Guest Ed Healthcare – February 2018

January 19th, 2019


Our Exclusive Health Care Guest Editorial

Access, Coverage and Politics: Uncertainty in American Health Cares
By Larry Matheis, Nevada Health Care Specialist

As a participant in and observer/commentator of the U.S. Healthcare System for nearly a half century, I find myself feeling like Bill Murray reliving Groundhog Day when I look at the current arguments about that system. I await an overplayed Sonny and Cher vinyl album to start in the background.

The health care debates have been at the center of the national political system since at least the 1960s, although the subject of adopting a national healthcare coverage system has been debated off and on since the first decade of the 20th century. Each of the debates has ended with some action that addresses as small a part of the bigger questions as politically possible.

A few years ago, I found myself on the speaking circuit providing an overview of the history of the American political battles over health care. Most of those patient souls who heard my lectures were surprised that I began my account of those battles with an account of the career of Otto von Bismarck. Everyone knows the quotation attributed to Bismarck: “Laws are like sausages. It’s better not to see them being made.” That has certainly been the case with the law passed by the Congressional Democrats and signed by former President Obama in 2010 and the efforts to undo those actions by Congressional Republicans and President Trump currently. Bismarck’s comment certainly appears relevant in our era of partisan division and the adoption of messy laws that often seem mere temporary measures that will be overturned after the next elections.

There is however, another comment by Chancellor Bismarck that is, I believe, even more appropriate when assessing the inaction or inability to make significant and permanent decisions in Washington DC. That comment was “Politics is the art of the possible.” Bismarck was not a theoretician or academic. He was a practical, and perhaps the first, modern politician and statesman. Although it was the late 19th century, he faced a distinctly modern challenge as he sought to bring together the notoriously independent small German states to form the modern German nation. The German states had a large educated middle-class. To move this population from complacency to a united nationalism, he proposed two reforms that became central to the twentieth century social reform debates in Western democracies and (eventually) all industrialized nations. Those Bismarck reforms were: social security retirement benefits and health care coverage.

Prior to World War I, President Theodore Roosevelt led the first effort in America to adopt a national healthcare coverage system based on the Bismarck model. Even the American Medical Association was temporarily in favor of a modified version of the German plan. With the U.S. entry into the World War, anything German was tainted and the debate ended. The national discussion did highlight the problems created by workers injured on dangerous industrial jobs, primarily in the population centers of the upper Midwest and New England. While avoiding the question of universal coverage for medical care, the nation adopted state-by-state workers compensation plans to assure medical care for injured workers. Health care coverage again was debated as part of the national debate about social security retirement benefits (another of the Bismarck reforms) in the 1930’s. While Social Security was adopted, the creation of a national healthcare coverage system was postponed because of the 1937 recession and then the American entry into World War II. When the issue was engaged again following that war, President Truman was defeated by a broad coalition and accusations of “socialized medicine” in the period of Cold War political rhetoric. National policy was changed however in a way that created the basic post-WWII healthcare coverage system. America linked health benefits to employment during WWII to allow heavy industries to recruit from a war depleted workforce by offering benefits that weren’t restricted by “wage and price controls”. This system was maintained as the organizing approach to health benefits following WWII for industry and organized labor under complex tax credits. Two generations of Americans accepted that health care benefits were simply a part of the employment contract and were more feared of losing what they had than attaining what they didn’t have. During this period, industrial accidents and acute illnesses were replaced by chronic disease as the principal health care worries for most Americans. President Johnson sought to accomplish Truman’s agenda in the 1960s, but had to settle for programs to cover the indigent (Medicaid) and seniors (Medicare) which focused on providing coverage for those without employment based coverage (Medicaid) or who were most likely to have chronic diseases (Medicare). President Clinton sought universal coverage through a complex regulated health insurance market proposal, which ended by covering low-income children (SCHIP).

With the election of President Obama, the 6th great healthcare reform debate started. The “Patient Protection and Affordable Care Act” (ACA) that was signed by former President Obama in 2010 addressed healthcare politics as possible given these historical actions. Most observers understand that employment based health care coverage is strained and had left 32 million Americans without coverage when they face the need and cost of health care. Most uninsured Americans live in households headed by an employed family member. A growing number of people who were self-employed or worked for small employers found that these policies had become so expensive they were simply unavailable, particularly to those with pre-existing medical conditions. Others found that their employers simply dropped medical care coverage.

The sense of political urgency in 2009 was also fueled by a new reality. For the first time in the nation’s history, a majority of healthcare costs were paid by a government source (Medicare, Veterans Affairs Health Care, Medicaid, SCHIP, Federal Employee Health Plans, and active duty military and their families), not be private coverage sources based on employment or personal purchases. 21.1% of Nevadans are covered by private insurance. Before the Affordable Care Act was implemented in 2013, a majority of Americans with coverage were covered by a government program. Primarily, this is because the nation’s largest population group, the Baby Boomers, are moving into the federal Medicare program as they reach the age of 65 years.

While universal coverage was never really on the table for the Democrats in the 2009 Congressional effort to draft healthcare legislation, the policy discussion aimed at dealing with coverage for working uninsured Americans. The ACA created eligibility for insurance or Medicaid coverage for most Americans by mandating that uninsured Americans purchase individual coverage through State Insurance Exchanges or through the expansion of the Federal/State Medicaid to adults based on income alone. The Republicans have eliminated the mandated purchase requirement and eliminated part of the federal subsidy of insurance costs. They are also considering budget reductions for Medicaid, elimination of the SCHIP program and reductions in subsidies of the Federally Qualified Health Clinics.

Where does Nevada stand at this point? The Nevada Legislative Committee on Health Care met recently and received reports on the status of coverage of Nevadans and the uncertainty created by the continuing food fight in the national capitol over healthcare. I’ll refer to the data presented at that meeting.

16.2% of Nevadans remain uninsured and without coverage. That means that Nevada continues to be near the bottom of the States regarding the percentage that have coverage. We now rank #4 regarding the highest rate of uninsured. It has improved from the 22% uninsured in 2012 before the ACA implementation.

According to the State Division of Insurance, 615,000 Nevadans are covered by private insurance (388,985 covered in large groups). There are 125,915 Nevadans covered by individual insurance policies. This was target group for the ACA. The Silver State Health Insurance Exchange (Nevada Health Link) actually had its largest enrollment of Nevadans for individual insurance. 91,003 Nevadans signed up for these policies. The repeal of the Individual Mandate is expected to further drive premium costs of insurance policies on the exchange and result in fewer healthy younger individuals from purchasing the products.

While 91,003 Nevadans are currently covered by private individual insurance policies which became available through the ACA, 213,555 Nevadans are now covered by the Federal/State Medicaid program because of the provisions of that law that expands eligibility to the program. That makes the current total Medicaid caseload a stunning 651,751. Before the implementation of the Medicaid provisions of the ACA in 2014, there were 322,560 Nevadans covered by the Medicaid program. Nearly half of the Nevadans covered by Medicaid are children. The SCHIP program for children who are not eligible for Medicaid has also seen a steady increase to a current caseload of 27,372 youngsters.

Currently, there are nearly 450,000 Nevadans covered by the Federal Medicare program. That number will continue to grow rapidly as the Nevada “Baby Boomers” move into this program.

For Nevadans, uncertainty about the impact of any actions taken by the Congress and Administration is the current reality. It should be expected that there will be a large number of Nevadans who again will become ill or injured without coverage. Care will be provided but the lack of compensation for all of the care delivered without payment will again drive costs up for everyone and make access to care even a greater problem than it is currently. Bismarck might well understand the American dilemma but will Nevadans who lose coverage for themselves and their families?