Patients' Bill of Wrongs

We're from the Senate and we're here to help.

"I think the Congressional Budget Office has the cost of his bill as increasing insurance premiums about 3 percent," Sen. John R. Edwards (D-N.C.) said last Sunday on ABC's Sunday morning political yak show. "It has ours increasing insurance premiums about 4 percent. The truth of the matter is that both bills give people a better product–better health care. And for that kind of marginal cost, we think the American people, employers and employees, will think this is a good buy."

Here's hoping employers and employees think so–because Sens. Edwards, Edward M. Kennedy (D-Mass.), and John McCain (R-Ariz.) don't want to give them a choice, at least not in their version of a Patients' Bill of Rights. Nor, for that matter, do their rivals, whose bill is sponsored by Sens. Bill Frist (R-Tenn.), John B. Breaux (D-La.) and James M. Jeffords (I-Vt.). The noise over these competing Patients' Bills of Rights–distinct from both the U.S. Constitution's Bill of Rights and the Airline Passenger Bill of Rights—is over when, where, and how hard we get to sue those companies that provide us with health insurance. It's an important debate. But what our senators have agreed upon– that it's their job to design our health plans—is important as well, and in some ways more disturbing.

Everyone who buys private health insurance, our bipartisan overlords have decided, must buy a plan that allows children to head straight to pediatricians and women to see gynecologists without first seeking permission of a gatekeeper doctor. All plans must pay for overnight hospital stays for mastectomy patients, and permit pregnant women to keep their chosen doctor, even if they switch health plans. Additionally, there are mandates for external review, emergency room visits, drugs, and clinical trials.

One doesn't have to deny that these benefits may be valuable to many individuals to worry that the federal government has decided to dictate every last jot and tittle of our health plans, one poll-tested mandate at a time. Health insurance has traditionally been regulated at the state level, and state legislators haven't been shy about deciding which health-insurance services residents must purchase. State mandates rocketed 25-fold from 1970 to 1996, according to one industry-funded study. By 1999, our 50 states and the District of Columbia had issued more than 1,000 mandates, which allow politicians to take credit for protecting the public interest while sending the bill, disguised as an increased insurance premium, to policyholders. These mandates played a significant role in driving companies to self-insure, and thus exempt themselves from state regulations. This, in turn, prompted the current effort to further federalize the regulation of health insurance.

"Congress has discovered what state legislators have known for years," says Greg Scandlen, a senior fellow in health policy at the National Center for Policy Analysis. "It's a lot of fun to pass health mandates. You get to say you've done something without any expense to the taxpayers. I just see a conga line of rent seekers lining up to get their things covered."

This dance is not enjoyable to watch. The health care marketplace is dynamic, with firms trying different models and offering different benefits to compete for customers. The political process simply can't keep up. Indeed, much of what the current legislation seeks to set in federal law has become standard practice or is already mandated by states. Way back in 1996, a General Accounting Office report found no evidence of "gag" clauses in managed-care contracts. According to the American Association of Health Plans, 43 states and the District of Columbia already mandate that health plans provide women direct access to gynecologists. Forty-one states and D.C. mandate that consumers have access to independent medical reviews. But why set these in federal law and limit the experimentation, as tomorrow's health care providers might discover better ways of serving people?

"Health care companies are changing the way they are doing business," says NCPA's Scandlen. "And not coincidentally, costs are going up again." It's one thing if these higher costs for more flexibility are chosen by consumers, who can put pressure on the companies to reduce them again if plans become unaffordable. It's another if they are foisted on the consumer by government regulation.

"Under the Kennedy bill, 1.2 million people will lose health care protection," says a spokesperson for Sen. Frist. She assured me that senators had done "years of work" responding to the "needs of citizens" who want "patient protections." I asked her how many are projected to lose health protection under her bill. "Under ours, it's fewer," she replied, later allowing that it's just shy of 900,000 Americans.

Those uninsured individuals will certainly be concerned about "patient protections." But I doubt if they'll agree with Sen. Edwards that the regulations being kicked around the Capitol these days are "a good buy."