Healthcare Reform

Healthcare Reform

The recent clamor surrounding the healthcare reform bill has citizens in an uproar across the country.  The issue of healthcare and health insurance costs is something that crosses party lines, yet Republicans and Democrats can’t agree on how to go about solving the crisis.

Health Insurance Coverage in the US

According to the most recent census data available, 15.4% of people in the United States are uninsured.  This amounts to about 46 million individuals who go without insurance either by choice or because they cannot afford it, while the other 255 million of us enjoy coverage through private or employer-sponsored health insurance.  The breakdown shows that Hispanics between the ages of 18 and 34 are the group that most often lacks health insurance.  There is an expected correlation between income and insurance, with people making at least $75,000 a year being three times less likely to go without insurance coverage than those making less than $25,000.  Geographically, the Northeast and Midwest house slightly fewer of the uninsured citizens than the Southern and Western states.

Being without insurance coverage puts you at a great financial risk individually.  In the case of an emergency, a hospital is required to treat you regardless of your insurance, and the bills will pile up.  Additionally, many people without insurance choose to forego annual checkups.  Neglecting simple things like physicals, blood tests, and dental exams can lead to much larger problems down the road.  For this reason, improving health insurance coverage in the US is one of two major points that President Obama brings up in his healthcare reform bill.

Health Care Costs

The annual health care costs have been climbing much faster than can be explained by an increasing or aging population.  In 2008, the estimated spending for health care reached $2.3 trillion, or $7,681 per person.  We spend more in this field than any other country.  This huge price tag explains why individuals and employers have found it difficult to keep up with the health care costs.  Most (51%) of this money is spent on hospital care and clinical services, while 10% is spent on prescription drugs, and 6% on nursing home care.

Unless the current healthcare system is reformed, economists predict that the costs will continue to climb, while weakening our economy in the process.  For this reason, health care cost is the second issue that President Obama is hoping to address with his healthcare reform bill.

Alternative to the Healthcare Reform Bill

There are a number of approaches to reducing health care costs.  Some suggest a heavier investment in information technology, while others focus on efforts to improve the quality and efficiency of health-related services.  Other proposals aim to revamp the provider compensation scale to make quality of service more valuable than quantity.  Government regulation has fluctuated over the years, but most people would agree that the Medicare program needs some upgrades and specialized attention.

One of the most tenable reform suggestions to date is in the form of a tax credit that makes insurance plans more attractive for low-income individuals and families without penalizing the middle and upper class citizens.  This may be the one method of reform that will find support from both political parties.  Consider this rather simple solution.  If all citizens between the ages of 18 and 65 are offered a 1-to-1 tax credit of up to $2500 a year for any money spent on health care or insurance premiums, it would cost the country approximately $507 billion, and the currently uninsured Americans can buy into a high deductible plan at virtually no cost to them.  This gives individuals and families some financial protection, and it also gives insurance companies more business, so they can afford to offer more reasonable rates and deductibles.  Businesses would also see some benefit because they could adjust the employee contribution to healthcare premiums up to the $2500 level for everyone utilizing the employer-based insurance plans.