Costs Will Force Congress to Look at Universal Coverage

Not since Bill and Hillary met Harry and Louise has comprehensive health insurance reform been on the front-burner of American politics.
But several observers say that’s about to change.
In August, for example, conservative economist and author Bruce Bartlett predicted in front of a Little Rock audience that corporate interests would pressure Congress to adopt a “single-payer” plan for universal health insurance, probably within the next two years.
Dr. Joe Thompson, director of the Arkansas Center for Health Improvement, says the only thing wrong with Bartlett’s prediction is the timetable. It won’t be that soon, he said, unless a major corporation suddenly announces that it will no longer insure its workers.
And U.S. Rep. Vic Snyder, D-Ark., said that Congress would probably continue to take “bites” at the problem until a new president takes office in January 2009. By then, he said, a “convergence” of dissatisfaction will force lawmakers to revisit the issue that introduced the country to Hillary Clinton as a policy wonk.
While Bartlett’s prediction specifically referred to a single-payer system — something like Medicare — he didn’t endorse the idea during his Aug. 17 lecture as part of the Central Arkansas Library System’s J.N. Heiskell Lecture Series.
In fact, Bartlett told his audience that the “conservative” answer to health care cost containment was high-deductible insurance coupled with health savings accounts allowing people to pay deductibles and co-payments tax-free while increasing consumer awareness of the actual cost of health care.
Still, both Bartlett and Thompson acknowledged the pressure that the increasing cost of health premiums was putting on businesses whose foreign competitors are relieved of the responsibility for providing insurance to their employees.
“Employers are still the ones putting the most dollars onto the table, so the proposals they bring to the table will be more and more dramatic,” Thompson said, offering up Acxiom Corp. of Little Rock and Wal-Mart Stores Inc. of Bentonville as backyard examples.
Last year, Acxiom faced an employee revolt — and was forced to do some backpedaling — when it replaced its traditional plan with a high-deductible, HSA plan for all employees. In September, Wal-Mart announced that a high-deductible plan would be the only option offered to employees hired after Dec. 31.
He has seen an even more astonishing proposal by a self-insured “major employer” that would cover non-emergency surgery only if the procedure was performed in a low-cost country like India.
Good News, Bad News
In October, according to a U.S. Census Bureau analysis, the population of the United States will reached 300 million. In round figures, 155 million of those are insured by an employer-sponsored plan, 15 million buy individual health policies and 43 million are covered by Medicare.
And then there are some 46 million who haven’t had health insurance of any kind for at least a year. That’s up from 42 million when the Clintons offered up the reform that came to be known as “Hillarycare” because the first lady chaired the committee that drafted the proposal.
A direct consequence of the country’s “piecemeal” approach to health insurance, Snyder said, was the fact that one in five National Guard troops, in Arkansas and nationally, called up for service in Iraq were deemed medically unfit for deployment. The most common problems were dental and most were easily corrected, but the widespread medical neglect slowed the deployment of guardsmen, he said.
The nonprofit Kaiser Family Foundation, which conducts an annual study of employer-sponsored health insurance, reported in September that the average cost of group health premiums grew 7.7 percent between 2005 and 2006. That figure represents both good and bad news. It was the slowest rate of increase since 2000, but it was also more than twice the rate of both general inflation and average wage growth.
It is likely the result of employers shifting more of the risk onto the individual in the form of higher deductibles — the conservative approach Bartlett endorsed.
Big Money
An average increase of 7.7 percent is, of course, an average. Kaiser found that 42 percent of people were covered by employee-sponsored plans whose premiums had grown by 5 percent or less between 2005 and 2006; another 13 percent were covered by plans whose premiums had increased by more than 15 percent.
Percentages are almost meaningless in the absence of hard dollar figures, and the Kaiser study collected those as well. As of spring 2006, the average premium paid in an employer-sponsored group plan was $4,242 for single coverage and $11,480 for family coverage. And, on average, the employee picked up 16 percent of the cost of single coverage and 27 percent of the family coverage, a split that has remained fairly consistent during the run-up in prices.
Offering health insurance is still nearly universal (98 percent) among companies with more than 200 employees and is almost standard (92 percent) among companies with 50 or more employees, although affordability can vary wildly, the Kaiser study found. In companies with fewer than 10 employees, though, only 48 percent offer plans, up from 47 percent in 2005 but down from 57 percent in 2000.
Single-Payer?
Political liberals often point to Medicare as a model for how government-financed universal coverage might work. Medicare provides a basic level of medical care, which this year includes prescription drugs for the first time, and pays providers a set amount for each service they provide. The result is administrative costs that are a fraction of that of private insurers and, of course, no profit margin.
Snyder, widely regarded as the most liberal member of Arkansas’ congressional delegation, scoffed at the idea that Medicare or any of the federal government’s other single-payer plans — veterans benefits or Tricare for military families — could be a model for universal coverage.
“I think Medicare has been a wonderful success story for the United States, but it’s not without its challenges,” Snyder said.
Maine, Massachusetts and Vermont are all experimenting with variations on universal health insurance, according to the National Conference of State Legislatures, which is tracking health insurance proposals around the country. But does anyone have a national plan that will overcome the objections that met Hillarycare?
Snyder says no, not yet. But one will emerge.