Byline: Philip J. Edmundson
The headlines and editorial pages are full of hand-wringing stories about tight state budgets and rising health care costs. These are often used as excuses for the failure to bring us to a goal that everyone agrees on: increasing the number of those insured for health care. Health care quality and the number of people insured can increase without increasing state budgets. In fact, by treating health insurance in the same fashion that we treat workers compensation, we can bring about a more favorable and equitable result for all citizens of this country.
Recently enacted cuts, as well as future expected cuts in state health insurance programs, have only exacerbated the problem of the uninsured and reversed the positive gains made in the uplifting economy of the late 1990s. There are more than 40 million people in this country who live without health insurance. Many are the unemployed poor, but many more are the working poor, lower-middle-class people and students. Not only is this situation untenable on its own face, it leads to poorer health outcomes and, often, higher costs when people lack preventive care and put off health care visits only to lead to expensive emergency room visits and more expensive treatment of advanced diseases and conditions. The harm to the individual is reflected in further harm to society as workers miss more time at work and students at their schooling.
Most of the poorest Americans have health insurance through Medicaid and other programs. The unemployed, the underemployed and the working poor account for the greatest number of uninsured individuals. These are people who do not have insurance because their employers do not offer health insurance or because they have made a decision not to take their employers' health insurance in a gamble that the savings of their cost of the coverage will be greater than their medical costs. Of course, this gamble works well for most of these folks, particularly the younger ones. But when it does not work well, the states pick up the cost of hugely expensive cases like cancer treatments through the uncompensated care pools. These pools act like a tax that is paid by those that do buy health insurance because it is added to the cost of group health insurance.
The simplest way to improve upon the current situation without increasing costs is to make the purchase of group health insurance mandatory for all employers, similar to the present workers comp system. All employees and students (or at least one in each household who buys a family plan) should be forced to participate in these employer-sponsored plans, with a maximum percentage share borne by the employee of, say, 25%.
This approach will bring all of the working poor, students and others who either cannot-or choose not to-participate into the system of those insured in this country. The whole point of insurance is, of course, to spread the risk out over a greater population. By forcing all employers, employees and students to participate in group insurance plans, we balance the load more equitably among our citizens and we reduce the number of uninsured people, thereby increasing the quality of health outcomes. Further, premiums for group insurance coverage will actually go down as everyone, particularly younger people, participate in the overall cost of health care. There will be less of a drain on the uncompensated care pools paid for by hospitals and cost-shifted to the responsible employers under the present system. Some companies and some individuals are getting a free ride and, sometimes, a bum ride. That can change if everyone participates in his or her fair cost of insurance.
Government-mandated insurance programs work. For example, most states require liability insurance in order to register a car as a way of insuring that potentially reckless drivers have a means of making their victims financially whole from an accident. Further, an employer, even if not at fault, is required to assume liability for medical costs and disability benefits for on-the-job accidents under workers comp laws in every state in the nation. These laws have provided a more equitable and efficient means of managing costs for almost 100 years now. Certainly, even the most cynical critic of government programs would not argue that we eliminate these very effective government mandates.
As for the objection that a government mandate will add undue costs, this is false from a macroeconomic perspective. The costs of health care are being paid for now. No one is denied care at the door of the emergency room. It is just a very inequitable and inefficient system now. Some employers make higher profits by not providing health insurance. Some individuals gamble by staying out of the system at the expense of the rest of us. While it is possible that some teetering businesses may shut their doors because they have an added cost of providing health insurance, other responsible employers who would gladly increase the number of their employees can easily meet the demand for the products or services previously provided by these employers. If every employer had to offer coverage, then competition would be on a more level playing field.
The bottom line is that near universal health insurance is more efficient and equitable and decent for a civil society. It can be provided by private health insurers, not just by a single-payer system. Treating health insurance like workers comp is a long-term solution whose time has come.
Philip J. Edmundson is chief executive officer of William Gallagher Associates Insurance Brokers Inc. in Boston.
