Kate's thought on health care

Those of you who know me well know that I don’t often talk politics with friends and family, despite the fact that it’s what I do for a living. Those of you who know me well also know that I’m not much of an ideologue and that most of my views are fairly moderate and all of them are grounded in my Christian worldview. Why say this? Well, for the past few weeks, I have watched as friends I love and respect react to the health care debate. I’ve read postings on facebook and blogs that display fear and anger. I’ve also watched and read news coverage of the issue that features everyday people echoing these sentiments. “This is government takeover of health care!” “This is socialized medicine!” “There will be rationing!” “Goodbye freedom and liberty!” These are the statements I hear and see repeated by friends and on the news.

I don’t often talk about politics, but I feel compelled to in the wake of these statements and the strong sense of fear and anger that is permeating many Americans. I support health care reform. I don’t believe that the bill passed by the House and Senate is the absolute best solution to our health care problems, but I do believe that it is a step in the right direction. This will likely be a long essay, but I hope you will stick with me as I try to explain why I believe this to be true and why the objections raised by many are inaccurate or unfounded. In the spirit of full disclosure, I do admit that I have not read H.R. 3590 (the House bill that passed on Sunday night), but I have studied health care policy for many years and have followed the current debate closely. I teach health care policy in my Public Policy class and gather information about the topic from a variety of scholarly and news sources. While I wouldn’t claim to be an expert, I know a fair amount about the topic.

So, what does this bill actually do? Well, I would point to a handful of provisions as among the most significant changes. In my mind, the most important provision is the one that prohibits insurance companies from denying coverage to people based on preexisting conditions. For years, insurance companies (who obviously need to make a profit to keep their shareholders happy) have made it difficult to get coverage if you have a preexisting condition. The reason is simple, people who have had cancer in the past are more likely to get it again, and having cancer is expensive. If insurance companies want to do well, they need to sell policies to lots of people who aren’t likely to get sick so that they can subsidize the costs when some of their customers do get sick. This is a logical step for insurance companies, but what about all the people who do have a preexisting condition? They are the ones who are most in need of a medical insurance policy, yet it is difficult or sometimes even impossible for them to get one. Everyone knows someone who might fall into this category…a breast cancer survivor, a survivor of childhood leukemia, someone with diabetes…the list goes on and on. Many of these people have been able to get coverage through their employer, but think of how unstable employers are right now. What happens to them if they lose their job and are unable to find an insurance company that will take them? The bill that passed mandates that insurance companies offer policies to all people, regardless of their past medical conditions.

I hear often that America has the best health care in the world. People point to the droves of foreigners who fly into Rochester to go to the Mayo clinic. This is absolutely true! We do have the best health care in the world…if you can afford it. Unfortunately for the 43.8 million Americans[1] (almost 15% of the country) who don’t have health insurance, access to the best treatment in the world is out of reach[2]. Yes, hospitals are required to treat patients who come in to the emergency room, but what makes places like Mayo so outstanding is not the one-shot treatments that one can get in the emergency room (where, incidentally, the costs are through the roof and those costs are passed on to the rest of us who do have insurance!), but the long-term, integrated health care that comes from having access to preventative medicine. Routine exams, check-ups, access to holistic wellness information…these are the things that come with my health insurance that help me to avoid catastrophic problems before they start. For 43.8 million Americans, there has been no access to this. The bill passed by Congress chips away at this problem by helping to insure 32 million of these people (this is one of the main reasons I said I don’t think this bill is the BEST bill, but that it moves us in the right direction…ideally it would cover more people). How does it do this? Well, the poorest Americans qualify for health care right now through the Medicaid program. The bill Congress passed will allow more people to sign up for Medicaid (about 16 million, according to the estimates). I know what you’re thinking…”Medicaid? Well that’s just another example of how the government can’t run health care effectively!” Now, I’m certainly not going to sit here and tell you that Medicaid is without any flaws, but contrary to what you might expect, Medicaid is actually a very efficient program. According to the American Academy of Family Physicians, on average health insurance companies spends about 15-20% of their claims paid on administrative costs. In contrast, Medicaid spends 4-6% of its claims paid on administrative costs. There are problems. The government needs to do more to make sure that doctors and hospitals are reimbursed fairly for the work they do for Medicaid patients, and the federal government needs to help states with more of the costs (since Medicaid is a program that is shared between the states and the federal government), but overall, the problems with Medicaid are largely problems that involve individual citizens taking advantage of the system (doctors who overbill, patients who claim work that isn’t done, etc) rather than problems with the policy itself. In the grand scheme of things, though, expanding the number of people who can’t currently afford to purchase health insurance to be eligible for Medicaid will help people get access to the preventative health care they need.

The bill also takes care of the people who fall in the middle—the ones who make too much to qualify for Medicaid and those who aren’t covered by their employers. As one of the most controversial components of the bill passed by Congress stipulates, by 2014, all Americans will be required to purchase health insurance or they will face a tax penalty. So, what to do if you’re not too poor, but not rich enough? Well, the bill creates subsidies to help these caught-in-the-middle people purchase health care through state exchanges. Instead of establishing a government-run insurance plan to compete with the private insurance companies (many people view this failure to include a “public option” as a big mistake), the government will help set up exchanges in each state where private insurance companies can offer policies to the uninsured residents in those states. Rather than purchasing insurance as an individual (which means you have no group discounts), these exchanges will let the public band together to purchase insurance from private companies as a group. The insurance companies will have to compete for business, which as any good business major will tell you, should drive price down and quality up. Again, though, the government will help you to buy this insurance if you can’t afford it by providing subsidies so that people who earn up to 400 percent of the federal poverty level ($88,200 for a family of four) don’t have to pay more than 9.5% of their income on health insurance.[3]

And then it’s up to you. Individuals will still have the freedom to decide not to buy a health insurance plan. But, if they do decide not to buy insurance, they will have to pay a small penalty…emphasis on the word “small”!. The penalty phase of this plan doesn’t kick in until 2014, so hopefully most people will have run out and signed themselves up for their favorite insurance plan by then! Assuming they don’t, the penalty in the first year is $95 or 1% of their income, whichever is greater. That penalty rises gradually each year, but tops out at $695 or 2% of their income. Huge, I know! Why force people to pay a penalty? Well, think about it. If these people choose not to have health insurance, but get sick and wind up at the hospital, we (the people who do have insurance) have to cover their tab. The penalty these folks kick in will help to off-set the subsidies that allow other families to buy insurance. Don’t want your money going to help other people? Then use your money to buy your own insurance!

There’s a lot more in this bill, but being that I’m starting my third page of musings, I’m going to tackle two more things and then let it rest. First, the tax on Cadillac health plans. Beginning in 2018, there will be a new tax on super expensive health plans. If your plan costs more than $10,200 (for an individual) or $27,500 (for a family) a year, you will pay a 40% tax on the amount above that limit. That means, if your individual policy costs $10, 300, you would pay a 40% tax on $100. I know that 40% seems ridiculous, but the goal of this policy is to help keep health care costs low. You don’t want to pay this tax, so insurance companies won’t offer plans that cost more than this. People who do have really luxurious health insurance often start to use more health care, even when they don’t need it. They go to the doctor when they have a common cold and they request expensive, but unnecessary, diagnostic procedures. The theory is that when you are thinking about how much the health care you consume actually costs, you won’t spend as much on frivolous things. Again, the money collected from this tax on people who have really good insurance is used to help people who currently don’t have any insurance.

The last piece of the puzzle that I consider to be really important is something that benefits a lot of my students. The new bill requires insurance companies to let children remain on their parent’s health insurance until they are 26 years old. This matters to me because in the current job market, a lot of recent college graduates are having a hard time finding a job right away, not to mention a job that offers health benefits. This will give them a little padding. It will also help keep insurance costs down because young, relatively healthy people pay into the insurance pool, but don’t generally consume a lot of health care. Again, this fits into the bigger point that the more people we have in the health insurance pool, the easier it is to keep costs down because the risk is spread out among more people.

So for these reasons, and many others, I support health care reform. This new policy is not going to ruin our current system; it will help make it possible for more people to partake in the amazing health care we do have in this country. This new policy is not a step towards socialism; it requires more people to purchase health insurance from private businesses.[4] This new policy does represent a big change to a major sector of the economy, but the non-partisan, and highly respected (on both sides of the aisle), Congressional Budget Office estimates that it will actually reduce the deficit by $143 billion over 10 years. It’s not going to solve all of our health care problems, but it is a start.

Finally, I am saddened by some of the responses I have seen to this bill from the American public. In our country, we elect people to represent us and to make policy decisions for the good of the people. If we think they are making the wrong decisions, we have the option to not vote for them when they are up for reelection. We can even mobilize our friends and family to not vote for them, too. What we shouldn’t do is yell racial slurs at them (as some opponents did when they called the great civil rights leader Rep. John Lewis a “nigger”) or throw a brick through their office window (as someone did to Rep. Louise Slaughter and to the county Democratic Party headquarters in one New York town) or shoot a pellet gun through their office window (as someone did to Rep. Gabrielle Giffords). We shouldn’t allow ourselves to be taken up by irrational fears or be swept away in the passion of anger. If you don’t like what Congress did (and, believe me, they didn’t break any procedural rules to do it, despite what you may have heard on TV!), then make yourself heard in the next election by voting. However, please don’t get caught up in the rhetoric that says that “Americans are opposed to this bill” and that “Congress is ignoring the voice of the people” because the public’s opinion on this issue is split. In the most recent polls, the number of people supporting and opposing the policy falls within the poll’s margin of error. However, when the American public is asked about specific provisions of the bill (rather than being asked if they support or oppose the bill being debated by Congress), they overwhelmingly support them. According to a Newsweek poll taken in February, 73% of respondents favored insurance subsidies for low income families. 76% favored the government requiring insurance companies to insure those with preexisting conditions. 81% supported the idea of an insurance marketplace where people could purchase insurance as a group. 59% supported requiring people to purchase health insurance if the government helped those who couldn’t afford it. The argument that “the public is opposed to this bill” just doesn’t fly when you actually ask people about the specifics of it.

So, there it is, my reasons why I support the health care reform bills. I hope that those of you who are opposed to this bill were able to read this with an open mind and heart. I also hope you take the time to learn more about the issue and to look for information from a broader array of sources (i.e. not your usual news sources). As I mentioned at the start of this essay, my Christian faith guides my views on policy debates. In the case of health care, I am particularly mindful of the many verses in the Bible that instruct us to care for the poor—and those without access to medical care certainly fit the bill in our day and age. The prophet Isaiah said, “Learn to do right! Seek justice, encourage the oppressed. Defend the cause of the fatherless, plead the case of the widow” (Isaiah 1:17). Jesus instructed his disciples to go preach the kingdom of heaven. He said to them, “Heal the sick, raise the dead, cleanse those who have leprosy, drive out demons. Freely you have received, freely give” (Matthew 10:8). And, as the contemporary translation of the Bible, The Message, states, “If you see some brother or sister in need and have the means to do something about it but turn a cold shoulder and do nothing, what happens to God’s love? It disappears. And you made it disappear. My dear children, let’s not just talk about love; let’s practice real love” (1 John 3:17-18). I don’t think that the government is under any obligation to follow God’s commandment to care for the sick and poor, but as a Christian, I am and it saddens me that some people who feel most strongly about caring for the sick and the poor oppose a government policy that does just that.

This essay obviously just scratches the surface, but I hope it has been food for thought. If you are interested in talking with me about it in more detail, please let me know.

Kate Knutson

Assistant Professor of Political Science

Gustavus Adolphus College

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[1] This statistic comes from the Centers for Disease Control and Prevention’s National Center for Health Statistics. The figure is from 2008.

[2] By the way, 43.8 million is a HUGE number. I can’t even comprehend how many people that is. I can’t comprehend 43.8 million of ANYTHING!

[3] By the way, when we looked at getting Brian insurance through Menards, it would have cost us 12% of his income…and that was getting it through a work-sponsored plan!

[4] Socialism is a doctrine that advocates government ownership of the means of production or distribution of goods to replace competition for profit with cooperation and equitable distribution of goods. While I do think an equitable distribution of goods might actually be a good thing and the “Christian” thing to do (see Acts 2:45), the plan that passed does not actually create government ownership of anything and, if anything, strengthens the free market by giving private companies even more customers.