In many horror movies, the hero kills the zombie only to find that the baddie’s hand he chopped off keeps crawling towards him, relentless in its quest to strangle the living.
Some of the health care bills moving through the California Legislature remind me of that sort of scene.
The state Senate health committee killed Gov. Schwarzenegger’s health reform, ABX1 1, last January. And it was a mercy killing: There was almost nothing good in this montrous legislation, which would have driven health spending out of control, with little positive effect on health outcomes.
But some of the bits and pieces of ABX1 1 are crawling through the legislature – and they’re likely more dangerous now than when they were in ABX1 1. ABX1 1 had a tax hike, so it would have had to get on the ballot, as an initative, to allow the people to vote on it directly.
But the junk moving through the legislature now doesn’t depend on taxing and spending directly. If Schwarzenegger signs these bills (and he’s made positive noises, according to the Los Angeles Times), Californians will face measurably higher premiums for health insurance.
I addressed some of these awful policies, such as an 85 percent loss ratio that threatens to reduce competition in health insurance by one half, in my analysis of ABX1 1. What’s scary is the LA Times report that Republican legislators are buying into this, and other bills that would partially achieve what ABX1 1 was gunning for – preventing health plans from pricing premiums according to risk.
One would force health plans to “obtain approval from state regulators before canceling coverage for people who have become ill and submitted medical bills.” (I quote the LA Times directly here, because they haven’t got the language right. What they’re talking about is rescinding policies from people who lied when they applied for health insurance. But if you just read the LA Times version, you’ll have quite a slanted perspective.)
Obviously, this will reduce the choice of plans offered. Would you rent out an apartment if the law forced you to get the state’s permission to cancel the rental, even if the tenant lied about his job status? Would you hire an employee if the law forced you to get the state’s permission to sack him, even if he’d lied about his drug use?
Then there’s a whack of bills otherwise increasing the regulatory burden on health insurance. The LA Times carried a discouraging comment from Republican Senator Sam Aanestad, MD, who said that insurance policies have become too complicated to understand: “I’ve got grown kids who have advanced college degrees, and they’re not sure if something’s covered or not.”
Well, that’s because few Americans buy health insurance directly, but rely on their corporate bureaucracy to do so for them; as well as the massive regulatory burden imposed by the California Department of Insurance and the Department of Managed Health Care. Sen. Aanestad must understand that every form from a health plan has to be approved by those bureaucracies.
Surely Sen. Aanestad, a defender of free markets, cannot really think that more regulation will improve what decades of regulation have made impossible to understand?