Less Government Involvement Holds Key to Affordable Health Insurance, Experts Say

Published December 1, 2008

Experts are pointing to the troubling growth of health care costs to justify making cost containment, rather than covering the uninsured, legislators’ top priority in 2009, citing excessive mandates and a lack of consumer control of health care as two chief culprits.

“If we could reduce some of these 1,900 benefit mandates throughout the country, we could lower health care costs,” said Sally Pipes, president and CEO of the Pacific Research Institute. “For example, every health insurance plan sold in the state of Massachusetts must cover in vitro fertilization, which is extremely expensive. This raises costs for everyone in the market.”

Figures Questioned

The U.S. Census Bureau’s report on health insurance statistics, which showed a decrease in the number of Americans uninsured last year, have been called into question by experts for overestimating and oversimplifying the number of uninsured.

Pipes pointed out 17.5 million uninsured Americans make more than $50,000 a year, which means they are likely able to afford health insurance but choose not to purchase it.

In addition, 10 million of the uninsured are non-citizens, Pipes notes, and 14 million are already eligible for government-sponsored health insurance such as Medicare, Medicaid, and the State Children’s Health Insurance Program, but have not enrolled. That means only about 8 million Americans are chronically uninsured, cannot afford health insurance, and are not eligible for federal programs.

“Proponents of government ‘solutions'” to the problem of the uninsured “talk about setting up a national insurance exchange, which would include a government plan and other subsidized plans. We can’t afford it,” Pipes said. “When people get things through government, they basically think it’s free and waste more of it. The solution is to put people in charge.”

Government Problems Identified

Pipes cites research into the “hidden taxes” on health insurance, which found inadequate reimbursements to providers by government health care programs raise costs for those with private insurance.

“Government programs pay so little, it raises the prices for everyone else by 10 percent,” Pipes said. “A good solution would be for government programs to give people vouchers to purchase private insurance, putting people in charge of their own health care. Then we could start controlling, and lowering, costs.”

Although numerous health reform proposals focus almost exclusively on covering the uninsured, more than 200 million Americans currently covered in the private sector continue to face health insurance cost increases of 5 to 10 percent every year, experts note.

“Large employers are able to absorb some of those costs and implement solutions such as wellness programs and disease management to keep premiums low,” said Greg Scandlen, director of Consumers for Health Care Choices at The Heartland Institute.

“However, without an effort by legislatures to deregulate the health insurance market, small businesses and individuals who purchase their own coverage will be left to face seemingly endless increases in premium costs, or to join the ranks of the uninsured themselves,” Scandlen concluded.

James P. Gelfand ([email protected]) writes from Washington, DC.