Democrats are laying the groundwork for their next healthcare overhaul if they take control of Congress in this fall's elections.
A new report from the Center for American Progress shows exactly what they have in mind, and patients won't like it.
The group has long served as a policy incubator for Democratic administrations.
Its latest report — "A Patient's Bill of Rights for Lowering Health Costs" — outlines a sweeping set of reforms intended to reduce premiums, deductibles, and insurance denials.
But it amounts to a new wave of price controls and regulations that would reduce choice, limit access, and ultimately make healthcare less affordable.
Start with the report's proposal to limit premium increases. Insurers would be barred from raising rates beyond underlying cost growth without regulatory approval.
That may sound like common sense.
In reality, it's a recipe for driving insurers out of the market.
We've seen as much before.
After Obamacare imposed a web of mandates and pricing restrictions, insurers exited markets nationally.
In some areas, patients were left with just one plan to choose from.
More price controls risk repeating that mistake — and taking another step toward Democrats' ultimate goal of a single-payer, Medicare-for-All healthcare system.
The report also calls for capping hospital prices at no more than three times Medicare rates in "concentrated" markets and then forcing insurers to pass those savings along to patients through lower deductibles.
But price caps don't magically lower costs.
They distort incentives.
Hospitals may respond by holding off on investments in additional capacity or new lines of service. Some may attempt to merge with competitors or close facilities.
Patients don't get cheaper care. They get longer waits and fewer options.
The Center for American Progress report also takes aim at so-called "transfer pricing," a practice used by vertically integrated firms like health insurers that also own physician groups and pharmacies.
To understand why this practice exists, consider one of Obamacare's key rules, the medical loss ratio. Insurers are required to spend a fixed share of premium dollars — 80% in the small-group market and 85% in the large-group market — on medical claims.
That limits how much they can keep as profit or use for administrative costs.
Vertically integrated firms have found a way to operate within those constraints.
When an insurer owns physician practices or clinics, it can pay those providers above-market rates.
On paper, that counts as "medical spending" under medical loss ratio rules even though the money never really leaves the company.
The result is higher reported costs, which can justify higher premiums, while preserving or even increasing overall profitability.
The think tank report's solution is to ban insurers from factoring in those internal transactions when setting premiums.
But that won't fix the underlying problem.
As long as the rules reward spending rather than efficiency, firms will find new ways to game the system.
A more effective approach would address policies that encourage vertical integration in the first place.
Regulations like Medicare's site-specific payment rules, which pay more for the same service when delivered in a hospital outpatient department than in an ambulatory surgery center or physician's office, have made it harder for independent providers to compete.
That has made independent providers acquisition targets for bigger entities — and unwittingly encouraged vertical integration.
The Center for American Progress's approach to prior authorization follows the same flawed logic.
The report would replace insurer oversight with a new system of independent clinical review organizations.
But swapping one set of gatekeepers for another doesn't solve the problem.
In both cases, treatment decisions are pulled away from patients and doctors and handed to third parties. The only difference is who's doing the denying.
Each of these proposals targets a real frustration.
But in every case, the solution is more government control.
That's the same approach that created many of these problems in the first place.
Obamacare's mandates — price controls, benefit requirements, and rigid coverage rules — have reduced competition, fueled consolidation, and driven up costs.
Now Democrats want to "fix" it with even more of the same.
Patients shouldn't expect a different result.
Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Healthcare Policy at the Pacific Research Institute. Her latest book is "The World's Medicine Chest: How America Achieved Pharmaceutical Supremacy — and How to Keep It." Follow her on X @sallypipes. Read more Sally Pipes Insider articles — Click Here Now.
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