When Congress returns from its August recess, health care reform will again be in the spotlight. As lawmakers grapple with extending health insurance to more Americans while lowering costs, there are a few fundamentals that must guide the drafting of legislation.
The first is that maintaining the status quo is not acceptable. As Commerce Secretary Gary Locke wrote in a recent column in the Wall Street Journal, rising health insurance costs are hurting business and stifling innovation.
In 1960, he wrote, U.S. firms spent 1.2 percent of their payroll on health insurance. That jumped to nearly 10 percent in 2006. “These escalating costs have been passed on to the middle class in the form of higher prices and flat wages,” Secretary Locke wrote in the Aug. 28 column. “Money that would have gone to raises has instead been spent on health-care premiums that have doubled over the past nine years.”
In addition, more than 1 million aspiring entrepreneurs are locked into jobs rather than launching their own companies because of health insurance.
Of course, the rapidly escalating cost of health insurance and medical care doesn’t hurt just business. Half of all personal bankruptcies are now caused by medical bills. Nearly 50 million Americans have no health insurance; many of them rely on hospital emergency rooms for their care, forgoing preventive medicine and other care that could improve their health and save money. For those with insurance, premiums are expected to nearly double over the next decade. Health care spending is projected to rise to more than one-third of the country’s GDP by 2040, crowding out spending in other areas.
To change these dynamics, there must be tighter regulations of the insurance industry. Companies should not be able to deny coverage to those with pre-existing conditions nor should they be allowed to drop customers who become sick or injured. Democrats and Republicans in Congress can agree to such common sense changes.
Such changes are needed because private insurance will continue to play an important role in health care for two reasons: Americans love the concept of private enterprise and with a growing federal deficit, a shift to an entirely government-paid-for and -run health care is unaffordable.
At the same time, vocal Americans have made it clear they like government-run health care. An odd outcome of the boisterous town hall meetings that some members of Congress held during the summer recess was the endorsements of Medicare. Signs saying “Keep the government out of my Medicare” were a mainstay at the rallies.
Despite the confusion — many attendees refused to accept that Medicare is run by the government — their defense of the program shows that the government can run a health care system to the liking of many Americans. Government can also run it more efficiently — Medicare’s administrative costs are much lower than those of private insurance companies — while allowing people to choose their own doctors.
So, let government, through a public option, compete with private insurers and let the public decide which it prefers. Currently, those under 65 have little choice and are paying too much for too little — a system no one should defend.