My family physician inadvertently let the cat out of the bag during a recent visit to his office. More and more medical decisions (what procedure to have, what drug to take) are being made, he said, on the basis of cost. What the good doctor didn't say, but what is increasingly obvious, is that Americans are once more getting the health care they can afford. If you can pay for the best, you get it; if not, well, too bad.
Unlike many health systems abroad, which ration care (if they must) on the basis of critical need or some form of first-come, first-served queue, the American system, which endlessly proclaims itself the best in the world, rations care according to class and income.
For a short time, in the 1960s when Medicare and Medicaid were first enacted, and in the 1970s when increasing numbers of employers chose to medically insure their work forces, this seemed to be a problem that was going away. It's now back with a vengeance.
Under the Bush administration, Medicare is being nickel-and-dimed to death by budget cuts and incrementally higher premiums that threaten to undermine the crown jewel of Lyndon Johnson's Great Society in the name of deficit reduction.
Medicaid, the program for the poor, is absorbing similar hits; its coverage is being indirectly slashed through increasingly lower federal payments to the administering states, as well as the elimination of federal benefit standards. Instead of being regarded as a health program, it's viewed from Washington as a welfare program, and we know what conservatives think of welfare.
Meanwhile, it's dawned on the nation's employers that they have no legal obligation to cover the health expenses of their employees. What seemed, in the strong-union era of a generation ago, to be a good alternative to granting wage increases is now viewed as an unnecessary and costly expense of doing business. As a result, fewer workers each year have access to medical coverage through their workplace.
The upshot is that a steadily rising number of Americans under age 65 do not have health insurance of any kind, since the American medical system has grown almost totally dependent on the kindness of ... not strangers, but corporations. Of course, this national disgrace is well known except, apparently, in Congress and at the White House. The existence of the estimated 47 million uninsured has helped fuel at least one perverse presidential candidacy, that of Republican Mitt Romney, whose claim to have covered the Massachusetts uninsured as governor has become virtually his sole rationale for running.
Romney has indeed legislated coverage for the Bay State's uninsured, although his mandatory program makes them pay for it largely out of pocket. But his plan is not only a chimera, a non-reform reform, it doesn't even address the key weakness of the American health-care system. The real problem is not the uninsured, but the fact that those already insured are not, in fact, adequately covered. For millions of Americans, their so-called insurance barely kicks in during an average year, because it's essentially catastrophic coverage.
It's there (assuming an uncontested claim) if a serious illness strikes, leading to long-term treatment or a lengthy hospital stay. But failing that, most yearly outlays for routine health maintenance are paid for not by the insurance company, but by the insured. Annual deductibles are now running into the hundreds of dollars for each family member; co-pays, the payments still required after deductibles are satisfied, are up to as high as 20% or 30% of the cost of covered procedures; and the premiums to pay for this semi-coverage rise at the end of each December like the visit of some malevolent Santa Claus.
The American health-care system, as presently constituted, operates not for the benefit of the sick, but for the benefit of the insurance industry. According to the latest figures from the Kaiser Family Foundation, which monitors medical costs, private health-insurance premiums have increased 73% in just the last six years.
Naturally, industry spokesmen argue that the rise is tied to climbing medical expenditures. There is some truth to this claim; the American system of medicine has become overly reliant on expensive and duplicative technology. Nevertheless, the overwhelming reason for mushrooming health-insurance premiums can be laid directly at the door of the insurers themselves, whose profits, says Fortune magazine, are up 35% since 2000.
These windfall profits have made the $172 billion medical-insurance and managed-care industry -- the two functions are generally combined -- the fourth-fastest-growing sector of the US economy (just behind America's ever-popular oil companies), as well as the second-best investment on Wall Street with a 31% overall return to stockholders during the past halfdecade. Perhaps not coincidentally, an estimated 14 million Americans were said in 2004 to be spending over a quarter of their entire incomes on medically related expenses, and of those declaring bankruptcy for medical reasons in 2005, three-quarters actually had health insurance.
Clearly, this is a system that's out of control and in need of major revision. Luckily, someone in Washington is paying attention. Sen. Ted Kennedy (D-Mass.), who has dedicated much of his distinguished career in government to expand health-care access, has ended his dalliance with piecemeal reforms and come out foursquare in favor of what has been called Medicare For All.
A universal, government-administered, single-payer insurance system, the senator rightly concludes in his new book America Back on Track [Viking, 2006], prepared with the assistance of Jeff Madrick, would not only cover the uninsured, it would rescue the majority of Americans from the oppressively high out-of-pocket expenses associated with private plans and the nagging fear of losing coverage tied to employment. At the same time, it would cut administrative costs across the board and end our illogical job-based system, freeing business financially to be more competitive in the world economy.
Kennedy would phase in an expanded Medicare program in two stages, first covering those under 18 and between 55 and 65, then extending coverage to those between the ages of 18 and 55. Steps will have to be taken in the process to make Medicare more fully comprehensive and keep it adequately funded, ending the need for private supplemental policies. That cautionary note aside, this is a plan the new Democratic Congress should get behind and push toward enactment.
A bill incorporating the essential features of Kennedy's proposal, the US National Health Insurance Act (HR 676), has been introduced in the House by Representative John Conyers (D-Mich.).
Wayne O'Leary is a writer in Orono, Maine.
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