Perry’s Plan For The Uninsured: Noble Concept, Bad Execution Which May Hike Number Of Uninsured In Long Run

Eye On Williamson brings us some information about Governor Perry’s proposed plan to address the uninsured with regard to healthcare.

EOW notes, appropriately so, that the soon-to-be-proposed “3% fee” (Quality Assurance Fee) on hospital bills that would raise an estimated $800 million to be matched with $1.2 billion in federal Medicaid funds, is the equivelant of a tax.

While the concept of helping the uninsured is a noble one, an additional fee/tax isn’t the way to pay for it.

User fees are appropriate ways to pay for certain things. Healthcare for the poor isn’t one of them.

Why? Because this is one of those “fees” that will have a trickle-down effect—and not a good one.

First off, for those with insurance, they’ll end up paying more for that coverage because the insurance companies will raise premiums to recoup their losses.

Second, for those without insurance, it means more out-of-pocket expenses until that $1.2 billion makes its way to Texas to assist them.

And, while I’ve not seen any guidelines for this allegedly proposed plan, I would be willing to bet that there will be people who fall in the “gap” between insurance and state assistance who will end up paying more for medical care because of this tax.
Increased fees like this are all right when they are on luxury goods or (in small amounts) on things that only a segment of the population uses, like specific-purpose licenses.

Let’s take a look at an example. One source lists the cost of an average hospital bill at $19,700.  Three percent of that is $591. Granted, it may not seem like much when compared to $19,700—or the fact that it may go a long way toward helping the uninsured.

However, that three percent is going to increase the number of the uninsured in the long run.

That’s right, folks: As the insurance companies hike premiums to pay for that three percent, it is going to simply push insurance out of reach for even more Texans, creating a vicious cycle this state doesn’t need yo start.