During a town hall in Florida this afternoon, Mitt Romney said his health care plan would “treat individuals like consumers” and allow everyone to purchase individual health insurance policies across state lines. “Funny thing how markets work if you have real consumers,” he added:
ROMNEY: I believe that in health care, the right answer is to get it to work more like a consumer market and less like a government dominant monopoly like it is today.
But a “consumer-driven” market doesn’t actually work for health care, where individuals are tasked with making life and death decisions without the specialized medical information and in many instances don’t have the choice of refusing treatment.
Certainly a level of competition in the insurance market makes sense — and the Affordable Care Act establishes state-based exchanges that encourage insurers to compete for business. Under the ACA model, insurers will have to offer a basic set of benefits and will be competing on cost without necessary sacrificing quality of coverage. Romney is proposing something entirely different. He wants to spur competition by allowing insurers to circumvent consumer protections in certain states and sell bare-bone policies to the healthiest beneficiaries.
Someone’s “son” or “daughter” — as Romney puts it — may experience short term savings as long as they don’t become sick, but once they do (inevitably) fall ill, their plans won’t offer coverage for the treatments they need and they will either go bankrupt trying to pay for their medical bills out-of-pocket or spend substantially more on comprehensive coverage. These more substantial plans will also experience an increase in costs because they will be overrun with the sick people who are either uninterested in a bare bones “competitive” policies — they don’t offer coverage they need anyway — or can’t qualify for them.
In fact, even if one were to sweep these concerns aside and enact Romney’s consumer-driven model, it would have little impact on national health care costs. That’s because the individuals who would want a cheaper plan are generally healthier and make up “a tiny fraction of healthcare spending.” As ER administrator and physician Liam Yore explains, “They’re not getting $30,000 stents or prolonged ICU stays, or needing complex chronic disease management. Conversely, those who are high consumers of health care simply cannot be made more price sensitive, since their costs are probably well beyond what they could pay in any event, and for most are well beyond the limits of even a catastrophic health insurance policy.”