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Affordable Health

Alfred Sommer, MD, MHS 

This is one of my last opportunities to author a largely unexpurgated column. It is time I tackled one of society’s most complex and politicized issues: health care “reform.”

In case you haven’t heard, our country is facing a health care crisis. Its largest and most embarrassing aspect is the 45 million Americans who lack basic health insurance and therefore have difficulty getting the essential preventive and treatment services they need. 

Of the 30 countries in the Organisation for Economic Co-operation and Development (OECD), only the United States, Turkey and Mexico deny their citizens this basic human right! It is well within our capacity to join the rest of the developed world.

“Community rating” ensures that the average cost of a premium is…average. This immediately makes health care insurance affordable to many who presently lack it.
Much of our essential health care is already provided from government coffers. To the civilian Federal Employee Health Plan, add the vast health service systems of the departments of Defense and Veterans Affairs, Medicare, federal and state funding of Medicaid costs, and state and local payments for indigent care and safety-net services. Nearly half of all essential health care spending, the stuff that saves “life and limb” (I’m excluding tummy tucks and Viagra), and nearly 60 percent of all hospital care, is paid from the federal purse. States pay another 10 percent.  

Why, then, is “insurance for all” a seemingly insurmountable problem? Because non-government payments for health care are largely employer-based and run through insurance companies. The insurance companies want to make a profit, and employers want to minimize their premiums. Both want to reduce the risk of actually paying for somebody’s care. In a large company, the costs for a few individuals needing catastrophic care—say for HIV, a brain tumor or a serious injury—can be spread over thousands of relatively healthy, young workers, so the impact on the insurance company’s profits, and the premiums they charge, is negligible. 

Insurance companies therefore avoid individuals who are self-employed or work for small companies. This category includes my son, a perfectly healthy 34-year-old starting his own business. The original quotes for his medical insurance averaged $13,000 to $25,000 a year! The high-cost premium was meant to discourage him from buying insurance. It worked. Just as obviously, people who are sick or disabled are least likely to find employment. They also can’t find affordable insurance premiums because their costs of care are already higher than “average.”

How to get around these obstacles? Simple. Everyone in a community goes into the same risk “pool”—the cost of critical care is spread across the entire community and represents an average that most individuals can afford. 

“Community rating” ensures that the average cost of a premium is … average. This immediately makes health care insurance affordable to many of those who presently lack it: the self-employed and the employers and employees of small businesses. Those who desire greater benefits and have the means to pay for them should be free to do so. Xerox and Kodak understood this concept: During their more profitable and enlightened days, they participated in the city of Rochester’s community rating system.

To close the remaining gap, we need a system that pays for the “average” cost of essential care for those who are poor, unemployed and not presently covered by government programs. 

Since the federal government already pays for half of all essential health care services, why not have it pay the rest? Like today’s Medicare and federal employee programs, the government only needs to ensure coverage for the “average” cost of “essential” care.

Sooner or later we will need to rationalize (“reform”) our health care system. It will inevitably change how we pay for care. But those changes should cost society no more than it does now, prove fairer to everyone and improve the health of all our citizens. 

All Americans deserve access to essential health care.

 

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