Why Americans dislike Obama's health care reform

Earlier this week, Senate Majority Leader Harry Reid, D-Nev., unveiled his chamber’s plan for health reform. The nearly 2,100-page bill boasts a price tag of about $850 billion and hues closely to the $1 trillion reform bill that recently passed the House. Democratic leaders have hit the airwaves to sell the country on the merits of their vision for reform.

But the American people aren’t buying their pitch. A recent Washington Post-ABC News poll found that 49 percent of Americans oppose the proposed reforms — slightly more than those who support them.

Why the negative response? Because they believe they’ll be worse off under the terms of the Democrats’ legislative package. And they’re right. Several recent studies have shown that the Democrats’ reform plan will increase health costs for most Americans.

A major study, based on actuarial data from the insurer WellPoint, found that the main elements of the various Democratic reform plans would increase insurance premiums in the 14 states where the company currently operates Blue Cross plans.

The series of WellPoint studies found that young, healthy customers would get hit particularly hard by reform, suffering an average insurance-premium increase of 154 percent.

In Virginia, for instance, a 25-year-old man now pays about $66 each month for insurance. Under reform, his bill would almost triple — to $181.

Already, half of young Americans go without insurance. These folks are typically just starting their careers and may not have much disposable income. If insurance becomes more expensive for twentysomethings, their uninsured rate will spiral even higher.

Another group likely to face higher health costs as a result of reform is small business. The Oliver Wyman study found that the average small business would get hit with a 19-percent premium increase within the first five years of passage of the House plan.

The data from WellPoint reveal that the major elements of the Democrats’ reform packages would increase health costs for 70 percent of small businesses. Researchers broke down the impact of reform by state and city.

All employers feel the pain of rising health insurance prices. But larger ones can spread out cost increases over many workers. Small businesses don’t have those advantages. So they have to compensate for higher premiums by cutting down on other labor expenses. That means lower wages, fewer new hires and even layoffs.

It’s not just young people and small businesses that stand to lose at the hands of the Democrats’ health reform plan. The average family with two kids would experience an 85 percent increase in premiums, according to WellPoint’s data.

Both the Senate and House reform plans would also require that insurance policies cover a prescribed set of benefits. For instance, every customer would have to maintain coverage for pediatric dental services, maternity care and assorted other medical services — even if he or she didn’t want or need it.

Such benefit mandates force insurance prices higher. Indeed, at the state level, benefit mandates increase the cost of a basic insurance package by 20 to 50 percent.

The Obama administration and congressional leaders have been quick to dismiss studies critical of their reform plan. Instead of addressing the substance of the critics’ findings, officials have simply attacked the messenger.

For instance, Nancy-Ann DeParle, Director of President Barack  Obama’s Office of Health Reform, recently claimed that WellPoint’s data couldn’t be trusted. In order to justify her assertion, she cited a report from the investment bank Goldman Sachs that concluded that health care reform would cut insurance-industry earnings by as much 50 percent. According to DeParle, such a forecast is proof that studies from insurers are self-serving and intellectually bankrupt.

But insurance plan profits represent less than one penny of every health care dollar America spends. Further, the reforms on offer have been tried time and again at the state level. And in every case, they’ve raised, not lowered, health costs.

Americans want substantive health reform. They want to see their costs go down and their quality of care go up. But the Democrats’ reform package won’t deliver on either goal. Is it any wonder they’re having such a tough time getting the public’s support?

Sally C. Pipes is president and CEO of the Pacific Research Institute in San Francisco. Her latest book is “The Top Ten Myths of American Health Care.” Follow her on Twitter @sallypipes.

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