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WCCO DEBATE: McFadden’s health care ‘plan’ would leave millions without insurance

Investment banker Mike McFadden’s health care “plan” would leave millions of Americans without health insurance and create a race to the bottom.

In a report by Minnesota Public Radio, multiple prominent health care experts slammed McFadden’s health plan and said that his ideas don’t hold up, would be unworkable if signed into law and would leave millions of Americans to fend for themselves.

Specifically, McFadden wants to let insurance companies sell plans across state lines, which would undercut Minnesota’s strong consumer protections and create a race to the bottom in terms of quality health care.

HEADLINE: “EXPERTS SAY MCFADDEN’S HEALTH INSURANCE IDEAS DON’T HOLD UP.” ”Experts, however, say much of what McFadden proposes has been tried before and left millions of Americans without health insurance.” [Minnesota Public Radio, 10/22/14]

MIT’s Jon Gruber: “A Number Of States Tried What This Guy Is Suggesting In The 1990s … And It Blew Up Their Insurance Markets.” ”MIT health economist Jon Gruber helped write the Massachusetts health care plan that then-Gov. Mitt Romney, a Republican, enacted in 2006. He said the nation’s health care system could not pay for the benefits McFadden wants to offer without requiring everyone to buy into the insurance pool. The Massachusetts plan, which included an insurance mandate, became the model for the Affordable Care Act. ‘You can’t fix the problem of the insurance market without a mandate, and that’s not just a theoretical conjecture,’ Gruber said. ‘We’ve seen it. A number of states tried what this guy is suggesting in the 1990s. They tried putting all of those insurance regulations in without a mandate, and it blew up their insurance markets.’“ [Minnesota Public Radio, 10/22/14]

Georgetown University’s Sabrina Corlette: During Past Attempts To Allow People To Buy Insurance Across State Lines “Many People Found It Unaffordable And Went Untreated.” ”As for McFadden’s contention that cross-border competition should be part of the health care solution, past regional attempts to spur sales across state lines were not successful, said Sabrina Corlette, a senior research fellow and project director at Georgetown University’s Center on Health Insurance Reforms. ‘What we found was that prices didn’t go down,’ Corlette said. ‘There were no new insurance companies selling to consumers or small businesses. They were really sort of ineffective.’ So too were the government-subsidized high-risk pools McFadden is calling for, Corlette said. ‘The coverage is just extremely expensive, and many people found it unaffordable and went untreated,’ she said.” [Minnesota Public Radio, 10/22/14]


“Selling Insurance Across State Lines: A Terrible, No Good, Very Bad Health-Care Idea.” In February 2010, the Washington Post’s Ezra Klein wrote that legislation allowing health insurance to be sold across state lines “would not change the number of insured Americans or save much money, but it would make insurance more expensive for the sick and cheaper for the healthy, and lead to more healthy people with insurance and fewer sick people with insurance. It’s a great proposal if you don’t ever plan to be sick, and if you don’t mind finding out that your insurer doesn’t cover your illness.” [Washington Post, 2/17/10]

CBO Said Legislation Allowing Insurance To Be Sold Across State Lines Would Not Mean More People With Insurance And Would Increase Costs For The Sick. “As it happens, the Congressional Budget Office looked at a bill along these lines back in 2005. They found that the legislation wouldn’t change the number of the uninsured and would save the federal government about $12 billion between 2007 and 2015. That is to say, it would do very little in the aggregate. But those top-line numbers hid a more depressing story. The legislation ‘would reduce the price of individual health insurance coverage for people expected to have relatively low health care costs, while increasing the price of coverage for those expected to have relatively high health care costs,’ CBO said.” [Washington Post,2/17/10]

Bottom Line: Investment banker Mike McFadden’s plan would undercut Minnesota’s strong consumer protections and create a race to the bottom in terms of quality health care.