Our Healthcare System: Too Broke to Fix?
According to a May 2007 CNN opinion poll, 64 percent of us think that our government should provide a national health insurance program for all Americans, even if it would require higher taxes. So what's in the works?
A group of 83 House Democrats, led by Rep. John Conyers of Detroit and joined by an alliance of nurses, physicians, and labor unions, is sponsoring a measure to create a national health plan that would abolish private insurers and make all hospitals non-profit. It's called HR 676. And it's supported by a grand total of one presidential candidate: Dennis Kucinich.
None of the other Democrats want to give the Republicans the chance to compare them to Karl Marx, the way they did to Hillary Clinton when her health plan was crucified in 1993. In fact, candidate Edwards even pooh-poohed the single payer concept, also known as "Medicare for All," which would pay for doctors, hospitals, and other healthcare providers from a single fund. (The Canadian healthcare system and Medicare are single-payer systems.)
In a comment worthy of a Republican, Edwards told Rolling Stone, "Do you think the American people want the same people who responded to Hurricane Katrina to run their healthcare system?" Obama has said that if he were starting from scratch he'd support a single-payer system, but given the morass we've got now, it's just not feasible.
The plans of the three front-running Democrats are all fairly similar: Obama has come right out and said as much, and Edwards has actually accused Clinton of copying his health plan. The plans of all three pretty much agree to keep private insurance, provide tax incentives to make healthcare more affordable, and offer the uninsured a program something like Medicare. The idea is that everyone would end up with some coverage somehow.
Republicans, who bleat about "socialized medicine" whenever the Democrats approach the issue, are all for tax incentives to help people buy their own policies. Some have called for doing away with the employer-based system of health insurance and replacing it with tax breaks, so that people could use all that extra money to buy their own coverage. Of course, those who don't make enough to pay big taxes might have a problem there.
Clinton says that her idea won't need any new government agencies, which is always a big bugaboo, and that people will be able to keep their current health plans. She plans to fund her program by dumping Bush's tax cuts for the wealthy and by, optimistically enough, using electronic files, and she would cap premiums at a percentage of income. According to a speech by John McCain, Hillary's plan is "eerily reminiscent of what they tried back 1993. I think they put some lipstick on the pig, but it is still a pig. And, second of all, it is the liberal outline-let government do it." The insurance companies, of course, are pressing for a "public-private" partnership, apparently so they could cover all the profitable patients and leave the rest (like people with diabetes) to the government.
One plan that's getting a lot of play is California's. Nineteen percent of California's residents are uninsured, the highest in the nation. Governor Schwartzenegger has proposed a plan that calls for a four percent payroll tax on businesses with ten or more employees that don't provide health insurance. Employers would also have the option of dropping their coverage for their employees and instead paying the four percent tax to the state. The plan requires that all residents buy health insurance or face a tax penalty, but only people making under $25,525 would get help buying their insurance. Schwartzenegger's plan would also force insurers to sell policies to people with preexisting health problems like diabetes, but the companies could set prices based upon age and geographic area.
So how do we measure up to the rest of the world? The United States has the honor of being one of the only two industrialized nations in the world without universal coverage; South Africa is the other, and even South Africa is working on it. Germany, for instance, has had a mandatory healthcare system since Bismarck in the 1880s. Even India has partial universal healthcare, run by local governments.
As it stands now, around 84 percent of us have health insurance, about sixty percent from an employer. In 2004, sixteen percent (45.8 million people) had no health insurance. Those who are covered usually pay 16 to 28 percent of their premiums, and they kick in for co-pays as well. And sometimes they just go under: Medical bills are by far the most common reason for bankruptcy in the United States. Since 2001, premiums for family coverage have increased 78 percent, while wages have risen 19 percent, according to a Kaiser study.
We spend more on healthcare than any other nation in the world: fifteen percent of the gross domestic product. New Zealand, for example, spends one third per capita of what we spend on healthcare, but beats us in every marker of efficiency and care. Germany, the UK, Australia, and Canada also hammer us in nearly all healthcare quality issues. But our system costs two to three times what they spend. American employers, companies, and individuals will spend about $776 billion on healthcare this year, up 56 percent from 2001. And still only ten percent of diabetics receive diabetes education.
Why do we spend so much for so little? Well, for one thing, insurance companies have big offices and make big profits. In 2006, the five biggest health insurers reported a combined net income of $10.6 billion on revenues of $188.4 billion. Proponents of universal healthcare say that insurance companies use 31 percent of their revenue for administration and profit, more than a thousand dollars a person every year. That's nearly double the administrative overhead in Canada.
Government contributes about 45 percent of all payments for healthcare already, making it the largest insurer in the land. Why not go a little farther?
Sources: San Jose Mercury News, October 2007; Wikipedia; Bloomberg.com;
Healthcare Table Courtesy of Wikipedia
(a) = Per capita expenditure on health (USD)
(b) = Healthcare costs as a percent of GDP
(c) = % of government revenue spent on health
(d) = % of health costs paid by government