In an article in the BMJ journal, Julie Rovner, chief Washington correspondent for Kaiser Health News, examines the debate over the future of the U.S. health insurance system. While political parties once argued over whether the government should ensure all residents have coverage, the discussion is changing. As the cost of medical services continues to grow faster than most Americans’ incomes, even people with private insurance coverage are finding the cost of care (deductibles, copayments) are becoming unaffordable.
The U.S. is once again deep in a debate over the future of its health insurance system—a debate that has waxed and waned for the better part of a century. This is ironic because the U.S. doesn’t actually have what one could call a health insurance “system.” Rather, it has a hodgepodge of programs—public and private—that cover most, but far from all, of its residents. And as the cost of medical services continues to grow faster than most Americans’ incomes, even people with private insurance coverage—which comes with ever increasing expenses in the form of deductibles and co-payments—are finding the cost of care becoming more than they can afford. That’s true for the government funded health insurance program for the elderly and disabled as well.
Fundamentally, this century long debate is focused on whether healthcare in the US should be directed more by the government or more by market forces and private competition. For decades, Democrats have pushed for more government, while Republicans have maintained that a free market would work more efficiently. Currently, just over half of U.S. healthcare is funded by federal, state, and local governments, with the rest coming from the private sector. That means nobody is truly steering the ship. And no one is very happy about that.
The U.S. is unique among developed countries in that it doesn’t guarantee at least a minimum amount of healthcare to its residents. New statistics from the U.S. Census Bureau show that in 2018, 8.5% of the population (27.5 million people) lacked health insurance, up from 7.9% the year before.
But as healthcare costs have risen, the current fight in the U.S. is less about how many people have insurance than about how much people who are already covered are expected to pay. The American media have been full of stories about people with insurance who have nonetheless been billed amounts that cause severe financial hardship and even bankruptcy.
A brief history of US efforts to rationalize the healthcare system
Following European expansions of health coverage in the late 19th and early 20th centuries, Theodore Roosevelt became the first American president to call for universal health insurance, during his failed effort to regain the presidency in 1912. His younger cousin, Franklin Delano Roosevelt, also tried, but failed, to make universal health insurance part of the package that became the U.S. social security program, in 1935.
As in England, the foundation for U.S. healthcare accessibility was laid during WWII. Facing an acute labor shortage that officials feared would cause devastating inflation, the federal government imposed strict wage controls. That prompted employers to compete for workers by offering fringe benefits instead, largely private health insurance. The benefit spread rapidly, and a 1943 government ruling that the benefit would accrue tax free made it even more popular with both workers and management.
A decade later, President Harry Truman tried to add compulsory health insurance to the social security system, but was rebuffed by a Republican Congress and the American Medical Association, representing the nation’s doctors. The AMA famously branded the effort as “socialist,” and hired popular actor Ronald Reagan, who would eventually become president of the U.S., to record an impassioned 10 minute attack on socialized medicine.
John F. Kennedy continued the push to expand health insurance. In 1965, two years after Kennedy’s assassination, President Lyndon Johnson signed the law that created Medicare, a public insurance program for senior citizens, and Medicaid, a joint federal-state program to provide health services for those with low incomes. By 2019 Medicare and Medicaid recipients accounted for more than a third of the population. But at the same time, as fewer employers offered coverage to their workers, the number of people without health insurance also continued to rise, reaching more than 30 million by the end of the 1980s—nearly 13% of the population.
That put the matter back on the political front burner, and when the next Democratic president, Bill Clinton, was elected in 1992, he made expanding health coverage his top priority. But as with Franklin Roosevelt and Truman, Clinton’s effort was rebuffed by fierce lobbying by doctors, hospitals, pharmaceutical companies, and other healthcare players who feared they would lose income under the plan, as well as by Republicans who objected to increased federal oversight of the healthcare system.
It would take until 2010, under President Barack Obama, for the US government to expand insurance coverage in a major way. Through a series of political deals and compromises, the Affordable Care Act was both a large step and a small one. It expanded access to health insurance, by dramatically increasing the reach of the Medicaid program and providing subsidies to help those on middle incomes buy private coverage. But it took only minimal steps to tackle the rising cost of medical services.
And because it was passed on a party line vote by a Democratic led Congress and signed by a Democratic president, the law is still the subject of heated partisan debate nearly 10 years later.
Republicans who unanimously opposed the health law in Congress tried hard to repeal it when they took control of Congress and the presidency in 2017. To their surprise, however, it turned out the public did not wish to see the law “repealed and replaced,” as they had been promising, and that effort failed as well.
One of the ironies of this back and forth debate has been that while Democrats and Republicans have fought over the role of government in healthcare, the healthcare system itself has increasingly become a hybrid of public and private. The public Medicare and Medicaid programs, for example, are now substantially administered by private insurance companies. Meanwhile, private insurance, largely as a result of the Affordable Care Act, is increasingly tightly regulated by the federal government, and is increasingly costly—a new poll shows the average worker with employer sponsored family health insurance pays over $6,000 a year for healthcare.
As the US approaches its next presidential election in November 2020, Democrats who are competing to take on incumbent Republican Donald Trump are arguing over whether to build on the Affordable Care Act or scrap the entire current health insurance system and start over with a government run program often called “Medicare for All.”
The details have yet to be worked out, but basically Medicare for All would create a new, federal government financed health program that would cover all Americans for virtually all medically necessary services, with little or no out of pocket expenses charged to patients at the point of service. It would be financed through the U.S.’s income tax system, but it remains unclear exactly who would pay those higher taxes and how much higher they would be.
Other Democrats running for president, however, say starting over with an entirely new health system is unrealistic in a society as politically divided as the U.S. Led by former vice president Joe Biden, they are pushing to expand existing programs in a more incremental way.
President Trump, meanwhile, after failing to get Congress to repeal the Affordable Care Act, promised repeatedly to unveil his own plan to reshape the U.S. health system, but as of publication he has not made good on that promise. Republicans in general, however, have made it clear that they are united in their opposition to the idea of more federal government involvement in the healthcare marketplace. They are once again charging that more government involvement in healthcare equals socialism.
What does the public want?
Ironically, most public opinion polls show that U.S. residents are less concerned with how many people have insurance—which has been the primary subject of national political debate—than they are with the prices even insured people are expected to pay for their medical care.
In 2003, according to the Kaiser Family Foundation, a non-partisan policy analysis group, 60% of Americans surveyed said insurance coverage was the most important health matter, with 33% saying cost was the most important. In 2018, by contrast, that had almost exactly reversed, with 59% saying cost was the most important health matter in their lives, and only 26% saying coverage.
A separate poll by researchers from the Harvard TH Chan School of Public Health and elsewhere also found healthcare costs near the top of voter concerns, with 70% calling health affordability “a very big problem.”
What happens next will depend on which party leads the government after the 2020 elections. History suggests that whichever party it is, it will, like its predecessors, likely prove unable to overcome the substantial political obstacles to enacting major change.
This story originally was published on Oct. 11, 2019, by Kaiser Health News