Horrible Obama Health Care

HOW OBAMACARE STRANGLES REFORM

WHILE Washington battles over President Obama's health-care scheme, real reform is under way elsewhere -- in places like Indiana, Utah, and Louisiana. Under the stewardship of innovative governors, programs in these states are giving patients more control over their own care -- and using the forces of free-market competition to lower health-care costs for everyone.

But Washington still matters -- because ObamaCare would crush these state-level initiatives.

Utah: Earlier this year, Gov. Jon Huntsman signed a series of reform bills aimed at reaching more than 300,000 uninsured Utahns. The centerpiece: a law letting Utah insurers offer cheap, no-frills plans exempt from costly state coverage mandates. The plans are less expensive than COBRA for people who've lost their jobs and an affordable option for the poor. Yet ObamaCare would end this effort: Utahns (and everyone else) would have to get insurance laden with "minimum coverage" requirements set in Washington.

Interest groups are already lobbying for their "treatments" to be covered -- everything from acupuncture to hair transplants. (No wonder Joe Biden is such a fan.) The baseline plans imposed by Washington would therefore be hugely bloated and way more expensive than Utahns want or need. But don't worry: Your federal tax dollars will make up the difference.

Indiana: The Healthy Indiana Plan, a Medicaid reform launched by Gov. Mitch Daniels to help cover low-income Hoosiers. Under HIP, each eligible adult gets a $1,100 account to pay for physical and mental-health services. The state kicks in most of the money; a small contribution based on the person's ability to pay makes up the rest. If the insured person doesn't spend all the money in a particular year, the remainder helps meet his share of next year's contribution.

HIP thus offers an incentive for people to be smart health-care shoppers. As a result, providers wanting to compete for HIP patients need to lower their prices, which keeps costs low for everyone.

ObamaCare will send HIP the way of the dodo -- because it will end up forcing Indiana (and every other state) to devote almost all their Medicaid funds to ensuring that everyone has one of those Washington-approved health plans. The crushing burden of "universal coverage" will leave states with no spare cash for creative reforms like Indiana's.

"A federal abolition of our HIP plan would be a cruel blow to low-income Hoosiers who now have very affordable health insurance that they control," says Gov. Daniels. "Any nationalized scheme that replaced it would be a huge step backward in quality and freedom of choice."

Louisiana: With about a quarter of its population covered by Medicaid, Louisiana ranks 19th among the states in total Medicaid spending -- yet consistently lands at the bottom for health quality. So Gov. Bobby Jindal is trying to move Medicaid patients out of the current system -- which simply pays doctors for the number of procedures they perform -- into privately managed insurance programs. The goal of Louisiana Health First is to give doctors incentive to keep Louisianans healthy -- rather than just rack up needless invoices.

But Jindal's plan would be another casualty of ObamaCare, which puts much greater control of Medicaid in federal hands. It's not even clear that the administration will grant Louisiana a waiver to launch the reform -- though such approvals have long been routine.

Jindal's health secretary, Alan Levine, notes: "When you take the incentive away from the states to be innovative and try new things, you lose the opportunity to get really good ideas from the people closest to the problems."

Just think back to Wisconsin's early-'90s welfare reforms under Gov. Tommy Thompson -- which eventually became a model for federal change.

The experiments under way in Utah, Indiana and Louisiana could meet with similar success. Competition among states to produce the most patient- and taxpayer-friendly system could even solve the health-care crisis without a national expansion of the welfare state. But if we get ObamaCare, we'll never know.

clyne.meghan, NY Post, 6/15/09