Santa Monica, CA -- Consumer Watchdog said the health insurance industry's support of national health care reform on the condition that it includes a requirement that every American buy insurance coverage -- the so called "individual mandate" -- is self-serving. The proposal amounts only to a customer delivery system for the fragmented, wasteful private insurance market. It will not solve America's health care problems and will only encourage the industry to charge higher premiums and demand more taxpayer subsidies while providing less health care.
"Insurance companies expect praise because they are 'willing' to sell their policies at whatever price they want to people who are forced to buy? That's like GM agreeing to a bailout plan that requires every American to buy a new Suburban each year, as long as GM gets to set the price and decide whether or not to include the transmission," said Jerry Flanagan of Consumer Watchdog. "If consumers can't afford coverage, or refuse to pay for a junk policy, they'll face tax penalties. Turning the U.S. government into a collection agency for for-profit health insurers is not universal health care, it’s full employment for HMO executives."
Not surprisingly, the mandatory purchase of health insurance is unpopular with middle-class Americans when they are told they could have to pay some of the premium costs, according to a 2008 Campaign for Consumer Rights poll. Less than one in five voters (16%) support such a plan. Nearly two-thirds (63%) are opposed when told there is no limit on what insurers could charge. According to a recent Harvard School of Public Health and Massachusetts Blue Cross Blue Shield Foundation poll, only 37% of those impacted by the Massachusetts' individual mandate support it
The Campaign of Consumer Rights poll is available at: www.campaignforconsumerrights.org
The Massachusetts individual mandate law is not a national model for universal health care, not only due to the serious flaws in the approach, but also because Massachusetts has relatively few uninsured to begin with, and most insurers in the state are nonprofits:
- Massachusetts’ policymakers failed to regulate insurance premiums. Despite the state’s stronger patient protections and lower percentage of uninsured, premium costs under the individual mandate continue to escalate. As a result, the board implementing the new law was forced to cut back on coverage benefits and shift toward high-deductible plans that reduced access to care.
- Despite dramatic reductions in coverage, premiums continue to increase and fewer Massachusetts resident can afford health coverage. New enrollment numbers for the state-subsidized Commonwealth Care health plans show that the number of people newly enrolled fell from July to September.
The inevitable outcome of Massachusetts' push for coverage expansions while refusing to regulate health insurance overhead and profit, provide an alternative to the private market, or guarantee minimum benefits is a proliferation of bare bones, junk insurance. Under such an approach, a patient might be technically “insured” but will not receive the coverage they need when they get sick.
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Consumer Watchdog is a nationally recognized non-partisan consumer advocacy organization.