National health care by the back door

March 21, 2000|By Timothy M. Smeeding

AS WE CELEBRATE nine uninterrupted years of national economic expansion, there is one trend that we cannot be very happy about: the number of Americans without health insurance, particularly the decline in employer-based coverage.

Since the economic expansion began in 1991, the number of Americans without health insurance has risen from about 36.3 million to more than 44 million persons, while the number covered by private employment-based coverage has fallen dramatically. Over this same period, the share of total national health expenditures paid by public funds has risen from 42 percent to 46 percent, while private health insurance payments have also fallen as a percent of total outlays.

President Clinton and those aspiring to his office offer multiple prescriptions for health care coverage that are reactions to the increasing numbers of the uninsured and other gaps in the private employer-subsidized system.

Medicaid coverage is growing larger, as is Medicare. We have added millions of low- to middle-income children to public plans via the Child Health Insurance Program, and we will soon add more as CHIP is fully phased in. Now the president and Vice President Al Gore want to add the parents of these kids to an adult version of CHIP. The president also wants Medicare to continue to cover disabled workers who return to work; to add prescription drug coverage; and to extend the program to those ages 55 to 64. Tax subsidies for long-term care and public monies for increased vaccinations are also part of the health coverage plan.

State legislators, as well as the White House, have made proposals to help self-employed workers and workers in smaller firms to buy their own coverage. In New York, revenues from tobacco settlements and from higher tobacco taxes will be used to expand coverage for the uninsured in state-subsidized and state-run health insurance programs.

The trend is clear. The only people who remain securely insured in the shrinking private employer-subsidized market are middle- and upper-class families between the ages of, say, 30 and 54 with large employers, and workers in public employment and large nonprofit organizations.

As health-care costs continue to rise, employers who retain their health insurance plans are shifting larger shares of those rising costs to employees, and lower-earning employees are increasingly deciding to forgo expensive health insurance, especially since the growth of state and federal subsidized plans like CHIP often provide them with better coverage at a lower price.

All this is happening in the midst of the longest economic expansion in our country's history, when unfilled jobs are scarce and employers are hard-pressed to find additional workers. If these trends continue -- and one expects that a recession or pressures to cut costs from increased competition abroad would only exacerbate them -- coverage will fall.

The bottom line is that we will soon have outright government-subsidized health plans for nearly everyone, instead of just tax-subsidized employer plans. This is what I would call National Health Insurance by the back door. And if this is where we are headed, why not discuss the issue openly and directly? The scars from the last attempt at universal coverage are beginning to heal, and this piecemeal movement toward public coverage could be handled more efficiently with a planned action that included all at-risk groups, not just one group or problem at a time.

Now is the time when we can afford such a change. Too bad that neither the president nor the major presidential candidates will discuss the larger issue directly. The pharmaceutical industry is just beginning to notice this trend, deciding it had better pay close attention to how public insurance schemes are being set up to cover prescription drugs. Why can't our elected leaders and candidates face up to the larger reality as well?

Timothy M. Smeeding is Maxwell professor of public policy in Syracuse University's Maxwell School of Citizenship and Public Affairs. He wrote this article for Knight Ridder/Tribune News Service.

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