Health insurance access is back on America's agenda

President Bush calls for action in his State of the Union address, while the Institute of Medicine pushes for universal coverage.

By Joel B. Finkelstein — Posted Feb. 2, 2004

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Washington -- Now more than ever, the problem of the uninsured must be addressed without delay. That is the unified message being delivered by politicians, special interest groups, voters and academics across America.

In his State of the Union speech, President Bush acknowledged this need. "For many people, medical care costs too much -- and many have no coverage at all," he said.

"Our goal is to ensure that Americans can choose and afford private health care coverage that best fits their individual needs," he said.

Bush offered some proposals, including association health plans, health insurance tax credits for low-income Americans and tax reforms to allow purchasers of catastrophic insurance with health savings accounts to deduct their premiums. Bush also urged Congress to pass tort reform to help reduce the frivolous lawsuits blamed for pushing up the price of professional liability insurance.

"The AMA is encouraged by President Bush's attention to the plight of the uninsured," said Donald J. Palmisano, MD, the Association's president. "We applaud the president's conclusion that 'a government-run health care system is the wrong prescription' for America."

But the Democrats' response to Bush's address showed that much disagreement remains about how to cover the uninsured. They argue that more tax cuts will do little for the millions of people who can't afford coverage and advocate instead for expansion of public programs to bring in more low-income Americans.

The politicians' speeches came shortly after the Institute of Medicine recommended that both Congress and the White House immediately begin working toward covering all Americans by 2010.

After meticulously studying the issues, the IOM came to the conclusion that the only satisfactory answer is universal coverage, said Shoshanna Sofaer, DPH, professor of health care policy at Baruch College in New York City and chair of the subcommittee that wrote the report.

That recommendation was echoed by dozens of national organizations, many of which have placed the problem of the uninsured on the top of their to-do lists.

"Living without health insurance is a serious health risk," said Yank D. Coble Jr., MD, AMA immediate past president. "It is unacceptable that 43 million Americans -- 15% of the population -- do not have basic health care coverage."

Several health care groups have formulated their own approaches to dealing with the problem. The AMA would like to build on the current system with refundable tax credits combined with purchasing pools designed to lower insurance costs.

The American College of Physicians helped write legislation pending in Congress that would combine similar measures with the expansion of public programs to ensure that all Americans up to 150% of the poverty level have coverage. "Our goal must be to expand the benefits of the system to everyone," said ACP President Munsey Wheby, MD.

The IOM looked at many strategies but refused to back any one approach. The panel was careful to say that universal coverage should not be equated with a single-payer system.

Widespread lack of health insurance not only imposes a financial and physical burden on those without access to medical services but also undermines access for the rest of the community. "We cannot afford not to cover the uninsured," Dr. Sofaer said.

People with insurance ultimately bear the cost of uncompensated care to uninsured patients in the form of higher prices and reduced access to health care services. Therefore, the IOM report suggests, the benefits of expanding coverage to everyone would spread even to those who already have health insurance.

Uncompensated care costly

Physicians are providing much uncompensated care, about $5 billion a year, though they face enormous obstacles to doing so, Dr. Coble said.

While few physicians would choose to turn away the needy, provision of free services is beginning to cut too deeply into their bottom lines and undermine the care they can provide even to patients with insurance.

These financial pressures of uncompensated care have combined with dramatically rising liability insurance premiums, growing mounds of paperwork and increased spending for prescription drugs to place unprecedented stress on the health care system. Those costs, which for a time were borne by physicians and hospitals, are now bleeding through to health care consumers, experts said.

The nation is stuck in a vicious cycle that is making it increasingly difficult for employers to offer their workers health insurance, said Mary R. Grealy, president of the Healthcare Leadership Council.

As the number of uninsured Americans grows, so do health care costs, pushing more workers out of their coverage. As a result, eight out of 10 uninsured Americans come from a working family.

Political pressure

Not only low-income workers are directly affected by insurance access problems and the rising cost of health care. Middle-class families also are increasingly faced with higher premiums, more out-of-pocket costs and even loss of health coverage.

These recent trends have voters concerned, experts said.

"When people looked at the system overall, 74% say the health care system is not meeting the country's needs," said Democratic pollster Stanley Greenberg, CEO of Greenberg Quinlan Rosner Research Inc., Washington, D.C. "We've passed through a decade, and we are back at a moment when health care is once again on the public agenda."

Voters ranked the affordability of health care second only to the economy as a major concern they expect lawmakers to focus on this year, Greenberg found in a recent poll conducted for the American Hospital Assn.

"The fear of not being covered is inching up the socioeconomic scale into the layers of the population that may have more political pull," said ACP's Dr. Wheby.

The public wants something done because it "knows that the health care issue is one that makes them very vulnerable," said Risa Lavizzo-Mourey, MD, president of the Robert Wood Johnson Foundation.

Employers are equally concerned, according to Robert Doherty, ACP's senior vice president of governmental affairs and public policy.

"The number of the uninsured are getting back to where they were -- in fact higher than when Clinton proposed his plan in the early 1990s -- plus now you have the impact of businesses increasingly expressing discontent," he said.

Conventional wisdom holds that no major reforms are passed in an election year. But experts are questioning that assumption in light of the overwhelming push to address the problem of the uninsured and the resulting rise in health care costs.

"We can expect the uninsured to be high on the agenda of the American people, which we hope will put it on the agenda of both the Congress and the administration," Grealy said.

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Voter angst

Health care costs were high on the list of concerns of 800 voters surveyed in four early primary states. Issues they felt should be a high priority for Congress and the president include:

Economy and jobs 45%
Affordable health care 27%
Terrorism and national security 27%
Social Security and Medicare 23%
Education 22%
Iraq 20%
Federal deficit 9%
Taxes 8%

Source: American Hospital Assn.

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Paying the price

$34 billion to $69 billion: Annual cost of covering care needed by 43 million Americans without health insurance.

$35 billion: Annual cost of uncompensated care, about $5 billion of which is free physician time and services.

$65 billion to $130 billion: Yearly cost in terms of diminished health and shorter life spans for uninsured Americans.

Source: Institute of Medicine

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