Issue Position: HB 392 Will Increase the Cost of Insurance in Delaware

Issue Position

House Bill 392 will only make the problems worse for those who currently pay health insurance premiums, those seeking employment in our state & those citizens who wish to have a say in their healthcare.

The rising health insurance premiums in our state can be attributed to three things. One, is our own individual choices. According to the United Health Foundation, obesity in Delaware has more than doubled over the past decade. We all know that a healthy diet and exercise is the first step in reducing cost because it leads to citizens seeing the doctors less. There are many local non-profit organizations that do a great job of spreading this message. Furthermore, these local organizations come with far less overhead and benefit cost than government. Rather than the state charging citizens/consumers more to create a new level of government; they should allocate more resources to "boots on the ground" community organizations that focus on educating citizens about healthcare. Education is a key driver in reducing costs. A more informed consumer will create a better healthcare shopper and a more citizen driven insurance market in Delaware. All of this comes at a far less cost to the citizens of this state.

A second problem that attributes to rising healthcare cost is the lack of competition. According to the American Medical Association, Delaware presently ranks as the 3rd least competitive health insurance market in the country. This means that companies like Blue Cross Blue Shield/Highmark (which insures 2/3rds of the policies in the state) will have a major influence on legislation and policies in Delaware. But wait, I thought Democrats wanted less corporate influence in Dover? Historically, competition has always been the ultimate price reducer for goods and services most valued by consumers. The breakup of the AT&T monopoly in the early 80's lead to dramatically lower long distance rates for consumers. High cost goods of the past like televisions and computers, are today much cheaper due to increased competition. Competition allows consumers more options to choose from that may be more in line with specific family needs and budgets. Competition also sparks the competitive fire that pushes companies to provide better quality at cheaper costs in order to gain a greater market share of consumers. HB 392 will effectively end competition in the Delaware healthcare market. HB 392 will also remove the freedom of choice in healthcare and services from the citizen to the government. As in all other cases of big government takeover, this is a recipe for disaster.

The final problem that attributes to rising healthcare costs is over regulation.
For the past decade, Democrats in Delaware have been promising to bring down the cost of insurance through new regulations and mandates aimed at greedy insurance companies. The results have been a 51% increase in health insurance premiums in the state since 2004. In addition, according to the Small Business & Entrepreneurship Council, Delaware is ranked the 11th worst state for employer based healthcare plans. Furthermore, the private employee family on average spends over 20% of their income on healthcare premiums, deductibles and services. So if you have ever felt that although you make more money today it doesn't feel like you have more to spend….this is a major reason why. In a small state where the biggest employer is the state (which is paid for by Delaware citizens), 25% of our population is on Medicaid (also paid for by citizens) and whose total population is less than 1 million; there is a small number of households who actually buy insurance. These numbers alone help to explain why Delaware already is an unattractive market for insurance companies who might want to compete. However, when Democratic legislators continue to add more regulations and mandates; it further chases off much needed competition in our state. If state government wishes to lower the cost of health insurance, then they need to demand more transparency in the insurance industry. Transparency allows the citizens to clearly understand all of the costs associated with the purchase of insurance. Transparency would simplify the language in policies so that average Delawareans understand the positives and negatives of insurance policies. Transparency would open the door for Delawareans to scrutinize each year, the rate increases that each insurer files with the Insurance Commissioner's office. Transparency would help citizens understand that regulations come with a cost. Common sense teaches us that if the cost of business goes up for insurance companies, then those companies usually recoup their cost from who? That's right…you, the consumers.

I love the line from legislators in HB 392 1601-A4 which states, "The current health care insurance system is increasingly bureaucratic and wastefully expensive, with a significant proportion of our state's health care funds going to insurance company profits and to corporate overhead and administrative costs, including high salaries, massive advertising, lobbying expenses and multiple and needlessly complex claims processing procedures. It is like the kettle calling the pot black. It is government who has proven to be wastefully expensive and bureaucratic. It is government who has consistently wasted tax payer funds on high salaries and pension benefits that even the private sector does not enjoy. It is government who is now looking to further expand its control over our lives into healthcare. I clearly understand that approximately 11% of Delaware's population is uninsured; however, the solution from Democrats should not be to remove the freedom to choose from the other 89% of the state. HB 392 is similar to legislation passed in Massachusetts and Vermont. In both states, the cost of health insurance increased. The citizens of Delaware are asking for lower not higher cost in healthcare. The citizens of Delaware are asking for more not less choice in healthcare. The Democrats don't seem to understand which is why we must work to end one party rule in this state. We must say "no" to HB 392.

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