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Jewish World Review July 30, 2009 / 9 Menachem-Av 5769 Health care: We don't need the Lexus By Jeff Jacoby http://www.JewishWorldReview.com | Imagine the sort of car you'd drive if government regulations made it illegal to sell any automobile that didn't feature 380-horsepower direct-injection V6 engines, computer-controlled electric power steering, eight-speed automatic transmission, four-wheel-drive, automatic climate control (including humidity and smog sensors), "smart key" technology, touchscreen navigation, backup cameras, LED headlights, acoustic glass, surround-sound stereo, and leather seat stitching. If those were the minimum requirements every car had to meet before it could be offered for sale, would you commute to and from work every day in a Lexus LS 460 or some other luxury vehicle? Well, you might, if the steep price wasn't an obstacle. But it's more likely you wouldn't be driving at all. If the government barred you from buying anything but a high-end car, you might have no choice but to rely on the bus or subway, or to find a job closer to home. Lawmakers can decree that every car on the road be a Lexus or its equivalent, but they can't make driving more luxurious for all. They can only make it more expensive — and for many drivers, unaffordable. And what is true of transportation is true of everything else: Raise the number of amenities that a product or service must include, and more consumers will be unable to pay for that product or service. That is why one of the simplest strategies for making health insurance more affordable is to reduce the minimum number of benefits that insurers are required to cover. In every state in the union, legislators and regulators drive up the cost of health care by making insurance policies more comprehensive. Rather than allow the free market to determine which medical services health plans will cover, states force consumers to pay for an array of covered benefits they may not need nor want. For example, 45 states require insurance policies to include treatment for alcoholism and 34 mandate coverage of drug abuse treatment. By law, contraceptives are covered in 31 states, as are hairpieces in 10 states, and in vitro fertilization in 13 states. It is not unusual for consumers who want health insurance to be forced to buy coverage for services they may consider highly dubious, such as acupuncture (benefits are mandatory in 11 states), chiropractic (46 states), osteopathy (22 states), and naturopathy (4 states). Forty years ago, there were only a handful of benefits that health policies were required by law to cover. Today, the Council for Affordable Health Insurance identifies an astonishing 1,961 mandated benefits and providers. While any one mandate may not add appreciably to the price of an insurance policy, in the aggregate their cost is huge. The Cato Institute, citing the Congressional Budget Office, estimates that state regulations increase the cost of health insurance by 15 percent. And since "each percentage-point rise in health insurance costs increases the number of uninsured by 300,000 people," as scholars John Cogan, Glenn Hubbard, and Daniel Kessler point out, it is clear that the proliferation of insurance mandates is one reason why millions of Americans are uninsured. Yet instead of pruning back this thicket of compulsory benefits, lawmakers are busily planting even more of them. As Kay Lazar reported in the Boston Globe on Monday, Massachusetts legislators have filed more than 70 bills this year to increase the array of services the state's health insurers are required to cover. Among the benefits the pending bills would mandate are hearing aids for children, cleft palate surgery, treatment of infantile cataracts, 48-hour hospital stays following a mastectomy, smoking cessation products, "asthma education," vitamin supplements for mitochondrial disease, post-partum depression screening — and the list goes on and on. As it is, health insurance in Massachusetts — which already mandates coverage for more than 40 itemized benefits, providers, and patient populations — is among the nation's most expensive. The last thing the Bay State (or any state) needs is for government to be driving the cost of medical coverage higher still. It should be left to the market, not to lawmakers and lobbyists, to decide which medical services should be included in a basic-vanilla insurance policy. When lawmakers yield to special-interest pleas that this or that benefit be made compulsory, the results are less choice, higher premiums, and more individuals priced out of the market. The key to health care reform is lively competition, not the dead hand of government compulsion. Legislators, take note: Enacting new mandates won't make medical insurance more affordable. Repealing old ones just might. Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. Jeff Jacoby is a Boston Globe columnist. Comment by clicking here. Jeff Jacoby Archives © 2006, Boston Globe

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