It is unlikely that any significant improvements in health care policy will come out of the U.S. Congress in the next two years. However, major changes might develop at the state level–especially in California–for two reasons. First, as the most populous state, with an economy richer than most nations, California will be a target for everyone with an agenda for health care policy. Second, Governor Schwarzenegger–who just vetoed as socialized medicine a “single-payer” plan that would have outlawed all private insurance–shows a predisposition to compromise with Democratic legislators in developing a health care program for California. The outcome is likely to set a national standard. And if it is based on the expensive and intrusive “mandatory insurance” of Massachusetts, the result will be unfortunate for the whole country.
Actually, there is a lot California could do to make health insurance available to many more people at a cost they can afford. Many simple steps could be taken that would cost nothing:
- Eliminate all regulations that mandate the type of coverage for every policy. At minimum, create a new category of basic policies that cover hospitalization or other expensive treatment for major illness or injury. Such basic policies would also cover annual physical examinations, immunizations, and two or three office visits a year. They would be free of any laundry list of required coverage and exotic treatments now mandated by state regulation for “politically correct” diseases. Special interests lobbying for the mandatory coverage of everything from chiropractic care to in vitro fertilization should not be allowed to force the cost of such care on everyone.
- Income used for premiums for basic coverage should be free of state taxes and withholding, or refunded as credits for those who do not pay taxes. Contributions to Health Savings Accounts for qualified low-premium, high-deductible policies should also be free of state taxes. If citizens cannot afford insurance, they can hardly afford to pay taxes on the money they use to pay premiums.
- Allow all employers to offer their employees basic insurance that is portable, so the employees can keep their insurance and Health Savings Accounts if they change jobs. Press the California congressional delegations to seek legislation making all such affordable policies sold in California available nationwide, so that policyholders can also keep their insurance when they change states.
- Encourage the once-vigorous system of charity health care by allowing all private hospitals, physicians, and surgeons to receive tax credits equal to double the amount of charity care that they provide.
The best way to avoid mistakes is to take a principled stand for individual rights. Insurance buyers should never be forced to do anything, but should be allowed as many options as possible. It is important to understand that mandatory insurance is not, as some conservatives have maintained, consistent with individual responsibility. Being forced to obey government orders is not “individual responsibility.”
The most expensive of mistakes are easily avoided. The obvious ones, evident in the Massachusetts plan, can be avoided as follows:
- Do not create a huge category of patients who are entitled, as a supposed “right,” to all the medical treatment they demand, with no co-payments or deductibles, and no responsibility to contribute a penny to their own health care.
- Do not replace the current, heavily regulated insurance market with something even worse, like a statewide “connector” which just replaces what is left of a free insurance market with a government monopoly–with the additional regulations and requirements that add cost and limit choice.
- Do not create and add any new government agencies or bureaucracies. Massachusetts kept the regulatory functions of the state health departments and insurance commission, and added four more, such as the Connector, the Massachusetts Payment Policy Board, and the Health Care Quality and Cost Control Council, with a separate Advisory Committee.
California and other states must resist the illusion that more government regulation, more government bureaucracy, and more government spending will help us pay our insurance and medical bills.
