Thursday, November 05, 2009

How the Government Will Run Health Insurance   [Hanns Kuttner]

Many decisions that today are made by individuals, employers, state government, and insurers will be made by the federal government if the House Democratic leadership bill, HR 3962, becomes law.

Here's what the federal government will decide:

—  What health insurance covers. The federal government will specify an "essential health benefits" package (Sec. 222). The legislation specifies eleven categories that must be covered. Some are obvious: hospitalization, physician services. Some you may have forgotten to ask for: whatever vaccines CDC recommends. In the future, a "Health Benefits Advisory Committee" will recommend changes. Lots of opportunities for future billings for lobbyists, PR firms, and lawyers to represent people who want the government to require what they provide.

— Your co-payments and deductibles. Among the tasks for the Health Benefits Advisory Committee: figure out what co-payments and deductibles should be. The legislation provides some guidance (Section 222 (c) (2) (C)):  they should be set as dollar amounts rather than as a percent of costs.

—  Which providers have to be available to you. Section 215 gives the federal government the power to set standards for provider networks to assure "adequacy" of providers. Negotiating deals with providers makes one insurer's premium higher or lower than another's. If the government says a provider has to be in the network, what's the point of negotiating?

With benefit and network design in the hands of the government, there won't be much left for the rest of us to do. Except pay for it. There's no requirement that in all this regulating that anybody care how much it will cost. Those who get government "affordability" subsidies won't care; the federal government will pay their additional cost. Everyone else will see the higher cost of premiums come out of their pockets.   

— Hanns Kuttner is a visiting fellow at Hudson Institute.

11/05 04:47 PMShare