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Defining 'Universal Health Care'

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Defining 'Universal Health Care' AN IN-DEPTH LOOK AT ISSUES AFFECTING HEALTH CARE FOCUS Defining ‘Universal Health Care’ and the Challenge of Achieving it By Sean T. Connaughton he concept of universal health care cover- cable. age is oft-discussed these days; it featured prominently in the recent election cycle And as is the case with many of the other systems dis- when talk turned to concerns about health cussed below, these arrangements are typically fi- T care access and affordability. nanced through some form of taxes, fees, or surcharge on citizens, and may also involve state-run health care To better understand those conversations, let’s clarify delivery systems. what it means when people refer to “universal health care coverage” and somewhat analogous ideas like The American health care system is a market-based nationalized or socialized medicine. combination of private providers, insurers, and suppli- ers that also features substantial government involve- Certainly, definitions differ and can be subjective. ment, both in statutory and regulatory standards, and on the provider and payer side. Accounting for those variations, the notion of universal health care coverage generally means a system in For instance, it incorporates elements of the single which a central (federal) government facilitates the (government) payer model through programs such as availability of quality, essential medical treatment ser- Medicaid (for low-income children, parents, qualified vices for all citizens in a way that protects them from adults, and disabled people), Medicare (for senior citi- financial hardship. It does not necessarily mean free zens), and TRICARE (for military service members, vet- coverage for any health condition imaginable. erans, and their families). How such systems function in terms of payment for, So-called “socialized medicine” is a subset of the single and provision of, care can vary. Given the overlap and payer category in which the government pays for fluidity inherent in defining these systems, drawing treatment services and also provides them. Great Brit- clear categorical distinctions can be a challenge. The ain has this type of system. characterizations below are based on research from multiple sources. Another type of universal care system is what’s known as a “two-tier” plan wherein government provides Many nations have a universal care system that in- basic, or minimum, health care coverage for citizens, volves government payment for health care services who also have the option to supplement that by pur- administered by private providers. This is commonly chasing additional insurance coverage on the commer- referred to as a “single payer” system. Nations with cial market. Australia, Denmark, Hong Kong, Ireland, this model include Canada, Finland, Italy, Japan, and Israel, the Netherlands, New Zealand, and Singapore Spain. These systems may still require beneficiaries to are nations with some form of a two-tier system. It cover the cost of co-pays or co-insurance, where appli- should be noted that standards vary by nation regard- VHHA’S FOCUS — DECEMBER 2018 1 ing what is covered by the core, government- include Medicaid and Medicare, programs which backed policy. reimburse providers below the actual cost of care, leading to funding shortfalls for providers. There’s Still other nations also a 32-year-old with what’s deemed federal law, Emer- universal care have gency Medical an “insurance man- Treatment and date,” which means Active Labor Act exactly what you (EMTALA), which think it does: Gener- requires hospitals ally speaking, all citi- to provide treat- zens are required to ment to patients purchase some form who show up at of health insurance the emergency coverage. Depending room, regardless on the nation, the of their ability to mandate can range pay. These safety from a rigidly pre- net programs in- scribed insurance troduce substan- protocol to a system tial amounts of uncompensated care into the in which government oversight is focused on up- health delivery system. holding a set of standards and regulations. This can include prohibitions preventing insurers from deny- The downstream economic ripple effects of un- ing coverage to people with pre-existing health compensated care are significant and can be harm- conditions. Austria, Belgium, Germany, South Ko- ful. In recognition of that, an array of reform- rea, and Switzerland are among the nations with minded policy proposals have been proffered over some form of an insurance mandate. the years to increase coverage and reduce charity care within a complex U.S. system that has private The framework on which the U.S. health delivery providers and payers. system functions has been established by Washing- ton over many years. A labyrinth of laws passed In 2010, Congress passed the Patient Protection over time by Congress, as well as regulatory proto- and Affordable Care Act (ACA) as a federal health cols from officials with the U.S. Department of care policy overhaul bill designed to address some Health and Human Services (HHS), the Centers for challenges in the health care system. Its reforms Medicare & Medicaid Services (CMS), among other prohibited insurers from denying coverage to peo- agencies, form the connective tissue of this ecosys- ple with pre-existing health conditions to help ex- tem. tend coverage to the uninsured or those previously priced out of the market. Other provisions to pro- Layered beneath that is a thicket of state statutory mote coverage enrollment and eligibility include and regulatory controls. Operating within that multi enabling young adults to remain on their parents -tiered regime is a largely market-based health care insurance longer, helping low- and moderate- delivery system, with private providers (hospitals, income people get insured by offering tax credits, doctors, etc.), suppliers (medical equipment mak- and broadening Medicaid eligibility to more low- ers and pharmaceutical companies), and payers income, childless adults. (insurers) that connect consumers (patients) to ser- vices. The Commonwealth of Virginia is one of 36 states that has adopted Medicaid expansion under the Built into the system are programs intended to pro- ACA — the General Assembly and Governor Ralph vide coverage for vulnerable populations. Examples Northam this year reached a budget compromise VHHA’S FOCUS — DECEMBER 2018 2 that includes coverage expansion as well as person- offset insurance premiums. al responsibility provisions regarding work, training, and education. Enrollment for that new health care When his plan was unveiled, critics including 2016 coverage for adults began Nov. 1, and the new cov- presidential nominee Hillary Clinton questioned its erage takes effect for those who enroll in the pro- rosy cost-containment assumptions and economic gram as of Jan. 1, 2019. implications, its impact on the broader health care delivery system, and whether it could truly elimi- As a major policy overhaul, the ACA features a com- nate out-of-pocket expenses like co-pays and de- plex financial structure that includes payment and ductibles (common elements of commercial insur- delivery system reforms, funding cuts, new taxes, ance plans and Medicare) without sacrificing pa- and an individual insurance mandate with a penalty tients’ access to some treatment services. for non-compliance that was upheld by the U.S. Su- preme Court in 2012 (the penalty was subsequently Even in delivery systems where government is the eliminated in the 2017 tax cut legislation passed by payer, whether health care providers and facilities Congress.) are publicly or privately controlled, patients still encounter out-of-pocket costs, broad-based taxes The ACA has survived several repeal attempts and it to support universal coverage programs, and con- remains the law of the land, though administrative front claim denials. support for the program has been scaled back in Washington. One interim step some have suggested is to create a Medicare public option program in the U.S. that Current estimates indicate about 90 percent of would allow people to purchase a government Americans have some form of health insurance. In health insurance plan and receive treatment from contrast, many of the aforementioned nations with private providers. Benefits included in the universal care systems boast virtually complete “Medicare X” plan would differ in some respects coverage of their populations through a combina- from the traditional Medicare program. U.S. Sena- tion of automatic, compulsory, and supplemental tor Tim Kaine (D-Virginia) is among the champions coverage. of this idea. Against that backdrop, there appear to be parallel However these discussions evolve on Capitol Hill tracks regarding health care on Capitol Hill: There and beyond, the Virginia Hospital & Healthcare As- are those who want to address ACA, either by re- sociation will monitor developments and collabo- pairing or replacing it, and those who prefer to rate with elected officials in Washington and Rich- move the U.S. closer to a universal health care sys- mond to provide our thoughts, concerns, and ideas tem. on policies that can truly address access, quality, and cost. Several Democrats in the incoming freshman class th of the 116 Congress ran on calls for a “Medicare- About the Author for-all” universal, single payer system. The political, Sean T. Connaughton has served as President structural, and financial considerations associated and CEO since 2014. Prior to joining VHHA, he with such an undertaking would make accomplish- served from 2010-2014 in the Cabinet of Governor Robert F. McDonnell. Connaughton ing that feat a steep challenge. previously served in a Presidentially-appointed, U.S. Senate-confirmed position from 2006- An example is the health care plan outlined by U.S. 2009. Connaughton’s public service also Senator Bernie Sanders (I-Vermont) during his 2016 extends to elected office – from 2000-2006, he was Chairman of the Prince William County presidential bid to effectively end employer- Board of Supervisors, which is the chief elected position in Virgin- sponsored plans in favor of a government-backed ia’s second largest county – and the armed forces.
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