Since the federal government is now requiring that nearly all American citizens purchase health insurance, we must also remember that the federal government is now also the sole arbiter of what constitutes health insurance, and therefore what consumers must actually buy. A great article recently published by Manhattan Institute scholar Steven Malanga in RealClearMarkets explains how this new regulatory power is already undermining sensible health care policy in a whole host of ways. He writes:
Congress took for itself the ability to require that people only buy insurance that provides a minimum of 'essential health benefits'...At hearings held by the Institute of Medicine on what coverage HHS should compel, a spokesman for the National Kidney Foundation pleaded for mandatory coverage of multiple kidney transplants per patient, while an obstetrician argued for mandatory coverage of nutrition counseling. Folks from Connecticut wanted to ensure that treatment of Lyme disease was part of mandatory coverage. No one explained how people or firms are supposed to pay for all of this. After several hours of hearings, the head of the IOM commission complained that, 'We have an impossible task.'
As Malanga explains, the individual mandate along with dozens of new insurance regulations has opened up the floodgates for lobbyists from myriad special interest groups and providers to request that the services they provide (or want) be deemed "essential" for all Americans and covered by all available health insurance plans, public and private. Rather than deciding for themselves what kind of insurance they and their families need, Americans will now be told what they have to buy. Malanga also explains how the federal government has wielded the power of defining minimum "essential" coverage to heavily regulate certain kinds of popular insurance plans (such as health savings accounts), perhaps pushing them out of existence and driving up costs for employers:
The new law has reduced the amount of money you can set aside in health savings accounts, narrowed the products you can buy with them and doubled the penalties the IRS can impose on you for unauthorized purchases made through these accounts. There seems little hope that effective consumer-directed insurance can survive...When you total up the requirements and restrictions on what now constitutes adequate health insurance, no wonder that many small firms keep telling us that they will not expand beyond 49 employees because doing some makes them subject to the complexities and penalties of Obamacare.
Malanga's analysis shows that the survival of the individual mandate is only the tip of the iceberg, given the federal government's new and sweeping regulatory powers that allow it to control nearly every aspect of the health insurance market. While calling for more insurance competition and consumer choice, the federal government is actively engaged in thwarting competition and restricting choices. You can read the full article here.