Wednesday, July 8, 2009

ObamaCare: Cadillac or Edsel

The Boston Globe reports on a battle brewing in New Hampshire over the state’s health care plan for its employees. The story focuses on the possibility the plan might end up being taxed under the new reform legislation being debated in Washington.

But it begs the question: how much of our country’s health care expense burden is created by plans like the one employees of the state of New Hampshire enjoy?

The plan is very generous, more so than most that you’re likely to encounter in the private sector:

For the secretaries and environmental engineers, game wardens and van drivers who work for the state of New Hampshire, surgery is free, even at Boston’s top teaching hospitals if it’s necessary. So are MRIs, CT scans, and X-rays. Pregnant women pay nothing for prenatal care; alcoholics aren’t billed for short stints in rehab. Seeing a therapist costs just $10, as many as 20 visits a year, and prescription drugs top out at $30 for a three-month mail-order supply. New Hampshire state employees get $450 annually toward gym memberships, if they go regularly, or $200 toward their own treadmill – and there’s a $150 annual reimbursement for yoga classes, diabetes clinics, and nutritional counseling

It sounds pretty good, and it is. The Globe estimates this coverage is worth $20,400 a year for a family, but the state’s workers only pay $60 a month. The story suggests that it’s an example of the kind of “Cadillac” plan the President has talked about. It’s surprising because you’d think that plans like these would be in the hands of fat cats at investment banks, not state workers.

The employees of the state have every right to negotiate a generous plan like this, and the state of New Hampshire is entitled to provide this kind of coverage. State employees have succeeded in almost entirely shielding themselves from the cost of medical care or health insurance.

However, do plans like this contribute to over-use of health care? How many other states have plans like these? How do plans like these compare to what private sector companies give their employees? How does it compare to what the federal government has in mind for its public plan?

Indeed, are we calling this kind of plan a Cadillac when it’s really an Edsel – a plan reflective of old thinking on health care? What would a “Toyota” health plan look like?

In our rush to pass some kind of reform in the next three weeks, we fail to answer far too many important questions.

The President keeps holding meetings to answer questions about health care. Instead, it would be better if he were leading an effort to ask more questions