(My) Impending Healthcare Crisis

When I broke the news to my parents this past Thanksgiving that I would not be seeking conventional employment after graduating this May, I was met with a surprising reaction: “You realize that you’re not going to be covered under our health insurance policy.” For a long time, I had been constructing a plan to show my parents that my decision not to work an office job was a viable path. Their revelation threw a wrench into my strategy to show that I could be financially independent. Why was I, a soon-to-be Columbia graduate with a world of opportunity at my fingers, worried that I would suddenly be without healthcare? Many of us think that our Columbia education has given us the flexibility to pursue what we want. And most of us will probably be seeking conventional employment where healthcare comes with the salary. But what happens when you want to take a year off to travel or to pursue a career in the arts? Or, suppose your dream job isn’t hiring – take, for instance, the unfortunate and unexpected loss of your previously-thought-to-be stable job at Bear Stearns – and you have to look for alternative employment. What happens to your health insurance? Unemployment that won’t last more than a couple of months is too short to warrant the paperwork and fees of a single-rider insurance policy. But what if you get in an accident and accrue astronomical medical costs? The truth of the matter is that healthcare in this country is not only about the old people and the unemployed. There is a serious and fundamental flaw in the system that bears down on each and every American citizen. The good news is that the inefficiency in the system can be mitigated. The bad news is that there have been numerous attempts to fix it with very few positive results.

The issue of healthcare has plagued our nation for the past century. The relatively little progress that has been made on this issue proves that the struggle for universal healthcare is one of the greatest tests for our nation. At the root of this quandary lies a fundamental tension of ethos in the American dream: the contradiction between an individual-based, frontier mentality and the expectation of protection and security from the richest and strongest federal government in the world. President Franklin D. Roosevelt recognized the falseness of the dichotomy between liberty and security, and between freedom and equality, in the mid-twentieth century. His biographer, James MacGregor Burns, puts Roosevelt’s belief this way: “Individual political liberty and collective welfare were not only compatible, but they were mutually fortifying.” The unsolved domestic quandary of universal healthcare shows that Americans have not yet realized that individual political liberty and collective welfare are connected, indeed, “mutually fortifying.”

History suggests that the notion of collective governance does not come naturally to humans; there must be driving forces that make it desirable and logical for the majority to come together and agree that a collective effort is more beneficial than an individual one. With the issue of healthcare topping the domestic agenda of the 2008 presidential election, the dynamics of the issue may be coming to a head. The primary catalyst seems to be the country’s changing employment demographics, which have shaken the employer-based health insurance system to the point where its sustainability is seriously questionable.

The debate over health insurance has existed since the idea and practice of organized medicine came about at the turn of the 20th century. From the time that progressive reformers were gaining support for their health insurance advocacy, physicians and other interest groups have opposed the initiative for national healthcare. Throughout the twentieth century, the American health insurance reform movement has infiltrated the national conversation. But complicatedly, national and international politics have influenced and shaped the debate, forestalling the necessary reforms. For instance, the progressive debate was effectively buried as the U.S. entered World War I. When the Great Depression hit, the priorities of reform were shifted, placing greater emphasis on unemployment insurance and old age benefits. Consequently, the Social Security Act passed without including health insurance. Presidents Franklin D. Roosevelt through Bill Clinton brought us Medicare and Medicaid, the rise of a “health maintenance organization” (HMO) system, and other revisions, but healthcare still fails to cover all who need it. The healthcare crisis has come to a head in the twenty-first century, with the costs of healthcare growing disproportionately to the wage/inflation rate. Furthermore, the nation’s employment demographics have changed vastly.

In light of these changes, many, including myself, believe that the employer-based system of insurance cannot last. The structure of our health insurance still looks like it did in the 1940s, when the United States was an industrial, working class nation driven by those with middling incomes. But the population has changed; how can the system of health insurance that worked sixty years ago be effective now? The American public presses this question today, making healthcare one of the foremost domestic issues of the 2008 presidential election.

The Democratic presidential candidates, Hillary Clinton and Barack Obama, confront the issue head on because they believe that healthcare in America is in crisis and will only get worse. They both believe that distributing responsibility between individuals, a private healthcare sector, and the federal government creates a more effective healthcare industry. They believe investing in the working population will provide Americans with economic prosperity. What the two candidates dispute is the role that the federal government should play as an intermediary force. Meanwhile, Republican candidate John McCain believes in a business-as-usual strategy that only seeks to tweak some of the existing problems of healthcare.

Senator Clinton’s proposed plan for nationalized healthcare is the most specific, and lays the foundation for a viable system; but it is not by any means a panacea. She proposes that the federal government act as the primary intermediary in a federal healthcare system. Her program, the American Choices Plan, is based on the principle of shared responsibility. The plan offers three choices: Keep your existing coverage through your employer or through individual coverage; choose from private health care options that “members of Congress enjoy” via a Health Choices Menu that includes a number of high-quality health insurance options; or, choose a quality public plan option like Medicare. The plan would depend on the purchasing power of millions of Americans choosing the second option, the Health Choices Menu. This would provide the large influx of capital needed for the federal government to facilitate an overhaul of the medical system. A newly efficient and modernized system would result in future savings. Moreover, health insurers, forced into negotiating with the federal government, would no longer be able to strong-arm individuals into choosing their plans. This would eliminate egregious discriminations that are currently taking place. However, Clinton’s proposal is opposed by drug and insurance companies worried about the lack of a check on immense federal power and troubled by a record of federal bureaucracy. Moreover, much of the financing would be shifted to those making over $250,000 annually—effectively reversing the Bush administration’s tax cut and directing it towards the national healthcare initiative—and to large insurers who would be expected to provide a certain standard of health insurance or contribute to the cost of national coverage. What is promising, though, is that Clinton clearly sees what currently is not working and therefore proposes to phase out excessive Medicare overpayments to HMOs and other managed-care plans, resulting in net savings of $10 billion.

Senator Barack Obama’s proposed plan is less specific, merely outlining principles that he finds important to uphold. He sees the federal government serving not as an active intermediary, but as a facilitator or a watchdog that would reform the private insurance market by creating rules and standards to ensure fairness and to make individual coverage more affordable and accessible. Obama, like Clinton, also sees the high cost of healthcare as the result of systemic inefficiency. His goal is not to provide or ensure universal coverage, but to focus on children, prevention and public health. His plan offers three choices: Cover the uninsured through guaranteed eligibility in a federal program; provide Americans with additional private plan options through a National Health Insurance Exchange; or work through state-led health care reforms currently taking place in some states. He does not identify where the financing will come from. Moreover, Obama’s proposal to provide subsidies to the uninsured who do not qualify for Medicaid or SCHIP seems alarmingly implausible, without a more detailed strategy for funding.

Republican candidate John McCain does not pursue universal healthcare as a goal; he would not seek to require Americans to carry health insurance, though he does acknowledge the need for extensive reform. McCain proposes to expand access for individuals and families by allowing people to buy health insurance nationwide (rather than only in-state) and permit them to buy through any organization or association of their choice. He also supports different methods of delivering care, which would develop routes for cheaper generic versions of drugs to enter the U.S. market. And of course, he calls for better options and benefits for our nation’s veterans. But the McCain platform fails to adequately address the current insurance program’s systemic inefficiencies, and it does not address the financial capture that results in stress on the individuals.

As the longstanding debate over healthcare shows, many impediments rooted in our national personality stand in the way of a national healthcare system. One of the reasons that employer-based healthcare has remained intact is that we do not want a country of loafers. By attaching health insurance to employment, politicians killed two birds with one stone: they provided a compelling incentive for people to seek and keep employment, and these people received health insurance. But too many of us characterize America as a free market society where individuals are responsible for themselves, both in failure and in success. Let’s face reality: individuals can live out the American Dream, pursuing their goals and flourishing, when the federal government provides a fertile environment that allows them to do so. American citizens have not yet embraced the principle of shared responsibility. Part of the reason we have been unable to solve the healthcare quandary is that there is no such thing as hitting rock bottom, like a stock market crash, which would demand a restructuring of the market. The costs remain diffuse because there are many parties. However, those costs now disproportionately weigh down on individuals, which is why the issue has become such a high priority. History has shown that the electorate is quite short-sighted; no politician has been able to frame healthcare reform in such a way as to persuade the electorate to see that long-term benefits outweigh the perceived difficulties of putting an overarching system in place. At the end of the day, the division between those on the side of universal healthcare and those against is the difference between entering a hospital for medical treatment and waiting at the door, unable to afford the care inside. That image may have easily been cast aside even a couple of years ago, but these increasingly uncertain times insist that we remember.