The American Mind

Single payers health care here we come

William Hillman

(6/2017) If you want to make America great again, start with these two things: get people back on the prosperity train and fix health care.

On the question of health insurance, the old system did not work and the new system does not work. It’s time for a single payer health care system.

Here are the facts from a recent report of 2013 U.S. health care expenditures:

• Medicare, Medicaid, the Children’s Health Insurance Plan (CHIP), the VA system, military, and the Indian Health Service cost nearly 48% of overall health spending.

• Federal, state and local government employee health insurance cost 6.5% of total spending.

• Tax subsidies for private employer-paid insurance cost 10% of total spending.

In all, the federal government along with state and local governments paid for 64% of the $2.9 trillion in total U.S. health care costs in 2013!

Private employers and private individuals paid for the balance of U.S. health care expenditures. Employees of private employers are better advantaged over any other group because their insurance rates are lower and their personal contributions to health savings plans are made on a pretax basis.

Today, the most vulnerable of all Americans when it comes to health care costs, are those who are not employed by a company offering insurance and not eligible for public coverage. Insurance costs for these Americans can be staggering because they don’t get the economies of scale that a large employer can get to cover its employees, and self-funding their own health care isn’t a practical option. And, most don’t get a tax credit. If these individuals have a small business, the costs to ensure their employees is an impossible financial burden. A study in 2008, indicated that over time fewer and fewer of newly-formed small businesses offer employees insurance.

Here are some examples of how things are breaking down:

• Major health insurers have announced they are withdrawing from the Affordable Care Act exchanges and those who purchase their health insurance are increasingly concerned about getting insurance and how much it will cost if they can get it.

• Providers are shutting their doors to their Medicaid patients because the federal government continues to reduce reimbursements for these patient visits. For some of these patients, the costs and inconvenience to travel to a provider who will care for them become so challenging that the choice is often, but incorrectly, to not seek medical care.

• Prescription drug costs have increased an average almost 10% in each of the past 3 years.

• A reported 60% of bankruptcies in the U.S. are due to expensive medical bills.

• There’s not a good system for insuring people from catastrophe illnesses.

• There aren’t good systems for ensuring that proper care is being delivered. A recently published article reports that among new mothers who have had the Zika virus; only 25% of their babies are getting the required head ultrasound.

• A recent report on international health system efficiency ranked the United States last of 11 developed nations on measures such as quality of care, access to care, efficiency of care, and equity of care. And as that inefficiency increases, a smaller percentage of our dollars go to providing health care and a greater percentage of our dollars go to processing claims and paying the salaries of executives at insurers, hospitals, and healthcare systems.

These challenges are not just being seen at the individual level. The bills for the generous health insurance and pensions given teachers, state and local workers by politicians to keep these "voters" happy are coming due. In most of Pennsylvania, pensions and health insurance are the two largest line items in school district budgets, and the squeezed budgets are causing school districts to lay off teachers and forego capital repairs and improvements. Small towns across the state are doing away with their police forces and services due to the stranglehold these obligations have on their budgets.

Health care insurance is inherently employment driven but in today’s world, we rarely stay with a single employer for our work life. But when an individual has high and unaffordable medical costs, getting a job with an employer that offers insurance becomes a top priority. Think about how that chokes our economic growth and innovation.

Maybe it’s time we all start to look at and talk about all health care funding - not just hot buttons like Medicare and Medicaid. Put it all on the table - private and government funding , the tax subsidies, and talk about all of it. Maybe if we do that we can develop a more equitable single-player plan for all of us.