Health care plan analyzed

http://www.heritage.org/Press/Commentary/ed072809c.cfm

 

...Section 116 is the real kicker. If insurers are able to turn a profit despite the federal restrictions and public plan competition, they must give back much of that profit to their customers, as dictated by a new federal bureaucrat. This so-called "medical loss ratio" gives power to a presidential appointee, the new Health Choices Commissioner, to dictate the permitted level of administrative costs and profits.

 

Even without these provisions, the bill gives an automatic advantage to the new public health plan. The public plan uses price controls, requiring doctors and hospitals to accept Medicare-designated payment amounts. Typically, these are significantly lower than private plan payments, often paying less than the cost of providing the care. (This is why so many doctors today refuse Medicare patients.)

 

Private plans lack this power, so doctors, hospitals and clinics will offset their public plan losses by shifting the costs onto the bills of their other patients -- making private plans even costlier. The Lewin study estimates this cost-shifting will add an extra $460 per person per year to the cost of private insurance. That worsens the automatic disadvantage they have of competing against a taxpayer-subsidized government plan.