Newt Gringrich on Health Care, Part I
Sunday, November 27th, 2011
In the past few days former Congressman Newt Gingrich has pulled ahead of the other candidates for the Republican nomination for president in 2012. This morning the influential New Hampshire Union Leader endorsed Mr. Gingrich. This could make him a serious threat to his chief rival, former Governor Mitt Romney.
We’ve already looked at Mr. Gingrich’s positions on Medicare and Social Security — vital issues to most Americans, including those with mesothelioma, who are usually in or nearing their retirement years when diagnosed.
Related to this is the issue of health care for everyone. Costs are out of control, and more and more people find it impossible to get health insurance. What does Mr. Gingrich propose to do about these problems? Here are some of the solutions Mr. Gingrich proposes on his website:
Make health insurance more affordable and portable by giving Americans the choice of a generous tax credit or the ability to deduct the value of their health insurance up to a certain amount.
Making insurance “portable” usually refers to being able to keep your insurance indefinitely even if you change jobs or move to another state. Exactly how a tax credit would make insurance more “portable” isn’t clear. However, receiving a tax credit to help offset the cost of health insurance certainly would be welcomed by many taxpayers.
Make health insurance more affordable and portable … by allowing Americans to purchase insurance across state lines, increasing price competition in the industry.
This idea has been debated to death. Proponents say that the cost of insurance varies widely from state to state. Therefore, if insurance companies in expensive states had to compete with insurance companies in inexpensive states, all of the business would go to the inexpensive state until the companies in the expensive states bring their costs down.
The problem with this theory is that the expensive states usually are expensive for a reason. For example, regulations in New York protect people from being denied insurance for a pre-existing conditions, with only a few exceptions. This means that if you get a job in New York your employer’s health insurance provider cannot refuse to cover you even if you have advanced cancer and heart disease at the same time.
But in many other states (such as Texas) you can be denied coverage for some pretty minor reasons. Texas health insurance is much less expensive than New York’s, because the insurance companies in Texas can more easily get away with denying coverage to sick people. But 25 percent of Texans are without health insurance, while only about 14 percent of New Yorkers are without health insurance.
(The uninsured are a big drag on the health care system and one of the causes of rising cost. When the uninsured do receive treatment, the cost is passed along to those who can pay. For example, hospitals pad their bills to make up for the money they lose by treating the uninsured. This has resulted in a “hidden tax” on everyone’s insurance premiums. An average family of four pays more than a $1,000 extra to help pay for the uninsured.)
Now, what would happen if a New Yorker could buy health insurance in Texas? People who are healthy enough to buy insurance in Texas would bail out of paying for expensive New York insurance. But people with pre-existng conditions would not be able to do that. That means the New York insurance companies would be stuck paying for a higher percentage of sick people, and their costs would go up. New York might be forced to change its laws and allow the insurance companies to deny coverage, too. This is not exactly a step in the right direction.
In any event, if the Affordable Care Act is not repealed, in 2014 those Texas health insurance companies will have to start taking customers with pre-existing conditions, anyway. So there goes their “advantage.”
We’ve barely begun to scratch the surface here, so we’ll pick this up in the next post.
