Opinion
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So crazy it just might work
By: David Freddoso
Commentary Staff Writer
11/04/09 1:04 PM EST
Rep. Darrell Issa writes today in Politico that with their new health care bill, House Democrats are combining all of the failed health insurance reform experiments in Massachusetts, Tennessee, New York and Kentucky, in the hopes that they will suddenly work if combined on a national scale.
- Tennessee's TennCare program made millions eligible for cheap or free insurance run under a complicated state managed-care program. Although it was intended to cover the poor, the uninsured and the uninsurable, it created a "crowd-out" phenomenon by prompting many employers to drop their insurance coverage and save money, knowing that their employees could enroll. Even worse, the over-enrollment eventually forced cutbacks in benefits, an enrollment freeze, and the elimination of coverage for nearly 200,000 patients in the program.
- In Kentucky, a "guaranteed issue" law (requiring insurers to take more risky patients) in combination with a "community rating system" (which forbade them from charging more based on the risk) eliminated insurance competition in the state. The reforms caused 40 state-regulated individual health insurers (not federally regulated employer-based insurers) to flee Kentucky, leaving only two companies to cover those who couldn't get insurance through work. Also driving the exodus were caps on insurance premiums and a law banning coverage that didn't reach a minimum threshold.
- Issa offers New York as an example of what happens when minimum coverage includes too many mandates. The state has 51 treatments and providers that every policy must cover, including podiatry, hormone replacement therapy, and contraception. Every plan sold in the state must cover occupational therapists and social workers. All of these mandates drive up the cost of insurance significantly. (New York is not the worst state for mandates -- some states require coverage of in vitro fertilization, acupuncturists and even marriage counselors.)
- Likewise, by requiring minimum coverage that is too robust, Issa writes that Massachusetts has reduced insurance options, even as its individual mandate (as in the House Democrats' bill) forces everyone to buy insurance under penalty of a fine. There are varied and complicated reasons why the state's patients are now facing waiting lists, but Democratic Gov. Deval Patrick has only made matters worse by threatening price controls for doctors at a time when the state doesn't have enough providers to cover all of the newly insured patients.
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