The House Health Care Bill: Preemptive Gouging and Other Failures

With the announcement that a public option was included in the House health care reform bill introduced Oct. 29, you would expect Americans to be elated. Now we are going to get choice and competition so every single American can access and afford health care. Health care as a right has finally arrived you say? But -- wait a second. With its 1990-page tome (my computer crashed and burned trying to open the document; this was besides trying to print it out), the House has sold the concept of health care for all down the river.

Because it won't take effect until 2013, the bill allows insurance companies to undertake a strategy one of my colleagues now calls "preemptive gouging." Before such a plan takes effect, the insurance industry will jack up rates and premium costs in order to recoup revenues that may be lost from the day the legislation takes effect. Thirty-six months seems like a good period to take real advantage of all Americans by charging unimaginable rate hikes. If you don't believe me, open your mail this autumn to find your annual health insurance renewal notice. Another of my colleagues, a highly successful Chicago-area small business owner in the catering business with 12 employees, just received a 47 percent increase in premiums over last year for his company's health policy. Yes, you are reading me right -- a 47 percent rate hike! And when he investigated how he could lower his premium, he was told -- hire younger and healthier workers. What bunk. We must now demand that any health care reform includes in it language that bars insurance companies from preemptive gouging. That is, what the banks and their credit card companies are doing now with new costs and fees, all to collect more revenues before the new regulations go into effect next February that will cap interest rate charges.

Next, the new house bill mandates coverage for 30+ million more Americans. Hooray, right? Nope. Insurance executives must be licking their chops, knowing that they will insure millions more Americans, and, with them, collecting millions (billions?) more in premium revenues without really any stiff competition from a watered-down public option.

The type of public option created is also one where rates will be negotiated, just like in the private markets. This option will cost $85 billion more than what had been seen as the most cost-effective plan in either Congressional chamber, a Medicare reimbursement schedule plus 5 percent. So will we have true choice and competition that drives down the cost of premiums? No way.

What about the new insurance regulations, like no more worry over pre-existing conditions to bar coverage? Great news, huh? Wrong again, at least in the near term. It is one of the pieces of the House plan that doesn't take effect until 2013. How odd when legislation can take effect immediately upon it being signed into law.

The House bill includes lifting the antitrust exemption. But with the public option looking just like a private market offering, lifting this exemption will have the look of Swiss cheese- - - - full of holes.

And we cannot forget about just how many citizens will have the ability to obtain the public option. Far fewer than we think.

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