Healthcare in America

Healthcare is a button issue in American politics and it has been so for generations. It would be fair to account healthcare being an issue as far back as the founding of the United States, but what really pushed it toward the center of political debate was with the introduction of Medicare, a social insurance programme for the elderly administered by the Federal government (in other words, socialized healthcare). Why is healthcare such a hot button issue in the United States? Well for those of you whom either live outside the United States, or those Americans whom have been living under a rock for the last few years, the arguments regarding healthcare have mainly being motivated by ideology.

There is a reason why the United States is the only Western country without some form of universal healthcare in place. It stems through this belief held that the constitution did not grant the Federal government powers to provide public healthcare (which they already do through Medicare). To the hardened rightwing, any form of public healthcare is ‘socialism’ or a system on the inevitable road to ‘communism’. In reality public healthcare isn’t explicitly covered by the constitution, and there is a dispute between both sides of the ideological field as to just what was meant by the term ‘general welfare’ in the constitution itself. For years liberals have disputed the claims over the unconstitutionality of public healthcare and they have advocated that the government take action and responsibility over America’s looming healthcare crises. The healthcare issue has become a tug-of-war between the right and left. One thing is for sure though, on a global scale the positions held by the rightwing over healthcare appear to be in the minority.

America’s healthcare crises

Regardless of what ideological side you stand on, there is one thing we should all agree on, that there is a healthcare crises in the United States. Though, depending on which side you stand on, you’ll attribute the crises to different reasons, and have drastically different solutions. There are those who will attempt to play down the healthcare crises, especially those arguing against any measure of public healthcare. Arguments such as ‘america provides the best healthcare in the world’ or ‘America has an abundance of professional doctors and nurses’ are weak attempts to discredit the existence of the healthcare crises. Just because a country has world class healthcare facilities doesn’t mean that everybody can readily access them, not at least with out losing their wallets and lively hoods in the process. So how do we know that there is a healthcare crises in America? Well let’s look at the statistics:

The United States is ranked 37th in Healthcare by the WHO out of 191 countries, with other lower income countries like Costa Rica ranking higher (1).

The United States ranks first for healthcare spending by the individual among the industrialized nations (1) (2).

In 2009, the year that followed the financial crises of 2008, we saw healthcare costs account for core reason among 60% of bankruptcies (3).

Deaths due to lack of healthcare

Another study in 2009 found that around 45,000 Americans die on a yearly basis because they are uninsured and unable to access the healthcare they require (4). This appears to have increased from 18,000 in 2002 (5). Another study put the number of deaths at 22,000 in 2008 and another Harvard study had this rate at more than 35,000 Americans (6). So we can say that the range could be anywhere around 20,000-30,000 if we were to combine these reports together.

Population of the uninsured

A 2006 study (7) found that there were 47 million Americans whom were uninsured for Healthcare. However there could be a number of reasons for this and it would be unfair to assume that all these individuals are uninsured because of the health insurers themselves. It could be purely by choice or by bad decision making that had deemed these individuals unqualified for further insurance. Though, further analysis into the research numbers found that of the some 47 million individuals whom are not insured, around 57% or 26 million of those uninsured (7) were in that position because they were unlikely to afford it or didn’t meet health criteria for coverage (pre-existing conditions). So it would be safe to say that the number for those unable to access healthcare is still significantly high.

The rise of healthcare costs

Healthcare costs have been on the rise for a number of years now. It is predicted that healthcare costs will rise by more than 7.2% in 2012 (7), where as 2011 was already a rise in healthcare costs by 7.4% compared to those in 2010. There is no doubt that healthcare costs have been on the rise for a good number of years now and there is no sign that these increases are even slowing down in the near future. As of 2011 healthcare spending accounted for just over 17% of America’s GDP and is set to rise to 26% of GDP expenditure by 2035 (8).

The decline and stall of income for the lower classes

The changes in average income over the years contrasts significantly to that of healthcare costs. Between the years of 2000 and 2009 median income rose by just 1.9% while between 2007 and 2009, average incomes for the middle classes fell by 4.3% (9). The poverty level in the United States by 2008 measured at it’s highest since 1994, to 14.3%(9). Overall, the wages for the middle classes saw a decline between 1999 and 2009 (20). We can compare this to another income bracket, the top 1% whom saw their incomes increased over the last few decades (see my analysis on taxes).

So what have we concluded from these statistics?

We’ve concluded that healthcare costs have been rising well beyond that of the incomes of the middle and lower classes (which have been in decline). We’ve concluded that many Americans are suffering financially and physically as the result of the costs and barriers to adequate Healthcare. We’ve also compared America next to other countries with universal healthcare systems and have pretty much concluded that in comparison, America is not proving to operate any better.  There is most definitely a problem in America’s healthcare system, despite the denials from some on these issues. I’ll get back to the contrarians on this matter later on, but individual citizens, politicians, advocates and analysts on both sides have acknowledged that there is a problem with the system, and like wise, both sides have solutions, different solutions none the less.

The American healthcare system

Aside from Turkey and Mexico, the United States is the only country in the western and industrialized nation not to have a universal healthcare system availabe. Actually, come to think of it, Mexico is in the process of transitioning to a universal healthcare system of their own(11), so we can just narrow this down to The United States and Turkey. So why does the United States, being the most powerful country economically in the world, not possess a universal healthcare system? There are a set of reasons as to why a system has not been established, but the core reason appears to be purely ideological.

The core argument against that of a universal healthcare system is this belief that the Federal government has no authority in ensuring the social welfare of the populace. This was the argument set out by Franklin Pierce following his veto in 1854 against the ‘bill for the benefit of the insane’ (12). Let’s look at other statements made by political leaders and advocates against public and universal healthcare over the years:

Ronald Reagan (1961) against medicare:

“One of the traditional methods of imposing statism or socialism on a people has been by way of medicine”

Senator Lindsay Graham (2009):

“I’m not going to allow my country to become a socialized nation when it comes to health care” (14)

George W Bush (2000):

“I’m absolutely opposed to a national health care plan. I don’t want the federal government making decisions for consumers or for providers” (15)

Barry Goldwater (1964):

“Having given our pensioners their medical care in kind, why not food baskets, why not public housing accommodations, why not vacation resorts, why not a ration of cigarettes for those who smoke and of beer for those who drink.” (16)

So the idea here from many opponents of socialized healthcare is that not only does government not possess the authority over this issue, but that socialized healthcare will inevitably lead to socialism, statism, and inevitably, communism. These statements obviously don’t ring true by real world standards because for one fact, we already have socialized healthcare in the United States and have been for more than 40 years, it’s called Medicare. Medicare’s inception goes right back in the 60’s and the opposition against it followed the exact same responses we see here today in opposition against universal healthcare. So why after some 40 years, has this country not turned communist after the introduction of Medicare? After all, this was a core argument from opponents prior to Medicare’s adoption. Well the mere fact that socialized healthcare still is a favourable and strong system in free western nations, including the United States, is evidence that the talk from opponents amounts to little more than ideological propaganda.

Why Medicare cannot be privatized

Medicare has been a thorn on the side of libertarian and fiscal conservatives since its inception back in the 60’s. Why is this? Because the continued existence and necessity of Medicare has become a demonstration of why a completely privatized healthcare system is unrealistic. There have been many proposals over the years to privatize the programme and transition the elderly to private insurers, including the most recent, Paul Ryan’s budget plan introduced earlier in 2011 (17). However none of these proposals have ever come to success.

Reagan and Medicare

Remember my reference regarding Reagan’s message against socialized healthcare? He was one of the staunchest opponents of Medicare when it was proposed. His message warning the masses of these threats to freedom through the form of social healthcare is still being used by many conservatives to this day against universal healthcare.  So what about Reagan’s message? Reagan became president roughly 20 years after he sent that message to the public in a campaign against Medicare. In the 1980 presidential elections Reagan won 44 out of 50 States to gain the presidency. In 1984 in the second presidential elections Reagan won every single State but Washington DC and Minnesota. Though his popular vote wasn’t that much larger in comparison to his opponents, the simple fact was that Reagan had plenty of support during that time, not just in public but also in congress.

For most of the time during Reagan’s administration, the senate was majority Republican . There was also a terminology used to describe the significant number of Democrats whom supported Reagan back in those days termed ‘Reagan democrats’. So why is this all significant? Well because although Reagan cut into Medicare benefits during his administration (23) he did not once move to privatize it, it didn’t even introduce a viable plan over to privatize it over time. What’s more, in 1987 Reagan did a complete U-turn to some of the cuts he made in Medicare and expanded the programme to include drug coverage and ‘catastrophic illness (23). Reagan’s contrasting position during his presidency on the healthcare programme compared to his position in the 60’s is very significant here. Another significant factor was that Reagan was a staunch fiscal conservative, so by definition, he shouldn’t be supporting socialized and government managed healthcare at all, yet Reagan changed his tune and turned his back on his ideology on this issue as far back as the 1980 elections:

In the 1980 presidential campaign against incumbent President Jimmy Carter, Reagan denied Carter’s charge that he had been an early opponent of Medicare. Reagan rather glibly deflected the charge, suggesting his opposition had been only to one early version of the Medicare legislation, while implying that he supported the idea of Medicare in an improved form. This denial, however, was considerably at variance with the historical facts.

http://www.larrydewitt.net/Essays/Reagan.htm

So why did Reagan change his tune so much about Medicare during his presidency? Why was he so reluctant to go the privatization route for Medicare at the time when he held significant support, and at the time he campaigned strongly that government had no business in these kinds of issues? Well from his actions it was apparent that Reagan did not take his ideological beliefs all that seriously, certainly not to the expense of his administration. He knew full well that if he walked to talk on the free market system he would inevitably leave out millions of seniors, one of his core voters, at the hands of medical profiteers. Reagan knew personally that the success of a completely private healthcare system was beyond reality at that present time because if he didn’t, he wouldn’t have hesitated to bring forward a plan to gradually privatize Medicare. Reagan was smart enough to know that the elderly for the most part would not find coverage in the private market simply because private medical insurers would not be interested in taking the risk and cost over covering Medicare beneficiaries. Even in Paul Ryan’s recent plan to eventually turn Medicare beneficiaries over to private insurers, the requirement would be for participant healthcare insurers to accept everybody whom would apply for coverage. That is of course unrealistic to expect from private health insurers considering that one of the requirements for coverage are low health risk individuals, something hard to find among the over 65’s. Common sense dictates that private healthcare insurers are in the business of making a profit, as are private hospitals and doctors. This is something that even the libertarian and fiscal conservatives appear to forget in all their eagerness to jump onto the privatization bandwagon. This is the nature of the private market.

Reagan wasn’t the only one in his flip flop over Medicare and socialized healthcare. Most of the 2012 Republican presidential candidates either promised that they would preserve Medicare in their administrations, or have been purposefully vague on the subject. These presidential candidates included Mitt Romney (19), who stated that he would not seek to transition out of Medicare, but would make it an ‘option’, Ron Paul (18), who stated that he would ‘preserve’ Medicare and Rick Perry’s (20)  vague position on the issue demonstrates their reluctance to walk fiscal conservative road on this issue. As for Bachmann? Well she’s been silent on this issue lately as well, we’ll assume she tried avoid the question.

Arguments against socialized healthcare

There are a number of arguments that have been made against socialized healthcare that are not necessarily positions held by supporters behind these programmes. One such argument I’ve come across more often is this fact that private healthcare facilities offer better services and lesser waiting times than public and socialized healthcare facilities. Now this was never really a case disputed by advocates like myself for socialized and universal healthcare. Common sense dictates that if you pay more for a private healthcare provider that is built to be competitive in the private market, you will receive a better and quicker service than those of socialized or public facilities. What the opponents of socialized and universal healthcare fail to realize is that the point of these programmes is to provide healthcare to the lesser privileged in society, and those whom cannot be covered due to their pre-existing conditions. These programmes are suppose to cover those left behind by the private healthcare industry. It is meant to be an alternative to those whom would otherwise be shunned from the private market. A family on a low income and with members whom have pre-existing conditions will not worry all that much about longer waiting times or lesser attractive services from public health providers, this is the last concern of theirs. Lower income earners, those left behind in the private market, seek basic medical attention and assistance, without the need for them to end up unnecessarily in debt or bankruptcy. This is the same case for the unemployed man or woman who requires medical assistance, but cannot afford to seek assistance at private healthcare providers.

On the campaign trail toward the presidency, Rick Perry argued that his State, Texas, provided the best healthcare in the nation (21). Now there are plenty of websites out there disputing this claim so I am not focused about factuality at this moment. What gets me from this statement is the fact that it is so common and typical of the arguments thrown against socialized healthcare. It has been a common position of opponents that somehow, because the United States supposedly has the best healthcare facilities, doctors and nurses in the world, there is should be no need for socialized healthcare. This doesn’t make any sense because (and I cannot believe I have to explain this) even if we do have a world class private healthcare system and medical industry, that doesn’t mean that all Americans can readily access this. I found myself in another debate on this issue where another individual insisted that if Americans truly needed medical assistance, it would be available to them if it was an emergency, regardless. Now I never made the claim that hospitals, doctors, would outright refuse treatment of an individual whom was in great need of healthcare. In fact it is illegal as per the Emergency Medical Treatment and Active Labour Act of 1986 (22). The situation is however more complex than this taking this incident as an example:

Charlie’s gash was small, less than half an inch long, but deep. The hospital called in a plastic surgeon, who put 14 tiny stitches into his chin.

Charlie called the incident “the worst day of my life” — mostly because he had to spend hours in a hospital instead of throwing snowballs. Weeks later, when the bills arrived, we had our own bad day.

The total charges for his minor spill came to $5,398. The largest single charge was a shocking $4,950 from the plastic surgeon.

http://www.nytimes.com/2010/08/07/health/07patients.html?_r=1

So although it is true that Americans will have the healthcare provided to them when they need it regardless, it doesn’t come without consequences, it doesn’t come without a price, often a life changing price. In this case Charlie (aged 6) whom hurt himself while playing outside with the snow, received the medical attention he required but at a great cost to his parents. Opponents would be quick to blame the parents for not giving their child the healthcare insurance coverage he needed, but then, while not much more information is given to us in Charlie’s case, in many cases there are legitimate reasons:

Imagine having a perfectly healthy two month old baby and having your insurance company tell you they won’t cover him. One local family says that’s what’s happened to them.

Baby Alex is a happy, adorable, big baby. And now at three months old, the family’s insurance company says he’s not eligible for coverage.

Alex eats well, is growing fast and has no pre–existing conditions. But his mom Kelli says their insurance company says he’s just too big. “Insurance standards say if he’s above 95 percent he’s uninsurable.”

Because of his size, Alex was turned down for health insurance, his height and weight put him in the 99th percentile according to CDC guidelines.

Kelli says it’s ridiculous, “It’s frustrating, it’s very frustrating.”

http://www.nbc11news.com/localnews/headlines/63813127.html

Baby Alex at that time would have found himself in the same position as Charlie and his parents. There was another case that caught my eye last year:

For newborn Houston Tracy, the historic health care overhaul came too late.

Houston, born March 15 at a Texas hospital, suffers from a defect in his arteries. When his parents, Doug and Kim, applied to have his corrective surgery covered under their insurance, they were denied, with their carrier claiming Houston had a pre-existing condition, reports CBS station KTVT.

The Tracys are fighting the decision by Blue Cross and Blue Shield of Texas.

“They kept saying it’s preexisting, it’s preexisting, but I don’t know how it can be preexisting on a baby that was just born,” Doug Tracy said. “If it’s mandated that everyone have health insurance, than how can one be denied?”

http://www.cbsnews.com/stories/2010/03/26/health/main6335430.shtml

These are but few of the many cases where children, even infants, new born, are refused coverage by medical insurers because of their ‘pre-existing’ conditions. So the idea that the argument for socialized healthcare is merely about gaining access to it is a short sighted position in the overall debate. This position only serves to distract from the major points in the healthcare debate, that private healthcare is becoming more expensive, beyond the affordability of millions, that private insurers purposefully exclude many coverage, leaving them in a position they can’t seem to come out of. What’s more, I find hypocrisy over those who argue that hospitals will treat people regardless and therefore there’s no need for socialized healthcare. Aside from the circumstances which I had demonstrated above, the reason why nearly all hospitals (with some exceptions, such as religious hospitals) will treat those in need regardless of discrimination is because they are required by law (22). Regulations and legal requirements obligate hospitals to treat the needy without discrimination; of course they can certainly continue charging an arm and a leg for that treatment. Any true free market system would not allow for such a law to exist, and yet, what this law requires is being used by conservatives as an excuse. I don’t know about you but this smells like more hypocrisy.

If you think those arguments are eye opening, there are others that will attempt to generalize and discriminate those who have suffered financially and physically as the result of the broken healthcare system. Common generalizations tend to target those individuals suffering or whom are unable to get healthcare as ‘lazy’, as individuals who ‘choose to live an unhealthy life’. One method of argument that many opponents of socialized healthcare will make is to take the circumstances of their own lives to argue against those who are unable to access the healthcare they need. I came across one opponent who stated that he was uninsured by choice, as was his father, and had been so for some time now. According to him, despite being uninsured, he has never had a major illness of any kind in his life, and stated that he lives and eats healthy. Apparently he is living proof of how the fault tends to lie on the individuals who suffer as the result of lack of healthcare. Such an argument is mind boggling to say the least. The obvious assumption is that those unable to access the healthcare they need, including those children in the cases I mentioned, or those whom were just born unlucky with certain conditions, should blame themselves because they chose to live unhealthy (I know, crazy). It’s one of those fallacious arguments made by socialized healthcare opponents to dismiss away the cases and incidences pointing to a broken healthcare system in America. Sometimes I don’t think they bother about seeking the truth.

Proposed ‘free market’ solutions

It’s not all denial or generalization coming from conservatives over the healthcare issue. There are many who do acknowledge that there are issues with the system, although their explanations of these issues and their solutions contrast significantly from those of liberals and other advocates for socialized healthcare. Libertarians and conservatives believe that the causes for the issues facing healthcare in America stems from excessive bureaucracy, government involvement, overregulation, essentially everything they argue to promote a free market system.

Allowing healthcare to be sold across state lines

A common solution provided by conservatives to solve America’s healthcare crises is to allow healthcare insurers to sell coverage across state lines without any or little restriction. Why would healthcare insurers be restricted state by state? Because each state has their own laws and regulations that they require businesses to abide by, healthcare insurers are no different. So what are the supposed advantages for lifting all state restrictions on health insurers?

  • It would supposedly give customers more choice for private health insurers
  • More competitiveness and bargaining power for consumers as they could choose between a wider range of insurers across state lines
  • The promotion of market enterprise, an increase in consumer numbers which will give private businesses opportunity to grow.

So what is the problem with this proposal? What are the negatives?

First of all, this proposal infringes on State rights in that it will remove by force the State laws and regulations that restricted these health insurers across State lines in the first place. For a group who often advocate for strong State rights and less Federal oversight, they certainly  no problem infringing on those very rights for the sake of business. Exactly who will be lifting these restrictions by force? (because we cannot expect states to individually give up their laws now can we?). We’ll assume that the Federal Government will be doing the dirty work here.

Secondly, allowing health insurers to sell across state lines may do exactly the opposite to what was initially intended. Allowing insurers to sell across state lines will also give health insurers more power to cherry pick their customers, which will take us right back to square one. It is true that consumers may very well have more options between health insurers in this scenario, but so will the health insurers themselves. I have already mentioned that healthcare insurers cooperatively limit whom they will cover based on various reasons (pre-existing conditions, age). By opening the market across state lines and limiting restrictions, we will be giving insurers the ability to cut costs further, we will be giving them a larger consumer base, and in turn we will be giving them less reason to open up to a more wider range of customers.

Reference:

(1)   http://healthvotes.com/general-health/19-countries-with-the-best-healthcare/1696/

(2)   http://articles.nydailynews.com/2009-08-23/news/17930526_1_health-care-universal-coverage-primary-care

(3)   http://articles.cnn.com/2009-06-05/health/bankruptcy.medical.bills_1_medical-bills-bankruptcies-health-insurance?_s=PM:HEALTH

(4)   http://www.reuters.com/article/2009/09/17/us-usa-healthcare-deaths-idUSTRE58G6W520090917

(5)   http://www.usatoday.com/news/health/healthcare/2002-05-22-insurance-deaths.htm

(6)   http://www.pnhp.org/excessdeaths/health-insurance-and-mortality-in-US-adults.pdf

(7)   http://www.reuters.com/article/2011/08/18/us-healthcare-costs-idUSTRE77H62B20110818

(8)   http://www.nber.org/aginghealth/2011no1/w16772.html

(9)   http://online.wsj.com/article/SB10001424052748703440604575495670714069694.html

(10)                       http://www.benzinga.com/media/cnbc/10/09/482777/wsj-middle-class-sees-income-decline-over-past-10-years

(11)                       http://www.nytimes.com/2011/01/30/world/americas/30mexico.html?pagewanted=all

(12)                       http://www.lonang.com/exlibris/misc/1854-pvm.htm

(13)                       http://www.issues2000.org/Ron_Paul.htm

(14)                       http://www.cbsnews.com/stories/2009/12/22/politics/main6009744.shtml

(15)                       http://www.issues2000.org/george_w__bush_health_care.htm

(16)                       http://www.psychologytoday.com/blog/adventures-in-old-age/200908/medicare-is-socialism

(17)                       http://www.politifact.com/truth-o-meter/statements/2011/may/25/agenda-project/throw-granny-cliff-ad-says-paul-ryan-plan-would-pr/

(18)                       http://abcnews.go.com/blogs/politics/2011/10/ron-paul-i-will-preserve-medicare/

(19)                       http://www.washingtonpost.com/blogs/ezra-klein/post/on-romneys-medicare-plan-a-devil-in-the-details/2011/11/04/gIQAgcOfmM_blog.html

(20)                       http://www.nationofchange.org/rick-perry-flip-flops-medicare-claims-he-%E2%80%98never-said-it-was-unconstitutional%E2%80%99-1314637819

(21)                       http://www.iowastatedaily.com/opinion/article_005817c4-e473-11e0-9c40-001cc4c002e0.html

(22)                       http://www.law.cornell.edu/uscode/42/1395dd.html

(23)                       http://www.politifact.com/truth-o-meter/statements/2011/dec/12/mitt-romney/romney-says-only-obama-has-cut-medicare/

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2 Responses to Healthcare in America

  1. Sergio says:

    Privatized is better. When you socialize it you take away competition and incentive, exactly the same with education and schooling, government schools are poorly inferior academically to private schools and home school. Ron Paul even said that in his day before the government screwed up and got involved with healthcare business that it was better. Unless you’re willing to suffer like Canada’s long wait times, it’s best to get the government out of the healthcare business

    • Hello Sergio.

      I’m going to make the assumption here that you glazed over my article and ignored the points made.

      Privatized is better.

      of course it’s better. That doesn’t mean that everybody can afford it or have access to it.

      I think driving my private car to work is better, but I take public transport as it’s more affordable for me. I’d take my private car to work more if I could afford it.

      When you socialize it you take away competition and incentive,

      No you don’t. Socializing healthcare does not take away competition. Like yourself said, private healthcare is better… less waiting times, great facilities, so naturally there will always be a consumer base willing to fork out their own cash to go private rather than public. Competition will naturally continue. In Australia for example they have public healthcare, but they have a booming private healthcare sector with competing companies as there are many who would opt private for the benefits. For those who can’t AFFORD it, they’re fortunate enough to fall back on public healthcare.

      As for private healthcare being affordable due to competition all on it’s own, without a public option…. in the United States, the ONLY country without a universal healthcare system, healthcare costs are the HIGHEST in the developed world. Private healthcare insurers have increased healthcare costs by more than 110% over the last 10 years and they continue to rise. It’s a business my friend… healthcare insurers will work together to hype up costs. The “more competition” excuse falls flat when you look at the healthcare costs of private healthcare providers over the last few decades. The stats say otherwise.

      Look up the stats then come back to me with another excuse will ya?

      Unless you’re willing to suffer like Canada’s long wait times,

      People in Canada like their healthcare just fine…. and if they’re not willing to wait for healthcare to be provided, they’ll go private if they can afford it and have short wait times. Simple.

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