What Is The Case Against HCR

a) It's not going to reduce costs

POLITICO: CMS: House bill increases health care costs. “Democrats have promised that health reform would reduce health care costs, but legislation the House passed last week would increase costs over the next decade by $289 billion. By 2019, health costs would rise to 21.1 percent of GDP compared to 20.8 under current law, according to an actuarial report prepared by the Centers for Medicare and Medicaid Services.

b) Therefore, despite what the WSJ might have thought, the business community has bailed. Unless you think this frantic e-mail from Moveon.org is crying wolf about my Pelosi lapdog of a congressman

  Have you seen those terrible TV ads in [My CT hometown] slamming Representative Chris Murphy because he voted for the House health care reform bill?1 The ads are funded by right-wing corporate lobbyists at the U.S. Chamber of Commerce, and they're verifiably false

(I'm not about to credit Moveon.org's own analysis as unbiased; maybe you are)

Sadly, I think what Obama and the Democrats in Congress have done is give what might be a potentially useful idea a really bad name. Consider this Gallup poll finding public support for health care guarantees evaporating

I don't these guys with their numbers, I don't trust their ideology and I don't trust them to be competent.  The polls show this is not a fringe opinion. Without a consensus of trust on these core values, this whole endeavor is a waste of time.

But, more to your main point.  First, it should be labeled "health insurance reform" rather than "health care reform" because the current plan is seeking to modify how health insurance works, not the care itself.

First let's remember what insurance really is:  it's a hedge against risk.  I pay insurance premiums in order to transfer the risk associated with catastrophic loss.  The more risk I transfer, the higher the premiums.

Let's address your different points:

a) too many people cannot get health insurance (pre-existing conditions) or cannot afford it

Well, if someone has a pre-existing condition, that person will generally have more risk to transfer, so it is only right and fair that those with more risk to transfer pay higher premiums.  Only if you buy into the false egalitarianism of "we're all equal" could you make a case that everyone's health insurance premiums be the same.  Guess what - we're not all equal.  Some of us are sicker than others.  Does life suck sometimes?  Yes.

b) insurance company practices, like rescissions after years of paying premiums, are indefensible

No, they are mostly defensible.  A rescission is when a policy is revoked after the fact.  This can happen if applicants lie in order to get insurance (e.g., lying about pre-existing conditions).  If I lie about the state of my health to make it appear that I am not as risky as I really am, then I've engaged in fraud and my policy ought to be revoked.  Of course it can work the other way as well - an insurance company may revoke the policy with little or no basis for their decision.  In that case, they've broken their contract and the aggrieved party should seek redress in court.  This is the way it's supposed to work when there's a contract dispute.  So I'm failing to understand how the system is "broken" in this regard.

c) insurance premiums are rising much faster than inflation or income, which means (a) is just going to get worse

True, but why are health insurance premiums rising so fast?  Part of it is because we are simply aware of more risk now than we were in the past - we are more knowledgeable about more diseases.  Part of it is simply because we are getting richer as a country, and with some of that wealth we purchase a higher quality of health (more frequent health screenings, etc.).   Part of it is because the cost associated with medical technology grows - an MRI costs more than a stethoscope.  But, part of it is because of the high medical malpractice insurance premiums that doctors pay, along with "defensive medicine" strategies, and these extra costs are passed on in the form of higher costs of services delivered.  So, tort reform that would reduce medical malpractice insurance would also lower health insurance premiums.  If you're really in favor of making health insurance more affordable, why not also support tort reform?  I don't know why you dismiss it out of hand.

And, part of the rising cost is due to government regulations and mandates about what policies must or must not contain.  As a single male, I am not interested in purchasing insurance to cover fertility treatments, yet depending on where I live, I have no choice but to do so if I want any health insurance at all.  If I'm permitted to shop across state lines, then I can get a policy somewhere else that doesn't have ridiculous coverage that I don't need and hence saves me money.  Again you dismiss this out of hand, but if it helps individuals lower their personal health insurance burdens, why not favor it?

Finally, part of the rising cost is associated with waste and fraud.  Why is there so much waste and fraud?  Because the real consumers of health care are not the patients, they are the insurance companies.  So the higher premiums get passed on to those who pay for the health insurance, which, typically, is not the patient, but the employer.  The employer passes on these costs in the form of reduced benefits, reduced pay, or reduced profit for the business.  So by the time the costs are shifted to the actual patient, they've been dispersed and hidden so much that it's hard for the patient to even notice that premiums have gone up.  There's no real economic mechanism for the patient to tell the insurance company "stop putting up with so much fraud".  Quite the contrary - because we as patients don't see any economic benefit from reducing fraud, we are put in a position to try to "game the system" and get as much for us as we can.  After all, it's a "free" lunch!  And merely mandating that everyone buy health insurance won't change this aspect of rising insurance premiums one bit - in fact, it will only make it worse, as more patients enter the system trying to 'game' it.  (Incidentally, out of all the insurance that we buy, health insurance is the only one that has such an arcane Rube Goldberg-esque web of funding.  Perhaps this is a deeper clue as to why health insurance is so expensive.)

d) our health care costs more than any other country, without producing commensurate increases in outcomes; without reform these costs are going to continue to rise

As explained above, some of the reasons why health care costs more in this country is because we are simply richer than other countries, and we have access to the best and newest (and expensive) modern medical technology.  This is a good reason to have higher health care costs.  I doubt anyone would favor getting rid of all the MRIs as a strategy for lowering health care costs!  However you suggest that we don't get more bang for our buck.  Why would anyone invest money in a new procedure or a new technology that didn't improve health outcomes?  It's not rational and I doubt that's what doctors and health insurance companies are doing.  Instead, to the extent that we don't get our money's worth, it is due to two other factors: (1) non-health-care-related expenses (e.g., higher medical malpractice insurance, greater levels of fraud), and (2) cultural factors.  I could have the best health insurance in the world, but if I do nothing but drink, smoke, eat fatty food and sit on my ass all day, guess what, I'm going to die young.  Again tinkering with the rules on health insurance won't change this reason.

So, what to do?  Here is what I suggest.

1. Make the real customers, the patients, foot some of the cost.  That way, there is a price signal sent to the insurance companies and the doctors that they do/don't approve of certain practices. 

2. Stop giving preferential tax treatment to employers if they provide health insurance.  If we all have the same tax advantages in purchasing health insurance then we can shop around and find the best deal.

3. Don't use insurance for everyday expenses.  It is a hedge against risk; there is no "risk" associated with routine checkups, so why should insurance pay for it?  Does car insurance pay for oil changes?  Does homeowner's insurance pay for lawn mowing?

4. Increase the number of medical schools in this country.  We have 30-bazillion colleges and universities, why so few medical schools?  This is another reason why health care costs are expensive: doctors have huge student loan debts to pay off.  Why is medical school so expensive?  Because there is an artificial shortage of doctors.  More medical schools means more doctors, which means lower tuitions.

5. As mentioned above, tort reform and shopping across state lines will also help.

Well this post is long enough, so I hope I've provided you with some items to think about.