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Press Release

    Testimony Before the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry

    08/10/1997

    (Chicago, Illinois) Secretary Herman. Secretary Shalala. Commissioners. Good afternoon. My name is Michael Cannon and I come before you to represent the 250,000 members of Citizens for a Sound Economy Foundation who believe consumer choice and competition among health care and coverage providers are the keys to consumer protection. These tools enable consumers and health coverage providers to discipline those providers who fail to offer a quality product.

    While Citizens for a Sound Economy Foundation applauds the Commission's devotion to the cause of consumer protection and quality health care, we are gravely concerned with the direction the Commission seems to be taking in an attempt to promote these goals.

    Today, consumers do not enjoy the level of choice they deserve. Why is this? Examining the problem we find the culprit is government. The federal tax code restricts consumer choice by pushing consumers into employer-based coverage and making it twice as expensive for them to buy coverage that meets their individual needs. This bias chiefly benefits the wealthiest Americans, increases health care costs by encouraging ever-higher levels of consumption, and leaves many consumers a captive clientele to the one or few health plans their employers offer.

    Over the past three decades, state governments have heaped mandate after mandate on health coverage consumers, forcing them to buy types of coverage they do not want or need. A recent study found that the 12 most common state mandates increase the price of coverage by as much as 30 percent. Now, the federal government has layered on two more mandates. This Commission seems poised to recommend that the federal government layer on as many as a dozen more.

    Such legislation is anti-consumer. It takes the power to choose out of the hands of consumers and puts it in the hands of government. It increases the cost of coverage and therefore puts coverage out of reach for many consumers.

    Such legislation will not hurt you. It will not hurt me. The fact that we are sitting in this room is a pretty good indication that we have been blessed in this life. We will see our premiums go up, we will curse our coverage provider, we may even change plans. After that, we will put the rate increase out of our minds.

    Who will be hurt by this legislation are consumers at the margins. It will hurt those who don't even know why their premiums went up, but who know that this latest increase means they can no longer afford coverage. It will hurt small businesses that, facing higher premiums, either cannot afford to hire an additional worker or must cancel health benefits altogether. More importantly, it will hurt those workers who are denied their benefits or even a job because that 30 percent price increase just got a little higher.

    Having observed your deliberations, I am concerned this Commission is looking at the problems in our health care market and asking the question, "What can we do about these problems?" without first having asked the more important question, "Why do these problems exist?" Citizens for a Sound Economy Foundation urges the Commission to take the time to examine this question. We believe that such an examination will point the way to greater consumer choice, rather than additional government mandates that take away consumers' sovereignty and force them to bear even greater burdens.

    Imagine the creative and competitive energies that would be released into the health care marketplace if consumers controlled their own health care spending and decisions and if providers had to compete to meet consumers' individual needs. Imagine the consumer protections and quality products consumers would demand once liberated to buy their own coverage in an open market.

    For decades, anti-consumer legislation has bottled up the natural market processes that make quality health coverage affordable for an ever-increasing number of consumers. Citizens for a Sound Economy Foundation urges this Commission to be a force for consumers by pushing for consumer choice, rather than additional government mandates.

    I thank you for your attention, and I would be happy to answer any questions you may have.