by Mark Plaster MD
Some of the proposed health care reform bills that are currently winding their way through Congress contain an “opt out” clause for those states who do not wish to participate in the ‘public option’ insurance plan, which is simply an expansion of Medicare. First, why would any state opt out of a government handout? There are some states who are dominated by one or two powerful insurance companies who have tremendous lobbying strength in those legislatures. Those states might opt out to protect those interests. But a larger reason might be that the state government might see the hand writing on the wall. The future of government health care is an expansion of state Medicaid. If states feel that they can escape this flood of red ink in the future they may opt out of the gift from the government in the short run. It’s entirely possible that the federal government will encourage states to opt out, thereby relieving the Congress of the responsibility for the uninsured. Further, those states that do opt out will subsidize those that don’t. But to think that states will opt out because “we are doing just fine without your money” is naive. Politicians are short sighted. States will take the money.
We already have a model for opting out. It’s the private school system. If you feel that the public school system is not for your child, either because it’s not safe, the education is poor, or the social influences are not up to your standard, you can take your child from the public sector and place them in private education. You can ‘opt out’ of public education. In fact the state plans on a certain number of these privately educated children not showing up on the first day of school. However, taxes from their parents are counted on to support public education. Despite this cost shifting, inefficiencies in public education cause cause district after district across the country to teeter on bankruptcy. If all the privately educated children came flooding into the public school system to get what is owed to them, the system would collapse. Similarly, in most universal health systems there is a ‘private tier’, where patients dissatisfied with their health care, the wait, whatever, can go to a private physician. It serves as a pressure valve for the system. In many ways, the US has served that purpose for Canadian patients who can’t find the health care they need in Canada. But what would happen if there was no opt out for them. The demand on the system would likely bring about its implosion. The incoming President of the Canadian Medical Association made this observation recently.
So even though you can opt out of the service, can you opt out of paying for the ‘public option’? Can you opt out of the tax increases? Of course not. The current Senate bill includes a mandated payment by the manufacturers of medical devices, such as pacemakers, artificial limbs, etc. Similar to the penalty on tobacco companies, they are not allowed to pass this on to consumers of these products. But pass-throughs are inevitable. Costs of other items will go up and these costs will be borne universally whether your state opts out of the public option or not.
Just as you can’t opt out of the taxes to pay for the system, seniors can’t opt out of the changes to their Medicare. Many elderly have chosen the private health plans of the Medicare Advantage programs. Many of these are slated for big cuts. Despite promises by President Obama that everyone can keep their insurance if they like it, seniors will not be able to opt out of these changes to their plans.
While current plans may allow states to opt out of participation in government administered health plans, there is currently no provision for the young and healthy to opt out of insurance coverages that they do not want or need. In fact these premium dollars are seen infusion of cash needed to pay for the health care of the poor. This is the reasoning behind why all health care plans need to be ‘qualified’ by the government. Young healthy people tend to opt out of buying expensive health plans that they feel they do not need. Requiring everyone, young and old, those with healthy lifestyles and those without, to buy the same ‘qualified’ insurance plan will insure that there is enough cash.
In the end, how much choice will states have? How much choice will individuals have? Not much. And that is why the opt out provisions are so politically palatable. They ‘allow’ states and individuals to make ‘choices’ where there are essentially no other options.