On this blog, we have debated how soon Americans will be ready for national health reform. Many observers believe that we’ll only get reform when more people are uninsured—specifically when more middle-class and upper-middle-class families find themselves “going naked.”
The chart below comes from a new Commonwealth Fund Report which shows that while two-thirds of low-income adults (earning less than 200 percent of the federal poverty threshold) were uninsured or underinsured in 2006, just 17 percent of those earning more than 200 percent of the federal poverty level (FPL) were either underinsured or uninsured at some point during the year.
“Underinsured” is defined as someone who finds himself spending 10 percent or more of his income on out-of-pocket medical expenses. (For those earning less than 200 percent of FPL, the number is 5 percent.)
The report observes that employers are continuing to back away from offering health benefits: “Between 2000 and 2005, the proportion of workers receiving employer-provided health insurance declined from 74.2 percent to 70.5 percent,” and again “middle- and lower-wage workers,” suffered most, with “the largest decreases” hitting this group.
The fact that 83 percent of those earning more than 200 percent of the
FPL are well insured explains why polls show 80 percent of Americans
saying they are happy with their health insurance—and, by and large,
don’t want to see it changed. This is why they are afraid of single
payer plans; they don’t want to be forced into something new.
Of course, their insurance may not be as good as they think it is, but
as long as they don’t become seriously ill, they won’t know that there
are gaps in their coverage. And most of the time, most middle and
upper-middle-class people are not seriously ill.
Meanwhile, low-income workers don’t have enough political clout to push
Congress to stand up to the lobbyists who will fight national health
reform tooth and nail.
Here, then, is the crucial question: how many middle-class and
upper-middle-class Americans will join the ranks of the uninsured or
seriously underinsured between now and 2009? If you believe, as I do,
that we’re heading into a serious recession, a fair number could lose
their benefits. But will it be enough to reach a tipping point?
This is why I think that the next president should have a back-up plan
for his or her first term. True national health reform will have
powerful enemies. For, as defined by the progressive candidates with
the most detailed plans (Clinton and Edwards), creating a sustainable,
affordable, high quality health care system for all will require:
- tightly regulating private insurers while forcing them to
compete, on a level playing field, with public sector insurance
(something like Medicare for all), and then letting Americans choose
whether they want to keep private insurance or sign up for the
- negotiating significantly lower prices with drug-makers and
device-makers, and insisting that they prove their products are better
than existing products before bringing them to market
- creating an independent “Center for Comparative Effectiveness
Research” which does head-to-head comparisons of tests, treatments and
products in order to determine which are most effective
- and finally, providing subsidies so that low-income and middle-income Americans can afford comprehensive insurance policies.
If the votes aren’t there to accomplish this goal, too much compromise
could be disastrous. We’ll end up where Massachusetts is today: with
“universal coverage” in name only, offering insurance that is too
expensive for many—and/or fails to provide adequate coverage.
There is no point in pretending we have national health insurance if we
let insurers sell “Swiss Cheese” policies (filled with holes) to the
middle class. And if we don’t rein in the cost of over-priced drug,
devices and treatments, tax-payers will not be able to afford the
subsidies that low-income and middle-income Americans will need. This
is what has happened in Massachusetts—which I’ve written about here and here. And Massachusetts is much wealthier than many states.
This why I think the next president should have a back-up plan for his
or her first term. If he or she doesn’t have the votes for full reform,
overhauling Medicare would be an outstanding first step, paving the way
for national health insurance in his or her second term. We need a good
model for national health insurance and Medicare could serve as a
prototype—if we cut the waste.
Right now Medicare is too expensive because it’s paying for so many
unnecessary, unproven and over-priced tests, drugs and treatments. Even
though it keeps hiking co-pays and deductibles, it’s headed for serious
But there is a blueprint for reform. The Medicare Payment Advisory
Commission (MedPac), an independent committee composed of intelligent,
well-informed people, has made excellent suggestions which include:
pursuing comparative effectiveness research; encouraging primary care
by raising fees for family doctors and other generalists; lowering
fees for some specialists; and refusing to cover products and services
unless we have medical evidence that they are effective. (See