Individual Insurance Mandate Comes into Play

Many political leaders - and now some leading insurance companies - are arguing that the government should require all Americans to have health insurance. Sen. Max Baucus (D-MT) advocates a federal mandate on individuals in his health overhaul blueprint. America's Health Insurance Plans and the Blue Cross and Blue Shield Association, two insurance trade groups, came out this week in favor of a mandate.

They argue a very valid point: If you guarantee that insurers must sell policies to anyone who wants to buy one, many people will wait until they get sick to buy it. That means there wouldn't be enough money in the insurance pool to pay for care, because healthy people wouldn't be paying in. It wouldn't really even be actual "insurance," as that is understood, where people pay premiums over time to protect against the risk of very expensive medical bills.

Since guaranteed issue is a popular proposal in a new health care regime, insurance companies know they have to prevent devolving to a lopsided pool where everyone who has "insurance" is sick. So they're saying they support an individual mandate, which would require everyone to purchase insurance by some yet-to-be-specified date to avoid this adverse selection problem. This would result in major losses of freedom for consumers. First of all, they would be compelled to pay for insurance or be fined for non-compliance.

New York Times reporter Robert Pear wrote Nov. 19: "Insurers did not say how the government should enforce an individual mandate : whether through fines, tax penalties or other means. Politicians have also been reluctant to specify details of enforcement, which could prove highly unpopular."

Another glaring detail, to which Pear alluded, is that if everyone is required to buy health insurance, no politician is going to let the insurance companies decide how much it should cost.

President-elect Obama's plan calls for regulation of private insurance to see that its prices are "fair" and comparable to that of his proposed government insurance program. This could mean that younger, healthier people would be charged more for their mandatory insurance so older, sicker people don't have to pay so much. Ultimately, these policies would be the death knell for the private insurance industry - and consumer choice.

It is in consumers' best interest to retain private insurance as an option, rather than yielding that function to the federal government. And most people understand this: A recent study noted that Gallup polls over the years show Americans prefer a private system to a government-run one.

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Australia: Absurd salaries for health bureaucrats

Western Australian nurses are demanding a better deal after Premier Colin Barnett defended salaries of $400,000 or more for 11 of the state's health bureaucrats. It was revealed in today's The Sunday Times that four Health Department bosses were on contracts that enabled them to earn $480,000 a year, while seven more could earn up to $420,000. Health director-general Peter Flett earns $540,000 after being appointed to the top job in October, $90,000 less than his predecessor Neale Fong.

Dr Fong, Australia's highest-paid public servant, resigned in January after the Corruption and Crime Commission found he had engaged in serious misconduct with disgraced former Labor premier turned lobbyist Brian Burke.

While in opposition, the current government pledged to cut excessive public service salaries once it took office. But Mr Barnett said the government had to pay high salaries to attract good administrators. "They are high salaries, but if you're talking about leading clinicians in the health sector that's the sort of salary level that prevails,'' he said today. "If we want top-quality people working within government, whether it's in health, education or legal areas, you're going to have to pay competitive salaries. That is a reality.''

WA Nurses Federation secretary Mark Olson said he was surprised at the number of health administrators on $400,000-plus salaries in WA. He said Mr Barnett was mistaken to claim that the wages of the state's top paid health bureaucrats were commensurate with similar jobs in the private sector. "It's just a fallacy. The previous government ran the same line,'' Mr Olson said. "When they paid that excessive salary to Dr Fong they said they had to pay him that money to get him from the private sector. "It turned out that he had been on about $330,000 a year and got more than a 200,000 pay lift when he went from St Johns (private) Hospital to the public sector.''

Mr Olson said Mr Barnett had also appeared to indicate that only doctors or people with a medical background could be appointed to top-level management positions in the health sector. "They don't have to be clinicians to move into these areas,'' Mr Olson said. "People who don't have medical qualifications are running very large health organisations around the country and around the globe.''

He said the current level of salaries was sending the wrong message to the people working ``on the floor'' in the state's health system. "It's a pure and simple equation - we are short of doctors on the floor, we are short of nurses on the floor,'' Mr Olson said. "I'd like to see the money going in that direction rather than to bureaucrats. There's no shortage of bureaucrats, there never has been.''

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