By CHARLES M. ARLINGHAUS
True health care reform will allow more options and more choices. The current plans in Washington create a central control that transfers authority from the people to the government and from the state to the federal government. Whether you believe in greater government spending or not, this is exactly the wrong approach.
Anytime Washington gets involved in any policy decision, Washington writes all the rules and tells everyone what to do. Health care is no exception. What started as a plan to find ways to cover people who don't have insurance transformed into thousands of pages of new regulations, mandates, prohibitions, oversight and general central control.
The federal government does not currently set mandates for health insurance; each state does to varying degrees. The new health care bills would transfer most of that authority to Washington. Washington will write the rules because Washington knows best.
Does Washington want to set up a few basic minimums that should be included? No. It wants to set up minimum coverage levels higher than many people's insurance today, maximum coverage levels, specific programs that every policy must include and a new administrative office to review and approve plan designs, plan changes and premium changes.
Generally, the more things a health insurance plan covers, the more expensive it is. Higher co-pays or deductibles will reduce the amount of financial risk and, therefore, the amount of the premium. More expensive plans will cover a higher percentage of "actuarial value," the amount you are expected to cost by statistical averages.
A high-deductible plan might make a lot of sense for a healthy young person, who will be covered against a catastrophe, but still have an affordable premium and, therefore, will buy insurance rather than avoiding it.
However, under the proposed reform, high deductibles are not allowed. New plans must cover at least 70 percent of value. You can keep the plan you have unless it's a budget plan. Budgets and cost-sharing are not going to be permitted. Never mind that most economists think that consumer involvement in costs is a good way to reduce the rate of premium increase.
On the other hand, while we want you to have insurance, we also don't want it to be too good. If your insurance coverage is too good, we're going to tax it. At the levels being considered in the Senate bill, New Hampshire state employees' coverage is about 25 percent too generous. In addition, about 25 percent of employers in New Hampshire give a benefit that the government thinks is too generous. Too nice to your workers? We'll tax that.
It's Goldilocks government at its best. We don't want plans that are too big or plans that are too small. Every plan needs to be just right.
Instead of Goldilocks making these judgments, we'll have a health choices commissioner. The commish will be assisted by the creation of more than 100 new bureaus and federal programs, including the Health Benefits Advisory Committee.
Our new health choices commissioner will have the authority to decide what falls into the just-right range of policy choices that are preapproved for you to choose.
Whether the final bill includes a government-run "public option" or not, the new regulations on private policies amount to more or less the same thing as the government actually running the plan. The "choices commissioner" will be able to approve or deny premiums, dictate coverage levels and "negotiate" prices. So the government will decide what coverage you can have, what it will cost and how much providers will get paid.
There are other ways to make changes in health care that don't involve a large new office in a concrete building in Washington making the rules for everyone in America.
Louis Brandeis believed that change could come from a single state serving as a laboratory of democracy to "try novel social and economic experiments without risk to the rest of the country." In theory, we could watch what happened in a state like Massachusetts and decide if it would work here.
The current proposals in Washington are the exact opposite of Brandeis' approach. A giant new bureaucracy won't allow different states to experiment with different things. Limiting plans to a narrow range of choices -- not too expensive, not too cheap -- eliminates any choices and innovation even in the design of individual plans. Centralized government planning with strict limits on thinking outside the government box does not traditionally lead to innovation.
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.