Insurance

The COVID-19 pandemic pointed a spotlight on the true nature of the U.S. health care system. We have a patchwork system of health insurance coverage, in which people’s access to services and level of financial protection (from healthcare-related bills) varies greatly depending on birthplace, age, job, income, location, and health status. If you are older than 65 or have a disability, you might be eligible for Medicare coverage. If you work full time for a company that offers health benefits, you might be eligible for employer-sponsored insurance. Or, depending on your income, state of residence, and other factors, you might qualify for Medicaid. You could also fall through the cracks. Today, 12 years after enactment of the ACA, otherwise known as Obamacare, 9% of Americans remain uninsured.

Many people in the U.S. work for employers that do not offer health insurance, or who do not sufficiently subsidize it, making it unaffordable for most low-income workers. Most documented (legal) immigrants must wait five years to qualify for Medicare or Medicaid. Most undocumented (illegal) immigrants may never be eligible for any type of governmental insurance. Millions of people live in states where eligibility rules mean they are actually too poor to qualify for subsidized coverage. Currently, about 50% of the population is covered by employer-sponsored health care coverage. Medicare accounts for 14%, Medicaid and CHIP about 20%, military about 1.5%, and the rest are either uninsured or covered by individual or non-group policies. No one in their right mind would ever purposely design the system we have. It is built on happenstance, unintended consequen­ces, and gap-filling.

Over the years, the U.S. has made a few efforts to create a national system of health coverage, starting with Truman and including Nixon and Clinton. All these efforts foundered in the face of opposition from health insurers, the AMA, and other healthcare industry stakeholders. The backbone of our health coverage system is employer-sponsored insurance, which makes access to health care heavily dependent on the ability to work a full-time job. This system arose as an unintended consequence of hospitals seeking a steady stream of revenue, war-driven labor policy, and IRS decisions. In 1929, Blue Cross arose from a Texas-based hospital system to receive prepayment for future healthcare costs, its first clients being schoolteachers. At the time many traditional insurers shied away from health coverage, afraid that only the sick would sign up. But Blue Cross proved that a company could manage risk and sell health insurance without losing its shirt.

It turned out that the ACA prov­ed to be a critically important safety net during the COVID pandemic. Despite massive job losses, people were able the keep their coverage through ACA-sponsored Medicaid, which was subsidized by Congress. But Congress is reluctant to commit to paying for this in the long term, meaning that underinsurance is a growing problem. As healthcare costs rise so do premiums and deductibles. Unless policymakers are able to curtail the power of healthcare monopolies to drive up costs, vir­tu­ally everyone’s access to affordable care is at risk. Our current patchwork system isn’t going anywhere soon, but to maintain at least the status quo, costs must be constrained and inequities in access corrected.