Bridging the information gap
If you haven’t been hibernating for the past year, you know that health care reform is the big issue in Washington right now. There’s also a good chance that you are confused by all of the terms, information and opinions that surround the issue. So what exactly is the deal with health care reform?
Democrats and Republicans have been trying (and failing) to institute some sort of health insurance reform since Franklin D. Roosevelt was in office, and President Barack Obama has made it his top domestic priority. The United States is the only wealthy, industrialized country without some sort of universal coverage, which many people see as unfair to those who can’t afford medical insurance. The number of people with this belief is growing — there are now nearly 46 million uninsured Americans, and an additional 25 million are underinsured.
The problem is compounded by the soaring costs of health care, which are not being matched by results. In 2007 the United States spent $2.4 trillion on health care, or $7,900 per person. This is far more than is spent anywhere else — 52 percent more than the next most costly country, Norway — yet our health care system is not far better than other wealthy nations.
There is a lot of debate about just how effective our system is, but our 50th place international ranking in life expectancy demonstrates that, at the very least, we are not leading the pack the way that our spending indicates we should be. Further, our high health care costs lead to high insurance premiums, which explain why so many people are uninsured as many businesses don’t cover their employees.
The problem is acute in California. The number of uninsured people in the state is 6.8 million and growing, while the percentage of people with employer-based coverage is 62.2 and shrinking.
To address this, Democrats have proposed several reforms that Congress is now attempting to reconcile. Many of their features are shared, while a few are causing major controversies.
The major elements of proposed reforms include:
• Making it easier to qualify for Medicaid (a government program that offers insurance for the poor).
• Offering subsidies to help people buy insurance on their own.
• Forbidding insurance companies from denying coverage to people because of pre-existing conditions. Currently, many people with ailments like diabetes or high blood pressure cannot get insurance because the companies refuse to cover them.
• Creating “insurance exchanges” — government-regulated marketplaces where individuals and small businesses can compare insurance plans and choose the best ones. These are intended to resolve the information problem that often leads to people being uninsured or underinsured, or paying too much for what they are getting. The government would likely improve competition in the insurance industry by allowing consumers to see the differences between plans and their prices
• Requiring businesses over a certain size to either provide coverage to their employees or contribute to the cost of insurance.
• Penalizing those people who choose not to get insurance.
• Creating a “public option” — a government-run insurance plan that will be an alternative for those buying their insurance through exchange.
This public option has been the biggest controversy over the course of the health care debate. Many conservatives are afraid of giving the government too big of a role in the actual insurance market, while Obama and many liberals argue that the public option will foster competition, lower costs and give consumers a greater variety of affordable choices. Conservatives also fear a public option will be of low quality, and its low premiums will lead businesses that currently buy private insurance to opt for the cheaper plan.
A more specific debate, this one between liberal and conservative-leaning Democrats . has been over the pricing of the public option.
Originally, liberals led by Speaker of the House Nancy Pelosi wanted to peg its payments to doctors at slightly higher rates than Medicare’s. Doctors led by the American Medical Association came out in force against this plan, saying Medicare rates are way below their costs and they could not afford similar rates from the public option. The so-called “blue dogs” — conservative Democrats — sided with the doctors, and Pelosi was forced to retreat from her position. As of now, any government-run plan would negotiate rates the same way that private insurers do.
The other major controversy over health reform has been its cost; Obama estimates the cost of his proposed plan at $900 billion. Republicans have objected, saying that America cannot afford such spending, especially in what will be the most expensive year ever for the federal government. They also question where he will get the money and are wary of tax increases.
We are moving closer to seeing some sort of reform, despite the problems. On Nov. 7, the House approved a reform plan by the narrow margin of 220 to 215 votes. Passing the Senate will be harder, as Democrats need 60 votes to overcome a Republican filibuster; there are 60 members of the Democratic caucus, but two are independent and one of those, Sen. Joe Lieberman (I-Conn.), has said he will not allow a bill that includes a public option.
Time is also working against health reform. Public opinion has been gradually shifting against it as Republicans have been more effective than the Obama team at marketing their position. This puts pressure on the Democrats from conservative states and might kill the chances of a major reform if it isn’t approved soon.
It is morally questionable at best that around 20 percent of our population cannot afford medical care, yet we are the richest country in the world. For the poorest Americans, a health problem can represent a financial deathblow. We have a responsibility to address that situation.
Further, for those who have insurance, our system is often confusing and overly expensive. Reform would clarify the system for consumers and lower insurance costs.
Though opponents often point out the undeniably huge price tag, the well-respected Congressional Budget Office has said that the House bill would actually reduce the deficit over the next 10 years.
This is because we already pay for the uninsured. Many people who are satisfied with their current coverage object at having to pay for others, but the reality is that people who are uninsured go to the emergency room for care that they cannot pay for — and the government foots that bill with our tax dollars. Economic studies have shown that the costs we incur because of uninsured people exceed the costs of insuring them, a damning indictment of our current system.
The biggest worry is that employees who receive high-quality insurance through work will see their employers switch to a lower quality public option. This is certainly a possibility and seems like the only claimed drawback of health reform that is an actual concern.
But the recent compromise to negotiate public option payments to doctors and hospitals like private insurers do seems like it may alleviate a bit of the concern about quality. This is likely to be only a short-term problem as the competition that the public option introduces to the market, combined with the greater transparency promised by exchanges, will alleviate it over time. This is because if so many employers really do switch to the public option, the private insurers will have no choice but to lower their premiums to compete with the government.
This may be a drawback, but it is likely to be a small, short-term one that is worth coping with in exchange for an insurance market that is efficient, fair, saves us and covers every American.