How Congress Should Operate on Health Care System : Central to the issue is the soaring rate of medical costs. We must act before these problems get worse, but we must move carefully.
This year’s debate over health care reform has demonstrated how enormously complex and difficult it will be to slow the growth of our dangerously high health care costs and to ensure that all Americans have access to the health care they need. But despite the impasse we have reached for the time being, the very fact that a full national debate over this very serious issue has begun in earnest--and it will continue--means that health care reform has at last received the priority it deserves.
Spending on health care has been rising at an unsustainable rate. As recently as 1965, we spent 6% of our gross domestic product on health care. We now spend 14%, and, if current trends continue, that figure will rise to 18% or 19% by the year 2000--only six years from now.
All of us feel these higher costs in the prices charged for insurance policies, in out-of-pocket deductibles and co-payments, in lower wages that result from companies’ paying more for health benefits, and in federal, state and local taxes to support government-sponsored health insurance and health care programs.
The costs of Medicare and Medicaid (Medi-Cal), in particular, are growing at an alarming rate. Since 1980, federal spending for Medicare and Medicaid has grown by 113%-- after adjusting for inflation. In 13 years, these two programs have risen from 16% of the federal government’s domestic budget to 22% this year and, unless changes are made, will rise to an astounding 35% five years from now.
These increasing costs are the major obstacle to eliminating federal budget deficits, and to reordering federal spending priorities so that more funds are available for other critical national needs.
One reason our health care costs are rising so rapidly is that the proportion of Americans over age 65--those with the greatest need for health care--is growing each year. Another is that more treatments have been made possible by medical and technological advances. A third is extremely high administrative costs, accounting for fully one-quarter of all U.S. health care costs.
In addition, we have too many hospital beds, a surplus of specialists and a shortage of primary-care physicians, a high rate of unnecessary procedures, high medical malpractice insurance costs, dependence on high-cost emergency room care by those who lack insurance and very high prices for many prescription drugs.
Most Americans have employer-provided health insurance. Almost everyone over 65 is covered by Medicare, and about half the poor are covered by Medicaid. But nearly 40 million Americans--85% of whom are workers or their dependents--have no health insurance at all. They rarely see a physician, waiting until a problem becomes acute. Then they resort to emergency room services, the most expensive care. Since the uninsured often are unable to pay their medical bills, hospitals and doctors shift the cost to patients with insurance.
Even more worrisome, millions of additional Americans lose their insurance as they lose or change their jobs. And increasing numbers of workers avoid changing jobs, because of fear of losing valued health benefits. Even those who remain in their current jobs have no guarantee of continued coverage, and people who work for small businesses are especially at risk of losing their insurance. If only one employee of a small business becomes seriously ill, insurance companies usually raise rates to unaffordable levels or refuse to renew coverage. Even small businesses with low-risk employees often pay 30% to 40% more than large companies, which negotiate discounts for insurance, for identical coverage.
Not surprisingly, about two-thirds of workers without health insurance are employed by firms with fewer than 100 employees. Many of those firms would like to provide insurance for their employees but simply cannot afford to.
For those who do have insurance, benefit packages vary widely, and many are seriously underinsured. The most serious gap in coverage for those who are insured is for illnesses or disabilities that require long-term care, which is a special concern of older Americans since Medicare does not cover nursing or home care, and little private insurance is available.
We must act before these problems get worse, but we must move carefully. All the alternatives to the present health care system raise serious questions. But costs are rising faster than our ability to meet them; large numbers of Americans are experiencing personal crises because they cannot pay for the health care they need. And our capacity to compete in the global economy is seriously threatened by health care costs that are far higher than those of other nations.
Although I am disappointed that we were not able to make more progress in solving these problems this year, I believe it would have been a mistake to have tried to develop and rush through Congress a major restructuring of our health care system in the waning days of this session. Congressional leaders have made the right decision to focus on passing, if anything, a bill which will serve as a modest first step in addressing the problems.
Because of this year’s groundwork, Congress will return to the issue next year with a far better understanding than we had a year ago of how we might extend coverage and control costs, and how we can accomplish those goals without disrupting the health care of those who are satisfied with the benefits they currently receive. We will be able to respond more effectively to the needs and desires of Americans as individuals, as well as serve the best interests of our nation as a whole.
