State politicians want to resolve all health care woes and impose the woke new concept of health care "equity." As usual, they won't come close and, if they have their way, will do more harm than good.
This year’s vehicle for that misguided agenda is the much-debated House Bill 1232. It seeks to address soaring health insurance premiums and dwindling health-plan options in the state’s market for small-group and individual coverage. But as introduced, the bill would backfire in a big way, ratcheting down reimbursements for providers to a point it could shut down some hospitals and drive doctors from Colorado.
Fortunately, fierce opposition from wide-ranging stakeholders in the health-care equation has slowed the bill down. As events unfolded at the Capitol this week, the lawmakers behind the measure offered a rewrite in committee, making considerable concessions to the bill’s many critics. Most notable among those concessions is that the legislation — introduced as the “public option” because it would create a government-run health insurance plan — now no longer would do so. Even the “public option” label was stripped.
The new version, adopted Tuesday by the House Health & Insurance Committee, instead directs the state insurance commissioner to set up a standardized health plan called the “Colorado Option” that private market insurance carriers then would be expected to offer and hospitals and doctors would accept.
Under the bill as amended, the health-care industry is required to reduce premium costs by 6% per year, starting in 2023 and for three years, totaling 18%. The standardized plan would set rates for reimbursement of health services beginning at 155% of Medicare reimbursements and going up from there.
Meaning, a fundamental flaw remains in the bill: It attempts to contain costs by arbitrarily dictating rates of compensation for health care — regardless of the real-world cost to providers. And it threatens coercion to achieve that end.
As our news affiliate Colorado Politics reported, the new version of the bill softened some of the opposition to the bill — but not from the majority of doctors among other health-care providers. The amended bill still raises concerns even for Democrats in the House who are medical professionals in their day jobs
Rep. Yadira Caraveo, D-Thornton, who is a pediatrician, said the Medicare reimbursement rates the bill now will attempt to foist on the industry don’t cover, for example, her pediatric services.
And, significantly, the proposal would impose a $5,000-a-day fine on anyone who refuses to accept the reimbursement rate or who refuses to participate in the standardized plan. Such a fine for 15 days would add up to $75,000, Caraveo said in Tuesday’s hearing, and could put her practice out of business.
The brute force behind this misbegotten proposal is still there: Lower prices or the state will do it for you by force. It is a glorified government price-fixing scheme and will have the same effect as all government price caps. It will harm consumers and make health care less available to those least able to afford it. We do not get more of anything by paying people less to produce it.
Politicians must know the ultimate hardship this bill would impose because price controls never work. Republican President Richard Nixon told us fuel was so important the government must cap the price.
Baby boomers remember the gas lines and "no gas" signs Nixon caused at the pump, which devasted the economy. Nixon could not force the owners of oil rights to pump it out of the ground. No one can force an investor to finance oil exploration and extraction at a loss.
If HB 1232 becomes law even in its amended version, health care providers of all kinds will find every means possible to avoid providing services that don't pay for themselves, let alone generate a profit. More physicians will retire early, as they have each time government has interfered in how they conduct their practices.
When health care providers inevitably escape serving the individual and small group markets, people in those demographics will suffer the most.
Price controls are the crudest and cruelest tools in the political magic kit. Intelligent and honest legislators know this trick deceives.
Price controls do not work as intended and never will. They violate fundamental principles of human behavior and market forces. By advocating HB 1232, politicians count on mass cognitive dissonance. They can order a lower price and tell the public they did something good. When it backfires, they're confident few will connect the dots. They'll tell us they tried, but the "greedy" health care providers would not cooperate.
Don't fall for this sleight of hand. Tell them to scrap House Bill 1232 and find a way to provide more health care, not the reduction in care this bill would certainly cause.