Reforming Health Insurance Via "Citizen Benefits"

There is nothing better about living on the north side of the Golden Gate Bridge than receiving my printed copy of National Review, taking it to my Marin County hot tub (not the one criticized by George H. W. Bush), and reading it aloud to chardonnay-sipping liberal friends.

Unfortunately, I nearly dropped my brie when I found a fundamental flaw in Reihan Salam and Scott Winship’s proposal for a “Leaner Welfare State” in last week’s issue.

Salam and Winship propose replacing the welfare state with “citizen benefits.” Their conclusion that the welfare state needs dramatic reform is solid. I also agree (as do all conservative health-policy analysts) with their recommendation to amend the tax code to give individuals command of our health-care dollars, instead of allowing employers to have monopolistic control over them.

Unfortunately, the authors also give the government too much power over the alternative, and their proposal violates fundamental principles of effective regulation of insurance.

Read the entire comment here.

Washington Examiner Column: ObamaCare and the Right to Health Care

President Obama has made no secret of his belief that health care should be "a right for every American." This moral argument for reform was no doubt among the strongest offered by Obamacare's proponents.

Unfortunately, Obamacare doesn't guarantee a right to health care. Instead, it undermines that right by subverting Americans' freedom to obtain the health care they prefer.

Read the complete column at the Washington Examiner.

Are Carriers or Brokers To Blame for Conflict Over Consumer-Driven Health Plans?

Greg Scandlen and I might be judging the information differently, or have different information about the same situation. There has definitely been conflict between brokers and carriers on this question. I think that I am more tolerant of the carriers’ version of the conflict than Greg Scandlen is.

More on the question of paying commissions on consumer-driven health plans.

Are so-called Consumer-Driven Health Plans Really Consumer Driven?

I am losing confidence that Qualifying High Deductible Health Plans coupled with Health Savings Accounts are actually “consumer-driven health care”. I have the same skepticism about other so-called consumer-driven plans.

Here’s why: I have a QHDHP and an HSA and am enrolled in a plan in the California small-group market. Until this year, I paid all medical costs up to the deductible. In 2010, the rates increased significantly and the carrier started covering more preventive care. I went for an annual physical (which I amd convinced I do not need) and did not pay one penny out-of-pocket. However, I am in the same “consumer-driven health plan” as I was in 2009.

Because I have a contact at the carrier, I called him and asked why they had done this. Here is what he said.

Whis is More Obese, San Francisco's Kids, or its Government?

Imagine this scene a year or two in our future: An inspector from the San Francisco Department of Public Health spots something shiny behind a restaurant freezer. He pulls out a plastic Iron Man™ action figure, which the manager claims belongs to his son. No dice – they haul him downtown for using toys to lure kids into his restaurant.

If Supervisors Eric Mar, David Campos, and David Chiu have their way, this embarrassing spectacle of political overreach will become reality. Their stated goal is to reduce childhood obesity, but will it work?

Read more in this month's Capital Ideas.

Should the State Dictate Hospitals' Nurse-Staffing Ratios?

No: Ratios condemn patients to inferior care. An op-ed by Dr. Robert Hertzka and me in the San Diego Union Tribune.

"The Avastin Mugging"

The Wall Street Journal carried a devastating editorial on “The Avastin Mugging”. The WSJ editorial board rightly challenges the Food and Drug Administration’s Oncology Drug Advisory Committee (ODAC) for threatening to take away breast-cancer patients’ right to use Avastin.

The editorial also cites disturbing evidence that ODAC’s reviewers considered not just safety and efficacy but price, which is not within the FDA’s mandate. However, the $88,000 annual cost that the editorial cites as “reflecting the costs of development and production” neglects an important component of pharmaceutical costs – complying with the regulatory burden of the FDA itself!

I recently published a study based on decades of research that leads to the conclusion that even a one-year delay in legal access to the many new medicines available costs about 200,000 American patients their lives. Congress believes the solution is to throw more money at the FDA, which it did via the 1992 Prescription Drug User Fee Act (PDUFA). Under this regime, renewed every five years, the number of personnel conducting drug reviews doubled, from 1,300 to 2,600, between 1992 and 2007. Last year, the agency as a whole exceeded its hiring targets. The FDA’s spending on the regulation of human drugs in 2009 was $802 million, and the president’s 2011 budget demands $1 billion, an increase of 20 percent over two years.

Despite such growth, the FDA is slowing down. In 2008, the average time to approval lengthened to almost 18 months from just 12.3 months the previous year. The FDA drives up the cost of innovation then uses the high cost of innovation as an excuse to punish innovators by requiring them to jump every higher regulatory hurdles.

That bureaucratic feedback loop may be good for the FDA but is certainly harmful to patients who need new medicines sooner rather than later.

ObamaCare is Already Creating More Uninsured Americans

I received an e-mail from a fan that goes like this:

I've decided to not renew my coverage when the bill comes in for the 4th quarter. I currently pay $320/mo for a $2500 deductible BCBS plan. I have an HSA and have saved up a fair amount of money in it. Pretty good deal. So why drop it?

1. I have never even come close to meeting my deductible. Everything I have done since HSAs came in has been paid for from my HSA. In fact, never in my life have I ever incurred more than $2,500 in medical expenses in one year. The odds are that will not change, even though I am older.

2. I expect a pretty substantial increase in my premiums, but it doesn't really matter. I would make the same decision anyway.

3. If I guess wrong and my health does change, I will be able to sign up for the new federal risk pool - but ONLY after I have been uninsured for six months. I might as well get started on that six month qualifying period now while I am still healthy.

4. There is no penalty for doing this. The federal risk pool is not allowed to charge me more than standard rates.

5. Meanwhile I will be able to save $4,000 a year on insurance premiums, which is no small matter these days that I am semi-retired.

6. I will not be able to contribute additional money to my HSA, but my income is low enough now that there is virtually no tax advantage to making an HSA contribution. My main tax issue today is the payroll tax, and the HSA has no effect on that.

So, I am joining the ranks of the uninsured. Thank you, Mr. Obama.

I can't say that I disagree with his plan.

Medicaid Grows As Fast In Boom Times As Busts

Monday's bailout of government unions threw yet more federal dollars at Medicaid. But why? The government wants you to think of Medicaid, like other welfare programs, as a sort of "automatic stabilizer." However, Medicaid has grown consistently, in both good times and bad. It's growth is not counter-cyclical.

Read more here.

ObamaCare's New Website Explained

A few days ago, President Obama gave a demo of the new ObamaCare website. Here's my more accurate version:

Will Harry Reid Call For ObamaCare's Repeal?

In a July 21 letter to U.S. Secretary of Health & Human Services, the Senate Majority Leader complained that ObamaCare's cuts to Medicare will "result in a net reduction in payment to Nevada's hospitals when they are unable to absorb such a cut." Furthermore, he questions the method used by the government to caclulate payments to hospitals, and is "very concerned about potential effects on beneficiary access if this regulation is finalized without adjustment."

Did Senator Reid finally read the bill, almost four months after passing it and a year after masses of Americans began to demand that Congress do so?

Read entire article here.

Offline Until Next Week

I'm in San Diego for the Annual Meeting of the American Legislative Exchange Council. So: No blogging. For updates from ALEC follow johnrgraham on Twitter.

Harry Reid Has Second Thoughts About ObamaCare

In a July 21 letter to U.S. Secretary of Health and Human Service Kathleen Sebelius, the Senate Majority Leader complains that ObamaCare’s cuts to Medicare will “result in a net reduction in payment to Nevada’s hospitals when they are unable to absorb such a cut.

Read more here.

Did Judge Tauro Kill ObamaCare?

On July 8, a federal judge in Boston, Joseph Tauro, took it upon himself to find the Defense of Marriage Act (DOMA) unconstitutional. His decisions in two cases might have unwittingly facilitated the legal challenges to Obamacare.

Read the complete blog entry at National Review Online.