Researcher Published by CQ Press, a division of Congressional Quarterly Inc.
Will all Americans finally get health insurance?
ome 45 million Americans lacked health insurance in
2005 — a number that has been climbing for two
decades. Every month, about 2 million Americans be-
come uninsured, at least temporarily, as lower-paying
service jobs with minimal benefits replace union-dominated manu-
facturing jobs with health benefits — undercutting the nation’s
employer-based coverage system. Health costs — rising faster than
wages or inflation — also push employers to drop coverage. Past
legislative proposals for universal coverage relied heavily on govern-
Uninsured Americans often seek treatment in
ment management, drawing fatal opposition from physicians and emergency rooms, such as this asthma sufferer at
Coney Island Hospital in Brooklyn. While Congress has
been expanding coverage for the very poor, students
insurance companies. But now consensus may be forming around and lower-income workers are losing coverage. Today
45 million Americans lack health insurance.
proposals requiring most Americans to buy private insurance with
public assistance. Republican governors in California and Massa- I
chusetts back such plans, as does former Sen. John Edwards, the N
first presidential hopeful to announce what’s expected to be a THE ISSUES ......................267
slew of universal-coverage proposals in the coming 2008 election. BACKGROUND ..................274
AT ISSUE ..........................281
CQ Researcher • March 30, 2007 • www.cqresearcher.com CURRENT SITUATION ..........282
Volume 17, Number 12 • Pages 265-288
RECIPIENT OF SOCIETY OF PROFESSIONAL JOURNALISTS AWARD FOR
EXCELLENCE x AMERICAN BAR ASSOCIATION SILVER GAVEL AWARD BIBLIOGRAPHY ..................286
THE NEXT STEP ................287
March 30, 2007
THE ISSUES SIDEBARS AND GRAPHICS Volume 17, Number 12
• Can America afford uni-
267 versal health coverage? 268 Cost of Premiums Rising
MANAGING EDITOR: Thomas J. Colin
ASSISTANT MANAGING EDITOR: Kathy Koch
• Should Americans de- Employers bear most of the
pend on states to expand expense. ASSOCIATE EDITOR: Kenneth Jost
coverage? STAFF WRITERS: Marcia Clemmitt, Peter Katel
Universal Coverage Faces
• Should individuals be
required to buy insurance?
270 Financial Obstacles CONTRIBUTING WRITERS: Rachel S. Cox,
Reducing health costs is the Sarah Glazer, Alan Greenblatt,
Barbara Mantel, Patrick Marshall,
BACKGROUND big challenge. Tom Price, Jennifer Weeks
Private Insurance Coverage DESIGN/PRODUCTION EDITOR: Olu B. Davis
274 America vs. Europe 272 Dropped ASSISTANT EDITOR: Darrell Dela Rosa
U.S. physicians resisted social
Government aid helped
insurance, fearing govern- some Americans.
ment control over medicine.
Wages Lag Behind Increases
277 Sickness Insurance 273 in Premiums
The first policy was sold Premiums rose 9 percent vs. A Division of
in 1850 in Massachusetts. 3 percent for wages. Congressional Quarterly Inc.
Workplace Plans SENIOR VICE PRESIDENT/PUBLISHER:
279 Large unionized companies 275 Chronology
Key events since 1895. John A. Jenkins
led the way in coverage. DIRECTOR, EDITORIAL OPERATIONS:
Looking Into the Future of
276 Health Coverage
279 Higher costs and changing New proposals offer new CONGRESSIONAL QUARTERLY INC.
business practices eroded approaches. CHAIRMAN: Paul C. Tash
employer plans. VICE CHAIRMAN: Andrew P. Corty
Stakeholder Groups May
278 Balk at Changes PRESIDENT/EDITOR IN CHIEF: Robert W. Merry
280 Bruising attacks scuttled They fear paying more, losing
coverage. Copyright © 2007 CQ Press, a division of Congres-
the ambitious 1993 effort. sional Quarterly Inc. (CQ). CQ reserves all copyright
and other rights herein, unless previously specified
281 Should Congress enact Presi-
in writing. No part of this publication may be re-
CURRENT SITUATION dent Bush’s tax proposal for produced electronically or otherwise, without prior
written permission. Unauthorized reproduction or
expanding health care?
282 Coalitions of interest groups
transmission of CQ copyrighted material is a viola-
tion of federal law carrying civil fines of up to
support universal coverage. FOR FURTHER RESEARCH $100,000.
CQ Researcher (ISSN 1056-2036) is printed on acid-
State Steps For More Information
283 Many states are considering
285 Organizations to contact.
free paper. Published weekly, except March 23, July
6, July 13, Aug. 3, Aug. 10, Nov. 23, Dec. 21 and
expanded coverage. Dec. 28, by CQ Press, a division of Congressional
286 Selected sources used.
Quarterly Inc. Annual full-service subscriptions for
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OUTLOOK The Next Step
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287 Additional articles.
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Cover: Getty Images/Mario Tama
266 CQ Researcher
BY MARCIA CLEMMITT
THE ISSUES health-care costs skyrocket,
so does the cost of health in-
surance, whether purchased
W hen Emily, a 24-
ered a lump on her thigh,
her doctor told her to get an
by individuals or by em-
ployers. Between 2000 and
2006, health premiums for
ance jumped 87 percent, far
MRI to find out whether it outpacing inflation’s 18 per-
was cancerous. But Emily’s cent overall increase. 5
student-insurance policy “Health insurance expenses
didn’t cover the $2,000 pro- are the fastest-growing cost
cedure, so she skipped it. 1 component for employers,” ac-
Several weeks later, during cording to the National Coali-
outpatient surgery to remove tion on Health Care. “Unless
the lump, Emily’s surgeon something changes dramatical-
found a rare, invasive cancer ly, health insurance costs will
AP Photo/David Kohl
underneath the benign lump overtake profits by 2008.” 6
— with only a 20 to 40 per- “If there’s one thing that
cent survival rate. The skipped can bankrupt America, it’s
MRI could have detected the health care,” warns U.S. Comp-
cancer much sooner, improv- troller General David Walker,
ing her chances for recovery. chief of the Government Ac-
Emily pieced together Many working Americans, like Daniel and Mindy Shea, countability Office, Congress’
payment for her treatment of Cincinnati, are un- or under-insured. Young workers nonpartisan auditing arm. And
from her school insurance, are hit especially hard: In 2004, a third of Americans in response to those who say
ages 19-24 were uninsured. Only 61 percent of
two state public-aid programs Americans under age 65 obtain health insurance the United States can “grow”
and a monthly payment plan through their employers. As health costs rise and its way out of uninsurance by
that ate up more than 40 per- incomes sag, more and more companies are dropping creating more and better jobs
cent of her take-home income. coverage, especially restaurants and small businesses. with coverage benefits, he
But a year later she learned states flatly: “Anybody that tells
that annual health premiums for all stu- loss, student status, early retirement or you we are going to grow our way
dents at her school would rise by 19 because they have entry-level jobs or out of this . . . probably isn’t very pro-
percent because a few, like her, had work in a service industry or a small ficient at math.” 7
racked up high expenses. The price business. Only about 40 percent of busi- While the public often pictures the
hike led many more students to skip nesses employing low-wage or part- uninsured as being unemployed, the
purchasing the coverage altogether. time workers offer health benefits, and fact is that most un- and under-insured
Advocates say such stories are a at $11,480 a year, the average family’s Americans have jobs. Only 61 percent
good reason why Congress should health-insurance premium now costs of Americans under age 65 obtain health
enact a universal health-insurance pro- more than a minimum-wage worker insurance through their employers —
gram. While Congress has been ex- makes in a year. Young workers are down from 69 percent in 2000. And
panding public health insurance pro- hit especially hard: In 2004, more than as health costs rise and incomes sag,
grams covering the very poor — a third of Americans between the ages more and more companies are drop-
especially children and their mothers of 19 and 24 were uninsured. 2 And ping coverage, especially very small
— students and lower-income work- in the construction and service indus- businesses. Because insurers raise pre-
ers increasingly are losing coverage or tries, only 80 percent of the managers mium prices for high-cost groups —
are finding, like Emily, that they can’t have health coverage. 3 as happened with Emily’s grad-school
afford adequate coverage. And the situation is only expected coverage — small companies whose
Today, 45 million Americans — about to get worse. U.S. health spending is employees get seriously ill or injured
15.3 percent of the population — lack expected to double by 2015 — to or pregnant often find themselves priced
health insurance, usually due to job more than $12,300 per person. 4 As out of coverage altogether.
Available online: www.cqresearcher.com March 30, 2007 267
tify a regular source of medical care and
Cost of Premiums Rising Rapidly are less likely to receive preventive ser-
The average annual cost of family health coverage has risen more vices,” he said. 11 And uninsured chil-
dren admitted to a hospital due to an
than 50 percent since 2001, to $11,500, and is expected to exceed
injury are twice as likely to die and 46
$18,000 in the next five years. Most of the cost is borne by the percent less likely to receive rehabilita-
employer. tion after hospitalization, according to a
recent study by the consumer advocacy
Average Premium Cost for group Families USA. 12
Employer-Sponsored Family Coverage, 2005 The growing number of uninsured
Americans also pushes up the cost of
Worker Employer Total: $10,880 publicly subsidized health insurance like
contribution contribution Medicare, the panel said. Working-age
uninsured patients with uncontrolled
$2,713 $8,167 diabetes or high blood pressure eventu-
ally enter the health system sicker than
$0 2,000 4,000 6,000 8,000 10,000 12,000 they would have been had they been
insured. 13 And about 20 percent of those
with schizophrenia and bipolar disorder
Average Premium Cost for Employer-Sponsored are uninsured and end up in jail or prison
Family Coverage, 2001-2012 when their untreated conditions trigger
$20,000 illegal behavior, said the panel. 14
$18,650 Adding to the problem, manufactur-
ing and unionized jobs were the main-
10,000 $11,500 stay of job-based coverage, but their
$9,068 numbers have been dropping for 20 years.
“I suspect you’re going to see wholesale
0 withdrawal of employer-sponsored health
2001 2003 2005 2006 2012
care” for anyone earning less than twice
federal poverty-level wages, said National
Sources: Kaiser Family Foundation, National Coalition on Health Care
Governors Association Executive Direc-
tor Ray Scheppach. 15
Now some states are trying to create lion Americans are predicted to be unin- “Economic security, jobs, health care
new sources of affordable coverage. sured by 2013 — 11 million more than and retirement security — those are all
Massachusetts is launching a universal- today, according to a University of Cal- now one and the same issue,” says Henry
coverage plan in 2007 that has biparti- ifornia at San Diego study. 8 The increase Simmons, president of the National Coali-
san support, and Republican California will cause 4,500 additional unnecessary tion on Health Care, which includes em-
Gov. Arnold Schwarzenegger hopes to deaths per year and $16 billion to $32 ployers, unions and academic and other
enact a similar measure. At the feder- billion in lost economic productivity and groups advocating universal coverage.
al level, no new initiatives are ex- other “human capital,” the study says. 9 Pension investment funds have re-
pected this year — except for a prob- The leading public myth about the cently realized that skyrocketing health-
able expansion of children’s coverage uninsured is that “people without health care costs could bankrupt Americans’
— but many expect universal cover- insurance get the medical care they need,” future if they are not checked, says
age to be a major theme in the 2008 said Arthur Kellerman, chairman of Emory Simmons. Since Medicare covers only
presidential election. University’s Department of Emergency some of the health services needed
America’s creeping lack of health cov- Medicine and co-chairman of an Insti- by retirees, virtually all elderly people
erage constitutes a crisis for the unin- tute of Medicine (IOM) panel that has who can afford it also purchase pri-
sured, even as the skyrocketing cost of called for universal coverage by 2010. 10 vate supplemental insurance to fill the
health care makes it inevitable that even In fact, the uninsured seldom receive gaps. But pension-fund investors are
more people will be uninsured in the appropriate care at the appropriate time, finding no investments that grow fast
future. If health premiums continue ris- said Kellerman. “The uninsured are less enough to allow retirees’ savings in-
ing at their current rate, about 56 mil- likely to see a doctor or be able to iden- come to keep up with the anticipated
268 CQ Researcher
soaring cost of future Medicare and
supplemental-coverage premiums. Americans Without Health Insurance
While no one expects significant
In 25 states, between 14 percent and 19 percent of the adults ages
action from Congress until after the
2008 presidential election, federal 18-64 did not have health insurance in 2005. States with high levels
policymakers increasingly acknowledge of uninsured residents typically have minimal state and employer
a need for action. Consensus appears insurance coverage.
to be growing for some type of hybrid
universal coverage that combines Percentage of People Ages 18-64 Without Insurance, 2005
public and private insurance.
“In the past the debate got bogged Wash. N.D. N.H.
down because different groups wanted Minn. Vt.
their first-priority proposal only,” says Ore. S.D.
Ron Pollack, founding executive direc- Wyo. N.Y. Mass.
tor of Families USA. “One group would Pa.
Ill. Ind. Ohio Conn. R.I.
say, ‘Coverage must be financed through Nev. Utah Colo.
public programs,’ while another would Calif.
say, ‘There should be no government Okla. Ark. Tenn. N.C.
action in the marketplace,’ And since Ariz.
Miss. S.C. D.C.
everyone’s second-favorite program was La. Ala. Ga.
the status quo, nothing happened.”
But that decades-old logjam may 23% and over
be breaking up, as advocates on all Alaska Fla.
sides of the issue creep closer to one 14-18.9%
another in their proposals. “The very Hawaii Under 14%
grand visions on both sides” — a
single-payer government system or Source: Kaiser Family Foundation, statehealthfacts.org, 2005
relying on individuals saving money
for their own care via Health Savings So far, every Democrat who has Among Republican presidential can-
Accounts (HSAs) — “are both completely announced he or she will run for pres- didates, former Massachusetts Gov. Mitt
impossible in our political system,” says ident has declared a commitment to Romney last year backed legislation
Yale University Professor of Political universal coverage, tying the issue to intended to achieve universal cover-
Science Jacob Hacker. the country’s overall economic health, age in his state, and former House
Even President George W. Bush, a but only former Sen. John Edwards, Speaker Newt Gingrich, who has not
longtime proponent of individually D-N.C., has announced a specific cov- yet thrown his hat into the presiden-
purchased HSAs, softened that stance in erage plan. “The U.S. auto industry is tial ring, also has called for systemic
his most recent proposal. Bush’s fiscal struggling, in part because of the ris- reforms in the health-care system.
2008 budget plan would offer similar ing cost of health care that this ad- While a consensus may be devel-
tax breaks to those buying all kinds of ministration has done nothing to ad- oping on the need for some kind of
health insurance, not just HSAs, either dress,” newly announced Democratic universal coverage, many contentious
as individuals or through employers. candidate Sen. Barack Obama, D-Ill., debates remain. For example, both the
Paul Ginsburg, president of the non- said last November. “I have long pro- right and the left have criticized the
partisan research group Center for posed that the government make a California and Massachusetts plans for
Studying Health System Change, says deal with the Big Three automakers requiring individuals to buy health in-
critics rightly point out that Bush’s tax that will pay for a portion of their re- surance, just as drivers are required
break doesn’t target lower-income peo- tiree health costs if they agree to in- to carry automobile insurance.
ple who are most in danger of losing vest those savings in fuel-efficient tech- Nevertheless, many believe the
coverage. Nevertheless, “eventually, the nologies.” Health-care costs account country is on the verge of a focused,
Democrats may see that the president for approximately $1,000 of the cost national debate on universal coverage.
has given them something — a revenue of each car produced by the Ameri- “In 2008, universal coverage will be
source” to help pay for expanding ca’s largest automakers — more than up there with Iraq as top election
coverage, he says. they spend on steel. 16 issues,” says Pollack.
Available online: www.cqresearcher.com March 30, 2007 269
Universal Coverage Faces Financial Obstacles
Reducing health-care costs is the big challenge
N ow that Americans appear to be reaching some con- Lawmakers also must figure out how to ensure affordable
sensus on the need for universal health coverage, major access to all. Many Republican proposals for expanding cov-
hidden obstacles — all involving money — must be erage rely on tax subsidies to help more people buy individ-
overcome. Among those thorny financial issues are questions ual health policies. Because such coverage wouldn’t be tied to
over who is going to pay for the coverage, how can afford- a job, it would be “portable,” so employees who switch or
able access be ensured for all and how can overall health-care lose jobs would not be without insurance.
costs be reduced. But buying individual health insurance can be far more ex-
Perhaps the most controversial issue is who will pay for the pensive than purchasing through an employer because insurers
coverage. In 2005, employers paid 75 percent of workers’ health- don’t “pool” risks the way they do for workers under employer-
premium costs — about $500 billion compared to the ap- based policies. So individual purchasers pay based on their fam-
proximately $170 billion that workers paid. 1 That’s “most of ily’s health status and age, which makes it the most expensive
the money outside the government that’s spent on health care,” way to buy health insurance. Moreover, insurers won’t even sell
says Stanley Dorn, a senior research associate at the liberal coverage to some people because the companies themselves con-
Urban Institute. To work, any universal-coverage plan will have sider it unaffordable.
to either continue to use those employer contributions or come “The words ‘kinda crummy’ come to mind when I think of
up with a suitable replacement for them. the individual market,” said former Maryland Insurance Com-
That’s why many universal-coverage proposals ask em- missioner Steve Larsen, now a private attorney. For example,
ployers for financial contributions. But making those contri- a case of mononucleosis and a chronic condition like hay fever
butions both fair and adequate is difficult, mainly because is enough for some insurers to deem a potential buyer unaf-
businesses vary so widely in what they pay today: Many fordable. “And if you have any type of serious mental illness,
contribute nothing, but others pay hundreds of millions of forget it,” he said. 2 A study by the Georgetown University In-
dollars each year. stitute for Health Care Research and Policy found that a 62-
Dorn says policymakers may want to consider asking all year-old overweight moderate smoker with controlled high blood
employers to pay a set amount into a general pool but vary pressure was deemed an unaffordable risk 55 percent of the
the amount by companies’ line of business and their geo- times he sought individual health coverage. 3
graphical location. That way, companies that compete with one Buying an individual policy is more affordable for the young
another would share the same burden. and healthy, says health-care consultant Robert Laszewski. His
As policymakers gear up for that shown that universal coverage is not Institute says that in 2004 universal cov-
debate, here are some of the ques- financially feasible, he said. erage would have added about $48 bil-
tions being asked: For example, his home state of Ten- lion to the $125 billion the nation spent
nessee managed to cover about 93 on health care for uninsured people —
Can America afford universal percent of residents — a national high most of which was paid out of pocket
health coverage? — by having Medicaid cover both the by the uninsured or was delivered with-
Critics of universal-insurance pro- uninsured and the uninsurable. But “in out compensation by doctors and hos-
posals have long argued that while attempting to do this the state is going pitals. 21 A proposed universal-coverage
expanding coverage is desirable, cov- bankrupt,” he said, “and there is a plan for Maryland would raise that state’s
ering everyone would simply cost major effort to backtrack.” 19 health spending by some $2.5 billion
too much. 17 Universal-coverage ad- Universal-coverage plans generally are per year, while a Minnesota proposal to
vocates, however, argue that current “unrealistic,” said former Health and cover the state’s 383,000 uninsured is
administrative expenses are high Human Services Secretary Tommy G. projected to cost an estimated $663-$852
partly because the United States has Thompson. I just don’t think it’s in the million in new annual funding. 22
a piecemeal system with many cards. . . . “I don’t think that adminis- Most proposals for universal cov-
uninsured. tratively or legislatively it’s feasible.” 20 erage call for increased government
“It is impossible to get everybody While few politicians today will say spending. And finding those dollars
covered,” former Senate Majority Leader America cannot afford universal cover- will be tough, given that the federal
Bill Frist, R-Tenn., a transplant sur- age, both sides agree that the costs will budget and many state budgets are
geon, said in 2004. 18 State efforts have be high. A study by the liberal Urban facing substantial deficits. 23
270 CQ Researcher
20-something son found an individual health policy for $150 a tem could be drastically cut” if insurers had to take all com-
month several years ago, but “if he was 58 years old, his pre- ers rather than carefully jiggering their policies, premiums and
mium would have been $1,500,” he says. “If you’re going to marketing strategies to attract only the healthiest, least expen-
do universal health care, you can’t age-rate premiums or bar sive buyers, they said.
people based on pre-existing conditions.” A key is to cut spending on care by “learning more about
No matter how widely risk is shared, however, behind the high what works for whom,” says Wilensky. But getting that infor-
cost of insurance lurks the ever-rising cost of health care. “The mation requires investment, she says.
10,000-pound elephant in the room is cost,” says Laszewski. In addition to cutting excess services, says Laszewski, making
Health-care costs have been growing faster than the entire coverage affordable will ultimately mean sacrificing some of the
economy or any other sector in it for the past 45 years, says health-care industry’s high profits and salaries. International com-
Gail Wilensky, a senior fellow at the nonprofit health-educa- parisons show that other countries spend less on health care while
tion foundation Project HOPE and former head of Medicaid delivering the same amount or even more services to patients.
and Medicare. “They can’t go on doing it for the next 30 years” Americans don’t understand that controlling cost is crucial
without crippling other parts of the economy, she says. to sustaining the health system, let alone expanding coverage,
U.S. health-care costs are the world’s highest because of in- says Laszewski. “I’ll bet you if you told consumers that if they
surers’ high administrative and marketing costs and because Amer- lost their jobs, replacing their insurance would cost $15,000 or
ican doctors and medical suppliers enjoy higher profits and salaries $16,000 a year, they’d understand that,” he says.
than their counterparts in other industrialized countries. 4
In today’s fragmented insurance system, insurers’ efforts to attract 1 Aaron Catlin, Cathy Cowan, Stephen Heffler and Benjamin Washington, “Na-
the healthiest, cheapest customers add extra overall costs, point out tional Health Spending in 2005: The Slowdown Continues,” Health Affairs,
January/February 2007, p. 148.
Paul Menzel, a philosophy professor at Pacific Lutheran University 2 Quoted in “Reinsurance for Individual Market Pricks Up Many Ears,”
in Tacoma, Wash., and Donald W. Light, professor of comparative Medicine & Health, “Perspectives,” Oct. 28, 2002.
health care at the University of Pennsylvania. 5 For example, they 3 “Hay Fever? Bum Knee? Buying Individual Coverage May Be Dicey,”
wrote, a Seattle survey found that 2,277 people were covered by Medicine & Health, June 25, 2001.
4 For background, see Marcia Clemmitt, “Rising Health Costs,” CQ Researcher,
755 different policies linked to 189 different health-care plans. April 7, 2006, pp. 289-312.
“The $420 billion (31 percent!) paid [annually] for manag- 5 Paul Menzel and Donald W. Light, “A Conservative Case for Universal Access
ing, marketing and profiting from the current fragmented sys- to Health Care,” The Hastings Center Report, July 1, 2006, p. 36.
“The public sector has fewer re- A 2006 Massachusetts law requir- ized nations with universal coverage
sources” now compared to when the ing every resident to purchase subsi- spend less per capita on health care
issue was debated previously, says dized coverage — unless that cover- than the United States. In 2004, for in-
Ginsburg, of the Center for Studying age is “unaffordable” — is already stance, the United States spent $6,102
Health System Change. A lack of will- running into an affordability crisis, said per capita on health care while Aus-
ingness or ability to commit new rev- Jonathan Gruber, a professor of eco- tralia spent $3,120; Denmark, $2,881;
enue has doomed at least one state nomics at the Massachusetts Institute Germany, $3,043; Luxembourg,
plan, he adds. When Maine launched of Technology. 24 The state has said $5,089; Sweden, $2,825 and Switzer-
a universal-coverage initiative in 2003, it would subsidize only those who land, $4,077. 26
the state “put almost no money in and earn up to three times the federal Not only are Americans paying more
got almost nothing out,” he says. poverty level (about $30,000 for an in- for health care than those in any other
The Democratic presidential hopefuls dividual and $60,000 for a family of industrialized country, but they are get-
who have called for universal coverage four), said Gruber. But “at three times ting lower-quality care — by some mea-
“will be desperate for revenues when poverty, health insurance is still ex- surements — than consumers in coun-
they put out their plans,” says Robert pensive. . . . It’s not feasible to have tries with universal coverage. While new
Blendon, professor of health policy and someone spend 20, 30 or 40 percent drugs and technology have improved
management at the Harvard School of of income on health insurance.” 25 longevity and quality of life for many
Public Health. “Money is going to be While some say universal coverage Americans, the United States is ranked
hard to come by. We’ve got defense is too expensive for America, many 37th by the World Health Organization
costs that are very, very high.” economists point out that industrial- in overall quality of care, based on adult
Available online: www.cqresearcher.com March 30, 2007 271
no doubt that you can have universal
Private Insurance Coverage Dropped coverage without substantially raised
costs,” says Simmons, president of the
The percentage of people with private health insurance dropped by National Coalition on Health Care. “Every
8 percentage points from 1987 to 2005 (right). At the same time, other country does it” already, he says.
the percentage of people insured by either government or private Universal coverage is needed to
insurance dropped 3 percentage points (left). As people lost private “get a [health-care] market that works,”
coverage, government picked up the slack to keep as many people he adds. “You can’t fix the issue of
insured as possible. cost” — which affects everyone, in-
sured and uninsured — “without uni-
Percentage of Uninsured People by Type of Coverage versal coverage,” he says. Absent a
100% universal-coverage requirement, “what
markets do is avoid risk,” such as
80 2005 when insurance companies develop
75.5% marketing and risk-assessment proce-
60 67.7% dures to avoid selling policies to sick
40 people. “It’s an open-and-shut case that
universal coverage is cheaper and bet-
20 ter” than the status quo.
0 Getting everyone covered and
Total Public and Private Private Insurance specifying uniform benefit packages
would create a huge, immediate, one-
Source: U.S. Census Bureau, “Historical Health Insurance Tables” time financial saving, Simmons says.
“Automatically, you’re talking about
and infant mortality rates. The United the ladder of opportunity . . . the cor- hundreds of billions of dollars” in sav-
States also ranks 24th among industri- nerstone of a democratic society, al- ings that “every other nation has al-
alized nations in life expectancy. 27 lowing people to . . . be productive ready captured,” partly accounting for
Those stark realities, coupled with and to take advantage of the oppor- lower costs abroad.
the fact that U.S. health-care costs are tunities of upward mobility.” 30
spiraling out of control, lead a grow- Others argue that having more than Should Americans depend on
ing number of analysts to argue that 15 percent of the population unin- states to expand coverage?
the United States can’t afford not to sured means that all Americans pay In recent years, states have been far
have universal coverage. more for health care. “The uninsured more active than the federal government
“I’ve always believed universal cov- are one of the inefficiencies” driving in expanding health coverage. Massa-
erage would carry significant costs and health costs into the unaffordable range, chusetts and Vermont passed universal-
would bring daunting . . . economic says Robert Greenstein, executive di- coverage laws in 2006, and Illinois
challenges,” said Harold Pollack, asso- rector of the liberal Center on Budget created a program to cover all children.
ciate professor at the University of Chica- and Policy Priorities. Other proposals are being discussed in
go School of Social Service Adminis- “Reining in health-care cost growth” state legislatures this spring. 31
tration. 28 But recently, he says, he has — which soared by 7 percent last year States’ uninsured populations vary
decided “there is no alternative” to alone — is a prerequisite for universal widely around the country, so they are
pushing forward with universal insur- coverage, says Robert Laszewski, an in- the natural venue for expanding cov-
ance. “The current system is no longer dependent health-care consultant and a erage, say some analysts. “All states face
able to accomplish important things we former health-insurance executive. Health- different challenges in reducing the num-
expect from our health care.” 29 insurance premiums grow even faster ber of uninsured residents,” so “im-
Former Gov. John Kitzhaber, D- than costs, and neither government sub- posing a one-size-fits-all program” at
Ore. — an emergency-room physician sidies nor the incomes of lower-wage the federal level “will not work,” said
who now heads the Oregon-based working people can keep up with the Arthur Garson, dean of the University
Archimedes Project, a health-reform current growth rate for long, he says. of Virginia School of Medicine. 32
initiative — agrees. Economic growth If coverage expansion were accom- With no national consensus emerg-
depends on good health for all, he panied by efforts to rein in spending ing on how to cover the uninsured,
said. Good health “is the first rung on and improve care, “there’s absolutely encouraging state action is the only way
272 CQ Researcher
forward, said Stuart M. Butler, vice pres- were uninsured, compared to unin-
ident for domestic and economic pol- Wages Lagged Behind surance rates in other states of 25 per-
icy at the conservative Heritage Foun- Increases in Premiums cent and higher. And the state was al-
dation. “Successful welfare reform started ready spending more than $500
in the states,” and coverage could be Workers’ wages rose less than million annually to compensate hos-
expanded by removing federal road- 3 percent from 2004 to 2005 pitals for treating the uninsured. 36
blocks and offering federal incentives while health-insurance “Federal action ultimately [will] be es-
to states “to try proposals currently bot- premiums jumped 9 percent. sential,” said Shoshanna Sofaer, profes-
tled up in Congress.” 33 sor of health policy at Baruch College
In California over the past year, the Comparing Increases in in New York City and a member of the
Republican governor, Democratic leg- IOM insurance panel. States don’t have
Health Insurance Premiums
islators and top executives from the the steady financing or the legal flexi-
and Workers’ Earnings,
state’s largest private insurer all pro- bility to expand coverage to all of their
posed universal-coverage plans, 2004-2005 residents. One roadblock, she said, is
though none has yet been enacted. 10% 9.2% the federal Employee Retirement In-
The California-based Kaiser Foundation come Security Act (ERISA), which lim-
Health Plan offered a plan that would its states’ power to control insurance. 37
provide “near-universal coverage” with- 6 “The best thing states can do is set
in two years to California’s 5 million 4 2.7% up role models,” says Brandeis Univer-
uninsured — who represent a whop- 2 sity Professor of Health Policy Stuart Alt-
ping 10 percent of all uninsured Amer- 0 man. “You can’t design true national
icans. “Despite the greater dimensions Premiums Workers’ health insurance state by state, because
of the problem in California, we be- earnings you’d get past a few states, then stop.”
lieve that a state-based solution is pos- While states’ efforts are important,
sible,” wrote Kaiser executives. 34 Sources: Alliance for Health Reform; says the National Coalition on Health
While federal laws restrict states’ Kaiser Family Foundation and Health Care’s Simmons, “we don’t think that
ability to expand Medicaid and set Research and Educational Trust, 2005 any single state, no matter how large,”
rules for employer-sponsored cover- can accomplish universal coverage of
age, that hasn’t stopped some states is supported by both Republicans, who’ve its residents “without major federal
from expanding coverage, says Stan- traditionally been skeptical of universal policy changes.” Many governors agree
ley Dorn, a senior research associate coverage, and liberal Democrats who and acted on their own only because
at the liberal Urban Institute. In the favor a single-payer system, he says. they’re frustrated with a lack of fed-
early 1990s, for example, Minnesota The flurry of major state proposals eral action, he says.
and Washington state both “imple- shows the nation is ready for change, Furthermore, even if all states
mented coverage systems that suc- he says, even though “the federal gov- achieved universal coverage, the result
ceeded brilliantly,” he says. ernment has been dysfunctional on do- would be a cost-increasing nightmare
Regardless of whether they succeed mestic issues for many years.” He pre- — the last thing the health system
completely, state initiatives provide dicts “a few more states” will expand needs, says Simmons. “If you think we
models and impetus for future national coverage soon, but many states are lim- have administrative complexity now,
efforts, say many analysts. “The state ited in what they can accomplish. imagine 50 individual state programs.”
action provides great momentum,” says All states can’t emulate the Mass-
Dorn. achusetts model, said James J. Mon- Should individuals be required to
“States are hugely important,” says gan, chief executive of the New Eng- buy health insurance?
Hacker at Yale University. “When two land-based hospital and physician At the turn of the new century, few
Republican governors” — Romney and network Partners HealthCare, because people were advocating that all Ameri-
Schwarzenegger — “break with the na- Massachusetts is very different from cans be required to buy health insur-
tional party to propose universal cov- most other states. 35 ance, but in recent years such voices
erage, that’s a huge boost,” he says. “We started with half the problem have grown louder. With interest grow-
Ginsburg, of the Center for Studying solved,” said Mongan, a former con- ing in a system that subsidizes the cost
Health System Change, says the 2006 gressional health aide who also worked of private coverage, advocates say un-
Massachusetts law has been a catalyst in the Carter administration. Only about less everyone participates no functioning
— “the answer to political gridlock.” It 10 percent of Massachusetts residents insurance market can develop. Insurance
Available online: www.cqresearcher.com March 30, 2007 273
is designed to even out annual health health insurance shouldn’t be any dif- courages it by imposing a financial
costs for everyone by having everyone ferent, notes Tanner. But economists penalty on those who wait to sign
pay similar amounts into an overall pool say there are some key differences be- up, he says.
each year, whether they are healthy in tween the two kinds of coverage. For The drug benefit “created a huge
that particular year or facing an unex- example, few people will drive more pool of people from age 65 to 95,”
pected sickness or injury. recklessly just because they have auto he explains. “And you allowed peo-
But opponents on the left say man- insurance. But the prevalence of gen- ple in at the same rates no matter
dating insurance is unfair to lower- erous health insurance has been what their age or pre-existing condi-
income families who can’t afford even shown to encourage patients to seek tion, so long as they signed up as
heavily subsidized private insurance. — and doctors to prescribe — more soon as they became eligible.”
And conservative critics say a re- and sometimes unnecessary or unduly The proof of that approach is in
quirement to purchase is undue gov- expensive treatments. 40 the pudding, he says. Private insurers
ernment intrusion into private life. Nevertheless, policymakers from have “flooded the market with plans,”
“You can talk until you’re blue in both parties increasingly consider and people are not faced with steeply
the face about risk pools and actuari- mandating health insurance “an es- escalating premiums as they age or
al tables and all the green-eyeshade sential accommodation to limited pub- their health worsens, he says.
reasons that the health insurers need lic resources,” explains Ginsburg of
everyone to participate in order to write the Center for Studying Health System
affordable policies. I understand all that,
and I basically don’t care,” wrote lawyer
and policy blogger David Kravitz about
Change. In 2004, for instance, then-
Senate Majority Leader Frist said “high-
er-income Americans have a societal
Massachusetts’ new buying requirement. and a personal responsibility to cover
“It is fundamentally wrong to force peo- in some way themselves and their chil-
ple to buy an expensive product in the dren.” 41 If those who can afford cov- America vs. Europe
private market, simply as a condition erage don’t enroll, the government
of existing in this state,” he wrote on
the Blue Mass Group policy blog. 38
Monitoring who is obeying the re-
should enroll them automatically in a
high-deductible insurance plan that cov-
ers catastrophic expenses and obtain
F rom the beginning, America differed
sharply from other industrialized
nations in its approach to health insur-
quirement and determining subsidy the payment for the premiums at tax ance. While Europe turned to social in-
sizes creates “one more aspect of citi- time, Frist said. And the mandate should surance, in which all residents pay into
zens’ lives” that government would apply to the “very, very rich” initial- a common fund that provides popula-
monitor, complains Michael D. Tanner, ly, then expand over time, he said. 42 tion-wide benefits, American physicians
director of health and welfare studies Requiring everyone to buy coverage resisted, fearing such an approach would
at the libertarian Cato Institute. A man- ensures that those with lower medical encourage government influence over
date would also be extremely difficult needs will pay premiums alongside those the practice of medicine. 43
to enforce, he says. with expensive illnesses, analysts point The development of the American
“An individual mandate crosses an out. “If the government says an insur- workplace-based insurance system
important line: accepting the principle ance company must take whoever comes echoed “themes that distinguish the
that it is the government’s responsi- their way, they couldn’t predict risk and more general history of the United
bility to ensure that every American might go broke” if only sicker people States,” wrote Rosemary A. Stevens,
has health insurance,” said Tanner. “In enrolled, says Marian R. Mulkey, senior University of Pennsylvania professor
doing so, it opens the door to wide- program officer at the California Health- emeritus of the history of science. So-
spread regulation of the health-care care Foundation, which funds health- cial insurance was trumped by “the
industry and political interference in care research. A mandate like the one commitment to private solutions to
personal health-care decisions. The re- Schwarzenegger proposes “relieves this public needs” and “the belief in local
sult will be a slow but steady spiral concern of insurers, who are business- initiatives wherever possible.” 44
downward toward a government-run es and must be on solid financial foot- As the 19th century ended, Euro-
national health-care system.” 39 ing to offer benefits.” peans leaned more toward “social
Advocates of a mandate argue that The Medicare drug benefit works democracy” — the belief the free mar-
if government can require automobile similarly, says health-care consultant ket cannot supply certain human ne-
insurance to ensure that costs are paid Laszewski. Medicare doesn’t require cessities, such as a minimum income
when drivers cause accidents, then seniors to enroll but strongly en- Continued on p. 276
274 CQ Researcher
employer contributions to insurance 1996
Most European countries adopt
income-tax free, enabling companies
to offer health insurance to attract
Congress enacts Health Insurance
Portability and Accountability Act to
compulsory health insurance. workers. make employer-provided coverage
transferable between jobs and more
1895 • accessible to the self-employed.
German physicist William Roentgen
discovers the X-ray, ushering in the 1997
age of modern medicine and rising
Health spending and consump-
Congress enacts State Children’s
Health Insurance Program (SCHIP)
tion rise rapidly, and work- to help states cover children from
1920 place-based health insurance low-income families.
Public commissions in California, spreads. Medicare and Medic-
New Jersey, Ohio and New York aid are enacted for the poor •
recommend universal state health and elderly.
• 2000s As health costs
and the ranks of the uninsured
The private Committee on the Cost rise, Congress mulls new tax de-
of Medical Care (CCMC) endorses
developing private health insurance;
Worries grow about health care
ductions and credits to help con-
sumers buy coverage; interest
American Medical Association becoming unaffordable. Presi- grows in compulsory insurance.
(AMA) opposes the idea. dents Nixon and Carter propose
universal health coverage and 2002
1929 health-care price controls. Cost Congress enacts Health Care Tax
The first hospital prepayment in- controls reduce federal spending Credit, available to whose who
surance plan is launched for on Medicare, but doctors and lose their jobs due to foreign
school teachers in Dallas, Texas. hospitals shift their costs to em- competition.
• Massachusetts enacts universal-
1930s-1940s coverage plan requiring all residents
to buy health insurance. . . . Ver-
Private hospital prepayment
insurance spreads around the
1990s Federal govern-
ment expands Medicaid and en-
mont enacts voluntary coverage
plan with subsidized insurance
country, as hospitals worry acts a new children’s health and medical cost trimming. . . .
they’ll go under when poor program, but employers begin Maryland plan to force large em-
patients don’t pay. Congress dropping health benefits. Wash- ployers to supply coverage or pay
and legislatures in at least eight ington lawmakers shy away into a state insurance pool is
states debate but don’t enact from large-scale coverage ex- struck down in federal court.
compulsory health insurance. pansion after President Clinton’s
ambitious attempt to enact uni- 2007
1935 versal coverage fails. President Bush proposes replacing
Attempts to include health coverage the tax break received by those
in the new Social Security Act are Sept. 22, 1993 with employer-based coverage
unsuccessful. Clinton unveils sweeping plan to with a tax deduction available to
reform U.S. health-care system. everyone. . . . Gov. Arnold
1943 Schwarzenegger, R-Calif., proposes
The first measure calling for com- Sept. 26, 1994 universal, state-subsidized health
pulsory national health insurance After a year of fierce debate, Senate insurance. . . . Advocates press
is introduced in Congress. . . . leaders declare Clinton’s bill dead. Congress to expand SCHIP to
National War Labor Board declares more children and parents.
Available online: www.cqresearcher.com March 30, 2007 275
Looking Into the Future of Health Coverage
New proposals offer new approaches
W ith the number of uninsured Americans creeping — “as a reasonable premium for their plan,” he laments. “The
inexorably upward, universal coverage is likely to chances that the law will ever be implemented are slim.”
become a hot political issue in the 2008 presiden- California — In January, Gov. Arnold Schwarzenegger un-
tial campaign. While former Sen. John Edwards, D-N.C., is the veiled a universal-coverage plan that also would require all res-
only candidate to have offered a specific plan so far, the state idents to buy a minimal level of coverage. Public programs
and federal plans being considered contain some new wrin- would be expanded to cover the lowest-income Californians,
kles that might help policymakers reach a compromise on how and subsidies would help others buy private insurance.
to expand coverage. Insurers would offer policies to all comers, at state-approved
Massachusetts — A 2006 state law requires all residents to rates. Employers with 10 or more workers would pay at least 4
buy insurance, beginning this year, or pay a penalty. Massachu- percent of payroll for health insurance or pay that amount into
setts will subsidize premiums for those earning under 300 percent a state pool. To trim costs, insurers would be required to spend
of poverty level (about $60,000 for a family of four) and waive at least 85 percent of every premium dollar on patient care.
the coverage requirement if no “affordable” policies are available. To entice more hospitals and doctors to participate in Cal-
Coverage will be sold through a state-operated market, the ifornia’s subsidized Medi-Cal program, the state would increase
Massachusetts Health Insurance Connector, and the state is ne- payments to participating providers. This would also eliminate
gotiating with insurers to get affordable premiums for com- what Schwarzenegger calls the “hidden tax” — low public-pro-
prehensive policies, something that’s proven to be more of an gram payments and uncompensated care for uninsured people
uphill struggle than lawmakers imagined. that providers now pass along as higher prices to paying pa-
“Massachusetts decided consciously not to grapple with rising tients. The Medi-Cal pay boost would be funded by a tax on
health-care costs and decided to do it later,” says Paul Ginsburg, non-participant doctors and hospitals.
president of the Center for Studying Health System Change, a Some employers are skeptical of the plan, which must be
nonpartisan research group. “Now they’re having a problem with approved by the California legislature. The plan would help
the bids coming in higher than expected.” companies that already provide health benefits because it would
That decision may have doomed the plan, says Robert force their competitors to ante up for health care also, said
Laszewski, a consultant and former insurance executive. An- Scott Hauge, president of the advocacy group Small Business
nual health-insurance premiums for the average Massachusetts California. But that could be perceived as unfair by some com-
family had already reached $15,000 a few years ago — high- panies with young workers, whose “invincibility-of-youth syn-
er than the current national family average of $12,000 — in drome” means they’d prefer cash to health benefits they be-
part because of the state’s high-cost academic medical centers lieve they don’t need, he said. 1
and plethora of physicians, he points out. “Yet the Massachu- Insurers are expected to balk at being forced to spend 85
setts legislature came up with $200 a month” — $2,400 a year percent of premiums on patient care, says Laszewski. “Wellpoint,
Continued from p. 274 when people lost their livelihood American liberals argued that social in-
to purchase food, clothing, housing through unemployment, disability or surance for health would unite the en-
and access to health services. Gov- retirement. In 1883, Germany added tire population into a single risk pool and
ernments were seen as necessary to health care to its social-insurance of- serve everyone’s long-term interest, ac-
guarantee those needs, explains Thomas ferings, though with a twist. Unlike cording to Bodenheimer. Though younger
Bodenheimer, adjunct professor of com- other programs, health insurance was people would pay for older people, and
munity medicine at the University of run by privately operated “sickness healthy people for sick people, this would
California, San Francisco. 45 funds.” Social insurance, including even out in the end, progressives argued,
In the late 1800s a conservative for health care, soon became the since the young will one day be old and
German government enacted the first European norm. the healthy injured or sick. 46
social-insurance programs in hopes of In the United States, lawmakers de- But conservatives answered that it’s
heading off a wholesale movement to- bated social insurance for decades and unfair to force young people to sub-
ward more radical socialism with gov- ultimately used it for a few programs. sidize health care for older, sicker
ernment ownership of industries. Sup- But health insurance remained a vol- neighbors and that people will spend
ported by mandatory contributions from untary purchase, managed by private more prudently on medical care if
all citizens, the first programs paid out companies. they buy their own.
276 CQ Researcher
California’s biggest [for-profit] insurer, Bush’s proposed deduction has a much
puts 80 cents on the dollar toward care, higher dollar value for higher-income
Getty Images/Ethan Miller
holding on to a full 20 cents for prof-
its and administration,” he says. Never- The Edwards plan — The presidential
theless, “everybody knows that it can candidate also proposes an individual
be done for less. In Medicare, 95 cents mandate, but the requirement would only
on every dollar goes to patient care.” kick in once new, affordable coverage
President George W. Bush — The options are available and employers are
president wants to replace the current either contributing to a general pool or
unlimited government subsidy for em- helping their own workers buy coverage
ployer-sponsored health coverage with through new, regional nonprofit pur-
a flat standard deduction available to Former Sen. John Edwards, D-N.C., is the chasing pools known as “health markets.”
everyone who buys at least catastrophic first presidential candidate to propose a The federal government would help
detailed universal health-care plan.
health coverage on their own or through states or groups of states set up such
an employer. Federal funds would be available for states to im- health markets, which would offer a choice of competing health
prove their markets for individual health policies, where people policies. Unlike most current proposals, the health markets would
would shop for non-workplace coverage. offer all buyers — in addition to private coverage — a public-
Economists praise Bush for proposing to replace the gov- insurance plan modeled on Medicare.
ernment’s current subsidy for health insurance — the exclu- “Let’s have real competition between public and private sys-
sion from taxable wages of employer-sponsored coverage — tems,” says Yale University Professor of Political Science Jacob
with more widely available assistance. But some critics on both Hacker, who consulted with Edwards on the proposal. “If you
the left and right agree the proposal doesn’t target the people put a level playing field between the public and private sec-
most in need of subsidies and doesn’t help create enough af- tors” — as in the health markets — the public programs “might
fordable coverage for them to buy. turn out to be cheaper. If that happens over time, people would
“Replacing the current tax treatment with a new standard vote with their feet,” he says.
deduction is a big step in the right direction,” said Heritage
Foundation Vice President Stuart M. Butler and Senior Policy 1 Renuka Rayasam, “Schwarzenegger Health Plan Raises Doubts.” U.S. News
Analyst Nina Owcharenko. Nevertheless, “an even better step & World Report, Jan. 10, 2007, www.usnews.com/usnews/biztech/small-
would be to replace it with a tax credit,” which would help 2 Stuart M. Butler and Nina Owcharenko, “Making Health Care Affordable:
lower-income families who are least likely to have insurance, Bush’s Bold Health Tax Reform Plan,” WebMemo No. 1316, Heritage Foun-
they said. Unlike tax credits, which benefit everyone equally, dation, Jan. 22, 2007.
The first such policy was sold in The mining, railway, and lumber
Sickness Insurance 1850 by the Massachusetts-based industries led the way in establishing
Franklin Health Assurance Company. insurance plans more similar to mod-
For a 15-cent premium, the policy paid ern HMOs (health maintenance or-
T he private market for what we
call health insurance today —
policies that pay medical bills — grew
$200 if its holder was injured in a rail-
way or steamboat accident. 47
Some employers offered sickness
ganizations), paying medical costs.
Their workers faced serious health
risks and labored in remote locations
slowly, mainly because health costs insurance as a worker benefit. In 1910, where traditional care wasn’t avail-
were low, even in the early 20th cen- the catalog store Montgomery Ward able. So companies established clin-
tury. Before 1920, there were virtually and Co. established a group insurance ics that prepaid doctors fixed month-
no antibiotics and few effective drugs, plan to pay half of an ill or injured ly fees to provide care.
and X-rays had been discovered only employee’s salary. 48 In 1918, the Dal- Nevertheless, between 1910 and 1920,
in 1895. Most of the financial burden las, Texas, school system established near the end of the so-called Progres-
from illness was due to lost wages, sickness insurance to protect teachers sive Era in American politics, “govern-
so insurers sold income-protection against impoverishment during the great ment-sponsored health insurance
“sickness” or “accident” insurance. influenza epidemic. 49 seemed a practical possibility in the
Available online: www.cqresearcher.com March 30, 2007 277
Stakeholder Groups May Balk at Changes
They fear paying more, losing coverage
A s costs and the ranks of the uninsured soar, there’s ance in favor of a government-run universal plan modeled on
plenty not to like about the current health-care sys- Medicare are politically impossible today. However, most re-
tem. Nevertheless, many longtime stakeholders fear form plans would force insurers to cover potentially sicker ben-
change. As has often happened in the past, insurance compa- eficiaries than most do today and would tighten rules for sell-
nies, health providers, employers and those with expansive ing and marketing insurance policies.
work-based health coverage all may balk at the changes uni- Many insurers mistrust changes because the current em-
versal coverage may bring. ployer-based system works well for them by weeding out the
“You often see interest groups wearing a cloak of ideology,” sickest populations, said former Rep. William Thomas, R-Calif.,
saying they oppose a reform plan on economic or philosophical who chaired the House Ways and Means Committee. Employed
grounds when they’re really protecting their money, says Stanley people “have to get up every morning, go to work and carry
Dorn, a senior research associate at the liberal Urban Institute. out difficult and complex tasks.” They’re essentially prescreened
For example, he says, during the bitter debate over President to be, on average, healthier than the general population and
Bill Clinton’s universal-coverage plan in the early 1990s, “you had thus easier to cover and still earn profits, he said. 3
companies that didn’t provide insurance to their workers and Insurers also distrust government-run “insurance exchanges”
knew they could lose money” if the proposal succeeded. “But in many universal-coverage plans that would establish standard
they didn’t talk about that. They talked about how evil it would benefit packages, ensure affordability and replace insurers’ mar-
be for the government to take over the health system.” keting with government-scrutinized plan descriptions. Insurers
Various employer groups are likely to weigh in on both sides have “traditionally hated” government limits on their market-
of the debate. Those who offer health coverage as a benefit today ing, says Dorn.
are more likely to embrace the change, although they may still be Finally, virtually all economists say any health system re-
hesitant to endorse all universal-coverage proposals, says Paul Gins- form must include cost cutting, including reining in salaries and
burg, president of the Center for Studying Health System Change, profits of doctors, hospitals and drug manufacturers. Some pro-
a nonpartisan research group. “They’d like to get out of the busi- posals ask providers to put money in up front to support cov-
ness of coverage long term, but the issue has always been whether erage proposals. Providers always push back against such steps.
they’d end up paying more in taxes” for a new universal cover- For example, when Democratic Maine Gov. John Baldacci
age system than they spend now to provide benefits, he says. unveiled a universal-coverage program in 2003, he included a
Large, unionized employers like U.S. automakers initially tax on insurance premiums along with both voluntary and
supported the Clinton plan in 1993, said Walter Mahan, former mandatory price caps on many health services, without which
vice president for public policy of DaimlerChrysler Corp. 1 Em- the governor said the program could not survive. Maine’s hos-
ployers who didn’t offer health benefits strongly opposed the pitals said they couldn’t survive having prices capped.
Clinton plan, which, like many universal-coverage plans today, “That cannot happen . . . without irreparably harming Maine’s
asked all businesses to chip in, including those that didn’t offer hospitals,” said Warren Kessler, a consultant and former head
health benefits before. of the Maine General Medical Center in Augusta. 4
Caught somewhat off guard by ferocious opposition from busi- Finally, those who currently have good coverage are sensi-
nesses that didn’t offer coverage — like restaurants and soda tive to any proposal that might make their own insurance worse
manufacturers — architects of the Clinton plan reduced the pay- or cost more. Interest groups like insurers and doctors who
ments required from companies that had not previously offered oppose any new plan “just have to play on the public’s fear
coverage and hiked the amount asked from employers who of- of losing what they now have,” says Dorn.
fered coverage. Complaining of unfairness, unionized employers
then pulled their support, said Mahan. The bad news for the 1 “Universal Coverage: It Can’t Happen Here . . . Or Can It?” Medicine
new crop of reformers: More and more companies have been & Health Perspectives, March 31, 2003.
2 Quoted in ibid.
dropping coverage since then, so the constituency of business- 3 Quoted in “Thomas Takes Aim Again at Tax-Favored Employer Coverage,”
es not offering coverage “is stronger now,” he said. 2 Medicine & Health, Feb. 16, 2004.
Insurers may have the biggest stake in the current system. 4 Quoted in “Baldacci Says Everyone Must Give a Little to Fund Care,”
Most analysts say proposals that would abolish private insur- Medicine & Health, May 12, 2003.
United States,” according to the Uni- New York — recommended universal coverage was adopted they would lose
versity of Pennsylvania’s Stevens. In state-sponsored health insurance. 50 control and cash. The chairman of Ohio’s
1920, expert panels in four large states However, doctors, hospitals and in- commission complained about “the con-
— California, New Jersey, Ohio and surance companies feared if universal fusion into which the public mind had
278 CQ Researcher
been thrown by the misleading, mali- munism — inciting to revolution,” wrote But even in the early days, em-
cious and false statements emanating Morris Fishbein, editor of the Journal ployer-provided insurance had limits.
from an interested and active commercial of the American Medical Association. 57 Many retired people, very low-income
insurance opposition.” 51 families and the disabled never had
Soon, popular support for govern- workplace-based insurance and were
ment-sponsored insurance dropped to Workplace Plans too poor to buy individual policies,
a low level again, as financial worry for which they would be charged pre-
receded in the 1920s economic boom.
In the overall prosperity of that
decade, the medical system flourished,
D uring the 1930s, as businesses
folded and millions sank into
poverty, the United States made its
miums based on health status.
After several years of debate, Con-
gress in 1965 enacted a new compul-
and hospitals built new wings in the largest-ever foray in social insurance. sory, universal insurance plan — the
mood of general optimism. Developed by Democratic Presi- Medicare program — to provide health
By 1929, however, more than a dent Franklin D. Roosevelt and en- coverage for elderly and some disabled
third of hospital beds were empty, acted in 1935, Social Security is a people and Medicaid to provide health
and many hospitals struggled to pay mandatory, universal system that pro- care for the poorest mothers with chil-
off the loans that had funded ex- vides income support for retirees, se- dren, elderly and the disabled.
pansion. Baylor University Hospital in verely disabled people, widows and
Dallas, for example, had $1.5 million under-age bereaved children. During
in overdue loan payments for con- the debate over passage, activists ar- Coverage Declines
struction and was behind in other bills. gued for including health insurance,
“Baylor was just 30 days ahead of the
sheriff,” said one observer. 52 Baylor’s
crisis led to health insurance as we
but the administration declined, in part
because it feared the contentious health
issue might doom the whole plan. 58
W ith Medicare and Medicaid in
place, most Americans had ac-
cess to health care.
know it today. Later, members of Congress made Nevertheless, health spending was
In search of cash, Baylor made com- unsuccessful attempts to extend social- rising sharply, and Presidents Richard
mon cause with local employers. In late insurance to health in 1943, 1945, 1947, M. Nixon and Jimmy Carter both pro-
1929, the Dallas school system set up 1949 and 1957. Nevertheless, by 1966, posed reforms to keep care afford-
a hospital-service prepayment plan that 81 percent of Americans had hospital- able, including universal coverage. Nei-
operated alongside its sick-benefit fund. ization insurance — mostly offered ther plan gained traction, however.
For a monthly premium of 50 cents, through their workplaces and often as Gradually, the higher costs and the
teachers would get free hospitalization a result of labor union demands — changed nature of American business
for 21 days and a one-third discount compared to only 9 percent in 1940. 59 began to erode the work-based in-
on additional days. Benefits became ef- Unlike today, from 1940 to 1966 surance system.
fective on Dec. 20, 1929, less than two large unionized companies dominated “Forty years ago, the largest private
months after the stock market crash. 53 the economy. Offered as a worker employer was AT&T, a regulated mo-
A few days later, elementary-school benefit, employer-sponsored health nopoly with guaranteed profits,” wrote
teacher Alma Dickson slipped on an plans successfully pooled the risk and Stanford University Professor Emeritus
icy sidewalk and broke her ankle. 54 contributions of many employees in Victor Fuchs and Ezekiel Emanuel, chair-
Hospitalized with a cast, Dickson be- order to keep individuals’ costs low man of clinical bioethics at the National
came the first patient in the first pre- and uniform, even in years when they Institutes of Health. “If health-insurance
paid hospitalization plan, the forerun- had accidents or illness. And, since the premiums rose, they could easily be
ner of today’s Blue Cross system. 55 sickest people are unlikely to be em- passed on to telephone subscribers.” 61
By 1935, 19 such plans had been ployed, relying on workplace-based That changed, however, as union
created in 13 states, as hospitals strug- plans allowed private insurers to more membership began declining in the
gled to stay afloat during the Great easily predict and control costs. 1980s, and manufacturing jobs began
Depression. 56 As the primary source of Americans’ migrating overseas and U.S. compa-
But many influential physicians ar- health insurance, the still union-domi- nies had to compete with foreign
gued that “prepayment” threatened pro- nated U.S. auto industry has evolved competitors that don’t offer health ben-
fessional independence. Recommenda- over the years into “a social-insurance efits. More and more Americans
tions that the nation adopt insurance to system that sells cars to finance itself,” ended up working in the largely non-
protect people against the rising cost of said Princeton University economics unionized service industry, which of-
care amounted to “socialism and com- Professor Uwe Reinhardt. 60 fered few benefits.
Available online: www.cqresearcher.com March 30, 2007 279
“Today, the largest private employer Former first lady Clinton — now
is Wal-Mart, which despite its size faces Clinton Plan the Democratic senator from New
intense competition daily from a host York who is running for president —
of other retail outlets,” Fuchs and Emanuel
wrote. “When they offer health insur-
ance, it must come out of their work-
T he highest-profile recent effort to
enact a universal health care plan
was President Bill Clinton’s ambitious
has assured voters she still believes in
universal health coverage, but she has
not yet announced a specific plan. “I
ers’ wages; for minimum-wage em- proposal to restructure the nation’s think she’s learned her lesson” and
ployees, this is not possible.” 62 health care system, unveiled on Sept. 22, likely will propose something “not quite
Over the past two decades, em- 1993. His Health Security Act was pro- as big and ambitious” this time, says
ployer-sponsored coverage has grad- posed at a time when the uninsured Brandeis’ Altman.
ually waned, along with the number ranks had swelled to 40 million, and For the next decade the dramatic
of insured Americans. Government pro- polls showed that up to two-thirds of failure of the Clinton plan frightened
grams have grown and picked up some Americans favored tax-financed na- lawmakers away from the issue, while
of the slack, however. tional health insurance. 64 Yet, within conservative lawmakers said the boom-
In 1987, fully 87.1 percent of Amer- a year Senate Democrats had pro- ing 1990s economy would enable the
icans were insured, with 75.7 percent nounced the plan dead, the victim of United States to “grow its way” out of
insured through private, mostly employer- bruising attacks by business, insurers uninsurance by creating more and bet-
sponsored, coverage. By 1999, the per- and medical providers. 65 ter jobs with coverage benefits.
centage of insured Americans had Five days after his inauguration, Clin- But that did not turn out to be the
dropped to 85.5.percent, 71.8 percent ton announced that first lady Hillary case. From 1997 to 2001, the econo-
through private coverage. In 2005, the Rodham Clinton would chair a health- my boomed and jobs were created,
overall percentage had dropped to 84.1 care task force made up of Cabinet but rates of employer-sponsored
percent — 67.7 percent with private in- members and White House staffers. It health insurance did not rise. The late
surance. 63 (See graph, p. 272.) held hearings for a year and produced ’90s experience “tells us that relying
In the face of declining coverage, a plan to attain universal coverage main- on economic growth alone to reduce
proposals to expand coverage have ly through expanded private coverage. the number of uninsured won’t work,”
been advanced repeatedly by the White It aimed to offer people a choice of af- said Ginsburg at the Center for Study-
House, members of Congress, state and fordable coverage while maintaining the ing Health System Change. 67
local governments and others. Only existing private insurance industry and Since Clinton’s efforts, Congress en-
some small-scale efforts have gone any- holding down health-cost growth. acted two coverage expansions. The
where, however. To do that, the Clinton panel pro- State Children’s Health Insurance Program
In 1994, Tennessee used federal posed creating regional government- (SCHIP) was enacted in 1997. The Clin-
Medicaid dollars and state funding to managed insurance markets to nego- ton administration and a bipartisan group
create TennCare. State officials hoped tiate health-care and premium prices of lawmakers led by Sens. Edward M.
money-saving HMOs could provide and insurance-benefit packages and to Kennedy, D-Mass., and Orrin G. Hatch,
coverage to many lower-income peo- oversee insurance marketing. It also R-Utah, gave states federal matching funds
ple and sicker Tennesseans, who were called for annual caps on health-cov- to expand coverage for children in low-
ineligible for Medicaid and couldn’t af- erage cost increases, and a require- income families. Today, SCHIP operates
ford insurance on their own. ment that all employers contribute to in all states, making nearly all otherwise
For a few years, the program saved the cost of coverage. uninsured children with family incomes
money and enrolled 500,000 residents But opposition soon grew from busi- up to twice the poverty level eligible for
who would otherwise have been unin- nesses that believed they had more to public coverage.
sured. But the federal government had lose than to gain from change. Em- With Republicans dominating the
agreed to contribute funding for only ployers who didn’t offer coverage White House and Congress, most recent
1.5 million people, and when enroll- balked at proposed fees to help fi- debate over coverage has focused on
ment exceeded that cap, TennCare re- nance the plan. Insurers objected to tax incentives to help Americans buy in-
fused to accept new applicants and regulations aimed at keeping them from surance. Criticized by lawmakers of both
struggled financially. For the past sev- skimming off healthy customers. After parties for offering too-small tax breaks
eral years, TennCare has fought to sur- 10 months of strenuous campaigns by in its early proposals, the Bush admin-
vive, plagued by charges of poor care opponents, public approval had istration has gradually expanded its plan
at its HMOs and disputes with the fed- dropped to a lukewarm 40 percent. 66 each year but has seen none enacted.
eral government over funds. (See sidebar, p. 278.) Continued on p. 282
280 CQ Researcher
Should Congress enact President Bush’s tax proposal for
expanding health coverage?
STUART M. BUTLER, KAREN DAVIS
VICE PRESIDENT PRESIDENT, THE COMMONWEALTH FUND
NINA OWCHARENKO, FROM THE FUND’S WEB SITE, JANUARY 2007
SENIOR POLICY ANALYST
THE HERITAGE FOUNDATION
FROM THE FOUNDATION’S WEB SITE, JANUARY 2007
hile it is encouraging that President Bush made
resident Bush’s proposal to reform the tax treatment of health care a theme of the State of the Union ad-
health care takes a bold step toward fixing America’s dress, his proposal to offer tax deductions to those
health system by widening the availability of affordable who buy health insurance would do little to cover the nation’s
and “portable” health plans and by defusing some of 45 million uninsured.
the pressure that currently leads to higher health costs. Under the president’s proposal, Americans with employer-pro-
Although some Americans would have more of their vided health insurance would have the employer contribution
compensation subject to taxes, this proposal is no more a counted as taxable income. But anyone with health coverage —
tax increase than limiting or ending tax deductions to move whether provided by an employer or purchased individually —
toward a flatter tax system. It would remove distortions and would have the first $7,500 of income excluded from income and
inequities and make tax relief for health insurance more payroll taxes or, in the case of families, the first $15,000 of income.
widely available. Those purchasing coverage in the individual market would
While the proposal can be improved in ways that would get a new tax break, as would those whose employer contri-
further reduce uninsurance, it is a big step toward sound tax bution currently is less than the new standard deduction for
and health policy. It would treat all Americans equally by health insurance.
ending the tax discrimination against families who buy their The proposal would increase taxes on workers whose em-
own health insurance, either because they do not have insur- ployers contribute more to health insurance than the premium
ance offered by employers or because they prefer other cov- “cap” allows, such as those that serve a large number of older
erage. workers. The administration estimates this change would translate
Ending that discrimination would have the added advantage into a tax increase for about 20 percent of employees. However,
of stimulating wider choice and greater competition in health this could rise to more than half of employees by 2013, if in-
coverage, which will help moderate the growth in costs. It creases in health-insurance premiums continue to outpace gener-
would also make it easier for families to keep their chosen al inflation. In addition, the president proposes diverting federal
plan from job to job, reducing the loss of coverage that often funds from public hospitals to state programs for the uninsured.
accompanies job changes. Although the plan would offer subsidies to people looking
The president’s proposal could be improved. While replac- to buy insurance on the private market, it would fail to assist
ing the tax treatment with a new standard deduction is a big most of the uninsured. Insurance premiums would still be un-
step in the right direction, an even better step would be to affordable for Americans with modest or low incomes. And the
replace it with a tax credit more like the current child tax tax increase for employees would likely lead to the erosion of
credit — at least for those buying health coverage outside employer-sponsored health insurance over time.
their place of work. A tax credit would especially help lower- The proposal wouldn’t do anything to make individual cov-
income families. With a deduction, many families would still erage available or affordable for those with modest incomes
be unable to afford basic coverage, but a credit set at a flat or health problems. The Commonwealth Fund found that one-
dollar amount or a high percentage of premium costs would fifth of people who had sought coverage in the individual
make coverage more affordable. health-insurance market in the last three years were denied
A tax credit could be grafted onto the president’s current coverage because of health problems or were charged a high-
proposal and would strengthen it considerably. er premium. The proposal, unlike plans in California and
By taking this step, Congress can help make the tax treat- Massachusetts, does not require insurers to cover everyone.
ment of health care more equitable and efficient, help more Nor would the proposal likely help the currently uninsured.
Americans choose the coverage they want and retain it from More than 55 percent of the uninsured have such low in-
job to job and begin to reduce the tax-break-induced pressure comes that they pay no taxes, while another 40 percent are
that is a factor in rising health costs.
in the 10-to-15-percent tax bracket and would not benefit
substantially from the tax deductions.
Available online: www.cqresearcher.com March 30, 2007 281
Continued from p. 280 Meanwhile, outside of legislative Coalitions of interest groups have
The only federal health-coverage chambers advocates increasingly have come together in 2007 to announce
expansion enacted in this decade was been calling for universal coverage. In support for universal coverage. In Jan-
a tax credit to assist workers unem- 2004, a three-year-long Institute of Med- uary, the Health Coverage Coalition for
ployed due to competition from in- icine study declared that eroding cov- the Uninsured (HCCU) advocated a
ternational trade, enacted in 2002 erage poses such a threat that the fed- phased-in approach to universal cov-
after a long contentious delay. But the eral government must launch a “firm erage, beginning with an expansion of
credit has reached only 10 to 20 per- and explicit” plan to achieve univer- SCHIP and creation of tax credits for
cent of those eligible for it, says the sal coverage by 2010. 68 families with incomes up to about
Urban Institute’s Dorn, which he calls Many analysts agree that universal $60,000, and then creating similar pro-
a “tragic” outcome for states like North coverage has been stalled not because grams for childless adults. 69
Carolina, where it was intended to of a lack of knowledge of how to ac- The coalition includes groups that
help people facing “the largest layoff complish it but because lawmakers have traditionally sparred over health
in the state’s history — the closing of lack the will to demand sacrifices. (See care, including Families USA, the re-
the textile mills.” sidebar, p. 270.) tiree organization AARP, the American
The program failed to catch on be- There are “at least four ways” to Medical Association, the American Hos-
cause its premiums are too high, he get universal coverage, says Simmons pital Association and the health-insur-
says. “It’s not realistic to ask people to of the National Coalition on Health ance lobby America’s Health Insurance
pay 35 percent of premiums when Care. “This problem is solvable. It does Plans. “Organizations that have never
they’re not working” when working not require atomic science.” spoken to one another in a friendly
people pay only 15 to 25 percent of manner are now talking about this,
theirs, he says. In addition, the tax cred- and that has transformed the debate,”
it in most states could only be used for
individual policies, whose premiums CURRENT says Pollack of Families USA.
Others aren’t convinced. The HCCU’s
generally are based on age and health “rhetoric was wonderful,” says Altman
status. “Even with a 65 percent sub- of Brandeis. “But the result shows how
sidy, people were facing an unafford- little they actually agree on.”
able $1,000 a month premium.” But Pollack says the coalition’s
Over the past decade, some con- proposal is a “sequential” plan that
gressional Republicans also have pro- Interest Grows will follow expansion of the children’s
posed allowing business and profes- program — expected to be enacted
sional groups to offer association health
plans (AHPs), which would enable
small businesses and the self-employed
A few states are moving forward
with universal-coverage plans, but
little action is expected on Capitol Hill
this year — with a move to universal
coverage after that.
In February the Service Employees
to band together to buy health insur- this year. Meanwhile, all Democratic International Union joined with Wal-
ance free from the state regulations contenders for the 2008 presidential Mart, an employer whose limited health
that apply to individual and small- nomination have advocated universal benefits have been sharply criticized
group insurance plans, which AHP ad- coverage, although only former Sen. by the union, to form the Better
vocates say unduly drive up coverage Edwards has offered a specific plan Health Care Together group, calling for
costs for small business. so far. (See sidebar, p. 276.) “quality, affordable” universal health care
In the 1970s Congress waived state While few expect federal action until by 2012. The group plans a national
insurance regulation for large employ- after the next president takes office in summit this spring to rally support but
ers to encourage them to provide cov- 2009, many Washington hands think has not announced a proposal, saying
erage for workers. But today both De- the tide finally may be turning. only that it supports joint public and
mocratic and some Republican “One big difference between now private-sector efforts. 70
lawmakers staunchly oppose allowing and several years ago is that there is But Dana Rezaie, a Wal-Mart shelf
AHPs the same freedom. AHP oppo- a loss of faith in employer-provided stocker in Fridley, Minn., says, “any-
nents argue that it is too easy for such coverage as capable of covering body can say they support something.
loosely formed groups to skim off work- everyone, including from unions and They need to show they really do.”
ers most likely to be healthy and low- key business groups” who have been After six years at the store, the widowed
cost, which would raise premium costs its strongest supporters, says Yale’s mother of three says she can’t afford
even higher for those left behind. Hacker. Wal-Mart’s health plan. 71
282 CQ Researcher
Congress is reviewing President ance, often with government assistance. coverage plan, which undoubtedly
Bush’s fiscal 2008 budget, which pro- A state-operated clearinghouse — the would shift some resources and bene-
poses a new version of his tax-based Health Insurance Connector — will fits away from currently insured people
coverage-expansion proposals. Bush help consumers comparison-shop for and health providers.
would ditch the current tax break Amer- affordable coverage. So far, however, Some interest groups that helped
icans receive for employer-sponsored the state is struggling to define bene- bring down the Clinton plan have
coverage and replace it with a more fit packages that insurers can sell at softened their stance, says Ginsburg
general tax break that would apply “affordable” prices. at the Center for Studying Health Sys-
both to employer coverage and to in- Meanwhile, the California legislature tem Change. In Massachusetts, he
surance purchased individually. is considering Gov. Schwarzenegger’s points out, insurers have accepted
The plan gets points from Green- proposal to require individuals to buy the new state-run insurance market-
stein at the Center on Budget and Pol- coverage. The plan would be funded place, even though in the past they
icy Priorities for tackling the unfair- with contributions from multiple sources, would have preferred to send out
ness of the current tax treatment of including government, individuals, em- their own people to market policies
insurance, which penalizes those who ployers, insurers and health-care and avoid head-to-head consumer
purchase insurance on their own. But providers. comparisons of plans. But insurers
the plan “has an Achilles’ heel,” Green- Vermont’s new Catamount Health realize that their long-time bread and
stein says, since it doesn’t encourage program will focus first on promoting butter — employer-sponsored cov-
pooling sicker and healthier people to information technology and other re- erage — “has topped out,” Ginsburg
spread costs and skews its tax bene- forms to shave administrative costs says, so they anticipate no growth
fits toward higher-income people. and an evidence-based standard of care unless they embrace government-
Nevertheless, Pollack does not ex- “community by community,” says sponsored expansions.
pect “a serious productive debate on Emory University’s Thorpe, who con- “There’s [been] a dramatic change
universal coverage” in 2007, with a sulted on the program. Then the state in national political attitudes,” says Sim-
presidential campaign heating up. How- will turn to expanding coverage. mons of the National Coalition on Health
ever, he does expect Congress to reau- In Texas, where more than 25 per- Care. One “truly remarkable thing is
thorize — and possibly expand — the cent of the population is uninsured, Re- that every Democratic and some Re-
10-year-old SCHIP program “before publican Gov. Rick Perry is looking for publican candidates now say we have
the end of the calendar year.” revenue sources to subsidize more cov- to achieve universal coverage.”
The Bush budget recommends fund- erage. In February he proposed selling But others say the country may still
ing SCHIP leanly, by not offering fed- off the state lottery and putting part of not be ready to make the concessions
eral assistance, for example, to the 14 the proceeds in an endowment fund needed.
states anticipating shortfalls in their to expand insurance coverage. 73 “It’s not clear to me that life has
2007 SCHIP budgets. But both politi- Last year, Rhode Island began re- changed very much,” says Altman of
cal parties strongly support SCHIP and quiring insurers to develop “wellness Brandeis. Forces that have resisted
are likely to ride to the rescue. Sen. benefit” policies to help individuals change in the past “are stronger
Gordon Smith, R-Ore., has called for and small businesses afford at least today,” and “you have very weak
doubling the federal cigarette tax to basic coverage. 74 leadership” from the White House
pay for the aid. 72 and Congress.
Endorsement by Democratic presi-
State Steps OUTLOOK dential hopefuls doesn’t necessarily
mean much, says Harvard’s Blendon.
“Democratic primary voters dispro-
portionately care about this,” he says.
A s health insurance gains mo-
mentum as a public issue, many
states are flirting with expanding cov-
But different priorities will prevail in
the general election. “The biggest
thing on everyone’s mind is casualties
erage, and three are struggling to get
universal coverage off the ground.
Massachusetts was first out of the
C onsensus has been building
around proposals that link pub-
lic subsidies to private coverage. But
Furthermore, Americans generally
“do not want an alternative health sys-
gate, enacting a plan in 2006 that will it remains an open question whether tem,” he continues. “They want to fix
require residents to buy health insur- Congress will finally enact a universal- the one they have.”
Available online: www.cqresearcher.com March 30, 2007 283
Unfortunately for politicians, the sim- 8 Todd Gilmer and Richard Kronick, “It’s the 21 Jack Hadley and John Holahan, “The Cost
plest, catchiest sound bite on health Premiums, Stupid: Projections of the Unin- of Care for the Uninsured: What Do We
reform involves covering the uninsured, sured Through 2013,” Health Affairs, April 5, Spend, Who Pays, and What Would Full Cov-
but that doesn’t “play politically,” says 2005, www.healthaffairs.org. erage Add to Medical Spending?” The Kaiser
9 Ibid. Commission on Medicaid and the Uninsured,
Blendon. While people do want every- 10 “Coverage Matters: Insurance and Health May 10, 2004, p. 5.
one to have access to health care, 22 “Maryland Universal Coverage Plan Esti-
Care,” statement of Arthur L. Kellerman, co-
“what they want most is cheaper pre-
chairman, Consequences of Uninsurance Com- mated to Cost $2.5 Billion,” Healthcare News,
miums for themselves.” mittee, Institute of Medicine, www7.national News-Medical.Net, Feb. 21, 2007, www.news-
academies.org/ocga/testimony/Uninsured_and_ medical.net; also see “How Much Would It
Affordable_Health_Care_Coverage.asp. Cost to Cover the Uninsured In Minnesota?
Notes 11 Quoted in “IOM Uninsured Report Cites Preliminary Estimates,” Minnesota Depart-
Rising Costs, Attacks Myths.” Medicine & Health, ment of Health, Health Economics program,
1 Jay Himmelstein, “Bleeding-Edge Benefits,” Oct. 15, 2001. July 2006.
Health Affairs, November/December 2006, p. 12 “The Great Divide: When Kids Get Sick, 23 For background, see Marcia Clemmitt, “Bud-
1656. Insurance Matters,” Families USA, March 1, get Deficit,” CQ Researcher, Dec. 9, 2005, p.
2 Jeffrey A. Rhoades, “The Uninsured in
2007, www.familiesusa.org/assets/pdfs/the- 1029-1052,
America, 2004: Estimates for the U.S. Civil- great-divide.pdf. 24 “Universal Coverage Rx: Tax-Code Changes,
ian Noninstitutionalized Population Under Age 13 “Expanding Coverage Is Worth It for All, Money, Insurance Pools and a Mandates,” in-
65,” Medical Expenditure Panel Survey Sta- IOM Panel Insists,” Medicine & Health, June terview with Jonathan Gruber, “On My Mind:
tistical Brief #83, June 2005, Agency for Health- 30, 2003. Conversations with Economists,” University
care Research and Quality. 14 Ibid. For background, see Marcia Clem- of Michigan Economic Research Initiative on
3 Diane Rowland, executive vice president,
mitt, “Prison Health Care,” CQ Researcher, the Uninsured, www.umich.edu.
Henry J. Kaiser Foundation, “Health Care: Squeez- Jan. 5, 2007, pp. 1-24. 25 Ibid.
ing the Middle Class With More Costs and Less 15 Quoted in “States Scramble for Ways to 26 “Health Expenditure,” Organization for
Coverage,” testimony before House Ways and Cover Working Uninsured,” Medicine & Health, Economic Cooperation and Development,
Means Committee, Jan. 31, 2007; for background, “Perspectives,” Feb. 8, 2005. www.oecd.org/document/16/0,2340,en_2649
see Keith Epstein, “Covering the Uninsured,” 16 Barack Obama, “Obama Statement on _37407_2085200_1_1_1_37407,00.html; also
CQ Researcher, June 14, 2002, pp. 521-544. President’s Meeting with Big Three Au- see Rhoades, op. cit.
4 Christine Borger, et al., “Health Spending Pro- 27 See Clemmitt, “Rising Health Costs,” op. cit.
tomakers,” press release, Nov. 14, 2006,
jections Through 2015: Changes on the Hori- http://obama.senate.gov. 28 “Pushed to the Edge: The Added Burdens
zon,” Health Affairs Web site, Feb. 22, 2006. 17 For background, see Marcia Clemmitt, “Ris- Vulnerable Populations Face When Unin-
5 Rowland testimony, op. cit.
ing Health Costs,” CQ Researcher, April 7, sured,” interview with Harold Pollack, “On
6 “Facts on Health Care Costs,” National Coali-
2006, pp. 289-312. My Mind: Conversations With Economists,”
tion on Health Care, www.nchc.org. 18 Quoted in “Frist: 100 Percent Coverage University of Michigan Economic Research
7 Quoted in Steven Taub and David Cook,
Impossible, 93 Percent Not Working So Well Initiative on the Uninsured, www.umich.edu.
“Health Care Can Bankrupt America,” CFO.com, Either,” Medicine & Health, Feb. 9, 2004. 29 Ibid.
March 6, 2007, For background, see Michael 19 Quoted in ibid. 30 John Kitzhaber, “Why Start With the Health
E. Chernew, Richard A. Hirth and David M. 20 Quoted in “Who Should Pay for Health Care Crisis?” The Archimedes Movement,
Cutler, “Increased Spending on Health Care: Care?” PBS Newshour Extra online, Jan. 19, www.JoinAM.org.
How Much Can the United States Afford?” 2004, www.pbs.org/newshour/extra/fea- 31 “Access to Healthcare and the Uninsured,”
Health Affairs, July/August 2003. tures/jan-june04/uninsured_1-19.html. National Conference of States Legislatures,
32 “Arthur Garson, “Help States Cover the
About the Author Uninsured,” Roanoke Times, May 26, 2006.
33 Stuart M. Butler, “The Voinovich-Bingaman
Staff writer Marcia Clemmitt is a veteran social-policy Bill: Letting the States Take the Lead in Ex-
reporter who previously served as editor in chief of Medi- tending Health Insurance,” Web Memo No.
cine & Health and staff writer for The Scientist. She has 1128, The Heritage Foundation, June 15, 2006.
34 George C. Halvorson, Francis J. Crosson
also been a high-school math and physics teacher. She
and Steve Zatkin, “A Proposal to Cover the
holds a liberal arts and sciences degree from St. John’s
Uninsured in California,” Health Affairs, Dec.
College, Annapolis, and a master’s degree in English from 12, 2006, www.healthaffairs.org.
Georgetown University. Her recent reports include “Cli- 35 Quoted in Christopher Rowland, “Mass.
mate Change,” “Health Care Costs,” “Cyber Socializing” Health Plan Seems Unlikely to Be U.S.
and “Prison Health Care.” Model,” The Boston Globe, April 14, 2006.
284 CQ Researcher
37 Quoted in “IOM Panel Demands Universal
Coverage by 2010,” Medicine & Health, “Per-
spectives,” Jan. 19, 2004.
FOR MORE INFORMATION
38 David Kravitz, “The Individual Mandate
Alliance for Health Reform, 1444 I St., N.W., Suite 910, Washington, DC 20005;
Still Sucks,” Blue Mass Group, Jan. 30, 2007, (202) 789-2300; www.allhealth.org. Nonpartisan, nonprofit group that disseminates
www.bluemassgroup.com. information about policy options for expanding coverage.
39 Michael D. Tanner, “Individual Mandates
for Health Insurance: Slippery Slope to Na- Economic Research Institute on the Uninsured, www.umich.edu/~eriu. Re-
tional Health Care,” Policy Analysis No. 565, searchers at the University of Michigan who conduct economic analyses of the
Cato Institute, April 5, 2006, www.cato.org. hows and whys of uninsurance and coverage-expansion proposals.
40 “Problems of Risk and Uncertainty,” The
Economics of Health Care, Office of Health Families USA, 1201 New York Ave., N.W., Suite 1100, Washington, DC 20005;
Economics, p. 26, www.oheschools.org/ (202) 628-3030; www.familiesusa.org/contact-us.html. A nonprofit group that advo-
ohech3pg3.html. cates for large-scale expansion of affordable health coverage.
41 Quoted in “Frist: Limit Tax Exclusion for
Employer-Based Coverage,” Medicine & Health, The Health Care Blog, www.thehealthcareblog.com. Blog published by health-care
consultant Matthew Holt; analyzes coverage proposals and other insurance issues.
July 19, 2004.
43 For background, see Anne-Emmanuel Birn, Heritage Foundation, 214 Massachusetts Ave., N.E., Washington, DC 20002-4999;
(202) 546-4400; www.heritage.org. Conservative think tank that supports state-
Theodore M. Brown, Elizabeth Fee and Wal- organized purchasing groups for health care.
ter J. Lear, “Struggles for National Health Re-
form in the United States,” American Journal Kaiser Family Foundation, 1330 G St., N.W., Washington, DC 20005; (202) 347-
of Public Health, January 2003, p. 86; Laura 5270; www.kff.org. Nonprofit private foundation that collects data and conducts
A. Scofea, “The Development and Growth of research on the uninsured.
Employer-Provided Health Insurance,” Month-
ly Labor Review, March 1994, p. 3; Thomas National Coalition on Health Care, 1200 G St., N.W., Suite 750, Washington, DC
Bodenheimer, “The Political Divide in Health 20005; (202) 638-7151; www.nchc.org. Nonprofit, nonpartisan group that supports
Care: A Liberal Perspective,” Health Affairs, universal coverage; made up of labor, business and consumer groups, insurers and
November/December 2005, p. 1426. health providers’ associations.
44 Rosemary Stevens, foreword to Robert
Physicians for a National Health Program, 29 E. Madison, Suite 602, Chicago, IL
Cunningham III and Robert M. Cunningham, Jr.,
60602; (312) 782-6006; www.pnhp.org. Nonprofit group that advocates for single-
The Blues: A History of the Blue Cross and Blue payer national health insurance.
Shield System (1997), p. vii.
45 Bodenheimer, op. cit., p. 1426.
46 Ibid., p. 1432. Plus Archive, http://library.cqpress.com. sured Boats,” Medicine & Health, Aug. 6, 2002.
47 Scofea, op. cit., p. 3. 59 Cunningham and Cunningham, op. cit. 68 “IOM Panel Demands Universal Coverage
48 Ibid. 60 Quoted in Danny Hakim, ‘Health Costs by 2010,” op. cit.
49 Cunningham and Cunningham, op. cit., p. 5. Soaring, Automakers Are to Begin Labor Talks,” 69 “Unprecedented Alliance of Health Care
50 Stevens, op. cit., p. vii. The New York Times, July 14, 2003, p. C1. Leaders Announces Historic Agreement,”
51 Quoted in Scofea, op. cit. 61 Victor R. Fuchs and Ezekiel J. Emanuel, Health Coverage Coalition for the Uninsured,
52 Quoted in Cunningham and Cunningham, “Health Care Reform: Why? What? When?” Health press release, Jan. 18, 2007, www.coalition-
op. cit., p. 4. Affairs, November/December 2005, p. 1400. fortheuninsured.org.
53 Ibid., p. 6. 62 Ibid. For background, see Brian Hansen, 70 Dan Caterinicchia, “Rivals Want Health Care
54 “Dallas School Teachers, 1928,” Rootsweb.com; “Big-Box Stores,” CQ Researcher, Sept. 10, for All,” Columbus Dispatch [Ohio], Feb. 8, 2007.
http://freepages.history.rootsweb.com/~jwheat/ 2004, pp. 733-756. 71 Quoted in ibid.
teachersdal28.html. 63 “Historical Health Insurance Tables,” U.S. 72 Alex Wayne, “War Supplemental To In-
55 Cunningham and Cunningham, op. cit., p. Census Bureau, www.census.gov. clude Money for Children’s Health Insurance
6. For background, see also “Sickness insur- 64 Bridget Harrison, “A Historical Survey of Na- Program” Congressional Quarterly Healthbeat,
ance and group hospitalization,” Editorial Re- tional Health Movements and Public Opinion Feb. 27, 2007.
search Reports, July 9, 1934, from CQ Researcher in the United States,” Journal of the American 73 Quoted in The Associated Press, “Texas
Plus Archive, http://library.cqpress.com. Medical Association, March 5, 2003, p. 1163. Governor Has Funding Idea: Sell the Lottery,”
56 Scofea, op. cit. 65 For background, see “Health-Care Debate The Washington Post, Feb. 7, 2007, p. A7.
57 Quoted in Cunningham and Cunningham, Takes Off,” 1993 CQ Almanac, pp. 335-347, 74 “Rhode Island: Making Affordable, Quality-
op. cit., p. 18. and “Clinton’s Health Care Plan Laid to Rest,” Focused Health Coverage Available to Small
58 For background, see “Federal Assistance 1994 CQ Almanac, pp. 319-353. Businesses,” States in Action: A Bimonthly Look
to the Aged,” Nov. 12, 1934, in Editorial Re- 66 Harrison, op. cit. at Innovations in Health Policy, The Common-
search Reports, available from CQ Researcher 67 “Rising Tide of Late ’90s Lifted Few Unin- wealth Fund, January/February 2007.
Available online: www.cqresearcher.com March 30, 2007 285
Books States take different approaches to expanding health coverage
as worry over lack of insurance grows.
Derickson, Alan, Health Security for All: Dreams of Uni-
versal Health Care in America, Johns Hopkins Univer- Gladwell, Malcolm, “The Moral Hazard Myth,” The New
sity Press, 2005. Yorker, Aug. 29, 2005.
A professor of history at Pennsylvania State University ex- Some fear that large-scale expansion of health coverage
amines the ideas and advocates behind the numerous 20th- would encourage patients to rack up higher amounts of use-
century proposals for universal health care in the United States. less health-care spending.
Funigello, Philip J., Chronic Politics: Health Care Security Holt, Matthew, “Policy: Why Is Fixing American Health
from FDR to George W. Bush, University Press of Kansas, Care So Difficult?” The Health Care Blog, Oct. 16, 2006;
A professor emeritus of history at the College of William 10/abc_news_why_is.html#comment-2418315.
and Mary describes the politics behind a half-century of failed An independent health-care consultant — along with blog
attempts at major health reform. comments by analysts, businesspeople and members of the
public — describes and discusses the interest-group politics
Gordon, Colin, Dead on Arrival: The Politics of Health that shape the universal-coverage debate.
Care in Twentieth-Century America, Princeton University
Press, 2003. Holt, Matthew, “Risky Business: Bush’s Health Care Plan,”
A professor of history at the University of Iowa explains Spot-On Blog, Jan. 25, 2007; www.spot-on.com/archives/
how numerous private interests — from physicians desiring holt/2007/01/bush_tax_deductions_and_the_lo.html.
autonomy to employers seeking to cement employer-em- An independent health-care consultant explains the concept
ployee relationships — have helped halt development of of risk-pooling for insurance and the current tax break already
universal health coverage in America. enjoyed by workers with employer-sponsored coverage.
Mayes, Rick, Universal Coverage: The Elusive Quest for Na- Reports and Studies
tional Health Insurance, University of Michigan Press, 2005.
An assistant professor of public policy at Virginia’s Uni- “Covering America: Real Remedies for the Uninsured,”
versity of Richmond explains how politics and earlier poli- Vols. 1 and 2, Economic and Social Research Institute,
cy choices regarding the U.S. health system shape the range June 2001 and November 2002.
of possibilities available for future reforms. Economists assembled by a non-partisan think tank analyze
multiple proposals for achieving universal coverage.
Richmond, Julius B., and Rashi Fein, The Health Care
Mess: How We Got Into It and What It Will Take to Get “Insuring America’s Health: Principles and Recommen-
Out, Harvard University Press, 2005. dations,” Institute of Medicine Committee on the Conse-
Two Harvard Medical School professors recount the histo- quences of Uninsurance, National Academies Press, 2004.
ry of American medicine and trends in financing health care In its sixth and final report, an expert panel urges federal
and conclude that the United States could afford universal lawmakers to create a plan for insuring the entire population
health coverage. by 2010.
Swartz, Katherine, Reinsuring Health: Why More Mid- Burton, Alice, Isabel Friedenzoh and Enrique Martinez-
dle-Class People Are Uninsured and What Government Vidal, “State Strategies to Expand Health Insurance Cov-
Can Do, Russell Sage Foundation, 2006. erage: Trends and Lessons for Policymakers,” The Com-
A professor of health policy and economics at the Harvard monwealth Fund, January 2007.
School of Public Health argues that more people could buy Analysts summarize recent state initiatives to extend health
insurance and coverage would be cheaper if the federal gov- coverage to more adults and children.
ernment offered insurance companies financial protection for
the highest-cost illnesses. Haase, Leif Wellington, A New Deal for Health: How to
Cover Everyone and Get Medical Costs Under Control,
Articles The Century Foundation, April 2005.
A health analyst for the nonprofit group outlines cost, quality
Appleby, Julie, “Health Coverage Reform Follows State- and coverage issues that the group says make it necessary for
by-State Path,” USA Today, April 5, 2006. the United States to switch to universal coverage.
286 CQ Researcher
The Next Step:
Additional Articles from Current Periodicals
Federal Solutions Graham, Judith, “A New Plan to Insure All; Proposal
Would Require Illinoisans to Get Health Coverage,”
Harkness, Peter, “No Band-Aid for Medicaid,” CQ Weekly, Chicago Tribune, Dec. 8, 2006, p. A1.
July 25, 2005, p. 2030. A state task force has endorsed a plan that requires all
Mike Leavitt and Tommy Thompson, current and former Illinoisans to obtain health insurance.
secretaries of Health and Human Services, respectively, agree
that Medicaid problems can only be solved through the Seewer, John, “Colleges Make Health Insurance Mandatory;
broader health-care system. Some Fear Cost May Burden Students,” The Washington
Post, March 27, 2005, p. A8.
Miller, Matt, “A Good Idea Inside a Bad One,” Time, Many public universities require students to have health
Feb. 5, 2007, p. 25. insurance prior to enrollment.
To make medical care more affordable, President Bush
wants to create a standard deduction for health insurance. State Coverage Laws
Porter, Eduardo, “Health Care for All, Just a (Big) Step Away,” “The Federalist Prescription; Health Care and the States,”
The New York Times, Dec. 18, 2005, p. C4. The Economist, Jan. 13, 2007, p. 27.
The federal government plans to provide $130 billion for In what could change the terms of the health-care debate,
Americans to buy health insurance. Gov. Arnold Schwarzenegger, R-Calif., said he wants to in-
troduce universal coverage in his state.
Schuler, Kate, “White House Looks to Price Transparency
to Lower National Health Care Costs,” CQ Today, March 13, Alonso-Zaldivar, Ricardo, “States Resurrect Topic of Medical
2006. Care,” Los Angeles Times, Nov. 13, 2005, p. A41.
President Bush and congressional Republicans are pinning Governors and legislators in 20 states have reached agreements
their proposals to lower health-insurance costs on consumers’ to expand medical coverage.
responsibility to make informed decisions.
Ramer, Holly, “States Try to Extend Health Coverage for Col-
Walters, Jonathan, “SCHIP and Beyond,” Governing, March lege-Age Young People,” The Associated Press, Jan. 3, 2006.
2007, p. 24. More states are allowing college-age adults to remain covered
Congress is set to debate the reauthorization of the State under the health-insurance plans of their parents.
Children’s Health Insurance Program.
Schuler, Kate, “Mandatory Insurance Is Romney’s Big
Insurance Costs Pitch,” CQ Weekly, June 5, 2006, p. 1538.
Republicans and Democrats alike have embraced Massachu-
“Schools Face ‘Death Spiral,’ ” USA Today, Feb. 15, 2006, setts’ new law — proposed by GOP Gov. Mitt Romney.
Los Angeles school officials had thought their unfunded CITING CQ RESEARCHER
health-care obligation for retirees was $5 billion, but their
Sample formats for citing these reports in a bibliography
new estimate of $10 billion is bad news for taxpayers who
have to foot the bill. include the ones listed below. Preferred styles and formats
vary, so please check with your instructor or professor.
Agovino, Theresa, “Wealthy Americans Worry that Health
Care Costs Will Eat Their Assets,” The Associated Press, MLA STYLE
April 7, 2006. Jost, Kenneth. “Rethinking the Death Penalty.” CQ Researcher
A majority of 1,500 wealthy Americans surveyed said rising 16 Nov. 2001: 945-68.
medical costs was among their top financial concerns.
Mandatory Insurance Jost, K. (2001, November 16). Rethinking the death penalty.
Graham, John R., “Filet Mignon, Pinot Noir and an MRI; CQ Researcher, 11, 945-968.
Compulsory Private Health Insurance Won’t Work,”
The Washington Post, Dec. 21, 2006, p. A29.
It is far better to deregulate health insurance than to force Jost, Kenneth. “Rethinking the Death Penalty.” CQ Researcher,
citizens into a system that does not serve their needs. November 16, 2001, 945-968.
Available online: www.cqresearcher.com March 30, 2007 287
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