- The Washington Times - Friday, July 5, 2002

On Capitol Hill, members of Congress are continually jacking up the price Americans pay for health care. They do this by giving away benefits and, in some instances, making people buy unwanted benefits. Mental health parity, a patients' bill of rights, a prescription drug benefit tacked onto Medicare the expenses are endless.
One would think taxpayers would be outraged. They're not, however, because they expect it. After all, when it comes to health care, most Americans think it should be paid for with "other people's money."
There's also no mystery why 39 million people lack health insurance. Mandates have driven up prices beyond the reach of many Americans. Those debating whether they can afford the cost of insurance, quite often decide to forgo it, knowing they can still obtain care if needed without it. For instance, many low-income children (and some adults) are eligible for government-subsidized insurance through Medicaid.
Still, many often forgo this subsidized health insurance knowing that, in the event of a major illness, they can obtain completely free medical care if needed. This is because hospitals are forbidden by law from turning away patients in need of emergency care for which they are unwilling or unable to pay. As with anything in life, all of these services are not actually free someone has to pay for them. Guess what? They are paid for them with other people's money.
Likewise, many workers think their employer should pay for employee health insurance. Some politicians have even suggested a law requiring it. This is ludicrous, of course, given that employers do not pay for health insurance. They pay a portion of their employees' salaries in the form of tax-free health benefits for which the employees forgo a similar amount of cash wages.
Every day I run across a new example. A young woman complained to me that her husband's employer-sponsored health insurance lacked family coverage. Since they were ready to start a family, she needed an individual health insurance policy with maternity coverage. Maternity benefits, however, raised the price of her insurance policy to about $1,000 per month. Over the course of a year, that is roughly equivalent to the amount needed to pay out-of-pocket for having a baby. It's no coincidence. She wanted a law requiring insurance companies to sell individual policies (with $12,000 in maternity benefits) to any couple willing to pay $2,000 in premiums. In other words, her cost of having a baby should be paid for with other people's money.
It only gets worse during our golden years. Despite being the wealthiest income group, seniors receive generous government-subsidize medical benefits. In fact, the Economist reported that today's seniors could expect to receive $2.50 in benefits for every dollar they paid into Medicare. And that's under today's set of benefits. Both houses of Congress are currently trying to add a drug benefit to Medicare, even though two-thirds of seniors already have drug coverage.
A recent poll by National Public Radio, Kaiser Family Foundation and Harvard's Kennedy School of Government confirms people's attitudes. The poll asked seniors what proportion of the their annual prescription drug expenditures insurance should pay? Almost half said at least 50 percent, and 41 percent thought it should cover substantially more.
When asked how much they would personally be willing to pay toward such a benefit, 69 percent said only $30 a month or less. Ten percent were actually willing to spend $30, 14 percent were willing to spend $20, 15 percent were only willing to spend $10, while almost one-third (30 percent) were not willing to spend a dime. Zilch, nada, nothing. I repeat. Thirty percent weren't willing to contribute anything toward helping themselves, as well as their fellow seniors (not to mention taxpayers) obtain affordable Medicare drug coverage. In other words, they wanted expensive drug coverage paid for with other people's money. Even more amazing, when asked what would be a reasonable amount to pay for such a drug benefit, only 16 percent thought it reasonable to expect it for free, although 30 percent had previously claimed they weren't willing to pay anything.
Sadly, the same survey found that few adults understand what health economists have long known a large portion of the rise in health care costs is because people tend to spend a lot more, and care little, when health care is paid for using other people's money.

Devon Herrick is research manager at the National Center for Policy Analysis.

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