RALEIGH – After a brief respite in the mid-1990s – as the new managed-care networks succeeded in negotiating a one-time reduction in reimbursements – health insurers and employers are again facing double-digit growth in cost. So why aren’t those who favor socialized health insurance, the so-called “single-payer” option, jumping for joy at their newfound opportunity to denigrate private insurance and promote new versions of their pet (kooky) idea?
Because employers and employees are beginning to react to the new health care environment in ways diametrically opposed to the old notion of swapping a private sector bureaucracy (the HMO, sheltered by government tax advantages) for a public-sector one. As reported in The Wall Street Journal, USA Today, and Health Care News (see www.heartland.org/health/whatis.htm), an increasing number of companies are moving toward a “defined contribution” model for health care, providing employees with tax-free funds with which they can purchase a private plan or medical savings option of their choice.
Real patient power would be a fatal blow to the trial lawyers, health care socialists, and others out to get the private insurers. If families have alternatives, and are not shackled to one employer plan or a government monopoly, they can stop around for the best plan and network for them. This would be a real “Patients’ Bill of Rights,” as contrasted with the various versions of a Trial Lawyers’ Bill of Wrongs moving through Congress and state legislatures.
With defined contribution, families also face financial incentives not to consume care on the margin, which is the key to holding down overall medical inflation. We now have decades of experience and research to show that patients will forego medical procedures with limited value if they face at least some of the marginal cost – without sacrificing their health outcomes.
Patient power would be significantly enhanced by changes in the tax code to allow everyone to deduct or receive a credit for a portion of their health care spending, rather than making such tax relief – worth thousands of dollars a year to many families – conditional on enrollment in employer-sponsored plans or government programs like Medicare and Medicaid. That’s why Democrats fought last year’s Republican bill on economic stimulus so vociferously. The bill would have given newly unemployed persons the same health care tax breaks that others enjoy through workplace insurance. Democrats wanted to shepherd these little lost lambs into Medicaid.
Thanks, but no thanks.