Making Healthcare Worse

There is no such thing as a perfect healthcare system. Believe me. I live with one that is simple and free at the point of delivery but, quite simply, inadequate to the needs of a developed nation. But America’s system is far from perfect either. What is its worst feature?

The gut reaction of many Americans, especially Democrats, would be to say the number of uninsured. But research by Johns Hopkins suggests that half of the uninsured could buy insurance if they chose to. This may be an underestimate. The researchers assumed that anyone earning less than $58,000 a year could not afford health insurance. Well, that might be the case in New York City, where both health insurance and the general cost of living are very expensive. But in large parts of the US $58,000 is an income that a family can live on.

Let’s focus the debate not on the 45 million uninsured. That category includes people who can afford insurance but simply prefer to spend their money on cell phones, partying and eating out. Surely it is better to focus any government help on the really hard cases. There are people who genuinely can’t afford health insurance or are simply uninsurable because of chronic pre-existing conditions.

Health insurance is often linked to someone’s job. That means if you change jobs you have to change your insurer. This can be disastrous. If you change insurers any health condition you already have will not be covered.

The solution is not to require insurers to cover existing conditions. That undermines the whole principle of insurance. Imagine if you could insure your house against burglary after the burglary has already happened. No-one would take out insurance until afterwards. Why waste money paying premiums for car insurance? Just take out the insurance after the accident. That way madness lies. Insuring yourself against a $1000 loss would cost $1000. What would be the point?

The solution is to break the link between employment and insurance. People should be able to take out personal health insurance which they can carry from one job to the next. Of course, this is possible now. Unfortunately federal government policy encourages people to have workplace insurance through tax subsidies. Employer provided health insurance is cheaper than personal insurance. This does not mean your employer pays for your health insurance. It just means the money comes out of your paycheck before tax is deducted.

This made sense in the 1950s and 60s. People had a genuine expectation of joining a big employer – an IBM, a Ford, or a government entity – and staying with that employer throughout their careers. Most people thought the trend of “Taylorism”, so called scientific management, meant that big employers were going to take a bigger and bigger share of the economy. The rapidly changing economy in which Microsoft would obscure IBM and Google would obscure Microsoft was unimaginable.

John McCain proposed doing something about this. He wanted to switch the tax subsidy from employer controlled health insurance to personal health insurance. Unfortunately the Obama plan goes in exactly the opposite direction. The President wants to encourage people to have employer controlled health care. This is applying the solution of the 1950s to a totally different world.

This is a real problem. The Obama plan takes the single worst feature of American healthcare and makes it worse.

Article provided by Quentin Langley
Lecturer in PR and Political Communications,
School of Journalism, Cardiff University

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