Well, I think the opening paragraph of the new government report on how well the insurance industry is truly "serving" the American public pretty well sums it up.
- In 2008, the average premium for a family plan purchased through an employer was $12,680, nearly the annual earnings of a full-time minimum wage job.
- “Medicare Expansion,” would build a national care system by expanding on the existing Medicare program for citizens over the age of 65 years, with a gradual phasing out of the very uneven and underfunded state-administered Medicaid programs3. This restructuring would involve gradual changes in the age of eligibility for the Medicare system, with the most needy becoming eligible first and eventually the entire population covered.
- The first step in the Medicare Expansion program would be to enroll children under 5 years of age, pregnant women and those with lifelong illnesses by the end of 2010. The remainder of the population would be phased in gradually, taking the most needy age groups first, until all persons are covered within five years. In 2011, those between 55 and 65 would be enrolled, and in 2012 those from 5 to 15 and those from 45 to 55 would be included. Those between 15 and 25 as well as those from 40 to 45 would be added in 2013. Finally, by the end of 2014, by adding the remaining population between 25 and 40 the entire U.S. population would be covered: There would be Medicare for all in a single-payer system. There would be no limitations based on pre-existing conditions, as is common in private insurance plans.
- The changes proposed under the Medicare Expansion program would be relatively easy to make from an administrative standpoint since age is easily verified and the basic system is in place and functioning. The Medicare program has established an effective track record during the past 43 years, covering almost 20 percent of the population, primarily the elderly and the disabled, who use medical resources much more than any other age group. Physicians, community hospitals and major academic centers have adjusted to this program and continue to provide high-quality care on a fee-for-service basis.
- Increasingly, both physicians and patients strongly desire a fundamental change in the present system of health care delivery, which involves multiple providers, opaque and diverse policies regarding coverage, and excessive paperwork. Both groups see Medicare as offering easy access and as both cost-effective and successful.
- Medicare permits patients a choice of physicians and hospitals, but places a cap on reimbursement for both, similar to that for private insurance plans. Our proposed phased expansion of Medicare into a system of national health care would be an important basis for rationalizing the allocation of health resources, including greater use of preventive medicine; widespread use of comprehensive electronic records (which are easier to establish in a national program, e.g. VA hospitals, than in diverse community hospitals and are currently used in only 1.5 percent of U.S. hospitals surveyed); more emphasis on primary care; and limits on the treatment of patients who have conditions with a hopeless prognosis4. Credentialing of physicians, training programs and hospitals would be facilitated with electronic records. Caution must be taken to maintain vigilant privacy of patient records as mandated by the federal HIPAA legislation.
- The program would utilize existing hospital facilities, with emphasis on more efficient administration. It would eventually lead to a single-payer system, and it would provide for care in rural as well as urban areas. Costs of marketing and middle management would be low as compared with the present system. Only slightly over 3 percent of current health care expenditures for the Medicare program is spent for administrative costs, whereas the figure may be up to 25 percent or even higher for private insurance plans.
- Just shifting many people from private health care plans to Medicare would generate significant immediate savings that could be used to fund the new system. The extensive overhead costs of physician and hospital billing would be reduced markedly, and patients would have a much better understanding of what is and is not included among their health care benefits. Medications provided under the expanded Medicare program should in most cases be generic, with the government negotiating for the lowest price with competing pharmaceutical companies.
- The Medicare program should in most cases encourage the use of hospitals that have more than one patient per room, unless there are specific indications for isolation or intensive care, in order to lower hospital and nursing costs.
- Medicare Expansion thereby has the likelihood of reducing the overall cost of health care, while at the same time providing greater access to care. Caution will be required to maintain equitable reimbursement for physicians and nurses to encourage high-quality care and to encourage bright young people to enter the field. Since the current Medicare program is expected to be bankrupt by 2017, the urgency of extensive health care reform is apparent—reform in which the emphasis is placed on efficient, effective, high-quality, no-frills basic care.
- With an expanded Medicare system, all Americans would be covered regardless of pre-existing conditions, and they would have complete portability of care and medical records throughout the nation. Those people who prefer more extensive coverage for desirable but not essential procedures such as cosmetic surgery, and many other conditions for which very expensive care provides questionable benefit, or self-inflicted disorders, would be placed lower on the list of covered disorders, similar to what Oregon has provided for more than a decade. All citizens would have the option of purchasing supplemental private insurance for these conditions, as now exists in the Medicare program.
- The very erratic and incomplete employer-provided health coverage would be gradually phased out to reduce costs and to make businesses more competitive with those in other nations. Retiree health benefits were first offered in World War II during a period of wage and price controls when many companies had a young work force with few retirees. Today, however, it’s the reverse, particularly in old-line industries. For example, Detroit’s Big Three automakers currently have more than four times as many retirees as active hourly workers.
- The current complex patchwork multiple-payer health insurance programs are much more expensive, regardless of how administered, and do not eliminate the majority of problems. By contrast, Medicare Expansion builds around an efficient and well-established single-payer system, and the incentive-driven but controlled fee-for-service mechanism supplemented by a private partnership for nonbasic and more extensive desired care. Medicare Expansion would thus establish a system of national health care in the United States that would both control costs and provide quality basic health care to all Americans.