Patient Power blogger Brian Schwartz has squared off against AFL-CIO president John Sweeney and Colorado executive director Mike Cerbo in debating whether free market health care is effective, and whether employer-sponsored health insurance is actually a benefit to employees. Sweeney and Cerbo believe that the free market for health insurance isn’t working (I’d debate that we don’t really have a free market at all, but that’s another story), and criticize McCain’s health care reform proposals that could result in fewer employers offering coverage, thus pushing more people onto individual health insurance policies. They make a valid point that health insurance provided by employers is a huge benefit to employees, and a tax deduction for the employers. Without the tax benefit, it is likely that fewer employers would offer coverage. McCain’s plan would call instead for tax credits for people purchasing their own health insurance - $2500 for individuals and $5000 for families, which Sweeney and Cerbo say is less than half the average price of premiums. But I think they may have been looking at group premiums when they did their math. It’s true that the tax credits are less than half the price of employer-sponsored health insurance premiums. But those policies are guaranteed issue, and quite a bit more expensive than medically underwritten individual policies. So if people were to have to buy their own individual health insurance, the tax credits would go a little further than Sweeney and Cerbo estimate (Jay and I pay about $5200/year for an underwritten individual HSA qualified health insurance policy for a family of three). They also state that the move from employer-sponsored health insurance to individual health insurance would mean that “existing regulations would also be eliminated. For example, state laws that mandate coverage for mammograms or hospital stays after childbirth could be ignored at will.” I’m not sure what they’re referring to here, as there are plenty of mandates on individual policies in Colorado, and I haven’t heard anything about individual health insurance carriers being able to ignore them.

But Sweeney and Cerbo make some very good points. Our goal should be extending access to health care to everyone, rather than the wealthiest Americans who can afford to buy the best health insurance policies. They point out that McCain’s plan would call for the health insurance industry to regulate itself, which is asking the fox to guard the henhouse. There’s no way that a for-profit industry with a huge political lobby and a captive market is going to regulate itself to the degree necessary.

Schwartz makes an excellent point when he says “We consume medical care like a business traveler dining on the company’s expense account: Since someone else pays the bill (insurance companies), patients need not shop around, so providers don’t compete on price.” Very true. When a health insurance policy covers everything (more likely in the case of employer sponsored plans than individual plans), there’s no incentive for the patient to avoid over-utilization of health care. But on the other hand, when people switch to high deductible policies, more of them are likely to discontinue maintenance medications for chronic conditions, citing cost of the medication as a major factor. So there’s not a simple answer. Schwartz would have us rely on the “market” for health insurance, with each person free to “choose what’s best for you and peacefully trade with others doing the same.” But what about the person with a child who has cystic fibrosis? Or Type 1 diabetes? Or the mother with MS? How are these people going to get health insurance through the “free market”? In some states, they will have no options at all without employer-sponsored health insurance, as they would be ineligible for individual coverage. I don’t think that health insurance needs to be tied to employment, but pushing everyone into the individual health insurance market won’t work either. Without a public, tax-funded, guaranteed-issue health insurance plan in place, the people with pre-existing conditions who earn too much money to qualify for Medicaid are going to be left with very few options for coverage. This is the major flaw in the idea of utilizing individual health insurance for everyone, and letting everyone choose what policy they prefer - there are too many people who don’t have a choice at all.

Overall, I have to agree with Sweeney and Cerbo - we need more government regulation and intervention in health care, not less.