By now, almost everyone has developed an opinion about the status of health care in our country, and it usually divides along ideological lines, with the word “Obamacare” in the middle. This is unfortunate if it ends the discussion, because both advocates and opponents agree that the Affordable Care Act (ACA) is not the final solution to our current health care dilemma.
We are still left with the fact that up to 10 percent of our population will continue to lack health care coverage. Some would rather pay the tax penalty than sign up for insurance; some because they cannot afford the rates even with a subsidy, some because their employers have cut their hours to part time, and others because their states have elected not to expand Medicaid. We also have not addressed the inevitable increased cost of fully enacting the ACA but once again have “kicked the can down the road.”
There are many factors that will determine what our health care system will eventually look like, but one of the most important is the mechanism of paying for those services. Unlike the other industrialized nations, our payment system for those under age 65 has evolved using private insurance companies, both for-profit and nonprofit. The result is that “health care” and “insurance” have unfortunately become fused into a single term.
Insurance is designed to protect people from events that will rarely occur, such as an automobile accident or a house fire. The system works because the majority of people paying their premiums will never collect any benefit, so there is a substantial cash reserve to pay for those who do.
Health care, however, is something that everyone will utilize at some time and, in fact, should be utilizing even more than they currently do to obtain preventive services. To create a large enough cash reserve, in addition to paying for administrative costs and dividends to shareholders, insurance rates continue to escalate. This is made even worse when only the people with health problems that require expensive treatment are the ones who have insurance. This system is unsustainable in the long term because at some point premiums will exceed what individuals and employers are willing to pay, or co-pays and deductibles will reach the point where having insurance will be beyond the means of most people.
If we as a society decide, like all of the other industrialized countries, that health care is a public good – like defense, police and fire protection – and infrastructure such as highways, then it should be funded like our other public goods through taxes. Since we are already paying twice as much for health care as other countries, and since a single system of payment will lower the overall cost by reducing administrative expenses and eliminating the need to pay shareholders, it seems like this option should be given serious consideration.
The simplest way to achieve this would be to expand Medicare to cover everyone. The system is already in place and has shown that it can pay for services with an overhead of about 5 percent, as opposed to 20 percent-plus for the insurance industry.
The political environment in Congress makes this a non-starter at the present time, but the current ACA legislation allows that individual states can be the testing ground for such a solution provided that such state-specific coverage increases access and gives coverage at least equivalent to the federal law. Vermont has already passed legislation that will put this type of payment system into place starting in 2017. Washington has similar legislation already drafted, the Washington Health Security Trust Act, which is in the Health and Wellness committee of the House of Representatives as HB 1085.
The insurance industry has had over 50 years to solve the problem of health care funding, and its involvement has resulted in ever-escalating cost, complexity and reduced access to care.
It is time for us to stop quibbling about what we have and start thinking about what we want. A society burdened with health care insecurity is not a well-functioning society. We need to decide if having a healthy population free of the risk of bankruptcy caused by health care debt is a priority. If so, then let’s look at all the options. I have suggested what is known as a “single payer” system for financing our health care needs. If there is a better plan to achieve this goal, then bring it forward.
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