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Consumers and Insurance Benefits Issues Paper The U.S. health care system continues to have serious problems, particularly in the area of coverage. Insurance benefits available for the health care consumers are certainly not enough to satisfy the growing needs for the qualified health care. Within the scope of this report, we will first analyze the current situation with US health care, to be followed by the discussion of the feasibility and relevance of the universal coverage option. First, 40.3 million people lack health insurance, and 29 million people have inadequate coverage. Twenty-eight million people have inadequate insurance that does not fully protect them (Donelan et al., 1996). The fraction of the population insured by employers has fallen in recent years, and many companies have shifted some or all costs of coverage to their workers. Hospital emergency rooms, long providers of last resort, face overcrowding, and many patients leave without having seen a physician. In some inner-city areas, hospitals charge for services they once delivered free.
Second, health care costs remain a problem. The United States spends more on health care than any nation, yet in many instances, has no better outcomes (Donelan et al., 1996). Although the rate of inflation in health care has slowed in recent years, this may be a result of one-time savings from managed care. The slowdown also may be short lived. Some observers believe that sagging profits in the insurance industry may soon impel premiums. If health care inflation accelerates, it would likely lead to an increase in the uninsured population.
(Donelan et al., 1996) Third, the United States faces the "corporatization of health care" and the subjection of medicine to the "morality of the marketplace" (Donelan et al., 1996). These trends include a rapid growth in for-profit health care, the takeover by large corporations of previously independent hospitals and institutions, and the emergence of corporate networks and systems. These developments have been accompanied by the dramatic growth of managed care organizations. Two-thirds of insured workers belong to managed care plans, and three-fourths of all physicians belong to managed care networks. The spread of managed care has raised concern that capitated systems induce providers to undertreat patients. In response managed care organizations have been forced to eliminate many practices that "reward" providers "for limiting care" (Donelan et al., 1996).
The states also have begun regulating managed care organizations. The battle over Medicare dates back to April 1995, when the Medicare trustees, in their annual report, warned that Medicare's Hospital Insurance (HI) Trust Fund faced exhaustion in 2007 (Feder and Levitt, 1995). This was hardly a surprise. Since 1970 the trustees had issued numerous warnings about the HI Trust Fund, and the Republicans ignored a similar report in 1994 (Feder and Levitt, 1995). Despite this, the Republicans welcomed the 1995 report as "manna from heaven," hoping it would justify the $270 billion they needed to cut from Medicare to balance the budget and reduce taxes (Feder and Levitt, 1995). In addition to this spending reduction, the Republicans proposed structural changes in Medicare.
Perhaps the most controversial of these were medical savings accounts, which would allow beneficiaries to buy inexpensive, high-deductible insurance policies and use tax-free dollars to meet their health care costs. The Republicans also wanted to change Medicare from its current system, in which beneficiaries are guaranteed a defined benefit package, to one in which beneficiaries would be entitled to a voucher that they would use to buy insurance of their own. These and other proposals were eventually incorporated into the Seven-Year Balanced Budget Reconciliation Act of 1995, which President Clinton vetoed on December 6, 1995 (National Association of Social Workers, 1997). Medicaid, the federal health care program for low-income people and people with disabilities, has also generated controversy. H.R. 2491 would have reduced spending for Medicaid by $163 billion over seven years. More important, the bill would have turned Medicaid into a block grant, removing the current guarantee of coverage to anyone who meets the program's eligibility requirements.
H.R. 2491 could have exacerbated the problem of declining coverage. Reduced funding and coverage for Medicaid would likely increase the uninsured population, particularly among children (National Association of Social Workers, 1997). Structural changes in Medicare could undermine the risk pool and place more of the risk and burdens on beneficiaries. In addition, because Medicare subsidizes "safety-net" and teaching hospitals, reduced funding could force these facilities to close and leave beneficiaries and uninsured people without access to health care (National Association of Social Workers, 1997). How might universal coverage come to the United States? Feder and Levitt (1995) proposed an incremental approach that would limit disruption while clearly improving the status quo. They identified possible steps to universal coverage that included reforming the insurance market, covering all children, and supporting home and community-based care.
This strategy could result in legislation that decreases rather than expands health care coverage; for example, without universal coverage or cost controls, insurance reform could increase the cost of premiums and cause low-income people to drop their insurance. Yet with the defeat of the HSA, Feder and Levitt believed that reform proponents had no choice but to move a step at a time. The debate over the Health Insurance Portability and Accountability Act of 1996 illustrates the difficulty of incremental reform. This act bans pre-existing-condition exclusions in group health insurance and makes it easier for employees to change jobs without losing coverage. Mental health parity was eventually dropped from the final version of the act. However, a scaled-back" version was included in Title 7 of the Fiscal Year 1997 Appropriations Bill for the Departments of Veterans Affairs and Housing and Urban Development, which President Clinton signed on September 26, 1996 (National Association of Social Workers, 1997). The history of the act suggests that reformers will have a difficult time agreeing on specific steps to universal coverage. In contrast with Feder and Levitt (1995), Aaron (1996) developed a crisis theory of universal coverage. He believed that although the possibility of national health insurance ended with the HSA, discontent with decreasing coverage and managed care will continue to grow, eventually forcing the government to treat health care as a "public utility" by regulating the system and providing coverage for uninsured people.
"Through this circuitous route, all Americans will achieve access to health care." (Aaron, 1996) Single-payer advocates also believe that discontent will grow, but they hope it will lead to a single-payer plan. Achieving universal coverage will likely require both incremental reforms and a crisis. On one hand, struggle for incremental reforms is needed to raise awareness of the problems of the health care system and the need for universal coverage. (In addition, as the battle over the Kassebaum-Kennedy act demonstrated, the struggle for incremental changes also isolates opponents of reform.) A strategy based solely on waiting for a crisis ignores day-to-day realities and issues and amounts to a strategy of inaction. On the other hand, as the history of the HSA suggests, without a crisis atmosphere, demand for fundamental change is unlikely. NASW has advocated a Canadian-style single-payer system as the best approach to universal coverage. The association might wish to re-evaluate, although not necessarily abandon, this position. In hindsight, single-payer supporters, including NASW, may have been too rigid in 1993 and 1994.
If single-payer groups had energetically supported the HSA, they might have succeeded in isolating opponents of universal coverage. The HSA did embody elements of a single-payer system and might have served as a point of transition to a single-payer system (Aaron, 1996). In reality, single-payer advocates and supporters of the HSA often worked at cross-purposes, playing into the hands of their mutual opponents. Ironically, NASW's commitment to a single-payer system may have undermined its commitment to universal coverage. The role of government should be to establish goals and parameters and evaluate outcomes, not deliver services. Applying this to health care, some researchers advocated an "entrepreneurial" system in which the government would "set the rules" - organize the market to promote competition, empower consumers, and discourage hierarchy. (National Association of Social Workers, 1997) The government would also require everyone to have health insurance (with employers and workers sharing the cost) and subsidize those who could not afford it.
US can also look at the Canadian experience. Rachlis and Kushner (1994), two leading Canadian health policy analysts and strong defenders of Canada's single-payer system, considered the implications for Canada of Osborne and Gaebler's analysis. According to Rachlis and Kushner (1994), Canada's health care delivery system is plagued by "poor planning, a lack of standards, an inefficient use of existing resources, and poor communications" (p. 6). To address these problems, they proposed incorporating managed, or "publicly financed," competition into the Canadian system of government insurance and universal coverage. (Rachlis and Kushner, 1994) The heart of this new system would be a network of government-regulated community health centers that would compete on the basis of quality of care and service.
For NASW the lesson is that the end - in this case, universal coverage - is more important than the means - a single-payer system - of achieving it. NASW has already acknowledged this point, at least implicitly. The 1996 Delegate Assembly endorsed principles for health care reform, including universal coverage, comprehensive benefits, integrated services, consumer empowerment, and progressive financing (National Association of Social Workers, 1997). NASW has long identified a single-payer system as the best way of implementing these principles, but it is not the only way. Despite its limitations, the HSA met most of NASW's criteria. The scenario described also represents a step in the right direction.
In short, NASW's commitment to a single-payer system should not prevent the association from supporting other, more politically viable approaches to universal coverage. (National Association of Social Workers, 1997) Finally, NASW might reconsider the relationship between incremental change and fundamental reform. In 1993 and 1994 NASW and other groups argued plausibly that incremental changes, such as insurance market reform, would derail efforts for universal coverage and hurt more people than they help. With universal coverage now off the immediate policy agenda, advocacy groups have focused on defending Medicare and Medicaid. In this context, limited reforms, such as the Kassebaum-Kennedy act, which even critics acknowledge would aid some people, may have more merit than they did a few years ago. Interestingly, the Wall Street Journal, the leading conservative newspaper in the United States, recognizes the potency and, from its perspective, the danger of incremental change. In an editorial, the Journal warned that "Kennedy-Kassebaum" could "fuel calls for still more government intervention to 'solve' the health care crisis" ("Hillary's New Strategy," 1996, p. A19).
Again, the central issue is supporting reforms that can lead to universal coverage. These might include coverage for children and premium assistance to unemployed workers (National Association of Social Workers, 1997). In the long run, universal coverage and a single-payer system seem inevitable. The U.S. health care system faces a contradiction between its increasing technological sophistication and its decreasing ability to provide coverage to its citizens (National Association of Social Workers, 1997). The only long-term solution is a universal system in which individuals are covered as a right of citizenship (National Association of Social Workers, 1997). Anything less - linking health care coverage with employment - raises the possibility of a two-tiered system and less than universal coverage.
Yet in the absence of a national crisis, universal coverage with a single-payer system will probably emerge only in stages. For years many advocates have assumed that universal coverage would (and should) come through a single-payer system. It may work out the other way, however. Movement toward universal coverage (insurance reform, premium assistance for unemployed workers, coverage for children, and so forth) may precede and provide a path to a single-payer system. For the time being, it makes sense for NASW to focus on steps toward universal coverage. Such a strategy is both consistent with NASW's traditional commitment to social justice and congruent with the political realities of our time.
Bibliography Aaron, H. J. (1996, January 25). Newest public utility? Health Affairs, 14(4), 8-30. Donelan, K., Blendon, R. J., Hill, C.
A., Hoffman, C., Rowland, D., Frankel, M., & Altman, D. (1996). Whatever happened to the health insurance crisis in the United States? JAMA, 276, 1346-1350. Feder, J., & Levitt, L. (1995). Steps toward universal coverage.
Health Affairs, 14(1), 140-149. Hillary's new strategy [Editorial]. (1996, July 24). Wall Street Journal, p. A19. National Association of Social Workers. (1997). National health care. In Social work speaks: NASW policy statements (4th ed., pp.
228-234). Washington, DC: NASW Press. Rachlis, M., & Kushner, C. (1994). Strong medicine: How to save Canada's health care system. Toronto: HarperCollins..
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