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 Health & Beauty | January 2007 
Golden State Gamble
 Paul Krugman - NYTimes
| | California Gov. Arnold Schwarzenegger gestures as he answers a question concerning the $143.4 billion, 2007-08 state budget he released in Sacramento, Calif., Wednesday, Jan. 10, 2007. (AP/Rich Pedroncelli) |
A few days ago Gov. Arnold Schwarzenegger unveiled an ambitious plan to bring universal health insurance to California. And I'm of two minds about it.
On one side, it's very encouraging to see another Republican governor endorse the principle that all Americans are entitled to essential health care. Not long ago we were wondering whether the Bush administration would succeed in dismantling Social Security. Now we're discussing proposals for universal health care. What a difference two years makes!
And if California - America's biggest state, with a higher-than-average percentage of uninsured residents - can achieve universal coverage, so can the nation as a whole.
On the other side, Mr. Schwarzenegger's plan has serious flaws. Maybe those flaws could be fixed once the principle of universal coverage was established - but there's also the chance that we would end up stuck with those flaws, the way we ended up stuck with a dysfunctional system of insurance tied to employment.
Furthermore, in the end health care should be a federal responsibility. State-level plans should be seen as pilot projects, not substitutes for a national system. Otherwise, some states just won't do the right thing. Remember, almost 25 percent of Texans are uninsured.
To understand both what's right and what's wrong with Mr. Schwarzenegger's plan, let's compare what he's proposing with the plan he rejected. Last summer, the California Legislature passed a bill that would have created a single-payer health insurance system for the state - that is, a system similar to Medicare, under which residents would have paid fees into a state fund, which would then have provided insurance to everyone.
But the governor vetoed that bill, which would have bypassed private insurance companies. He appears to sincerely want universal coverage, but he also wants to keep insurance companies in the loop. As a result, he came up with a plan that, like the failed Clinton health care plan of the early 1990s, is best described as a Rube Goldberg device - a complicated, indirect way of achieving what a single-payer system would accomplish simply and directly.
There are three main reasons why many Americans lack health insurance. Some healthy people decide to save money and take their chances (and end up being treated in emergency rooms, at the public's expense, if their luck runs out); some people are too poor to afford coverage; some people can't get coverage, at least without paying exorbitant rates, because of pre-existing conditions.
Single-payer insurance solves all three problems at a stroke. The Schwarzenegger plan, by contrast, is a series of patches. It forces everyone to buy health insurance, whether they think they need it or not; it provides financial aid to low-income families, to help them bear the cost; and it imposes "community rating" on insurance companies, basically requiring them to sell insurance to everyone at the same price.
As a result, the plan requires a much more intrusive government role than a single-payer system. Instead of reducing paperwork, the plan adds three new bureaucracies: one to police individuals to make sure they buy insurance, one to determine if they're poor enough to receive aid, and one to police insurers to make sure they don't discriminate against the unwell.
The plan's supporters say that it would save money all the same. Those who are currently uninsured would receive preventive care, which is often cheaper than waiting until they show up in emergency rooms. Insurers would spend less money trying to weed out high-risk clients and more money actually paying for health care: the plan would require that insurers spend at least 85 percent of premiums on health care, considerably more than most insurers do now.
Still, why all the complexity? The smart, well-intentioned economists who devised the plan think they're being more politically realistic than single-payer advocates - that it's necessary to placate the insurers. But that's what Bill and Hillary Clinton thought, too - only to find that their plan's complexity confused the public, while the insurance industry went all-out to defeat it anyway.
So am I for or against the Schwarzenegger plan? That's a tough question. As a practical matter, however, I suspect that the real question is what to do after the plan founders from its own complexity. And the answer is, damn the insurers - full speed ahead.
Senator Kennedy Seeks Universal Health Plan
Kevin Freking - Associated Press
The federal government should join the state of Massachusetts in enacting universal health coverage, said Sen. Edward Kennedy, the new chairman of the Senate committee with jurisdiction over numerous health issues.
Kennedy's home state is the first to require everyone to have health insurance, just as drivers must have automobile coverage.
Kennedy has his own version of what universal health coverage would look like. He wants to extend Medicare to all. In his first hearing Wednesday as chairman of the Senate Health, Education, Labor and Pensions Committee, the Massachusetts Democrat called on 10 witnesses from all over the country to talk about how to make health care more affordable.
"Insurance coverage is down. Costs are up. And America is heading to the bottom of the league of major nations in important measures of the quality of care," Kennedy said.
Kennedy emphasized how Democratic legislators in his home state worked last year with Republican Gov. Mitt Romney in crafting universal coverage there. He wants the same spirit of compromise to take hold in Congress.
However, the hearing also showed that finding agreement won't be easy. While all the witnesses agreed that health care is becoming less affordable every year, they often had polar opposite solutions.
For example, the Business Roundtable renewed its calls to change medical liability laws and for the federal government to give consumers more information about the cost and quality of the care they get, two priorities often cited by the Bush administration.
"High health care costs are affecting job creation, and high health care costs are hurting our ability to compete in global markets," said Larry Burton, the roundtable's executive director.
But Andrew Stern, international president of the Service Employees International Union, called for much more dramatic change. He told lawmakers that it's time to recognize that employer-based coverage "is dead." The statement infers a much more active role for the federal government in funding health care.
Karen Davis of the Commonwealth Fund, which conducts health research, told lawmakers to look at Denmark as a model for the U.S. She said that nation's government pays doctors a capped rate for each of their patients, plus additional amounts when they perform a service. Each doctor handles about 1,500 patients, and they can handle walk-ins and same-day appointments. Doctors are also readily available during the off-hours, too, she said. And Denmark residents love their health care system, she said.
Most of the witnesses agreed on two points:
First, Congress should expand funding for a health insurance program that now provides health insurance to about 5 million children. The children live in families that make too much to qualify for Medicaid, but not enough to afford the monthly health insurance premiums offered through the private sector.
Second, Congress should not get in the way of states trying to expand the number of their residents who have health insurance.
The state of Massachusetts employs a combination of subsidies and penalties to make insurance more affordable and to force people to buy it. The law requires employers with 11 or more full-time employees to offer health coverage or be subject to a $295 fee for each employee, as well as face being billed for services their uninsured employees get.
California Gov. Arnold Schwarzenegger this week proposed a plan that would extend health care to 6.5 million uninsured Californians. Under the proposal, all Californians must have insurance, although the poorest would be subsidized.
Some of the committee's Republicans would like the committee to renew its attention to help for small businesses. They support a plan that would let businesses buy insurance through regional or national trade associations. The insurance would be free of many state mandates. That could make it a cheaper alternative, but would also provide scaled-back coverage in some instances.
"My primary interest is to provide health insurance reform for small businesses and working families, and I believe that 1 million more people will be insured if we enacted the (small business health plans)," said Sen. Mike Enzi, R-Wyo. |
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