When talking about health care reform as a matter of politics, there are few things on which liberals and conservatives agree. Many don’t believe that there is in fact a problem with our current method of delivering health care and some believe that reform isn’t necessary. It is. America is the only industrialized nation in the entire world in which every inhabitant regardless of wealth, race, geography, or legal status does not have access to quality affordable health care. Many say that with today’s economic situation we cannot afford to reform health care. We can and we must. Over half of all personal bankruptcies are related to medical costs and today, the rate of personal bankruptcy is unlike any seen since the Great Depression. Leaving America’s health care system unchanged, that’s what’s unaffordable.
Every year more Americans are uninsured. A recent survey estimated that nearly 13 million adults trying to buy health insurance directly from the insurance companies were denied coverage or treatment due to a pre-existing condition. Nearly 80 percent of America’s 46 million uninsured are members of working families and nearly one-third of America’s uninsured work for small businesses of 100 employees or less.
Every year the cost of health care continues to spiral further out of control. The average employer-provided health insurance premium has more than doubled since 2000. Comparatively, the average wage has increased at less than one-third of that rate. Americans pay more and more to be covered, and some actuary in an insurance company tower does his or her best to deny them as much treatment as possible. Doctors perform more and more treatments, unnecessarily at times, in an effort to shield themselves against frivolous “jackpot” medical malpractice lawsuits further driving costs up.
I come into the health care debate with political views that are certainly left-of-center, but I’ve been raised by a father who is an orthopedic surgeon in private practice and a mother who worked in health care consulting for fifteen years in New York City. I see reform as absolutely essential and believe wholeheartedly that every American resident should be provided health care, but I understand the concerns of doctors who don’t wish to see government-instituted price controls that would come from the public insurance plan being pushed by Senator Ted Kennedy, Congressman Henry Waxman, Speaker Nancy Pelosi, and other liberals in Congress. At the same time, I see the conservative rhetoric about “socialism” and “death panels” and the republican proposals to drastically lower taxes for the richest Americans as poor ways to accomplish the goal of universal coverage. With this understanding in mind, my question is, how can we provide affordable coverage to everyone while protecting the free market and limiting the government’s involvement in the actual provision of health care?
The answer lies in changing health care incentives and imposing new regulations on the health insurance industry. Let me explain. The consumers’ (you and I) primary incentive is to receive as much care as necessary to treat or cure their problem. The providers’ (doctors, drug makers, hospitals) primary incentives are to provide the consumers with as much care as they need in order to make a living. The incentives line up. I want care and am willing to pay for it, and health care providers want to give me care and will accept payment for it. Easy, right? But wait! There’s more! Health care is one of the few realms where consumers are not directly paying providers. So we have consumers who want but don’t directly pay for health care, providers who want to give but don’t directly receive payment for health care, and insurance companies. Well what do they want? What’s their incentive? They don’t receive care. They don’t provide care. They want to make a profit by helping us pay for care we may need if we get sick. How do they do this? They charge premiums to consumers, who they’ve picked because they are healthy; they pay doctors less than their requested fees, denying patients to those doctors who don’t accept their below-market rates; and they have whole departments dedicated to finding ways to pay for as little of their consumers’ medical bills as possible, often times by dropping them due to unknown preexisting conditions. So consumers want treatment, providers want to give treatment, and insurance companies want to pay for as little treatment as possible. The incentives don’t line up any more, do they?
With all of the time that the talking heads on television have spent discussing the outrageous “death panel” “euthanasia for grandma” tweets of a now-resigned governor from Alaska and all of the time that the commentators have dedicated to watching people yell at town hall meetings, it’s only mildly astonishing that no one has bothered to inform Americans about the real solution to the health care problem. Changing incentives. It’s probably because there’s no plan making its way through Congress that would do this.
Senator Ron Wyden, a liberal Democrat from Oregon, and Senator Bob Bennett, an archconservative Republican from Utah, would disagree. They have introduced the Healthy Americans Act in each of the last two Congresses to little fanfare. Yet surprisingly, cosponsors as varied as Senate Republican Conference Chairman Lamar Alexander of Tennessee (the third-highest ranking Republican in the Senate) and Bill Nelson, Florida’s own Democratic Senator, have signed on.
So what does the Healthy Americans Act do? In a nutshell, it changes the incentives for the provision of health care by mandating that every American buy health insurance, mandating that employers, employees, and the government all pay into that health insurance, and mandating that the insurance companies accept all clients regardless of pre-existing conditions. It sets up some limited tax deductions for consumers to help them pay for their insurance and it designates an agency in each state that would be responsible for providing Americans with impartial information about each company’s insurance plan. Insurance companies “health and prevention statistics” would be published, and insurers would be able to offer lower premiums to people who quit smoking, attend the gym multiple times a week, or lead healthy lifestyles in other ways. Instead of denying people care, insurance companies would spend their time and resources trying to prevent chronic illness. The federal government would not get into the business of providing health care or health insurance, it would merely serve as a funnel to provide information and insure that money is directed to the insurance companies. All of this would be coupled with significant medical malpractice reform and a reworking of the tax code. The Wyden-Bennett Healthy Americans Act would provide everyone with a baseline of affordable health insurance, would protect the free market at the same time, and would return a 1.48 trillion dollar surplus to the federal government as estimated by the Congressional Budget Office. It would seem like everyone wins!
So why won’t this universal free-market health care plan pass through Congress? Surprisingly, it has nothing to do with Republican obstructionism, but rather with the influence of labor unions within the Democratic Party. One of the largest benefits unions provide to their employees is a lavish health care plan won through collective bargaining agreements with management. If Wyden-Bennett passed, union members would have more affordable choices for health insurance that would potentially provide better coverage. Unions would be cut out of health care, thereby drastically reducing their appeal to people who are currently union members. Unfortunately unions are too powerful within the Democratic Party to allow President Obama or liberals in Congress to support the Healthy Americans Act, which scorers say could legitimately gain more than seventy votes in the Senate.
Until something budges, millions of Americans will continue to go uninsured and millions of Americans will continue to be denied the care that they need. Health care will continue to cost more and the system will deliver everyone less. Until members of both parties rise above the shackles of their individual special interests, the status quo will not change. There’s nothing more unaffordable than that.