Proposals for Universal Health Care or Back to the Health Care Future

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Proposals for Universal Health Careor Back to
the Health Care Future

• Leonard Rodberg
• Urban Studies Dept., Queens College/CUNY
• and
• NY Metro Chapter
• Physicians for a National Health Program
• May 29, 2007

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Everybodys Got a Health Plan!
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Why Health Care Is On the Agenda
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A Declining Number of Firms Are Offering
Insurance
5
Firms Shift Health InsuranceCosts to Workers
6
Rising Number of uninsured
Number of Uninsured Americans (Millions)
45
40
35
30
25
20
1980
1985
1990
1995
2000
Source U.S. Census Bureau
7
U.S. Health Costs are 70 Greater than the Median
of Other Countries
United States
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The Outlier Nation Our Public System Covers
Fewer
United States
Source F. Colombo and N. Tapay, Private Health
Insurance in OECD Countries, OECD 2004
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While Private Insurance Dominates
United States
Source F. Colombo and N. Tapay, Private Health
Insurance in OECD Countries, OECD 2004
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THE MAJORITY OF AMERICANS HAVE PRIVATE INSURANCE

• Total Population
• Private health insurance
• - Employer-provided
• - Individual
• Public health insurance
• Medicare
• Medicaid
• Uninsured

• Million
• 288 100.0
• 174 60.5
• 160 55.6
• 14 4.9
• 72 25.0
• 41 14.2
• 31 10.8
• 42 14.6

Source National Center for Health Statistics,
2003
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BUT IT PAYS MUCH LESS THAN HALF THE COST

• 2004
• Personal Health Expenditures
• Private Funds
• Private health insurance
• - Self-funded plans
• - Insurance company plans
• Out-of-pockets payments
• Other private funds
• Public Funds
• Medicare
• Medicaid
• Other public expenditures

• Billion
• 1,753 100
• 965 54
• 658 37
• 340 19
• 318 18
• 236 13
• 70 4
• 789 46
• 309 18
• 293 17
• 187 11

Does not include tax subsidy for private
insurance. See Woolhandler Himmelstein,
HealthAffairs 2002
Source Centers for Medicare and Medicaid
Services, 2006
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HIGH COST OF HEALTH INSURANCE PREMIUMS

• National Average for Employer-provided
  Insurance
• Single Coverage 4,024 per year
• Family Coverage 10,880 per year
• Note Annual income at minimum wage
  10,300
• Annual income of average
  Wal-Mart worker 17,114
• Source Kaiser Family Foundation/HRET
  Survey, 2005

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The Good News

• Universal health care is accepted as a goal by
  many mainstream politicians.
• The Bad News
• Universal health care is defined simply as
  everyone having some kind of insurance, not
  everyone having access to care.
• This wont solve the problem!

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Common Features of the New Plans

• The problem Too many uninsured.
• The solution Require everyone to have insurance
• Employers contribute but dont necessarily offer
  insurance
• These plans dont reform the structure at all
• Their true objective appears to be to preserve
  the private insurance industry, even though it
  adds cost but no value to our health care system.

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Wyden Healthy Americans Actslash and burn

• Eliminate the tax deductibility of employer-based
  insurance ? end employer benefit
• Require individual purchase of private
  insurance
• Transitional payments by employers
• Subsidies to low-income individuals
• Relies on insurance company competition to
  contain costs

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Stark/Edwards/Hacker Planindividual mandate
with a pretty face

• Employer mandate (play or pay)
• Individual mandate with community rating
• Subsidies for low-income
• Regional purchasing plans (Health Markets)
• Offers government/public program (single
  payer?) as well as private insurance plans.

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Stark/Edwards Seductive Verbiage

• For everyone Shared responsibility
• For the fearful Lets people keep what they have
• For those worried about cost Everyone will work
  together to make the system more efficient
• For single payer advocates Individuals and
  businesses can choose if they want the public plan

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Ten Top Reasons Why Individual Mandate is Poor
Public Policy

• 10. Enforcement is bad for public health
• 9. Insurance companies will resist and
  undermine community rating and guaranteed
  issue
• 8. Financing through premium payments requires
  complex and intrusive means testing
• 7. Will not lead to universal coverage
• 6. If premium is affordable, health care is
  not (copays, deductibles)

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Ten Top Reasons Why Individual Mandate is Poor
Public Policy

• 5. Even more bureaucracy (Health Markets)
• 4. Private health insurance will be a continuing
  consumers nightmare (copays, deductibles,
  exclusions, denials, appeals)
• 3. Increases the cost of the system, most going
  to private insurance companies
• 2. No cost control continually rising cost

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And the Top Reason Why Individual Mandate is Poor
Public Policy

• 1. It doesnt reform the system at all. It would
  not help those of us who think were insured.
• -- Half of middle- and lower-income adults
  experience serious problems paying medical bills
  or insurance premiums. (Commonwealth Fund 2006)
• -- Three-fourths of those who declare
  medical bankruptcy had insurance (D.Himmelstein
  et al, Health Affairs, 2005)
• It doesnt solve any of the problems --
  especially rising costs -- that concern everyone.
  
• It is not a real structural change.

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Kennedy-Dingell Medicare for All Medicare for
most people

• Automatic enrollment phased in by age over 5
  years
• Tax-based financing
• Public Medicare-like program is the default
• Option of Federal Employees Health Benefit Plan,
  i.e., private insurance
• Retains Medicaid for the poor, Medicare for
  elderly
• Some savings through public programs efficiencies

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Whats Wrong With Offering a Public Plan vs. a
Private Plan?

• Consumer cannot predict future health needs ? no
  basis for choosing a plan or accepting limits.
• Advertising can mislead consumer.
• Private plans avoid sick people and paying for
  illness ? adverse selection for public plan.
• A level playing field is impossible (Private
  insurance companies require subsidies to stay in
  the game).
• Most important, theres no way to control costs.

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THERE IS A SOLUTION

• Expand the existing Medicare program to cover
  everyone
• Improve the coverage it offers
• Eliminate private insurance

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Conyers/Kucinich/et al Expanded and Improved
Medicare for Allsingle payer national health
insurance

• Everyone receives a Medicare card assuring
  payment for all needed care
• Free choice of doctor and hospital
• Doctors and hospitals remain independent,
  negotiate fees and budgets with Medicare
• Financed through progressive taxes
• Public agency processes and pays bills

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Some Implications of True Medicare for All

• The same coverage for everyone No means
  testing coverage would not depend on income,
  employment or age
• Medicaid would no be longer needed
• Hundreds of billions of dollars in administrative
  costs would be saved
• Costs would be controlled through capital
  planning, budgeting, and quality reviews
  conducted through the single insurer

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Covering Everyone and Saving Money through
Medicare for All

• Additional costs
• Covering the uninsured and poorly-insured
  6.4
• Elimination of cost-sharing and co-pays
  5.1
• Savings
• Bulk purchasing of drugs equipment
  -2.8
• Reduced hospital administrative costs
  -1.9
• Reduced physician office costs
  -3.6
• Reduced insurance administrative costs
  -5.3
• Primary care emphasis reduce fraud
  -2.2
• Net Savings
  -4.3

Source Health Care for All Californians Plan,
Lewin Group, 2005
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How Would It Be Paid For?One Example
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Why Such a National Health Insurance Program is
Possible Today

• Everyone is affected the uninsured, the
  underinsured, and everyone else who is insecurely
  insured.
• Employers who offer insurance want to be relieved
  of the burden of rising costs and unfair
  competition from employers who don't offer
  insurance.
• Small businesses want to offer insurance to their
  employees but cant afford it.
• Limited reforms that keep private insurance in
  place have been tried and failed.

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More Reasons Why Such a National Health Insurance
Program is Possible Today

• Private insurance cant solve the fundamental
  problem of cost and access.
• If we bypass the insurance companies, we can have
  a Medicare for All system that is simpler, less
  costly, and provides access to health care for
  everyone.
• Every other industrialized country has done it.
• Lets move forward with it!

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RESOURCES

• Physicians for a National Health Program
• www.pnhp.org
• PNHP New York Metro Chapter www.pnhpnyc.org.
• HealthCare-NOW
• www.healthcare-now.org
• Commonwealth Fund
• www.cmwf.org
• Kaiser Family Fund
• www.kff.org