The Senate Finance Committee recently began considering a health care reform bill written by its chairman, Senator Max Baucus.
That bill has been touted as a more moderate alternative to the more costly and intrusive health care plan President Obama advocates.
But the chairman’s bill, though it does not include a government-run health insurance company, would still lead to a near total Washington takeover of health insurance, and, therefore how Americans get their health care.
How would it do this?
First, it would require all individuals to purchase government-approved health insurance.
This mandate would eliminate many low-cost plans and force all Americans to purchase plans with coverage they may not need, want, or even be able to afford.
In a new paper, Michael Cannon, a health-policy expert at the Cato Institute, writes that that this mandate “would be an unprecedented form of federal action … and would mark a radical change in the relationship between American citizens and their government.”
The penalty for not purchasing government-approved insurance will be a steep fine, collected by the Internal Revenue Service. National Review describes the fine as “nothing more than a hefty, regressive tax on low and moderate wage working Americans.” Clearly, many of the very Americans the bill purports to help will be among those most hurt by this provision.
Washington’s control would also be enforced through a new regulatory entity, called an “insurance exchange,” where small business and individual market policies must be sold.
The exchange would impose a new set of federal regulations that dictate everything insurers can and must do. Among them are defining how companies calculate premiums, forcing them to offer two government-specified plans, and restricting them from offering more than four types of insurance plans, regardless of consumer needs or preferences.
Proponents of this nearly $1 trillion bill claim it will reduce health care costs. But when huge new taxes are imposed upon insurance plans, insurers, and medical-device makers, how can anyone doubt costs will increase for patients? It’s common sense.
The fact is, massive new regulations, taxes, fines, and mandates will only increase costs for everyone.
Consider a real example: What would happen to a young family of four, with two 35-year-old parents, that wants to buy a Cigna PPO plan from the individual market with a $2,000 deductible? That plan currently costs the family $512 per month in Phoenix, Arizona. If the reforms included in the chairman’s bill were implemented, the price of its plan would nearly double to $998 per month. Insurers would not be allowed to charge according to risk, so a low-risk family such as this one would pay more to make up for coverage needed by others.
Politicians and bureaucrats will no doubt try to mitigate the cost increases, and are likely to do so by delaying and denying care. The chairman’s proposal already includes provisions that cut Medicare benefits.
Eventually, when health care spending threatens to take over the federal budget, Congress will likely impose new restrictions on other patients, as well. No longer would families and doctors have the final say. It’s hard to believe this could happen in America.
Republicans believe we don’t need to destroy what works for most Americans to achieve health care reform. And we believe we must protect seniors’ Medicare Advantage program that would see a $120-billion, 10-year cut under this proposal.
We believe in patient-oriented reforms that would lower costs and improve access. Our proposals include passing comprehensive medical malpractice reform, allowing small businesses to band together to buy insurance at discounted rates just as large companies do, and allowing all Americans to buy lower-cost insurance policies from any state.
We want to empower patients, families, and doctors, not federal bureaucrats.
Sen. Jon Kyl is the Senate Republican Whip and serves on the Senate Finance and Judiciary committees. Visit his Web site at www.kyl.senate.gov or his YouTube channel at www.youtube.com/senjonkyl.