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Universal Free Insurance? Yes! Stripped Down? No!

August 8, 2023

Summary: The new book “We’ve Got You Covered” offers a laudable prescription for the US: universal free insurance for primary, specialty, and hospital care. However, its vision for basic (“bare bones”) coverage unnecessarily undermines the potential for high quality care for all.

We’ve Got You Covered: Rebooting American Health Care
By Liran Einav and Amy Finkelstein

How can we fix the US health-care system?

Requiring coverage did not get us to universal coverage. We must therefore provide it. Automatically. Only then will we achieve universal coverage. This is why basic coverage must be taxpayer financed. Charging premiums for basic coverage is at odds with providing that coverage automatically.

Any medical care that is included in basic coverage must be completely free to the patient. If not, the lesson is clear: we’ll end up back in the same mess of trying – and not fully succeeding – to come to the aid of patients who cannot afford the required payments for that basic coverage. We’ve described what basic coverage must do – it must be provided automatically, with no patient payments for covered services.

Basic coverage must systematically cover all essential medical care for the critically ill. For all conditions. Basic coverage must also include primary and preventive care for patients who are not yet critically ill.

The big picture is clear. Basic coverage should include primary and preventive care, specialist, outpatient, emergency room, and hospital care. Once we go beyond that high-level description, there will inevitably be a multitude of gray areas. There are many aspects of medical care that can be excluded from basic coverage while still fulfilling our social contract: infertility treatment, dental care, vision care, physiotherapy, various forms of long-term care, and the list goes on and on. These are hard choices, But they are just that – choices.

For the thirty million Americans without formal insurance, basic coverage would be an improvement. It would provide reliable coverage of major medical needs without any costs to the patient – or attempts to collect costs from them. For the seventy million low-income Americans with Medicaid, basic coverage would be similar to the coverage they already have.

For the remaining two-thirds of Americans, basic coverage would likely be worse on many – although not all – dimensions. We suspect that many of them would purchase supplementary insurance. This includes the one hundred fifty million Americans who have private health insurance and the sixty-five million elderly and disabled Americans with Medicare. For them, basic coverage would mean longer wait times, for example – along the lines of what those covered by Medicaid or the Veterans Affairs experience – and less well-apportioned waiting areas and hospital rooms.

The coverage we do have is a universal mess. The only option is to tear down the current “system” and rebuild it from the ground up.

Comment by: Don McCanne

In their book, “We’ve Got You Covered,” Liran Einav and Amy Finkelstein have provided a very valuable contribution to the dialogue on healthcare reform in the United States. They have described many of the defects in our very expensive yet highly dysfunctional financing system that result in financial hardship for so many while leaving tens of millions without adequate coverage for care.

In their proposal for reform, they do advocate for a few policies that would be essential in a system of healthcare justice for all. They would include absolutely everyone automatically without the necessity of requiring an insurance premium but rather funding the covered system with a progressive income tax. They would eliminate deductibles and co-payments to make healthcare free on access. They would include primary and preventive care for everyone.

In their policy proposals, they do make one profoundly deficient recommendation. They would propose a basic set of benefits for everyone that would be similar to the current coverage under Medicaid, but, for two-thirds of Americans, coverage would be worse than people now receive under private insurance or Medicare. Basically this would be much worse than the proposed single payer Medicare for All model because it would be Medicaid for All (though the authors reject this label because individuals could purchase upgrades in coverage).

What would be wrong with this? Their intent is to make healthcare affordable for everyone by eliminating premiums, deductibles, and copayments, yet most individuals would be faced with the potential for large out-of-pocket costs unless they did buy a major upgrade in coverage, but then they would have to pay for that. This means that the private insurance industry would continue in its role of diverting billions of our healthcare dollars to its own pecuniary interests with the inevitable high costs and consequent impaired outcomes that we are seeing today.

Also, the healthcare delivery system would likely continue to try to avoid providing care to the sector that was structured like the underfunded Medicaid beneficiaries, and would cater to the more affluent sector that was insured with these supplementary plans, creating a two-tiered or multi-tiered delivery system: basement ward with budget drugs for the basic plan and penthouse medical suite with the million dollar miracle drugs for the affluent. Besides, how many physicians would decline to see patients covered only by the basic plan, accepting only patients with comprehensive supplemental coverage, just as they now decline Medicaid patients?

I’d like to go back a few decades and give a different definition of what basic care is. My brother, Monte, and I practiced primary care in South Orange County. (In 1995, the Los Angeles Times published a human interest story on our practice. We saw routine illnesses, minor trauma, employment physicals, family planning, uncomplicated obstetrics, and other routine problems you would expect, referring more serious problems to the specialists, or to specialized centers. We were paid by private insurance, Medicaid, Medicare, cash, and often not at all, but we basically just provided care as it was needed, even to the undocumented, largely ignoring the payment side of the practice. Primary care with interaction with the rest of the healthcare delivery system is what I would suggest is basic care and is what should be covered by a single payer Medicare for All system. This approach really worked well for our patients. Rather than being care that is stripped down, like the authors suggest, it is just reasonable routine care that we should be giving, rejecting extravagances such as the building of luxurious penthouse medical suites, or the production of new drugs designed to sell for a million dollars.

You might wonder what happened to our practice. Employer sponsored plans converted to managed care and were not interested in including solo practitioners like my brother and me in their panels. MediCal, a very large part of our practice, was privatized and our patients were sent to contracting groups, including our fairly large obstetrical (midwifery) practice. Eventually, Medicare privatization, especially Medicare Advantage plans, also excluded our practice from their panels, though that was about the time we retired. Based on this, I would say that we do not want to look for the insurance industry to provide us with coverage for basic care, as I have defined it.

We just need to reinforce the delivery system, staff it, provide the care that people need, and use public funding to finance the system. We are spending enough now to do that. Truly comprehensive basic care for everyone! Medicare for All!

About the Commentator, Jim Kahn

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Jim (James G.) Kahn, MD, MPH (editor) is an Emeritus Professor of Health Policy, Epidemiology, and Global Health at the University of California, San Francisco. His work focuses on the cost and effectiveness of prevention and treatment interventions in low and middle income countries, and on single payer economics in the U.S. He has studied, advocated, and educated on single payer since the 1994 campaign for Prop 186 in California, including two years as chair of Physicians for a National Health Program California.

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