Patient Power

Debunking “Dying for Coverage” (part 2)

Update to: Is being uninsured a fatal disease?

Linda Gorman has once again taken Families USA to task for their bogus research. Last week it was about their claims of Medicaid “cuts.” Most recently, her post at StateHouseCall.org debunks their “Dying For Coverage” articles, which make claims on how many people die from lacking insurance in each state.

The implication is, of course, that if being uninsured kills, then the proper policy is to make sure everyone has insurance! That means that government makes it a crime for people not to buy politician-approved insurance (the “individual mandate”), or the government takes over the insurance industry by becoming the “single payer.” But as I’ve written elsewhere, having someone else pay for your medical care does not guarantee that you get it.

Even if the Families USA studies were true, it does not justify the authoritarian policies they recommend. One could use the studies to motivate people to donate to charities that assist people in buying insurance. But it is immoral to force people to do so.

In any case, on to the debunking!

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Employers & employees save big with HSAs

Check out Linda Gorman’s post on how Manitowoc County, Wisconsin has saved its taxpayers and employees money by offering its employees high-deductible insurance plans and contributing to their Health Savings Accounts (HSAs):

It estimates that employees with family plans will save a minimum of $2,126.70 in cash compared to what they would have paid under the old low deductible with co-pay plan. The County’s cash savings per family plan are projected to be $5,941.80 a year.

It worries me that Democrats in DC are pushing legislation that would effectively kill HSAs.

Linda has also pointed out that enrollment in HSAs increased by more than 35% in 2007. The April 29 Consumer Power Report (not on-line yet) from Consumers for Health Care Choices summarizes:

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Instead of HB 1389: Show politicians’ guilt for costly insurance

The Rocky Mountain News published my letter to the editor on Tuesday (print & on-line).

Darla Stuart (Speakout April 22) writes that since “Colorado’s citizens and businesses deserve to know the real cost of the health-care insurance,” politicians should force insurance companies to provide “transparency.” But we really deserve to know how politicians have inflated insurance costs in the first place.

Tax policy encourages employer-based insurance, which essentially chains us to one insurer. Shielded from competition, insurers need not compete on price very much.

State-level bureaucrats succumb to special interests by burdening small-group policies with many benefits we do not need. The Congressional Budget Office reports that such mandated benefits increase premiums by at least six percent [p. 16, 20], and possibly more than ten. It also reports that community rating laws increase premiums by nine percent [p. 16].

What’s becoming increasingly transparent is where allegedly well-intentioned controls like House Bill 1389 will lead: politician-controlled health care and insurance where bureaucrats make decisions that rightfully belong to you and your physician.

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“Kisses of death” attack SB-217’s “Value Benefit Plans”

The core of Senate Bill 217 (previous posts here) are so-called “Value Benefit Plans” that are supposed to be taxpayer-subsidized plans for low-income individuals and families. These plans are free from the dozens of mandated benefits that drive up the cost of insurance in the individual and small group market. Insurance companies would submit such plans to the legislature, who would give the companies permission to sell them – but only to “low-income” individuals.

During the April 9 hearing on SB-217, Senator Hagedorn himself admits that the “kiss of death” to his Value Benefit Plans would be “to load up mandates.”¹ Ironically, as Mark Hillman has noted, there were about a dozen of them in Hagedorn’s original proposal.

This is a real risk. As Ari Armstrong notes in his excellent overview of what’s wrong with health care policy,

once politicians force you to buy something, special-interest groups will constantly fight to include their pet service as part of the forced package, whether you want it or not. The result will be continual pressure to expand the scope of the forced insurance and make it ever more costly.

Indeed. The Denver Business Journal reports that this is already happening:

Another House provision would direct the panel to consider plans that cover hospice and palliative care, which specializes in the relief of pain from serious illnesses. Critics say that will drive up the costs of the plans, which were originally conceived as a low-cost option for people who need minimal coverage. Hagedorn is said to be unhappy with the House’s changes to the bill.

¹ Source: Personal notes from the hearing. I have not acquired the recording.

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The uninsured cost-shift scam

When is it OK for someone to confiscate $400 from you each year, and claim that it’s the moral thing to do, because it saves you $85? Typically such scam artists would end up in prison. But in this case, the perpetrators are Colorado politicians and the backers of Senate Bill 217 (news). This bill tries to smuggle compulsory insurance into Colorado, hence making it a crime for Coloradans not to buy insurance approved by politicians and the special interest groups they pander to.¹

One of the popular justifications of compulsory insurance is the “cost-shift from the uninsured” and that forcing everyone to buy insurance (defined by politicians, of course) would make individuals “responsible.”² The story is that the uninsured get medical care without paying, which increases premium costs for the insured. So why not simply force everyone to buy insurance?

First off, it’s a non sequitur. As I’ve written before,

holding people “responsible” would mean punishing freeloaders themselves and allowing providers to prevent freeloading. … What if we applied this rationale to freeloaders who leave restaurants without paying the bill? This certainly increases prices, but forcing all citizens to buy “diner’s insurance” punishes the innocent.

And even worse, how much is this cost shift anyway? And how much is it compared to proposed health care reforms? As the following video shows, it’s just $85 annually per privately-insured resident.^3,4 That’s just one percent of an average premium.⁵ Mandated benefits laws increase premiums by at least 6%, and possibly more than 10%!

Worse yet, as I write below the video link,⁶ health care reform plans to remedy this are budgeted to cost each insured Colorado resident at least $400 per year!

The compulsory insurance proposal (with tax-subsidized premiums) by Colorado’s Blue Ribbon Commission on Health Care Reform would cost taxpayers more than $1 billion annually. Senator Bob Hagedorn’s Senate Bill 217 is similar. It would cost taxpayers $1.23 billion per year, reports the Rocky Mountain News. This tax would exceed $400 per privately-insured Colorado resident.

References:

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FamiLIES USA and Medicaid “cuts”

The essence of lying is the intent to deceive.

Families USA has issued a press release claiming that the Bush Administration’s FY2009 budget contains “cuts in federal Medicaid payments.” Yet, as Linda Gorman points out at StateHouseCall.org (and in the Rocky Mountain News), these “cuts” are merely reductions in how fast Medicaid’s budget will continue to grow:

…the Bush Administration has not proposed Medicaid budget cuts. Its FY 2009 budget proposal increases Medicaid spending by $12 to $13 billion over expected spending in FY 2008. This is in addition to FY 2005-2007 spending increases of about 10 percent. What the Bush Administration is proposing is a slightly smaller budget increase, about 7.1 percent rather than 7.4 percent. The 2009 budget numbers are available from the federal government here on page 61.

If Families USA and its fellow travelers were a real family making $50,000 a year, these budget numbers would be the equivalent of having an expected windfall of $53,700 reduced to $53,550. This small reduction in the rate of federal spending will, the people of Colorado are being told, cost Colorado “more than 3,500 jobs and an accompanying $135 million in wages,” a neat trick given that Colorado is not an entity and does not earn wages.

If a newspaper in your area reproduces this nonsense, perhaps it should be politely reminded Families USA is known for approaching health care with a well defined ideological slant and for producing lousy numbers on all manner of health care issues. It might also be asked to check before reproducing Families USA press releases as news.

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Medicaid Billing : nothing simple about it.

Advocates for more government control of health care like to say that having only one “insurer” will simplify billing. For a brief introduction to their 68-slide version of simple billing, browse through the Colorado Medical Assistance Billing Program 2007 Practioner Billing Workshop, available here.

Administrative overhead anyone?

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Gorman on SB-217 & Compulsory Insurance

Last Sunday the Pueblo Chieftain published a commentary on Senate Bill 217 and compulsory insurance by Linda Gorman, Director of the Independence Institute’s Health Care Policy Center. Some highlights:

With Senate Bill 217, which has passed the Colorado Senate and awaits House action, state lawmakers who believe that higher taxes and more spending constitute health care reform have sunk to new depths of legislative trickery. …

SB217 creates a Connector program, “health marts” “through which an individual eligible for the state subsidy may select” one of the state designed “Value Benefit Plans (VBP).” The health insurance offered through VBPs would be designed by a government committee. …

If the governor agrees with the expert recommendations, and he will, SB217 would require that they be submitted to the Legislature on the “third legislative day” of the 2010 session. They then would pass through the Legislature like grass through a goose. People in favor of tax and spend health care reform know that the more voters know the less they like tax and spend reform. Speedy passage limits public debate.

Speedy passage reduces the possibility that people might find out that individual mandates are failing in Massachusetts, where about 20 percent of the uninsured already have been exempted because buying insurance costs them too much. They might be reminded that insurance is not health care, especially when Massachusetts controls costs by cutting payments to doctors, creating a shortage of doctors in the program and ridiculously long waits for care.

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McCain in Denver this Friday

From the Denver Post:

John McCain, the presumptive Republican presidential nominee, will hold a town hall meeting on health care Friday in Denver, his campaign says. …

They want government to make the decision,” the Arizona senator was reported as saying, “I want the family to make the decision as to what kind of health care they want for their children.”

McCain has said he favors giving families tax credits to allow them to buy health insurance on the open market and to allow them to seek out health providers outside their state. Critics say such a policy would translate into states dropping protections and regulations to remain competitive.

The Denver event is open to the public and starts at 10 a.m. at the Robert E. Loup Jewish Community Center, 350 S. Dahlia St. Because McCain is protected by the Secret Service, Benton advises attendees to arrive at 8:30 a.m.

My brief analysis of McCain’s plan:
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SB-160: Compulsory charity immoral & impractical

Earlier this month The Rocky Mountain News published a commentary of mine about the inherent immorality of government-run charities (in this case, those for children’s health insurance) and a proposal to challenge such charities to compete with voluntarily-funded charities.

The budget: An “immoral document”

A “moral document.” This is what Colorado House Democrats called their budget, which seeks to expand government-run children’s health insurance through Senate Bill 160. This moral grandstanding is typical of the anointed, who support expanding Medicaid and the State Children’s Health Insurance Program (SCHIP) — and it’s nonsense. There’s no compassion or virtue in spending other people’s money taken by force.

If a thug forces you to donate to charity, does that make either you or the thug virtuous or compassionate? What if this charity unfairly competes with voluntary charities, fosters dependency of recipients, encourages people to stop buying private insurance, and is run by a government that makes insurance expensive in the first place? All of these apply to Medicaid and SCHIP, which are government-run charities.

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