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What Every Voter Needs To Understand About The American Health Care System

By on August 31, 2012

The Republican National Convention is history, Hurricane Issac is winding down in Missouri and the lines of battle for 2012 have been drawn. The Obama-Biden team will doubtlessly talk about health care next week, but their positions are a matter of public record. If you are one of the handful of people left in this country who has not made up your mind about the candidates, here is some important background information you should know before you head for the polls:

The American health care system is the way it is because of events way back in WWII and 1946. It takes some doing to explain our system to people from other countries. We were the only Western country without a significant Labor party in the Twentieth Century. We never seriously flirted with Socialism. Labor pretty much attached itself to Roosevelt and the New Deal.

After the war, Labor leaders then decided that, instead of pushing for a national health plan to reward those who contributed so much to the war effort and the shift to a peacetime economy, they would follow the path of allowing health insurance to be attached to employment. What’s more, government encouraged this by declaring health insurance costs an untaxed benefit for both worker and employer. The cost of the insurance wasn’t a lot in those days because there was not a lot medicine could do. The first workers with employer-based insurance worried more about lost wages than medical bills when they got sick.

As time went on, Unions worked to improve coverage through the collective bargaining process. And they did a good job, often getting greater benefits for white-collar and blue-collar workers alike. Families too shared in the bonanza. Charity care covered the poor. Everyone was fairly happy.

Then great technologic advances came along and suddenly medicine could do a lot for both the sick and the well, and charged accordingly. Open-heart surgery, anti-cancer drugs, critical care units in hospitals did wonderful things, but they drove up the cost of care and insurance. This continues. In the 1990’s as the Cold War ended, the US entered the Global marketplace. Suddenly US companies were competing with new operations worldwide where both employee and executive compensation was much less, and governments picked up the bill for health care.

US firms were disadvantaged by having to add the cost of employee health insurance to the price of their widgets in the marketplace. This is a particular problem for small businesses who don’t have a lot of spare cash. Costs continued to rise faster than incomes. A crisis was upon us.

The trouble now is that we are locked into our unique system of tying health insurance to work. Companies are not required to offer insurance. In the years leading up to 2010, many dropped insurance as an offering to improve their competitive position. Many passed more and more of the cost on to the employee in the form of co-payments and deductibles and carve-outs. Now in a time when the cost of health care can bankrupt a family, this is a problem.

The Obama administration has tried to come up with a plan that works with the current employer-based system and tries to devise a system where employers either offer insurance, if they are large enough, or contribute to a pool that helps establish exchanges where those without coverage can buy insurance on their own. It has some features designed to keep costs down, but it is the mandate that everybody participate, similar to mandated auto insurance, that is the hot issue in this election.

So far the Romney platform pledges only to dismantle recent reform work and find ‘a better way.’ We have no idea what that way is or how long it will take to find it. We would be better off if we could either go back to 1946 and find a way to copy what other countries did, or finally announce, as some Conservatives would like,  that if you have the money you can get care and if you don’t you either depend on charity or do without. Then at least we would at least know where we stand and what we need to do next.

But neither is going to happen in this or any upcoming year. Too many people have a vested interest in the status quo, starting with third parties and middlemen. Scare tactics and misinformation are the order of the day. We now have the most expensive but not most effective health care system in the world.  The whole system, not just Medicare, is on a collision course with reality.

That is the current background behind all the sloganeering and name-calling this year.

Now you know, you decide…..

Tom Godfrey

 

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