Universal Coverage? How About a National Healthcare Market at Last?

Tens of millions of Americans lack health insurance. Extending coverage to them has been a core goal of health reform proposals since the 1960s. President Richard Nixon offered a universal health plan in his first administration, but since then Republicans have hesitated to commit the nation to so costly an undertaking. Is it time to rethink? Should Republicans accept universal coverage as a goal?  We posed this question to NewMajority’s contributors.

At a minimum, Republicans must endorse the concept of universal access to health insurance – health insurance for all who want it.  At the same time, we should not have an individual mandate for healthcare with the system as it exists now.

The problem with a mandate is not only that it is an intrusion on personal freedom – falling particularly hard on those with limited incomes, which would require subsidies, otherwise known as public funding – but that it is unclear how it would benefit the people who would be forced to buy health insurance.  A high-deductible plan such as would likely be offered to many of the currently uninsured offers catastrophic care but little financial incentive to go to the doctor for preventive care, including prescription drugs, that can save big costs to the system later on. (And there’s little tax incentive for those at the lower rungs of the economic ladder.) Unlike mandatory auto insurance, which addresses the situation in which a driver who causes an accident is responsible for the associated costs, the lack of health insurance does not impose direct costs on another identifiable person.  (Yes, care for the uninsured drives up the costs for everyone, but because high-deductible plans have a high deductible, some of that care will remain uncompensated – or simply unprovided.)

What incentive would insurers have to reduce premium increases with the system essentially staying the same but adding a mandate? Can we really say that the current market for health insurance offers meaningful competition to the employers who purchase most health insurance plans in America today? Retaining the current link between employers and healthcare makes sense if the polls are right that most Americans are happy with their current health insurance.  But then one really can’t say that there is much “choice” in healthcare, except for those families fortunate enough to be able to choose either spouse’s coverage.

If the nub of the problem that the mandate is designed to solve is the otherwise healthy young adults who choose not to have health insurance and their premiums need to be captured to make the system more efficient, why not offer policies that are designed to make insurance more attractive to these people?  Plans that essentially only offer catastrophic coverage are, to many of them, simply too expensive given the relatively lower salaries of many younger workers.  So they do not purchase insurance.

Instead, there are many questions to be answered before moving to a mandate.  Why, for instance, does medical imaging cost only $98 in Japan, as an oped in the Washington Post stated yesterday?  Those kinds of pricing reforms or better competition would “bend the cost curve” pretty fast.  More generally, should insurance become a national, rather than a state market?  Why can’t Republicans endorse that reform?

Preventing insurers from banning applicants outright based on preexisting conditions is such an indispensable condition to an individual mandate that it should be enacted first, before the individual mandate. Let’s see how that system works in practice in terms of premium rates and coverage actually provided before requiring a mandate.  Otherwise, we could be left with a system in which people are required to pay for coverage that, practically, they can or will never use.  Or, if requiring millions of people to join the system will moderate premium increases, let’s see some data on that first.

Some would say that we have almost beaten Obamacare and that a defeat for Obamacare would presage a Republican resurgence at the polls.  Even if either statement were true (and I doubt both, the second not least because post hoc ergo propter hoc is a logical fallacy), that should not be a recipe for inaction on healthcare.

Instead, Republicans need to show that we actually do care about people’s healthcare and are offering solutions.  As a start, let’s go back to the Heritage Foundation’s idea from the time of the Clinton health proposals and open the Federal Employees Health Benefit Program to others.  I’d suggest the self-employed and their families and the unemployed.  No subsidies, just the opportunity to purchase the insurance offered by the plans that compete in each state under FEHBP.    It’s a system that offers competition among private plans, so Republicans should welcome this.

So:  How about “Access for All” as the Republican slogan?  Or are we just “the party of no?”

To read other contributions to this symposium, click here.