Proposed New Rules for Delayed Employer Health Mandate

The Obama administration on Thursday released new proposals for carrying out a major requirement of the federal health care law that was postponed earlier this summer.

At issue is how to gather information that would allow the government to enforce a requirement that companies with 50 or more workers provide affordable health insurance to their full-time employees. Companies that don’t comply would risk fines.

The new proposal from the Treasury Department seeks comment on options to reduce or streamline reporting by employers, insurers and health plan administrators. In some instances, the administration is proposing to eliminate duplicative reports and in other cases, it’s asking for less detail.

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A Majority of Americans Support Health Insurance Mandates, but Why?

According to a survey by The Commonwealth Fund, an independent foundation working toward health policy reform, health insurance mandates are supported by 80 percent of Democrats, 52 percent of Republicans and 68 percent of Independents who were polled. Any way you split it this comes out to be a majority of Americans.

Reading these numbers, it is not surprising that all of the leading Democratic presidential candidates have come out in support of some form of employer and or individual mandate. Senator Hillary Clinton would require all Americans to have health insurance and would require that all large employers provide their employees with coverage or contribute to the system. Former Senator John Edwards would require all Americans to have coverage by the year 2012 and would have employers either provide coverage or pay 6% of wages into a pool to provide coverage. Senator Barack Obama would require that only children have coverage and would require employers to provide “meaningful” coverage to their employees.

I am often puzzled by these kinds of survey results and want to dig for more information. I want to ask those surveyed, “What are you really thinking?” I presume that the thought process goes kind of like this. In our country employers provide health insurance. They always have, haven’t they? So, in order to make sure everyone has coverage, we should make all employers provide coverage. Simple. Problem solved. Next Question.

After all, those answering the survey do not have to answer the tough questions like what role will the current insurance markets play? Who would enforce the mandate, especially for individuals? How do we make sure that risks are broadly pooled? And more importantly, what will be achieved? At the end of the day will we really have better healthcare in America? That really is the question, isn’t it?

I notice the Republicans are shying away from calling for mandates, even though a slim majority of Republican voters have answered the survey question saying that they support mandates. Why? Is it because they recognize that making sure that everyone has health insurance really does not address the issue of providing healthcare? I would like to think so. I would like to think that there are some candidates (and maybe they are not all Republicans) who recognize that the healthcare system is essentially broken and that by simply making sure everyone has insurance coverage does not address the underlying brokenness of the system. In fact, it could exacerbate it.

I would also like to think that these candidates are smart enough to know that no form of government intervention can fix the problem. The fix must come from rebalancing the healthcare economics in the country. It starts by shifting the power to control delivery and pricing of healthcare services from the current provider/payor/government complex to the free, open, and transparent market where innovation and entrepreneurship can be applied to solve the problems of access, quality, and cost. By setting up the right incentives, change will happen faster and with better results than any scheme that comes out of central planning. Not only will healthcare become more affordable for all, it will be a better quality meaning better outcomes and better patient experiences.

A good example of this course of action is a new website announced today by Regence, the largest health insurer in the Northwest/Intermountain Region. This spring they will launch a member feedback feature that enables the health plan’s three million members to share information with each other about their provider experiences. The site will provide the means to evaluate and review information on physicians, dentists and other healthcare professionals, and to see comments and ratings posted by other members.

The free and open distribution of information about cost, quality and the patient experiences coupled with the incentive to seek out this information will lead to a more efficient value-based healthcare system.

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Mandates or Innovation?

As the presidential political campaigns heat up and more of the discussion centers on health care, we are going to be hearing a debate about mandating health insurance. Many politicians are promoting a health care system whereby the government would require individuals to purchase health insurance just as states currently require auto insurance coverage.

Greg Scandlen the president of Consumers for Health Care Choices, a national membership organization based in Hagerstown, Maryland, and an expert in Health savings Accounts (HSAs) has published an interesting article on the subject of mandates. The piece can be found on the Heartland Institute website and is entitled: Don’t Mandate: Innovate

Here is an excerpt:

Failed Mandates

We have already seen that innovations such as Health Savings Accounts (HSAs) will appeal to market segments that did not find value before. Approximately 40 percent of the people who have purchased HSAs in the non-group market were previously uninsured.

But HSAs are only one of many possible innovations in health care financing. Mandatory coverage short-circuits the vital process of innovation in a competitive market.

Further, mandatory coverage simply doesn’t work. Virtually every state currently mandates auto insurance coverage, and the number of uninsured motorists is very similar to the number of people without health insurance.

In 17 states, the rate of non-insurance for auto (which is mandatory) is higher than for health insurance, which is not mandated.

To read the whole article click here: Failed Mandates


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