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Free Liberal: Coordinating towards higher values

Free Liberal

Coordinating towards higher values

New Study Provides Ways to Cut Costs and Improve Health Care in New Mexico without Bigger Government

(Albuquerque) When the 2008 legislative session kicks off next week, health care, specifically the passage of Governor Richardson’s proposed “universal coverage,” plan will be at the top of the agenda.

Unfortunately for New Mexicans, the proposal fails to address the most problematic features of New Mexico’s health care system – high tax rates and ever-increasing government intervention – and would actually exacerbate those problems by giving near total control of New Mexicans’ health care to a new “Health Care Authority.

In his new policy brief “Cutting Costs and Improving Health Care in New Mexico,” Paul Gessing of the Rio Grande Foundation argues that policymakers should go in the opposite direction. “Rather than piling more costs and regulations on top of the already-heavy burden faced by New Mexico health care consumers, policymakers should work to peel back those government-imposed burdens.”

As Gessing points out, “New Mexico is one of just a few states that charges sales or gross receipts taxes on deductibles, co-pays, fee-for-service care (including dental costs), and over-the-counter medicine. Rather than a massive new bureaucracy, shouldn’t we stop unnecessarily taxing basic health care?” The first principle of health care is “Do no harm.” Shouldn’t New Mexico tax policies adhere to that ideal as well?

Eliminating New Mexico’s unique tax on many health care services would be a good start, but as Gessing argues, “Over the years well-intentioned policymakers have adopted 49 mandated treatments that every insurance policy must cover. These mandates mean higher insurance costs and more uninsured New Mexicans.”

In order to slow the rapid accumulation of mandates or at least mitigate their cost, Gessing advocates “Cost-benefit analysis of each new mandate and to enable individuals to shop for health care across state lines where fewer mandates reduce insurance costs.”

Lastly, Gessing urges New Mexico to encourage the use of Health Savings Accounts both for Medicaid recipients and for employees of small businesses as a means of increasing health care ownership and creating a more efficient system. “Ownership of one’s own health care,” Gessing argues, “is the key to providing better health care at a lower cost.”

As Gessing concludes, “Governor Richardson’s proposal will chase doctors out of New Mexico while destroying the private insurance market, all while increasing tax burdens on businesses. If policymakers really want to increase access to quality health care, the market-based reforms proposed here are more likely to succeed than bigger government.”

Full text of the policy brief is available at: http://www.riograndefoundation.org/downloads/rgf_free_market_health_care_reform_ideas.pdf



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