The end of any election is a natural time to reflect on the issues that marked the campaign and look ahead to the direction a new administration is likely to take. There is little doubt that the just-concluded presidential campaign was highly polarizing. But there is also little doubt that it focused a great deal of attention on an issue of burning interest to a large majority of Americans—the problems facing our health care system.
That said, it's natural to ask where we stand as we wait for the administration to set its course, and where we might go next. The path we take will have major implications for the health of our nation and our economy.
Our health care system is at a crossroads. The affordability of care is a growing problem—not just for the uninsured but for half of American workers with limited wages and health benefits. Although moderating somewhat recently, health insurance premiums have risen at double-digit rates for four years. Rising health costs are of great concern to American businesses, but failure to invest in a healthy workforce also can lead to premature death, preventable disability, and lost productivity.
The affordability of care, growing instability in insurance, increasing numbers of uninsured, frustration with administrative complexity, rising concerns about quality of care and patient safety were at or near the top of the list of concerns Americans cited to pollsters over the last year. Americans want, need, and expect action on the health care system's biggest problems. My hope is that the administration and Congress have listened closely and will act boldly.
The administration has proposed a number of initiatives to address the public's concerns, but policy proposals to date may not be sufficiently ambitious to meet the many challenges we face. We need to chart a course that makes health care affordable for all Americans, lets employers attract and retain a healthy and productive workforce, and transforms the health care system to improve safety, quality, and efficiency. It's within our grasp to do so.
Affordability for the Public
The administration has proposed tax credits of $1,000 for individuals with incomes under $15,000 to buy individual health insurance, with partial assistance for those with incomes up to $30,000. But this, along with other administration proposals, would make only a small dent in the number of uninsured, helping perhaps 2 to 8 million of the 45 million Americans lacking coverage. Buying insurance on the individual market is far more expensive than even the $3,700 employers paid in 2004 for single coverage.
A better approach would be to ensure affordability of coverage for all through a combination of expansion of employer coverage and public programs like the State Children's Health Insurance Program, or CHIP, and Medicare. Automatic enrollment in CHIP would provide coverage for 7 million uninsured children. Covering their parents under CHIP would protect another 8 million adults. Covering young adults under their parents' insurance or CHIP would protect more than 3 million uninsured, low-income young adults and help them be healthy and productive. Providing adequate tax credits based on income—say, making sure no one pays more than 5% of their income for premiums—would make coverage more affordable for millions of workers and those who lose their jobs. Eliminating the two-year waiting period for the disabled under Medicare would provide coverage for 1 million disabled who are most at risk. And letting older uninsured adults buy into Medicare early would bridge the gap between retirement for health reasons and having coverage. Together, these proposals would provide coverage to nearly all of our nation's uninsured.
Providing access to affordable coverage is not difficult. But it requires making health care a top public policy priority and committing the funds needed to do the job. The administration has proposed spending about $120 billion over 10 years to improve health care. A national commitment of $100 billion a year is more likely what we need.
No question—this is a big investment. But it has a substantial payoff, not only in a decent and humane society but in improved economic productivity. The Institute of Medicine estimates our economy loses $65 to $130 billion a year as a direct result of having so many people uninsured. Even more alarming, 18,000 people a year die because they are uninsured and can't get needed care. What's the price tag on that?
Affordability for Business
The U.S. health care system is built on employer-based insurance coverage. Some 160 million Americans get their health insurance this way. Yet, this system is increasingly at risk. Small businesses have cut back on coverage due to double-digit premium hikes. Even big businesses have reduced retiree coverage and are shifting more costs to employees.
The administration has advocated association health plans—cross-state health plans offered by organizations not subject to state health insurance regulation—as a way to make coverage more affordable for small businesses. But this approach carries substantial risk. Such plans would be exempt from state regulatory requirements, meaning they and the coverage they provide could more easily disappear when participants need them most.
A better alternative would be to open up the Federal Employees Health Benefits Plan (FEHBP) to small businesses and uninsured individuals so they can take advantage of group purchasing. More than 200 private plans participate in FEHBP, giving workers a wide range of plan choices. Federal reinsurance could protect insurers that attract sicker enrollees and, at the same time, lower premiums to businesses. And providing tax credits to low-wage workers could help to make their share of premiums affordable.
Rising Health Care Costs
Making health insurance more affordable for individuals and employers isn't enough. We need fundamental change to improve the performance of the health care system. The administration has proposed health savings accounts, or HSAs, combined with high-deductible health insurance policies, as a key strategy for controlling health care costs. It is also counting on tort reform as a major cost-control measure. Unfortunately, this doesn't get to the root causes of rising health care costs. HSAs and high-deductible plans might work for a few healthy and high-wage employees, but increasing the number of people who must pay $1,000 out of pocket before insurance kicks in—when more than 70 million Americans already have problems paying their medical bills—is not the right remedy.
Instead, we need a multi-pronged strategy directly aimed at increasing the safety, quality, and efficiency of health care delivery. Elements would include:
Any improvement is welcome. But if we make only modest plans, we run the risk of letting a teetering system topple. It's clear that we can no longer continue on our current course, but need to turn the health care system around so that it provides safe, effective, and affordable care for all.
Such a system is within our reach. We have the talent. We have the resources. We have workable solutions. What we need is a national commitment to ensuring a health care system that is accessible to all and operates at the highest levels of safety, effectiveness, and quality. Investing in the health of our children and our workforce is key to ensuring America's continued economic strength and vitality. We can afford to do no less.