Americas’ healthcare system is in a state of crisis. Forty four million people in this country are without health insurance. According to the Institute of Medicine 18,000 people die a year due to lack of insurance. The number of uninsured people is expected to grow in the future because of federal and state budget constraints, cutbacks in public coverage programs, increasing cost of healthcare and insurance premiums and continuing high rates of unemployment. CRISIS – an unstable or critical time or state of affairs in which a decisive change is impending. (Websters’ Dictionary)
Americas’ healthcare system is in a state of crisis. Forty four million people in this country are without health insurance. According to the Institute of Medicine 18,000 people die a year due to lack of insurance. The number of uninsured people is expected to grow in the future because of federal and state budget constraints, cutbacks in public coverage programs, increasing cost of healthcare and insurance premiums and continuing high rates of unemployment.
Citizens Action Coalition advocates for a single payer health care system. This health insurance strategy would greatly reduce, if not virtually eliminate employment based heath insurance; the small group and non-group insurance markets; current federal, state and local programs to cover the uninsured; and most out of pocket health spending by individuals and families. Under a single payer system all American citizens would have access to affordable quality health care.
In Indiana more then 800,000 people are without health insurance. Seventy percent of those without insurance in Indiana are full time workers. The population of the uninsured in Indiana is rising twice as fast as the national average. We have the highest per capita rate of medically bankrupt families in the nation, among over 77,000 Hoosiers. In a four-year period, since June of 2000, Indiana lost 138,800 jobs.
In 2002 the Family and Social Services Administration conducted a 10,0000 person study to study the cause and effect lack of insurance has on people and the state. The Study interviewed businesses, uninsured Hoosiers, brokers and providers. The study found the cost of health insurance is the number one reason Hoosiers are uninsured. Indianapolis is the 2nd most expensive city in the nation for per family annual health insurance premiums.
In addition to cost barriers, preexisting conditions hinder many people from receiving healthcare coverage. An unhealthy or older person with an individual health plan is likely to pay premiums of 40% more than a younger healthy person. Some people with chronic health problems are unable to buy individual insurance because of their preexisting condition.
Employment and the uninsured
The majority of Americans receive their health insurance through their employers. With premiums increasing, employers are asking employees to take on a larger share of the cost, pricing people out of the system. Due to the rising cost of healthcare, some employers have dropped health insurance all together. Between 2000 and 2005 employers offering health insurance dropped 9 percent. Part-time seasonal and temporary workers are often not even offered health insurance through their employer. In fact, there is no law that requires employers to offer health insurance at all to their employees. The Federal Employee Retirement Income Security Act (ERISA) of 1974 constrains the ability of states to mandate employment-based coverage.
Health insurance became tied to employment in the early 1940’s when 15 million people joined the armed services during World War II, straining the labor market. To control runaway inflation from a tightened labor market President Franklin Roosevelt passed price and wage control legislation, as well as the Revenue Act of 1942. The Revenue Act imposed high taxes on corporate earnings but allowed health benefits to be written off as a tax-deductible business expense. Since companies could no longer compete for workers with high wages, they began offering fringe benefits like health insurance.
General Motors and the United Auto Workers recently struck a deal on health insurance costs. The UAW has agreed to pass on more of the health insurance costs to hourly and retired workers. Ford and Daimler-Chrysler are expected to ask for similar concessions. GM employs more than 10,000 people in Indiana. The state is also home to thousands more GM retirees who receive health benefits.
Corporate bankruptcy legislation, written by lawmakers in Congress, allow companies to scrap health benefits promised to employees who retire early-sometime voluntary, sometimes not. On October 8th, 2005 Delphi, the largest auto parts maker in the country, filed for bankruptcy protection, seeking to cut medical and life insurance benefits for its retiree’s. From 1988 to 2004, the share of employers with 200 or more workers offering retiree health insurance plunged from 66% to 36%.
Medicaid and Medicare
Public programs such as Medicaid and States Children Health Program (SCHIP) are programs set up to provide health insurance to low income families. Both programs provide good coverage for those who qualify. However, strict eligibility requirements and complex enrollment procedures make these programs difficult to access and even more difficult to maintain. A small pay raise can sometimes be enough to disqualify a family form these programs. Since both of these programs are dependant on state funding, they are vulnerable to state budget constraints. When the state is having a difficult time financially these programs often suffer from budget cuts.
Medicare has provided universal health coverage for all US citizens age 65 and older and some people with disabilities that are “uninsurable”. The Federal government established Medicare under the Social Securities Amendments of 1965.
"No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings they have so carefully put away over a lifetime so that they might enjoy dignity in their later years." (Independence, Missouri, July 30, 1965) Lyndon B. Johnson
Despite gaps in benefits Medicaid has been able to provide coverage to all US senior citizens with much lower administration cost than the private insurance can. Single payer systems, such as Medicare generally are considered to have substantially lower administrative cost than private insurance plans, because the need for advertising, underwriting and much eligibility and billing work disappears. Medicare spends 3% on overhead compared to 15 – 25% the insurance industry spends.
Universal Single Payer Health Insurance
A universal public system could be financed this way: The public financing already funneled into Medicare and Medicaid would be retained. The difference, or the gap between current public financing and what we would need for a universal health care system, would be financed by a payroll tax on employers (about 7%) and an income tax on individuals (about 2%). The payroll tax would replace all other employer expenses for employees’ health care. The income tax would take the place of all current insurance premiums, co-pays, deductibles, and any and all other out of pocket payments. For the vast majority of people a 2% income tax is less than what they pay now for insurance premiums and in out of pocket expenses such as co-pays and deductibles.
Single payer health insurance is not socialized medicine. Socialized medicine is a system in which doctors and hospitals work for the government and draw salaries from the government. Doctors in the Veterans Administration and the Armed Services are paid this way. Examples also exist in Great Britain and Spain. But most European countries, Canada, Australia and Japan have socialized financing or socialized health insurance. The government pays for care that is delivered in the private (mostly not-for-profit) sector. This is similar to how Medicare works in this country. Doctors are in private practice and are paid on a fee-for service basis from government funds.
A single payer health insurance system would work like this: every American citizen would receive a national medical ID card in which they would show to the front desk clerk at the time of service. All American citizens would be eligible regardless of health or income status. Providers would bill the government directly. Provider billing procedures would be simplified because there would be no need to determine the secondary health insurers, and standard forms for all enrollees would make it easier for those submitting bills. The cost of the healthy and the sick would be averaged across the entire US population.
The long-run sustainability of a single payer system would depend on containing cost increases; many potential cost and utilization controls would reside at the federal level. Because nearly all the health spending would be aggregated under the federal budget, the decision about what society deems affordable would be both very public and unavoidable.
If we continue to address the issue of healthcare in this country with a business as usual attitude, we will most certainly face ever-increasing rates of uninsured citizens. When large portions of people are uninsured; families, businesses, the economy and the well being of our society as a whole pay a large price. Health insurance in America has been looked at as a “fringe” benefit, not a right. As a society we need to put politics aside and start addressing health care policy. We need to make access to health care for all, a Right, not a privilege that goes out to the highest bidder.
These are the issues of immediate importance we are working on right now.