The True Consequences Of So-Called Consumer Driven Health Care


In today’s Wall Street Journal, Robert Carroll lays out the conservative philosophy for health care reform. Like Sen. John McCain, Carroll believes that the employer-insurance subsidy contributes to higher health care costs by encouraging overutlilization of care. “The subsidy encourages people to buy bigger policies that cover more, and leads to greater health-care spending,” Caroll argues.

Eliminating the income-tax exclusion “should reduce private health-care spending; to the extent this reduced the cost of health care, it should also put downward pressure on the growth of Medicare and Medicaid costs.”

But in shrilling for McCain’s plan to dismantle the employer-based system and push Americans into high-deductible plans in the individual market, Carroll gets the consequences of leaving individuals responsible for financing their own health care entirely backwards.

According to a Commonwealth study, for instance, the major effect of a high deductible is likely to be “a one-time shift in spending from premiums to patient out-of-pocket outlays.” Premiums to employers and workers would be reduced by 10 to 15 percent, “but most of that reduction would be a reduction in covered medical outlays and a shift to out-of-pocket expenses for which patients would be responsible,” a Commonwealth study concluded.

Shifting the risk and cost of health insurance onto the individual will increase medical debt and discourage preventive care utilization. In fact, adults enrolled in high-deductible insurance plans (with deductibles of $1,000 or more) reported one of four cost-related access problems:

– because of cost did not fill a prescription

– did not see a specialist when needed

– skipped a recommended test treatment, or follow-up

– had a medical problem but did not see a doctor

Encouraging more people to skimp on preventive care, could fuel growth in health care spending, not reduce it. In fact, advocates of so-called consumer driven health care plans, miss the forest for the trees. The sickest 20 percent of Americans account for 80 percent of health care costs. Yet consumer plans would do little to lower the costs of their care and may actually add to their ranks.

Carroll proclaims that “Almost Everyone Would Do Better Under the McCain Health Plan.” In truth, it’s difficult to think of anyone — the not-yet sick or the already sick — who would benefit from punting needed care because of higher cost.