Universal health care coverage is a highly controversial issue all over the world, but of special interest in the United States. The U.S. is considered one of the few truly industrialized nations in the world which does not provide some form of comprehensive health care coverage for its citizens. This paper will examine some of the arguments and data provided both for and against a universal health care (also referenced as UHC) plan.
Universal Health Care The U.S. has been in turmoil over the topic of Universal Health Care for some time now. The idea sounds simple enough; government provides coverage for everyone, rich or poor and everyone gets the services they require. However, many citizens may think twice about such a program when they look into the details of how it is funded and delivered to the public.
Before getting in too deep in this subject it is important to understand the term Universal Health Care (UHC). Universal health care refers to government mandated programs intended to ensure that all citizens, and sometimes permanent residents, of a governmental region have access to most types of health care. Patients may pay for some portion of their care directly, but most care is subsidized by taxpayers and/or by compulsory insurance (Search 2010). UHC is a very broad term which could mean anything from government financing (as in Medicare / Medicaid for all) to use of tax law to bring everyone into the private health-insurance system (as recently enacted in Massachusetts under Republican Governor Mitt Romney).
Public under-education is huge factor in the United States indecision on a UHC plan. Last autumn, the Center for Medicine in the Public Interest found this out firsthand. “Our organization interviewed people on the streets of New York City and asked them if they’d prefer “government” health care or “universal” health care. They overwhelmingly chose “universal” health care. Nobody realized that they were the same thing” (Center 2009). What’s worse, when asked how much more they’d be willing to pay in taxes to support universal health care, many responded, “We want it to be free, like in Europe and Canada.”
It is a commonly addressed fact in this argument that the United States is one of the few modern nations that does not provide some type of UHC for its entire people. The government does directly cover a little over one-quarter of the population through health care programs for the elderly, disabled, military service families and veterans, children, and the poor (Search 2010). Federal law ensures public access to emergency services regardless of ability to pay. However, this has been one of the large contributors to the rising health care portion of the federal budget.
Any UHC option will have to be paid for with higher taxes or spending cuts in other areas such as defense, education, or even medical research and development. This is a tradeoff that most Americans would not be willing to make. This is especially true since the health care expenditures in the United States are the highest of any developed country, at 15.3% of GDP. The country with the next highest spending is Switzerland, at 11.6% of GDP. Which may cause the public to ask “Why spend more money on big government programs that MIGHT work? When we already spend so much on things that don’t work?” The National Center for Health Statistics calculated in 2005 that the U.S. spent twice as much on health care per capita ($7,129) than any other country.
It is also argued that most countries that have some kind of universal coverage generally spend less. This is because the costs of a universal system are less than private. Drugs can be purchased in greater bulk, prices for services can be negotiated at a lower rate due to the larger pool, and a large singular system would reduce the overhead involved in processing insurance and medical services.
One recent study, by the firm Price Waterhouse Cooper, projected that global health care spending would triple by 2020. This could consume 21% of GDP in the U.S. and 16% of GDP in many other countries. With current U.S. spending only an estimated 84.2% of citizens have some form of health insurance coverage. The cost of health care premiums is rising much faster than the general rate of inflation or employee wages. Since 2001, premiums for family coverage have increased 78%, while inflation has risen 17% and wages have risen 19%, according to a 2007 study by the Kaiser Family Foundation.
Those who advocate a government-run health system for the United States often point to the British National Health Service and the Canadian health system as excellent models of state-financed, high-quality health care. It is argued however, that one of the biggest of these issues is the prolonged wait times for many services, including cancer treatment and cardiac surgery. For example, a typical Canadian seeking surgical or other therapeutic treatment had to wait 18.3 weeks in 2007. Approximately 875,000 Canadians are currently on waiting lists for medical treatment and many Canadians can’t even get routine care. Of those who sought routine or ongoing care in 2005, one in six had trouble even getting into a doctor’s office for a routine procedure or check-up (Handeyside 2008).
Without a national program, UHC is being attempted other local levels. Massachusetts implemented a near-universal health care system by mandating that residents purchase health insurance in July 1, 2007. The City of San Francisco is also undertaking a universal health care system for uninsured residents. California, Maine, Vermont and Hawaii are also considering or seeking to implement universal or near-universal systems.
Private insurance companies spend billions to stop anything near UHC in the U.S. recognizing that any single-payer plan would result in huge losses for their industry. Groups like The Heritage Foundation, sponsored by the insurance industry, argue to hide their major concern about UHC: “that it jeopardizes insurance industry profits.” (Whelan & O’Shea 2008) Why would they want a different system, when they can charge such huge overheads? The Journal of American Medicine posted in 2007 that Medicare operates with 3% overhead, non-profit insurance 16% overhead, and private (for-profit) insurance 26% overhead.
The UHC argument almost always excludes the key point of portability. Many people in the U.S. just want to be able to take their insurance with them from job to job. Many businesses require 90 days of service before benefits kick in. That means a person changing jobs may go months without any insurance. Approximately 25 percent of employed individuals choose employment based on better health benefits. (Henry 2009).
The current legislation before Congress is known as HR676 or The United States National Health Care Act (USNHI). It would establish an American universal health insurance program. The bill would create a “publicly financed, privately delivered healthcare system that uses the already existing Medicare program by expanding and improving it to all U.S. residents” (Healthcare-Now! 2009). This conversion to a not-for-profit healthcare system will take place over a 15 year period, through the sale of U.S. treasury bonds. As of 5 February 2010, 87 members of congress are in support of this bill. This opens the realm to a new area of questions as to who will prioritize the re-hiring structure of the hundreds and thousands of potential private insurance employees let go in this process.
For the potential impact of HR676 we can look to a study by recognized economist, Dean Baker, of the Center for Economic Research and Policy. He concluded that under HR676, a family of three making $40,000 per year would spend approximately $1900 per year for healthcare coverage. In 2007, the average annual premium for families covered under an employee health plan was $11,000. (National Coalition on Health Care 2007), and Baker also states, that in 2005 the average employer that offered coverage was contributing $2,600 to healthcare per employee, or 217.00 per month. Under HR 676, the average costs to employers for an employee making $30,000 per year will be reduced to $1,425 per year; or about $119.00 per month. In larger terms, this could result in a 3% reduction in over-all healthcare spending.
The proposed funding plan for HR676 includes maintaining current federal and state funding for existing healthcare programs; as well as adding an employer payroll tax of 4.5%, an employee payroll tax of 3.3%. This would be in addition to the already existing 1.45% for Medicare. The plan also includes establishing a 5% health tax on the top 5% of income earners; 10% tax on top 1% of wage earners, and incorporating a 1/3rd of 1% stock transaction tax.
Many groups are advocating for HR676 as one of the front-running options to change America’s health care system. Physicians for A National Health Program are one such group, with more than 17,000 members comprised of providers and other health professionals (Physicians 2010).
A new UHC plan or even a major revision to current programs would help a vast majority of American families. According to a Kaiser Family Foundation poll, 28 percent of middle income families (annual family income between $30,000 and $75,000) stated that they were currently having a serious problem paying for healthcare or health insurance. The amount people pay for health insurance increased 30 percent from 2001 to 2005, while income for the same period of time only increased 3 percent. (Robert 2009). It is estimated that approximately 50 percent of personal bankruptcies are due to medical expenses. (Collins 2008), and many unwed couples are getting married in order to provide their new spouse with access to health care benefits (Henry 2009).
The US Census Bureau has stated that in 2006, the percentage of Americans without health insurance was 15.8%, or approximately 47 million uninsured people. Among the 84.2% with health insurance during that time, coverage was provided through an employer 59.7%, purchased individually 9.1%, and 27.0% was government funded (Medicare, Medicaid, Military).
In 2007, those numbers increased to nearly 50 million Americans who did not have health insurance, while another 25 million were underinsured (Collins 2008). This may have been in part due to the fact that from 2000 to 2006, overall inflation has increased 3.5%, wages have increased 3.8%, and health care premiums have increased 87% (Kaiser).
Another important factor in this debate is that in any country dominated by private health insurance is subject to adverse selection, or market failure. “Adverse selection in insurance markets occurs because those providing insurance have limited information with which to estimate the health risks on which they may need to pay future claims” (Search 2010). Those with poor health are more likely to apply for insurance and more likely to need treatments requiring high payouts. Those with good health may find the cost of insurance too high for the perceived benefit, and remove themselves from the risk pool. This adverse selection raises overall health costs. Among the potential solutions developed by economists are single payer systems (such as HR676) and requiring all citizens to purchase insurance (Massachusetts model).
Another common argument against a UHC system include the opinion that patients with serious illnesses such as cancer face much longer odds of survival in government-run health care systems. In the United Kingdom, the five-year survival rate for patients diagnosed with breast cancer early on is 78 percent, compared to 98 percent for similar patients in the U.S. (CIA 2009). Opponents to UHC also argue health care is not a right, and it is not the responsibility of government to provide health care, and increase taxes on its businesses and citizens even though not all of them would require similar benefits under the plan.
Probably the most abused subjects in this debate are the matter of higher taxes, and increased wait times, which could result in unnecessary deaths. Because of the decreased available time with physicians there is a perception of a poorer quality of care. It is also believed that the profit motive, competition, and individual ingenuity (all factors that our capitalist economy was founded upon) which lead to greater cost control and effectiveness would be eliminated.
On the opposite end of the spectrum, it has been said that the profit motive adversely affects the cost and quality of health care. If managed care programs and their provider networks are abolished, then doctors would no longer be guaranteed patients regardless of the quality of care they provide. Theoretically, quality of care would increase as true competition for patients is restored. Also, because of medical underwriting, which is designed to mitigate risk for insurance providers, applicants with pre-existing conditions, some of them minor, are denied coverage or prevented from obtaining health insurance at a reasonable cost. Health insurance companies have greater profits if fewer medical procedures are actually performed, so agents are pressured to deny necessary and sometimes life-saving procedures to help the bottom line (Search 2010).
In terms of numbers of available providers, one opinion is that the loss of private practice options and possible reduced pay could dissuade many would-be doctors from pursuing the profession. Government efforts to provide incentives to college graduates to study medicine would increase the costs of a universal health care system, and therefore the taxes associated with implementing it.
Common arguments by supporters of universal health care systems include the points that health care is a basic human right, and ensuring the health of all citizens benefits a nation economically.It is also often addressed that health care is increasingly unaffordable for businesses and individuals. UHC would provide for uninsured adults who may skip treatment needed for chronic health conditions
It has also been argued that by reducing paperwork a universal system would allow doctors to spend more time with patients, thereby increasing physician productivity. Patients would be encouraged to seek preventive care, enabling problems to be detected and treated earlier.
A centralized national database would make diagnosis and treatment easier for doctors, especially as people move around the country. However, this is also a huge point that most Americans are not interested in. Giving “big Brother” broader access to the personal information of every person living within its borders is not something that the average American wants to do.
Recently, on January 27, 2010, during the State of the Union Address, President Obama stated, “If anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know … I’m eager to hear it”.
Whether America decides on a UHC plan or major revisions to the private system we have now, it is extremely evident that something has to be done. In this fight, knowledge is power and the undereducated need motivation to learn about the programs being planned and voted upon by our legislatures. It is clear that the national argument about health care reform and potential UHC has to advance into terminology and facts that the masses can easily understand and that don’t look like convenient politics for those in office and those seeking office.
References
http://www.cms.hhs.gov/CMSLeadership/09_Office_OACT.asp
https://www.cia.gov/library/publications/the-world-factbook/index.html