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What to do about health care? Make it affordable

This article first appeared in the St. Louis Beacon, Nov. 1, 2009 - Every year, America's employers and employees pay millions of dollars to insurance companies, and patients incur significant out of pocket health-care costs. Yet, despite this significant cost, and even with a wealth of medical providers and technology, millions of Americans and more than 746,000 Missourians remain uninsured. Even more are unable to pay for needed medical care. And everyday this costly system excludes even more individuals.

True health-care reform means building a functional system out of these connected, but ill-functioning pieces. While we need greater emphasis on providing better primary care, promoting wellness and negotiating medical and pharmaceutical costs, the new system must be built on the assurance that everyone will have access to affordable choices for needed care.

Affordability is the vehicle that allows us to take advantage of improvements in the delivery system. If individuals cannot afford the premiums to purchase insurance, or cannot afford co-pays for care, we will not have achieved real reform.

Affordability is an issue for businesses as well as families. With insurance premiums growing four times as quickly as wages in Missouri, employers who provide health care as a benefit face hard choices about how to handle their portion of the growing costs. Employees also face challenges as they pick up larger portions of insurance premiums, co-pays and other out-of-pocket costs.

The good news is that affordability has been one of the primary considerations during discussions on health care reform in both the U.S. House and Senate. The bad news is that to trim the overall cost of the proposals, affordability could be compromised. There are a number of important considerations to address before we can truly achieve health care affordability for all.

The first priority should be an affordable option for those with very limited incomes. There is general agreement in both the U.S. House and Senate that the lowest income uninsured individuals should be covered by expanding the current Medicaid system. Medicaid has a good benefit package, low administrative costs, and requires minimal out of pocket expense. Eligibility for this expansion is likely to be 133 percent of the federal poverty level, or about $24,300 annually for a family of three.

Many of the individuals who will qualify work in low-paying jobs without health insurance, or at one or more part time jobs without benefits. The Missouri Department of Social Services estimates that expanding Medicaid at this level would cover about 255,000 Missourians who are not currently eligible, plus 137,000 who are currently eligible.

A second requirement to achieve affordability is assuring lower and middle income individuals who are not eligible for Medicaid also have affordable premium options. This can be accomplished with a sliding scale of subsidies, but for it to translate into families getting the care they need the fees must not break their budgets.

Not only must premiums be affordable, but benefit packages must be adequate to cover health needs. Several proposals now seek to cut the cost of health-care reform by weakening the benefit packages. Doing this will only result in more of the debilitating medical debt and bankruptcies that result when people receive care either not covered by insurance or with exorbitant out of pocket costs.

Another important consideration in achieving affordability is changing the rules regarding the flexibility insurance companies have to charge varying rates to people of different age groups, geographic areas, genders and health conditions. Insurance companies should not be allowed to deny coverage because of pre-existing conditions or cancel policies when people get sick. These current practices leave too many individuals with no affordable options.

Creating affordable choices for insurance as part of comprehensive federal health-care reform must be paid for, but not by leaving millions of Americans still uninsured. Some savings can be found by providing incentives for quality care, better coordination of care, encouraging preventive care and weeding out waste and fraud.

Reform should reflect a shared responsibility for financing that will make affordability possible. Employees, employers and insurance companies must all pay their fair share. Additional sources of funds should also be on the table. Both the U.S. Senate and House seek to do this by small taxes on those who can most afford it and who have reaped the greatest benefits in tax cuts over the past decade.

This is the time to put politics and profits aside to assure everyone has access to affordable, quality care no matter where they live or work, their age or their medical history.

About the author

Ruth Roetheli Ehresman is director of health and budgetary policy for the Missouri Budget Project.