a full blown “plan,” and families with two income sources could get health care contributions from both employers.

These reforms are only the tip of the iceberg. Reforming Medicaid to give recipients more control and choice, enacting medical malpractice reform, eliminating tax penalties for those who don’t get insurance from their employer, and giving all persons (including state workers, Medicare, and Medicaid recipients) a health savings account (HSA) option are among the many reforms that Pennsylvanians, and all Americans, need.

Reducing the cost and improving the quality of health care will not be achieved through higher taxes, more government spending, and increased regulation. But giving consumers more control over health care decisions will free the creative power of the marketplace and make health care more affordable and accessible to all Americans.

# # #

Nathan A. Benefield is Director of Policy Research with the Commonwealth Foundation (www.CommonwealthFoundation.org), an independent, nonprofit public policy research and educational institute based in Harrisburg. The Commonwealth Foundation is a member of the Health Care Freedom Coalition, a national network of groups advocating for reform at both the federal and state level to make health care more affordable.