Sally C. Pipes: Why Americans dislike Obama's health care reform

Earlier this week, Senate Majority Leader Harry Reid, D-Nev., unveiled his chamber's plan for health reform. The nearly 2,100-page bill boasts a price tag of about $850 billion and hues closely to the trillion-dollar reform bill that recently passed the House. Democratic leaders have hit the airwaves to sell the country on the merits of their vision for reform.

But the American people aren't buying their pitch. A recent Washington Post-ABC News poll found that 49 percent of Americans opposed the proposed reforms -- slightly more than those who supported them.

Why the negative response? Because they believe they'll be worse off under the terms of the Democrats' legislative package. And they're right. Several recent studies have shown that the Democrats' reform plan will increase health costs for most Americans.

For starters, consider research from the consulting firm PricewaterhouseCoopers. Analysts found that the Democrats' health plan would cause the average family to shell out $20,700 more for insurance between 2010 and 2019 than they would in the absence of reform.

Another major study, based on actuarial data from the insurer WellPoint, found that the main elements of the various Democratic reform plans would increase insurance premiums in the 14 states where the company currently operates Blue Cross plans.

The series of WellPoint studies found that young, healthy customers would get hit particularly hard by reform, suffering an average insurance premium increase of 154 percent.

In Virginia, for instance, a 25-year-old man now pays about $66 each month for insurance. Under reform, his bill would almost triple -- to $181. A similarly situated man living in Louisville, Ky., would see his monthly insurance costs go up by $120. That's an extra $1,440 a year.

Researchers at the consulting firm Oliver Wyman arrived at the same conclusion. They calculated that the House bill would increase health premiums for the youngest third of the population by nearly 70 percent.

Already, half of young Americans go without insurance. These folks are typically just starting their careers and may not have much disposable income. If insurance becomes more expensive for twentysomethings, their uninsured rate will spiral even higher.

Another group likely to face higher health costs as a result of reform is small business.

The Oliver Wyman study found that the average small business would get hit with a 19 percent premium increase within the first five years of passage of the House plan.

The data from WellPoint reveal that the major elements of the Democrats' reform packages would increase health costs for 70 percent of small businesses. Researchers broke down the effect of reform by state and city.

The average small employer in New York City could expect a modest premium increase of 6 percent. But in Franklin County, Ohio, a similarly sized firm would be hit with an 86 percent increase. Small businesses in Louisville and Richmond would see premiums go up by 20 percent and 25 percent, respectively.

All employers feel the pain of rising health insurance prices. But larger ones can spread out cost increases over many workers. And they can use their purchasing power to extract lower rates from insurers.

All employers feel the pain of rising health insurance prices. But larger ones can spread out cost increases over many workers. And they can use their purchasing power to extract lower rates from insurers.

Small businesses don't have those advantages. So they have to compensate for higher premiums by cutting down on other labor expenses. That means lower wages, fewer new hires and even layoffs.

It's not just young people and small businesses that stand to lose at the hands of the Democrats' health reform plan. The average family with two kids would experience an 85 percent increase in premiums, according to WellPoint's data.

Millions of Americans are already struggling to stay afloat financially. Saddling them with even higher insurance costs would push many over the brink and make economic recovery that much more difficult.

This provision has good intentions. But it enables people to game the system by going without coverage until they get sick and actually need it. Consequently, healthy people leave the insurance pool. Without premiums from the healthy to balance out the claims costs of the sick and older people who have higher medical costs, insurers are forced to raise premiums for everyone.

In fact, states that have implemented guaranteed issue have witnessed insurance premium increases of 227 percent.

Both the Senate and House reform plans would also require that insurance policies cover a prescribed set of benefits. For instance, every customer would have to maintain coverage for pediatric dental services, maternity care and assorted other medical services -- even if he or she didn't want or need them.

Such benefit mandates force insurance prices higher. Indeed, at the state level, benefit mandates increase the cost of a basic insurance package by 20 percent to 50 percent.

The Obama administration and congressional leaders have been quick to dismiss studies critical of their reform plan. Instead of addressing the substance of the critics' findings, officials have simply attacked the messenger.

For instance, Nancy-Ann DeParle, director of the President Obama's Office of Health Reform, recently claimed that WellPoint's data couldn't be trusted. In order to justify her assertion, she cited a report from the investment bank Goldman Sachs that concluded that health care reform would cut insurance industry earnings by as much 50 percent. According to DeParle, such a forecast is proof that studies from insurers are self-serving and intellectually bankrupt.

But insurance plan profits represent less than one penny of every health care dollar America spends. Further, the reforms on offer have been tried time and again at the state level. And in every case, they've raised, not lowered, health costs. Extending them nationwide would subject millions of Americans to a new world of insurance they simply can't afford.

Americans want substantive health reform. They want to see their costs go down and their quality of care go up. But the Democrats' reform package won't deliver on either goal. Is it any wonder they're having such a tough time getting the public's support?