Harry and Louise on John Edwards' plan
Universal Health Care Through Shared Responsibility
John Edwards 08
February 5, 2007
“We have to stop using words like ‘access to health care’ when we know with certainty those words mean something less than universal care. Who are you willing to leave behind without the care he needs? Which family? Which child? We need a truly universal solution, and we need it now.”
— John Edwards
John Edwards’ vision for health care reform is built on four steps:
First: Business Responsibility.
Businesses… will be required to either provide a comprehensive health plan to their employees or to contribute to the cost of covering them through Health Markets.
Second: Government Responsibility.
- Offer New Health Insurance Tax Credits: …to subsidize insurance purchased through Health Markets… …sliding scale to middle class families and refundable…
- Expand Medicaid and SCHIP: …to serve all adults under the poverty line and all children and parents under 250 percent of the poverty line…
- Require Fair Terms for Health Insurance: …community rating and guaranteed issue…
- Secure the Health Care Safety Net: …a health care safety net including public hospitals, clinics, and community health centers remains necessary.
Third: New Health Markets.
The U.S. government will help states and groups of states create regional Health Markets, non-profit purchasing pools that offer a choice of competing insurance plans. At least one plan would be a public program based upon Medicare. All plans will include comprehensive benefits, including full mental health benefits. Families and businesses could choose to supplement their coverage with additional benefits. The markets will be available to everyone who does not get comparable insurance from their jobs or a public program and to employers that choose to join rather than offer their own insurance plans.
- Freedom and Security: (Health Market plans are portable)
- Choice between Public and Private Insurers: Health Markets will offer a choice between private insurers and a public insurance plan modeled after Medicare, but separate and apart from it. Families and individuals will choose the plan that works best for them. This American solution will reward the sector that offers the best care at the best price. Over time, the system may evolve toward a single-
payer approach if individuals and businesses prefer the public plan.
- Promoting Affordable Care: Health Markets will negotiate low premiums through their economies of scale… …reducing the need for underwriting and marketing activities…
- Finally: Individual Responsibility. Once insurance is affordable, everyone will be expected to take responsibility for themselves and their families by obtaining health coverage. Some Americans will obtain coverage from public programs like Medicare, Medicaid, and SCHIP and others will get coverage through their jobs. Other families can buy insurance through the regional Health Markets. Special exemptions will be available in cases of extreme financial hardship or religious beliefs.
By Don McCanne, MD
One of the more important reasons that John Edwards wants to be president is that he really wants to reform health care. He understands the great advantages of the single payer model. But he also understands that he cannot be elected when Harry and Louise point out to the nation that John Edwards is going to “raise our taxes in order to force socialized medicine on us.”
The health policy experts in the progressive community understand this. They understand that the polls demonstrate strong support for Medicare, but also strong support for employer-sponsored plans. Employers currently cover 59 percent of the nation. The workforce and their families are comparatively healthy and most are content with their current coverage. In spite of polls indicating strong support for single payer or Medicare for All, there is a very real reluctance to give up private plans perceived as largely funded by the employers in exchange for a government-run program, especially since many equate that with queues and rationing.
For this reason, the progressive policy community has proposed reform which would allow individuals the option of keeping their current coverage, while establishing a competing public program that would prove to be so compelling that eventually most individuals would want to trade in their private plans for Medicare for All coverage. Although an abrupt shift to a single payer system is not considered to be politically feasible at this time, this gradual shift would be, or would it?
Harry (sitting at the breakfast table, reading the newspaper): I see this guy Edwards wants to tax us to fund some nutty government “Health Markets,” whatever the heck that is.
Louise: Why can’t those politicians leave our health care alone? Why do they keep wanting to get the government involved?
Harry: Like I’ve been telling you for years, Louise, those liberals just want to “raise our taxes in order to force socialized medicine on us.”
In aiming for this highly dubious goal of political feasibility, what beneficial policies has Edwards sacrificed?
- Employer mandate: Smaller employers and those in many of the service industries will struggle with the affordability of plans that provide reasonable coverage, or with the affordability of their contributions to the Health Markets.
- Individual mandates: The requirement for individuals to buy health plans is dependent on the fiction that affordable plans that provide reasonable coverage will be available. With community rating and guaranteed issue, they can never be. Health care costs too much. Premiums can be made affordable only by making access to health care unaffordable through high out-of-pocket expenses.
- Tax credits: To work, refundable tax credits must be very generous for not only lower-income individuals, but average-income individuals as well. The amount would have to be close to what employers are already contributing. Tax credits would introduce the administrative complexity and the unnecessary demeaning intrusion of means testing. It is much more efficient to establish progressive funding of a health care system through tax revenues rather than through tailoring premiums and tax credits to each of the 300 million people in our nation.
- Medicaid and SCHIP: As welfare programs, without an adequate political voice, chronic underfunding will remain a problem. Access will remain a problem because of a lack of willing providers, perpetuating a two-tiered system.
- Health care safety net: Policies do need to be established to be certain that adequate facilities are available in underserved areas. But rather than being near the bottom of government budget priorities, the presence of safety net facilities can best be assured by by funding them through the same high-quality coverage that everyone else would have.
- Health Markets: The model of competing private plans has been thoroughly discredited. No matter what regulations are established, private plans will continue to select the healthy - especially the healthy workforce and their healthy families. The private plans cover the majority of us who are healthy and cost very little, while we taxpayers pay most of the costs for health care for those with medical needs. Even Harry and Louise should understand how absurd this is.
- Administrative inefficiencies: The program suggests that the Health Markets will provide oversight that would reduce administrative costs. Maintaining a fragmented system of public and private programs with thousands of plans and provider lists would perpetuate the excesses of the plans and the administrative burden on the providers. Keeping the plans in place and adding a new administrative intermediary, the Health Markets, is not exactly the ket to achieving administrative efficiency.
- A new public Medicare program: The current Medicare program includes higher-cost seniors and individuals with long-term disabilities, including chronic renal disease. If we were to open the existing Medicare program to everyone else, the pro rata share of the premiums would be so high that Medicare could never compete with the private plans that insure the healthy. In recognition of this, a separate new Medicare has been proposed. Early enrollees would likely include individuals with greater needs, including the currently uninsurable and those from plans terminated by employers with unfavorable claims experiences. It is likely that this separate Medicare risk pool would have much higher premiums than would the private plans insuring the healthy, resulting in the death spiral of Medicare premiums (premiums spiraling upward causing the healthy to leave and concentrating even more of the high-cost individuals in the plan, until no one can pay the premiums).
The way to avoid a Medicare death spiral would be to eliminate the current fragmentation of risk pools: low-cost pools for the healthy and high-cost pools for the sick. All pools need to be combined into one universal risk pool that really does redistribute the risk. Since average-income individuals can no longer afford a pro rata premium, the risk pool must be funded equitably through a progressive tax. Once you solve the problem of pooling risk, why keep in place superfluous private plans that serve no real function but which burn up funds in useless administrative services.
Louise (sitting at her computer, while Harry reads the newspaper): Harry, I’ve really been concerned about how much we’re spending on my health care and how little I’m getting for it. You don’t have to worry because of your Medicare, but I do. When I googled some of the problems, the computer kept taking me to Physicians for a National Health Program. So I looked over their website.
Harry: Yeah? What do they have to say?
Louise: Well, a whole lot.
Harry: Like what?
Louise: Well, it’s too much to say in one sentence. There are a lot of issues I’ve never given much thought to.
Harry: National health. Sounds like socialized medicine to me. I can’t imagine that they’re on to something.
Louise: Well, I don’t know, Harry. I think that we’ve been missing the big picture when we stopped listening because the government would be involved. But these folks have shown that we’re already paying enough taxes to pay for insurance for all of us, but we’re not getting it merely because we keep protecting the private insurance companies.
Harry: You mean WellPoint, UnitedHealth, Cigna, and them others?
Harry: Those crooks! They’d better not mess with my Medicare!
Louise: That’s the point, Harry. If we’d throw them out we could all have Medicare and save money while we’re doing it.
Harry: Like I was telling you, Louise. You can’t listen to those liberals like Edwards. He wants to leave the private plans in control. Those liberals will never get it right.