Last year, about 150 members of Congress cosponsored at least one of 12 different bills designed to create personal Medical Savings Accounts (MSAs). Also called Medisave Accounts and Medical IRAs, Medical Savings Accounts are attracting growing support again this year, as new MSA bills are fashioned in the current legislative session.
As state governments take on the difficult task of health care reform, legislators must accept the fact that federal policy — particularly tax policy — has shaped and molded our health care system. Since the states cannot change federal policies, they cannot address the root causes of most of our problems.
Serious problems exist in the market for private health insurance. At both the state and federal levels, a number of proposals perporting to solve these problems would in fact make them worse. Some of the proposals would also exacerbate other problems — causing more people to be uninsured and contributing to rising health care costs.
A common assumption behind most health care reform proposals is that the private sector is causing our national health care crisis. In fundamental ways, the federal government rather than the private sector is responsible for our health policy crisis, and state governments can make few improvements as long as unwise federal policies remain in place.
As politicians confront the difficult task of health care reform, they face a dizzying array of reform plans. In fact, there are so many plans that most analysts have ceased trying to keep track of them. Yet the vast majority of all plans — both good and bad — are based on a few simple idea. This backgrounder provides a brief summary.
As part of his new health care plan, President Bush announced his goal for health insurance reform: sick people should be able to obtain health insurance for the same price as healthy people. If you knew you could buy health insurance after you become sick for the same price charged to the healthy, there would be no reason to purchase it while you were healthy. Only sick people would buy it and premiums would be exorbitant.
The thesis of this book is simple: If we want to solve the nation’s health care crisis, we must apply the same common-sense principles to medical care that we apply to other goods and services. Health care is often said to be a necessity. However, there are other necessities such as food, clothing, housing and transportation. If we paid for any of these items the way we pay for health care, we would face a similar crisis. If we paid only 5 cents on the dollar for food, clothing, or housing, for example, costs would explode in each of those markets.
Health care costs are rising in the United States for the same reason they are rising in every developed country: most of the time when we consume medical services we are spending someone else's money.
Countries with national health insurance make health care "free" to patients and at the same time limit spending and access to modern medical technology. As a result, there is widespread rationing, bureaucratic inefficiency and a lower quality of care.
America's health care system is in crisis. That is the conclusion of virtually every commentator on AMerican medicine, regardless of policital persuasion. Ask any doctor, any patient, any business executive or politician. Indeed, virtually everyone who even has remote contact with the health care system will readily agree that it is in the need of reform.
Health care spending for the elderly, like Social Security, is financed on a pay-as-you-go basis. Both employees and employers are discourged from putting aside money during an individual's working years to pay for health care during retirement. As a result, each generation of retirees depends on the next generation of workers to pay its medical bills.
A proposal put forth by Senator Edward Kennedy would require all U.S. employers to provide health insurance for theor emploees. The problem this proposal addresses is about $4 billion in annual unpaid hospital bills, incurred by employees who lack health insurance.
The number of Americans without health insurance has increased by 25 percent since 1980 and now totals 37 million people. A major reason why so many people lack health insurance is that state government regulations are increasing the costs of insurance and pricing millions out of the market for insurance.
With each passing year, the fraction of our national income devoted to health care continues to rise, and therefore no end in sight. One reason is the growing expense of health care for the elderly.
The American system of public and private health insurance, by in large, is designed to insure that hospitals do not go out of business, that they receive sufficient revenues to cover their costs.
Although the term ‘free enterprise’ is conventionally used to describe the economic systems of the United States and Britain the salient characteristic of both economies is the size of the public sector. In the United states, as in Britain, the government is the largest single element in the system. It is the biggest consumer, the biggest employer, and far and away the biggest spender. Besides being the largest element of both economies, government also exerts a distorting effect on such freedom of action as survives in the private sector.
Americans today enjoy the finest and most extensive health care of any nation in the world. They have the greatest access to medical services, and rank among the healthiest of all societies.
Superficially, it would seem that proposals for National Health Insurance (NHI) in the United States have landed in the dustbin of history, and the issue is no more. Certainly the Reagan Administration has made no secret of its opposition to NHI, and the current emphasis is on reducing government involvement in, and spending on, health care. The Reagan Administration will be replaced by other administrations, however, and the pendulum could then swing back in favor of NHI. That there is a political base for such a reversal is beyond doubt.
By most accounts, Britain is the most socialistic of all the western industrial democracies. It is not particularly socialistic in terms of having achieved a more equal distribution of income and wealth. The true distribution of income in Great Britain is probably not much different from that exhibited in the United States. The distribution of wealth in Britain is probably more unequal than its distribution in the United States. But Britain is socialistic in terms of having transferred to the state more and more power over economic resources.