Sunday, March 22, 2009

Universal Health Care a Necessity

The stimulus package currently undergoing Senate debate, a combination of tax reductions and domestic spending designed to create jobs, is a step in the right direction to fixing the economy.

In the long run, however, another glaring problem faces our economy. That "elephant in the room" is the condition of the American health care system.

Approximately 46 million Americans are uninsured at the moment. Millions more, while they have insurance, could lose it at any point if they encounter significant medical conditions. The health insurance situation in this country is a patchwork one; individuals and families find health care through employer-based insurance, individual, and government-assisted plans. Some choose simply to forgo insurance altogether, considering its costs.

In the United States, costs of the uninsured treated in emergency rooms are passed on to hospitals and eventually to consumers. Furthermore, patients with good insurance often receive more treatment than necessary. Ultimately, care is not distributed efficiently and as a result, the system costs much more than it should.

Businesses are severely limited due to health insurance costs. If they choose to cut back on benefits, however, they are less able to attract talent. For graduating seniors, this is a real concern. As many of us leave and are no longer eligible to be covered by the insurance of our parents, our job search is limited by the benefits offered. Individuals take jobs not based on what their talents best suit them for, but based on what they can get out of it in terms of health insurance. This discourages the free movement of labor and hinders the progress of the American worker and employer.

Most industrialized countries have realized that health care costs are unnecessarily restrictive on the economic movement of society and have chosen to decrease these costs by providing universal health care. It is high time that the United States followed suit. Universal health care would encourage economic growth, revitalize the middle class, and cost society less.

The economy will grow with a universal health care plan because the plan will decrease costs for businesses, allowing for greater job creation. Consider the plight of the automakers. According to thinkprogress.org, General Motors estimates that health care costs add $1,525 to each car it produced. In 2004, the company spent more on health care than on steel. These types of costs are simply prohibitive on good business at this point. Universal health care would ease these costs and allow struggling businesses to stay afloat.

Universal health care is necessary to revitalize the middle class in America. Stimulus checks are helpful, but the risk of serious illness or injury often prevents families from injecting money back into the economy, preferring instead to save it for an emergency that they fear will not be covered (if, indeed, they are fortunate enough to have health insurance). Middle class spending is key to driving the economy out of a recession, but the burdensome costs of health care restrict this spending and choke economic growth.

Then there is the question of affordability. It may seem hard to believe, but U.S. health care spending currently dwarfs that of countries with universal systems. According to a study done by the Commonwealth Fund (a health policy group), the United States spends 53 percent more per capita on health care costs than any other industrialized country. The reasons are numerous, but significant ones include administrative overhead across numerous insurers and the fact that the costs of emergency room care for those who cannot afford it are passed on to hospitals, insurers, and ultimately, consumers.

While there are many proposed models for universality, in the short run, a system where the government offers a program to compete with private insurers would help insure more people while driving costs down.

Medicare, for example, boasts significantly lower administrative costs (the most conservative estimates still regard them to be at least three times cheaper) than the private sector, but is only available to a certain set of Americans (seniors). Making a similar program available to all, regardless of their location or pre-existing condition, would serve as greatly needed competition in an industry where quasi-monopolies already exist on the state and local level. This would reduce costs for everyone.

There are different paths to achieving this objective, ranging from affordable government plans to compete with insurers, to coverage mandates, to a single-payer system. There should be vigorous study and discussion of proposed plans and the government should aim to find one that works.

However, this is not an issue on which we can afford to continue our present course of action. The country needs to address its health care crisis, and soon. The long-term strength of the economy depends on it.