BY: JUDITH FEDER, PhD
Dr. Feder is dean, Policy Studies, Georgetown University, Washington, DC.
This article is adapted from the transcript of a talk she gave to the Negotiating
the Healthcare Market with Integrity Conference.
The problem of the uninsured in the United States is, first and foremost,
a moral problem. I believe our goal should be to live in a society in which
no one is unable to get health care because he or she cannot pay for it. Achieving
that goal means that everyone should have health insurance. We are a sufficiently
wealthy nation to make health insurance available to everybody. What follows
is a discussion of the policy choices we need to make to achieve this moral
objective, the politics necessary to ensure that the choices are made, and the
political roles and responsibilities of health care professionals themselves.
Looking at a few facts concerning the uninsured will help us put the policy
issues into perspective. About 80 percent of the uninsured are working, most
of them full-time.1 About 70 percent of uninsured workers lack coverage
because their employers (or family members' employers) do not make insurance
available to them.2 More than half of the uninsured have incomes
below twice the poverty level, which is about $16,000 dollars for an individual
and about $28,000 dollars for a family of three.3 Without employer
coverage, such people simply cannot afford an insurance policy that costs, on
average, $2,300 for an individual and $6,000 for a family.4 For older
adults or people with pre-existing conditions, the price is even higher.
The extraordinary national prosperity of the late 1990s did not make health
insurance more affordable. In fact, those several years of enormous prosperity
failed even to fix the decline in employer-sponsored coverage we saw in the
late 1980s and early 1990s. Low-wage workers in particular bore the brunt of
that decline and, despite recent improvements, smaller proportions of low-wage
workers are covered today than were covered a decade ago.
Moreover, public programs have significant gaps in their ability to address
this problem under current law. Medicaid, which was designed as a part of the
welfare system, distinguishes between "deserving" and "undeserving"
poor and is directed primarily at children, along with the recently enacted
State Children's Health Insurance Program (SCHIP). To some extent, the
mothers of such children are also covered, mostly when they are pregnant. In
theory, Medicaid allows states to cover parents, but in 32 states those parents
who earn the minimum wage earn too much to be eligible for Medicaid benefits.
And under the federal Medicaid statute, childless adults are not eligible for
Medicaid, regardless of their income — unless they are disabled or otherwise
unable to work.
Public recognition is growing that large numbers of people will remain without
insurance coverage unless federal policy changes and the government intervenes.
Neither prosperity nor the market will solve the problem. And the evidence of
the past tells us that, without government intervention, people who lack insurance
coverage will get less health care, will get care later, and as a result will
be more likely to suffer poor health or die because of it than people who are
part of the insured population.
Good News, Bad News
The good news is that President Bush has recognized lack of health insurance
as a problem that needs policy intervention. He has proposed providing the uninsured
the money they need to purchase insurance through a tax credit geared toward
the low- and modest-income population. Although some question whether a tax
credit — as against, say, expansion of Medicaid — is the best way to reach
low-income people, the fact that the administration recognizes that some
kind of public subsidies are needed is a definite plus. Until this year,
the other good news was that the federal budget had a surplus that could be
used to support those subsidies. But the bad news is that tax cuts have largely
eliminated the surplus and the uninsured remain relatively low on the list of
claimants on available federal resources. Why is that so? Generally speaking,
most Americans have health insurance coverage. The Clinton administration, when
it talked about the need for health care reform in the early 1990s, often noted
that many people are only one paycheck away from losing their coverage. If the
economy again deteriorates as it did in 1991-1992, people at risk of losing
their employer-sponsored coverage will get scared again. They will then recognize
that this is a situation anybody can fall into.
However, whether we see a new recession or not, low-wage people are disproportionately
likely to find themselves without coverage. As far as health insurance is concerned,
the United States has an "us" and "them" situation. The
"us," the vast majority of working Americans, have coverage through
their employers; those who are left out, the "them," area disadvantaged
minority. In political terms, we need to find a way to get the money from "us"
to pay for "their" coverage. Put another way, we need to get the money
from those of us who vote, to give to those who do not.
This us-versus-them situation dates back at least a half century. Employer-sponsored
coverage began to expand after World War II and did, in fact, take care of most
working Americans. In the 1960s, Medicare was developed to take care of retirees.
The creators of that program originally hoped it would be the first step toward
national health insurance, covering the entire population, but their plans were
frustrated. The nation did develop Medicaid for children and (sometimes) their
mothers. As yet, there is no social consensus that the rest of the uninsured
population matters very much. That lack of consensus is why we are where we
The Providers' Role
The role of health care providers in today's political constellation varies
from organization to organization. Some providers as organized groups — such
as the American Hospital Association and the American Nurses Association — are
fairly good about advocating expanded coverage. The strongest advocates tend
to be nurses, pediatricians, internists, family physicians, and the unions for
the health care workers.
There is a difference, however, between advocating a position issue rhetorically
and being willing to put your money where your mouth is. It is easy enough for
providers to voice support for expanded coverage — and quite a different
matter for them to put all their political resources behind it.
Expanded coverage is not a top-tier issue for many associations; indeed, their
top-tier issues usually relate to their members' incomes. They tend to
be focused on Medicare payments because Medicare is the largest payer for health
care in the public sector. Some providers care about Medicaid, but since most
do not get much money from Medicaid, they don't care much about it.
For example, we can say that organizations representing hospitals obviously
care about the rates they get paid. Those representing teaching hospitals care
not only about the standard payment rates for Medicare beneficiaries but also
about the way graduate medical education is treated. Nurses' groups care
about whether advanced practice nurses are able to bill independently of physicians.
Groups for home health agencies care enormously about the rate home health agencies
get paid. Psychologists care about whether they get paid on the same basis as
psychiatrists. There are no particular good guys here. Every organization is
out to protect the economic interest of its membership, which is what one would
expect them to do.
Providers' concerns about their revenue compound the difficulties in finding
resources to finance coverage expansions. Not only do their organizations devote
more energy to payment issues than to expansion of coverage; they are also likely
to oppose expansion proposals that would partially finance new coverage by limiting
payments to providers. As a result, we cannot count very much on provider organizations
to help us solve the problem.
Though we may forget it, each of us is in one way or another a part of the
health care system. That being so, we must look beyond our private interests
toward the kind of society we want to live in. Considering one's social
interest is critical if one intends to take an ethical role in a public
policy debate. Individuals must recognize what it is they are willing to give
up. The thing given up may be money — settling for a smaller Medicare payment,
for example. But it may alsß mean giving up the time and energy needed
to hold one's professional organization and political officials accountable
for achieving the goal one believes in. If we really believe in it, we will
make that sacrifice.
- Paul Fronstin, "Sources of Health Insurance and Characteristics of
the Uninsured: Analysis of the March 1999 Current Population Survey,"
EBRI Issue Brief, no. 217, Employee Benefit Research Institute, Washington,
DC, December 2000.
- Philip F. Cooper and Barbara Steinberg Schone, "More Offers, Fewer
Takers for Employment-Based Health Insurance: 1987 and 1996," Health
Affairs, vol. 16, no. 6, pp. 142-149.
- Paul Fronstin.
- J. Gruber and L. Levitt, "Tax Subsidies for Health Insurance: Costs
and Benefits," Health Affairs, vol. 19, no. 1, pp. 72-85.
Why Doesn't the United States Have Universal Care?
After Judith Feder, PhD, finished her presentation to the Conference
on Organizational Ethics, she took questions from the audience. Here are two
questions she fielded.
Why doesn't the United States have universal health care for
all its residents? Is this the fault of economic pressures?
Economic pressures certainly limit the delivery of care. Look at uncompensated
care, for example. The money to pay for it has got to come from somewhere — or
else it simply will not be given. Some institutions provide as much uncompensated
care as they can. But many others do not. I don't believe that a health
care system that ultimately relies on altruism is ever going to live up to the
social commitments that I would advocate. If we truly want everybody to have
health care, then it is incumbent upon me as a member of society to help pay
Could you explain why some hospitals seem uninterested in expanding
coverage to the uninsured? After all, they provide care for such people.
Any hospital naturally wants to get paid for every person it treats. If that
were all that is involved in expanding care for the uninsured, all hospitals
would be for it. Unfortunately, the package is rarely that neat. Most hospitals
don't do a lot of charity care, and they limit the care they do
provide. They can thus control their liabilities for the uninsured. What interests
them more is the reimbursement they receive for the patients they do serve — Medicare
patients, for example. Medicare is bread and butter for such organizations.
Hospitals cannot refuse to serve Medicare beneficiaries. Thus their political
priorities: They care much more about what they are paid for Medicare than they
do about expanding coverage. A bird in the hand is worth much more than a bird
in the bush, as the old saying goes.
Then, too, when policies are developed to cover everybody, as they were under
the Clinton health care reform plan of 1993-1994, those policies include mechanisms
to contain costs for those who are already insured, as well as to expand coverage
to those who lack it. The Clinton proposal was quite aggressive in the efforts
it envisioned to slow down the rate of growth of payments for the currently
insured. Providers, looking at their bottom lines, thought they had more to
lose than to gain from the expansion of coverage under the Clinton plan.
The moral of this story is simple: In order to get everybody insured, the United
States must be willing to put new money into the system to pay for coverage
for everyone without it.
Copyright © 2001 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.