When Professor William Graham Sumner first coined the term “The Forgotten Man” in 1890, he wrote:
As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine what C shall do for X… I call him the Forgotten Man.
In the health care debate today we see not merely Forgotten Men but a Forgotten Class: Millions of middle-class families are being forced to pay billions in higher health insurance premiums to help those with pre-existing conditions.
This hidden tax, paid every month to insurance companies instead of to the government, is one of the most crushing financial burdens middle-class families deal with today.
It doesn’t have to be this way. We don’t have to use price controls to force middle-class families to bear the brunt of the cost of helping those who need more medical care. We could just give those with pre-existing conditions more help to get the care they need.
That was the idea behind the Consumer Freedom Amendment I helped draft earlier this month. By giving consumers freedom from Obamacare’s dysfunctional price controls, millions of middle-class families would be freed from paying billions in health insurance premiums they would not otherwise be forced to buy.
Such a system would be more honest because it would directly provide for those with pre-existing conditions through government rather than laundering that support through the insurance industry. Americans would be more aware of the cost of this support because it would be visible in budget line-items paid for through direct taxation, rather than through the invisible tax of higher premiums. It would also fix many distortions in the marketplace that lead to lower quality care for the sick and healthy.
Proponents of the Affordable Care Act like to talk about how it bans discrimination against patients with pre-existing conditions so that insurers cannot charge sick applicants more than healthy applicants. This ban sounds nice, but in reality it creates perverse incentives that end up hurting everyone.
Think of it this way: if you are an insurer who gets $10,000 in premiums and $20,000 in reinsurance payments from the government each year, but a patient with a specific pre-existing condition usually costs $60,000 in care, you have a $30,000 incentive to avoid those types of patients.
Instead of charging those patients more, because they can’t, insurers shift some of the costs to their other customers, the Forgotten Class. Insurers also find creative ways to discourage patients with certain pre-existing conditions from signing up in the first place. These tactics include narrowing provider networks and increasing copayments for treatments needed by patients with those pre-existing conditions.
The result is fewer insurance choices and a lower quality of care for the very people the supposed “ban on discrimination” is meant to protect. It also means a greater financial burden on middle-class families.
A version of the Consumer Freedom Amendment was incorporated into the new Senate health care bill, but the new version still forces insurance companies to follow Obamacare’s “single pool” regulation.
Experts are divided on the impact keeping this Obamacare regulation would have on the Consumer Freedom Amendment. Some say it would make no difference, while others say it would nullify the entire amendment. Either way, a new analysis by a government agency claims it would raise insurance premiums for people on freedom plans by $600 a year.
I do not want to gamble $600 in relief for middle-class families in exchange for an amendment that might be undermined because of Obamacare regulations.
That is why I will vote “no” on the motion to proceed on the new Senate health care bill. America’s middle-class families deserve the best chance possible to escape Obamacare’s burdensome insurance regulations. The full, original version of the Consumer Freedom Amendment is the best chance we can give them.