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The Choice Should Be Yours

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Polls show that Americans are really happy with the health insurance that they are getting from their employers; therefore health reform must protect these benefits by making it impossible for Americans to choose anything else.

I am mystified by this argument.

The logic is that, given the choice, millions of Americans would drop their employer provided benefits thus triggering some sort of employer-based system "death spiral." As scary as that sounds, how does it make sense? If Americans are really happy with the health insurance that they are getting from their employers, why would they choose something else? Moreover, if one of health reform's goals is to ensure that Americans are happy with their health insurance, why NOT let them choose something else if it would make them happier?

Americans are free to choose everything from what they eat, drive and watch on TV to the President of the United States. Yet, when it comes to allowing Americans to choose the health insurance that works best for them and their family, the freedom to choose suddenly becomes un-American. What is "uniquely American," some argue, is not the freedom to choose, but the employer-based health care system, which they say needs to be protected so that Americans won't lose the health benefits that they have today.

I agree with just about everyone in the reform debate when they say "If you like what you have, you should be able to keep it." But the truth is that none of the health reform bills making their way through Congress actually delivers on that promise. What the legislation guarantees is that your employer will continue to choose your health insurance plan for you. Just like today, your employer will still be able to drop coverage or change health insurance plans at ANY time and if for some reason you lose your job or change jobs, you are still going to lose the health benefits that you had with your employer. So, if you like the health insurance plan that you have, you will be able to keep it, as long as your employer chooses to keep it and/or you don't lose your job.

While it's likely that reform will expand health care choices for more employers by giving them access to the new health insurance exchanges, your company's human resource department will still be the one choosing whether or not to take your company to the exchange just as your human resource department will be the one picking your plan in the exchange. You may want the public option, but as the bills are currently written, if your company's benefits manager picks something else, you get something else.

Now, what does this mean? It means that under a new system, you will have the same inability to hold your insurance company accountable that you do today. Let's say that your health insurance company is denying your claims, raising your rates or just being rude to you on the phone, what can you do about it? If your car insurance company was doing any of those things, you could threaten to change plans. Make that same threat to your health insurance company and you're likely to get laughed at because most Americans don't have the ability to take their business elsewhere because most Americans are stuck with the plan that their company's benefits manager chooses for them.

Denying Americans the ability to make their own health care choices will also limit the impact that innovative new approaches like the public option will have on the system as a whole. For example, under the House Bill, the public option will only be available to the less than 30 million Americans who will be allowed to choose insurance in the exchange. CBO estimates that out of that 30 million in the exchange only 6 million Americans would enroll in the public option. How will competing for a fraction of the customers in this market have a significant impact on an insurer like UnitedHealth Group which will be guaranteed to keep the majority of the 73 million customers that it already has outside of the exchange? (And, as the CBO estimates, limiting the public option and the exchanges to what may ultimately be a less healthy population could result in a public option that charges "higher premiums than private plans.")

Now imagine if YOU, rather than your company's benefits manager, was in a position to choose the health insurance plan that works best for you. As a member of Congress, I get to do this every year. I log onto a website where I can easily compare a variety of health insurance plans on the basis of how much they cost and what benefits they cover. I can find out which plans will cover visits to the doctor/s I want to see. I can even see what percentage of customers are satisfied with a given plan.

How does this hold insurance companies accountable? Well, under today's system, if an insurance company wants to attract new business or keep their customers, all they have to do is win over a company's benefits manager. (Dinner, golf, maybe tickets to a sporting event are all acceptable strategies.) But if all Americans are empowered to choose the health insurance plan that works best for them, insurance companies suddenly have to win over Americans not just to attract new business, but to keep the business that they have. Insurance companies will need to start competing with other insurance companies to offer more affordable rates. They will have to start worrying about their customer satisfaction ratings. Knowing that you can take your business elsewhere, these companies will have to think twice about raising your rates or denying your claims or even being rude to you on the phone. They might even have to innovate new ways to keep you -- not your company's benefits manager - happy and healthy.

One analysis found that even just giving Americans a choice in where they get their health insurance could save Americans and their employers (because more choices and competition is good for business too) as much as $360 billion over ten years. This can be done within the employer-based health insurance system by making it possible for employers to convert the tax-free money that they used to subsidize employee health plans into vouchers that their employees can use to choose their own health benefits. Employers can still attract employees by offering good health benefits, but now they could also attract employees by offering more health care choices.

Who would oppose such a plan? Well, benefits managers were the first to complain. They argue that giving every American even just one choice would "have a major adverse impact on employer-sponsored health coverage." But again, I don't see it. There are risk-adjustment and reinsurance provisions in the bills designed to protect employer plans in the unlikely event that all of a company's healthy or sick employees decide to choose something else. Countries like the Netherlands have been successfully adjusting for risk for years, so I am confident that the U.S. can make it work too. But I don't see why Americans if they really are so happy with the health benefits that they have today are suddenly going to rush to choose something else. I also don't understand why we would want to create a system that would force people to keep health insurance that they don't like.

If you like the health insurance that you have you should be able to keep it, but if you don't like the health insurance you have, you should be able to choose something else.