Why Congress’ Healthcare Bill is Bad for Arizona

December 20, 2009 by  

Congress’ Healthcare “Reform” bill is a mere handful of votes shy of passage. Far from achieving the objectives of providing healthcare to all Americans and lowering costs, Arizona citizens can count on these outcomes instead:

Fundamental changes in the standard of care.  While more people may technically be “covered”, over-utilization of services will lead to longer waits for health care and inevitable rationing of care.  Not to worry, though.  The bill plans for this.   A 15 member health commission, much like those in countries with similar nationalized healthcare, will have extraordinary powers to dictate what is covered, for whom and how it will be paid for.

This change will bring a fundamental shift to our system – from doctors providing medical treatment based upon whether it is safe and effective to a cost-effectiveness standard.  Trust between the doctor and patient will be compromised as patients question in whose best interest their doctor may be acting.  Reducing medical care to a commodity-driven business model places every patient’s life at the mercy of a panel’s worthiness criteria.  Being denied care or waiting to see your primary care physician, or obtain diagnostic tests results in inferior medical outcomes and higher mortality rates, such as are evidenced in Canada and the U.K.  Why these outcomes are not an integral part of the healthcare debate is troubling.

There is a reason medical tourism is booming business in the U.S.   We have the best medical care in the world.  Most other nations, especially those with nationalized healthcare, lack what it takes to be the best – a system that rewards the best – the best hospitals, the best surgeons, the best drug therapies available. Is it a coincidence that the incentives in medicine drive medical innovation?  Changing the incentives will also drive physicians out of the profession as they will no longer be caring for patients, but delivering treatment according to formula – and at reduced pay to boot.

Practicing physicians will be further negatively affected by this bill as it does not address a major cause of rising costs of health care:  medical malpractice lawsuits.  An AMA survey reported 93% of physicians report practicing defensive medicine, costing the U.S. $865 billion in indirect costs.  Instead, the plan rewards states that ignore this issue and withholds funding from those that cap non-economic damages and pass other tort reforms.

Under the current system people are divorced from health care cost considerations since a third party – either an employer or insurance – is managing them.  Fixing this disconnect is key to promoting an economically and physically fit citizenry.  In other words, people taking responsibility for their health, staying well and spending their healthcare dollars wisely.  Instead, Congress’ plan emulates failing government programs that do just the opposite.  The result is an unsustainable Medicare system with a $38 trillion liability.  Amazingly, the Senate’s proposal this week to lower Medicare eligibility to 55 – greatly increasing the number of people in the failing program even as $500 billion is cut from it –  makes Medicare the latest iteration of the “public option”.   

Increased unemployment.  The imposition of $135 billion in new taxes on businesses who cannot afford to finance their workers’ health coverage will increase unemployment.  Even the Congressional Budget Office confirmed that this tax on jobs, called a “pay-or-play” mandate, “could reduce the hiring of low-wage workers,” and that as many as 5.5 million jobs could be lost as a result of the new taxes.

The employer mandate isn’t the only new tax targeting businesses.  The bill includes nearly half a trillion dollars in other taxes – including a surtax on the so-called “wealthy” that actually hit more than half of small businesses right where they live.  This will greatly stifle job creation, much less expansion at a time when unemployment is at a 26 year high.  Together this equals new taxes totaling $729.5 billion just on businesses.

Unfunded mandate on states.  Arizona is $1.4 billion in the red this for the last half of this fiscal year and the 2011 budget is looking twice as bad – yet Washington’s plan forces states to increase eligibility in their Medicaid programs, costing Arizona, in particular, dearly.   Here’s why:

According to AHCCCS’s analysis    (page 4),  “Under the current Senate proposal from 2014 through 2020 the total costs to provide coverage to adults above the Medicaid minimum is projected to be $46.8 billion in Arizona. Since Arizona has already expanded [eligibility by passing Prop. 204], the State’s costs are projected to be $17 billion.” 

In other words, because of Prop. 204, Arizona will become a  ‘donor state’ to other states’ mandatory Medicaid expansions under the Senate’s healthcare reform bill – other states’ will be federally funded while ours will not be.

Governor Brewer also expressed these concerns to Congress as reported in the Arizona Republic, “We can’t afford it.  We can’t afford the AHCCCS program we have currently.” This is why Congress included a $90 billion Medicaid bailout in the “Stimulus” package and another $23.5 Billion bailout in this bill. 

Higher insurance costs.  Contrary to Congress’ goal to lower healthcare costs, this plan will raise the cost of insurance significantly – for everyone.  Here’s why:

First – new Federal rules mandate all plans, whether private, employer or government-run, will have to meet minimum benefits standards and comply with community rating and guaranteed issue mandates.   We would basically model the nation’s plan after what the state of New York put in place in the early 1990’s.  Their average premiums in the individual market are more than twice the national average and still 14% of the population remains uninsured.  

Second – the bill does not allow for lower cost plans, such as popular high deductible health plans and consumer-directed accounts like HSAs, to exist going forward, removing this option for 5% of Americans under 65.

Third – young and healthy persons, whose insurance premiums now cost about ¼ the average premium paid by individuals aged 60-64, will subsidize the premiums of more disease-prone and older adults under the new plan – and it will cost them.   As a result, many will choose or be forced to pay the 2.5% of their income in penalties rather than the high cost of insurance.  Mandates don’t work.  Hawaii has had an individual insurance mandate since 1973 and still has a 10% uninsured rate. 

Healthcare freedom threatened.  Nowhere does the United States Constitution provide Congress the right to force its citizens to purchase health insurance. This bill usurps fundamental freedoms Arizonans enjoy – to be able to purchase health care privately and whether or not to participate in a health plan. 

The Arizona Legislature successfully referred the Arizona Healthcare Freedom Act to the ballot next year so Arizona citizens have the opportunity to preserve these fundamental rights in our state constitution. Real and substantive health care reforms are critical to Arizona, but only with freedom for a foundation.

A version of this article first appeared on ABC-15 online opposite the viewpoint of Victor F. Trastek, M.D., CEO of Mayo Hopsital.

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