National Healthcare

NATIONAL HEALTHCARE….A few days ago, during an email exchange with a friend, I mentioned that I don’t usually tout cost savings as a big argument in favor of universal healthcare. It’s true that a national healthcare plan would almost certainly save money compared to our current Rube Goldberg system, but I suspect the savings would be modest. Rather, the real advantages of national healthcare are related to things like access (getting everyone covered), efficiency (cutting down on useless — or even deliberately counterproductive — administrative bureaucracies), choice (allowing people to choose and keep a family doctor instead of being jerked around everytime their employer decides to switch health providers), and social justice (providing decent, hassle-free healthcare for the poor).

Today, the LA Times has a story that sits at the intersection of several of these issues:

Health plans offered by professional associations were once havens for millions of people who couldn’t get coverage anywhere else. But as medical costs have soared, groups representing professions as varied as law and golf have been forced to stop offering the benefit or been dropped by insurers.

….Although no one tracks association coverage to know how many plans have disappeared, the experience of Marsh Affinity Services is telling. A decade ago, Marsh, which brokers and administers the health plans, had 142 such clients. Today, all but three have shut down.

….Over the same period, the nation’s uninsured population, now estimated at 45 million, rose dramatically, fueled in part by the dearth of affordable options for the self-employed, experts say. Among uninsured workers, nearly 63% are self-employed or work in small firms, Todd Stottlemyer, president of the National Federation of Independent Business, told Congress recently.

This shouldn’t come as a surprise. For obvious reasons, health insurers have never been eager to write individual policies, and even in most group policies it’s the employer who bears most of the risk. (If their claim rate goes up during the year, their premiums get bumped the next.) Even worse off are groups that allow its members the option of whether or not to join: they inevitably attract the sickest members in disproportionate numbers, leading to a “death spiral” that’s explained well in the article.

So today, with healthcare costs rising and the population getting older, policies for professional groups are becoming a thing of the past — and individual policies are disappearing along with them. And without that, a lot of people simply can’t afford to start up a company, work for a small business, or become self-employed. They’re stuck.

This is nuts, of course, but it’s inevitable in any system of private healthcare. It’s not that insurance companies are evil, it’s just that they’re in business to make money and you don’t make any money insuring sick people. The fact that these are the people most in need of insurance doesn’t matter.

But it’s still nuts. And that’s why we need national healthcare.