America's Proposal for Universal Health Care

The number of uninsured is a growing problem that we face in America and it affects all walks of life (economical status, ethnicity, race, and gender).

According to the U.S. Census Bureau 46.6 million people were without any form of health care coverage in 2005. This was an increase from 45.3 million in 2004 and a significant rise in just one year. Furthermore, the census in the U.S. states that 245.9 million people did have health care coverage in 2005. This number is a significant increase from 247.3 million in 2004. In 2005 employment based health insurance was 59.5 percent, a decrease from 2004 at 59.8 percent.

The data from the Center on Budget and Policy Priorities shows that the number of insured people who had employment based health insurance in 2003 were 60.4% and 63.6% in 2000. This demonstrates a steady decline in employment based health insurance coverage. When assessing the reason behind the decrease in employment based health insurance, one can find several reasons for the decline.

A rise in health care costs is one of the reasons for the decline in employer based health coverage. The huge increase in the cost for employee based health coverage has forced employers to choose between whether or not to maintain costs by decreasing health care coverage for their employees (CBPP, 2004). The rise in cost has shifted some of the burden of paying for health care to the employees themselves. As a result, premiums have also increased. This has been a significant burden for the lower to moderate income workers who are already struggling to stay above water financially.

Another cause of the increase in the uninsured is the increase in unemployment. According to the Center of Budget and Policy Priorities (2002) the unemployment rate in 2001 was 4.8 percent in 2002. According to the U.S. Department of Labor the unemployment rate for 2005 was 5.1 percent. Furthermore the unemployment rate for Macomb, Oakland, and Wayne Counties averaged 6-10% (Michigan Labor Market, 2006). As indicated from the data above, 247.3 million people rely on employment for health care coverage. Without these jobs there would be no health care coverage for these workers.

There would be a need for these workers to find an alternative in health care coverage. In addition to not having a job it may be difficult for these unemployed workers to find coverage. The Center on Budget and Policy Priorities (2002) states that "very few childless adults are covered by Medicaid". This will increase the strain on the health care system. Ironically, the same article from the Center of Budget and Policy Priorities states that "corporate profits rose by 16% in 2004, while employment based health insurance coverage fell" (2004).

In 2003 the nation spent $1.8 trillion dollars (15.2% of the gross domestic product) on health care expenditures (citizenJoe.org). However, the amount of money spent on health care does not guarantee a healthy population. "The population as a whole lags far behind in key indicators of health, such as life expectancy and infant mortality" (Shi and Singh p. 63). The high costs of health care have caused an increase in premiums for health insurance. This has made insurance unaffordable for many Americans.

In 2000, Americans without health insurance were estimated to number 40.5 million or 16.8% of the total population (National Center for Health Statistics 2002, 312). Uninsured individuals are less likely to receive medical care when needed. Thus, uninsured individuals can actually cost the system more in the long run. For example, diabetics who do not receive regular medical care can end up frequently hospitalized with costly complications.

Additionally, children who are unvaccinated can become infected with preventable diseases and pose a health risk to the general public. "The cost of health care and the problem of obtaining stable, affordable health insurance is the most pressing consumer issue facing American families" (ConsumersUnion.org).

The other big issue with our current system is access to care. Cost is a major contributing factor to the problems with access. "In the United States, access is restricted to (1) those who have health insurance through their employers, (2) those who are covered under a government health care program, (3) those who can afford to buy insurance out of their private funds, and (4) those who are able to pay for services privately" (Shi and Singh, p. 11).

Thus, many Americans fall through the cracks and have no health insurance at all. "The Institute of Medicine estimates that 18,000 Americans a year die because they are uninsured. The number of Americans living with illness that could have been prevented with treatable diseases that are going untreated is much higher" (Rep. Schakowsky p. 1). Lack of health insurance and the rising costs of health care continue to be an obstacle for many Americans. "The AmeriCare Health Care Act ("AmeriCare") is a practical proposal to ensure that everyone has health coverage in our country."

Because Americans have to pay so much for health care coverage, this has caused a huge strain in the department of accessibility. "Seventy-eight percent are dissatisfied with the cost of the nations health care system, including 54 percent "very" dissatisfied" (ABC News/Washington Post Poll). Therefore, there are likely to be changes in the current system. One proposed change would be to adopt a universal health care system. Recent data suggests that many Americans are now in favor of a universal health insurance program.

Solution Options

The solution that the United States has arrived at to help cure the problem of the uninsured is a national health plan. In the past the plan for a universal coverage did not take off because of the fear Americans have in allowing the government to make uniformed decisions in the quality of its care. However, the nation is now moving towards a strong desire for a universal health plan.

Congress has come up with the AmeriCare Health Care Act of 2006 "legislation which would ensure quality health care for every American" (Consumers Union, 2006). In the Rand Health Study conducted by economists Stephen Long and Susan Marquis, the question of whether or not health care coverage can go universal in the United States was explored. Several questions were asked regarding the cost of going universal and whether or not the job can be left up to the states (Rand Health, 2000).

The results of the data was drawn from the "Robert Wood Johnson Foundation (RWJF) Family Health Insurance and Employer surveys, conducted in 1993-1994 in Colorado, Florida, Minnesota, New Mexico, New York, North Dakota, Oklahoma, Oregon, Vermont, and Washington. According to the Collectively, these states are similar to all states in their health care systems and population characteristics, and span the variation observed in all 50 states in important population and health policy characteristics. The surveys, which Long and Marquis designed in collaboration with leading survey organizations, compiled extensive insurance, utilization, health status, and demographic information" (Rand Health, 2000).

Cost

Many states have proposed or implemented programs to provide insurance to low-income, uninsured residents. How much will these programs cost? According to the study "the cost of the expanded coverage in the 10 states combined ranges from about $4.3 to $7.9 billion, depending on program features. This represents 3 to 5 percent of total personal health care spending in 10 states" (Rand Health, 2000).

Effectiveness

AmeriCare will save Americans and taxpayers by expanding coverage to everyone in the U.S. It will improve Medicare by providing lower cost sharing requirements and it will provide an annual out-of-pocket limit in cost sharing. "AmeriCare is a practical and simple proposal for universal health coverage that builds on both Medicare and employer based systems. AmeriCare will build on Medicare which is an efficient, successful and popular program and will be established with minimal description to the current system. AmeriCare will provide preventive physician hospital, mental health and maternity coverage along with an affordable prescription drug benefit" (Capitolupdate.org). It will simplify medical care by allowing providers to spend more time with patients and less time trying to sort out forms and procedures required by multiple insurance companies.

Today, we lose between $60 billion in productivity annually because so many Americans lack health insurance coverage (AmericasHospitals.com). If the United States took the exact format that Medicare uses to create a universal health plan like AmeriCare, the program costs would be considerably low. Medicare has generally out-performed both private insurance and the Federal Employees' Health Benefits Program in containing per capita costs; in addition Medicare's administrative costs are only 2% of benefit payouts compared to 15% to 30% in the private sector (AmeriCare Health Care Act of 2006).

Equity

It is estimated that independent actions by states probably would not reduce the nation's uninsured. The reason has to do with states that possess a high percentage of uninsured individuals. In the Health Care Coverage for the Nation's Uninsured study, existing "states in this condition would have to spend more per capita than other states to attain equivalent outcomes. But they lack the tax capacity to do so. In sum: the states that most need to expand insurance coverage have the smallest capacity to do so. As a consequence, a strategy relying on incremental, state-by-state action is likely to leave the nation with significant lingering gaps in health care coverage. Some states may need targeted federal assistance-for example, a program like CHIP (Children Health Insurance Program), which provides federal matching funds to help states implement expanded coverage" (Rand Health, 2000).

On the other hand, anyone who is a resident of the United States would have the opportunity to receive universal health care. The draft of the AmeriCare Health Care Act of 2006 explains that "everyone who has a set amount of annual income would have to pay a certain amount in premiums. Families with an income less than $40,000 and individuals with an income less than $20,000 would not have to pay any premiums. Individuals who earn less than $30,000 and families who earn less than $60,000 will pay a reduced premium. Individuals and families above those income levels will be r4equired to pay 20% of the premiums unless covered by an equivalent employer plan. Individuals who are self employed and people outside of the workforce who are not covered by a family member's plan and their income is in excess of the subsidy levels will pay full AmeriCare premiums. Collection of AmeriCare premiums will be deducted during annual tax season" (Americashospitals.com).

Administrative Burden

If this plan were to pass, it would be necessary for administration to give higher reimbursements to providers in order to attract and retain them. Providers are not attracted to plans that do not offer an attractive reimbursement package to them for their services. If lower reimbursements are maintained in this program, the choice of providers for all consumers on this program would be greatly limited (Michigan.gov).

Another important factor with this plan is the higher degree of government regulation that would be in place as opposed to private insurance. This process ensures that equitable treatment of enrollees is given across the board. Citizens must remember that this would be a publicly financed system that would require checks and balances so that quality can be monitored. Health plans monitor quality of care. As mentioned in EMET Expanding Publicly Subsidized Coverage for Low-Income Adults, "state reviews claims for provider fraud. Recipients have the right to administrative appeals/hearings should any services be denied" (Michigan.gov).

Political Feasibility

This program may not work for two reasons. One of the reasons why the program may not work has to do with America's strong dislike of federal regulation and interference in their well-being. As mentioned in the health care study, another reason why it may not work is because the "public program may "crowd out" private insurance. Some families may shift from employer plans to a public program because the latter is cheaper. Or families may lose the opportunity to purchase private insurance - for example, if some employers stop offering insurance because they know that employees can be covered by the public program. This kind of crowd-out could increase program costs. Moreover, the programs would not be reaching the target population-the uninsured" (Rand.org).

On the other hand, the key will be whether a political compromise can be reached that allows both for a substantial improvement in our current system while allowing both Democrats and Republicans to claim it was a result of their efforts. A somewhat analogous situation is how both parties take credit for Welfare Reform and federal surpluses during the 1990's. So the success of any plan depends on its ability to satisfy the electoral ambitions of both political parties. The second major hurdle to reforming the U.S. health care system to increase access and reduce cost is cost. As has been stated most Americans are not willing to increase taxes in order to provide coverage so any plan will either have to surmount this feeling or be cost neutral. The AmeriCare Health Care Act of 2006 seeks to address the problems of the access to health care by guaranteeing universal coverage. Its primary strategy for containing costs is by utilizing Medicare's highly efficient administrative infrastructure that operates on a 2% margin and by allowing the government to negotiate drug prices directly with pharmaceutical companies (Federation of American Hospitals, 2006).

It is unclear from the proposal and rather unlikely that these two factors alone would be sufficient to combat rising inflation, demographic pressures, and increasing reliance on technology. The plan does address the issue of continuity in allowing people to keep their own insurance if they wish. It also does not impose any health care redistribution thereby avoiding the public's fear of health care rationing. The second major hurdle it has that is related to cost is politics. The current administration is opposed to allowing the government to negotiate drug prices directly with pharmaceutical companies so the bill is potentially subject to a Presidential veto. Also because of its relative weakness with regards to cost controls it is unlikely to garner much support from Republicans. Given the narrow Democratic majorities in both Houses of Congress as well as the relative conservative to moderate leanings of newly elected Democrats, the Bill faces a long road toward passage. It could, however, serve as a good starting point to once again begin the conversation on how to solve this pressing national need.

References

Americare Healthcare Act of 2006. Retrieved December 1, 2006, from Federation of American Hospitals Web site:
www.fahs.com/issues/congressional_communications/AmeriCare%20Qs&As.pdf

ABC News/USA Today/Kaiser Family Foundation, Retrieved December 1, 2006 from USA Today Web site: http://www.usatoday.com/news/health/2006-10-15-health-poll2.htm

America's Hospitals. (2006). AmeriCare Health Care Act of 2006. Retrieved October 12, 2006 from
http://www.americashospitals.com/issues/congressional_communications/ /Americare%20Qs&As.pdf

Capitol Update. (2006). House Committee Approves HSA bill, Real Health Care Reform Legislation Still Awaits Consideration. Retrieved October 17, 2006 from http://www.capitolupdate.org/Newsletter/index.asp?nlid=186&nlaid=797

Center on Budget and Policy Priorities. (2005). The Number of Uninsured Americans Continued to Rise in 2004. Retrieved November 26, 2006 from
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Hoeberg, David. (2006, October). The Public Policy Medicare for All. Retrieved November 20, 2006 from The American Spectator web site:
http://www.spectator.org/dsp_article.asp?art_id+10560

Langer, G. (2006, September 9). Health Care Pains Growing Health Care Concerns Fuel Cautious Support For Change. ABC News. Retrieved
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Michigan Department of Community Health. (2005). EMET Expanding Publicly Subsidized Coverage for Low-Income Adults (112105 Medicaid/
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Meier, C. (2003). How many Americans are uninsured...and for how long? Retrieved November 26, 2006 from www.heartland.org/new/Article.cfm?artID=12425

Rand Health. (2000). Health Care Coverage for the Nation's Uninsured Can We Get to Universal Coverage? Retrieved November 20, 2006
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Rosenbaum, M (2006, August 14). A Fighter For Families. Retrieved November 20, 2006, from http://www.janschakowsky.org/

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Shi. L & Singh, A.D. (2004). Delivering Health Care in America A Systems Approach (3^rd ed). MA: Jones and Bartlett Publishers.

U.S. Census Bureau. (2005). Income, Poverty, and Health Insurance Coverage In the United States: 2005. Retrieved November 26, 2006 from http://www.census.gov/prod/2006pubs/p60-231.pdf