Americans have a tough choice to make when it comes to the health care reform; will a government-driven health care system provide more affordable quality health care to all citizens than a market-driven one? The debate seems to be strongly divided between the republicans and democrats, with democrats advocating a government-driven system and republicans advocating a market-driven system. The disagreement over what must be done to improve our health care system is a profound one, which possesses an outcome that will influence not only the financing and providing of health care, but our economy as a whole.
Most Americans are under the impression that the central disagreement is over whether or not health care coverage should be expanded. Although the Democrats’ main contingency is that every American has some kind of health insurance plan, the Republicans are not opposed to expanding coverage to the uninsured. “In 2008, presidential candidate John McCain proposed a plan which would have provided to every American household a tax credit which could only be used to purchase a health insurance policy” (Capretta). This was a largely universal plan in the fact that its function was to enable every American to purchase some level of health insurance coverage with the financing of the government. Clearly, the disagreement is not over expanding coverage.
The real disagreement is over the allocation of resources in the health care sector. Both sides agree that our current health care system is unsustainable due to costs rising more rapidly than wages or government revenues. Americans must decide which system will increase the affordability and quality of health insurance for all citizens. The only way to slow rising costs without sacrificing quality of care is to improve the efficiency of interactions between patients, doctors, and hospitals.
According to the Blue Ribbon Commission for Health Care Reform, an estimated 792,000 Coloradans, nearly one fifth of our population, don’t have health insurance (3). Health insurance costs are rising rapidly and with them so is the number of Coloradans who are uninsured. Since all Colorado policyholders pay for those who cannot afford coverage, premiums continue to rise. ‘In fact, total premiums for employer-sponsored insurance more than doubled in Colorado between 1996 and 2005 As a result, Colorado families are paying as much as 19% of household income in 2005, more than double the percentage in 1987. According to Family USA, an estimated $934 of the average $12000 annual family insurance premium in Colorado is the cost of care provided to those without insurance’ (Blue Ribbon Commission for Health Care Reform 4).
So who are the uninsured? According to the Blue Ribbon Commission for Health Care Reform, ‘70% of the uninsured are in the workforce or are a dependent of a worker. While 75% of the uninsured are families with an annual income of $50000 or less, 13% have family incomes of $75000 or more. Almost 20% of the uninsured are children and 40% are between the ages of 19-34. 57% of the uninsured are white’ (5). The uninsured are found in all income groups, ages, and races, which means that the health care debate is one that all Coloradans should be concerned about. Clearly something needs to be done to extend coverage to the uninsured to better the quality of life for all Coloradans. Since we’re all paying for the uninsured, it makes more sense to invest that money in making sure everyone has affordable health insurance rather than paying high premiums.
According to the U.S. Census Bureau, “Personal or household income is generally regarded as the single best measure of the degree to which people are ‘well off.’” The Bureau of Labor Statistics shows an average percent change in household income from 1988 to 1998 at 5.7%, from 1998 to 2008 at 5%, and projects from 2008 to 2018 at 4.7%. Household income indicates the economic well-being of the United States, which will continue to increase at a lower rate than before. If health care costs continue to rise, even more of Americans’ household incomes will have to go towards insurance, resulting in an even lower economic well-being of American citizens and more specifically, Colorado residents. Furthermore, America already has a deficit of over $14 trillion and if there is need for further increases in the federal budget, our deficit will increase exponentially.
In order to reduce health care costs and enhance the quality of care provided, there are several steps Colorado must take. Firstly, the growth of health insurance premiums must be slowed. To do this, we must cover at least 85% of the uninsured and increase Medicaid provider reimbursement to help minimize cost shifting. Secondly, requiring employers to provide health insurance plans pre-tax would reduce employee health premiums and the government must provide sliding-scale subsidies to help low-income workers to buy insurance. Thirdly, require every legal resident of Colorado to have at least minimum health coverage while providing affordability exemptions. These are just a few changes to the health care system mentioned in the final report made by the Blue Ribbon Commission for Health Care Reform that would benefit all Coloradans while reducing health insurance costs.
Republicans argue that the answer is a market-driven system in which consumers choose between competing health insurance providers, basing their choices rationally on price and quality. The government would still play an important role in protecting consumer rights but the challenge of providing better quality health care at lower costs would be left to the insurance providers rather than Congress. However, this system sounds similar, if not the same as the one we have now. If this system were instituted, none of the Blue Ribbon Commission for Health Care Reform’s recommendations would be considered. Under “ObamaCare,” several provisions in the House and the Senate bills have been instituted, which are intended to force doctors and hospitals to change how they practice medicine by leveraging Medicare payment policy against them. “For instance, there are penalties for hospitals that have too many of their patients readmitted for care, and for physicians who are outliers in terms of how many services they render for certain diagnoses” (Capretta). “The Congressional Budget Office (CBO) projects that relatively small savings will result from the Medicare commission idea, and even smaller amounts will be saved by the other reforms touted by the administration. In ten years' time, even if all of the ideas were fully implemented, Medicare and the rest of American health-care would look and operate largely as it does today, which is to say as a fee-for-service insurance model that rewards volume and fragmentation, not integration and efficiency” (Capretta). While some of these reforms may marginally improve health care from the status quo, they will not fundamentally change Medicare or health care in general and are therefore intangible solutions.
Clearly, no one side has the right answer. So how can we reach a solution? On January 31st, a judge from northern Florida ruled that the new federal health care laws are unconstitutional. “Northern Florida U.S. District Court Judge Roger Vinson last week granted a stay to his January ruling striking down President Obama’s federal health care law. While Vinson has called the law unconstitutional, he also agrees with the Obama administration that it would be “extremely disruptive” to block implementation of the law” (Marcus). Luckily, Republican Colorado Attorney General John Suthers has entered Colorado into a multi-state lawsuit challenging the constitutionality of the individual health insurance mandate of the federal law. “State Republican lawmakers last week introduced legislation that would allow Colorado to opt out of federal health reform legislation by joining an interstate compact that would supersede the federal law and give states within the compact the right to regulate themselves. Congress would need to approve the compact, but it would not need the president’s approval, according to state Republicans” (Marcus).
It is clear that relying entirely on the federal government to allocate resources in the health care sector is not a viable option, but neither is relying entirely on a market-driven system. If the recent legislation is passed, Colorado could be excluded from federal health care reform and be allowed to institute its own reforms. If these reforms follow the recommendations found in the final report made by the Blue Ribbon Commission for Health Care Reform, we can attain quality and affordable health insurance coverage for all Coloradans.
Bibliography
Capretta, James C. What the Health Care Debate is Really About. The Public Discourse. January 19th, 2010.
The Blue Ribbon Commission for Health Care Reform Final Report. Colorado Official State Web Portal. January 2008.
U.S. Census Bureau. http://www.census.gov/
Bureau of Labor Statistic. http://www.bls.gov/
Marcus, Peter. Good and bad for health reform. The Denver Daily News. March 7th, 2011.
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