Mandatory Insurance Could Solve Health Crisis, Aid Politicians
Trailing Democrats by more than 20 points on the issue, Republicans ought to think boldly about health care and recommend truly universal insurance coverage — by making it mandatory and paying for it by capping tax deductibility of insurance premiums.
[IMGCAP(1)]For that matter, it’s an idea that Democrats could also support. And, after the two parties finished fighting about details during the election year, they actually could pass it into law some year soon. The insurance crisis demands it.
Mandatory health insurance — making it like auto insurance in every state — would cover all of America’s 43 million uninsured, lower costs for employers (who aren’t hiring new employees in the United States partly because of rising rates) and improve health quality.
The idea has a bipartisan pedigree. It was advanced in the early 1990s by the late Sen. John Chafee (R.I.), a moderate Republican, who had 22 co-sponsors on a mandatory insurance bill in 1994.
It’s been embraced more recently, in different forms, by centrist Sen. John Breaux (D-La.), liberal Sen. Edward Kennedy (D-Mass.) and conservative Ways and Means Chairman Bill Thomas (R-Calif.).
And, during the presidential primaries, both Sens. John Edwards (D-N.C.) and Wesley Clark (D) called for a variant on it — a requirement that all children in America be covered.
Right now, the idea is being promoted by one of the most imaginative think tanks in Washington, the New America Foundation, a veritable font of proposals to reshape politics and the economy for the Information Age and the baby boom retirement era.
The foundation’s president, Ted Halstead, estimates that it would cost the government $80 billion a year to assure that all Americans have health insurance — $10 billion less than Democratic Sen. John Kerry (Mass.) is proposing to cover only 27 million of the nation’s 43 million uninsured.
But Thomas Scully, President Bush’s former Medicare chief, says that the cost could be substantially paid for by limiting the tax deductibility of insurance premiums and ending current subsidies to hospitals to treat the uninsured. There wouldn’t be any uninsured.
For Bush and Republicans, the short-term political benefits of the idea are blazingly obvious — it would give them an answer to the Kerry proposal that they don’t now have.
Bush’s current ideas — a tax credit for low-income workers and association health plans for small employers — would cover at most 8 million persons at a cost of $79 billion over 10 years.
Former White House communications chief Karen Hughes has told various groups that the administration is considering a larger plan, but the White House is uncommunicative as to details.
A Senate Republican task force on the uninsured headed by Sen. Judd Gregg (N.H.) seems to be plying the same incremental ground and dismissing comprehensive solutions.
Besides countering Democrats, a universal, mandatory proposal would have an added benefit for the GOP — Republicans could say, as Democrats already do, that lowering health insurance burdens on employers will help create jobs in America.
As The Washington Post reported last Saturday, U.S. automakers pay about $1,300 in employee health costs to build a mid-size car in America — but practically nothing when they build it in Canada.
The Post’s Kirstin Downey quoted Ford Vice Chairman Allan Gilmour as saying that high health costs have “created a competitive gap that’s driving investment decisions away from the U.S. If we can’t get our arms around this issue as a nation, our manufacturing base and many of our businesses are in danger.”
According to Halstead and his foundation’s health expert, Laurie Rubiner, Canada’s government-run, single-payer health insurance system is one way to provide universal coverage, but not the best way.
The better way is to make it mandatory. “In essence,” they wrote last year in a Post op-ed, “all Americans should be required to purchase their own health insurance from among competing private providers, with the government providing subsidies to those who need them.”
Actually, under the New America Foundation proposal, employers also would be required to either offer a basic insurance package to their employees or give their employees a fixed percentage of its cost.
The employer contribution requirement makes the plan resemble the “play or pay” proposal favored by Kennedy, while the individual mandate is the idea Breaux has been promoting.
The basic plan envisioned by the NAF is the mid-level Blue Cross plan offered to federal employees, which covers in-patient hospital visits, doctor visits in a preferred provider network and preventative care, but involves deductibles and co-pays. It costs about $7,000 a year.
Scully proposes that employers be able to deduct only the cost of that plan from corporate taxes and that employees pay taxes on any insurance benefit they received that was more generous, thereby saving — after a phase-in period — $30 billion to $40 billion a year. He estimates government subsidies to hospitals to treat the uninsured in emergency rooms at $35 billion a year.
He acknowledges political difficulties with such ideas — Republicans would oppose increased tax burdens on some corporations and unions would oppose taxes on members who enjoy so-called “Cadillac” health plans negotiated for them.
Still, the fact is that, at the moment, employers facing double-digit health cost increases — and burdened by the duties of administering coverage — are cutting back or dropping coverage, causing insecurity among workers.
Under present circumstances, most workers have no choice of health plans and have to accept what their employers give them. Under the NAF proposal, they’d have wide choice and could take their policies with them if they switched jobs.
Average premium costs also would go down because everyone would be in the nation’s insurance pool — including millions of healthy young people who pass up coverage because they don’t think they need it.
Health quality would improve because insurance companies would have an incentive to provide preventative services to keep their patients out of hospitals.
Bottom line: There’s a big, great idea out there that could solve a major national problem. It’s just waiting for a political taker.