The Census Bureau reported today that the number of Americans without health insurance reached a record high in 2006 of 47 million, or nearly one out of every six Americans. Blacks are twice as likely as whites to be without insurance, while Hispanics are more than three times as likely. North Carolinians are slightly more likely to be without insurance than residents of other states. Both the number and the percent of people without insurance have grown since 2000.
President Bush's recent observation that "people have access to health care in America...After all, you just go to an emergency room” is as unhelpful as it is callous. His new rules to restrict states from expanding insurance for children through through the State Children's Health Insurance Program (SCHIP) will only make the problem worse.
What about the following three-part proposal based loosely on the Massachusets plan?
First, offer all Americans the opportunity to participate in either Medicaid, SCHIP, or a new publicly-administered, high-deductible, catastrophic health insurance plan. None of these plans would offer Cadillac care, but they would provide basic, no-frills services.
Second, set the premiums for these plans on a sliding scale based on income. That is, set the premiums to be certain fraction of people's incomes, just as we do with the Food Stamp Program (food stamp families are expected to contribute roughly 30 percent of their incomes to their own food purchases; a smaller percentage would be appropriate for medical insurance). People with no income or very low incomes would be enrolled for free--this is essentially how Medicaid works now. People at or near the poverty line would contribute something, and people with moderate or high incomes would pay the full actuarial cost of participation. Some families who currently participate in Medicaid and SCHIP would have to begin paying something for medical insurance (and have the option to switching to the catastrophic plan) while some near-poor and moderate-income families would begin receiving subsidized health insurance. Families with greater means would get access to services at cost. Payments could be made through the tax system, much as FICA taxes and self-employment taxes (Social Security and Medicare) are handled now. These payments would receive the same tax treatment that private payments now receive.
Finally, mandate that everyone either obtain insurance--either through their employer, from a private provider, or from the government--or demonstrate sufficient resources to cover their own health care. This last provision is needed to keep people from free-riding on emergency room care. It is also needed to broaden the insurance pool and to keep people from waiting until they are sick to purchase one of the government plans. Again, the tax system could be used to enforce this mandate. The government would require payments into one of its health plans unless people could document some other type of coverage or a level of assets.
The proposal has the potential to insure every citizen who needs insurance. The societal costs would be enormous; one way or the other public and private funds would have to pay for 47 million people who aren't covered now. However, the drain on the public treasury would be modest. The government would only take responsibility for providing no-frills plans, and it would only cover a small portion of the payments beyond what it is already covering. The majority of Americans who have private insurance could keep those plans under the same conditions as today.
