The Case for Universal Coverage

July 24, 1994|By BENJAMIN L. CARDIN

In recent weeks, some members of Congress have suggested that the cost of guaranteed health coverage for all Americans is too high. They are willing to delay the goal of universal coverage for an indefinite period of time, and to settle this year for a bill that makes only incremental changes in our health care system.

This go-slow approach may sound wise, but it is based on a deep misunderstanding of the way our health system works and what will happen if we take a timid approach. The fact is that effective health care reform cannot be done incrementally; it is dependent on universal coverage.

Incremental insurance reforms -- without guaranteed universal coverage -- will result in more uninsured Americans, not fewer.

Let me explain why. Many policy-makers are looking at community rating as an important measure to correct inequities in the insurance market. Community rating means that your health premiums will not change simply because you are unlucky enough to get sick. Under pure community rating, everyone pays the same price for health coverage. Medicare is a community-rated plan. Most proposals, however, allow for some price variation based on family status, geography or age.

Insurance reforms such as the elimination of pre-existing condition exclusions and community rating will expand coverage to people who have been excluded from coverage in the past. That is good; we want that to happen. But it would be a disaster if it happens and younger, healthier individuals pull out of the system.

Without universal coverage, that is exactly what would happen. The expansion of coverage through insurance reforms such as community rating would average costs, resulting in premium increases for some people and decreases for others.

Some opponents of universal coverage have attempted to confuse the issue by arguing that even Social Security does not cover 100 percent of eligible Americans. They propose that we should design health insurance reform to cover only 91 percent or 95 percent of Americans.

If health care reform is designed to cover every American, we will likely miss some of them. But if we admit defeat right from the start and don't even try to achieve universal coverage, some slippage will still occur, and we will wind up even further from the goal.

The unintended result of failing to pass guaranteed universal coverage is that younger, healthier Americans are likely to opt out of coverage rather than pay higher premiums. Without guaranteed universal coverage, they would have this choice.

The loss of this healthier population would be a financial disaster for everyone who remains in the system. There would be a continual spiraling up of premium costs as sicker individuals obtain coverage and healthier ones opt out of the system.

This is exactly what happened in New York when the state implemented insurance reforms in the individual and small-group markets without implementing universal coverage. While New York now has fairer insurance laws, it also has fewer people insured. In the individual market alone, there was a whopping 12 percent decrease in the number of people who have health coverage one year after the reforms took effect.

The irony is that if we take the "safe" incremental approach in order to avoid what some might consider the "costly" ideal of universal coverage, we are likely to increase costs and leave more Americans without health insurance.

Now, employer-based health coverage is on the wane. As more people become uninsured, the bills for the insured must go up. At University Medical Center in Baltimore, for example, all bills are increased by 16 percent to make up the cost of caring for the uninsured. Without health reform and universal coverage, health care facilities will be less likely to locate in poor and under-served areas, causing a greater use of expensive hospital emergency rooms, again adding to health care costs.

Many of those who favor a go-slow approach argue that we should do part of the job this year and come back to finish health care reform in the future. This strategy ignores the fact that more and more people -- 5.4 million in the last 14 years -- are losing insurance, and costs are rising at twice the rate of inflation.

Delayed health care reform is more expensive reform. The longer we wait, the more people there will be without coverage, and the harder it will be to reform the system.

As Congress struggles to chart a course between competing political demands, I hope universal coverage will not become a casualty of misinformed concerns about its costs. We can afford universal coverage. What we cannot afford is incremental change in our health care system -- without universal coverage -- which will create a whole new set of problems for Americans expecting health security.

Benjamin Cardin represents Maryland's 3rd Congressional District in the House of Representatives. He is a member of the Health Subcommittee of the Ways and Means Committee.

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