Talking Points on Universal Health Care Insurance

Universal Health Insurance

What is Universal Health Care?

Universal health care is a straw man. Most proponents of "universal health care justify their concerns by pointing to a discredited Census Bureau statistic reporting 47 million Americans live without health insurance. They assume individuals who lack health insurance also lack access to care, and thus the solution to the problem of access rests in creating a universal health insurance program. Yet for the most part, everyone in the United States already has access to health care. Even the uninsured have access through hospital emergency rooms, free clinics, charity care provided by physicians, and prescription drug programs offered by pharmaceutical companies.

Universal health care is a misnomer. Advocates of "universal health care use the phrase to soften the blow of highly controversial policy proposals. Most often "universal health care means health insurance mandates (whereby the government requires all individuals to carry health insurance coverage and show proof of coverage) or a government-run, single-payer health insurance program.

Health care is not a right. Proponents of "universal health care contend health care is a right. What they really mean is some people in the U.S.--taxpayers or employers, for example--should pay for the health care of other people (in addition to paying for their own). But health care is not a right; it is a service. Michael Cannon and Michael Tanner of the Cato Institute note, "People cannot legitimately claim a right to something if that claim infringes on the rights of another.

Are 47 million people without health insurance?

On August 28, the U.S. Census Bureau reported 47 million Americans are "uninsured. But that figure is highly suspect.

Measurements of uninsured prove inaccurate. Many health policy experts question the Census Bureau ,, s methods for determining the number of uninsured. The Census Bureau uses a "point-in-time approach, meaning it counts the number of uninsured on any given day. This method does not identify the chronically uninsured (those on whom public policy should focus), and the method also relies on respondents remembering or knowing whether they have insurance. For example, Medicaid qualifies as insurance, which some respondents apparently do not realize. In addition, several states conducted their own surveys and found the Census Bureau ,, s results much higher when compared to their findings.

A one-size-fits-all solution will not work. The uninsured population is not homogeneous, yet "elected officials too often focus on solving everyone ,, s problems with a single solution. For example, some call for a universal approach based on the inaccurate assumption that elderly, sick people make up the majority of the uninsured. However, the young and healthy actually make up the majority of uninsured. According to the Census Bureau, 30.6 percent of the uninsured are between the ages of 18 and 24, and another 26.4 are between 25 and 34. Solutions for one group will not solve the problems of another, making a universal approach wasteful and ineffective.

Health insurance mandates should be rejected.

Mandates offer empty promises. Many analysts contend "universal coverage plans will not lower health care costs. In fact, the opposite tends to occur: higher prices and fewer choices for consumers. Twila Brase, president of the Citizens ,, Council on Health Care in Minneapolis, states, "Universal coverage promises everything, but guarantees nothing. Brase continues, "If we mandate universal coverage, we say goodbye to the ethical and professional practice of medicine and hello to the restrictive realities of socialized medicine. This emperor has no clothes.

"Universal coverage falls short. The government pays only a portion of the bill for Medicare and Medicaid, leaving the rest for private payers to pick up. John R. Graham, director of health care studies at the Pacific Research Institute, explains, "Because the government does not cover the costs of Medicare and Medicaid patients fully, private insurers pay higher prices to doctors and hospitals. These are then passed on to individuals and employers as higher health insurance premiums. Graham continues, "If we reduced the size of government health programs, private health care would become more competitive, cost less, and [be] available to more Americans.

Mandates make little sense. Government cannot force people to buy what they cannot afford. Therefore, in order to have mandates, the government would have to provide substantial subsidies and guarantees of access to coverage. Yet, if the uninsured are provided with subsidies and guarantees of access, mandates would not be necessary. In addition, mandates would mean the government would have to act as insurer of last resort. What if no private insurer wants to offer coverage to a certain state, like Montana? What if a single company offers coverage in Montana but provides terrible service? Customers have no choice but to buy, no matter what level of service.

Insurance mandates do not work. Government cannot force people to buy what they do not want to buy. For example, some proponents of health insurance mandates point out that many states require drivers to carry automobile insurance. So insurance mandates must work, right? Wrong! Greg Scandlen, president of Consumers for Health Care Choices, notes that in 16 states where automobile insurance is mandatory, the uninsured rate for automobile insurance is higher than the uninsured rate for health insurance, even though the auto insurance is mandatory and health insurance is voluntary. Insurance mandates do not result in universal coverage.

Third-party payer drives up prices. The high cost of health care plays a key role in limiting access to care. Expanding health insurance coverage is likely to increase the cost of health care. Under the current third-party payment system, insurance companies and government programs pay most health care costs, and the insured pay little or nothing out-of-pocket. As a result, overutilization of medical services occurs, which leads to higher prices. The extensive use of insurance to cover our health care needs is an underlying cause of our health care system ,, s problems--not a solution to them.

Insurance is a numbers game. Most health insurance mandate proposals would increase the number of people enrolled in government-subsidized programs like Medicaid. In many cases, even persons currently covered by private insurance would have incentives to drop their coverage and move to the government plan, perhaps because the government plan is less expensive, or it ,, s more convenient to have the entire family in one plan. This would leave fewer persons covered by private insurance, whose premiums would then rise as a result.

Price transparency is important for cost control. In order to be effective consumers, patients need more information, not less, about how much their health care costs. The more people are covered by insurance, either in the private sector or by government programs, the less transparent the health care system becomes, because prices are not readily available, or even of particular interest, to consumers who are not paying directly for their care.

Single-payer proposals should be rejected.

The federal government cannot afford to bankroll another health care program. Federal government revenues in 2006 totaled $2.4 trillion. The present value of long-term liabilities for the Medicare, Medicaid, and Social Security programs currently stands at $39 trillion, according to the U.S. Government Accountability Office. The liability has increased 147 percent in the past six years alone. Clearly, the federal government cannot afford to increase its health care liabilities even more.

State governments are in no better position to fund a single-payer program for their residents. Last year, Medicaid eclipsed education as the largest expenditure for state governments. States spent $336 billion, accounting for 22 percent of their budgets. Just one public health program that serves 18 percent of the population takes one of every five dollars spent by state government. Like the federal government, states cannot afford to increase their health care liabilities.

Even if the federal government or states could afford to cover everyone ,, s health care needs, such a government-run program would fail. Proponents of government-run health care often point to Canada and Britain as models that work. But the two countries offer better examples of how government-run programs fail to improve access to care. At any given time, 800,000 Canadians and more than one million Britons are waiting for health care. In 2005, the Supreme Court of Canada ruled that "delays in the public health care system are widespread, and that, in some serious cases, patients die as a result of waiting lists for public health care.

Administrative costs soar in single-payer programs. In Canada ,, s single-payer plan, administrative costs represented 45 percent of claims. In the U.S., administrative costs represent just 8 percent of claims. The average Canadian family pays 47 percent of its income in taxes, and most of that goes to pay for the single-payer system.

Single-payer programs chase away health care providers. Canada ranks 24th of 28 countries in the number of doctors per thousand people, according to the Organization for Economic Cooperation and Development. In the U.S. a growing number of doctors are dropping their current Medicaid patients or refusing to accept new Medicaid patients into their practices, because the program reimburses them less than it costs to care for those patients and payments are often delayed by weeks or even months.

Market-based solutions work best.

Health Savings Accounts return control to consumers. About 4.5 million Americans use health savings accounts (HSAs), according to America ,, s Health Insurance Plans. HSAs give patients more control over their health care dollars, which in turn promotes more responsible spending.

Empowered patients are more careful consumers of health care. The increase in consumer control over spending has made consumers more cost-conscious and has encouraged such innovations as retail health clinics, which give patients more convenient and less-expensive access to high-quality care, and specialty hospitals, which provide patients with a less-expensive, more patient-friendly option for specific types of surgery.

Recognizing need saves money. Instead of expanding the reach of government-run health care programs to persons not truly in need (the "universal approach ), government programs should focus on serving low-income persons and those unable to get private insurance because of their unusual health care needs. For example, SCHIP, originally intended to serve the needs of low-income children, has expanded and covers a wider range of individuals, now including middle-income adults in the program. This has fostered dependency, increased government spending, created a permanent program, crowded out private insurance, and no longer focuses as strongly on children lacking care. Instead, SCHIP should target the neediest children who lack other sources of health insurance, as originally intended.