Title: Universal Health Care Revisited
Author:
Section/SPIG: Community Health Planning and Policy Development
Issue Date:
The last attempt to formulate a national plan for universal health care ended 11 years ago with the collapse of the Clinton Plan for “health care reform.” Since then, there have been incremental initiatives toward greater health care coverage, notably HIPAA and SCHIP, but as laboratories for developing universal health care, the states have not been able to marshal the necessary political and economic resources. This may now be changing. According to the National Conference of State Legislatures, at least 18 states currently have introduced legislation regarding universal health care: California, Colorado, Connecticut, Florida, Hawaii, Kansas, Illinois, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New York, Ohio, Oklahoma, Rhode Island, and Vermont.
Maine’s Dirigo Health plan has gotten considerable attention since it was signed into law in 2003. It is a voluntary, market-based plan, intended to achieve universal coverage in the state by 2009. It was designed to provide small businesses and employees with an option for coverage. But as a voluntary plan, it will fall far short of universal coverage, for it uses private marketplace health insurance, with premiums subsidized by the state on a sliding scale based on family income. Maine contracts with Anthem Blue Cross and Blue Shield of Maine and competes with existing health plans to offer health coverage to employees who work at least 20 hours per week. Employers must offer coverage to dependents and families. Employers cover at least 60 percent of the cost of the workers' premiums, and employees must then pay the remainder of the cost. The state now provides coverage for families earning up to 200 percent of the federal poverty level.
California has been considering a much more radical approach, one that would use a single-payer to achieve true universal health insurance. State Senator Sheila Kuehl’s legislation, dubbed the California Health Insurance Reliability Act, would provide medical, dental, vision, hospitalization and prescription drug benefits for all Californians. It would replace private insurance plans and also extend coverage to approximately 7 million Californians who have no health insurance. The program would be funded by a system of means-based premiums, and all uninsured residents would have to buy coverage or enroll in a sponsored program. A Lewin Group study found that a single-payer system could cut health care expenses in California by $25 billion per year, and save California $343.6 billion in health care costs over the next 10 years, mainly by cutting administration and using bulk purchases of drugs and medical equipment.
On April 21, the Vermont House passed and sent to the Senate a bill to create a single-payer system under which all Vermonters would gain coverage for all health services determined to be "essential" by the state government. It would create a health care delivery system that is “equitable, universal, well-coordinated, patient-centered, cohesive, unified, comprehensive, continuous, sufficient, fair, sustainable, and accountable,” establish cost containment targets, and enforce them through global budgets for hospitals and caps on physician reimbursement rates. The state would impose “play or pay" taxes on both employer payrolls and employee paychecks at businesses that don't offer health insurance. State health planning would be brought back in the form of an “integrated, community-based system” overseen by regional community health boards composed of citizens. The cost to the state would be about $2 billion per year. Of course, if enacted, the funding available to the state legislators will help them decide what services are “essential.” The legislation does not address how to integrate Medicare, Medicaid and other public health insurance programs into the state’s universal health care.
The fundamental problem in the states is that they contain within them the same competing interests that doomed the Clinton plan, and so a greater countervailing force from outside the states is needed. In a nation where business prosperity is paramount and competition is respected and feared, the decisive push to do something may be found in what it will take for businesses and states to prosper today.
General Motors and the other automakers are a case in point for the inability of business to continue to bear the burden of health insurance benefits and compete in a multi-national marketplace. Wal-Mart, and other low-wage employers that fail to provide full health insurance to many of their employees, have raised issues of unfair competition by, in effect, shifting their costs to the states through the states’ safety net programs. At the same time, the states are so short of revenue to continue funding Medicaid and other programs in their budgets that they are looking to tax their businesses for increased revenue. In addition, the states are facing rapidly rising costs for the health benefits they continue to provide to their own former employees in retirement.
Can there be any solution to this short of a federal takeover of the financing of health care? With its own rapidly growing costs for an expanded Medicare program and over half the costs of Medicaid, how else but by realizing the administrative efficiencies of a single-payer health care system can the federal government accomplish it? By consolidating federal, state, and private health insurance programs under one administration, the savings could be more than sufficient to fund a true universal health care program.(1)
Some of us see this as incremental too, for it addresses the financing of health care, but does nothing to rationalize its delivery. To do that, further steps are needed to remove the remaining profit motive from the delivery system and restructure its priorities toward prevention and public health. Only then might we as citizens and taxpayers receive full value for what we spend on health, a measure in which we ranked 72nd among all nations in the World Health Report 2000.(2)
References
- Woolhandler S, Campbell T, Himmelstein DU. Costs of health care administration in the United States and Canada. N Engl J Med 2003;349:768-775
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- For a useful summary of the World Health Report 2000 and its insights for the US health care non-system, see “With Liberty and Justice for All?”