Its not breaking news that a debate over healthcare reform is going on all across the country, so I'll jump right in and try to get some of the numbers out of the way first. We stand to spend $2.5 trillion this year alone on healthcare with between $1.2 and $1.6 trillion coming from the government, depending on how you cut up the numbers (ie if you include tax credits to businesses or not). The proposed healthcare overhaul sits at $1 trillion to be spent over 10 years, or $100 billion per year. That hypothetically would increase the annual spending of the government from around $1.5 to $1.6 trillion per year. While $100 billion per year is not an insignificant number, it becomes more than reasonable when considering the rate at which healthcare spending has been increasing and what is at risk if the money is not spent. Healthcare expenditures continue to rise by 6-8% annually, far outpacing the expected 3-4% of inflation. The math is pretty simple and the numbers dramatic enough (I used a fairly conservative 6.25% increase and got $3.4 trillion/yr in 5 years and $4.6 trillion/yr in ten) to see that spending $1 trillion now to cut costs later seems like a pretty wise investment in our future.To do so several measures have been proposed such as restricting insurance companies' ability to deny coverage or drop coverage based upon pre-existing conditions, and not allowing them to set yearly or lifetime spending caps on individuals. Both of these would obviously be beneficial to individuals, but they also would help the nation in ways I don't feel has been highlighted in this debate. As it stands now, caps and pre-existing conditions allow the insurance companies to make money off of the healthy, and then simply abandon them when the risk becomes too great. For example, more often than not once people have reached their cap they are forced into medicaid and their costs are passed to the federal government. Or, if they are denied coverage for a procedure or treatment because of a bogus pre-existing condition clause and are unable to pay independently, the healthcare provider is forced to take a loss which is in turn passed along to everyone else in the form of higher costs. Essentially this allows the insurance companies to make their profits off of someone until the numbers become unfavorable at which point they pass the bill to the federal government, and by extension, the nation's tax payers. If insurance companies want the opportunity to provide healthcare coverage, they should also take on the responsibility of doing so.
However, while the reform and cost saving approaches are important, they are only stop gap measures, and it is likely the insurance companies will eventually find a loophole. Because of this, without the public option, it is my opinion that this healthcare reform will ultimately fail. A public option would help to level the playing field and provide fair competition to the insurance companies' near monopoly, one that has become more and more complicated, more expensive, all while restricting access care. In 1997 293,000 people were employed by the health insurance industry. Ten years later that number had grown to 444,000, an increase of 52%. By comparison overall employment grew by only 12% during that time. Today the number is likely closer to half a million and does not take into account those employed by healthcare providers specifically to deal with insurance agencies. When your business model is based around finding ways not to pay for medical treatments, it certainly seems that increasing your work force by 52% would be a move to make things more complicated, and not to find ways to save the consumer money.
But what about the naysayers? Some of the arguments coming out of the town halls have simply been maniacal ranting or have come from industry plants (50,000 insurance industry employees have been mobilized to fight reform), but one coming from ordinary citizens which I fail to understand is the outcry against a public option. Currently every US voter is already covered by a public option, should they live to be 65. Are these people simply going to tear up their Medicare cards when they turn 65 because its “socialism?” As I've pointed out in past posts, neither a public option or a single payer system are socialized medicine. The government would not control your physician or your hospital. Those would remain standalone institutions, operating independently and reimbursed by the public programs and with private funds much in the same way that they are paid by insurance plans now. The differences would be cost savings in the form of a ten fold decrease in overhead and improved coverage, both for those without coverage and those with existing coverage.
Most of arguments against healthcare reform which I have heard personally have been along the lines of “that all sounds great... but if people can't pay for their own healthcare, why/how should we?” The way I see it this is a flawed line of reasoning. Not with regards to the big government vs small government, or even funding social welfare programs in general, but specifically when you apply a question of that nature to healthcare. No one asks who will be covered by the police or fire departments, or who will pay for repairing or roads or educating our children. These simply are the costs of society and the benefits afforded to us by those costs. All members of our society are entitled to certain services, and we provide those which are deemed to be essential to the good of our nation. What I struggle to understand is why some people so vehemently disagree with the notion that healthcare is one of these staples, that for some it could be so much of a paradigm shift so as they can't see the forest for the trees. We're not talking about making sure everyone has access to BMWs and first class flights, this is about ensuring the health of our neighbors, co-workers, friends, and family. Healthcare affects us all, is larger than what any one person can manage, and is essential to the well being of our nation as a whole. It is unimaginable to think that a family would be bankrupted by an unexpected elementary school bill, or that the fire department wouldn't respond to more than one house fire per year, yet similar scenarios happen every hour in healthcare.
Last night President Obama made this point much more eloquently than I can, and while I had initially capped off this paragraph making the point that this is a matter of national pride, after the president's speech I much prefer his reiteration of Sen. Ted Kennedy's idea that this is a matter of national character. We shouldn't do this because we pride ourselves as being a great nation, but instead, because it simply is the right thing to do.
Final note: I wrote most of this prior to President Obama's speech Wednesday night, but was holding it back until after the speech. I was pretty sure that he would back off of the public option, and thankfully I was wrong. Instead, he presented it clearly and with a factual representation of what it is, a measure by which to offer coverage to those who can not afford or find health insurance while at the same time injecting competition into an increasingly bloated and monopolized system. And isn't it sad that on a night in which the president focused on restoring civility to an open debate, Rep. Joe Wilson couldn't even make it through the 45 min speech before reverting to pointless grandstanding.
http://www.epi.org/economic_snapshots/entry/webfeatures_snapshots_20070919/
http://online.wsj.com/article/SB125107323271252625.html
http://www.pnhp.org
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