While there is broad agreement there are problems in our health sector that must be solved, the American people consistently have said they oppose government control. Yet many of the decisions now being made in the bowels of the bureaucracy could lead to a government system that people fear.
The consequences of government involvement in health care have become more and more apparent as people have become informed about what the health overhaul law would do. No longer does the government seem to be a fairy godmother but rather a tough enforcer of an avalanche of new mandates, taxes and regulatory requirements.
The assurance that government would make sure all Americans have health care coverage has turned into a mandate that we all must have insurance defined by the government and with the government determining what our “choice” of health policies will be.
The latest example of our loss of individual control over health care decisions is playing out deep in the weeds of definitions over what must be counted as medical care and what counts as administrative expense in health insurance — the so-called “medical loss ratio,” or MLR. According to the new law, at least 85% of premium dollars must be spent on medical care for large firms and 80% for smaller ones.
It sounds like a simple and straightforward issue, but a world of challenges and complexity lies beneath the surface. The National Association of Insurance Commissioners (NAIC) has been charged with making recommendations to the federal government about what should and should not be counted in the equation.
To show how consequential the decision is, President Obama briefly scheduled, then canceled, a trip to speak to the NAIC meeting in Seattle in mid-August where the MLR issue was being debated.
Many of the decisions being made by regulators could make it almost impossible for private insurance companies to comply, leading inevitably to a government-run health system.
Connecticut state insurance commissioner Thomas Sullivan warned, “What we’ve learned since March, is that if you like your health insurance you may not be able to keep it,” he told the Seattle meeting, “and state regulators will have a role in implementing health care as long as that role supports the goals of HHS (the U.S. Department of Health and Human Services), which may not necessarily be what’s in the best interest of consumers.”
He later told reporters: “I’m concerned there’s still a lot left to be done in interpretation … I fear that some have an agenda to interpret … with the express purpose of getting to a single-payer option.”
Many other health actuaries and experts at the Seattle meeting said they believed the MLR was meant to be so disruptive to private insurance that it would eventually push us into a single-payer system.
HHS is not obligated to take the recommendations of the NAIC. Ultimately, the bureaucracy will decide. And their decision will be hugely consequential.
An issue that is being most hotly debated right now is whether the federal, state and payroll taxes that insurance companies are required to pay must be counted today as administrative expenses or whether they can be subtracted from premium collections before the calculations are made.
Health insurers say the decision could determine whether they have the money to invest in fighting fraud, setting up networks of qualified physicians and updating information technologies. For other companies, the decision very well could determine whether they survive.
Six senior members of Congress also weighed in on the issue with a letter to the president of the NAIC, saying they meant for taxes to be counted as an administrative expense.
America’s Health Insurance Plans, which represents insurance companies, countered that the legislation specifically says taxes shouldn’t be counted. Other independent analysts have validated the AHIP position.
So the politicization of health care begins, with even the president set to weigh in on a decision that would make most people’s eyes glaze over in the minutia. The president will meet with the NAIC at the White House in September or so to discuss the issue.
It now is clear that decisions about what kind of health insurance we have, how much we must pay, what it covers or doesn’t cover, will be made by politicians and bureaucrats.
This evokes a statement by health economist Paul Starr in his Pulitzer Prize-winning book, “The Social Transformation of American Medicine”: “Political leaders since Bismarck seeking to strengthen the state or to advance their own or their party’s interests have used insurance against the costs of sickness as a means of turning benevolence to power.”
The process has begun. Unless ObamaCare can be rolled back, the politicization of American medicine will reach into the smallest decisions affecting our medical care for decades to come.
And, just five months after the health overhaul law was enacted, we see how the regulatory bureaucracy may well push us into the single-payer, government-run health care system that even the very liberal 111th Congress couldn’t enact.
Published in Investor’s Business Daily, August 20, 2010.