Unintended Consequences

by Robert Herold


My health insurance premiums for this year have increased by nearly 17 percent. I'm not alone. Yours no doubt did, too. And I hear that larger increases are coming. Lots of people must have taken seriously ill over the past 12 months.


Stunned by the cost blitz, I tried to find out why. I called the state board that sets the rates. The answer to my question came packaged as a tautology: We approved the requested rate increases.


I called the HMO. They informed me that the state board wouldn't have approved the rate increase if they weren't warranted.


I then called the state. No help. Seems that my kind of insurance doesn't fall under the purview of the state authorities. They never explained why.


The old run-around.


I'm aware that prescription drug expenses have exploded, but I suspect that the real culprit behind this is our highly touted welfare reform.


In a recent column, the Washington Post's David Broder confirmed my suspicions. Seems that the California health care advocates have sounded the alarm. Health costs are going Code Red. And why? Broder argues that because of welfare reform, both hospitals and doctors find themselves in a financial bind. The federal government ponies up far less for Medicaid, so the hospitals and doctors have passed their costs on to the great American middle class.


Apparently the architects of welfare reform never got around to answering the key question: What do the hospitals do if the indigents don't stop showing up at emergency rooms? Well, they're still showing up, and someone has to pay for it.


My 17 percent helps. Yours, too.


But didn't you hear? Welfare reform is a huge success. Just ask any Congressman who voted for it. Ask our Congressman, George Nethercutt. Then ask him to explain the 17 percent increase. And ask him or any member of the political class to explain the hospital increases. And ask them to discuss their plans to address the prescription drug cost explosion. I'll bet that you get a blank stare.


I'm not totally letting the insurance companies and HMOs off the hook. I'd bet that they've figured out a way to turn the situation to their advantage. Bookies aren't bookies if they don't know how to make a good bet.


In 1994, these same folks beat back Bill Clinton's health care reform initiative. (Well, really it was Hillary Clinton's -- and that was the problem.) As Broder observes, instead they sold the country on incremental improvement. You may recall that they spent quite a wad of money discrediting anyone who saw insurance companies as part of the problem.





While I may not be able to get an answer from anyone, it seems that some bigger enchiladas have appeared on the consumer scene. California consumer advocates are now telling everyone that the incremental improvement strategy is bankrupt, and real reform is needed.


But complicating a solution is the fact that politicians, both moralizing Republicans and pandering Democrats, have pounded their chests now for several years and laid claim to giving single mothers back their pride. That is, we sent them to McDonald's, and why not, because all that stuff about aid to mothers wasn't working anyway.


In my previous life, at a meeting attended by senior academic leadership at EWU, a dean rose to announce the good news that Idaho had approached the school and requested that the School of Social Work provide some needed counseling services. Seems that Idaho now had money to burn, because, after all, they had been going at welfare reform with such enthusiasm. Yup, those moms were flipping those burgers. But, it turned out, juvenile problems were on the rise and counseling was needed.


Political scientists call it the law of unintended consequences. You could also call it a case of pay now or pay later.


There's no doubt that the largely discredited Aid to Families of Dependent Children brought with it more than its share of unintended consequences. No one who framed that reform thought that it would have the effect of destroying what fabric was left in many fragile families. No one considered how insane it was to make it more profitable for the man of the house to leave.


Nor did anyone consider how enormous, sterile, high-rise public housing projects would result in increased crime and deviant behavior. It was left to Tom Wolfe to sum up the disaster succinctly. In his little book From Our House to Bauhaus, he called attention to the importance of private sinning, and opined that these awful structures shoved all sinning into public spaces where it took the form of serious deviance.


No one thought of such an outcome.


Our most recent attempt to rescue the poor -- a group that even the Bible says will always be with us -- carries with it its own inventory of unintended consequences. There's the emerging health care crisis -- that 17 percent problem -- there's even more pressure on what's left of the nuclear family, there's redistribution of income, the disproportionate cost to the middle class, even more regressive income tax rates and all the stuff we don't even know about yet.


But since so many members of Congress have invested so much in claiming success, what is the likelihood they will own up, rethink and retool?


Dream on.