Public Option Paper Final
- 1. Public Option: Optional or Necessary?Eric S. Enright & Dianne L. DrinkardIntroduction to Health CareKeri StevensNovember 9, 2009Table of ContentsI. IntroductionII. The Face of the Uninsured in the United StatesIII. Health Care Systems of the World
- 4. The National Health Insurance Model
- 6. IV.The History of Health Care in the United States
- 7. Beginning to the Baylor Plan
- 8. The Birth of Blue Cross
- 10. SCHIP and Medicare Part D
- 12. V.Current Reform Proposals Being Considered
- 13. Obama's Plan With an National Insurance Exchange
- 15. VI.What Is the Public Option?
- 16. VII.Pros and Cons of the Public Option
- 17. VIII.ConclusionIX.ReferencesAbstractIndustrialized nations around the world have found a way to ensure health care for every citizen. In the United States, however, millions of uninsured people cannot afford to pay for their health care. Here we provide evidence to support a public option as the best way to provide a vehicle for all those within our shores to obtain it. We compare current world health care systems and ours, and give a brief history of how our current system came into existence. We also discuss the current reform proposals being considered, show the pros and cons of a public option, and show how getting involved together can help us gain a government protected right to health care for all.Public Option: Optional or Necessary?Many industrialized countries with economies and governments similar to the United States of America have found the ability to provide health care to all of their citizens, while spending less money per capita on health care then the United States. With nearly 50 million U.S. citizens without affordable access to health care, we need a government sponsored, public option health care plan.The Face of the Uninsured in the United StatesIn the United States of America there are arguments on who is uninsured and why. In The Uninsured, an analysis written by The Henry Kaiser Family Foundation (2009) it states, “The number of non-elderly uninsured Americans rose to 45.7 million in 2008” and of the 45.7 million “80% of the uninsured under 65 are native born or naturalized citizens” (p. 6).That leaves 36,560,000 citizens of the United States of America uninsured. Some argue that many can afford to obtain insurance for themselves, as “8 in 10 are members of working families. Only 19% are in families with no one working” CITATION Ran09 \l 1033 (James, 2009). With health care costs raising faster than inflation and insurance coverage dropping rapidly, many employers are unable to keep employer-sponsored insurance because of the rapidly increasing premiums. The employers that are able to keep coverage have raised the share that employees must pay “from $ 1,543 to $ 3, 515” CITATION Nat09 \p 2 \l 1033 (National Coalition on Health Care, p. 2). About two-thirds of the uninsured are individuals and families who are poor (income less than the federal poverty level of 22,025 for a family of four in 2008) or near-poor (with income between one and two times the poverty level) CITATION the09 \l 1033 (The Kaiser Family Foundation, 2009) To this two thirds of the uninsured, the $ 3,515 employee contribution is just a portion of the medical expenses they would incur. There would be charges for many prescriptions, co pays, office visits, and many other expenses. This puts the option of employer-sponsored health insurance out of reach for many. The fact is, many families have to make a choice between health insurance or many essential things for daily living such as food and shelter.Not to be forgotten are the 9,140,000 uninsured non-citizens in the United States, a number obtained by subtracting the number of uninsured naturalized citizens from the total of uninsured (The Kaiser Family Foundation, 2009). Some argue that taxes should not help these people, to just forget about them, but laws state that they are entitled to emergency treatment if their situation is life threatening. If we just ignore the problem, we are burdening the hospitals and bringing up a question of morality. Dr. Fizan Abdullah, a pediatric surgeon at John Hopkins Children’s Center, stated \" Our civilization and our nation will be judged by how we treat our most vulnerable\" CITATION Mar09 \l 1033 (Carmichael, 2009). Don't you agree? We do.Health Care Systems of the World To understand how our system works, we shall explore the different health care systems in the world, of which there are four main systems. They all have the same basic goals; to keep people healthy, treat them when they are sick, and protect them from financial ruin. The differences come in how they are managed and financed. In The Healing of America, a book by T.R. Reid CITATION TRR09 \n \t \l 1033 (2009), they are explained, we will summarize these four models here.First there is the Beveridge Model, a single-payer system of health care, where the government owns and finances health care to all citizens through taxes. The government owns and operates most hospitals and doctors. The Beveridge system has general practitioners (gatekeepers) which must give a referral for one to see a specialist. This takes away choice and has increased waiting times. In this form, the unemployed and poor are provided the same care as everyone that works and pays taxes (universal coverage). Patients never receive a bill for health care services. This is often referred to as single payer, national health services. It began in Great Britain and is now found in Spain, New Zealand, most of Scandinavia, and Cuba. The second is the Bismarck Model, a multi-payer system of health care, where employers and employees split the cost of insurance through payroll deductions. The insurance companies, often called \" sickness funds\" , are mainly non-profit, private, and must provide coverage to everyone, regardless of health, age, or income. They are strictly regulated by the government, and thus can provide cost control similar to a single payer system. In this system, everyone that works pays a percentage of his or her income to a health insurance plan that the employer matches. This is done to ensure affordability for everyone. If you have no income the government pays for your insurance. In this model, hospitals and doctors are private, and there are no restrictions on a choice of doctor. Primary care physicians do not have to refer a patient to a specialist, so access to health care is universal, and a patient may go to any doctor they choose and the insurance must cover the bill. This system began in Germany and is now found in France, Belgium, Netherlands, Japan, and Switzerland.Third there is the National Health Insurance Model, which employs parts of both the Beveridge and Bismarck models. It has private hospitals and doctors, but the insurance is government run and each citizen must pay through income taxes for the insurance. The government is able to control costs by being their own non-profit insurance company, negotiating very low prices for service. This system is a single-payer system, and is found mainly in Canada. The primary care doctors are gatekeepers, as the government requires a referral to see a specialist. This makes for long wait times to see a doctor and takes away the freedom of choice of doctors.Last is the Out-of-Pocket Model, which provides health care to people who can pay the entire cost out of pocket. There is no government involvement, and most citizens with this system have no access to health care. It is found in many poorer nations such in Africa, India, China, and South America where many citizens never see a doctor their entire life.These four health care models are found in variations in every country in the world. While none are perfect, they are being transformed by each country to improve the health of its citizens. The United States is unique in that it has a multi-payer system that incorporates all these models. For the elderly, the disabled and children of recipients of TANF funding, it is much like the Beveridge Model, with the government exercising much control over who can be treated for what, and how much providers get paid. The government exercises total control over this group. For the working middle and upper class group, our system would most resemble the Bismarck Model, except that other countries that employ this model have a plan to cover everyone, and do not make a profit. In some ways, the U.S. also resembles the National Health Insurance Model as well, as the working pay into health care (Medicare) which is paid by the government to private providers. Last, but certainly not least, and the group we are concerned with the most, is the working poor, who cannot afford the high cost of health insurance premiums and must go with the Out-of-Pocket Model, getting care in an emergency, but having to pay the bill out of their pockets, or the costs being absorbed by the hospitals, raising the total cost of health care for everyone. How did this come about? We will now explore the history of health care in the U.S. and how it became the behemoth it is today.History of Health Care in the United StatesBefore 1929, most people in the United States paid for health care out of pocket to private hospitals and doctors. With new medical technology and understanding of disease, treatment became more effective and advanced, which led to much higher costs. This put health care out of reach for most. In Delivering Health Care in America, a book by Leiyu Shi and Douglas A. Singh (2008), it states:Private health insurance began as a prepaid plan at the Baylor Hospital in 1929. For a predetermined fixed fee per month, Baylor, and subsequently other hospitals, started providing inpatient services. Thus, the financial structure of the first health insurance plan was based on capitation…within a few years, the insurance function was taken over by the Blue Cross Commission (pp. 338-339).The Blue Cross Commission became the Blue Cross Association. Its primary goal was to make hospital care more affordable. In the 1930s Blue Shield was added to provide affordable patient care outside of the hospital. The Blue Cross /Blue Shield insurance program began as a private, non-profit insurance company; they charged everyone the same, regardless of age or health. The success of Blue Cross/ Blue Shield prompted for-profit insurers to enter the market. The for-profit health care insurers are what most Americans use now, and they make a profit mainly by covering the people who are the healthiest and ignoring the sickest, also known as \" cream skimming\" (Shi & Singh, 2008, pp 235-236). They charge higher premiums for age, gender, health status, and pre-existing medical conditions. The success of the for-profit insurance agencies eventually pushed Blue Cross/ Blue Shield to become for-profit as well (Shi & Singh, 2008, p. 98). This system kept gaining in popularity, with more and more employers offering health insurance. This new system provided no coverage for the poor or elderly, and was not affordable to those whose employer did not offer insurance. This led to Medicaid and Medicare in 1965, a type of insurance financed by the government through taxes, for the elderly, disabled, and the very poor (Shi & Singh, 2008, pp. 207-216). These programs helped achieve the highest rate of access to healthcare the United States had ever seen, but there are still 45.7 million uninsured in the United States (Henry J. Kaiser Family Foundation, 2009). In more recent days, the State Children's Health Insurance Program (SCHIP) began in 1997 to cover children under 19 that would otherwise not have any coverage, due to the parents earning too much to qualify for Medicaid (Shi & Singh, 2008, p.219). Also, part D of Medicare began in 2006 to assist the elderly with the prescription costs (Shi & Singh,2008, pp.112-113). So children from poor families and seniors are covered, but how about the rest of us? We must rely on employer-sponsored or private health care plans, or pay out-of-pocket for our health expenses. With a failing economy, many face job losses and loss of their insurance, unless they are lucky enough to be able to afford COBRA to extend their coverage up to 18 months until they find work and another plan. Many have been out of work that long already, and job losses continue. So what of us? President Obama has proposed a plan to reform health care policy, but the details are being fought out between political parties while many of us are facing acute illnesses such as the pandemic of the Swine Flu, and chronic illnesses such as Rheumatoid Arthritis and Heart Disease, which we cannot afford to treat. What is this plan? More importantly, will it be sufficient to cover all Americans who need care, and will it reach us in time? Current Reform Proposals Being ConsideredObama's plan includes a national insurance exchange, plans to increase competition in the health care delivery market, to increase quality and access to care, while cutting costs in its delivery (Barack Obama and Joe Biden's plan to lower health care costs and ensure affordable,accessible health coverage for all, 2009).What is an exchange? Simply put, it is a warehouse of sorts for the various public and private plans in existence, and is designed to provide consumer choice, and inspire competition in the market. It could be a state-wide or nation-wide exchange, a nation-wide being the strongest option for competition while increasing efficiency and lowering costs (Klein, 2009). The largest issue by far, as of late, is the idea of a public option, but what is it? We will now examine it, and our need for it in health care reform.What is the Public Option?The public option is a government sponsored health care plan much like the private insurance plans now in existence, that people can purchase to pay for health care. How this plan should be run and funded is still being debated, and there are several options for its implementation. It could be funded solely by those who buy into the program, otherwise known as self-sustaining, or it could be federally subsidized by taxes. There also is an option for a state-run program, with each state setting the guidelines for its implementation. Another option being debated is an option that would only be implemented as a \" trigger effect\" , which is to say that it would not be implemented at all unless the private insurance companies could not keep their costs down or cover the many citizens with pre-existing conditions. In that case, it would trigger the plan to be implemented CITATION Tri09 \l 1033 (Torrey, 2009).Who would benefit from such a plan? A public plan would benefit several groups, mainly those who cannot already take advantage of an employer-sponsored plan, those with pre-existing conditions which exclude them from most private insurance plans, and young, healthy persons, who would find a cost-effective way to purchase insurance. In our current system, health insurance is voluntary, so those who purchase it are more likely to be the ones who use it most, which keeps costs rising. Many professionals and officials believe that all working individuals should be required to purchase insurance to keep costs lower. Their belief is that by having more younger, healthier people in the plans, the burden is shared for the costs of those already aged or with chronic conditions that require costly services, and it will help the younger paying individuals as they age and need more services in the future, at a lower cost. They believe it spreads the cost more effectively across the board CITATION Tri09 \l 1033 (Torrey, 2009). The Pros and Cons of the Public OptionThe Pros of a Public OptionThe Cons of a Public OptionLower Premiums
- 18. There would be more people paying
- 19. into the program, which would drive
- 20. premium prices down (Torrey,
- 21. 2009).
- 22. No Profit Margin or Tax Liability
- 23. Plan funds would have federal or state funds to pay for them, therefore would not require rate hikes to increase profitability, as governments
- 24. are non-profit entities. Also, because they would not make a profit from premiums, they would not be
- 25. subject to taxation (Torrey, 2009).
- 26. The Cons of a Public Option
- 27. Private Insurance Companies Would Go Out of Business
- 28. With such a large, profitable group to compete with, insurance companies fear
- 29. they could not afford to keep providing current levels of service to their customers and still pay their investors (Torrey, 2009).
- 30. Lower Payments to Providers
- 31. Some physicians now refuse to take
- 32. Medicaid patients because they do not get reimbursed enough for their services
- 33. from the government. With another public program, they worry that they
- 34. Bargaining Power
- 35. Insurance companies would have to compete with public funded programs for customers. Having a large group to contend with would force private companies to keep the cost of premiums down, and give customers better deals to stay competitive (Torrey, 2009).
- 36. Portability
- 37. A public option would make it possible for an individual to change jobs or move and keep their insurance coverage.
- 38. Depending on whether it is federally
- 39. or state funded, one could go anywhere in their state or the country and stay
- 40. covered with this type of plan (Torrey, 2009).will receive even less payment for services. (Torrey, 2009). Not all doctors enjoy high wages, some rural doctors
- 41. make just enough to get by.
- 42. A Single-Payer System Might Emerge
- 43. Many people fear government intervention in individual affairs, and dislike the idea of a single-payer system run by the government. The introduction of a public option would cause many to choose that option, and many believe it may well be the first step towards a government-run, single-payer system in the U.S. (Torrey, 2009).The pros clearly outweigh the cons in this case, as the points against the public option are weak. For one, some countries (Canada, Great Britain, Germany) that have a Universal Health Plan also have some private insurance plans available to supplement the public plans, suggesting that a public plan will not put private insurers out of business (Shi & Singh, 2008, pp. 24-26). Also, the point that many physicians fear lack of reimbursement seems to be ill-founded as well, as a majority of physicians support the public option (Henry J. Kaiser Family Foundation, 2009). The final point against the public option is that it would lead to a single-payer system, which politicians fear more than the general public. They speak of long waiting times and loss of choices in Universal Health Care, but those of us who are uninsured or underinsured usually wait until it is too late to be treated until it is an emergency, and then we have no choice in the matter at all. Talk about wait times and choices! The fact is that the majority of the general public, as well as many providers support a single-payer, Universal Health Care Plan CITATION Tod08 \l 1033 (Neale, 2008). ConclusionIt is now clear that as long as we take care of both patients and providers in health care reform, a public option is necessary. A measure of a country is how they take care of their citizens; it is a moral issue. In most industrialized countries, all citizens are created equally in the health care arena, and though patients must often wait for treatment of non-emergency conditions, the rich and poor wait an equal amount of time. This suggests a solidarity between people that America apparently does not share. It takes a true moral commitment to serve the citizens of a nation and succeed in developing a health care system that encompasses all persons, regardless of status in the community CITATION TRR09 \l 1033 (T.R.Reid, 2009). How can each of us assist in accomplishing our task to provide dignified health care for all? The answer lies in GETTING INVOLVED in the process, ensuring that proper health care reform happens. By contacting our legislators on the local, state, and federal levels (by voting, phone, e-mail, rallies, etc.), we will show them by sheer numbers that we stand together in solidarity (a word well known worldwide but seldom heard in America) to obtain a public option in health care, not just today, but ongoing. We must come together to fight for a common cause, and make certain all of us are assured a government protected right to good health in our quest for life liberty, and the pursuit of happiness, rights which are already guaranteed by our constitution.ReferencesBarack Obama and Joe Biden's plan to lower health care costs and ensure affordable, accessible health coverage for all. (2009). Retrieved October 16, 2009, from www.barackobama.com: http://www.barackobama.com/pdf/issues/HealthCareFullPlan.pdfCarmichael, M. (2009, October 30). For kids, being uninsured can be a killer. Retrieved November 7, 2009, from www.newsweek.com: http://blog.newsweek.com/blogs/thehumancondition/archive/2009/10/30/for-kids-being-uninsured-can-be-a-killer.aspxHenry J. Kaiser Family Foundation. (2009). The uninsured, a primer. Menlo Park, CA: The Henry J. Kaiser Family Foundation. Retrieved November 6, from kff.org: http://www.kff.org/uninsured/upload/7451-05.pdfHenry J. Kaiser Family Foundation (2009, September 16). Poll: majority of doctors support public option. Retrieved November 6, 2009, from www.medicalnewstoday.com: http://www.medicalnewstoday.com/articles/164083.phpJames, R. (2009, October 14). Which Americans are uninsured? Retrieved October 14, 2009, from Time.com: http://www.time.com/time/health/article/0,8599,1930096,00.htmlKlein, E. (2009, July 29). A market for health reform. Retrieved November 6, 2009, from www.washingtonpost.com:http://www.washingtonpost.com/wp-dyn/content/article/2009/07/28/AR2009072802114.htmlNational Coalition on Health Care. (2009, September). Health insurance costs. Retrieved October 12, 2009, from the National Coalition on Health Care: http://www.nchc.org/facts/cost.shtmlNeale, T. (2008, June 20). Nationwide protests support a single payer healthcare plan. Retrieved November 6, 2009, from www.medpage.today, com: http://www.medpagetoday.com/PublicHealthPolicy/HealthPolicy/9889Shi, L & Singh, D. A. (2008). Health services financing. Delivering health care in America: A systems approach (Fourth ed.). Sudbury, MA: Jones and BartlettReid, T.R. (2009, September 12). No country for sick men. Retrieved November 5, 2009, from www.newsweek.com: http://newsweek.com/id/215290/Torrey, T. (2009, October 21). Public option health insurance pros and cons. Retrieved November 5, 2009, from www.about.com: Patient Empowerment: http//patients.about.com/od/healthcarereform/a/publicoption.htm