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Stones & Bones / volume 10 number 9, September 2008 DOSE OF REALITY Presidential contender John McCain’s proposals for health care reform are cloaked in nice-sounding verbiage that tends to hide from view the intent and consequences of what he is proposing. Hidden best are the intent and consequences of a key McCain proposal to change federal law to, as he says, “allow families to be able to buy health insurance nationwide, across state lines.” What he is really saying here is that he wants to change the law to allow health insurance companies to sell policies across state lines. This is actually the same thing, but by phrasing the proposal in the light of giving families more freedom in choosing insurance policies, McCain obscures the fact that the intent of this proposal is really to benefit the for-profit private health insurance industry by freeing it from governmental regulation. Currently, the states regulate the private insurance industry. A company selling health insurance policies in any state must abide by that state’s regulations. The regulations vary markedly from one state to another. Some states have very stringent consumer protection laws, and others, like Alaska, have very few. Several examples: Some states require insurance companies to accept all individuals who apply for coverage regardless of health or other considerations; Alaska does not. Some states require that insurance companies spend at least 75 cents of every premium dollar on health care, leaving 25 cents for administration, marketing, and profit; Alaska does not have that requirement. Some states limit the length of time that insurers can exclude coverage of pre-existing conditions to six or twelve months and prohibit selling policies with exclusion riders stating that the insurer will not cover treatment for specific conditions; Alaska has no such rules. Some states limit to six or twelve months how far back insurers can look into an applicant’s medical history to define coverage exclusions; there is no such limit in Alaska. Two years ago the Republicans in Congress tried to change all this by means of a bill, HR 2335, which would have allowed an insurance company based in one state to sell policies in all other states without having to abide by the rules of those other states. Democrats strenuously objected to the bill, as did many consumer advocacy groups, and the bill failed to pass. In essence, McCain now proposes to rejuvenate the failed legislation, thereby deregulating the health insurance industry. This action would make it possible for insurance companies to sell policies in states having strict regulations without having to abide by those regulations. They would need only base their operations in one of the states having minimal or no regulations. The immediate consequence is obvious: Insurance companies would quickly relocate to states such as Alaska which have minimal if any regulations. They would no longer be required to insure persons in those states that currently require them to accept individuals with pre-existing conditions, and that means that even more Americans would be unable to buy insurance. Another consequence is that industry profits would increase because the companies would not be required to spend set portions of their income from premiums to pay for health care. They would also have increased freedom to raise the premium rates on individuals deemed to be at high risk, or to refuse them any insurance at all. Perhaps worst of all, an insurance company based in a low-regulation state like Alaska could have a field day cherry-picking not only from Alaskans but from the entire population. They could refuse to insure the half of the population that requires 95 percent of the health care dollar, selling the others cheap policies that would still allow huge profits. The nation would be flooded with thousands of low-cost, low-payout policy offers from the many insurance companies now operating. The sad thing is that, human nature being what it is, people would be inclined to buy the cheapest policies available, not realizing what little protection from health care costs they were getting. It is already a complex matter for an individual to choose among insurance policies—if he can get one at all—and it will be far worse under McCain’s deregulation plan. It does great things for the private health insurance industry, and very bad things to the American public by guaranteeing them increasing health care costs while decreasing their access to health care. The health insurance industry of course loves McCain’s proposal and will strongly support it. However, the day is approaching when the majority of Americans will finally realize that the private for-profit health insurance industry really has no role to play in providing them with affordable and comprehensive health care. Based on the false premise that health care is a commodity suitable for the marketplace, the industry has, over the course of the last forty years, proven that it is not a viable vehicle for financing health care. Dr. John Geyman pointed out in his important new book on the dying insurance industry, Do Not Resuscitate, that the idea of insurance is to share the risk involved in paying for health care over a broad population, and public insurance programs such as Medicare accomplish that end by placing all beneficiaries in a single risk pool. Private insurance, by contrast, goes against that fundamental concept by using multiple risk pools, and the overall cost to the public is enormous. We now have more than 1,300 private insurance companies operating in this country, collectively dividing the population served into thousands of risk pools. That fragmentation has contributed to the increasing cost of health care at a rate two to three times faster than household incomes and the cost of living are increasing. At the same time, the cost of health insurance and insurance industry profits have soared, while access to health care has declined. Should McCain’s plan come into being it will merely make the situation worse. The bottom line: a vote for John McCain is a vote not only to continue with our nation’s dysfunctional health care system, but to make it even more dysfunctional and expensive. Neil Davis is a retired geophysicist and author of several fiction and nonfiction books. His most recent book is Mired in the Health Care Morass. More on health care issues can be found at his blog, http://healthcaremorass.blogspot.com. Neil can be contacted at neildavs@mosquitonet.com. | ||
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