Weekly Newsletter: March 9, 2009
Government-Run Plan Could Cause Millions to Lose their Current Coverage
Following on the heels of last week’s “health care summit,” both the House Ways and Means and Energy and Commerce Committees will hold hearings this week on health care reform options. However, while President Obama has stated that those who like their current health insurance should be able to keep it, several studies suggest that Democrat health reform proposals may result in significant changes for millions of Americans.
For instance, the left-leaning Commonwealth Fund recently released its own report outlining ways to generate savings within the health sector—one of which involved a proposal, also supported by President Obama, to establish a nationalized health insurance plan to “compete” with private insurance coverage in a new Connector or insurance Exchange. The report’s technical appendix shows that less than one-quarter of those with employer-sponsored coverage—only 37.5 million out of 153.8 million currently receiving coverage through their employer—would maintain that coverage. Virtually all of the rest would have their coverage shifted to the Connector—and, the report notes, two-thirds of those would end up on the government-run program. The appendix also notes that this transition would be far from voluntary; the report projects hundreds of billions in savings for employers, largely “resulting from the shift of employers to the public plan”—in other words, businesses who currently offer coverage “dumping” their insurance plans and placing their employees on the government-run program.
The Lewin analysis of the Commonwealth report echoes a prior study of the Obama campaign proposal to establish a nationalized health insurance plan. That estimate found that up to 118 million individuals would lose access to their current private health insurance if a government-run plan were established, and that more than 130 million individuals would enroll in the nationalized insurance plan.
Based on these data, some Members may be concerned by the implications of creating a nationalized health insurance option, particularly the dislocation of existing workers who may well be satisfied with their current coverage. Members may also be concerned about the budgetary implications of creating such an expansive new entitlement—particularly given Medicare’s nearly $86 trillion in unfunded obligations—and whether this new government program would exercise controls on patient care as the sole means available to slow the growth of costs.
Members may instead support less radical alternatives to the nationalized insurance plan, that would focus more on expanding access to care for individuals of limited means. Providing incentives for low-income individuals to afford coverage, expanding choices for individuals to purchase the plan that best meets their needs, and promoting healthy behaviors would all serve to expand access while slowing the growth of health care costs—alternatives that Members may prefer to a massive new government plan that could harm those happy with their current health insurance options.
Articles of Note: Problems with the Status Quo
Two recent articles, published in the same week, highlight the problems with the health system—specifically, the Medicaid program. In the first, the New York Times cited a report noting that many Medicaid beneficiaries who remain eligible for the program often lose coverage when attempting to renew their benefits due to paperwork and related logistical difficulties. In the second, the New York Post reported on an investigation whereby a single provider billed Medicaid for $1.2 million in allegedly fraudulent claims for prosthetic eyes for patients with normal eyesight.
Reading both these articles, many Members may be concerned that wasteful and fraudulent spending is improperly restricting access to care for millions of Medicaid beneficiaries. Some Members may also believe that instead of spending additional money on the current flawed system—as Democrats did by providing $90 billion in “stimulus” funding for Medicaid—Republicans should explore solutions that can crack down on fraud, improve beneficiaries’ quality of care, and provide options for beneficiaries to voluntarily use Medicaid dollars to supplement private health insurance premiums.
House Republican Conference Chairman Mike Pence wrote an op-ed published in Investor’s Business Daily this week articulating many of these same problems, along with principles for reform; the article may be found here.