Twelve Ways to Increase the Cost of Health Insurance
By Richard E. Ralston
December 22, 2009
Health care legislation now being debated in the Senate will do nothing to make health care more affordable but quite a lot to make it more expensive. It serves the purpose of a massive and permanent expansion of the size and power of government and the political class as an end in itself. Twelve of the many provisions that will increase the cost of care include:
The increase in government spending is largely unfunded. The ten years of increased taxes and fees to cover six years of spending conceals the true long-term cost. Taxes collected for four years before the new spending begins will of course not be set aside and hidden under a mattress by Senator Reid and Speaker Pelosi. The government will blow right through it and spend it on other things until the new spending begins. More taxes will accompany much more debt and the cost of serving the debt, which will increase the cost of health care for everyone.
The requirement that insurers take a loss and issue policies to those with pre-existing conditions will shift costs for their care to other premium payers.
The limit on co-payments will shift costs to premium payers.
The limit on deductibles will shift costs to premium payers.
New fees and taxes on medical equipment manufacturers will increase the cost of equipment and insurance.
The cost of medical liability insurance—and the defensive medicine it forces physicians to practice in order to protect themselves—punishes financially the states that currently limit the size of non-economic damages and the fees lawyers take from settlements. Rather than limiting such costs, it will provide strong incentives for trial lawyers to increase litigation, which will increase the cost of health care and insurance for everyone.
The tax on insurance companies for policies that provide the most benefits will increase premiums on those policies.
More health care providers will be reimbursed for less than the cost of their services, shifting those costs to other patients and premium payers.
Pre-tax contributions to flexible savings and health savings accounts will be limited and their use made more difficult, increasing the taxes and cost of care for those with such plans.
The legal requirement to buy insurance under penalty of fines and imprisonment will force the purchase of insurance with provisions specified by the government, in response to providers with the political pull to force coverage of their services. That will increase the cost of insurance.
Higher costs will not be limited to private insurance: Medicare taxes will be increased while benefits are decreased.
Medicare Advantage plans will be eliminated, reducing benefits for the ten million seniors who have them, and forcing them to pay more for "Medi-Gap" insurance—creating a financial jackpot for the AARP in disregard for the interests of its members.
Other provisions will increase spending and debt, such as forcing states to provide Medicaid to millions of additional people without any revenue to pay for it.
Even though the Congressional Budget Office has not taken many of these costs into consideration—especially cost shifting—they have determined that a bill that would create more than one hundred new agencies, boards, and commissions, and that would spend trillions of dollars, would not cut the cost of health insurance.
The Senate bill is a deliberate, systematic deception for the purpose of concealing the cost of a huge expansion of government—and the forced dependence of citizens on politicians for another crucially important aspect of their daily lives. Senators need to hear from voters now that they must not vote for legislation that increases our medical costs while eliminating our rights and personal choices.
Richard E. Ralston is Executive Director of Americans for Free Choice in Medicine.
Copyright © 2009 Americans for Free Choice in Medicine. All rights reserved.
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