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Is it time for Universal Health Care in the United States?

May 27th, 2014

Universal Health Care

Credit: Zach Alexander via Flickr under Creative Commons

Universal health care, is a catchy term and one that tends to sharply divide the American public. But maybe it’s time for the United States to stop resisting the pull of universal health care, and finally implement a form of it. Or at the very least seriously consider the benefits that such a system could bring to the country.

The State of Affairs

At the moment the United States is the only major country in the world to not have some system of universal health care, whether based on different levels of subsidized private health insurance like Germany or Switzerland or just single payer care like Canada or the United Kingdom.

Because of this, the U.S. consistently ranks first among industrialized nations for the most money spent per capita on health care. Not to mention an uninsured rate consistently in the mid teens. The number of uninsured Americans peaked at 18 percent in late in 2013, but has since declined to about 13 percent in early 2014, according to polling data from Gallup.

In 2010 nearly 18 percent of U.S. GDP went to health care spending. That’s 17 cents of every purchasing dollar in the United States. Compare that to the Netherlands spending just 12 percent of its GDP on healthcare and Germany and France, each allocating 11.6 percent of their GDP to health care spending.

For that same year, according to a study from the The Organisation for Economic Co-operation and Development (OECD), the United States spent $8,233 on health care per citizen, which is double that of other developed countries in the same study.

Looking at those numbers it’s hard to deny that something is wrong with the American health care system. So is the answer universal health care? The advantages such a system are easy to see: everyone is covered, the prices of health care and health related items are regulated, and not to mention the economy benefits from having a healthy population.

The Affordable Care Act

When the Affordable Care Act (ACA) was signed into law, its supporters billed it a historic moment in American health care. The ACA would be the first step towards a more fair, and affordable system of health in the United States, they said.

The reality though is that the ACA fell short of those promises.

Rather than fundamentally restructuring the health care system, the ACA took aim at some of the worst problems created by the current system. Probably the best thing that the ACA did was to ban health insurance companies ability to discriminate against prospective customers based on their health history, also known as pre-existing conditions.

However the ACA does very little to actually change the system of private for-profit health insurance that has been the primary driver behind the explosion in American health care costs over the last several decades. Instead of creating a Medicare/Medicaid for all type of system, the ACA still relies primarily on private health insurers, but now those with annual incomes below a certain level can receive federal assistance in purchasing health insurance.

Vermont

Universal health care in the United States might be closer to a reality than you think. Since 2011 the Green Mountain State has been preparing to become the first state in the country to have universal health care.

The goal of Vermont is to create a single payer health care system, much like our Canadian neighbors have. This system would cover every Vermont resident regardless of means or income. It would also have the central authority to negotiate and regulate health care prices from providers in the state.

At the moment legislators in Vermont hope to implement the system by 2017, but there are still many hurdles, economic and ideological that need to dealt with before then. Not the least of which is coming to an agreement with the federal government about the proposed system.

Regardless of the outcome, the strive for universal health care in Vermont speaks to a deep desire among the American population for a simpler, and cheaper health care system.

A modest proposal

So what would be the best way for the United States to implement universal health care? Many advocates point to an expansion of the Medicare/Medicaid system to include every citizen. These federal health care programs have proven to be effective at keeping our senior citizens and poor families healthy. In theory why couldn’t they be expanded so that everyone is eligible for the programs?

An expansion like that could easily cover the basic health care needs of the majority of Americans. In that event the private health insurance system could also be left in place, but in a reduced role. Those Americans with  the means and desire to be insured privately could still do so. Or even those insured through the federal program would have the option to purchase supplementary health insurance on the private market.

Of course that is a very simplified version of how the U.S. might adopt universal health care. The actual process of creating that type of system would be a long drawn out and likely vicious fight against those interests heavily invested in the current private health insurance system. However that doesn’t mean universal health care is a goal not worth fighting for.

Small businesses and Medicaid: Why getting your workers enrolled in Medicaid can help you save money

May 19th, 2014

Health Evaluation

Credit: Quinn Dombrowski via Flickr under Creative Commons

Starting next year (2015), the Affordable Care Act’s employer mandate will take effect for those businesses employing at least 50 full time workers. Under the ACA an employee is considered to be full time if they work at least 30 hours each week.

Currently the majority of American businesses that size already offer their employees a health insurance option. But for those businesses who do not, and continue not to after the employer mandate takes effect, they will face stiff annual penalties starting at $40,000.

For many businesses who will be subject to the employer mandate starting in 2015, the idea of purchasing health insurance for their employees might make their accountants shiver. This is especially true if they employ a lot of low income earners who may not actually enroll in the health insurance plan. This results in a low participation rate and actually drives the price of health insurance up for the employer.

However there is another option for these businesses. An option that will both save them money and give their workers the opportunity to enroll in comprehensive health insurance coverage for a very low cost.

Enter Medicaid

One of the major provisions of the Affordable Care Act is the large expansion of the federal health insurance program for low income Americans, known as Medicaid.

Medicaid is essentially free, state sponsored, health insurance for those Americans earning at or below a certain amount per year.

When the ACA was signed into law back in March 2010, the plan was to expand the Medicaid program in every state. The result would be that low income earners making up to 133 percent of the current year’s Federal Poverty Level, would be eligible for Medicaid. Although Medicaid is a creation of the federal government, each state is responsible for the administration of the program within their borders. The federal government simply supplies the funds to make the program possible.

The mechanism through which the federal government planned to compel states to expand their Medicaid programs under the ACA, was to threaten the cutoff of all Medicaid funds unless the state expanded the program. In theory this could be considered a sound approach, however the Supreme Court did not agree. Back in June 2012 when the Supreme Court upheld the major tenets of the ACA, it struck down the mandated Medicaid expansion for the states.

At that point expanding Medicaid was still possible for states, but now it was not mandatory. As a result states had the option to opt out of expanding the program with no penalties. At the time of this writing about, half the states this year (2014) chose expand their Medicaid programs. They are listed below:

  • Arizona

  • Arkansas

  • California

  • Colorado

  • Connecticut

  • Delaware

  • District of Columbia

  • Hawaii

  • Illinois

  • Iowa

  • Kentucky

  • Maryland

  • Massachusetts

  • Michigan

  • Minnesota

  • Nevada

  • New Hampshire

  • New Jersey

  • New Mexico

  • New York

  • North Dakota

  • Ohio

  • Oregon

  • Rhode Island

  • Vermont

  • Washington

  • West Virginia

Employers and Medicaid

So how can employers in these states benefit from the Medicaid expansion? According to the ACA’s employer mandate, businesses have to at least offer their employees a health insurance options that’s deemed “affordable” under the ACA.

That’s a set cost for businesses who are also expected to contribute a certain amount of money to employees’ health plans. So the more workers that enroll in the employer’s offered health insurance, the more it typically costs the business.

Here is where Medicaid comes in. If the workers are eligible to enroll in Medicaid then they are able to enroll in the federal health program completely free of charge. This saves the business money because they are not enrolling on the company  policy, and benefits the employee with free health insurance. The cost savings over the course of a year can quite substantial for a business.

How do I help my employees sign up for Medicaid?

If getting your employees on Medicaid sounds like something you want to do for your business, then how do you go about it?

There are a number of health insurance brokers who specialize in exactly this. One example is the company BeneStream, they offer a service where they will install a software at your business that helps employees determine their eligibility for Medicaid. They will then advise you as to how to get your employees enrolled.

If you don’t want to work with an outside company then you can have your employees simply go the ACA health insurance exchange website at HealthCare.gov. Once they are there on the website and applying for health insurance the system will determine if they are eligible for Medicaid and then help them enroll.

Before doing that though, it’s a good idea to get your employees together and give them some information about their health insurance options under the ACA. In fact you are actually required to do this. The Department of Labor has template informational letters that you can give to your employees informing them of their health insurance options.

One last thing is, that Medicaid works on a slightly different timeline than other health insurance options, especially if you are hoping to transfer your employees over from your current health  plan to Medicaid. You should aim to have your employees enrolling in Medicaid about 90 days before your current plan’s renewal date, so make sure to begin the process way ahead of time.