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Tuesday, September 26, 2006
Market-based health care a better idea
The Atlanta Journal-Constitution
In health care, the race is on. It’s either government-managed universal health care or the marketplace.
The two competing visions struggle for supremacy. One, reflected in a proposal by Lt. Gov. Mark Taylor that’s based on a just-implemented Illinois plan, is an example of the incrementalism that has followed the defeat of HillaryCare. The other, a version of which was outlined last week by former U.S. House Speaker Newt Gingrich, is primarily market-based.
“One hundred percent coverage is achievable through market-based solutions, private and corporate efforts, tax incentives, direct public subsidies, strong community support and faith-based outreach programs,” said Gingrich. “Personal responsibility, portability and health care consumerism are the hallmarks of such a system.” He continued:
“If the Georgia Legislature wants a market-based solution to health care and not a national universal insurance system, it is imperative that it utilize existing law, encourage current market trends and supplement the federal HSA [health savings accounts] legislation.”
Taylor’s incrementalism would expand Georgia’s taxpayer-financed insurance programs to cover all children younger than 19, regardless of their parents’ income. The cost to taxpayers of the existing Peachcare program for children whose parents earn less than 235 percent of the federal poverty scale, or about $37,800 for a family of three, is about $156 per child per month. That’s partially offset by premiums of up to $70 for a family with two or more children.
Taylor’s PeachKids proposes premiums of $40 to $90 per month, potentially obligating taxpayers to subsidize the children of the wealthy, who may find it more economical to buy better coverage for their children through the taxpayer-subsidized plan. One other group certain to be drawn to the Taylor plan are state employees who aren’t eligible to participate in PeachCare because they have access to coverage through the state health plan.
Taylor and Gov. Sonny Perdue differ sharply, incidentally, on the cost of his proposal. Taylor projected the cost at $13.8 million in the first year and $57 million later. Perdue’s campaign officials have estimated the cost at $111 million in the first year.
Nobody can say for sure what it will cost. One consideration is how many children whose parents are now voluntarily self-insuring would sign up. Many parents, like state employees with children, choose not to pay for coverage. Another consideration is how many upper-income bargain shoppers would drop coverage to buy the taxpayer-subsidized plan Taylor proposes.
In the creep toward government-provided universal coverage, able parents are encouraged to shift medical coverage for their children to a government provider.
The Georgia plan is patterned on one in Illinois that kicked off in July. That state’s Medicaid director, Anne Marie Murphy, told Associated Press writer Shannon McCaffrey that 35,000 children have signed up, with 50,000 expected in the first year. Illinois gets no federal reimbursement, and the first-year cost is projected at $25 million. Taylor has said 75,000 Georgians would be eligible.
Much of the conservative alternative is built around information, incentives and changed consumer habits. One key, made possible through 2003 federal legislation authorizing health savings accounts for individuals, gives consumers financial incentive to pay attention to what drugs and procedures cost.
Health savings accounts, combined with catastrophic care insurance plans, provide financial protection against major medical problems while giving individuals incentive to manage their health. A revolution is under way.
On Monday, The Wall Street Journal profiled the inflation-driven switch by one small business in Fort Wayne, Ind., Russ Moore Transmission Inc. Far more than he expected, part-owner and General Manager Nick Bond found himself drawn into hand-holding many employees through the transition, actually leading them through the price-information search. But that’s to be expected as price shoppers learn how to be smarter consumers.
A push is on nationally to get more price and quality information online. If consumers are paying or pocketing, they do have incentive to find out.
Two directions, two choices. The nation can go to universal government-provided health care, which is where we’re headed. Or we can change the system and the culture. I choose the latter.
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