Minor Thoughts

Shawn Tully, at Fortune, details 4 reasons why the current healthcare “reform” bill will do more to raise costs than lower them.

First, they will impose rich, standard packages of benefits, with low deductibles, for all Americans. Those policies, typically containing everything from in-vitro fertilization to mental health benefits, are usually far more expensive than anything most people would pay for with their own money.

Second, the plans would impose on a federal level the doctrine of community rating, in which all customers have to be offered the same rates, regardless of their health risks. Community rating forces young people to pay far more than their actual cost, a main reason for today’s 46 million uninsured, while it subsidizes older patients.

Third, Obama would ban consumers from buying private insurance across state lines, perpetuating the price differences in today’s fragmented market, instead of allowing all Americans to shop anywhere for the best deals.

Fourth, both plans propose what’s known as a “public option,” or a Medicare-style plan that would compete with the private offerings. The previous three proposals would make the private plans extremely expensive. With the same subsidies, the Medicare-style plan could put them out of business.

This plan will only lower the price of health care if by “price” you mean premiums and payments made directly to insurers or health care organizations. But if you include the necessary taxes and subsidies in your definition of “price”, well, the price is going to go straight through the roof.