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Political Clash over Health Care

05/28/02 12:00AM By John McClaughry
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Everyone views with alarm the escalating costs of health insurance and the growing numbers of Vermonters who do not have coverage. The liberal solution is, as usual, a new government program. Senator Peter Shumlin, has pushed a bill through the Senate to create a "Vermont Health Access Plan Buy In Program." It would be a government health insurance company run by the Commissioner of Prevention, Assistance, Transition and Health Access.

Anyone who has had no health insurance for a year, and whose income is below 300% of the federal poverty level ($51,100 for a family of 4), could participate. So could a small business (19 or fewer employees) if it enrolled at least 75% of its employees, and paid at least one half of their premiums.

So what's the advantage to this? The advantage comes from the fact that state government can and does coerce hospitals, nursing homes, doctors and dentists into selling their care at below-cost prices. The Senate bill would require that premiums paid by the covered individuals and companies be sufficient to pay providers ten percent more than the federal government pays for Medicare. This is well above what the state's Medicaid program now pays, but it's still well below the actual cost of the services. In other words, the new buy-in program would give enrollees a discount extracted from the hides of medical providers. Then, of course, the hospitals and doctors will have to once again raise their raise their rates to non-governmental customers.

It is time some people in Montpelier faced the likelihood that more legislation to force hospitals, nursing homes, doctors, and dentists to give out health care on the cheap will soon reach the point where it threatens to jeopardize the quality of our health care system.

It is also time for those same people to face up to the moral question: Can they in good conscience hand out benefits to people and instead of raising taxes to pay for them, coerce the providers into absorbing a loss.

There is a way out of this mess. It requires legislators to give up on the constant expansion of government programs. It requires a return to individual and family responsibility, restoring a competitive insurance market, tax equity for premiums, and income-based assistance to enable all working families to buy and own their own affordable policies. It also requires some moral courage, which has been sadly lacking among the friends of expanded government-run Health care plans.

This is John McClaughry, thanks for listening.

John McClaughery is president of the Ethan Allen Insitute, a Vermont policy research and education organization.
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