Mandatory insurance takes what's wrong with health insurance and makes it worse. It means higher costs, less incentive to please patients, and the prohibition of affordable insurance plans. Amendment 63 would block Colorado politicians from imposing mandatory insurance. It would also prevent the feds from pressuring the Colorado legislature to enforce Washington's version of it.
In opposition, Edie Sonn of the Colorado Medical Society says Amendment 63 "will lead to higher health care costs for insured individuals and businesses as they are forced to absorb the costs of the uninsured." This cost-shifting argument is both wrong and deceptive. Mandatory insurance will increase costs and impose much larger cost shifts.
President Obama says we're "paying 900 bucks on average" because some uninsured patients don't pay medical bills. He's referring to a Families USA study that Independence Institute economist Linda Gorman has shown to be highly flawed. The study over-estimated the cost of uncompensated medical care. It "disregarded categories accounting for roughly 33% of the payments" for the uninsured such auto insurance, community health centers, and various government programs.
The cost shift is no more than $85 annually per insured Coloradan, according to the Lewin Group's 2007 "Baseline Coverage and Spending" report for the Colorado Blue Ribbon Commission. This is consistent with a recent Kaiser Family Foundation Report, which concludes that it's at most "1.7% of private insurance premiums."
This amount is trivial compared to how much mandatory insurance increases premiums. Consider Massachusetts, which has mandated insurance since 2006. The most affordable plans sold through Massachusetts' insurance exchange cost almost three times more than those available in Fort Collins. The Boston Globe reports that the premiums in Massachusetts are the highest in the country and emergency room visits and costs have increased. The Massachusetts Medical Society reports "long waits, more practices are closed to new patients" for primary care.
Mandatory insurance is like pouring gasoline on a fire. It entrenches the main cause of high health care and insurance costs: the patient is rarely the paying customer. Health care prices decrease or stabilize when patients pay, rather than insurers. Examples include Lasik, cosmetic surgery, and whether you like it or not, abortion.
But patients are rarely customers because the tax code and other controls favor excessive insurance. The typical health plan is not insurance, but prepaid health care. If car insurance worked this way it would cover routine and predictable expenses such as oil changes and new brakes.
Prepaid health care insulates patients from the true costs of treatment. Patients are typically indifferent to prices or more affordable alternatives. Since the patient isn't paying, physicians have an incentive to exaggerate diagnoses such that third-party payers (insurers, Medicare, Medicaid) will finance expensive treatment. Prices of health care and insurance soar as a result.
Mandatory insurance makes this worse by banning lower-cost insurance policies. Politicians mandate costly benefits and limit deductibles, which both increase premiums and further distort insurance into prepaid health care. A typical mandated benefit increases insurance premiums by about 0.75 percent, concludes a 2008 study led by MIT economist Amanda Kowalski.
Legal health plans under the Obama health control law must include at least ten mandated benefits such as laboratory and preventive services (HR 3590, sec. 1302). If you paid cash for such services you'd make sure they were necessary and mind the price. Such discretion isn't needed if your health plan pays. Demand for services increases, as do wait times and costs.
The CMS opposes Amendment 63 by objecting to cost-shifting. But mandatory insurance does this, too. Instead of saving money to self-insurance, banning lower-cost policies makes people buy more costly and comprehensive insurance than they'd like. This is like requiring minivan owners to pay the same car insurance premiums as Porsche owners.
For more affordable insurance and health care, politicians should repeal damaging political controls, not add them. For example, they should change the unfair pro-insurance tax code so it no longer punishes people for paying cash for medical care. Also, allowing people to buy more affordable policies sold in other states would decrease the number of uninsured by millions.
There's no right to medical care, but we have the right to seek it through voluntary exchange. Colorado Amendment 63 would protect Coloradans from politicians seeking to violate this right.
Versions of this article were printed in the Colorado Springs Gazette, the Colorado Daily, and the Denver Daily News.
Follow Brian T. Schwartz on Twitter: www.twitter.com/wakalix
It not only says you must buy it, it says you must buy it from the monopoly holder. Who can now price gouge because he has a captive customer base.
This is why we do not allow this situation to arise. We either outright move something into the public sphere or we allow private industry to run it in a heavily regulated way. As in, if they want to raise their prices they have to go before a government board and *ask permission* to do so.
Water, for example, is something that everyone must buy ... even if you just drink soft drinks they are made from water. There is no "mandate" that you buy it, you just have to or you'll die. Period. Furthermore, it doesn't make any economic sense to have competing water systems in a city. The infrastructure requirements are simply to high. So you are going to have one water system per city.
And that system can NOT be run by a private, for profit, industry. Even ignoring price gouging, imagine having the power to shut off the water to the house of anyone you don't like. No showers for them. The amount of power it would give the owner over the residents of the city is intolerable. We don't allow that kind of thing in America.
Which is why I was shocked that they let the public option die.
http://www.patientpowernow.org/2009/09/mandatory-auto-insurance-justify-mandatory-health-insurance
and
http://www.patientpowernow.org/2008/04/medical-insurance-auto-insurance/
Personally, I despise insurance companies ( and have several horrifying experiences), but there has to be some way other than the status quo to deal with the millions of uninsured people out there.
And for the record I'm for universal health care, but obviously this country is not rational enough for that.
You don't have competition in health insurance because of the way physician networks work. I *could* but insurance from, say, Horizon, but my physician here would not accept it. It takes trained staff to process insurance claims and since each companies paperwork is different a given person can only know so many. So a given doctor's office can only afford to hire enough medical secretaries to process a few forms of insurance.
There are two ways to inject competition into this system in our state and make this situation work for us.
1 - By force of legislation demand that all insurers operating in Colorado must accept a standard claim submission form and accept binding arbitration by a special, dedicated, SPEEDY ( cause with medical stuff waiting is not always safe ), Colorado court for any disputes in coverage. Thus the process of submitting a claim to any of them or arguing about a claim with any of them would be identical and all doctors could accept all forms of insurance.
2 - Create a statewide public option with non-profit pricing and make it available to all Coloradans. Yes, that means making the for-profit compete with a non-profit. But if the "inherent inefficiencies of government" leave them a profit margin in their competition that is fine. And if a solid government run insurance program runs them out of business by just flat out being better ... good.
They have the right to their opinion, but if you believe that government needs to be 100% out of healthcare, then are you also saying that there should be NO SUBSIDIES for GME, no medicare, no medicaid, no research dollars, etc. This should be an ALL or Nothing vote, not a rant against the HealthCare reform act.
The mandatory insurance idea forming the core of ObamaCare has already been tried -- and failed -- in Massachusetts, resulting only in skyrocketing health costs, a desperate shortage of doctors, and significantly longer waits for medical care than in the rest of the country. Some Massachusetts patients must now wait almost a year for a routine physical exam.
As a practicing physician, such Massachusetts-style problems are the last thing I want here in Colorado. Colorado voters can avoid the mistakes of Massachusetts by supporting Amendment 63.