Universal Health Care, the Basics

Low-income communities frequently lack access to doctors or preventive health care services.

Every American should be guaranteed a basic level of health care coverage. For those who earn too little to pay for insurance, the government will need to offer subsidies to help them afford the cost of a basic plan. Universal coverage is not just a goal of reform—it must be a requirement. Determining what constitutes a basic level of care should be left up to unbiased experts.

There are both economic and moral reasons to insure everyone. First, the economics: At the current growth rate, government spending on health care will rise to 37 percent of GDP by 2050, putting all discretionary spending in the federal budget at risk.¹ The increasing costs will be incurred almost entirely by Medicare and Medicaid. However, it would be a mistake to blame these two programs for causing the country’s unsustainable health care costs. From 1997 to 2006, spending per covered patient grew at 4.6 percent annually in Medicare, versus 7.3 percent under private insurance plans.² Spending on Medicare and Medicaid reflects the rising costs of health care in general and helps explain why the whole system needs reform.

The cost effectiveness of insuring everyone is simple to understand. Not carrying insurance encourages people to delay treatment of minor conditions that could, and frequently do, become more serious and more expensive to treat than if they had been caught earlier. Once they have insurance, people will have less reason to delay treatment. They will also have options other than the emergency room. Hospitals and doctors charge everyone higher fees for services as a way to insure themselves against the financial risks taken by providing care to uninsured people. Uninsured patients are hardly getting a free ride. Hospitals charge them two to four times as much as private or public insurers would for the same services, and they are twice as likely as insured patients to be pursued by collection agencies.³

The moral reason for insuring everyone is no less difficult to understand. Uninsured and underinsured people avoid needed care.⁴ Not high-priced, sophisticated treatments by specialists, but basic care, which should be a right of everyone in a society as rich as the United States. For uninsured people, cancers go undetected longer and are more likely to be fatal when discovered; coronary heart disease and hypertension are not managed and often progress until they cause a heart attack or stroke; and delayed treatment of diabetes accelerates the pace of kidney and other organ failure and contributes to an earlier death. A study by Harvard Medical School found that 45,000 people die each year because of lack of health insurance.⁵ Between the ages of 55 and 65, the risk of death for people who don’t have health insurance is double the risk of people who do.⁶ These grim statistics are explained by the fact that uninsured people do not use primary care. The “ounce of prevention” argument still makes a lot of sense, except when people can’t afford an ounce.

Health care costs will rise in the coming years no matter what version of reform is adopted. But costs do not have to rise unsustainably. In addition to insuring everyone, health care reform should encourage and reward the use of primary care. The Milken Institute estimates that in 2003 alone, modest improvements in the prevention and management of chronic diseases could have led to a trillion dollars in savings.⁷

Some say that now is not the time to embark on an ambitious reform agenda. The country is struggling to come out of a recession and national debt may climb to 83 percent of GDP by 2019, according to Congressional Budget Office projections.⁸ But this logic misses something crucial. Waiting delays the benefits that reform can bring—and those benefits could be huge. According to the Council of Economic Advisors (CEA), for example, cutting the rise in health care costs by 1.5 percent—from an annual growth rate of 6 percent to 4.5 percent—would add 2 percent to GDP by 2020 and 8 percent by 2030.

“The real income of the typical family of four could be $2,600 higher in 2020 than it otherwise would have been and $10,000 higher in 2030,” the CEA writes. “And the government budget deficit could be reduced by 3 percent of GDP relative to the no-reform baseline in 2030.”⁹ The budget ramifications in the first decade of reform are certainly not trivial, but the whole point of this Hunger Report is to look beyond a short time horizon and see the wisdom of investing in a sustainable future.

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