National Health Insurance
National Health Insurance
Health is described as a state of complete physical, social, and mental wellbeing. In order to ensure that the population of a given nation remains at or achieves a good health status, health expenditures must be financed. Health care expenditures are the total amount of spending for personal health care, administration, research, construction, and other expenses that are directly related to patient care. Although insurance coverage is not the sole determinant of health, timely access to quality care does play a key role in maintaining and improving health. Many developed nations have a system of national health insurance to finance health care for their citizens. Though these plans vary, all provide national health insurance and take into account the political, historical, and social factors of the given society. Variations in national health insurance plans may relate to the organization of the health care system in a given country, or to the provisions of the plan. Many plans guarantee minimal national health insurance to all constituents; others provide insurance to all who meet low income standards, and yet others provide national health insurance with provisions that allow citizens to purchase supplemental private insurance. Countries that have national health insurance plans include Australia, Japan, China, Sweden, Russia, the United Kingdom, Germany, the Netherlands, Austria, Sri Lanka, Chile, and Canada, to name a few.
These national health insurance plans have limitations and differing levels of effectiveness. The Canadian national health insurance plan is one of the most impressive and historically established plans among developed nations. Initially developed in 1968, this plan is funded by federal and provincial tax revenues, as well as insurance premiums paid by all taxpaying citizens. Consequently, Canada ranks high on indicators that suggest the health of a society. Infant mortality, for example, is low in Canada, and the life expectancy of Canada’s citizens is high. Despite this success, some have criticized Canada’s system for a decrease in the professional authority of physicians and the rationing of health care. Critics of Canada’s national health care system argue that in theory the system provides everyone with health care, but not necessarily superior health care.
In contrast, Sri Lanka, a peripheral or developing nation, instituted a national health insurance plan in 1992. The Sri Lankan government provides health care to its civilians mostly free of cost. The Sri Lankan government split the management of health care between provinces and administrative divisions. Provincial levels of government are responsible for the management of all health care institutions; divisions, which include medical officers, are responsible for administering health care. Though the national health insurance plan of Sri Lanka is not as well established as Canada’s, health indicators for this country are good. Like Canada, Sri Lanka boasts a relatively low infant mortality rate (59.6 per 100,000 births), and life expectancy has been increasing. Although it is too early to assess the limitations of Sri Lanka’s national health insurance plan, the plan includes provisions for development and change. The Sri Lankan Ministry of Health is responsible for the formulation of health policy; the ministry monitors the performance of the country’s health organizations, and moderates and changes policy when necessary.
The United States stands as one of the world’s developed nations that does not have a comprehensive national health insurance plan. Despite the lack of such a plan, the United States spends a larger percentage of its gross domestic product (the nation’s total economic output) on health care expenditures than any other country, including countries that provide national health insurance coverage. Many American citizens have no insurance. The American health care system can be characterized as heavily influenced by such political action committees (PACs) as the American Medical Association (AMA), the American Hospital Association (AHA), the American Pharmacists Association (formerly the American Pharmaceutical Association, APA), and other special interest groups. The American health care system is also based upon a profit incentive, and health care expenditures are funded through numerous sources. These factors have contributed to vast inequalities in who receives health insurance and health care. These factors also explain why there is no national health insurance system in the United States, and the emergence of categories of Americans who are characterized as underinsured and uninsured.
The U.S. medical-industrial complex—the rapidly growing industry that supplies health care services for profit—is the result of the AMA’s and APA’s professional and political efforts during the nineteenth century to establish accredited medical training and unfavorable views of holistic medical practices. These historical efforts led to a great increase in the power of these and other special interest groups associated with American health care. While changes to existing insurance standards and policies are the responsibility of the U.S. government, the corporations that make up the medical-industrial complex employ PACs to influence congressional decisions regarding health care. Failures in efforts during the 1990s to implement a national health insurance system illustrate the strength of the influence of the medical industry. In November 1993 the administration of President Bill Clinton announced a national health insurance plan called managed competition. This plan would have provided national health coverage and was designed to account for problems related to both access to and the cost of health care. But the aforementioned special interest groups opposed this plan, voicing reservations about new forms of bureaucracy and cost controls. The AMA and AHA opposed the proposed limits placed on physician fees and hospital charges, while the APA opposed cost controls on the production of drugs. Ultimately, the Clinton plan was not implemented.
Corporate managed care represents an evolutionary process in the American health industry that started in the 1970s when prepaid health maintenance organizations (HMOs) were introduced. Ideally, the purpose of managed care is to provide appropriate health care, including preventive services, thereby reducing costs while maintaining, even improving, quality. In practice, such plans typically compete for subscribers by offering the lowest possible cost for health care. Health care is generally organized into plans that consist of an insurer who administers the plan and who has numerous contracts with physician groups, clinics, laboratories, and so on. Since the inception of corporate managed care, preferred provider organizations (PPOs) and point-of-service (POS) plans have been developed in addition to HMOs. However, many contemporary managed care corporations operate on a for-profit basis, which can lead to controversy. The primary issue is that the provision of health care is pitted against the pressure on corporations to make profits; the mission of offering access to care runs contrary to the incentive of financial gain.
Health insurance in the United States is provided through a mixture of private (individual, employers, family) and public (federal, state, and local government) insurance programs. In 1965 Title XVIII of the Social Security Act created both the Medicare and the Medicaid insurance programs. These programs were the first and remain among the few federal insurance programs established in the United States. Medicare is designed to provide health insurance to persons over the age of sixty-five, permanently disabled workers and their dependents, and persons with end-stage renal disease. Medicaid is a jointly funded federal and state program that is designed to provide health insurance to the poor, with stringent eligibility requirements. State Child Health Insurance Programs (SCHIPs) are a more recent initiative to provide public health insurance in the United States. These programs allow states flexibility in planning and implementing health insurance for low-income children under the age of eighteen.
Most U.S. health care expenditures are covered through private insurance programs. Private insurance is funded largely by employers with employee subsidies. In addition, many Americans own family or individual policies. Nonetheless, in 2004 approximately forty-five million Americans were uninsured and did not have any private or public health care coverage. Many of the uninsured are poor working-class Americans who may work only part-time. There are others who are considered underinsured. They have jobs that provide minimal health care coverage, or insurance policies with major loopholes that are often costly to the consumer.
The profit motive and the influence of the medical-industrial complex are not solely responsible for the lack of national health insurance in the United States. The culture of the United States is based heavily on the principles of individualism, capitalism, and laissez-faire. For many Americans, the notion of government-run national health insurance seems un-American. Alternative versions of national health insurance that are being promoted in the United States include single-payer and pay-or-play insurance plans. Proponents argue that these alternatives are less socialistic and would promote capitalism. Although Americans do not agree on the solution, most public health officials, health care providers, and U.S. citizens agree that a more inclusive type of health insurance should be developed.
SEE ALSO Health Economics; Insurance; Insurance Industry; Medicaid; Medicare; Mental Health
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La Fleur F. Small
National Health Insurance
NATIONAL HEALTH INSURANCE
Proposals for a national health insurance system were heard as early as 1912, when President Theodore Roosevelt's Progressive Party platform (following the example of Germany and other European nations) called for "the protection of home life against the hazards of sickness, irregular employment and old age through the adoption of a system of social insurance adapted to American use." Shortly thereafter, the American Association for Labor Legislation (AALL) formed a Committee on Social Insurance comprising prominent members of the American Medical Association (AMA) and others. The committee recommended a compulsory plan covering the majority of workers.
Efforts to enact the AALL plan at the state level failed, largely due to opposition from organized medicine and other conservative elements that considered it a harbinger of radical social change. The AMA initially called the plan the "inauguration of a great social movement" (1917), but rapidly changed course and consistently opposed mandatory health insurance since that time. In 1920 the AMA House of Delegates resolved to oppose "any plan embodying the system of compulsory insurance which provides for medical service to be rendered contributors or their dependents provided, controlled or regulated by any state or the federal government." The labor leader Samuel Gompers joined in opposition, apparently fearing that benefits gained through legislation rather than negotiation would be vulnerable to later repeal or limitation.
In 1927 President Calvin Coolidge appointed a Committee on the Cost of Medical Care, funded by a consortia of foundations, led by Carnegie and Millbank. The committee documented the severe and widespread problems Americans faced in obtaining and paying for medical care. The Committee called for care provided through group practice, paid for by insurance or taxation. The AMA attacked the plan a "socialism and communism—inciting to revolution." The stock market crash and onset of the Great Depression in 1929 vastly increased the number of Americans who could not afford basic medical care.
Franklin D. Roosevelt campaigned for the presidency in 1934 on a platform that promised aggressive government action to relieve the massive social and economic dislocations created by the Great Depression. Health insurance was included in a long list of problems facing the nation. Shortly after election, he named a cabinet-level Committee on Economic Security to look into "all forms of social insurance." Health insurance was included in a long list of problems facing the nation. However, the AMA's unrelenting opposition to any public health insurance again frustrated action. The President's advisors reasoned that organized medicine could hold the entire Social Security bill hostage. They recommended that, instead of including a health component, the President offer a study of health insurance options. The Social Security Act passed in 1935 with no mention of health care, but authorizing the study of actions the government might take to assure the economic security of older citizens. Subsequent Social Security Board reports called for health insurance, hospital construction grants, grants to states for indigent care, and health insurance programs. These recommendations formed the basis of the Murray-Wagner-Dingell bill.
President Harry S. Truman endorsed the Murray-Wagner-Dingell bill in 1945 and asked Congress to enact compulsory health insurance funded by payroll deductions. AMA opposition killed the bill. After Truman's upset victory in 1948, the AMA voted a special assessment of members to "resist the enslavement of the medical profession." Truman failed to win legislation, but did develop a plan to provide sixty days of free hospital care for aged Social Security beneficiaries. This idea later became the core of insurance benefits under Medicare.
The 1960 Democratic Party Platform endorsed medical care benefits for the aged under Social Security. Shortly after taking office, President John F. Kennedy made health insurance his priority domestic issue in the New Frontier. AMA reaction was rapid and predictable. Insurance companies joined in opposition. However, public response to Kennedy's 1962 rally in Madison Square Garden made it clear that health insurance had popular support. Kennedy was assassinated before Congress seriously considered his proposal. The political climate created by the Kennedy assassination was masterfully exploited by President Lyndon B. Johnson. Johnson's overwhelming defeat of Barry Goldwater in 1964 and the simultaneous election a large Democratic majority in Congress set the stage for enactment of the Great Society programs, starting with Medicare. Johnson made health insurance his top legislative priority. On July 28, 1965, Medicare and Medicaid became law, providing Social Security–based coverage for hospital and physician services to the aged, and a program of matching federal grants to states for coverage of physician, hospital and nursing home services for the poor. In a symbolic gesture, Johnson signed the bill in Independence, Missouri, joined by former President Truman.
Medicare and Medicaid rapidly changed the structure of health care in the United States. Millions of aged and poor, received services for which physicians and hospitals were fully reimbursed. This new revenue stream supported modernization of the nation's hospitals and creation of technology intensive academic medical centers. Federal involvement in the medical system also desegregated hospitals and other institutional providers. Rapid growth in national health expenditures followed—more than doubling within five years, a pattern that continued for the next twenty-five years. The pressures of this growth on public programs and privately held insurance created an unlikely alliance of interests for enactment of health insurance to expand coverage and contain costs.
In 1969 Walter Reuther, president of the United Auto Workers, formed a Committee of 100 for National Health Insurance, an alliance of labor unions and liberals activists. Reuther launched a national effort to develop and enact comprehensive health insurance. Senator Edward M. Kennedy became the leading Congressional supporter of the resulting Health Security Plan, launching his continuing role as the most consistent Congressional advocate for comprehensive national health insurance. Public and Congressional support for national health insurance legislation strengthened. President Richard M. Nixon declared his support and submitted an administration bill. For a short time in the early 1970s, a cross-party political consensus emerged that might have proved strong enough to achieve legislative action. However, the liberal-labor coalition fell apart over Kennedy's efforts to compromise with the administration and moderates in Congress. Shortly thereafter, the Watergate scandal and Nixon's resignation effectively closed the window.
President Jimmy Carter's election in 1976 reopened the debate. The Carter administration developed a plan—Health Security—that combined requirements for employers to offer health insurance to their employees with an expansion of the Medicare and Medicaid programs. Health costs were to be contained through high patient out-of-pocket spending requirements. Senator Kennedy and Representative Henry Waxman advanced their own bill—Health Care for All Americans Act—that combined a national health budget with insurance plans offered to all employers and individuals through a consortia of companies. With the Democrats in disarray, and historic opposition by organized medicine, business, the insurance industry, and conservative Republicans, any possibility of legislative action was doomed. In the aftermath of this failure, there were modest expansions of Medicaid coverage for pregnant women and children, and the introduction of new Medicare reimbursement methods for hospitals, a largely futile effort to contain hospital costs.
In the Ronald Reagan and George Bush administrations (1981–1993) the focus of health policy was largely on cost containment rather than expanding coverage. However, additional modest expansions of Medicaid emerged from the Democratic Congress. During this period the number of uninsured Americans continued to grow. Importantly, during the 1990–1991 recession, large numbers of middle class Americans lost jobs and insurance coverage, fueling new political support for health care reform.
President Bill Clinton made health reform the centerpiece of his presidential campaign, and after his 1992 election designated his wife, Hillary Rodham Clinton, to lead Administration efforts to design and enact a national health insurance bill. On September 22, 1993, Clinton addressed a joint session of Congress to describe the plan, historically named "Health Security." The Clinton plan combined familiar elements of previous health insurance proposals with complex and novel ideas for cost containment and management of insurance competition. The core concept would have mandated employer purchased coverage through "accountable" provider plans contracting with state-regulated consumer alliances. Public funds would subsidize low-wage employers, the self-employed and near-poor. The alliances would manage competition to assure access and risk pooling. Congress was initially friendly to the plan, but its complexity, inept management of the political process by the administration, and well financed, vociferous opposition by insurance companies health plans and organized medicine combined to defeat the Clinton effort. The after-effects of the health care reform debacle helped elect the conservative 1994 Republican Congress. These developments created a political climate in which Teddy Roosevelt's goal of a national system to assure access to a health insurance for all Americans could not be achieved, and unleashed a market-driven reform of health care delivery, dramatically changing the practice of medicine. At the end of 1999, an estimated 44 million Americans remained uninsured.
Susanne A. Stoiber
(see also: Health Care Financing; Medicaid; Medicare; Poverty and Health; Uninsurance )