The terrible truth conservatives won't speak out loud -- can't seem to admit to themselves, in fact -- is that the private insurance industry cannot provide affordable health insurance that would pay for the health care of all Americans. It cannot even provide affordable health insurance to most Americans across their entire lifetimes.
This is true even if their wildest libertarian wishes are fulfilled, and all the government programs like Medicare and Medicaid and SCHIP evaporate, and the employee benefit insurance system ends, and consumers could purchase insurance across state lines in one great big unregulated health insurance free market.
We know this because insurance company executives have admitted it. Recently some insurance executives let it slip to Congress their business models depended on dropping customers with big medical bills and denying coverage to people with preexisting conditions. Who above the age of 40 doesn't have a preexisting condition? And we know this because the health reform plans being proposed by the Right are nearly all, in one way or another, predicated on separating Americans into low-risk and high-risk pools. The private insurance industry is eager to get that low-risk pool all to itself and sell it competitive, affordable health insurance policies.
But the plans tend to be hazy about what will happen to those in the high-risk pool. I mean, what with global warming, there are only so many ice floes on which to set people adrift these days.
The Cato Institute
On the Right, conservative think tanks are the main generator of health-care policy ideas. Recently I looked at the Manhattan Institute's health care proposals. Now I'm going to look at the Cato Institute. Cato has a range of health-care policy proposals, including an original and genuinely daffy plan I call "insurance insurance" -- essentially, insurance to pay for insurance.
The Cato Institute is one of the "think tanks" doing its best to derail President Obama's health-care proposals and push the nation into a completely private, "free market" system. Cato was founded in 1977 by Edward H. Crane, a successful financial analyst; and Charles Koch, a billionaire co-owner of Koch Industries. The Koch Family Foundation is one of the largest sources of funding for conservative organizations in the United States. According to SourceWatch, Cato has a number of corporate sponsors and also receives money from several of the usual funders of right-wing think tanks -- the John M. Olin Foundation, the Lynde and Harry Bradley Foundation, the Scaife Foundations. See "Enemy of Health Care Reform: The Manhattan Institute" for more on how these foundations use think tanks to manipulate public opinion.
Cato differs from most of the other right-wing think tanks in that it is more libertarian than conservative and does not always toe the conservative line. Cato fellows were opposed to the invasion of Iraq, for example. Cato has issued position papers on "corporate welfare" that lean more in the direction of progressive than standard
conservative ideas. Cato has been very much at odds with conservatism over presidential power issues.
However, in the matter of health-care reform, Cato swims in the same tank with more hard-Right organizations, such as the Heritage Foundation and the Manhattan Institute. The eventual plan is to eliminate government involvement in health care, phase out employee-benefit health insurance, and place everyone at the mercy of
the private health insurance industry. "At the mercy of" is not hyperbole. The unregulated industry would be free to cherry pick customers, as it does in many states today. Many people would not be able to purchase insurance at any price.
Take, for example, a recent op ed in the Los Angeles Times by Cato senior fellow Michael Tanner. In "Obama doesn't have the only prescription for health care reform," Tanner lays out the basic conservative ideal.
First, phasing out employee benefit insurance, Tanner says, would lower the cost of private insurance policies. "Employment-based insurance hides much of the true cost of health care to consumers," Tanner says, "thereby encouraging overconsumption." I personally question whether large numbers of people are marching into their
doctors' offices and demanding unnecessary medical procedures just because they don't have to pay the bill. We've seen evidence lately that "overconsumption" is at least as often caused by doctors ordering extra tests and procedures to bump up their profits.
Purchasing Policies Across State Lines
Next, Tanner says, make insurance more competitive by allowing people to purchase policies across state lines. Republicans love this idea. Indeed, there are significant differences in the costs of policies from state to state. So, let's let people in a high-cost state, such as New York, purchase policies in low-cost states, such as Kentucky. This would create more competition, causing costs to drop all over. Wouldn't it?
Last year the Chicago Tribune's Judith Graham interviewed Sandy Praeger, president of the National Association of Insurance Commissioners, how this would work in the real world.
Insurers will set up shop in states with few regulations and market low-cost policies to people across the country. These policies will offer minimal coverage and appeal primarily to younger consumers.
"It will be a race to the bottom," Praeger said, and there will be "very few consumer protections. ... You'll have plans that don't cover the benefits that people need...And healthy people are going to buy those less costly plans, because they don't think they need [the protection]." ...