Not to be outdone by the socialist health care proposal that Iowa House Democrats have introduced (House File 96), Joe Biden’s website indicates that he will introduce the Biden public option providing the choice to Americans to be covered under a Medicare like plan rather than their current health care coverage. While the Biden Plan doesn’t eliminate private health insurance altogether, like the Iowa House Democrats plan, it has countless dangerous consequences.
A report released this past year by Navigant studied the impact of a variety of proposals to create a government-run insurance plan to compete with private health insurance companies. This analysis found that between 25 and 52 of Iowa’s 90 rural hospitals would be at high financial risk for closure if a government-run insurance plan entered the market. The study found that there would be losses of millions in revenue if current Medicare rates replaced current higher commercial rates to hospitals.
Just look at data from the Iowa Hospital Association. “More than 60 percent of hospital revenue is derived from government health insurance payments through Medicaid and Medicare”, and these “payment rates fall far short of covering the actual cost of care and do not keep up with rates of inflation.”
Iowa’s hospitals are already struggling due to lower government reimbursement rates in the Medicare and Medicaid programs, as well as the impacts this spring from the elimination of elective procedures due to COVID-19. The following data is collected from Iowa’s hospitals and shows the number of hospitals below certain total revenue margins in 2019.
- Below negative 5% = 9 hospitals
- Below 0% = 22 hospitals
- Below 2.5% = 23 hospitals
- Below 5% = 25 hospitals
With the majority of those unsustainable revenues coming from Iowa’s Critical Access Hospitals who already experience higher Medicare and Medicaid patient stays, it is easy to see how a public option will lead to rural hospital closure, meaning less access for Iowans to birth centers, mental health treatment, and emergency care.
Rather than proposing radical and dangerous health care plans, the Iowa House Republicans funded an increase to Iowa’s Critical Access Hospitals in Medicaid in FY 2020 and FY 2021. All Iowa House Democrats voted against this funding.
This “free” health care plan proposed by Joe Biden and House Democrats is unaffordable and would lead to massively higher taxes on Iowa families and business. Not only that, but banning private health insurance would lead to insurance and health care job losses in the thousands, take away choice and access, and ration care