Universal Health Care
Core of the Debate: Who and What Does the System Cover?
As the 2020 Presidential race steams toward its fever pitch destination, health care has morphed from a talking point to a party line policy promise. Calls for single-payer and universal health care have dominated the election landscape, with the terms being used interchangeably. However, the concepts are fundamentally different. Conflating these theories has hindered productive dialogue since it leads to the unreasoned conclusion that the only way to achieve universal health care is through the utilization of a single-payer model. Thus, it is essential to clarify what these concepts involve and explore how California is proactively attempting to achieve the goal of universal health care.
Universal Health Care and the Single-Payer Model
Universal health care, distilled down to its core, is the ability of all citizens and legal residents to access affordable and appropriate health care. A multitude of methods facilitate this ideal, including health insurance, a single-payer system, an insurance mandate or socialized medicine.
The primary vehicle used in California, and the United States as a whole, is a multi-payer model. This method allows for health care to be paid for through a combination of sources, including employers, individuals and the government. Other countries utilize the single-payer model, in which the government, through tax revenue, bears the financial burden for individuals’ health costs. Both models are intended to achieve the goal of universal health care.
Universal Health Care Does Not Equate to Free Health Care
Universal health care does not equate to free health care, which is a misnomer borne of the “universal” slogan. The term “universal” simply refers to individuals whose health care costs are covered. It does not define the type of care and extent of expenses that are covered.
• For example, the United Kingdom provides public health care through the National Health Service. This public health care system is funded through taxation and is available to all legal residents. While most services are provided free of charge to residents, there are charges associated with dental treatment and prescription drugs. Additionally, general practitioners are considered the primary point person in relation to care. Therefore, appointments are typically short, lasting an average of 8–10 minutes.
• Health care in Sweden is considered universal and is publicly financed by employees and employers paying into a public fund. While the health care is publicly funded, there are fees associated with many services. This includes fees for hospital stays, primary care visits, specialist visits and prescriptions.
• In Norway, health care is a universal, tax-funded, single-payer system. Policy is controlled centrally through the Norwegian National Insurance Scheme. However, the responsibility for providing health care is decentralized. In this system, Parliament determines what is covered, although there is no defined benefit package. Copayments are required for general practitioner visits, specialist visits, outpatient hospital care, same-day surgery, physiotherapy, prescriptions, radiology and laboratory testing. Out-of-pocket payments finance about 14% of total expenditures.
• Canada has a publicly funded health care system that is financed with general revenue raised through federal, provincial and territorial taxation, such as personal and corporate taxes, sales taxes, payroll levies and other revenue. Provinces also may charge a health premium on their residents to help pay for publicly funded health care services. Services not covered under this plan include dental care, vision care, limb prostheses, wheelchairs, prescription medication, podiatry and chiropractics. Additionally, ambulance services are not fully covered.
• Taiwan has a single-payer system with an insurance mandate to buy the public insurance option. Preventative medicine, screenings and physicals are not covered and have to be paid for out-of-pocket. Taiwan has a fee-for-service health care model, which means physicians are paid per visit. As such, medical appointments generally are limited to 5 minutes and subsequent visits are made if all treatment cannot be completed in the first 5 minutes. If patients visit their physician too often, the government sends an official from the Bureau of National Health Insurance to inquire and discuss the overuse of the system in an effort to reduce costs.
California Closing in on Universal Health Care
California’s population is approximately 39.78 million people. Approximately 7%, or 2.7 million people, are uninsured. Of the 2.7 million Californians without health care coverage, approximately 1.8 million are undocumented residents. The remaining 900,000 uninsured are legal residents. In a vast majority of cases, countries offering universal health care do not provide coverage to undocumented residents. Therefore, when comparing California’s insured population to other countries, the rate of insured legal residents should be used as the baseline since most countries only insure that demographic. As such, comparing California’s insured population to the rest of the world reveals this state is closing in on achieving universal health care, with an insured population of 97.6% of its legal residents.
The Fiscal Impact of Medi-Cal’s Expansion
The anticipated means that California would utilize to achieve “health care for all” is the expansion of Medi-Cal. The proposed expansion, which was announced on Governor Gavin Newsom’s first day in office, would cover any undocumented young adult who is otherwise eligible for Medi-Cal. The bipartisan Legislative Analyst’s Office (LAO) estimated the cost of Medi-Cal expansion to young adults would grow to, potentially, slightly less than $300 million net general fund. This is significant because Governor Newsom’s budget proposal to provide full-scope Medi-Cal coverage to undocumented immigrants, ages 19 to 25, put program costs at $194 million net general fund expenditure for 2019–2020. Interestingly, the LAO estimated costs for 2019–2020 was $60 million lower due to a redirection of current funding for county health activities, which would offset the cost of this program. Expansion of the program is expected to provide health coverage to approximately 138,000 undocumented adults in its first year.
Legislation in 2020
When Governor Newsom originally took office, he outlined an agenda that included a single-payer health care system. But as of 2017, the goal requires an estimated $400 billion per year in funding, which would be derived primarily from re-allocating senior Californians’ Medicare payments into state rather than federal cash boxes (see Business Issues article on “Single-Payer Health Care”). If the fiscal re-allocation wasn’t a large enough impediment, then President Donald Trump and any Republican—as well as several Democrats, for that matter—will likely oppose these efforts.
Given these hurdles, Governor Newsom appears to be acting incrementally. In 2019, California saw sweeping legislation that pushed the universal health care agenda. Most notably, the state now offers health benefits to undocumented immigrants who are ages 19 to 25. This trend will likely continue in 2020 given the national debate, and Californians can expect to see bills aimed toward expanding Medi-Cal.
Universal health care schemes do not equate to free health care. When analyzing universal health care countries, it’s evident that patient costs are covered by tax-funded public financing. These corporate and individual taxes do not cover all health care expenses, which means patients are left personally paying for partially covered and exempted services despite being charged the equivalent of a health care premium under the guise of an all-encompassing tax. These services include care and treatment Californians expect to have covered under their health insurance, such as preventative care, prescription medication, ambulance transport, and physical, occupational and speech therapy.
Although access to health care may be considered a fundamental right, the method in which individuals pay for that health care must be allotted ample thought and consideration. The “Universal Health Care” slogan places form above substance, and Californians need to recognize how their health care will be paid for under such a model.
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