By Marcia Angell
Guest Columnist
Boston Globe
January 29, 2007
Today the Globe launches a rotating seat on the op-ed page. Each guest columnist will appear each Monday for six weeks, before the next columnist takes over.
THE GREATEST source of insecurity for many Americans is the soaring cost of health care. Leaving jobs can mean losing health insurance, and even when insurance is offered, many workers turn it down because they can’t afford their growing share of the premiums.
Businesses are having trouble, too. Those that provide good health benefits see more of their revenues siphoned off by the health insurance industry, with a resulting loss of competitiveness (General Motors spends far more on health benefits than Toyota).
Insurance is not the same thing as health care — not by a long shot. Private insurers maximize profits mainly by limiting benefits or by not covering people with health problems. The United States is the only advanced country in the world with a health care system based on avoiding sick people.
It’s not surprising, then, that health care reform is at the top of the political agenda. Most current proposals de-couple health benefits from employment and encourage individuals to buy their own insurance. The fact that they were ever coupled is a historical accident; there is no logical reason for it. Yet, employment-based insurance has been the only practical option for people not old enough for Medicare or poor enough for Medicaid, since the individual insurance market is notoriously treacherous.
In his State of the Union address, President Bush proposed tax deductions for individuals who venture into that market and buy insurance on their own. Family premiums above $15,000 and single premiums above $7,500 would be taxed. This is a gesture, not a plan. It is just one more example of the conceit, shared by many on the right, that nearly any problem can be solved by jiggering the tax code. In fact, many of the uninsured don’t pay taxes at all, and many more would find their small tax relief greatly outweighed by the price of insurance.
More serious proposals are coming from the states, with Massachusetts in the lead. These aim for universal coverage by requiring uninsured individuals to purchase health insurance, under pain of — you guessed it — tax penalties, with state subsidies for the poor and near poor. In Massachusetts, there will be a token contribution by employers who don’t provide health benefits, but most of the cost will be borne by individuals. A new state agency, the Commonwealth Health Insurance Connector, is charged with seeing that insurers offer adequate benefit packages at reasonable premiums.
Though well-intentioned, plans like these all have the same fatal flaw: They offer no workable mechanism to control costs, mainly because they leave the private insurance industry in place. Yet, soaring costs are the fundamental problem ; lack of coverage follows from that. Already the Massachusetts Connector is having difficulty holding premiums down to the levels forecast when the plan was enacted. Even if they are held down at the start, there is little to stop insurers from raising them afterward , shrinking benefits, or both. It will take a large and costly bureaucracy to ride herd on all the ways to game this system. Perhaps the biggest risk is that failure will give universal care a bad name, just as the failure of the Clinton plan did 13 years ago. (That plan, too, made the mistake of giving the private insurance industry a central role.)
We need to change the system completely and get the insurance industry, as well as employers, out of it. Private insurance companies offer little of value, yet skim off 15 to 25 percent of the health care dollar for profits and overhead. It would make much more sense to extend Medicare to everyone. That could be done gradually by dropping the eligibility age a decade at a time, while phasing out the insurance companies. The loss of insurance jobs would probably be more than offset by job gains in other industries no longer saddled with health costs.
Medicare is not perfect, but its problems are readily fixed. It is far more efficient than private insurance, with overhead of less than 4 percent, and since it is administered by a single public agency, controlling costs would be possible. Unlike private insurers, it cannot select whom to cover or deny care to those who need it most.
It is time to stop tinkering at the margins. Medicare for all is the only reform that has a prayer of providing universal coverage while containing costs.
Dr. Marcia Angell is a senior lecturer at Harvard Medical School and former editor-in-chief of the New England Journal of Medicine.
