News & Commentary
Hawaii's Universal Health Insurance Lesson
by Carrie L. Lukas
January 30, 2009
Townhall.com
When President Obama signs the "Children's Health Insurance Program Reauthorization Act of 2009," (which passed the Senate by a vote of 66-32 last night) he will take the country on the first of what are likely to be several steps during his Administration toward "universal" health insurance.
I haven't seen any polling, but I bet "universal" is a word that appeals to most Americans. We all want people to have access to good things like health insurance and quality medical care. Yet Americans should recognize that when politicians talk about "universal" insurance, they're really talking about "government" insurance. And, as government takes over the insurance aspect of healthcare, it will inevitably take over other aspects as well. Politicians lambast private insurance companies for measures taken to manage costs and discourage medical over-consumption, but you can be sure that Uncle Sam will be most aggressive in these areas. Look to countries with government-run healthcare to get a glimpse into the long-waiting lines for medical procedures and government-imposed rationing that Americans can expect once we move fully to a single-payer system.
Those who already have quality healthcare may assume that this debate really doesn't have much to do with them. After all, as a candidate, President Obama promised "if you like your current health insurance, nothing changes." Yet Americans should consider the dynamic that would occur as the government provides more and more publicly subsidized insurance options.
The experience of Hawaii in launching the first state-based "universal" child health insurance program is instructive. The program was created in hopes of helping the island state's uninsured children (estimated to number between 3,500 and 16,000) by providing free health insurance coverage and access to doctor's visits for just a $7 co-pay.
What lawmakers soon learned was that it isn't just the existing pool of uninsured who wants to take advantage of a free government alternative; many parents dropped their private coverage in order to qualify for the government-funded plan. A staggering 85 percent of those who enrolled previously had health insurance. Dr. Kenny Fink, an administrator at Hawaii's Department of Human Services, summed up what was happening: "People who were already able to afford healthcare began to stop paying for it so they could get it for free. I don't believe that was the intent of the program." Just seven months after the program's launch, government officials decided to shut it down.
Maybe encouraging people to switch from private to government-provided insurance wasn't the intention of Hawaii's universal children's health insurance initiative, but that result certainly shouldn't have come as a surprise. When a free alternative becomes available, it's sensible for families to reevaluate if they should continue paying for a service on their own. This dynamic will hold true whether the federal government starts offering preschool through the government-run public school system (another Democratic priority) or if they expand eligibility for government-subsidized healthcare.
The Heritage Foundation estimated that about half of children who would obtain health insurance through SCHIP if eligibility is raised above 200 percent of the poverty line would have previously had private insurance. Other economists have placed the estimate even higher. As more families decide to stop paying for private insurance and switch to the government system, some children may actually end up having worse healthcare coverage than they did before the government generously offered taxpayer-funded support.
The migration from the private insurance marketplace to government programs will have consequences beyond the effects on individual families and even beyond the price tag that will have to be borne by taxpayers. Private insurers will be losing business to the public system and will have increased difficulty offering their services at the same prices. They may have to find ways to cut costs or reduce expenses. As their services become comparatively less attractive, more people will make the switch. Employers who today help pay for employees' health insurance may begin to decide it isn't worth the investment and that employees would rather have money in their pockets and make the leap into the government program.
President Obama may sincerely not want Americans currently happy with their health insurance to be affected by new government policies. But such policies have consequences beyond their most visible beneficiaries. Americans would be wise to understand that whether they like it or not change may be coming their way.
8 Comments
Nick C | February 2, 2009, 1:22pm | #
Ms. Lukas,
Why are you complaining about health care in the US or anything else here in the US.
Are you not living in Austria. It seems as though you have vacated the US for another country. Come back and be part of the system instead of complaining about them in a country which does have universal health care. When you get sick you will not get a bill. Or maybe you should receive a billing for any and all health care. What is it you decided to take your money and run. When are you going to change your citizenship?
Dana | February 2, 2009, 1:39pm | #
Ms. Lukas
The state run health care system in Hawaii probably failed because people were driven to go with the option that was more affordable to them. If private insurance was not available and everyone used the State system, they could pay for it with a small tax increase to offset the cost, which would be way less than what is taken out of a person's paycheck each month to pay for Private insurance. Sign me up!
Carolyn | February 2, 2009, 2:14pm | #
Hello Carrie,
I listened to your interview with Thom Hartmann today. Here are my thoughts. (I am a 43 year old woman and live in Oregon.)
I read Ayn Rand when I was 16 years old. I expect you did, too. I have gone on (waaaaay on) to realize the fundemental flaws in her thinking, and in libertarian thinking in general. I have observed the world through the lenses of reason, common sense, love, and intellectual honesty.
I do not know you and will not attack you, even through the anonymous medium of the computer. However, I want to make some suggestions for you to think about.
1) Do you ever feel like you are fitting reality into your philosophy instead of observing reality and then proceeding to form a philosophy? When I listen to libertarian folks, the pattern I notice is that you have this "philosophy that is correct damnit" and that you are going to analyze facts and reality by only looking through that lens. Lobbying for things to fit into this world-view becomes job #1.
2) Thus, when examining a proposal (ie uiversal health care) that runs counter to your philosophical position you spend inordinate amounts of energy finding flaws (which are often disputed handily) in the proposal from the other side. Instead of developing and lobbying for solutions and plans and ideas and proposals of your own. You are too busy pointing out the wrong-headedness of the other side.
3) Because this becomes a dominant way of thinking for libertarians, intellectual dishonestly easily sneaks in. You have just GOT to make your argument work. Listening carefully to all sides, with a open heart and mind, is not job #1. The drive to solve problems is weakened and the drive to prove your philosophy is strengthened. You may hide your real intentions and your real supporters (who funds iwf?). You find people are constantly saying "but, that's not true..." or "that won't work" but you dismiss them as "not getting it". Do you view yourself thinking this way soometimes?
Because of all this, silly arguments that obscure reality are then made. For example, in your article you posit that people who previously had insurance but who want to opt-in to a government sponsered program (which costs less in premiums and at office visits) are doing so because they want "money in their pockets". What, to buy a new flat screen TV? Perhaps they want the money to just make it through the month more easily. But, you say, they will have to pay anyway through TAXES! (Libertarians are for free choice, unless they choose to fund things through taxes??) And we say, well, that seems to work and be MUCH more fair, less costly, efficient, and lets not forget.... moral and ethical. Yes, we may all have to pay for healthcare, but why not do it more fairly and effciently especially if in the end we get a better product? And we present reams of evidence. And then you say "that's not true" (because you MUST support your argument at all costs) and present really weak, sometimes laughable, arguments against the mountains of reality-based evidence. Then fear becomes a weapon. "Uncle Sam will be most aggressive!" you say. You say that government funding of healthcare is just the beginning! Their secret aim is to control your every healthcare move! Using fear is a sure sign your argument is weak and that you don't have any solutions to propose yourself.
You describe yourself as a scholar. Well, lots of other scholars disagree with you. In fact, you are in the minority. No, you are a dying breed. Please re-think what side you are on. Use your skills to support proposals that make sense. Submerge your ego and listen to others. Examine your own thinking patterns closely. Then join us in the movement towards a happier world.
Ms. Lake | February 3, 2009, 9:29pm | #
It scares the living daylights out of me to think that some petty bureaucrat will have the ability to micromanage my health care. I can't imagine having the likes of an IRS or Social Security clerk controlling my care. And of course, no one will ever be responisble for what ever "mistakes" might be made. Or how about this one--you receive some kind of treatment which proves to be very costly. You think the government has it all covered only to discover that three or four years later you have to pay it all back with interest! That's not far fetched--Social Security does that quite frequently. So, in order to fight this insane demand you will have to hire a lawyer to decipher all the regulations. Then again, maybe your care will be too costly and you'll be out of luck 'cause it simply won't be cost efficient to give you the treatment you need to keep on living. Of course, the elites will have the best of everything and they won't have to pay for it at all becasuse as we all know--Democrats don't pay taxes!
MSagacious | February 4, 2009, 12:14pm | #
Very astute observation on the Hawaii Healthcare system for Children. I lived there, and when we could finally take no more of the socialistic life, moved away.
Your comments are accurate as perceived from someone who lived it. When you walk into a doctors office in Hawaii, in addition to filling out normal forms, you are also handed DHS forms (so you can find out if you qualify for "social services" - that is what they call it), if you are bringing a child, you are handed forms for the state socialized healthcare system for your child, and if you are pregnant, you are automatically signed up for WIC. When I found out and tried to be removed from WIC, I was told "people don't request to come off of WIC. Just wait for your service to run out and you will come off automatically." I had to make over 15 phone calls to be taken off of WIC.
This is a broken system. And we want this for our entire country? I'm running out of places to move!
Christina | February 25, 2009, 4:48pm | #
I lived in a socialist society for a number of years and our country is indeed headed for socialism and this is pure proof of it. All of the comments here from people who haven't lived it will never understand the consequences until experienced. We are headed there and eventually will pay big time for it, with our money and quality of services.
papau | October 23, 2009, 3:23am | #
Hawaii has mandated employer-provided health care since 1974, with Hawaii’s businesses paying the highest percentage of employee health insurance premiums in the country because the Hawaii Prepaid Health Care Act (PHCA) requires almost all Hawaii employers to provide health insurance to employees who work 20 hours or more for four consecutive weeks with an employee’s contribution to health insurance coverage not exceeding 1.5 percent of wages. The result is a per-capita total health cost that is 60% of the US average – about the same as the rest of the world, with a lower than the national average uninsured rate. The new “universal program” was for children only and was stopped due to budget concerns, leaving intact the great coverage and low cost that comes from mandatory affordable employer provision of coverage. The insurance companies 31% overhead has to end and will only end via a public option and an affordable mandate – either via subsidy as in the Senate Bill or via mandatory employer contribution as in Hawaii. Please contact an actuary – I am a retired actuary – before you write your next piece on insurance.
Christt | April 8, 2010, 3:11am | #
If we are concerning about the safety of our vehicles and other assets, then why not we bother about our health.A benefit is a health care service or supply that is paid for in part or in full by Medicare. There are substantial uncovered costs that a supplemental policy can help with.
It is important for you to understand that Medicare does not cover everything, and it does not pay the total cost for most services or supplies that are covered.
http://medicarenewsline.com/