You Will Lose Your Private Health Insurance
By Robert Tracinski
Before Thanksgiving, the Senate voted to opening debate on President Obama's health-care bill, and that debate has begun in earnest this week.
Well, if they want a debate, let's let them have it. But let's not get distracted by the sideshows Senate Majority Leader Harry Reid has planned for us.
Forget about abortion. Of course the left will accept restrictions on funding for abortion, because they want to keep moderate Democrats on board for the goal they know is really important: giving the government a dominant role in health care. Everything else is just details, and funding for abortions is an issue to which the left can return at leisure later on-once government is firmly in charge of everything.
And don't bother debating the "public option," either, because it's already dead; enough Democratic senators have come out against it. But Harry Reid is all too happy to have a debate over the public option so he can make a show of "compromising" and giving it up. And while we're having that fake debate, he's hoping that we won't be challenging everything else in the bill.
So let's get straight what the real essentials of the bill are-and how disastrous they are.
Three provisions constitute the vicious heart of the Democrats' health-care overhaul.
The first is "guaranteed issue" and "community rating." This is the requirement that insurance companies have to offer coverage to people who are already sick, and that they be limited in their ability to charge higher rates for customer who pose a higher risk. The extra expense to the insurance companies of covering people with pre-existing conditions will get passed on to existing customers in the form of higher premiums. But why spend years paying these inflated premiums for insurance you're not using, when you can get exactly the same benefits by waiting until you actually fall ill? The obvious result is that million of people, especially healthy young people, will quickly realize that there is no reason to buy health insurance until they get sick.
Rather than increasing the number of insured by making health insurance more affordable, this bill makes health insurance more expensive and increases the incentive to simply drop your insurance until you need someone to pay for your medical bills. It is an attempt to turn health insurance into what the left really wants: another welfare program in which everyone is entitled to free benefits, mandated by the government. But this would wreck private health insurance, making the whole industrial financially unsustainable.
Following the usual pattern of government intervention, the health-care bill offers another intervention as the solution for the problem created by the first. The "individual mandate" requires everyone to buy health insurance and subjects us to a tax if we fail to do so. But this is an especially onerous new tax, the first tax not tied to any kind of income or activity. It's not a tax on stock-market profits, say, or a tax on buying cigarettes. It's just a tax for existing.
So fearing a public backlash, Congress didn't have the guts to make this new tax very large-only $750. Yet actual insurance can cost more than $3,000 per year-and as we shall see, this legislation goes out of its way to drive up those rates by mandating more lavish coverage. So we end up getting the worst of both worlds. This provision won't actually drive anyone to buy health insurance and prop up the risk pools for those who are insured. All it will accomplish is to create a brand new form of tax.
But the biggest power-grab in the bill is the government takeover of the entire market for health insurance. The bill requires all new policies to be sold on a government-controlled exchange run by a commissioner who is empowered to dictate what kinds of insurance policies can be offered, what they must cover, and what they can charge.
Right now, your best option for reducing the cost of your health insurance is to buy a policy with a high deductible, which leaves you to pay for routine checkups and minor injuries (preferably from savings held in a tax-free Health Savings Account) but which covers your needs in catastrophic circumstances-a bad car accident, say, or expensive treatment for cancer. This is the kind of coverage I have.
But the health-insurance exchange is intended to eliminate precisely this kind of low-cost catastrophic coverage. Its purpose is to force health-insurance companies to offer comprehensive coverage that pays for all of your routine bills-which in turn comes at a higher price. So under the guise of making health insurance more affordable, this bill will restrict your menu of choices to include only the most expensive options.
So there we have the real essence of this bill. It restricts our choice of which insurance to buy and pushes us into more expensive plans. At the same time, it destroys the economic incentive to purchase insurance in the first place and replaces insurance with a free-floating tax on one's very existence.
By all means, let's debate some of that in the Senate.
When you understand what this bill does, you can see why the Democrats would be happy to compromise and drop the public option-for now. This bill so comprehensively wrecks private health insurance that pretty soon a "public option" will seem like the only alternative, and they will already have put into place one of the new taxes needed to pay for it. If the left's goal is to impose socialized medicine in America, this bill does it in the most callous and destructive way possible. It smashes private health care-then leaves us stranded in the rubble, at which point we will be expected to come crawling back to the same people who caused the disaster and ask them to save us.
That is the final and perhaps most compelling reason to kill this bill: the sheer arrogance of the whole enterprise. It is the arrogance of stampeding an unwilling public toward a monstrous 2,000-page piece of legislation while admitting that it still has huge problems, but promising that it will all somehow be fixed later on. It's the arrogance of selling us a bill that expands government spending by hundreds of billions of dollars while telling us that it will reduce the deficit. It is the sheer unmitigated gall of appointing a bureaucrat to run a government-controlled insurance market that takes away all of our health choices-and then calling this bureaucrat the Health Choices Commissioner.
That's the kind of government arrogance that has to be smacked down hard, and that alone is reason to demand that your senator reject this vicious bill in its entirety.
Robert Tracinski writes daily commentary at TIADaily.com. He is the editor of The Intellectual Activist and TIADaily.com.