Sick Politics

Like the 1999 special election to fill a vacancy in Rockland, this year's race to fill the state Senate seat vacated by Roy Goodman in Manhattan is sparking a rush for reform in Albany.

The law passed back then was the repeal of the New York City commuter tax, which Albany Democrats and Republicans signed onto in the midst of the special election merely for political advantage. But this year's politically inspired "reform" would be truly damaging to New Yorkers—it would push people off health insurance all across the state.

One of the candidates in the Manhattan special, Democrat Liz Krueger, has made passage of the so-called "women's health bill" a central part of her campaign.

The bill has been stalled in Albany for over a year because the Catholic Church objects to legislation that would require employers to pay for women's birth control. Feminists and church leaders have squared off over the issue; Krueger has helped re-ignite the debate by suggesting in her campaign ads that the legislation has failed because there aren't enough women in the state Senate. Vote for her, and you'll get your women's health bill.

The controversy is yet another example of what's wrong with how policy is made in New York. No one is debating this bill as a piece of health-care legislation. And on those grounds, it's a lousy law: It will raise the cost of insurance, further reduce individuals' choices in selecting policies for themselves and increase the number of New Yorkers who can't afford insurance.

The legislation is essentially a series of government mandates that tell insurance companies and anyone who buys private insurance in New York state that their policies must cover a range of services and procedures, from contraceptives to mammograms. The women's bill is essentially a response to a so-called "men's health-care bill" rushed through Albany a few years ago that requires insurers cover screening for prostate cancer.

On the surface, these bills seem worthy, especially as they are described in the press. After all, who could possibly be against women's health, or men's for that matter? But both are an example of government trying to tell a private, voluntary market how it should act. And experience has shown that these kinds of efforts, even when they are well-intentioned, have all sorts of unintended consequences.

Back in the 1980s, for instance, many states passed mandates requiring that insurers demand a second opinion when a doctor recommended surgery. The idea was to stem rising health-care costs, but the effect was the exact opposite. A national study found that the mandate raised premiums an average of 7 percent because most doctors were reluctant to contradict a colleague.

Ever since then, health-care policymakers have been wary of mandates, but that hasn't stopped legislators from rushing to approve them. In the 1990s, in particular, as special-interest groups have figured out how to lobby heavily for their own favorite mandate, they have multiplied.

In 1997, New York chiropractors waged a well-funded campaign that got Albany to mandate that all chiropractic care must now be covered by insurance. A study two years later by the state Department of Health estimated that the mandate increased health premiums by 1.5 percent.

Yet legislators dismissed such predictions when they enacted the bill, and seemed to take an almost devil-may-care attitude about the debate. Queens Assemblywoman Catherine Nolan even said, when asked why she favored the chiropractors' bill: "They go to the little leagues. They are active. They want a bill, I'm happy to help them."

On such flimsy grounds is health-care policy in New York state now made.

Not surprisingly, interest groups are now lining up for shares of the pie. About 100 health-care mandates are floating around Albany, including bills to require insurers to cover acupuncture, infertility treatments and hair prosthetics (wigs).

Inexorably, every mandate will drive up premiums 1 or 2 percent. The state already tacks onto every private policy a whole host of surcharges to subsidize hospitals. With mandates and surcharges, I estimate that New York is adding 15 percent to 20 percent to the cost of every private health-care policy.

That's money that would otherwise find it's way back into workers' pockets in the form of lower deductibles and co-pays, and it would prove a huge boon to the more than 500,000 self-employed people in New York who must buy their own insurance.

But instead, because of high costs, New York now has more working people without insurance than any other state.

What's worse, mandates limit the ability of insurers to offer alternative policies to individuals priced out of the market. New York, with its high health costs, needs low-cost plans that only cover essential services and feature high deductibles. Such policies protect individuals from the cost of catastrophic illnesses but ask policy holders to pay many ordinary expenses, such as the costs of tests.

These policies are especially popular with the self-employed, with young workers who don't get sick much and with workers at small companies that otherwise would provide no coverage. But they are unknown here because mandates make them impossible.

Some states have moved to stop the mandate madness. Pennsylvania, for one, has passed a law requiring that any proposed mandate first be examined by a commission to determine its costs. That commission has already rejected as too expensive and counterproductive a host of mandates already in force in New York, including the men's health-care bill.

But while other states make health-care policy, in New York the issues get obscured by election politics, ideological battles and Albany's horse trading. The losers are the millions of working people in the state who no longer have insurance.