Pilzer talks health care with legislative committee
Park City resident and renowned economist Paul Zane Pilzer addressed a legislative committee on healthcare issues at an interim meeting on Wednesday, claiming Utah’s current system of private insurance is anti-competitive.
Although he has written books on the subject and served as an advisor to two former United States Presidents, Pilzer said he made the presentation as a "Utah citizen and parent wanting the carriers to do what’s right, which is not for them to deny Utah citizens the right to affordable health care. If they won’t do that then this is a classic case where the government needs to step in."
In 2005 the federal government made it possible for employers to reimburse employees, if they purchase their own health care plan, tax free. Pilzer said this helps individuals, families and businesses to use less expensive plans than offered under large-group plans typical of most employer-provided insurance.
"They did this to really level the playing field because people who work for large companies have always had the tax-free benefit," Pilzer said. "But insurance companies don’t want you leaving a group plan to buy an individual policy because they’ll make less money."
Because of this, Pilzer said, SelectHealth, Intermountain Health Care’s insurance branch, and Regency, Utah’s two largest private insurance providers, have both set a policy to deny policies retroactively if the policy holder is reimbursed for the cost of the premiums.
"I don’t know of any other states who have done this, because if one carrier did it they would lose all their business to another carrier because in most states there are dozens," Pilzer said. "It would only work if they all decided together to do this, which, if they did, is a criminal offense.
"They have a logical rationale. In most states there are individual/family carriers that just give individual/family policies to individuals and families, and group carriers who just supply to group policies to groups. In Utah the two big companies do both."
Rep. Brad Last, the State House Committee Chair, said the local legislature needs to do more investigation before they make a move.
"We need to look into it a little bit more," Last said. "The thing I’m most interested in is finding out what the situation is in other states. If we find out that we’re not really different than other states, I’m not sure if we should do anything. I think we need to look at it, but I think the appropriate place for it at the moment is in the privately held Health Care Organizations Task Force.""
Last said the meeting was about whether or not the health care system in Utah is broken, and if it is, what needs to be done to fix it.
"Pilzer’s thing is one issue — individuals should be able to buy insurance without the insurance companies worrying about who is paying the premium," Last said. "For small businesses it’s often an issue of health care being unavailable or too costly. Pilzer just believes that consumer-directed health care is the wave of the future."
The committee, made up of both members of the Utah House of Representatives and the Utah Senate, listened to Pilzer, as well as a representative from SelectHealth.
"At the meeting, the insurance companies said it was all about adverse selection," Last said. "Get everyone into the pool so the young healthy people are paying for the older sick people. We need to balance affordable health care with a stable insurance market, but if we as regulators step in we might disrupt things and make it worse for the health care consumers in Utah."
Jason Burgess, Representative for SelectHealth, was unavailable for comment before press time.
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