Pass an Imperfect Health Bill and Move Forward
The health-care reform plan under consideration is not perfect. It will not solve all of our health-care problems. But it is the best bill we can get through Congress in our polarized political climate.
Comprehensive health reform was proposed almost 65 years ago by President Truman. It has remained stillborn ever since. Now costs are out of control, and we are beginning to throw the poor and the sick out of the lifeboat to the sharks.
If we do not do the best we can now, we are all certain to lose. Less coverage, rising premiums, rising taxes, higher co-payments, more uninsured, fewer hospitals, more misery. Is that what we really want?
Gallup-Healthways Well-Being Index data for June 2009 revealed 16.0 percent of American adults currently without health insurance. One in six of us. Unacceptable. It will also prevent us from getting a handle on health-care costs.
The data from the index also showed that the groups more likely than average to be uninsured were Hispanics; those earning less than $36,000 per year; those aged 18-44; blacks; people from the South; people from the West; and men.
What is certain is that a tsunami of rising health-care costs is set to wipe us all out if we stay put and do nothing.
According to Centers for Medicare and Medicaid Services, national health expenditures were $2.339 trillion in 2008. Total output of our economy was $14.441 trillion. Health care is 16.2 percent of our entire economy.
Since 2000, the economy averaged a 4.8 percent growth rate, while health care averaged 7 percent. If health care doubles every 10 years and the economy every 15, by 2018 it will be 20 percent of our economy. Very soon, something will have to give.
Deducting investment, public health and administrative costs/profits, personal health-care expenditures were $1.952 trillion dollars. This comes to $6,411 per person, including children. The per-capita cost of health care rises significantly with age. In 2004 data, around age 50 an average person begins to exceed the per-capita amount. We baby boomers are getting older. What then?
Private health insurance reduces its risk by excluding many of the poor (uninsured) and sick (with pre-existing conditions). Medicare covers most people over 65, who generally require more health-care expenditures. Therefore, according to AARP Bulletin, the average annual health-insurance premium for single coverage was (only) $4,824 in 2009, not taking into account co-payments and deductibles.
Medicare and Medicaid are draining the federal treasury at an unsustainable rate. Medicare spending grew 7.2 percent in 2007. Medicaid grew 6.4 percent.
Current receipts no longer cover benefits paid by Medicare Hospital Insurance. Its trust fund will be exhausted by 2017. Medicare Part B premiums cover less than 30 percent of expenditures. Its trust fund contains assets equal to only four months of expenses. Newer Part D prescription benefits are only 10 percent funded by premiums, the rest by current taxes.
Federal law requires treatment at emergency rooms. But this treatment is usually less efficient and more costly than care provided in other settings. Some uninsured avoid care until they face a crisis, which is more costly to treat and too often results in a chronic condition, reducing their productivity and increasing the long-term cost of their medical care. The cost of emergency care is then shifted to taxpayers, the insured and those paying out of pocket.
If we are going to require, at a minimum, emergency treatment for everyone, including the uninsured, and I believe that basic human decency compels us to do so, then it is only fair to require everyone to contribute to the cost of that care.
Whether it be through taxes, or through a mandate requiring basic, minimal coverage, we need to eliminate cost-shifting and the free-rider problem. This will give us a clearer picture of where our money is going so we can make rational choices about coverage and cost.
Because we Americans generally believe in maximizing personal freedom and choice, we must budget for a reasonable level of care. Match our sense of justice and compassion with our ability to pay. Focus on care that is cost-effective and also care that is critically necessary.
A person desiring broader coverage than the minimum should be free to obtain it at the market price. But basic, preventive care that prevents huge costs to our society and health-care system from avoidable illness should be provided to all. This will benefit everyone - recipient, taxpayer, policyholders and self-insured.
Tom Goergen lives in Southern Pines. Contact him at firstname.lastname@example.org.
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