{"id":28193,"date":"2011-04-07T01:48:04","date_gmt":"2011-04-07T07:48:04","guid":{"rendered":"http:\/\/www.nmpolitics.net\/index\/?p=28193"},"modified":"2011-04-07T01:48:07","modified_gmt":"2011-04-07T07:48:07","slug":"free-market-not-regulation-key-to-cost-effective-health-care","status":"publish","type":"post","link":"https:\/\/nmpolitics.net\/index\/2011\/04\/free-market-not-regulation-key-to-cost-effective-health-care\/","title":{"rendered":"Free market, not regulation, key to cost-effective health care"},"content":{"rendered":"
\"\"<\/a>

Paul J. Gessing<\/p><\/div>\n

Legislation is now sitting on Gov. Martinez\u2019s desk that would, at least in theory, bring greater transparency to health insurance pricing.<\/p>\n

The long and short of Senate Bill 208<\/a> is to set up new requirements if a company wishes to raise rates. Rising health care costs are of course a problem, but nothing in this bill will contain or reduce health care costs for New Mexicans.<\/p>\n

Nonetheless, the legislation is designed to achieve \u201cmom and apple pie\u201d status. Who could oppose transparency that makes it more difficult to raise rates? In fact, we at the Rio Grande Foundation<\/a> have been at the forefront in promoting government transparency in recent years.<\/p>\n

Transparency is generally a good thing, but it doesn\u2019t save this bill. That\u2019s because the problem with health care in New Mexico and in the United States in general is not a lack of transparency, but a proliferation of government mandates and regulations that transform health insurance companies from competitive companies operating in a free market to the equivalent of a heavily-regulated government utility.<\/p>\n

The problem with SB 208 is not that it, on its own, will destroy health care in New Mexico. The problem is that the legislation and the mindset behind it further perpetuates the belief that we are just a few additional regulations away from better quality, more cost-effective health care. What we need are pro-market health care reforms, not more meddling in how insurance rates are adjusted.<\/p>\n

Comparing other markets with health care<\/h3>\n

<\/p>\n

It is instructive to compare more lightly-regulated markets with health care. We have a competitive market that \u201cregulates\u201d the price of car insurance and life insurance \u2013 not to mention the prices of computers, food, and many other objects we purchase in our daily lives (without an elaborate and costly review process).<\/p>\n

Imagine if every year the Albertson\u2019s or Smith\u2019s grocery store down the road had to go through an elaborate hearing process with the Public Regulation Commission every time they wanted to charge a different price for a box of cereal or a pound of beef.<\/p>\n

The result of such a process would be major price increases, a lack of flexibility, and a net reduction in both price and quality competition.<\/p>\n

The average person intuitively understands that supermarket \u201ctransparency\u201d and involvement of the PRC in setting prices would be unnecessary and costly. But Albertson\u2019s and Smith\u2019s are \u2013 at least relative to the health insurance industry \u2013 nearly unregulated. Unfortunately, this is not the case in health insurance.<\/p>\n

More regulation makes health care more costly<\/h3>\n

The Legislature did nothing this session to peel back\u00a0New Mexico\u2019s 57 mandates<\/a> or make the provision of health care any cheaper (by eliminating the gross receipts tax on deductibles and co-pays or reforming Medicaid, for example). And, of course, the Obama Administration has further locked in existing inefficiencies in the system through onerous regulations from Washington.<\/p>\n

The attitude of more government regulation is doomed to continue making health care more costly and less responsive to customer\/patient needs. Until we have policies in place that encourage a competitive market, no amount of reviews or transparency will make health insurance \u2013 or health care \u2013 more affordable.<\/p>\n

Paul Gessing is the president of New Mexico\u2019s\u00a0Rio Grande Foundation<\/a>, an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Until we have policies in place that encourage a competitive market, no amount of reviews or transparency will make health insurance \u2013 or health care \u2013 more affordable.<\/p>\n","protected":false},"author":790,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1192,16],"tags":[117,111,107],"class_list":["post-28193","post","type-post","status-publish","format-standard","hentry","category-commentary","category-guest-columns","tag-health-care","tag-open-government","tag-roundhouse"],"_links":{"self":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/28193","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/users\/790"}],"replies":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/comments?post=28193"}],"version-history":[{"count":0,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/28193\/revisions"}],"wp:attachment":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/media?parent=28193"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/categories?post=28193"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/tags?post=28193"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}