Health Insurance For Tomorrow

Vast changes are about to occur in health insurance in America. Some will occur as a result of economic necessities, others by political action. The election of President Barack Obama signaled at least the willingness of Americans to look for change.

Whether the new president can negotiate through the minefield of doctors, insurers, labor unions, and industry to find an amicable solution is, to say the least, uncertain. He has framed the issue of health insurance no longer as an American's right but more importantly as an economic necessity. Health insurance is a way to get Americans back to work.

Glenn Beck of CNN has likened the solution of the economic problems facing Social Security, Medicare, and Medicaid to the cost of stopping an asteroid aimed at this country, due to strike in 2019, at a cost of $53 trillion. According to the Social Security and Medicare trustees, only a 122% increase in Medicare tax and a 26% increase in Social Security tax can avert it. In 2007, health care expenditures increased by 6.1% to $2.2 trillion, or $7,421 per person. Total private and federally funded health costs represent 16.2% of the gross domestic product, compared with 16% in 2006 (Health Affairs 2009;28;246–61). Well, those are issues for the next generation. Forget about them for now and let's just consider some of the issues facing health care tomorrow.

To provide the universality of health insurance, major changes will occur in how we pay, what we pay, and who does the paying. As physicians and hospitals are squeezed in the current economic environment, it might be a chance to look at what is going on in the health insurance world. Private insurers are coming under significant pressure as unemployment and health costs increase (AMNews, Nov. 24, 2008). Insurers are having increasing difficulty providing dividends to their stockholders without raising premiums. This is an issue as membership falls and the burden is placed on fewer subscribers. At the same time, investment income that had been used to support services has taken a beating in the stock market.

In Michigan, where many current and former auto workers are losing some or all of their health insurance coverage, Blue Cross and Blue Shield of Michigan is talking of increasing premiums for single contracts and Medicare supplemental coverage up to 55% (Detroit Free Press, Jan. 17, 2009). Such a hike will be sure to force even more people to join the ranks of the uninsured.

President Obama's proposal during the run-up to the election called for supplementing private job-based health plans with a federal plan. Faced with increasing unemployment, employer-based health insurance may not provide much of a support and may not be depended on for long. It is possible that in this economic environment, the public may be more interested in moving more fully to a government-funded program. Before withdrawing his nomination for Secretary of Health and Human Services, Tom Daschle had been talking about starting a federal insurance plan fashioned after Medicare and running it in competition with the private insurers. Congress already is enlarging federally supported health plans by expanding the SCHIP program by adding 4 million children under age 18 at an upgraded poverty level. The Massachusetts health insurance plan, which mandates a combination of industry- and state-funded health insurance plans, is being held up as a potential model. It has decreased the percentage of uninsured in Massachusetts to the single-digit level.

Regardless of the plan chosen, it is certain that impact on the total cost of health care will not be achieved without physicians giving up part of or the entire traditional fee-for-service payment system. That system has resulted in excess use of procedures and specialists. Historically, as fees were decreased, the volume of services increased to compensate.

The quality care guidelines of the American College of Cardiology and the American Heart Association have had no measurable effect on the utilization and cost of health care. How fee-for-service payment will be modified is uncertain, but it will likely lead to something more than just decreasing fees.

Some suggest that the current economic environment will not permit major changes; other suggest that the mounting need to provide health insurance to the uninsured will force congressional action. Stay tuned.

Vast changes are about to occur in health insurance in America. Some will occur as a result of economic necessities, others by political action. The election of President Barack Obama signaled at least the willingness of Americans to look for change.

Whether the new president can negotiate through the minefield of doctors, insurers, labor unions, and industry to find an amicable solution is, to say the least, uncertain. He has framed the issue of health insurance no longer as an American's right but more importantly as an economic necessity. Health insurance is a way to get Americans back to work.

Glenn Beck of CNN has likened the solution of the economic problems facing Social Security, Medicare, and Medicaid to the cost of stopping an asteroid aimed at this country, due to strike in 2019, at a cost of $53 trillion. According to the Social Security and Medicare trustees, only a 122% increase in Medicare tax and a 26% increase in Social Security tax can avert it. In 2007, health care expenditures increased by 6.1% to $2.2 trillion, or $7,421 per person. Total private and federally funded health costs represent 16.2% of the gross domestic product, compared with 16% in 2006 (Health Affairs 2009;28;246–61). Well, those are issues for the next generation. Forget about them for now and let's just consider some of the issues facing health care tomorrow.

To provide the universality of health insurance, major changes will occur in how we pay, what we pay, and who does the paying. As physicians and hospitals are squeezed in the current economic environment, it might be a chance to look at what is going on in the health insurance world. Private insurers are coming under significant pressure as unemployment and health costs increase (AMNews, Nov. 24, 2008). Insurers are having increasing difficulty providing dividends to their stockholders without raising premiums. This is an issue as membership falls and the burden is placed on fewer subscribers. At the same time, investment income that had been used to support services has taken a beating in the stock market.

In Michigan, where many current and former auto workers are losing some or all of their health insurance coverage, Blue Cross and Blue Shield of Michigan is talking of increasing premiums for single contracts and Medicare supplemental coverage up to 55% (Detroit Free Press, Jan. 17, 2009). Such a hike will be sure to force even more people to join the ranks of the uninsured.

President Obama's proposal during the run-up to the election called for supplementing private job-based health plans with a federal plan. Faced with increasing unemployment, employer-based health insurance may not provide much of a support and may not be depended on for long. It is possible that in this economic environment, the public may be more interested in moving more fully to a government-funded program. Before withdrawing his nomination for Secretary of Health and Human Services, Tom Daschle had been talking about starting a federal insurance plan fashioned after Medicare and running it in competition with the private insurers. Congress already is enlarging federally supported health plans by expanding the SCHIP program by adding 4 million children under age 18 at an upgraded poverty level. The Massachusetts health insurance plan, which mandates a combination of industry- and state-funded health insurance plans, is being held up as a potential model. It has decreased the percentage of uninsured in Massachusetts to the single-digit level.

Regardless of the plan chosen, it is certain that impact on the total cost of health care will not be achieved without physicians giving up part of or the entire traditional fee-for-service payment system. That system has resulted in excess use of procedures and specialists. Historically, as fees were decreased, the volume of services increased to compensate.

The quality care guidelines of the American College of Cardiology and the American Heart Association have had no measurable effect on the utilization and cost of health care. How fee-for-service payment will be modified is uncertain, but it will likely lead to something more than just decreasing fees.

Some suggest that the current economic environment will not permit major changes; other suggest that the mounting need to provide health insurance to the uninsured will force congressional action. Stay tuned.

Vast changes are about to occur in health insurance in America. Some will occur as a result of economic necessities, others by political action. The election of President Barack Obama signaled at least the willingness of Americans to look for change.

Whether the new president can negotiate through the minefield of doctors, insurers, labor unions, and industry to find an amicable solution is, to say the least, uncertain. He has framed the issue of health insurance no longer as an American's right but more importantly as an economic necessity. Health insurance is a way to get Americans back to work.

Glenn Beck of CNN has likened the solution of the economic problems facing Social Security, Medicare, and Medicaid to the cost of stopping an asteroid aimed at this country, due to strike in 2019, at a cost of $53 trillion. According to the Social Security and Medicare trustees, only a 122% increase in Medicare tax and a 26% increase in Social Security tax can avert it. In 2007, health care expenditures increased by 6.1% to $2.2 trillion, or $7,421 per person. Total private and federally funded health costs represent 16.2% of the gross domestic product, compared with 16% in 2006 (Health Affairs 2009;28;246–61). Well, those are issues for the next generation. Forget about them for now and let's just consider some of the issues facing health care tomorrow.

To provide the universality of health insurance, major changes will occur in how we pay, what we pay, and who does the paying. As physicians and hospitals are squeezed in the current economic environment, it might be a chance to look at what is going on in the health insurance world. Private insurers are coming under significant pressure as unemployment and health costs increase (AMNews, Nov. 24, 2008). Insurers are having increasing difficulty providing dividends to their stockholders without raising premiums. This is an issue as membership falls and the burden is placed on fewer subscribers. At the same time, investment income that had been used to support services has taken a beating in the stock market.

In Michigan, where many current and former auto workers are losing some or all of their health insurance coverage, Blue Cross and Blue Shield of Michigan is talking of increasing premiums for single contracts and Medicare supplemental coverage up to 55% (Detroit Free Press, Jan. 17, 2009). Such a hike will be sure to force even more people to join the ranks of the uninsured.

President Obama's proposal during the run-up to the election called for supplementing private job-based health plans with a federal plan. Faced with increasing unemployment, employer-based health insurance may not provide much of a support and may not be depended on for long. It is possible that in this economic environment, the public may be more interested in moving more fully to a government-funded program. Before withdrawing his nomination for Secretary of Health and Human Services, Tom Daschle had been talking about starting a federal insurance plan fashioned after Medicare and running it in competition with the private insurers. Congress already is enlarging federally supported health plans by expanding the SCHIP program by adding 4 million children under age 18 at an upgraded poverty level. The Massachusetts health insurance plan, which mandates a combination of industry- and state-funded health insurance plans, is being held up as a potential model. It has decreased the percentage of uninsured in Massachusetts to the single-digit level.

Regardless of the plan chosen, it is certain that impact on the total cost of health care will not be achieved without physicians giving up part of or the entire traditional fee-for-service payment system. That system has resulted in excess use of procedures and specialists. Historically, as fees were decreased, the volume of services increased to compensate.

The quality care guidelines of the American College of Cardiology and the American Heart Association have had no measurable effect on the utilization and cost of health care. How fee-for-service payment will be modified is uncertain, but it will likely lead to something more than just decreasing fees.

Some suggest that the current economic environment will not permit major changes; other suggest that the mounting need to provide health insurance to the uninsured will force congressional action. Stay tuned.