ObamaCare Buyers Club
http://online.wsj.com/articles/obamacare-buyers-club-1414793493?mod=hp_opinion
Liberals are fighting liberals over referenda that would make the health law worse.
Democrats keep saying that opposition to the Affordable Care Act is a spent political force, but not so fast. Senate Republican candidates have run more ads against ObamaCare than on any other issue, according to Kantar Media/CMAG. But perhaps more fascinating this election year are the state referenda that confront rising costs and declining patient choice.
The pity is that these states are trying to solve the problems caused by ObamaCare with more ObamaCare-like rules and government control. Leading this challenge from the left as always is California, where on Tuesday voters will consider Proposition 45, which would impose stronger price controls on health insurers.
The state’s individual and small-business insurance markets were reasonably functional, but now all coverage must conform to the White House’s income-redistribution goals, and premiums are headed up fast. Anthem Blue Cross—whose 2010 rate hikes President Obama infamously served up as a reason to vote for the bill—is raising small group rates 9.8% next year. The California insurance commissioner prefers 2.1%.
So Prop. 45 would give the commissioner the power to reject rates he deems “unreasonable,” with no reference to actuarial or solvency standards. Government would dictate what products consumers are allowed to buy and use its clairvoyance to decide what businesses can charge.
One irony is that the ObamaCare exchange known as Covered California already fixes prices via crony capitalism, albeit in the back room. Instead of promoting competition among many insurers to lower costs, the bureaucracy follows a practice called selective contracting: Insurers receive a list of demands and Covered California then picks a few compliant winners. The losers are excluded from the exchange’s subsidized consumers.
Bedfellows make for strange politics, and the double irony is that the campaign against Prop. 45 is led by Covered California and such ObamaCare supporters as Nancy Pelosi . They don’t want an interloper to disturb their discretion. With characteristic California unwisdom, Prop. 45 gives outside pressure groups and especially trial lawyers the right to challenge rates in court.
The result could be a neutron bomb for California’s insurance markets worse even than ObamaCare. An insurer expecting a 9.8% raise and taking losses on 2.1% won’t sell policies. In 2010 Massachusetts insurers stopped writing new policies for a time to boycott similar rate-review price controls. Prop. 45 fell in the polls this fall, though a Hoover Institution poll this week suggests the measure could pass.
Another state to watch is South Dakota, which is trying to regulate back into existence the access to medical providers that ObamaCare destroyed. Patients expecting to keep the doctor they liked continue to discover that the narrow networks offered on the exchanges resemble the standard of care in Medicaid.
So Initiated Measure-17 would force insurers to accept “any willing provider.” All doctors and hospitals licensed by the state that met certain de minimis conditions must be covered by all plans, regardless of cost or quality. Like Prop. 45, IM-17’s cure is worse than the ObamaCare disease.
The new narrow and ultra-narrow networks were the only way for insurers to comply with ObamaCare’s mandates and keep their products affordable. If the better alternative of competition is ruled out, limiting provider choice can produce volume discounts and lower charges, much like Covered California’s selective contracting. Networks can also be a useful tool, in moderation, leading to superior medical and economic outcomes by steering patients to more efficient and high-value providers.
If any willing provider passes, premiums will necessarily shoot skyward. South Dakota is a minor insurance market but the vote is being watched closely because IM-17 could become a model for other states or the federal government to restrict or even outlaw narrow networks.
The California and South Dakota referenda reflect liberal health-care confusion. If health prices are too high, simply decree lower prices. If those prices lead to poorer quality, simply decree better quality. The reality is that government can’t do either without doing more harm.
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So how refreshing that some states are attempting to substitute individual choice for political control. A ballot question in Arizona would approve a “right-to-try” policy, which would change state law to allow the terminally ill to receive experimental medicines not approved by the Food and Drug Administration. As long as they are aware of the risks and have exhausted other options, there are no good medical or ethical reasons for these patients to die waiting on the bureaucracy.
Inspired by the “Dallas Buyers Club” smuggling of AIDS drugs in the 1980s, right-to-try laws have passed in Michigan and other states, though these statutes are likely pre-empted by the federal laws that empower the FDA. But then maybe they’ll lead to an instructive legal rumpus, especially because the feds will disregard laws about “medical marijuana” but not potentially life-saving medicines. This battle, like the one against ObamaCare, is worth fighting.
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