Viewpoints : Universal Health Care Worth the Sacrifices

Several weeks ago, California’s Major Risk Medical Insurance Board agreed to provide comprehensive health insurance for state residents who have been denied coverage due to pre-existing conditions such as cancer, diabetes, heart disease and exposure to the AIDS virus. Under this new program, otherwise uninsurable Californians will pay 125% of the average monthly health-care premium for healthy individuals in their age group and location.

Although the program is an important achievement, it is just the latest bandage on the state’s patchwork--and increasingly sickly--health-care system. Enrollment is limited to 10,000 participants. And the premiums aren’t cheap: They range up to $3,423 a year for people in the Los Angeles area from age 40 to 44.

Until our officials enact a comprehensive health insurance law for all Californians, we--like all Americans--must continue to rely on an ill-functioning three-tier system of medical care. At the top are those with private insurance, below them are the people in health maintenance organizations (HMOs), and at the bottom are the 6 million people without any insurance at all.

Under this three-tier system, which cost more than $70 billion last year, all Californians suffer from ever-higher medical costs and less-than-optimal care, including those fortunate enough to have private insurance.

Of course, “insured” Californians usually receive the best medical care because their plans provide the widest choice of doctors, private hospitals and range of treatments for illness.

But the insured are penalized by the present system as well. If these individuals suffer a heart attack or traffic accident, for example, they might be taken to a public hospital’s overcrowded emergency room, which is filled with uninsured patients who cannot receive care anywhere else.

The insured eventually pay for the treatment of the uninsured through increased premiums and scaled-back benefits for their policies, plus higher taxes. In 1988, for instance, uninsured patients nationwide accumulated $8 billion in unpaid hospital bills. To cover the shortfall, hospitals simply raise their bills to insurance companies and the federal government. Such cost shifting is responsible for a third of the increase in insurance premiums in recent years.

The insured are surprisingly vulnerable under the present system too. They could lose coverage if their employer discontinued its insurance or went out of business, or if the insurance company failed.

In just a few years, moreover, some healthy individuals won’t be able to get private insurance at all. As genetic testing becomes more sophisticated and widespread, insurance companies will be able to identify individuals susceptible to such diseases as cancer, diabetes or epilepsy. Based on these tests, insurers may deny or cancel coverage for people who may someday need it the most.

Californians in HMOs or the similar PPOs (preferred provider organizations) often receive care as good as that given the privately insured. But to achieve cost advantages, HMOs do not allow their participants to choose their own doctor. Instead, HMO members must visit specified doctors and hospitals. As a result, some HMO participants might see doctors who do not know them or even specialize in their illness. In addition, HMOs usually cover only specified procedures and are often slow to implement new medical treatments, a particular drawback for people with AIDS or the HIV infection.

Worst off in our three-tier system are the 6 million uninsured Californians who must rely on public health care. The uninsured are more than just California’s poor; they also include employees of small businesses and their dependents, the self-employed, part-time workers, the young, the disabled and those who have taken early retirement but are too young to qualify for Medicare.

If the uninsured get sick, they must take whatever care is available in our overcrowded and under-funded public hospitals, where they often receive less than optimal attention.

According to a just-published study of nearly 600,000 patients nationwide, the uninsured arrived at the hospital far sicker than insured people of the same age, sex and race, and they were 44% to 124% more likely to die during their stay.

Before California replaces its ill-functioning three-tier system with universal health coverage, what issues should be considered?

An important part of any new system is some form of employer-provided health insurance--with a minimum level of guaranteed benefits--to all workers and their dependents. Employers who do not wish to provide such benefits should pay a special tax with the proceeds going to a fund to cover their workers.

Californians who have lost their jobs or taken early retirement could be covered through an expansion of Medi-Cal or the creation of a public insurance plan separate from welfare. Obviously, any new public program will have to pay physicians and hospitals a fair rate for their services, unlike the under-funded Medi-Cal system.

To provide adequate care for all now-uninsurable Californians, the new major risk medical insurance program should be expanded beyond its 10,000-person limit, and subsidies must be provided for individuals who cannot afford to pay the insurance premiums.

Californians should be forewarned that these suggestions will come with a price, which will be determined by how much coverage is extended to how many people. It remains to be seen how the costs will be distributed among hospitals, insurance carriers, employers, taxpayers and patients.

Any plan to provide universal health care must also be accompanied by new cost-control measures.

Physicians, hospitals and other health-care providers can save significant sums through the elimination of “overpracticing,” the tendency to conduct unnecessary tests and procedures. Over time, additional savings would be generated through the greater availability of preventive medicine, particularly for the uninsured. By the time these individuals visit a hospital emergency room, the treatments are often far more costly than they would have been in the earlier stages of the illness.

Insured workers might also be asked to pay a larger portion of their medical bills--up to a fixed annual maximum-- to make them more cost-conscious and reduce unnecessary doctors’ visits.

To create a new statewide system of universal health care, all groups except the now-neglected uninsured must give up something to achieve the greater good.

Last year, however, the state Legislature did not enact universal health care because special interests--including business, labor, doctors, hospitals, insurers and consumer groups--could not reach a compromise. In the current session, several bills are under consideration, including AB 14, introduced by House Speaker Willie Brown (D-San Francisco) and Assemblyman Burt Margolin (D-Los Angeles). So far, Gov. Pete Wilson has not indicated his position on these bills.

Californians cannot look to the federal government for leadership on this issue. Over the past year, the President and most of Congress have bemoaned the nation’s costly but ill-functioning medical-care system but have offered no specific plans for solving the problem. Isn’t it time for California to take the lead, as it has with other social issues in past years, and create a fair yet affordable model system of universal health care?