Up & Coming Weekly

26 UCW MARCH 10 - 16, 2010 WWW.UPANDCOMINGWEEKLY.COM Community Concerts Community Concerts Presents ... Presents ... For Bill Medley Tickets, Call Ticketmaster at 1.800.745.3000 Crown Box OfÀ ce 910.438.4100 March 27, 2010 • 8:00 p.m. Bill Bill Medley Medley CROWN THEATRE If you want to know why President Obama, leaders of the Democratic Congress, their allies in activist groups and the press are try- ing to sell their health care program by bashing insurance companies, you need only to look at a few numbers. But I don't mean the numbers on health care spending, inflation or profitability. Those figures show that the vast majority of the dollars spent on health care go to providers — to doctors, hospitals, medical devices and pharmaceuticals — rather than to insurers for their overhead and return to shareholders. The profit margin in health insur- ance is low, typically four percent or less. Blue Cross & Blue Shield of North Carolina, that boogeyman of the state's liberal imagination, posted a net margin of just over two percent last year. So the fact that Blue Cross is planning double-digit increases in its premiums next year does not identify the culprit. It just identifies the problem — excessive demand for medical services of marginal benefit, financed in ways that insulate patients from the real prices of the care they consume. The numbers that really matter to Obama & Co. are the results of public- opinion polls. Consistently, they show that voters generally like medical pro- viders and generally don't like health insurers. That's why the latter are being targeted. The left needs villains to make their fictional account of health care inflation seem plausible. It's really as simple as that. You can see the problem clearly by taking a look at the results of a poll Gallup did last summer. Asked about names or groups whose health-care reform recommendations they had confidence in, 73 percent of respondents expressed confidence in doctors and 61 percent said the same about hospitals. Even drug companies (40 percent) got a higher rating than health insurers (35 percent). Since then, the only significant change in public sentiment has been a dramatic decline in public confidence in the ability of President Obama and Democrats in Congress to recommend the right course of action. Republicans started low on the scale and likely haven't improved their situation much. Voters have little faith in politicians of both parties at the moment, a sentiment that is both reasonable and reassuring. What health insurers can do to improve their public image is a question beyond the scope of this column or my expertise. But policymakers could do something, if they were so inclined. The existing health insurance industry is not itself a creation of free markets coordinating individual decisions and enterprises. It is the creation of govern- ment interference in the market. For decades, for example, if people bought medical services with cash, it has cost them as much as 50 percent more than paying for the same services via an insurance claim, because of the income and payroll taxes applied to cash but not to insurance premiums. In the absence of this distortion, it is highly likely that health insurance would look more like other forms of insurance. Individuals and families would own their own policies, rather than having employers make all the decisions and workers feel trapped in their jobs because they can't take their health plan with them if they leave. These individual and family subscribers would pay reason- able premiums, often fixed for multi-year terms, and most would file insurance claims only rarely, after being in a serious accident or developing a major ill- ness. That's the direction employers and individuals are moving now, thanks to the proliferation of consumer-driven health plans that combine high-deductible insurance policies with tax-free savings accounts from which patients pay for routine services. The John Locke Foundation decided years ago to offer two such plans to our employees, and we have experienced virtually no premium in- crease over the past two years. We don't hate our health insurer. As consumer-driven health care contin- ues to grow, other Americans may change their perceptions of health insurers, too. That's one reason why the Left must destroy consumer-driven health care and impose government- run health care soon, before they run out of villains to bash. Casting Insurers As Villains by JOHN HOOD JOHN HOOD, Columnist. COMMENTS? 484-6200 ext. 222 or editor@upandcomingweekly.com

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