Universal Coverage Not an Option Until Medicare is Reformed

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.

We can’t possibly discuss the question of extending coverage before addressing the horribly flawed healthcare payment and delivery systems that are currently in place. The notion that we can reduce healthcare spending by adding 40 million people into the existing risk pool is simply counter intuitive.  While many claim that the uninsured are shameless free riders on the current healthcare system, the reality is that the uninsured are necessarily more cost conscious and probably to a large degree more efficient consumers of healthcare than insured consumers since they pay for virtually all of the services they receive while the brunt of an insured patient’s bill is picked up by the insurer.  Extending these people health coverage, for free, logically will lead to these individuals using considerably more health care with only a fraction of the cost consciousness that drove their pre-insured use.  If current US healthcare spending is unsustainable even without these uninsured Americans in the risk pool, adding more individuals to a crappy system will simply add more fat to an already out of shape healthcare system.

Ultimately, every American should have catastrophic injury insurance which would ensure that everyone is covered from the “nightmare” scenarios.  But before even that can be addressed, the United States needs to fix Medicare.  In theory, addressing Medicare shouldn’t be particularly problematic.  The fix is fairly straightforward: some combination of raising taxes, the retirement age, and cutting benefits for the elderly.  However in practice, addressing Medicare is thought to be political suicide because old people vote too.  The only feasible way to address Medicare is for some genius of a political operative to gather the most influential and politically secure members of Congress from both parties, put them in a room, hash out an agreement, and collectively present it without disclosing who supported what.  It isn’t the most transparent way of doing things, but there is something to be said for smoke filled rooms. Medicare spending alone could break this country.  Medicare reform needs to be priority number one, and then we can talk about whether or not to extend coverage.

To read other contributions to this symposium, click here.