Cato’s Michael Tanner faults both parties for not focusing on the consumer in the recent “health care summit,” Bipartisan Indifference to Controlling Health Care Costs. Echoing the points he made in our video conference link last year, Tanner wants the consumer in charge of consumptions. He argues that the Democrats appear to view consumers as a class that needs protection and the Republicans only give lip service to consumer focused health care. He argues for high-deductible policies. When these are coupled with Health Savings Accounts, consumers make intelligent, cost-conscious choices. Insurance is meant to cover major unexpected illness or disease. “Insurance is ultimately meant to spread the risk of catastrophic events, not to simply prepay your healthcare.” Currently, we have third party payers–in effect someone else is paying for our health care, it’s free, so why not overuse it.
“Think of it this way. If every time you went to the grocery store, someone else paid 87 percent of your bill, not only would you eat a lot more steak and a lot less hamburger — but so would your dog. And food costs would go up for everyone.”
“The RAND Health Insurance Experiment, the largest study ever done of consumer health purchasing behavior, provides ample evidence that consumers can make informed cost-value decisions about their health care. Under the experiment, insurance deductibles were varied from zero to $1,000. Those with no out-of-pocket costs consumed substantially more health care than those who had to share in the cost of care. Yet, with a few exceptions, the effect on outcomes was minimal.”
“And, in the real world, we have seen far smaller increases in the cost of those services, like Lasik eye surgery or dental care, that are not generally covered by insurance, than for those procedures that are insured.”
Simple solution: 1) Tax employer provided insurance as the compensation it is. 2) Eliminate state line barriers to insurance competition. 3) Incentivize HSAs. 4) Allow tax credit/deduction for high-deductible policies. 5) And, enact significant tort reform capping damages. In short let the consumer decide. I can tell you it worked at the company I was associated with here in Reno: the employees loved it, the employer reduced premium expenses.
Sadly, Obama showed his true colors by denouncing high-deductible insurance and greater consumer cost sharing as “not real insurance.” He wants control, increased consumer dependency, and the power to dictate the economy. In short, BIG GOVERNMENT!
Tom Motherway