Heritage Foundation Articles Find Patients’ Rights Legislation Ignores Uninsured, Free Market Solutions

With the House expected soon to vote on competing patients' rights legislation, Robert Moffit, director of domestic policy studies for the Heritage Foundation, has released on the foundation's Web site three essays analyzing the debate surrounding the bills and offering alternatives. Highlights from the three essays appear below.

• "Why Federal Unions and Members of Congress Want to Escape the Patients' Bill of Rights": While the Senate-passed patients' bill of rights covers government programs, including the Federal Employees Health Benefits Program, the House versions do not contain such a provision. Moffit notes that federal employee unions have said the legislation would raise premiums for those covered. Also, Moffitt states that Sen. Edward Kennedy (D-Mass.), one of the sponsors of the Senate bill, has argued that members of Congress and federal workers do not need the protections offered by the bill, as they "enjoy a broad choice of plans" under FEHBP. Kennedy's comments, however, illustrate the "essential reason" the legislation is "missing the point," Moffit writes. With consumer choice, patients can "reject" or "fire" plans that do not meet their needs or perform "poorly." Moffit concludes that if Congress were "genuinely concerned" about patients' rights, legislators would "work on fixing a broken and distorted health insurance market that frustrates both consumer choice and competition" (Moffit, "Why Federal Unions and Members of Congress Want to Escape the Patients' Bill of Rights", 7/23).
• "What the Latest Market Reveals About the Viability of Tax Credits for Health Insurance": Using a recent study from eHealthInsurance.com, a "major broker of insurance policies on the Internet," that found that tax credits could "substantially offset" the expense of purchasing insurance for "millions of Americans," Moffit writes that tax credits are a politically "popular" option, as they "advance personal freedom" in the health care market. In citing the eHealthInsurance.com study, Moffit notes that when given the option, consumers purchase "comprehensive" coverage with "modest" deductibles that have less-restrictive rules. "Economists call this rational economic behavior. Consumers of health insurance, contrary to what critics of consumer choice sometimes assume, are not stupid," Moffit writes. By pursuing a policy utilizing tax credits, Moffit concludes the legislators would make "health insurance more widely available to families who need it" (Moffit, "What the Latest Market Reveals About the Viability of Tax Credits for Health Insurance", 7/13).
• "'Patients' Bill of Rights': An Unhealthy Remedy": Regardless of what version of patients' rights legislation is enacted, premiums will be "jacked up" and "lawsuits seem imminent," Moffit writes. However, a "better solution" is available: "It's the same one that gave us 5-cents-a-minute long distance, $10 overnight shipping to anywhere in the world and 59-cent cheeseburger day at McDonald's: Free market competition." Moffit adds that lawmakers have made a "serious misdiagnosis" by thinking patients can "sue their way to good health." Moffit then describes two options for expanding consumer choice in the health care market. First, employers could make "defined contributions" to a health plan of an employee's choice, as with a 401(k) plan. Employee contributions could be withheld from paychecks. Or, Moffit writes, by issuing refundable tax credits, legislators could give access to "comprehensive" benefits to consumers, including those workers whose employers do not offer insurance. By purchasing their own insurance, employees would contract with health plans, giving them the right to sue if the plans "don't live up" to the agreement. "Thanks to the nature of competition ... HMO officials wouldn't have to be forced to become more responsive. They'd do it because it's in their self-interest" (Moffit, "Patients' Bill of Rights: An Unhealthy Remedy", 6/27).