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opinion guest_columns
Wednesday, August 13, 2008
Governor's Overhaul Can't Cure Health Care's Ills
By Paul J. Gessing
Rio Grande Foundation
After failing to gain either legislative or popular support for his ambitious, universal health care plan which would have relied heavily on government mandates, Gov. Bill Richardson has introduced a scaled-back proposal that will be considered in the upcoming special session.
The governor's bills which were unveiled recently would:
n Require all children through the age of 18 to have health care coverage from private or public sources. The bill contains no enforcement mechanism or penalty for parents who don't secure coverage for their children.
n Appropriate $58 million to expand existing programs to reach an estimated 50,000 children who qualify for publicly funded coverage but don't receive it. The additional spending would be a recurring expense.
n Establish a new Health Care Benefits Administration to consolidate management of several existing public coverage programs, including state employee and public retiree insurance plans.
n Gradually limit premium increases insurance companies can charge small businesses from 20 percent today to 10 percent per year in five years.
n Require insurers to spend at least 85 percent of premiums on services and guarantee that anyone who needs insurance can get it regardless of health status.
n Establish privacy requirements for patients' electronic medical records.
While this scaled-back proposal is a significant improvement over the original — if only because it is scaled back — legislators should still be skeptical as to whether the proposal, if passed, would result in any improvement in New Mexicans' health care or uninsured rates.
Specifically, requiring that parents obtain health care for children through the age of 18 is bound to be ineffective as there is no enforcement mechanism, but this is actually a good thing.
After all, responsible parents want their children to be covered, but not all parents are responsible and many others either can't afford it or believe that putting food on the table and gas in their car to get to work is more important than health insurance for their children.
Spending $58 million to put more children on government plans is also a poor option. How about giving parents an equivalent state tax break to set up Health Savings Accounts for their children?
Regarding efforts to set up a Health Care Benefits Administration, limit premium increases, and set up arbitrary requirements for insurers, these are nothing more than means to further impose government control on the health care sector of the economy.
New agencies and micromanaging the insurance industry are not going to result in significant improvements in either the quality or availability of health care in this state.
The fact is that government policies are largely to blame for the current mess. Did you know that New Mexico charges the highest tax — 4 percent — on insurance premiums in the nation? How about eliminating New Mexico's gross receipts tax on deductibles and co-pays which are tax-exempt in almost all other states? This tax, which exceeds 8 percent in some areas of the state, is applied to this ever-increasing area of health care expenses.
These are just a few ways in which the negative impact of current government policies could be mitigated. They would also be far more likely to succeed in expanding health care access to the greatest number of New Mexicans.
While the governor should be applauded for scaling back his mandate-heavy original proposal, the new plan still moves us toward an increased government role in health care. Hopefully, legislators will again reject more government reliance and instead consider market-based reforms in the 2009 legislative session.
Paul Gessing is president of the Rio Grande Foundation, a research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.
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