Health Care Lessons from the Old South
Apparently the insurance commissioner of Georgia is currently refusing to comply with Kathleen Sebelius’ request to create a state pool for high-risk insurance plans as required under the health care reform bill signed into law in March. According to The New York Times (April 13, 2010) the commissioner told Sibelius that the legislation is likely to be declared unconstitutional, and that even if it is not, its requirements constitute both an unwarranted expansion of the federal government and a threat to the financial stability of the nation. Visibly, he doesn’t like the act, and is taking his bat home.
What does this tell us?
It tells us that the Obama administration has settled down to the technical business of implementing the legislation while its opponents are gearing up politically to tear it down. Technical conversations from the administration, political campaigning from the Republicans.
It also tells us that however imperfect the legislation may be, those of us who do not want to see a Republican-controlled Congress after November would do well to gear up in a similar fashion. That is going to be really hard for many of us, because the legislation that passed was not the one that many of us would have chosen – no single-payer, no strong public option, no single national exchange, the Hyde Amendment and worse into law, no Medicare to people under 65. But this is baby and bath water time. Do we stand by and let the Republicans take down the first major extension in health care cover for more than four decades? I don’t think we should. The trick will be to defend the legislation, however imperfect, in ways that enable us to win support later for its progressive reform.
So what to say? Maybe at least this.
- Many of the imperfections in the legislation passed on March 21 were the product of conservative lobbying and a misplaced desire for bipartisanship. The act would be stronger for the inclusion of a large public option. It would be stronger for the creation of a single national exchange rather than 50 separate state ones. It would be stronger if its main reforms were implemented immediately; but those improvements were left out to appease blue-dog Democrats and to attract (unsuccessfully as it transpired) the support of more moderate Republicans.
- The reforms do save money. The CBO is clear on that. The Republicans may now claim that their schemes will save more. But we must remember that there were no such schemes on the table during the years of Republican control in Washington DC; and that the cost savings in the schemes now suddenly on Republican lips are achieved at the cost of excluding more Americans from cover.
- The reform does address – if only incrementally – key weaknesses in the existing system. 48 million Americans without health cover of any kind. Twice that number under-insured and vulnerable to personal bankruptcy if illness strikes. Insurance companies so unregulated that they could, and did, exclude from cover people whose pre-existing medical conditions made cover so vital. The legislation does provide funding for wellness programs; coverage for young adults on their parents’ policies; immediate access to coverage for the chronically ill previously excluded from coverage; financial help to buy coverage for the near-poor; Medicaid coverage for adults as well as children, and up to a higher poverty threshold (133%). It does address most, though not all, of the access issues that have long scarred American medicine.
- But the legislation is not perfect – it cannot be defended as such – and it was achieved at a huge political price. Women’s rights took a huge hit. Abortion rights were eroded. Elements of age and gender rating continue. Immigrants’ access to health care is restricted – even access by legal immigrants – many of whom are women. Health care in the US will still be something that has to be bought through insurance. Health care remains a commodity, not a civil right. This act is not the thin end of a wedge taking us to a single-payer system. The insurance companies providing coverage remain private. They remain massive. They remain profit-driven and they remain only lightly regulated. True, they will be slightly more regulated in the future than they are now, but they will also be more subsidized with federal dollars. That subsidization is a bitter pill to swallow.
- The legislation is not a government take-over of health care, no matter how often the Republicans claim otherwise. The Government is not the winner. Insurance companies are the big winners: more clients, subsidized by the state. Americans on low incomes are the other big winners – access at last for most of them, though not all. We are all winners – even those of us adequately covered already – to the degree that our health-care security increases, and to the degree that the small detailed changes (on things like pre-existing conditions) matter and kick in. We are also all losers, to the degree that the bill is stronger on access than on cost control, and to the degree that health cost inflation continues to outstrip the rate of wage increase. All women win to the degree that gender rating is reduced, and that pregnancy and domestic violence are no longer discriminated against as pre-existing conditions. Younger women in particular lose to the degree that access to abortion is made progressively more difficult.
- What we have in this legislation are more than a set of winners and losers. What we have in this legislation is a resetting of the unspoken social agreement that is endemic to health care: a veritable social contract between the sick and the healthy, the young and the old, the rich and the poor, men and women both. When Republicans challenge the legislation, we need to keep that social contract in mind. If Republicans don’t like the reform they need to tell the American people what part of that social contract they want to change.
- We must say too that much remains to be done. This legislation is a beginning, not an end. The main drivers of costs in the American health care system remain firmly in place. Three at least (a) the fee-for-service modes of remuneration that generate volume rather than quality medical cover; (b) the ever stronger for-profit insurance companies whose central rationale is entirely in tension with a publicly regulated system of health care provision; and (c) the private hospitals that are free to exploit their local monopoly position. The argument should be: access problems are beginning to be addressed. Cost problems await us as the second stage of reform. We can’t leave the cost debate to the conservatives. We need our own set of cost-reduction proposals, and we need it fast.
In the frenzied politics of Washington, there is not much space for calm reflection. If there were, it would be common knowledge that all health care systems contain unavoidable dilemmas – conundrums which their design has to accommodate. All health care systems ration. There is never enough health care to go round. Some ration by time, some by class, some by need. The unreformed American health care system rationed by class – it excluded one American in seven. That will change but the need for rationing will not. And all health care systems based on for-profit insurance face issues of adverse selection and moral hazard: insurance companies that don’t want to insure the sick; and healthy individuals who don’t to finance the care of the ill, especially if that illness is self-induced. Other insurance-based health care systems (the German and French in particular) address that dilemma successfully by tightly regulating their insurance companies and by using their co-pay requirements to encourage healthy living and preventive care. It is time for us to do the same.
This view is developed more fully in Answering Back: Liberal Responses to Conservative Arguments (Continuum Books, 2010)
 The best guide to this remains Ezra Klein “The Health of Nations”, The American Prospect, May 2007, pp. 17-21
David Coates holds the Worrell Chair in Anglo-American Studies at Wake Forest University. He is the author of Answering Back: Liberal Responses to Conservative Arguments, New York: Continuum Books, 2010.
He writes here in a personal capacity.