While House Democratic leaders have gloated over their recent approval of a 1,990-page health reform proposal that would cost in excess of $1 trillion, the American people may be less enthused with the results. Congress should be working to make health care more affordable — not more expensive — for ordinary Americans.
One study from consulting firm PriceWaterhouseCoopers estimates that the congressional reform package would cause individual health insurance premiums to increase $1,500 more than they otherwise would between 2010 and 2019. The average family policy would cost $4,000 more by 2019 if the Democrats’ reforms take root.
Another study examined the impact of the congressional reform package at the state level. WellPoint, the nation’s largest insurer, used its membership data from 14 states to calculate how reform would affect its customers’ premiums.
The WellPoint study found that premiums would rise for Americans of average age and health status in all 14 states. Young people and small businesses would be hit particularly hard.
Consider a 25-year-old man living in Louisville, Ky. Right now, individual coverage costs him $61 a month. According to the WellPoint analysis, the chief elements of the Democrats’ reform plan would jack up his monthly premium to a whopping $181. That’s a nearly threefold increase.
One of the primary reasons is a rule that would require insurers to extend coverage to all Americans regardless of their age, health status or medical history.
That may sound worthwhile, but it encourages people to game the system by going without insurance until they get sick and actually need it. States that have already implemented guaranteed issue have seen premiums go up 227 percent.
Indeed, new guaranteed-issue rules would increase our young Kentuckian’s premiums by $91.
Health reform would also extract a pound of flesh from the nation’s small businesses. Consider what would happen to an Atlanta, Ga.-based firm with eight young, healthy employees. It currently pays $226 a person every month for coverage. But under the Democrats’ reform proposal, the company’s monthly premiums would go up by 71 percent, to $388 per employee.
Of course, some Americans would benefit if the Democratic health plan passes. In California, for instance, the WellPoint study found that older and less healthy people would end up paying 37 percent less for individual coverage.
But those gains would come at the expense of affordable care for others. Younger, healthy Californians would be charged more than double their present rates. These folks are generally just beginning their careers and tend to earn far less money than the middle-aged folks who might enjoy lower premiums. If coverage becomes even more expensive for the young, ever greater numbers of them will opt not to buy insurance.
That would be unfortunate, as young people already comprise almost half the uninsured population.
Put simply, the Democrats’ preferred reforms could increase both costs and the number of uninsured.
There are several ways to make insurance more affordable and thus expand coverage without spending more money. Congress could roll back regulations that prohibit insurers from offering low-cost catastrophic plans.
Lawmakers could also allow them to reduce the number of mandated benefits on insurance policies. Mandated coverage of all manner of medical procedures can raise the cost of a basic insurance plan by up to 50 percent.
Would-be reformers are so dead set on overhauling the American healthcare system that they’ve chosen to ignore the effects of their proposals on real people. If they’re successful in their efforts, most Americans will be worse off.
Sally C. Pipes is president and CEO of the Pacific Research Institute in San Francisco. Her latest book is “The Top Ten Myths of American Health Care.”