Written by Peter Ferrara - Heartland Institute
President Obama says a cornerstone of his health care overhaul plan is that if you like the health insurance you have today, you will be able to keep it.
But if you now have employer-provided insurance, the Obama health plan provides plenty of incentives for your employer to dump you into the proposed public option, government insurance plan, and pay the 8 percent payroll tax for that instead. If the employer's workforce averages $50,000 a year in wages, the payroll tax will cost the employer only $4,000 per worker per year, which may be considerably less than the health coverage he or she currently provides employees.
In addition, the health choices commissioner may decide your employer's plan is not "qualified" under the government standards because it doesn't cover all mandated treatments and procedures or requires too much cost-sharing by the employee. Your employer could be fined for every day the "violation" continues and be prohibited from enrolling new employees. This would encourage your employer to dump your coverage.
Even if you purchase health insurance directly on your own, you won't be able to keep it if your insurer is driven out of business by the government health plan. A big reason that will happen is that the government has the power to dictate what it will pay doctors and hospitals. Medicare now pays doctors almost 20 percent below market rates, and hospitals more than 30 percent below market. Medicaid pays 30 percent to 40 percent less than Medicare.
The health reform bills now pending in Congress allow the government public option to pay doctors and hospitals under the Medicare rates to start, and the government is expressly given the power to change that over time and pay even less.
Private health plans will not be able to compete with a government public option plan that has lower costs because it dictates lower payment rates to doctors and hospitals. In addition, the experience with Medicaid and Medicare has been that these government plans drive up the cost of private health plans as doctors and hospitals underpaid by the government plans try to recover the losses by charging more to privately insured patients.
That would further aggravate the competitive disadvantage imposed on private health plans forced to compete with the government plan.
The Lewin Group, an independent health care consulting firm, estimates these factors would push up the cost of private health insurance for family coverage under the House bill by $2,148 a year in 2010 as compared to the public option. That's a competitive disadvantage of almost 25 percent.
Obama's health plan also will greatly restrict choice, because the government will force you to buy the health plan it decides you must have. That plan would reflect the lobbying of many special-interest groups insisting on coverage for the services or treatments they help to produce or that may benefit them especially. That means you will have to pay for all the benefits the government decides to require even if you don't want them.
Obama also repeatedly says that under his health plan, if you like your doctor, you will be able to keep him or her. But the question is whether under his plan, with the government so sharply underpaying the doctors, your doctor will be willing to keep you.
You'll also lose the choice of any health care the new government bureaucracy decides is waste, or not cost-effective, or that the market no longer provides because the government won't pay enough for it, including new cutting-edge, restorative, pain-relieving or life-saving miracle drugs.
The reality is that the Obama health plan would be the death knell for consumer choice in health care.