"Plan for a Healthy America"
Health Affairs
March 23, 2005
Change In Challenging Times:
A Plan For Extending And Improving Health Coverage
Health care for every American may be the current test of the strength of our convictions, as civil rights was in the 1960s.
By Jeanne M. Lambrew, John D. Podesta, and Teresa L. Shaw (from the Center for American Progress)
As veterans of previous policy battles, we do not underestimate the political challenge involved in making the U.S. health system accessible to all. Nor do we disagree with the assessment that moral conviction has been lacking in past health policy debates. However, we reject the claims that health reform is doomed by political paralysis and an incapacity for Americans to sacrifice for the greater good. At opportune points in U.S. history, pragmatic ideas have overcome seemingly impossible political odds and become policy. We also believe that the perceived disconnect between values and health reform reflects not a lack of conviction but a failure to express that conviction in a policy environment. In most faiths and value systems, it is wrong to tolerate pain, suffering, and even death that could be prevented with different policy choices. The challenge is to translate these deeply held values into action that ensures a better system and healthier nation.
Abstract:
Some speculate that Americans are neither politically capable of nor morally committed to solving the health system problems. We disagree. We propose a plan that insures all and improves the value and cost-effectiveness of health care by knitting together employer-sponsored insurance and Medicaid; promoting prevention, research, and information technology; and financing its investments through a dedicated value-added tax. By prioritizing practicality, fairness, and responsibility, the plan aims to avoid ideological battles and prevent fear of major change. By emphasizing the moral imperative for change, especially relative to other options on the policy agenda, it aims to create momentum for expanding and improving health coverage for all.
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.119
Comment: The leadership of the Center for American Progress is to be commended for challenging the notion that “major change is politically infeasible.” They present very convincing arguments that now is the time to
move forward with a program that would provide comprehensive health insurance coverage for everyone.
Somewhat reminiscent of the Clinton attempt at reform, they have patched together a model that they believe would cross the political divide and receive the support of the various vested interests. The Clinton effort pleased no one.
As we look at a few of the features of this “politically feasible” model, please keep in mind that a critique of their model should not in any way deter us from our efforts to move forward with comprehensive reform. The selected and incomplete comments below about some of the features relate only to whether Center for American Progress has produced the definitive model for reform.
- Employer-sponsored coverage would be left in place, with current tax incentives that would encourage the continued participation of employers
Problem - Funding is regressive, providing a greater tax subsidy for higher income individuals. And this leaves in place our flawed, expensive, administratively inefficient system of funding care
- The Federal Employees Health Benefits Program (FEHBP) would supplement the employer system for those without options for group coverage (Healthy America pool)
Problem - Most FEHBP plans have cost sharing that would impair affordable access for those with modest or low incomes. And it still leaves the private health plans in place
- Medicaid would serve as a safety net for low-income people
Problem - Medicaid is chronically underfunded, reducing the number of willing providers, and that will not change when it continues to be perceived as a welfare program for the poor
- Reinsurance would be used to cover high-cost people
Problem - 20% of people use 80% of health care. Reinsurance would remove this major portion of health care spending from the risk pools of the private insurers and transfer it to the taxpayers. Why leave in place this highly flawed, expensive and wasteful system of private insurers when the taxpayer would be footing much of the bill?
- Refundable, means-tested tax credits would be used to help fund coverage for lower-income individuals
Problem - Unless the tax credit approached 100% of the premium, very few low-income individuals could participate. If the full premium is provided then, once again, why leave in place the superfluous, wasteful private plans?
- Individuals who fail to enroll in one of the programs would pay an income-related assessment and Medicaid would be the default payer
Problem - 80% of the uninsured do not have access to affordable employer-sponsored plans nor the funds to purchase insurance in the individual market. Enacting an individual mandate with the threat of financial penalties for individuals with very little if any disposable income can impact their ability to pay for other essential needs such as food and housing. Higher-income free riders utilize only a very small portion of total health care costs, and it would be more effective to have them contribute their equitable portion through a single, universal system.
- New funding would be through a value added tax (VAT)
Problem - A VAT is administratively complex and expensive to administer, but, much worse, it is highly regressive, shifting even more of the tax burden from the wealthy to the masses
The Center for American Progress proposal also includes recommendations for an emphasis on disease prevention and health promotion, developing better information about high-quality care, and utilizing the benefits of information technology. These are certainly fine. But their proposal fails to seriously address some of the major issues such as the profound administrative waste of our fragmented system of funding care, the costly and ineffective high-tech excesses related to excess capacity, the failure to negotiate excess prices, and the failure to ensure an adequate primary care infrastructure.
There is another model that would ensure that everyone would have access to comprehensive health care that would be funded equitably and that would return the health care decision-making process to the patient and his or her health care professionals. But then the single payer model is designed to spend our health care dollars on patient care rather than on the other vested interests.
The Medicare legislation demonstrated that the only way that we can please the insurance industry is to give them more money than a public system (Medicare) actually costs. Maybe it really is time to give up on bending over backwards in trying to please the insurers and get on with the important task of trying to take care of the needs of patients.
Let’s act on the Center for American Progress’s clarion call to “translate these deeply held values into action that ensures a better system and healthier nation.” But let’s make sure that all options are on the table so that there is no doubt that we are selecting the model that is best for America.