Senate Health Care Bill Increases Premiums for Self-Employed

The Washington Post is revelling in the news that the Congressional Budget Office (CBO) has released an analysis of the Senate Health Care Bill, claiming that "the measure would leave premiums unchanged or slightly lower for the vast majority of Americans" (emphasis mine). They'd like you to stop reading at that sentence and assume that this bill does the job of reducing health insurance premiums for those who need it most. But, who is not included in the "vast majority"?

The answer may surprise you. In fact, in my opinion, this legislation does the least to reduce insurance costs for those who can use the most help: the self-employed. According to the CBO, "the measure would have its most dramatic impact on the individual market. Becuase they are not part of a workforce or other group that can pool its risk, consumers tend to pay more for policies with fewer benefits." Moreover, the CBO concludes that "premiums [in the individual market] would be 10 to 13 percent higher, on average, than under current law, climbing to $5,800 a year for individuals and $15,200 for family coverage."

So, while the Democrats in Congress would like you to believe that this report is a victory for their bill, it's really a huge failure. This bill raises health insurance rates the most for those who need the help the most. And, because the self-employed are the entrepreneurs of America, what this bill really does is to discourage the entrepreneurial spirit that contributes to the greatness of America.

Health (Insurance) Reform is Ill-Conceived

Keith Hennessy, Michael O. Leavitt, and Al Hubbard wrote an Op-Ed in the Wall Street Journal that supports the assertion I made earlier this week. in my post Health insurance is the problem. Since all appearances currently indicate that the so-called Government-Option is dead, many of our legislators are scraping the bottom of the barrel to find the policies that have broad bipartisan support, in hopes of passing some type of health insurance reform before the end of the year. Unfortunately, because of the urgency of passing something quickly (so that we all have time to forget what they've done to us before we have to opportunity to throw them out on the street), some of the provisions are subject to little debate.

The Op-Ed explains exactly how two of these provisions, Guaranteed Issue and Community Rating, "would create a massively unfair form of income redistribution and create incentives for many not to buy health insurance at all." (Not to mention that they would lead to dramatically higher health insurance rates for all of us!) Since their explanation is clear and succinct, I'll let you get it right from the horse's mouth, instead of repeating it.

In addition to having a number of unintended consequences, these two policies completely fail to recognize that the widespread use of insurance is part of what keeps health care costs increasing. Until we can separate health insurance from the issue of health care, we can not really achieve the goal of making quality health care affordable for all Americans, which is one of very few of Obama's (stated) goals with which I can agree.