UHCEF Article of Interest

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Taming a Medical Monster: Rising Cealth-Care Costs Force Illinois to Reckon with Future
William H. Albers (click here for link to original article)
Sunday, September 24, 2006

There is some bad news about health care in the recent Census Bureau report. The number of Americans without health insurance has risen to 46.6 million, up 1.3 million in the past year. Costs continue to escalate at a rate three times that of inflation. Employers are shifting more costs to employees, dropping coverage for retirees or going out of business altogether. Large manufacturers continue to struggle to compete in the global marketplace, since only the U.S. burdens its employers with the cost of health insurance.

Yet there is a glimmer of hope. Almost everyone now acknowledges that universal health care is a desirable goal. In a recent poll, over 70 percent of respondents favored a nationally financed system which would provide coverage for all. In the absence of any action at the federal level, grass-roots campaigns in several states, including Illinois, are attempting to address the uninsured. Legislation to reduce the number of uninsured has been enacted or introduced in several states.

In 2004, the Illinois Legislature enacted the Health Care Justice Act (HCJA). A 29-member task force was appointed to gather information about the uninsured and to issue a report by this December. The committee hired a consultant to recommend solutions. Public hearings have been held. Six proposed solutions have been submitted. The committee, which meets Tuesday, is now attempting to reach consensus on a plan to recommend to the Legislature.

Any solution must satisfy at least three major criteria. First, there must be universal, affordable coverage. Second, cost containment should be built in. Third, coverage should be comprehensive and fair.

Possible solutions for the uninsured take several approaches. Several attempt to increase the number of individuals covered by private insurance, including an employer mandate, individual mandate, tax incentives, health savings accounts (HSAs), purchasing cooperatives and vouchers. All of these would increase health care costs.

Other plans would seek to expand enrollment in Medicare or Medicaid by lowering eligibility requirements. Finally, some propose a single-payer system, similar to Canada’s, in which a government agency receives funds from individuals and employers, and reimburses providers for care.

Six proposals have been submitted to the task force. The consultant, rating each on a point system based on essential ideals, ranked single-payer the highest. It is the only solution which meets each of the criteria. Because of low administrative costs and simple reimbursement policies, a government-managed system can cover all citizens for no more than is now being spent on health care.

This alternative is highly controversial because it would eliminate private insurance. Not only would it be opposed by insurance companies, but others oppose it philosophically. “I do not favor national health insurance because it is not the American way,” one elected official recently said.

The desire to preserve private insurance, while understandable, ignores the fact that our current predicament is a result of reliance on the private, free enterprise system. For the past 12 years, since tabling of the Clinton plan, no significant reform has been seriously discussed at the federal level, and market forces have brought us to this unacceptable position.

Unregulated private insurance has not and will not solve the current problems of excess cost and 46 million uninsured. Health care is unlike any other commodity in our economy. Demand is inelastic and society tells us that everyone is entitled to the same care, regardless of the ability to pay. However, private insurance, because it needs to generate profit, tries to exclude those at high risk, thus limiting the pool and reducing payouts. The old and the poor are covered by public plans, but many middle-class working families are unable to afford private insurance (premiums for a family of four exceed $10,000 annually), and many others with chronic conditions are denied coverage and fall into the ranks of the uninsured.

To reach consensus, the task force may recommend a compromise. A hybrid proposal has been drafted which includes an employer mandate (employers above a certain size must offer health insurance) and an individual mandate (all individuals must have health insurance; those who cannot afford it may receive subsidies). Any proposal using either mandate will reduce the numbers of uninsured only if there is also an insurance mandate (insurance companies must expand the risk pool by offering insurance at the same rates to all).

The ideal solution to our health-financing problem is a federal single-payer system. Realistically, that is not going to happen for a while. A state-by-state approach is not optimal. There could be 50 different systems.

The Legislature must seriously consider the final recommendations of the task force and pass legislation. Any action which reduces the number of uninsured in Illinois (currently about 1.8 million people) will improve the health and well being of our citizens. This problem has been ignored by our leaders for far too long, and Illinois now has a chance to lead the way.

William H. Albers is a pediatric cardiologist and professor emeritus of pediatrics at the University of Illinois College of Medicine at Peoria. He lives in Dunlap.
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Universal Health Care Education Fund, 8 Beacon St, Ste 26, Boston, MA 02108-3722
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