Every year or two, I get an e-mail from my former housemate in France asking me to help make sense of some raging American political issue – impeachment, the electoral college, superdelegates – that is getting regular coverage abroad but which is largely unfathomable if you’re not fully immersed in our political system. On Christmas Eve, after the Senate’s passage of the health care bill, the latest e-mail came from Maxime. If I had a few minutes (ha!), could I help him understand the stakes in the health care reform debate, especially the public option? My response oversimplified and only touched on a small portion of the legislation, but tried to explain the crux of what the House and Senate bills would do in ways a non-expert can follow. Assuming this may be of some value to a few Americans as well, here is a slightly modified version of what I wrote him:
In the US, there are three main ways that people get health insurance. According to the US Census Bureau:
* about three in five (59 percent) are covered through private insurance provided through their employer or the employer of a family member;
* about one in three (29 percent) are covered through the government – primarily through Medicare, a program for the elderly, or Medicaid, a program for the poor;
* about one in ten (9 percent) buy insurance for themselves on the individual market.
Together, about 85 percent of the population has health insurance (the percentages above don’t quite add up because some people have overlapping coverage). The rest of the population – about 15%, or 46 million Americans – has no insurance. The uninsured are primarily low-income working-age adults who are in jobs that do not offer health insurance and who make too much to qualify for public insurance (Medicaid). Uninsured rates are also higher for the young and immigrants.
What health insurance reform would do – under both the Senate and House versions that gained passage and are awaiting reconciliation into a final bill – is provide coverage for most of those who are now uninsured. It would do that primarily by: 1) making more people eligible for Medicaid; and 2) providing subsidies to purchase insurance on the individual market. There would also be new incentives for small businesses to offer coverage. Most people would now be required, or mandated, to have insurance. At the same time, the bills reorganize the individual and small group markets by creating “exchanges” where people and small businesses could go to compare and purchase insurance.
Alors – what is the public option? The public option debate involves whether these new health insurance exchanges where some people (those not covered by their employers or government) and businesses would go to buy their insurance would include a government-operated insurance product. The House bill would require a public product to be available, along with private insurance options. Under the Senate bill, there would be no government product as a choice on the exchange – you could only purchase insurance from privately-operated companies. The huge battle over the public option between liberals and conservatives has been highly symbolic and political. In reality, very few people (maybe 2 percent of the population) would be insured by the new public product even if the House bill becomes law.
The real importance of the bill is that it makes affordable coverage available to tens of millions of those currently uninsured through the expansion of existing public programs (Medicaid) and through public subsidies for private coverage. Given the significant toll that the lack of insurance takes on people’s health and finances, that’s huge. It also does a whole bunch of other good things – such as prohibiting insurance companies from not covering necessary services or canceling your coverage if you get sick. The bills take a less comprehensive approach to bringing the cost of medical care under control, but contain a variety of promising approaches that many believe have the potential to create a health care system that produces better outcomes at lower cost. And since the bills include substantial new revenues to pay for the expansion of coverage, they will not add to the federal deficit over the next decade and beyond.
Of course the bills are far from perfect, and health care reform proponents can point to serious and worrisome flaws in the bills, especially the fact that some twenty million Americans could remain without insurance. Perhaps the biggest drawback to this reform is that it works within the broad architecture of the current system, whereas many would say that it would have been better to tear down the system and rebuild entirely with a single-payer system or something completely different. That approach was rejected by both the President and Congress, who believed (rightly, in my view) that they could never succeed in passing fundamental reform. Given this approach, and given the political realities of needing 60 votes to pass anything through the Senate, passage of health care reform will be an extraordinary and worthwhile accomplishment.