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LATEST SUBMISSIONS

Remove barriers to affordable health insurance

Sunday, February 11 at 12:01 AM

By Sally C. Pipes

Ever wonder why health insurance costs so much in Colorado? Well, maybe it has something to do with the fact that every insurance policy in the state must cover all kinds of services — including professional counseling — deemed unnecessary by many.

In fact, Colorado has 37 of these mandates. Should a resident want to buy a policy that doesn’t cover, say, chiropractor visits, sorry — the government has decided that everyone must have that coverage.

Recently, enthusiasm for universal health-care coverage has swept the nation, with governors in Massachusetts and California leading the way. Maine and Vermont are currently revising their own systems of expanded health-care coverage, and at least eight other states are pursuing similar reforms.

Certainly, the approximately 47 million uninsured in America is a significant problem, but the proposals under consideration do little to address the primary reason for the lack of coverage — very expensive insurance.

And why are those costs spiraling upward, seemingly without limit? One major reason is government meddling in the market for health insurance, particularly through the imposition of restrictive mandates and regulations.

The average state has 36 mandates on an individual health insurance policy. And with each mandate, the cost to the consumer goes up. These mandates often stand in the way of making health insurance more affordable in the first place.

Just as options on a new automobile add to the total cost of the car, so too do insurance mandates.

If affordability and accessibility are the problems behind the number of uninsured, then why haven’t state governments removed the mandates for those who want to buy a basic policy? It’s not just the government’s desire to micromanage — it’s interest-group politics.

Acupuncturists, for example, certainly provide an important pain-relief service to many individuals. But is it really necessary for everyone to have acupuncture coverage whether they want it or not? It would make far more sense to give individuals the freedom to purchase policies that suit their specific needs.

The current system guarantees that everyone pays the highest possible price.

We are covered for things we don’t use. Or if we do take advantage of these mandated benefits, we don’t realize the full cost of the benefit because someone else pays.

But we all indirectly absorb those costs thanks to higher premiums.

The conversation about health-care reform is long overdue, but unfortunately for most consumers, it’s headed in the wrong direction.

Without addressing the high costs of health care, efforts to achieve universal coverage by legislative fiat will fail. Just look at automobile insurance. Even though it is mandatory in all but three states, one in seven drivers on our roads remains uninsured. There’s a better way to expand health-are coverage — through greater purchasing freedom and fewer regulations.

Let’s hope Colorado learns from the heavy-handed approaches of other states and opts for a more effective approach — like ending the silly requirement that all insurance policies cover things like marriage therapy, which most people will never need.

Sally C. Pipes is president and CEO of the Pacific Research Institute. She is a resident of San Francisco.

READER COMMENTS

Certainly, mandates have the effect of raising the cost of health care. But there are other factors with a much greater effect. The biggest factor is our low fertility rates and abortion. There are over 40 million people under the age of 35 that have been aborted in the last 35 years that would be relatively healthy payors for healthcare but not high users. They would offset the high costs of our otherwise aging population. Also, our behaviors are raising the cost of healthcare. Overweight Americans are causing an increase in certain high cost diseases such as diabetes, heart attack, and stroke.

Posted by Steve on February 14, 2007 07:45 AM

This sounds nice on the surface, but in my case, this sort of insurance would have been a complete disaster. My wife suffers from two chronic conditions - bipolar disorder and dysautonomia - that only became apparent in the last few years. Both require constant medical attention and a large number of prescriptions to control. In my wildest dreams, would I have ever predicted that she'd come down with either condition? No way. And if I'd had the type of health insurance Ms. Pipes is talking about, the insurer would have either not covered these problems, or charged me an exorbitant rate to cover them. I'm sorry, Ms. Pipes, but this idea stinks.

Posted by Mike on February 13, 2007 09:13 AM

Health Savings Accounts available to everyone would be a start in the right direction. Today these accounts are only available to folks who meet some very stringent restrictions as far as the kind of insurance plan they have. Make them available to everyone who wants to put away money to pay for future health needs.

Posted by Art on February 13, 2007 07:52 AM

And what happens to the health insurance rates for those who have a disease through no fault of their own like Type 1, not Type 2, juvenile diabetes? They will not be insurable. The cost of their policies will be prohibitive. Will the private insurance companys throw them (since they won't produce a profit for health insurance companies) to the government for coverage? Ms. Piper has yet to respond to me from an email that I sent to her. A bill was introduced in Congress by Senator Enzi from Wyoming last year that would have the effect of setting aside these state mandates. It was not passed. I wonder why. Health insurance companies are in business to make a profit not provide care to people.

Posted by cheryl doyle on February 13, 2007 06:41 AM

It would be nice to simply be covered for hospitalization and perscriptions. Paying for the occasional doctor visit isn't nearly as expensive as the premiums for coverage, even when covered under an employer's plan.

Posted by Jay on February 12, 2007 06:16 AM