Time to take a new approach to health insurance
Posted on Friday, September 8, 2006
USA Today reported that the U. S. Census Bureau recently released estimates that 46. 6 million people in the United States lacked health insurance in 2005. It also stated that the percentage of people who received their health insurance through their jobs decreased to 59. 8 percent, the lowest level since 1993. Reasons cited for the decline in job-based coverage included people losing jobs, employers not offering insurance and workers choosing not to enroll.
The concept of job-based health insurance is largely American. It started on a large-scale basis following World War II when federal wage controls motivated employers to add fringe benefits such as health insurance, which were not controlled, to entice workers. The practice grew steadily following that period, and health insurance as a benefit eventually became one of the biggest issues in collective-bargaining agreements between employers and unions. In the early days of employer-sponsored health insurance, it was typical that the insurance was paid entirely by the employer, and there was "first dollar"coverage for those insured. That is, payment was made to providers without a large deductible and co-insurance.
Over the years, as health costs grew significantly both in terms of real costs and as a percent of employers' operating expenses, attempts were made to control costs by various utilization review methods and by shifting more of the cost to the employee. Utilization controls and the use of managed care, such as HMO's and PPO's, have had some positive effect but have also resulted in bitter collective-bargaining disputes. While employees, through their unions, wanted first-dollar coverage to remain as it was, employers wanted more cost controls because health-insurance expenses were getting out of line and higher than what they could afford. This conflict scenario continues to be played out today and is one of the key reasons employers are dropping health insurance as a benefit.
At this point in time, I believe we should really question the logic of our country relying on employerbased health insurance as the primary method going forward. The high cost of health care is one of the reasons companies are outsourcing their labor overseas. In the automobile industry, the high cost of health insurance in the United States favors imports over domestically produced cars in terms of vehicle price. Closer to home, we read about Wal-Mart being criticized for the level of health insurance provided to its associates. This should not primarily be a Wal-Mart issue - it is a national issue. Wal-Mart is not picked on because it is unique - it is picked on because it is a big target.
In my view, all people should be required to have health insurance - and be able to get it at affordable prices. The insurance could come from a combination of sources: employers, the government and directly from insurance companies. With our current "system," with its 46. 6 million people uninsured, the negative impact goes far beyond the people who lack the insurance. It is one of the sin gle greatest reasons why health-care costs for the rest of us are so high. When hospitals and other providers have huge levels of uncompensated care, they must balance their budgets by increasing the price of services to everyone else. So in the end, we all pay. Perhaps it is time for us to rethink public policy (if we had one ) on health insurance and move it away from being primarily employer-based. We are required to carry insurance for the privilege of driving a car. Along the same lines, perhaps we should be required to have health insurance. Massachusetts is beginning to experiment with such a program. The state requires insurance for all of its citizens, but its approach still largely relies on employers for coverage. For people not covered through employers or other sources, such as Medicare, Medicaid or private insurance, the state government plans to provide a means of affordable coverage to the rest of the population. Massachusetts has a smaller-than-average percentage of its population who are uninsured; therefore, the financial risk is somewhat limited, but the state should be complimented on taking this bold step.
• • • Thomas P. O'Neal is a retired health-care executive and a Bella Vista resident. He can be reached at toneal 6044 @ aol. com.
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