Few issues in recent years have gotten as much attention as the debate over national health insurance. With health care expenditures taking nearly one out of every six dollars spent in this country and about 14 percent of the population without adequate coverage for medical expenses, the magnitude of the problem cannot be overemphasized. There are no easy solutions to the problems of increasing costs and the lack of coverage for everyone. Health care is an emotional issue, and any reform will be complex and affect almost all Americans to varying degrees.
The following discussion of national health insurance does not give any precise answers or solutions. Rather it addresses many aspects of the issue, describes some approaches suggested for solving current problems, and attempts to predict what seems most feasible in the short term. The major goal of this discussion is to provide readers with a better framework for following—and perhaps participating in—the debate that will undoubtedly continue for some time.
Some Basic Questions
The issue of national health insurance is best addressed by having an understanding of its many dimensions. This discussion is organized around several questions, not all of which have precise or easy answers.
Don't We Already Have National Health Insurance?
The answer is "yes," for many Americans. Unlike most other industrialized countries, however, the United States does not have a system of national health insurance that covers everyone. Although national health insurance does exist in the form of Medicare, Medicaid, certain veterans' benefits, and coverage of military personnel and their families, each of these programs attempts to address the issue of health insurance for a specific group and each takes a different approach.
Some people would say that most other Americans are also covered under a national health insurance program. While the role of the federal government is probably not extensive enough for most persons to agree with this observation, the federal government does in fact have an influence on the design of employer-provided medical expense plans of almost all but the smallest employers. This influence comes from numerous pieces of federal legislation, such as ERISA, COBRA, the Family and Medical Leave Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and HIPAA.
Many Americans have a tendency to feel that the federal government should have no role in health care reform. But approximately 50 percent of all medical care expenditures are for persons who are either employees of the federal government or covered under the national health insurance programs previously mentioned. Therefore, the government and the taxpayers who fund its activities have a direct stake in controlling the cost of medical care. (However, it is easy for many observers to become a bit cynical when they compare their own medical expense plan with the generous plan available to members of Congress.)
What Is the Objective of National Health Insurance?
It is difficult to determine exactly what a national health insurance program should accomplish. Alternative proposals either have different objectives or place varying degrees of emphasis on a combination of objectives. There are two primary concerns with the current health care system—rapidly increasing costs and the lack of coverage for a large segment of the population. Some programs are essentially a proposed solution to only one of these concerns; other proposals address both concerns in varying degrees. It would be much easier to find a solution if there was consensus on the scope of the actual problem.
Unfortunately, the two problems are not independent, and solving one problem may actually exacerbate the other. For example, making broad coverage available to everyone might so increase the demand for medical treatment that costs would go up because of a shortage of medical providers. This situation occurred after the passage of Medicare. In addition, efforts to control costs could lead to rationing of medical care so that some types of care would be available only to the more affluent segment of the population who could afford some type of supplemental insurance protection.
Do Americans Want Reform?
This is a difficult question to answer. During the health care debate over the last few years, numerous polls were taken. There seemed to be overwhelming agreement among the American people that the health care system is broken and needs fixing. Some proponents of national health insurance inferred from this opinion that there was support for radical reform.
As the debate continued and more polls about the underlying mood of the public were conducted, a different picture began to emerge. Most Americans were happy with their own medical expense coverage. They were also aware of rapidly rising costs, but those in managed care plans had been less significantly affected by them. In fact, as many employees elected managed care options, they actually saw their out-of-pocket medical expenses decrease. Although the public was not in favor of changes that would affect their relationships with providers of medical care, a surprisingly large percentage of the public was aware that reform carried a financial cost, and within limits many Americans were willing to foot the bill.
These further surveys also indicated that the major concern of Americans was the lack of security surrounding their own medical expense coverage, particularly if they became unemployed or changed jobs. There was fear that the loss of employment would put them in the category of uninsured. Even if coverage could be continued under COBRA, its high cost would make it unaffordable. Considerable concern was also expressed over the lack of coverage when changing jobs because of preexisting-conditions provisions in the new employer's coverage. While Congress is often considered out of touch with the electorate, these, in fact, were significant issues addressed by recent major health insurance legislation.
One final observation about these surveys: They showed that the majority of Americans do not want another program as bureaucratic as they view Medicare to be.
Is the Goal Universal Coverage or Universal Access?
Some national health insurance programs call for universal coverage, which means that all Americans would be covered. Unfortunately the cost of universal coverage would be very expensive, and it is questionable whether such a program could be accomplished voluntarily. As long as some people are in a position of voluntarily electing coverage, there are those who would be unwilling to pay the price, even if it was subsidized. Therefore, universal coverage probably requires a program similar to Medicare and accompanying tax revenue to support the program. With the majority of the public wanting a nongovernment program of health insurance, many other national health insurance proposals focus on universal access and realize that a goal of slightly less than universal coverage is all that is realistically attainable. But even this goal will require subsidies for some segments of the population.
Who Should Pay the Cost?
A majority of the uninsured have inadequate resources to pay the cost of voluntary coverage, even if it were suddenly available. As a result, there will be some need to subsidize the cost of coverage if the number of uninsured is going to be reduced substantially. Who pays? The alternatives are many, but they can largely be summed up in one word—taxes. There have been numerous suggestions about the form of these taxes, but in all cases they will fall on some or all taxpayers. These alternatives include general tax revenue, additional Social Security taxes, and taxes on cigarettes because smoking is the source of many medical problems.
Sometimes overlooked is the fact that many of the uninsured do receive medical treatment. Even though uninsured persons may be unable to pay, treatment by hospitals and physicians is usually not denied for serious illnesses or injuries. However, when the hospital or physician writes off a large portion of these bills as uncollectible, the cost is in effect being passed on to those who do pay their bills (usually through insurance) in the form of higher charges than would otherwise be made. In theory, the cost to many individuals or employers will decrease if a larger portion of the population has the resources to pay their own expenses. This is used as the rationale for taxing employers or individuals to pay the cost of providing protection for the uninsured.
What Benefits Should Be Available?
One of the major debates in designing a national health insurance program involves the scope of the benefits that will be included. At one extreme in the debate are those who feel the government should guarantee only a minimum level of health care. Private medical expense insurance or personal resources would be necessary to obtain broader benefits. At the other extreme are those who feel that a comprehensive level of health care should be available to all Americans. This group views complete health care protection as a basic right that belongs to everyone regardless of income.
The current system of health insurance falls somewhere between these two extremes, and this is probably where any ultimate solution will be found. Most Americans do not have coverage for long-term care, and many have limitations on such benefits as mental health and substance abuse. Some medical expense plans limit coverage for prescription drugs. Such limitations exist not because employers see no value in these benefits but because realistic cost constraints dictate the benefits that are provided. Employers cannot afford a medical expense plan that will do everything for everyone, and it is questionable whether Americans are willing to pay the cost of a national health insurance program that has such a lofty goal.
Another issue is whether a uniform package of benefits should be available nationwide. Under some proposals, benefits would be determined on a state-by-state basis, while under other proposals, a national benefit standard would be established. These proposals typically call for the abolishment of state benefit mandates.
Does Cost Containment Harm Quality?
While there are undoubtedly inefficiencies in the health care system, many of these inefficiencies have been addressed in recent years. For example, hospitals, faced with limits on Medicare and Medicaid reimbursements, have been forced to operate in a more cost-effective manner. However, future efforts to control costs will probably need to be more severe and may come with a high price. Americans arguably have the best and most innovative health care system in the world. Can this quality be continued if prices are controlled? Or will it continue only for those who have additional resources to pay? Control of costs, if taken beyond a certain point, will lead to the situation that exists in most countries with national health insurance programs—rationing of medical care. Questions like the following will then need to be answered: Should organ transplants be limited to persons under age 50? Should very expensive health care continue to be provided to premature babies who have a less than 25 percent chance of survival? To what extent should medical treatment be provided to persons with AIDS and other terminal illnesses? Will controls on the cost of prescription drugs eliminate the resources needed to develop the next generation of medicines?
Are Employer Mandates the Proper Approach?
National health care proposals differ with respect to the employer's role in making coverage available to its employees. Some proposals would require virtually all employers to make coverage available to employees (including part-time employees) and their dependents and to pay a portion of the cost. Under all such proposals, there are additional programs for the unemployed and subsidies to some employers for whom the cost exceeds a certain limit. However, small employers would be hit hard by most of these proposals and have lobbied against employer mandates. There is considerable support for the argument that the cost of employer mandates would force some small employers out of business.
One major argument for employer mandates is that the alternative is a government-run program with its accompanying bureaucracy.
What Is the Role of Medicare and Medicaid?
Many differences exist over the role of Medicare and Medicaid in health care reform. Although some argue for a single system to cover all Americans, opponents argue that the Medicare and Medicaid programs serve specific groups and are working reasonably well. Why alter the part of the system that is already closest to the concept of universal coverage?
It is interesting to note that national health insurance proposals are much more likely to fold Medicaid recipients into a new program than they are to include Medicare recipients. This fact reflects the reality that tinkering with Medicare can have grave consequences because of the high voter turnout of the elderly.
What Are the Political Realities?
The possibility of any national health insurance program depends on whether Congress can design a program that receives broad-based support. Although Republicans are unlikely to offer solutions that are as far-reaching as the initial Clinton administration's proposal and that will offend as many segments of society, public clamor for change will undoubtedly lead to continued reform of the current health care system, modest though it may be. Clearly any change will be designed to appeal to a different class of constituents. While the initial Clinton administration's proposal appealed to such groups as organized labor, the Republicans are much more likely to be influenced by the concerns of small businesses. However, no program will be successful and politically palatable unless it receives support from many diverse groups, including employers, insurers, hospitals, physicians, drug companies, and the general public.
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