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Universal Health Insurance That's Not Under Government Control


Universal Health Insurance That's Not Under Government Control

July 27, 2007
Health PolicyOther

How shameful that more than 40 million people in this great country — the wealthiest in the world — lack health insurance. The uninsured not only suffer from poorer health, but are all too often mistreated when they do seek hospital care: either charged bankrupting prices or tossed out.

Does it make economic sense to provide coverage for tens of millions of uninsured? Critics say that we need at least $50 billion to subsidize those who cannot afford health insurance, and that universal health care will lead to a socialist, government-run health care system.

But these criticisms misunderstand both the economics and administration of universal health care. Yes, it must be funded by taxes, which we pay primarily to help the less fortunate. But as Switzerland demonstrates, universal health care can be managed by private health insurers and providers.

The Swiss buy health insurance from more than 80 competitive insurance firms that, in turn, reimburse Switzerland’s primarily private hospitals and physicians. The government’s role is limited to subsidizing the poor so they can shop for health insurance just like everybody else, and ensuring that the sick pay the same prices as the healthy.

This consumer-controlled universal health care system costs 40 percent less than ours, and the quality of care and availability of resources exceed even those in wealthy Connecticut. It controls costs and quality because people buy the insurance that gives them the best value for the money. The insurers, in turn, control their prices by favoring cost-effective providers.

In contrast, government-controlled, universal health care systems, cannot politically afford to offend inefficient and ineffective providers that wield enormous political clout and lobbying funds. They control costs by rationing care to the sick, as demonstrated by lengthy waiting lists for specialist care in the U.K. and Canada. The waits not only inflict needless pain on those who need new hips or their arteries unblocked, they sometimes kill: 25,000 British cancer deaths in 2000 would not have occurred in the U.S.

Don’t get me wrong. Our private health insurers and providers are hardly saints. Insurers wrongfully deny enrollees the medical care they paid for and too many hospitals commit deadly “medical errors” and abuse the uninsured. Both are bloated with executives who get paid far too much for doing far too little. They get away with it because we have trusted the wrong agents to keep them in line. The government officials and employers who use our money to buy our health insurance do what’s good for them — not what’s good for us.

Yet, some worry that a consumer-driven universal health care system still gives the government power to select the benefits that our health insurance policies must contain. Can you imagine the gold-plated cars if the government required certain automobile options? The heated seat manufacturers would insist that our rear ends need warmth, whether we wanted to pay for the hot seats or not. Similarly, Congress, would choose options that health care lobbyists want us to buy. After all, Congress spends our money, not theirs.

But insurance need not require benefits. Homeowners insurance, for example, does not provide a certain number of visits by a carpenter or electrician. Instead, it protects us against all catastrophic housing repair expenses. Similarly, universal health insurance could require coverage of any medical expense that is catastrophically expensive, and those who wanted more insurance could buy it themselves.

Some dismiss universal coverage as unfeasible, citing the high percentage of car owners who lack insurance in states that require it. But countries like Germany that require health insurance achieve virtually complete participation.

Universal health care? Yes. Government-controlled health care? No.

Let’s get this done American-style by generously funding the poor so they can buy the health care they need at a price they are willing and able to pay.