Medical Insurance Reform The Problems Ahead
Posted on Thu, May 20, 2010
Throughout the healthcare reform debate we have never question the fact that change is needed. The cost of medical insurance has gotten completely out of hand. I think most people would agree, that while the reform bill currently in place may offer great medical benefits to many uninsured Americans, it also ensures that healthcare costs are going to continue to escalate. Compare the average cost of family medical insurance by state (the government has issued a report on this), to see that Massachusetts has the highest family healthcare cost in the nation. Since the current healthcare reform bill was largely modeled on the state run system in Massachusetts, it seems fair to predict that costs will continue to rise. The government report shows the average family medical insurance cost ranges from a low of $9,365 in Idaho to a high of $14,138 in Massachusetts.
Much of the health care reform debate was focused on the pricing practices of medical insurance companies. Now focus is moving towards the pricing practices of medical providers. In Massachusetts, for example, the U.S. Department of Justice is investigating whether one of the state's hospitals are guilty of violating antitrust laws. According to an editorial in the Boston Globe, the DOJ inquiry was launched after it was shown that some hospitals are demanding "rates much higher than others ... for identical procedures." Meanwhile, the same editorial cites a report by Massachusetts Attorney General Martha Coakley that showed that hospitals with "geographic monopolies" use their market clout to push rates up "and contributes to annual increases in medical insurance premiums that greatly exceed the cost-of-living index." Finally, an admission that high medical insurance premiums are a symptom of high healthcare costs!
Under the new health reform bill it was sugested that by requiring young adults to get medical insurance, medical insurance costs would be balanced out. As a large percentage of young adults have always opted out of having medical insurance coverage, the average age of the insured population has always been higher than it otherwise would be. As a remedy to this problem the current reform bill fails significantly! The way the law is written it would be cheaper for young adults to pay the penalty for not having medical insurance rather than actually buying medical coverage. Then they could just buy the medical insurance coverage when they get sick, as per-existing conditions are no longer a factor in getting a medical insurance plan.
The National Federation of Independent Businesses has joined the lawsuit filed by 20 state attorneys general and governors challenging the constitutionality of the Patient Protection and Affordable Care Act. The main argument of the lawsuit is that the government has no power to force individuals to enter into an intrastate contract. According to an article by the Associated Press regarding the NFIB's support of the suit, the government argues, "the decision to opt out of medical insurance is not merely a matter of an individuals personal choice. It has consequences for others, since uninsured people will get sick, or have accidents, and someone must pay for their medical care if they can't afford it. Individual decisions to forgo medical insurance coverage, in the aggregate, substantially affect interstate commerce by shifting costs to health care providers and the public." The court battles will go on for a long time as both sides have a reasonable argument.