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Brian McManus, Alexandria, Va., column: Health care reforms would break the bank

By Brian McManus ALEXANDRIA, Va. -- Health insurance premiums for families in Grand Forks soon could shoot up by as much as 95 percent. That's what the Council for Affordable Health Insurance determined after hiring one of the nation's top health...

By Brian McManus

ALEXANDRIA, Va. -- Health insurance premiums for families in Grand Forks soon could shoot up by as much as 95 percent.

That's what the Council for Affordable Health Insurance determined after hiring one of the nation's top health care actuaries to examine the three major components of Congress's leading health care reform proposals.

The first of these proposals is an "individual mandate," which would require every American to have health insurance. In other words, unless one is eligible for a government program such as Medicaid or Medicare, one would be required to buy insurance. Failure to do so would result in a fine.

Sounds simple. To achieve universal coverage, just force everyone to buy coverage. But history shows that's not always what happens.

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Massachusetts lawmakers imposed an individual mandate in 2006, and the state is frequently lauded as a model by health reformers. Yet, as many as 200,000 Bay Staters remain without health insurance; and state spending on health care has skyrocketed. Since the legislation passed, government health spending has gone up by 42 percent.

Another leading proposal in Congress is "guaranteed issue." As the name suggests, this policy would guarantee access to health insurance for everyone -- including those with preexisting conditions -- at any time.

But such a policy actually counteracts the individual mandate. One of the main reasons for instituting a system of universal coverage is to motivate Americans to visit doctors frequently and address medical problems before they deteriorate into costly illnesses.

With guaranteed issue, though, there would be little point in getting health insurance until one actually needs it. Why pay for insurance now if you can just wait until you need it?

If there was a "guaranteed issue" law for car insurance, one could just wait until an accident to buy coverage.

Lawmakers also want to dictate insurance premiums based on what is known as "community rating." This would require health insurers to charge everyone the same price or close to it, regardless of their health, age, and other factors.

Imposing price controls in this way, however, would drive up rates for younger and healthier buyers as well as people who live in rural areas.

The reason is simple. Health insurers would be prohibited from adjusting their policyholders' premiums based on their expected costs. So, they'd have to raise rates on everyone else simply to stay in business.

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Combined, these three "reforms" would drive health care costs through the roof.

According to my organization's analysis, the average family of four living in Grand Forks with a $1,500 deductible is paying about $636 per month. Under Congress's leading health reform plans, however, this premium would rise to $1,240.

Once again, it's valuable to look at Massachusetts, since it's the only state that has produced a health care system similar to what President Barack Obama and congressional Democrats want. Right now, the cheapest plan in Massachusetts is more than $9,000 a year, and the most expensive plan is more than $20,000 a year.

With Congress poised to spend more than $1 trillion on health care reform, it seems unacceptable that insurance premiums could nearly double in Grand Forks. It makes one wonder if American families will be able to afford health care "reform."

McManus is director of federal affairs with the Council for Affordable Health Insurance, a research and advocacy association of insurance carriers.

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