A system that works for America
By Register Editorial Board
The Des Moines Register
December 7, 2005
The U.S. health-care system doesn’t work for ordinary people. It doesn’t work for Bill Cotton of Des Moines, who is spending his life savings for his wife’s nursing-home care. Or Hollee Crees of West Des Moines, who has had to fight the state of Iowa to keep her son on Medicaid. Or John Greener of Washington, Iowa, who can’t retire from teaching because his health care would be unaffordable.
And they’re insured. Then there are the 45 million Americans without health insurance.
The Register’s editorial board has pushed repeatedly for a tax-financed system of health care that provides basic care for all Americans. We have suggested using Medicare as a financing model that could be gradually expanded to cover everyone. Why Medicare? It’s a proven model that provides uniform coverage with low administrative costs – around 3 percent, compared with an average of 15 percent in the private sector. Medicare is familiar, which makes it politically palatable.
Medicare was created 40 years ago because seniors needed help with health care. Now everyone needs it. It makes sense to build on the idea of pooling people together, lowering costs through economies of scale and greater negotiating leverage, and offering uniform benefits people can understand.
We realize our suggestion is hardly simple. Medicare would need to be reformed before it could be expanded – and not in the way Congress “reformed” it in 2003. It should provide a uniform drug benefit that allows the government to negotiate the cost of drugs. It should offer a more comprehensive package of benefits, which would eliminate the need to purchase supplemental insurance. It should do a better job of coordinating patients’ care.
But wouldn’t a system like that break the budget? No. A taxpayer-financed system, covering all Americans, could save 1.1 trillion health-care dollars over 10 years, concluded a recent study by the nonprofit, nonpartisan National Coalition on Health Care, the nation’s largest alliance working to improve health care.
The coalition offered four scenarios for reforming health care in this country. All are comprehensive reform plans, not tinkering around the edges. All would provide everyone with health insurance, increase efficiency and improve quality of care. All four would save money. The one that would save the most money: a universal, publicly financed program.
Kenneth Thorpe, a former government economist, estimated the cost and savings using Congressional Budget Office methodology. He assumed employers would pay 75 percent of the tax for covering employees and workers would pay the remaining 25 percent through payroll taxes. The benefits wouldn’t be bare bones either. They would be similar to what federal employees enjoy. The system would provide drug coverage and wouldn’t require purchasing supplemental insurance.
The coalition isn’t a bunch of left-wing nuts. It’s co-chaired by former Iowa Gov. Robert Ray, a Republican. Members include Principal Financial Group, AARP and Blue Shield of California.
None of the coalition’s coverage and cost scenarios exactly matches the expansion of Medicare that the Register advocates. But they clearly indicate that Medicare expansion would be feasible and save money.
The alternative to comprehensive reform is to keep putting Band-Aids on a system that doesn’t work even for the insured. Quality and availability of care varies for those covered by Medicare versus Medicaid versus benefits through public jobs versus thousands of different plans through private employers versus insurance bought in the open market. And millions are uninsured. The fractured system’s very structure – or lack of it – makes it wasteful.
Instead, the United States could use the money it’s already spending on health care to cover all Americans.
One system. Everyone pays for it. Everyone is insured by it. It would be more efficient and more humane.
It would work for ordinary people. It would work for America.
The obstacle: Special interests
So what stands between America and a tax-financed system of health care?
Powerful special interests that funnel cash to politicians for their political campaigns and lobby heavily to protect their bottom lines.
Reforming the current system theoretically could eliminate the health-insurance industry, although parts of that business would likely remain. Consumers in many countries with national health-care systems buy insurance policies to cover care beyond what the government provides. The pharmaceutical industry would see smaller profits if a government system negotiated down the cost of drugs for everyone.
Two other key players, physicians and businesses, have historically opposed a taxpayer-financed system. Their main national associations continue to do so. As members’ costs and frustration mount, however, views are starting to change.
Business associations have long advocated market-based solutions rather than a government system. Yet, in part because of existing government involvement, the free market hasn’t worked in health care. Businesses large and small see that each year when they receive their annual health-insurance rate increases.
The American Medical Association, too, has fought the idea of a national system, but some physician groups are coming around. Many doctors are growing tired of the paperwork burden of dealing with thousands of different private insurance plans in addition to government programs. And physicians embrace a credo of providing health care to everyone.
The business and medical lobbies wield considerable clout in the halls of Congress. If some of that clout shifted toward pushing reform, rather than resisting it, Congress would be forced to respond.
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