To no one’s surprise, the Democratic takeover of Congress has been accompanied by a sudden renewal of the national debate over health care. Less predictably, the debate was kicked off this week by a Republican, Governor Arnold Schwarzenegger of California. Like most governors, Republican or Democratic, Schwarzenegger is frustrated by the economic and human costs to his state of this nation’s failure to provide affordable health care to all. Unlike most, he’s bold enough to try to do something about it.
In his third annual State of the State address January 9, Schwarzenegger called for new legislation to require that every Californian obtain health insurance. His plan includes easier access to Medicaid for the poor, subsidies to help low-income families buy their own insurance, mandates on small businesses, plus taxes on doctors and hospitals to help fund the subsidies. Those not covered at work but too rich for subsidies — anyone, that is, with incomes above $41,500 for a family of three — would be required to buy coverage on their own. The cost to that family of three for a new, cut-rate plan will be $2,000 a year in premiums and up to $10,000 in out-of-pocket fees. It’s hardly perfect. Still, it could help.
Schwarzenegger figures the plan will cost California about $12 billion a year. But, he says, that and more will be made back in savings on emergency care for the uninsured and in workdays not lost to sickness. His plan is modeled on a Massachusetts law signed last year by another Republican governor, Mitt Romney. The biggest difference is that Massachusetts has a half-million uninsured to worry about, while California has 6.5 million.
Schwarzenegger claims his state is poised, thanks to its size, to set the terms for future discussion of the issue — much as it is trying to do by cutting greenhouse gases. “We are the modern equivalent of the ancient city-states of Athens and Sparta,” the governor said this week. “California has the ideas of Athens and the power of Sparta. Not only can we lead California into the future … we can show the nation and the world how to get there.”
It’s a classically American sentiment. We like to think we’re a beacon to the world. But in this case, the governor is wrong. The industrialized world doesn’t need our lessons. They’re way ahead of us on health care. Indeed, Schwarzenegger’s plan, even if it works, will still leave California light-years behind the rest of the developed world.
It’s no secret that every industrialized nation besides America already provides citizens with universal health coverage. All of them except Germany do it by operating a single government health plan. Schwarzenegger, unwilling or unable to take on the big insurers, who make billions off the current system, is offering a Rube Goldberg scheme that leaves the insurance industry in charge of delivery. It’s essentially an update of the ill-fated 1994 Clinton plan. It still leaves us with less bang for a lot more bucks.
America currently spends about $1.99 trillion per year on health care, accounting for about 16% of our nation’s total economic activity, according to a report issued this week by the federal Centers for Medicare and Medicaid Services. By contrast, the nations of the European Union spend on average just over 9% of Gross Domestic Product. Part of the difference comes in more expensive treatments offered at the high end of American medicine. Most of it, however, is eaten up by insurance company profits and bureaucracy, including the cost to American doctors of keeping up with ever-mounting paperwork.
Just do the math: Americans spend about 25 to 30 cents of every health dollar on bureaucracy and overhead. European countries with single-payer government health plans spend about 3 cents.
Defenders of the American system like to claim that our private-enterprise health care gives Americans choice, keeps medical decisions in the hands of doctors rather than government bureaucrats and leaves us healthier. Just about every American knows by now that the claims are a load of hooey. For most of us, private insurance doesn’t mean choice, but a bewildering maze of contradictory and unaccountable corporate bureaucracies.
As for being healthier, the opposite is true. America is number one among industrialized nations — by a wide margin — in per capita health spending. Yet we’re 22nd in life expectancy and 34th in infant mortality, the most important measures of a nation’s health. The wealthiest among us enjoy the finest medical care in the world. Most of the rest live in a gray world of confusing and ever-deteriorating private plans. The unlucky — 42 million of us — live in constant fear of the sickness that will destroy their lives.
The Schwarzenegger and Romney plans are meant to address only the last piece of the problem: the insecurity of Americans without coverage. They won’t do anything about the other problems — the costs of bureaucracy, the Kafkaesque maze of overlapping private plans, the profiteering of big insurers and the drain on our economy. They will relieve us of a system that is unconscionable, and replace it with one that is merely bad.
There’s a danger that these half-measures, by making things tolerable, will put real reform even further off. Still, tolerable is better than intolerable. If Romney and Schwarzenegger can move us even that far, they deserve our thanks.