Unintended consequences of health care reform bill

The House passed the Health Care reform bill, but with an anti-abortion amendment that would prevent the public option or insurance companies that get federal subsidies from paying for abortions. Now the bill goes to the Senate, which can also make changes, whereupon wheeling and dealing will take place to reconcile the bills.

Harvard economist Martin Feldstein explains that the health care bill may well do the opposite of what it was intended to do, sending insurance costs soaring while actually cutting down the number of people with health insurance:

Obamacare could have the unintended consequence of raising health insurance premiums and causing a decline in the number of people with insurance.

Here's why: A key feature of the House and Senate health bills would prevent insurance companies from denying coverage to anyone with preexisting conditions. The new coverage would start immediately, and the premium could not reflect the individual's health condition.

This well-intentioned feature would provide a strong incentive for someone who is healthy to drop his or her health insurance, saving the substantial premium costs. After all, if serious illness hit this person or a family member, he could immediately obtain coverage. As healthy individuals decline coverage in this way, insurance companies would come to have a sicker population. The higher cost of insuring that group would force insurers to raise their premiums. (Separate accident policies might develop to deal with the risk of high-cost care after accidents when there is insufficient time to buy insurance.)

The higher premium level would cause others who are currently insured to drop coverage, pushing premiums even higher. The result would be a spiral of rising premiums and shrinking numbers of insured.

Yes, the bill includes financial penalties for not getting health insurance, but Dr. Feldstein shows how the amount is so small that a rational person would be way ahead just paying the fine and not buying insurance until actually getting sick.

The other detail here surprised me: Not only may an insurance company not deny anyone coverage for a pre-existing condition, but “the premium cannot reflect the individual’s health condition”? How can that be financially feasible?

UPDATE: Well, here is one way around this problem that Democrats are proposing, the way of Dracon, the Greek lawmaker and patron of harsh punishment. Maybe throwing people who don’t buy insurance into prison for five years
will get them to buy health insurance:

Today, Ranking Member of the House Ways and Means Committee Dave Camp (R-MI) released a letter from the non-partisan Joint Committee on Taxation (JCT) confirming that the failure to comply with the individual mandate to buy health insurance contained in the Pelosi health care bill (H.R. 3962, as amended) could land people in jail. The JCT letter makes clear that Americans who do not maintain “acceptable health insurance coverage” and who choose not to pay the bill’s new individual mandate tax (generally 2.5% of income), are subject to numerous civil and criminal penalties, including criminal fines of up to $250,000 and imprisonment of up to five years.

I’m not sure if these penalties made it into the bill that passed. Does anyone know?

House Health Care bill puts pro-death provisions back in

The latest version of the Health Care reform bill in the House of Representatives would use taxpayers’ money to pay for abortions:

The Pelosi health-care bill. . .authorizes the public plan to cover all elective abortions — and it will certainly do so. Can anyone imagine the Obama administration’s HHS deciding otherwise? And people receiving federal subsidies would be able to use them to purchase private insurance plans covering abortion. Which is to say that federal funds will, in a break with longstanding policy, be entangled with abortion.

With the public option, there will not even be a chance to opt out of abortion coverage. As Time magazine has reported, all enrollees in the public option will be required, by law, to put at least $1 a month into a fund that will pay for abortions, and the legislation explicitly proclaims that “nothing in this Act shall be construed as preventing the public health insurance option from providing for” abortions.

Oh, yes, as the quotation indicates, the bill will also include the “public option”; that is, a government-run insurance company to compete with private companies.

Not only that, LifeNews reports that the bill will require end-of-life counseling and that patients provide advance directives if they are open to having the doctors let them die. It will also allow taxpayer money to pay for assisted suicide in states where that is legal (Oregon, Washington).

This is to say, every controversial element that had formerly been taken out so as not to alarm the masses has been put back in!

A vote may come as early as Saturday. (Then it will have to be reconciled with the Senate bill in back room negotiations.)

Swine flu makes churches feel unclean

Politics Daily reports on Swine Flu panic in churches:

Christians not only gather together for worship at least weekly, but they also dip their fingers in common fonts of holy water, pass baskets up and down the pews to collect donations, exchange handshakes and hugs at the sign of peace, and — in varying formats — share bread and wine at communion, sometimes drinking from a single chalice or picking from a loaf of bread. Those churches in which a priest or minister gives out individual wafers of consecrated bread aren't much better off, studies show, especially if the minister is dipping the Host in a chalice or placing it on each communicant's tongue.

Last Friday, the Department of Health and Human Services joined with the White House Office for Faith-based and Neighborhood Partnerships to issue a guide for worshipers and clergy to limit the spread of the virus. The guide says congregants should wash their hands often, avoid large gatherings, and stay home if they feel sick — measures known by the rather chilly term of "social distancing." The guide also says that "faith and community leaders may consider adjusting such practices" as a common cup "in order to reduce the spread of flu."

In some places that's already happening. The Roman Catholic bishop of Brooklyn, where the first cases of swine flu were reported last spring, this month told priests in all 198 parishes to stop offering wine during communion and said they should distribute communion in the hand rather than on the tongue, which is an older practice that some parishioners, especially the elderly, still prefer. The bishop in St. Cloud, Minn., has done the same, and in the Archdiocese of Washington, pastors are reminding parishioners that they can give each other a friendly nod instead of shaking hands at the Sign of Peace, which is exchanged just before communion.

In its detailed series of guidelines, the Presbyterian Church (U.S.A.) held out the possibility that church services could be suspended entirely — as happened in Mexico City in April — if the situation deteriorates, and said congregants may want to consider decreasing the frequency with which they receive communion. The PCUSA guidelines also counsel ministers to think about preparing communion while wearing surgical gloves or masks, pre-cutting communion bread with a "sanitized electric knife," and having worshipers spread themselves out among the pews to create an "envelope" of personal space — all of which, the guide concedes, is not exactly the message the church wants to convey.

"Passing a bottle of hand sanitizer around is not a good symbolic action, since part of the meaning of Communion is the notion that the Lord welcomes sinners, those who are unclean, into the divine presence," the guide says. "Saying you have to be sanitized to partake of the Lord's Supper can undermine the symbolism of God's grace."

I find such precautions unseemly. Do you?

HT: Joe Carter

What the public option would do

A health care reform proposal to set up a government health insurance program to compete with private companies is back in the mix. Economics columnist Robert J. Samuelson discusses how it would work, but offers this conclusion:

A favored public plan would probably doom today's private insurance. Although some congressional proposals limit enrollment eligibility in the public plan, pressures to liberalize would be overwhelming. Why should only some under-65 Americans enjoy lower premiums? In one study that assumed widespread eligibility, the Lewin Group estimated that 103 million people — half the number with private insurance — would switch to the public plan. Private insurance might become a specialty product.

Many would say: Whoopee! Get rid of the sinister insurers. Bring on a single-payer system. But if that's the agenda, why not debate it directly?

In the same issue of the Washington Post, Fred Hiatt, who is no conservative, suggests what a public option would do:

If, as advocates sometimes argue, a public plan operates without favoritism, it will be simply one more entrant in the marketplace. Like other companies, it will have marketing and administrative costs. In some markets served by few private plans, it could offer a useful alternative. But it won’t radically reduce costs.

If, as advocates argue at other times, the point is to insure sick people whom private companies, despite all regulatory efforts, find ways to shun, the public plan could offer a valuable safety net. But that wouldn’t save money.

And if, as seems likeliest — and as House legislation mandates — the plan uses government power to demand lower prices from hospitals and drug companies, those providers may lower quality or seek to make up the difference from private payers. Private companies would have to raise their rates, so more people would choose the public plan, so private rates would rise further — and we could end up with only the public option and no competition at all. Single-payer national health insurance may be the best outcome, but we should get there after an honest debate, not through the back door.

Medicare for everyone

Democrats in the House of Representatives are reviving the public option–that is, a government-run insurance company–and calling it by the tried, true, and popular brand name Medicare. Others would go further, expanding the current Medicare to cover uninsured people, or even everyone.

Senate has a health care bill

The Senate now has a specific health care reform bill to consider now that the Senate Finance Panel Passes a $829 Billion Health Plan:

The Senate Finance Committee approved an $829 billion plan to overhaul U.S. health care, clearing the way for a full Senate debate over the broadest expansion of the government’s role in the medical system since the creation of Medicare in 1965.

Just one Republican on the panel, Senator Olympia Snowe of Maine, voted for the measure in an otherwise party-line 14-9 tally. That marked the first time a Republican in either the Democratic-controlled Senate or House has supported the revamp legislation, President Barack Obama’s top domestic priority. . . .

Unlike other versions of the overhaul, the finance bill includes a new tax on the most-expensive insurance plans, doesn’t require employers to provide coverage to workers, and omits a provision creating a new government insurance program, the so-called public option, which most Republicans oppose.

Nonprofit co-operatives would instead provide competition to an insurance industry that stands to gain millions of new customers because the bill requires Americans to obtain insurance. The measure also imposes new restrictions on insurers’ ability to deny people coverage.

If the bill passes the Senate, it would then have to be reconciled with a corresponding House bill coming down the pike. That bill may well contain a public, federal insurance option to compete with the private insurance industry.