In a party not lately known for strategic thinkers, Rep. Paul Ryan (R-Wisc.) stands out among Republicans. His is the handsome face the GOP appears to be pushing forward to make it appear that - yes, America - the Republican party recognizes that we need to do something about health care.
In an op-ed piece, "Fix Health Reform, Then Repeal It," in the New York Times, Ryan recently outlined his vision:
When helping Americans with pre-existing conditions obtain coverage, we should focus on innovative state-based solutions, including robust high-risk pools, reinsurance markets and risk-adjustment mechanisms. I intend to continue advancing true patient-centered reforms like attaching tax benefits to the individual rather than the job, breaking down barriers to interstate competition, and promoting transparency and consumer-friendly coverage options.
We should ensure that health care decisions are made by patients and their doctors, not by bureaucrats, whether at an insurance company or a government agency. By inviting market forces into health care, we can encourage a system where doctors, insurers and hospitals compete against one another for the business of informed consumers.
The surface plausibility of Ryan's argument breaks down when you begin to deconstruct the true meaning of the terms of art he uses in his op-ed piece as well as the more detailed plan he has put forward on his website.
Take "innovative state-based solutions" and "breaking down barriers to interstate competition."
Insurance companies would love nothing more than to shake off the chains of tough state insurance regulation and base their operations in states such as Louisiana, which under its Republican governor, Bobby Jindal, is notoriously lax in that regard:
Louisiana has been in the fore front of this laissez-faire approach to insurance regulation. In most states, companies selling automobile and property insurance have to apply for approval of any rate increase to the insurance department in any state where they want to sell insurance. Not in Louisiana. The Insurance Rating Commission was abolished last year, and companies are free to raise their rates on a regular basis.
In virtually every other state in the country, there is a consumer protection office, often located under the office of the Governor or the Attorney General, which independently checks and audits to be sure that regulated companies are following the law. That would apply not only to insurance companies, but also to utility companies that have a monopoly operating in certain areas of the state. But not in Louisiana. There is no independent check and balance. And the loser, of course, is the policy holder, the ratepayer, the consumer.
Ryan dispenses the customary Republican bromide about "health care decisions [being] made by patients and their doctors, not by bureaucrats." Then, he artfully gets down to his real objective: "inviting market forces into health care [to] ... compete against one another for the business of informed consumers."
In his blissful vision of the market freed from the shackles of demonic "bureaucrats," Ryan treats health insurance as if it were breakfast cereal - just another product that "informed consumers" can take from the shelf and drop into their shopping carts.
The problem with that simplistic notion is that health insurance is unlike any other consumer purchase. If you don't like the ingredients listed on the cereal box, you can buy something else. If you don't like the taste, you can buy a different product the next time you shop. With private health insurance, you and - more to the point - your medical record essentially lock you into the company that provides your policy. If you change employers, lose your job or go into business for yourself, prospective insurers will scrutinize your application and the medical records of you and your family to figure out whether you are likely to generate more revenue in premiums than they might have to pay out in benefits. As I pointed out ("Your Health Insurer Will Screw You") some months back, the only benefits insurers care about appear on their bottom line.:
For-profit companies make money three ways:
First, they use medical underwriting, which is industry shorthand for finding ways to reject those applicants most likely to need care. Not only people with serious illness are denied insurance; so are individuals who may be 20 pounds overweight as well as those with acne or an old athletic injury.
Second, health insurers routinely weasel out of, or delay for months - even years - making payments for valid medical and hospital claims.
Third, they look for plausible reasons to reverse payments they have already made on your behalf. These reversals can occur one or more years after you thought your bill had been paid. And when a physician or hospital has to refund a payment, guess who gets the bill. You.
And it doesn't stop there. Investigative units routinely look at individuals who have been seriously ill to see if there's anything in their medical or prescription history they can use as a pretext to terminate their insurance. The industry term is "rescission."
If Rep. Ryan is typical of other members of Congress, he and his family get their health insurance through the U.S. Office of Personnel Management and its Federal Employees Health Benefits plans. Private insurers compete for each member's business but can offer only plans that have been accredited by an independent, nongovernmental organization to eliminate deceptive language and allow individuals to make their selection from plans that are truly comparable.
Though Ryan himself can benefit from accredited plans that offer consumers genuine protection, his plan for America would throw out not only strict federal oversight; it would undermine the power of state regulators over policies issued to their residents by other states. The result of Ryan's vision would be a race to the bottom that the insurance industry would love.
Perhaps, that is one of the reasons that Ryan is so highly treasured by the insurance industry. According to OpenSecrets.org, the nonpartisan group that tracks political money and influence, insurance interests have been Ryan's single largest source of campaign funds ($534,071) since 1989. In preparation for his reelection race this fall, insurance companies have already contributed $102,220 (as of February 21, 2010).
Ryan may sound more reasonable than House Minority Leader John Boehner (R-Ohio), whose "Hell, no, you can't" has become a YouTube sensation. In the end, Ryan's health-care plan is the same old Republican snake oil; only the vial is different.