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Support for universal health care gains traction |
| Sun April 1st, 2007 |
BenefitNews.com
Leah Carlson Shepherd
Employee Benefit News
As a policy idea, universal health care has taken huge leaps - from being generally disregarded to being widely popular in a short amount of time.
Several years ago, few politicians, academics, industry experts and newspaper columnists openly called for universal health care. Back then, they debated smaller steps to gradually reduce the uninsured population, betting that a pitch for universal coverage would be politically unpalatable.
Now that assumption has reversed. Powerful lawmakers, including presidential hopefuls Sen. Barack Obama (D-Ill.) and former Sen. John Edwards (D), are moving health care to the forefront and asserting that universal coverage is not only possible, but imperative.
Mixed views
Supporters say universal coverage could lower medical prices and alleviate the cost concerns of employers because doctors and hospitals would face much less uncompensated care, or bad debt. Currently, providers and insurers raise their prices for patients with employer-sponsored coverage to make up for the unpaid medical bills of uninsured patients.
Critics warn universal coverage could be too expensive and inefficient. Many of them feel free-market reforms would do a better job of fixing the problems in the health care system.
Universal coverage doesn't necessarily mean a single-payer system, which Canada and most European countries use. It could be achieved through a combination of individual mandates, employer mandates and government subsidies.
About 56% of Americans would prefer universal coverage to the current U.S. system, and 68% feel providing coverage for everyone is more important than keeping taxes down, according to an October 2006 poll of 1,201 Americans by USA Today, ABC News and the Kaiser Family Foundation.
Similarly, a recent Wall Street Journal poll found 30% of Americans would support a universal coverage plan in their state, while 27% feel that it should be a federal program, and 43% oppose universal health care.
In a recent EBN QuickPoll, 26% of respondents supported universal health care, and 26% opposed it. Another 5% supported a state measure, but not a federal measure, while 43% said they'd need more information to form an opinion.
Congressional front
A number of Democrats in Congress are advocating various approaches to reducing the number of uninsured Americans.
For example, Sen. Edward Kennedy (D-Mass.) and Rep. John Conyers (D-Mich.) are pushing to gradually expand Medicare to cover all Americans.
Sen. Ron Wyden (D-Ore.) introduced the Healthy Americans Act to require individuals to carry health insurance and make employers pay higher wages to allow workers to buy coverage. Premium subsidies would be available for low-income families.
Meanwhile, Sen. Jeff Bingaman (D-N.M.) and Rep. Tammy Balwin (D-Wisc.) want to authorize federal funding for individual states and Indian tribal organizations to expand health insurance coverage.
State front
Maine became the first state to pass universal coverage legislation in 2003 with the Dirigo Health Reform Act, aimed at covering every citizen by 2009, according to the National Council of State Legislatures. In 2006, Massachusetts and Vermont passed legislation to ensure that all state residents have health insurance.
Earlier this year, governors in California, Minnesota, Pennsylvania and Washington state presented plans for universal coverage. In addition, legislators in California, Connecticut, Hawaii, Indiana, Maryland, Minnesota, Missouri, New Hampshire and Oregon introduced universal coverage bills, according to the National Council of State Legislatures.
Because of his state's size, California Gov. Arnold Schwarzenegger's universal coverage proposal attracted the most attention.
Under his plan, employers with 10 or more workers that don't provide health coverage must pay 4% of their total Social Security wages to a state fund, that would subsidize coverage for California's working uninsured. The cost of this coverage would be measured based on a sliding fee scale of what those employees earn. Workers would purchase coverage using pretax dollars.
Like the Massachusetts law, Schwarzenegger's plan requires individuals to carry health insurance and provides subsidies for low-income residents. It also forces insurers to guarantee coverage, regardless of pre-exisiting health conditions. Hospitals would have to pay the state 4% of revenues, and doctors would pay 2% of revenues. Profits at insurers and hospitals would be capped at 15% of revenue.
In addition, Schwarzenegger's plan requires employers to establish Section 125 plans so that employees can make tax-sheltered contributions to health insurance, which would save the employer from making additional payments under the Federal Insurance Contribution Act.
Possible legal hurdle
Some lawyers believe the universal coverage plans, such as the ones in California and Massachusetts, would violate federal statutes and could be struck down.
Tom McCord, a partner with the law firm Nixon Peabody, confirms, "All the state programs, to the extent that they place an obligation on employers to either provide a health benefit or pay a tax in lieu of providing health benefits, do face serious challenges. That portion of the law may be challenged under ERISA. It is potentially vulnerable."
A court could strike down an employer mandate without nullifying the rest of the provisions in the law. "It's not all or nothing," McCord explains.
In January, the U.S. Court of Appeals for the Fourth Circuit ruled that Maryland's fair share health care bill violated ERISA because it would have required employers with 10,000 or more employees to spend at least 8% of their total payrolls on health insurance for their workers or pay the amount their spending falls short to the state.
ERISA pre-empts state laws so that employers aren't forced to navigate a hodgepodge of different state mandates on health benefits, the appeals court concluded. - L.C.S.
Associate Editor Chris Silva contributed to this report. |
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