May 22, 2009 5:17PM # A Correction By [Michael F. Cannon](https://www.cato.org/people/michael-f-cannon) --- SHARE In a previous [post](https://www.cato.org/2009/05/21/the-coburn-burr-ryan-nunes-mandate-price-control-bill/), I offered my impressions on the Coburn-Burr-Ryan-Nunes health care reform bill, based on my reading of the [bill summary](http://coburn.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=d4eab376-d507-4fb9-9f17-8b479a10affc) prepared by their staff. The very next day, I had a friendly discussion with those staffers about the legislation. (They were most gracious; many thanks to them.) It turns out some of the things I wrote were inaccurate. So I’d like to make the following corrections. Based on my reading of the bill summary and my discussions with staff, my previous post ought to have read that the Coburn *et al.* bill would: - **Mandate** that **Offer federal subsidies** to states that create a new regulatory bureaucracy called a “State Health Insurance Exchange,” - **Mandate** **Require** that all plans offered through those exchanges meet federal regulatory standards, - **Mandate** **Require** “guaranteed issue” in those exchanges, - **Mandate** **Create** “uniform and reliable measures by which to report quality and price information,” - **Impose price controls** on those plans by prohibiting risk-rating, - **Launch a government takeover** of the “insurance” part of health insurance, by means of a “risk-adjustment” program intended to cope with the problems created by price controls, and **Require** that states creating an exchange also create some mechanism for providing coverage to people with high-cost illnesses, including but not limited to risk-adjustment, risk pools, or reinsurance, and - **Fall just short of an individual mandate** by setting up (mandating?) **Require** that states creating an exchange take steps to facilitate enrollment, which may include automatic enrollment in exchange plans at “places of employment, emergency rooms, the DMV, etc.” — essentially, trying to achieve universal coverage by nagging Americans their residents to death. My description of the legislation as a “Mandate-Price-Control Bill”? Not accurate. My claim that the bill involves tax increases? Based on my erroneous impression that the bill would impose price controls on insurance premiums. The bill may lead to some tax increases (it proposes new categories of federal spending after all), but for the moment I take staff at their word that on net the bill would not increase taxes or government spending. Why the errors? Suppose a bill summary says that federal legislation would “ensure” the creation of state-based exchanges and that individuals “would get” access to an exchange. Does that mean the bill would *mandate* the creation of exchanges, or that states could choose to create them or not? What if that’s the only language, and there is no mention of states having an option? (What does [this guy](http://spectator.org/archives/2009/05/20/the-republican-health-care-alt) think?) Suppose the bill summary promises, “Guaranteed access to care…regardless of patient age or health history,” by virtue of the rules it would impose on insurers within the exchange. Does that spell *rating restrictions* (i.e., price controls)? What if the bill summary then promotes a tool (i.e., risk-adjustment) commonly used by European systems to cope with the adverse consequences of price controls? Reasonable people can disagree, I suppose. Rather than spend any more time on what I don’t like about the bill and the bill summary (and there is more), let me emphasize what I do like. The authors understand the need to [reform the tax treatment of health insurance](http://www.bepress.com/fhep/11/2/3/). And they understand that leveling the playing field between job-based and “individual-market” insurance amounts to a huge tax cut — even when revenue-neutral. They propose to [block-grant part of Medicaid](https://www.cato.org/pub_display.php?pub_id=4049), and would further [means-test Medicare premiums](http://www.americanexperiment.org/uploaded/files/should_medicare_be_meanstested.pdf). Not my ideal bill, or even the best I can hope for under the circumstances. But it would do much good and is a far cry better than anything we’re likely to see from the other side of the aisle. ##### Related Tags [General](https://www.cato.org/general), [Health Care](https://www.cato.org/health-care) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).