Tuesday, December 22, 2009

Health Care and Inequality

The debate over health care reform drags on with charges and counter charges. When the groups opposed to change want to throw down the gauntlet they will describe the Democrat’s proposals as a “complete takeover of the health care industry.”

Using the words “complete takeover” makes it sound like the private insurance industry once served people who now get health care provided through the government, or have no health care at all.

Opposition groups define the duty to provide health care as their right in private markets. They want health care to be an option that goes with a job. Otherwise the saga of America’s health care is a government takeover of groups ignored, and groups abandoned by the fee for service private sector.

Health care provided through employment leaves retirees out of health care, which is why those over 66, the Social Security retirement age, have Medicare health coverage. Notice that Medicare maintains the fee for service principles favored by the private sector. That’s because Medicare is financed with a 1.45 percent tax on wages, which fee for service advocates contend is just like an insurance premium.

Medicare is just one of the partial and patchwork solutions to health insurance. Since health care for those younger than 66 assumes employment, the unemployed are left out. Congress responded to the unemployed with legislation known as COBRA that allows the unemployed to buy their group health insurance at group rates, but only for 18 months. The time limit assumes the unemployed will find more work with health insurance.

Since jobs that pay low wages, or jobs that use low skills, do not always include health care the working poor are left out. Congress responded with Medicaid, but with strict limits on income and assets. The limits are so low that many families above the Medicaid limit are without health insurance. Congress responded with legislation known as SCHIP (State children’s health Insurance Program) as a Medicaid supplement to cover children, but not their parents.

Workmen’s compensation, which is really health insurance for injuries on the job, duplicates some of the coverage for private insurance policies but ignores the unemployed since it too requires a job.

If a job does not include health care insurance individual and family policies get mysteriously expensive and unaffordable for millions with wages too low to pay fees and premiums charged.

The patchwork of government health care reflects the limitations imposed by private sector advocates with the political strength to maintain fee for service principles.
To have health insurance for the uninsured it will be necessary to address the inequality of wages and income outside a fee for service system. The wealthy will have to pay higher income taxes to support health care subsidies to have health care reform. Most of the public debate tries to disguise this requirement, but reform that insures the uninsured must have subsidies to make up for low income.

The debate goes on, but the wealthy are resisting. Health care reform remains doubtful, but we will see.

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