A genuine cure for our health care woes
By Johnathon S. Ross
Toledo Blade
Dec. 20, 2008
With new leadership in place, America can end a national disgrace. Forty-six million of our friends, family and neighbors have no health care coverage at all. The Institute of Medicine estimates that over 18,000 Americans die each year from lack of health insurance alone. Tens of millions more risk bankruptcy because they have bare-bones insurance. Our troubled economy will only worsen this sad situation.
Senate Democrats are poised to prescribe a health reform proposal that will likely be based on a national insurance exchange, similar to the Federal Employees Health Benefit Program. The plan will probably mirror the reform proposals that President-elect Barack Obama made during his campaign.
Under this plan, federal oversight would increase regulation of the insurance plans that participate. The insurance exchange would guarantee coverage to all who purchase coverage, even those with pre-existing health conditions. Low-income individuals and families who do not qualify for the State Children’s Health Insurance Program (SCHIP) or Medicaid would receive subsidies toward the purchase of insurance through the exchange.
Large businesses that do not offer insurance to their employees would be required to contribute a percentage of their payroll to the exchange to help their employees purchase coverage. Small businesses may receive tax credits to help them purchase insurance for their employees. The program will likely include a mandate that requires everyone, or nearly everyone, to have health insurance or pay a fine.
Does this plan sound complicated? It is. It requires regulating hundreds of insurers who consistently strive to avoid sick (and therefore more expensive) patients. It requires regulating thousands of businesses to confirm they cover their employees or pay into the exchange, and it requires finding and fining those who do not buy insurance.The complexity of handling millions of subsidized individual health insurance policies purchased through the new exchange will cost an estimated $100 billion yearly. Yet many people will likely remain uninsured.
Massachusetts is held out as the latest model. Half of the uninsured remain without coverage despite substantial expansions of Medicaid and subsidies for the purchase of private insurance. Massachusetts has yet to confront the issue of fining those who fail to purchase insurance. Costs continue to rise sharply. This is no surprise because this approach keeps the private, for-profit insurers at its center.
Similar to our current setup, each insurer, hospital, and doctor must keep track of myriad contracts, discount arrangements, benefit packages, formularies, limited referral networks, and insurance rules designed to reduce utilization and to increase the insurers’ profits. This paperwork, which has nothing to do with delivering care, is a huge waste of resources.
Currently, insurers keep 15-20 percent of the premium dollar for their operating costs and for shareholder profits. Why would they want to reduce spending if they get to keep nearly one-fifth of what ever we spend?
Massachusetts is not alone in finding universal coverage and cost control impossible using this model of reform. Such was the experience in at least seven states where such a model has been tried before. Do we really want to multiply this complex state experiment by 50 before we see if it can actually work?
There is an alternative, however — a proven cure for our health care woes. Physicians for a National Health Program, a membership organization of tens of thousands of physicians from across the county, prescribes a nonprofit, single-payer national health insurance program as outlined in H.R. 676, The U.S. National Health Insurance Act.
This legislation establishes an improved and expanded Medicare for all. Everyone is automatically enrolled. Payroll and individual taxes replace private insurance premiums and out-of-pocket payments. This creates a single insurance pool adequate to cover all with no additional spending.
How can this be? Multiple independent studies confirm that the administrative simplicity of a single universal insurance pool, like Medicare, yields savings that would allow comprehensive coverage for all at current levels of spending. A tax-based public system is simple and efficient. Medicare spends only 3 percent on overhead.
Most other industrial democracies use this type of low overhead, tax-based public insurance system to cover all their citizens. They spend half of what we spend per person and they achieve better health outcomes. America wastes about 30 percent of our $2 trillion health care dollars on administration. Reducing administrative waste could save $300 billion each year, enough to cover all the uninsured and provide better coverage for the rest of us with complete choice of doctor and hospital.
Business owners stand to benefit, as well. A tax-financed, universal national health insurance system will help ensure a healthy workforce at a lower cost. Our current “non-system” is less effective at keeping workers healthy and productive, and its high costs reduce our competitiveness in the global marketplace.
America needs guaranteed, high quality, affordable health insurance for all, with “everybody in and nobody out.” We cannot attain this goal if we rely on schemes designed by Wall Street and the for-profit health insurance industry.
An improved and expanded Medicare for all is the proven cure and the only way to restore America’s health. We can save lives, save money and make the right choice by supporting H.R. 676, the National Health Insurance Act.
Johnathon S. Ross, M.D., M.P.H., is past president of Physicians for a National Health Program (pnhp.org) and a leader of the Single Payer Action Network in Ohio (spanohio.org).