Obama’s healthcare plan is still highly controversial, and between court challenges and Republicans in Congress committed to reversing this outrageous power grab by the Obama administration, many provisions are unlikely to ever be implemented. However, as with most ideas, not all of it is bad, and one part could end up revitalizing healthcare in NY, if allowed to be used as intended.
Healthcare insurance exchanges are an idea whose time may be due, and the Obama plan wisely mandated that each of the 50 states develop their own exchange. Originally conceived by center-right think tanks like the Heritage Foundation, if used properly, this could be the means to restoring a real market for health insurance in NY.
It wasn’t that long ago, about 25 years, when health insurance was an open, market-based product, like car or life insurance. You could buy it from any insurance company in a package that suited your needs. Younger people could buy insurance that just covered catastrophic accident or injury, since it better fit their needs and budget.
But, as with too many things these days, meddling “do-gooder” politicians got involved and decreed that everyone should have comprehensive health insurance coverage, whether they wanted it or not.
Politicians began extolling the virtues of managed care from new, brilliantly conceived organizations known as HMO’s. They were supposed to save consumer big bucks by being more hands on with patients, determining what care people really needed and didn’t need.
Then, destructive regulations began flowing as fast as the ink could be spewed. Health insurance became a highly overregulated Frankenstein’s monster, with politicians regulating coverage to eliminate any choices or configuration options. Every plan offered in NY became the equivalent of a Rolls Royce plan, but now with Rolls Royce prices. Many consumers were priced out of the health insurance market.
Exchanges were conceived of to promote competition and consumer choice. They are designed as an alternative to large group plans, allowing each consumer the ability to take their employers contribution, add additional money if desired, or pool contributions from multiple employers, to purchase insurance on the open market. But this only works when you have choices in the products you are allowed to buy. Otherwise, you end up like Massachusetts, with even less choice and higher prices.
So, as we begin to debate how insurance exchanges can benefit NY, listen carefully for the plans to increase consumer choice and reduce regulations. Without reforming the monster we have, simply overlaying a new structure on the broken one will only make things worse, creating a Frankenstein’s monster on steroids.
Robert Hornak is a Queens-based political consultant, blogger, and an active member of the Queens Republican Party.
