Analysts Urge Caution to Trust Markets

Published April 1, 2007

On February 7, a diverse group of nine national companies and unions announced it was forming a coalition to reform the nation’s health care system and ensure universal coverage by 2012. Many analysts say they hope the new group will avoid calling for more government involvement in health care.

The Better Health Care Together campaign will hold a national summit in May to discuss ways to achieve the organization’s goal.

The founding group–consisting of AT&T, The Howard H. Baker, Jr. Center for Public Policy, Center for American Progress, Committee for Economic Development, Communications Workers of America, Intel, Kelly Services, Service Employees International Union, and Wal-Mart–is currently working to expand its membership.

At press time, representatives of the group had few details about its plans for May.

Policy Voice

“While there is certainly a recognition in the group that we want very much to expand and engage in dialogue with all relevant sectors, our immediate focus now is on recruiting members from the business community and the labor community,” explained James McIntire, vice president for public affairs at Kelly Services.

“But it’s important that everybody understand it has to be a multi-sector solution, ultimately,” McIntire continued. “Hopefully in May, we’ll present a new perspective. We are certainly not yet ready, and don’t plan to be ready by May, to point to any specific solution.”

The coalition does not plan to draft potential legislation, said AT&T spokesperson Claudia Jones, but intends to “have a voice as laws and policies are written.”

Guiding Principles

At a February 7 news conference in Washington, DC, the coalition announced its core principles:

  • that every person in the nation will have quality, affordable health insurance coverage;
  • individuals have a responsibility to maintain and protect their health;
  • the nation must dramatically improve the value it receives for every health care dollar; and
  • businesses, governments, and individuals all should contribute to managing and financing the new health care system.

“I think what makes this group different from others that have come forward–everyone agrees the system is broken–is that we’ve set 2012 as a date when everyone in the U.S. will have universal health care,” said Candice Johnson, spokesperson for the Communication Workers of America union. “I think you need to do that to get policymakers focused on what needs to be done. So the group brings different experiences around these four key principles and has found some common ground there.”

Solutions Pending

Though free-market analysts from coast to coast agree lowering the cost of health care is a laudable goal, they urged the coalition to seek market-friendly ways of achieving it, instead of getting the government more deeply involved in health care than it already is.

In a February 7 news release, Kelly Services President and CEO Carl Camden noted the employer-based health coverage system is a World War II-era relic that has outlived its usefulness in the twenty-first century, and that health care policies have to be made as portable as the U.S. workforce is mobile.

Ryan Ellis, federal affairs manager at the Washington, DC-based advocacy group Americans for Tax Reform, agreed, but said legislation currently pending would achieve the group’s major goals.

“Making [health savings accounts] more flexible is necessary in order to promote portable health insurance,” Ellis said. “Some concrete examples of how would be to permit insurance premium costs as an HSA expense and raise the dollar cap limit to the out-of-pocket maximum.”

Flexibility Necessary

“State insurance mandates are killing people–literally,” Ellis continued. “Passage of the Health Care Freedom of Choice Act, and less importantly, Small Business Health Plans, would solve this.”

The Health Care Freedom of Choice Act (H.R. 636), introduced in the U.S. House of Representatives by Rep. Michele Bachmann (R-MN) on January 23, would allow individuals to deduct more medical expenses from their taxes. The legislation for Small Business Health Plans, the Health Insurance Marketplace Modernization and Affordability Act of 2005 (S. 1955), was introduced in the Senate last session and contains several measures to make employees’ health insurance more affordable for small business owners.

Government Payment Shortfalls

Linda Gorman, a health policy analyst at the Independence Institute, a free-market think tank in Golden, Colorado, said almost universal access already exists, “just not the way the left wants.

“The uninsured already pay for a lot of their care. We are paying for critical access providers and federally qualified health care centers,” Gorman explained. “The problem is that government is not paying for the care that it buys and [that it] mandates that private [sources] provide–Medicaid and Medicare are now paying less than cost.

“This is killing providers, and they are beginning to get out of government programs after decades of charging private payers more to pay for the overhead,” Gorman said.

“The result is going to be unequal treatment because heavily regulated government entities generally do a lousy job,” Gorman continued. “The solution [the left proposes] is to expand government control so that everyone has equally lousy medical care. To do this, it is necessary to shift the focus to the uninsured, when in fact, they aren’t the problem–Medicaid and Medicare are.”

Government Control

Diana Ernst, a health care policy fellow at the Pacific Research Institute, a free-market think tank in San Francisco, agreed with Wal-Mart CEO Lee Scott’s observation at the news conference that “government alone won’t and can’t solve [the health care cost] crisis.”

However, Ernst said, “government [by itself] can aggravate it. While the supposed ‘collective’ responsibility that includes government is only intended to help, increased government control in health care could mean less individual choice, less competition, and less innovation–a very bad result for Americans.

“The Wal-Mart/union coalition should support a bigger role for the consumer-sensitive market and health savings accounts so that individuals can have more control of their own health care dollars and less government-imposed regulation of their health care choices,” Ernst said.

Karla Dial ([email protected]) is managing editor of Health Care News.

For more information …

Health Care Freedom of Choice Act (H.R. 636),