Saturday, March 13, 2010

Reinventing the wheel, and making it square

Liberal Democrats are in the fight of their lives with less-liberal Democrats over health care and are using insurance companies as their whipping boys to distract from the ugly details of their plan.
This is a popular tactic. Trial lawyers have managed to whip up a sizeable segment of the public to hate insurance companies.
The libs want three things in their plan: guaranteed issue, which means companies must insure anybody; “pre-existing conditions,” which mans companies cannot screen anyone out for being sick; and community rating, which means everyone pays the same.
Sounds fair, right? Sure, if you want to wreck another industry the way liberal policies wrecked banking and auto manufacturing.
As someone said recently, liberals have managed to concoct a plan no rational person would buy, and now they plan to force everyone to buy it.
Being forced to insure someone who already has cancer means that irresponsible people – and there are a lot of them – won’t buy insurance until they get cancer. So they won’t pay any of the costs, but everybody else will, including responsible people who have been paying premiums all along.
It isn’t as if these brilliant ideas haven’t been tried.
Heritage Foundation scholars looked at several states that tried such reforms in the 1990s and found the results were “nothing short of catastrophic.”
New Jersey's experience with community rating and guaranteed issue found "a precipitous decline in enrollment, a corresponding increase in premiums, and a change in enrollment composition toward older and potentially more expensive enrollees."
In New York, community-rating was tried. "In the first year," Ed Rubenstein wrote in National Review, "25-year-old males were hit with premium hikes of over $500, while 55-year-olds paid about $415 less than under the risk-rated system. Not surprisingly many young people decided to drop their coverage. With fewer young, healthy policyholders available to subsidize older ones, insurance premiums skyrocketed..."
Slow-learners in Maine enacted these same insurance rules in 2003. After being in effect for five years a healthy 30-year-old male had a monthly premium of $762 in the individual market. In New Hampshire, which shunned community rating and guaranteed issue, similar coverage costs $222 a month, Heritage said.
There are ways to lower the costs of health care, and health insurance, such as tort reform, tax credits, and cutting insurance loose from employment. Liberals aren’t interested in those ideas. They propose to give away “free” to everyone something that is expensive by its very nature.
Hey, while you’re at it, could I have a 30-foot sailboat?

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