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Answering the Big Questions About Health Care Reform

A major health care reform debate is occurring between Democrats and Republicans, insurance companies and consumer organizations, and large and small businesses. Citizens should be part of this debate by telling elected representatives how they feel about health care reform. Yet how you feel depends on how you answer several big questions:

  • Should access to health care be a legal right?
  • What role should the federal and state governments play in our health care system?
  • Would you support substantial changes to the status quo?

How we choose to answer these questions will have significant implications.

The fundamental question is whether health care should be a legal right.

If health care is a right as opposed to a privilege, we must develop mechanisms to insure that everyone is guaranteed access to health care. Therefore, some form of mandate will need to be enacted. This could be in the form of an individual mandate (i.e., everyone is legally required to have health insurance) or in the form of employer mandates (i.e., employers must provide health insurance). The government would also have to provide some form of health insurance to the unemployed.

This leads to another essential question: what role should the federal and state governments play?

Government can fufill one or more of the following functions: insurance provider, service provider, regulator. There could be a government insurance option for those who cannot obtain insurance thru their employer or a private insurance company. If government were to provide insurance, would this significantly affect the private insurance market? Would this increase or decrease competition? This is a debatable issue for which there is no certain answer.

What if the government becomes a service provider?

In the current debate, this is often referred as the public option. Government would finance and/or administer health care options in the form of physicians, hospitals, clinics, or a new organizational form. Those who oppose the public option argue that it would decrease competition, decrease quality, and increase consumer dissatisfaction because individuals would not have the freedom to choose providers. Another major criticism is that government would be permitted to “ration care.” The image of a bureaucracy in which waiting lists and denials are the status quo engenders fear. Yet many seem to forget that we currently ration care on the basis of individuals’ ability to pay. One potential alternative is to establish a set of “cooperatives” fully administered by the private sector but regulated by government.

How would an increased regulatory role work?

In this role, government would set standards that may include: banning companies from limiting insurability through “pre-existing conditions;” requiring the use of electronic medical records; rate control for the sale of prescription drugs; specifying consistent reimbursement rates; and changing the structure of Medicare and Medicaid. In this regulatory context, one major proposal is to eliminate the provision of health insurance as an employee benefit. Individuals would receive a tax-credit that would allow them to purchase whatever health insurance they choose. Proponents suggest that this would increase competition among insurance companies and increase consumer choice. However, this would be a major change of the status quo, transforming how our current health care system is financed.

How greatly should the status quo change?

This may be dictated by which policy objective we want to maximize: cost containment, addressing the needs of the uninsured, and/or making health care a legal right. Each choice comes with tradeoffs. For example, if our primary objective is controlling costs, then reform that would increase taxes for a significant portion of the population is not attractive. However, if our chief concern is to decrease the number of uninsured and under-insured citizens, then we must be willing to accept higher costs, including higher taxes. We can make progress on reform only if we are willing to answer these big questions and accept their implications.
 

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