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====== FOR IMMEDIATE RELEASE ======

America First Party
1630 A 30th Street #111
Boulder, Colorado 80301
http://www.AmericaFirstParty.org

Tuesday, October 20, 2009

Stop the Central Planners: Health Care Proposals Will Increase Costs, Undermine Care

Boulder, CO - Seemingly desperate to pass legislation which can be termed 'health care reform,' a Senate Committee approved a bill last week which would force insurers to enroll subscribers with preexisting conditions, irrespective of financial risk. In their rush to transform one-sixth of the nation's economy, lawmakers may be ignoring the risk that they are likely to put the entire nation's private health insurance industry into a death spiral.

The Baucus bill qualifies as an assault on the middle class. PriceWaterhouseCoopers issued an alarming study which showed that those who have purchased insurance directly will see an additional 47% increase in estimated premium cost by 2016 if the bill is enacted, over and above annual increases already expected without new legislation. This means an additional $2,900 for a typical family plan. Employers offering insurance to 50 or fewer employees would likewise see a 28% increase. Health care related taxes, cost shifting due to cuts in Medicare reimbursements, and healthy individuals dropping out of or electing to not enroll in costly insurance plans are the major factors.

A 'death spiral' is an insurance term for an unsustainable insurance scenario. This occurs when new subscribers are permitted irrespective of financial risk, or as in the case of the Baucus bill, regardless of preexisting conditions. The unavoidable effect is an incremental increase in cost and in premiums, which then entices some low-risk subscribers to leave the plan, since they are permitted to rejoin when they have an existing condition. With fewer payers in the group, premiums must again be raised, which then causes more subscribers to drop out. This repeating cycle causes the plan to collapse. Some point to Maine, Kentucky, and Washington State as actual examples, where demands of state regulators reportedly created actuarially unsound conditions for insurance companies.

While our nation's health care crisis is not to be underestimated, proposals circulating on Capitol Hill do not sufficiently address the real problems, and are steeped in a central planning mentality which discounts the private sector's ability to innovate and contain costs. In fact, experience shows that costs can be reduced by 50 - 90% with proven forms of medical practice at the local level, while simultaneously increasing the quality of care and providing access to care for the uninsured. For a more detailed examination of this subject, please see "Skyrocketing Medical Costs: Their Causes, and How To Bring Them Under Control"

Contacts:
Jonathan Hill, National Chairman, 1-866-SOS-USA1, ext. 4
Michael Lynch, Press Secretary, 1-866-SOS-USA1, ext. 2

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