Is “Shared Responsibility” Really Shared?

 

“Shared Responsibility” vs. Equitable Financing

There are two problems underlying the health care crisis in the United States:

  1. Health care is too expensive in the United States, and becoming more unaffordable with each year.
  2. It is increasingly difficult to squeeze from our health financing system the dollars necessary to provide everyone with adequate care.

“Share Responsibility”

Without seriously addressing the first problem (sky-rocketing costs), there is growing “Shared Responsibility” movement to address the second problem through some combination of employer mandates, individual mandates, and government subsidies.

This concept was enshrined in the Massachusetts Chapter 58 Reform of 2006, and has since been echoed by similar proposals in other states, in bills placed before Congress, on the platforms of Presidential candidates, and proposals by non-profit advocacy groups.

Deceptive Language

The discourse of “shared responsibility” is incredibly misleading: it leads us to believe that the proposed reforms would distribute the economic burden of health care equitably across socio-economic groups, when in fact these proposals are incredibly regressive (making low-income individuals and small businesses shoulder the largest burden).

Furthermore, there is no way to measure “shared responsibility” - it is essentially a rhetorical phrase, and leaves us with no way of telling whether one piece of legislation would “share responsibility” more than another. It is an attempt to replace the older, internationally recognized concept of equitable financing, which does allow us to measure the equitability and fairness of health care financing.

Mandates and Health Care Financing

Shared Responsibility proposals attempt to expand health care coverage by requiring employers to pay for their workers’ health insurance or pay a fine (employer mandates), require uninsured individuals at certain income levels to buy insurance for themselves or pay a fine (individual mandates), and often extend government subsidies to low-income households.

However, all of this money is actually coming from one place: YOUR POCKETS. It comes from your pocket when you are mandated to purchase a plan; it comes from your taxes when we extend public subsidies to the uninsured; and although employer spending on health care could conceivably come out of profits, in practice it is taken out of workers’ wages and/or passed on to consumers in the form of higher prices.

What is important is not who is “responsible” for health care spending, but whether that spending is progressive, flat, or regressive. Does it shift the costs of health care disproportionately onto the shoulders of the low-income, or does it distribute those costs fairly across income groups?

Equitable and Sustainable Financing

Individual and employer mandates are not unique because they force people and businesses to buy in to the health care system. All countries with universal health care require people to buy in to the health care system - usually through taxes: income taxes, payroll taxes, or from general funds raised from a range of taxes and tariffs. What is unique about mandates is that they are essentially poll taxes. When you require people to buy into a health care system through their income taxes, for example, they pay in a portion of their income - that proportion might be the same for everyone (a flat tax), or it might be larger the higher your income (a progressive tax). A poll tax, on the other hand, charges the same dollar amount for each person or business, requiring low-income groups to pay a much larger portion of their income and high-income groups to pay a disappearing percentage of their income.

The regressiveness of “sharing responsibility” is precisely what has made it a politically attractive option: low-income communities and small businesses have little political clout, and are rarely political insiders. This is the same reason that has lead many reformers towards “sin taxes,” such as taxes on tobacco, to fund health reform. These are overwhelmingly regressive taxes that don’t mobilize opposition from coalitions representing broad socio-economic groups.

However, health reforms based on regressive financing are not sustainable. As income distribution becomes more and more unequal, a larger and larger portion of society’s wealth beyond what is needed to meet basic needs is concentrated in the hands of the wealthiest. And yet, just as health care costs are sky-rocketing, the dominant reform proposals in the United States involve financing that is incapable of taxing the income of the wealthiest, and instead tries to squeeze funds out of lower-income households.

An International Standard

There is an international standard for evaluating the fairness of a health system’s financing mechanism. This standard is enshrined in the 2000 World Health Report, which rated each country according to “fairness in financial contribution to health systems”: the United States ranked 54th in fairness, behind every developed nation in the world and many developing nations.

Countries with Single Payer Health Care have much more equitable financing of health care, as they rely on taxes that allow individuals to pay a managable portion of their income into a national pool, instead of requiring residents to purchase insurance policies as a commodity or pay for health care out-of-pocket.

RESOURCES ON EQUITABLE FINANCING