Universal Health Care in the U.S.: Costs, Gaps, and Reform Models

The Scope of Under-Insurance in America

In 2002, more than 43 million Americans were without adequate health care, according to the Coverage That Matters (2001) study, as cited in Un-insurance Facts and Figures: The Institute of Medicine of the National Academies (year unknown). Furthermore, the United States was, at that time, the only developed country other than South Africa that did not provide health care for all of its citizens, as noted in Stephen M. Ayers' study, cited in The U.S. Healthcare System: The Best in the World or Just the Most Expensive (2001). Insufficient health care can ultimately create more serious issues for the uninsured; the effects can spread to the individual's family, society in general, and ultimately the economy. For example, worsened health conditions can lead to psychological or emotional stress on the family. Additionally, loss of employment, increased debt, or even bankruptcy can result in emotional stress and hardship for the individual and the family.

Adverse effects on the economy are not as often anticipated as a consequence of inadequate health care. However, when under-insurance leads to loss of work, increased debt, or bankruptcy, the economy is affected because banks and other financial institutions are ultimately required to absorb unpaid debt. Furthermore, businesses that rely on consumer spending lose revenue because the affected consumer is unable to patronize them or obtain credit. The consumer also suffers from damaged credit ratings, the effects of which can persist for years.

Economic and Social Consequences of Inadequate Coverage

In Michael Moore's documentary Sicko, the Smith family was interviewed as a working middle-class family whose lives were greatly affected by under-insurance. Mr. Smith suffered three heart attacks, and his wife was diagnosed with cancer. As a result of their medical deductibles, the Smiths could no longer afford their home and ultimately moved into their daughter's basement. This example illustrates a central problem with the current health care system — lack of affordability — which can lead to severe financial hardship and loss of livelihood and lifestyle.

In Sicko, another problem with the current health care system was examined: lack of treatment. Mr. Tracy Pierce was suffering from kidney cancer. He did not have health insurance and was denied coverage because of his illness. Mr. Pierce ultimately died without obtaining the necessary medical care. The health care industry frequently denies treatment to those in need due to pre-existing medical conditions, and many individuals are dropped from their private plans because retaining them would be too costly (Moore, 2007).

It remains to be seen — especially in light of the consequences for the individual, the family, and the economy — why the United States suffers from such prevalent under-insurance when most other developed countries, such as Canada, England, France, and Cuba, do not. One explanation, implied by Sicko, is that in the United States the health care system operates as a business. There is an ongoing financial tension between the revenue interests of the health care system and the medical needs of Americans. If a patient becomes too expensive, she risks losing her medical benefits; if a person represents too great a financial risk, she may not obtain benefits at all.

How the U.S. System Compares to Universal Health Care Nations

Compared with countries offering universal health care — such as Canada, England, France, and Cuba — the U.S. health care system is both more expensive and less effective, according to the Organization for Economic Cooperation and Development's 2000 comparative analysis of 29 countries (Paris: OECD, 2000), as cited in The U.S. Healthcare System: The Best in the World or Just the Most Expensive (2001). One explanation for this is that the lack of treatment resulting from under-insurance causes health conditions to worsen, which in turn becomes more costly to the system overall (Coverage That Matters, 2001, as cited in Un-insurance Facts and Figures: The Institute of Medicine of the National Academies, year unknown).

In Sicko, the countries with universal health care — Canada, England, France, and Cuba — were spotlighted. In Cuba, a comparison of prescription medications revealed that a patient would pay $0.05 for a prescription compared to $120 in the United States for the same medication. In Canada, there is no pre-approval process required to obtain health care and no deductibles. In England, medication costs on average $10 per prescription for working adults, while everyone else obtains the same medication at no cost. Furthermore, in England, prenatal care is free, emergency room visits are free, and travel costs to reach a health care facility are reimbursed. In France, both health care and day care are free of charge (Moore, 2007).

Compared to countries with universal health care, the United States has a higher infant mortality rate, a shorter life expectancy, and a more expensive health care system, according to the World Health Organization's World Health Report 2000 — Health Systems: Improving Performance (Geneva: WHO, 2000), as cited in The U.S. Healthcare System: The Best in the World or Just the Most Expensive (2001). Despite these outcomes, the United States remains one of the last developed countries to officially implement a national health care plan.

Tamaskar and Rising, in their 2003 article "Theoretical Models for Delivering Universal Health Care: An Analysis of Important Concepts," addressed the methods by which countries with universal health care — such as Canada, England, France, and Cuba — implement their systems. Each method of implementation has its advantages and disadvantages; two of these systems — single-payer accounts and medical savings accounts — are examined in further detail below.

Universal Health Care Models: Single-Payer and Medical Savings Accounts

By definition, a single-payer account, as found in Canada, is one in which the costs of medical care are financed by a single source — usually the federal government. Citizens visit private physicians who are then reimbursed by the government (Tamaskar & Rising, 2003). The benefits of this type of program are numerous: each patient receives health care regardless of age, health status, employment status, socioeconomic status, or inability to pay. This system ensures that health care is equally provided for all.

Another approach proposed by Tamaskar and Rising is the medical savings account — a relatively new model for achieving universal health care. The premise behind this system is that health costs are inflated because people are over-insured: when a person has comprehensive insurance, they may seek medical care even for minor conditions. A medical savings account addresses this by requiring that individuals deposit money into a tax-free savings account designated for medical expenses. One advantage is that individuals are likely to use their medical benefits more wisely. Another is that people may be more motivated to avoid injury or health risks because they are directly paying for their own care (Tamaskar & Rising, 2003).

Conclusion: The Case for Universal Health Care

Each system for implementing universal health care has its set of benefits and drawbacks. Still, no system put in place for a purpose will be entirely beneficial or entirely detrimental. It is the duty of those implementing the system, and of those who are part of it, to ensure that it accomplishes the purpose for which it was designed. With this in mind, implementing an effective universal system of health care in the United States could offset many related costs to the individual, the family, and ultimately the economy.