The Magazine

The 'Consumer Protection' Racket

Democrats try another route to government-controlled health care.

Sep 28, 2009, Vol. 15, No. 02 • By DAVID GRATZER
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And this could be just the beginning. The House bill creates several mandate-generating committees. Bodies like the Task Force on Clinical Preventive Services would have the power to regulate the insurance industry and determine what is a reasonable insurance plan to sell on the national health exchange (the only way for the unemployed, the self-employed, and small businesses to buy coverage). Hidden in the House bill is a committee to take into account "health inequities."

If these reforms pass, America will be a lot like New Jersey. The Garden State has a slew of mandates and enforces community rating. For a 25-year-old man living in New Jersey the premium on a basic insurance policy is more than five times what it would be if he lived in Kentucky. A few years ago, an insurance coalition pointed out that it was cheaper for a family of four in New Jersey to lease a Ferrari on a monthly basis than to buy a family health care policy.

Obamacare would leave us with too many rules, which would crush innovation and add unnecessary costs with little benefit. This, though, may be just what the Democrats have in mind. For years, they have hoped to shift millions of Americans into a Medicare-for-all type program, and at the core of Obamacare is such a public-option proposal. With support for it faltering, Democrats are turning to regulating the insurance market as the next-best route to Washington-controlled health care.

What Americans want is a health insurance marketplace that is reliable, affordable, and compassionate. Congress needs to stop looking for villains and introduce simple reforms to foster responsible competition. The most effective remedy is also the simplest: Allow people to purchase health insurance across state lines. Consumers could shop around and select a policy that best meets their needs--not the political interests of their state legislators. Those with chronic illness will still struggle to obtain coverage, but subsidized insurance pools--those used in Minnesota could serve as a model--can tackle this problem.

Democrats think they have a winning message by touting the importance of consumer protection. But just who is going to protect the consumer from the government?

David Gratzer, a physician, is a senior fellow at the Manhattan Institute.