Would the Health Reform Prescriptions Offered by President Obama and
Congressional Leaders Help Patients?
April 1, 2009

STATEMENT ON HEALTH REFORM
From the Health Policy Consensus Group

President Obama repeatedly has reassured the American people, "If you've got
health care already, and probably the majority of you do, then you can keep your
plan if you are satisfied with it. You can keep your choice of doctor."
Research shows 82 percent of Americans rate the health care they receive as good
to excellent.

At the same time, there are serious problems of cost, value, and access
throughout our health sector. It is vital to address these problems. But any
health reform proposal to change what needs fixing also must preserve the
freedom, innovation, and quality of American medical care that people value.

We believe a better functioning, more competitive, and transparent marketplace
would cover more people and deliver the higher-value care we seek.

We are gravely concerned that several of the proposals offered by the President
and the Congressional leadership would make matters worse, not better. These
flawed prescriptions for radical change should not be accepted as part of any
serious and sustainable health reform proposal:

* A new government health insurance plan

* An employer "play-or-pay" mandate

* A uniform, government-defined package of benefits.

* A mandate that individuals must purchase insurance.

* A National Health Insurance Exchange extending federal regulatory powers over
private insurance.

* Federal interference in the practice of medicine through a federal health
board, comparative effectiveness review, and other government intrusions into
medical decision-making.

We explain below why we believe these ideas would diminish individual Americans'
freedom and control over their personal health decisions.

A new government health insurance plan:

A new national health plan, to be operated by the federal government, is being
proposed with the claim that it would give Americans a choice between public or
private health plans. While there may be initial assurances that the plans
would operate on a level playing field, the government inevitably will use its
regulatory, pricing, and taxing authority to favor its plan.

Congress would give the government plan the power to dictate prices so it can
artificially under-price private plans and drive them out of this one-sided
"marketplace."

Many people then would be left with little or no choice, as employers would drop
their current coverage and send their workers into the public plan. Research by
The Lewin Group shows that as many as 118.5 million Americans would lose or be
switched out of private health coverage.

This massive crowding out of private health insurance would undermine the
employment-based coverage that most Americans under age 65 have today.

Once private plans have been driven out of the market, people will realize that
the government plan will not be able to sustain the quality and quantity of
benefits they were promised.

Government instead will begin to ration care and services, driving out
innovation, competition, and patient-centered quality.

A "play-or-pay" mandate that employers must provide or pay for health coverage
for their workers:

Employers would be required to pay an unspecified "meaningful contribution"
toward their workers' health insurance or pay a new tax to fund the government
plan.

If they are not "playing" in the new system by directly providing health
insurance, then they will be "paying" to fund the government plan.

It is a political certainty that the option to "pay" this new health insurance
tax will be set lower than the current levels at which employers now "play" by
providing their own coverage, enticing many of them to transfer their employees'
insurance coverage to the mercies of the new government plan.

Whether they choose to pay or to play, small employers will be hit especially
hard by a new mandate to finance all or part of the health insurance premiums
for their employees, directly or through new taxes. Any initial subsidies to
them will quickly be overtaken by higher mandated costs. As they absorb new tax
burdens they cannot control, the result will be more lost jobs and lower wages
for workers.

A uniform, government-defined package of benefits: Decades of experience in the
states confirm that whenever benefit packages are determined politically rather
than by the marketplace, legislators find it very difficult to say no to anyone
asking that their services and products be included.

People would have a "choice" of only the expensive one-size-fits-all plan
mandated by government, significantly increasing the cost of health coverage.
Workers would pay for this more expensive coverage through lower wages, lost
jobs, higher taxes, and lower-value health care.

A mandate that individuals must purchase insurance: If the federal government
requires everyone to purchase health insurance, it must define what qualifies as
insurance. All signals indicate this would be a very expensive benefits
package, designed as one-size-fits-all in theory but delivered as
one-size-fits-none in practice.

Sweeping government mandates create a conflict between escalating costs,
limited resources, and the false guarantee of rich coverage – triggering price
and supply controls.

Many individuals will need subsidies to receive coverage that otherwise would be
unaffordable to them, but taxpayers will resist filling an abyss.

As a result, political leaders will try to cover rising costs indirectly and
invisibly – through general revenue subsidies, tax increases, deficit spending,
and escalating fees, fines, and taxes imposed on employers. And to make the
mandate work, the government also must establish and enforce binding penalties
for individuals who do not comply.

A National Health Insurance Exchange extending vast federal regulatory powers
over private insurance: A new National Health Insurance Exchange is being
proposed to "streamline the purchase of health insurance."

It actually would steamroll over private choice and patient preferences by
providing a vehicle to extend sweeping federal regulation into virtually every
corner of our health sector. This would reduce choice for patients and
discourage or prohibit innovation and flexibility in health insurance offerings
that today are helping many companies and families balance their health costs
with other needs.

Federal interference in the practice of medicine through a federal health board,
comparative effectiveness review, and other government intrusions into medical
decision-making:

Congress appropriated $1.1 billion in taxpayer funding for comparative
effectiveness research in the economic stimulus bill, establishing the Federal
Coordinating Council for Comparative Effectiveness Research, which will assess
medical treatments available to Americans.

This provides an irresistible temptation for politicians to go beyond providing
better information and start restricting the treatment choices available to
patients. House Appropriations Chairman David Obey (D-Wis.) said the intent was
that drugs and treatments "that are found to be less effective and in some
cases, more expensive, will no longer be prescribed."

The clear and present danger is that any centralized health board will use the
cover of comparative effectiveness findings to meet budgetary bottom lines, at
the expense of patients' medical needs and personal preferences.

This is a particular danger to the health of people who suffer from rare
conditions or who need access to specific medicines and treatments but who may
lack the political power to influence the reviewers' decisions.

There are many problems that need to be addressed in the health sector, and the
signatories to this statement have written extensively about our ideas for
reform.

Because the reform agenda is moving rapidly through Congress, we believe the
American public should be aware of the likely impact of the policies described
in this statement which are under active consideration by elected leaders.

We believe that the proposals put forth by the Administration and Congressional
leaders would harm, not help, patients and would not fulfill the goals and
promises made to the American people.

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