View From a Height

Maryland does Health Insurance "Reform"

For a while now, Maryland's Republican governor has been fighting with the overwhelmingly Democratic state legislature over a number of issues - taxes, budgets, regulation, and now heath insurance. Gov. Ehrlich has kept up these positions even as the local press, from Baltimore and Washington, assail him for having the temerity to actually behave as though he were - gasp! - a Republican.

Taking a look at the health insurance bill the Democrats have produced should make Marylanders happy they didn't put a Kennedy in Annapolis. Now, the doctors and the hospitals, figuring that they won't get anything better, and that they know which way the wind is blowing, have decided to give in and go along with the bill, no doubt hoping to avoid political wrath when the time comes to look at them.

But they said the legislation includes many welcome provisions, including establishment of a state fund that would hold doctors' insurance increases to 5 percent this year. Without state intervention, doctors insured by the state's largest carrier face an average 33 percent increase.

...

The two groups took no position on Democrats' plan to pay for the doctors' relief fund with a tax on HMO premiums, a provision that is central to Ehrlich's opposition.

Read that again. The legislature is going to subsidize malpractice attorneys by taxing health insurance. Talk about cutting out the middle-man!

We all know that this was how the market, such as it is, was working anyway. Doctors got sued, their premiums got raised. They passed those costs on to their customers, the insurance companies. (What, you though you were their customer? Ha! Who actually pays those bills? Anthem, that's who. And you wonder why they set rules on treatment?) The insurance companies, most of whose premiums come from employers, not individuals, turn around and pass on those costs. It's one set of deep pockets turning around to the next set until they get to you.

The legislature is just adding another set of deep pockets to go after - the government's, i.e., all of yours. It's a classic case of socializing the risk while privatizing the benefit.

In the process, they're asking for a cut for one of their prized constituencies - professional bureaucrats. Highly unionized. Give lots to campaigns. I suppose I could be really cynical and suggest that another Democratic legislature is taxing you to pay for their political campaigns, but I'm sure they'd object to putting it in those terms. After all, any of those union members who really want to could spend half of the rest of their lives in front of union grievance board and government oversight committees forcing the union to stop withholding the "political" portion of their dues. That is, if the union leadership hasn't already gone to NEA school to figure out how to claim with a straight face that they have no political expenditures.

Yes, the bill also halves the "pain and suffering" cap from $1.6 million to just over $800K. That's a diversion. We all know that the main cost of litigation is from class action suits which the bill doesn't address, and the fear of lawsuits, which it barely addresses.

No wonder the doctors and the hospitals are happy to have it. And no wonder they "don't take a position" on how it's funded.

I can think of about 400 simple objections to this piece of "reform." Why 5% and not 10%? What happens next year? Why not start creeping the rate downward, so that eventually all of the doctors' malpractice costs are covered? And if that's such a good idea for malpractice insurance, why not for health insurance? If malpractice insurance is so profitable, why not find a way to encourage competition? If health insurance is so profitable that there's room for a tax, why not find a way to encourage competition?

Here's one nobody wants to ask: what about making people, rather than a succession of institutions, responsible for their own health care costs?