Rescuing Health Care

The dramatic rescue effort to save the lives of 33 miners in Chile has riveted the world’s attention in recent weeks. It shows respect for life—that each life matters. But what would you think of one of the world’s wealthiest societies that let not just 51, but 51 million of its people go without health insurance, which for most of them means no affordable health care when they are sick? We are, of course, that nation. Two years ago, when the effort to reform the health system began, that number was millions smaller, between 45 and 47 million. But the Recession has caused it to grow quickly, according to the U.S. Census Bureau.

So millions of Americans need a rescue. Before the reform was passed into law by Congress, insurance companies in the United States could refuse to cover the chronically ill; could drop any policyholder who became chronically ill; and could set annual caps and lifetime caps on coverage. Insurers could also deny a customer’s claim for payment on the basis of an error made on the insurance application. Insurers did not allow parents to keep their uninsured, young adult children on their family policies. And insurers could raise premiums without any governmental authority so much as asking them why the increase, or why so much? And if you owned or worked for a small business, which millions of Americans do, your rates were much higher (according to one report, 18 percent higher) than larger employers paid for the same coverage. Not fair, is it? Those unfair practices meant that many small businesses had to forego covering their employees. And “medical bankruptcy” was the result for individuals and families whose premiums rose astronomically or whose coverage was dropped or who for whatever reason were uninsured.

All that--and much more--will change if the reform is implemented fully in 2014. Fortunately, some improvements have already begun. Since mid-September some of the industry’s worst practices have become illegal.

Insurers can no longer refuse the sick, drop the sick, or set lifetime caps on coverage. As long as a customer can pay the premiums, the coverage continues. Increases in premiums must be reviewed by a federal board; it sees the insurance rates nationwide when granting or refusing proposed rate hikes. Now, parents whose young adult children up to age 26 have no access to health insurance can include them on their own policies. Insurers can’t deny coverage on a technicality or application error, either; instead they must prove fraud. And the law prohibits insurers from gouging small employers, charging them much more for the same coverage large businesses offer. Now, tax credits are available for qualifying small businesses to help them offer affordable plans especially to low-wage workers.

Is this socialism, as opponents have charged? No. It is not even a “government program.” The government has hired no doctors or nurses, set up no competing insurance companies, bought no clinics or hospitals. New government-run hospitals and clinics are not part of the new reform of health care law. (Note: The federal government does all of that for veterans, however, but few pundits have called the Veteran’s Administration socialist, or tried to close the hospitals and other services they run.)

In fact, the reform passed by Congress will enable private insurers to grow their businesses—a very capitalist idea—by requiring that every adult buy minimal coverage, which each can choose. Insurers stand to gain some 51 million new customers. The reform is pro-business. It has also left in place the private, employer-sponsored plans that currently provide coverage for most Americans. But the reform tries to help workers when they are laid off, fired, or have quit and find themselves without insurance.

Eventually, individuals, families and small businesses will be able to purchase a plan from a statewide or regional “exchange.” And exchange is an aggregate of customers with real buying power, where the premiums ought to be lower than those currently offered to anyone not in a large employer’s plan.

Why should healthy Americans who would rather not buy insurance be required to buy it by law? Because it benefits the society as a whole. Anyone can become injured or ill, and the costs of care are high. Requiring health coverage is just like requiring drivers to buy liability insurance—good drivers, bad drivers, young and old—because accidents are too risky and expensive to let any driver go without it. It is like requiring all taxpayers to pay for roads (even those who don’t drive and stay at home), schools (even those without children or who school them at home or in private schools). Some goods society as a whole needs and everyone ought to share the basic costs and benefits. Imagine what our roads and our schools would be like if whoever wanted to could opt out of paying that portion of their tax?

Of course, whatever some fail to pay, others must pay. Right now, hospitals are legally obliged to perform emergency room care for the uninsured. Hospitals see it as a burden. The “federal government” reimburses them for part of that care; the rest of us make up the difference in higher hospital prices. Also, the “federal government” means the taxpayers: we already pay for health care for the uninsured—even those who could afford it but don’t bother to buy it, like some young and healthy people. Yet what we pay is outrageously expensive. Emergency room care costs much more than care in a doctor’s office; much more than routine, preventive care. It should be used only for emergencies.

With the reform, all Americans will be required to carry insurance, more equally shouldering the cost. Those with very low incomes will receive government assistance; the hope is that they can maintain their health through routine, preventive care.

Will the reform be expensive? Without the reform bill, employers routinely saw health insurance rates rise each year. The reform should reduce the size of such increases. Those who currently carry no insurance will have to buy it. One third of the uninsured are young, working Americans; they must now enter the insurance pool. Insurance only works if the pool contains a mix of health and sick; an influx of young healthy people helps everyone.

The reform is not perfect. It does not include a public option to keep competition keen and prices low. And it does not do enough to curb the constant increase in the cost of health care; that major hurdle must still be crossed. An executive order holds it to the Hyde Amendment—no federal funds for abortion. It does not allow legal immigrants to participate in the exchanges for five years; and does not allow illegal immigrants to purchase on the exchanges at all. Yet, the reform law has already removed enough waste in Medicare to prolong Medicare coverage for another decade. That’s an achievement. And for the reasons I’ve given, the reform is a vast improvement over what we had or would have without it. If voters can keep opponents from repealing the law or eviscerating it over the next few years, which they have promised to do, then no American need ever declare medical bankruptcy again.