Background on the Health Care Crisis

There are 46 million Americans that do not have health care coverage. Medical bills are the cause of nearly half of all personal bankruptcies. The United States spends more on healthcare coverage than any other industrialized nation, but is not near the top for overall performance. Health Care spending is increasing at a rapid rate, almost double the rate of inflation. Spending is now at 16% of GDP (gross domestic product)

Most people get coverage from their employer, or their spouse or parent’s employer. The Federal Government and state governments split the payment for Medicaid for low-income families. The Federal Government pays for Medicare for citizens 65 and older. The Federal Government and states pay for the State Children’s Health Insurance Program, for low-income children who do not qualify for Medicaid. The Federal Government pays for the Veterans Administration for veterans and their families. Combined, these programs cover 27% of the population, and they make the Government the largest insurer in the country.

How is the Health Care crisis affecting Millennials?

Eight million 18-24 year olds are uninsured, or 28% of our peers. We are the fastest growing segment of the uninsured population. Many lose coverage from their parents at 19, and work part-time at jobs that do not provide coverage to their employees. This leaves a lot of Millennials one accident away from financial ruin.

Employer based coverage is also taking a hit. Many CEOs are complaining that not having a national healthcare system is making US firms less competitive with international rivals who are based in countries that provide Health Care to all citizens.

Reforms

Many on the left are calling for a single-payer Health Care system, much like the National Health Service in Britain. In this system, the central government pays for all health expenses (elective surgeries are not always included). Some on the right are calling for an end to public insurance and employer coverage and to shift to a system in which citizens can choose their own care and where market forces regulate prices.

With a new president who has a lot of political capital, many are expecting a sweeping reform to our Health Care system. However, looking at other industrialized nations reminds us that there’s no perfect blueprint. Very few countries enacted a overhaul, or start-from-scratch Health Care system; more common is a patchwork approach that has evolved over time.

The last time the US gave Health Care reform a look was 1993 when President Bill Clinton and his wife Hillary pushed for reform. The attempt broke down mainly over patient choice. This time around, the feeling is that the coalitions have shifted, and now business is pushing for reform as hard as consumers. Doctors are also fed up with the inefficiencies of Medicare.

Reformers often cite the number one problem wit the current US system is that it does not provide the right incentives. It pays doctors to perform procedures, but it doesn’t invest enough in ensuring good health upfront. In fact, many studies have shown that preventive care is more effective in maintaining a patients health and is more cost-effective as well. One of the advantages of a single-payer system is that, in theory, doctors would not have incentives for just performing procedures, but for the overall health of their patients.

Experts believe that Obama’s plan will build upon the current employer based coverage by mandating that people buy insurance and subsidizing those who cannot afford it.

The Congressional Budget Office’s Analysis of the Health Care Crisis

Although the aging of the population is frequently cited as the major factor contributing to the large projected increase in federal spending on Medicare and Medicaid, it accounts for only a modest fraction of the growth that CBO projects. The main factor is excess cost growth-or the extent to which the increase in Health Care spending exceeds the growth of the economy. The gains from higher spending are not clear; however, substantial evidence exists that more expensive care does not always mean higher-quality care. Consequently, embedded in the country’s fiscal challenge are opportunities to reduce costs without impairing health outcomes overall.