Choices in Health Insurance
UnitedHealth Group’s move last week to give physicians full say over patient care has been rightly hailed as good medicine, but pundits went overboard when they predicted the decision could win millions of new customers for United, the nation’s second-largest health insurer.
Consumer choice is limited in today’s health care market. Most Americans obtain their health insurance through private employers, and only 17% of firms offer workers a choice of two or more health plans. For most Americans, the choice is “take it or leave it.”
President Clinton tried to expand patient choice with his 1994 Health Security Act proposal, but the 1,342-page plan outlined a meddlesome federal bureaucracy that, with a blitz of insurance industry ads against it, was roundly rejected in Washington. Now, however, the influential American Medical Assn. has proposed a more viable plan that could achieve a similar if more modest result.
The heart of the AMA’s proposal is to give workers a federal tax credit specifically for the purchase of health care. Individuals could buy coverage through employers or through health purchasing cooperatives set up by churches, unions, trade groups and others. Currently, employers subsidize employee coverage and get the tax credits: This plan cuts out the middleman, making the tax credit an explicit part of employee compensation.
It’s complicated, but essentially the choices and the money would be put under the control of the individual. Because the plan envisions spending no new federal money, it would still leave millions uninsured. But it’s a good start.
Fiddling with the federal tax code is usually a nonstarter in Washington. But the AMA--which only two months ago managed to persuade Republican legislators to buck their party leadership and endorse a far-reaching HMO reform bill--has succeeded in making the idea the centerpiece of a major summit on health care in Washington on Jan. 13. The fact that the conference is being organized by special interests ordinarily at each other’s throats--the American Hospital Assn., the American Nurses Assn., the Health Insurance Assn. of America and the U.S. Chamber of Commerce, among others--illustrates that a consensus is building in the private sector on the need for fundamental health reform. And in a poll conducted recently by organizers of the Washington conference, 55% of respondents said they preferred using the budget surplus to provide health coverage for the uninsured over cutting federal income taxes or paying down the national debt.
Health advisors to leading presidential candidates Al Gore, George W. Bush and Bill Bradley already agree on the basic principles embodied in the AMA proposal, namely the need to enhance consumer choice and target subsidies at vulnerable populations. At the very least, then, the candidates should join the AMA and members of the Washington summit in recognizing principles that should be the bedrock of any meaningful reform.
