UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

August 27, 2009

THE FINANCIAL BENEFITS OF HEALTH REFORM

Into the Storm - Universal health insurance will eliminate both the need for and cost of many public and private insurance programs and have a significant effect on productivity. By universal, I don't mean single payer, etc., but any system that guarantees health insurance that is adequate, affordable and reliable.

Healthcare proponents don't mention these savings. So far, proponents have only talked about holding down cost increases. To many, this sounds like cutting service. As a result, advocates are fighting a rear guard action by focusing only on cost. If they don't change and start talking about real financial benefits, they will lose.

Universal health insurance will lower current insurance costs by eliminating the medical portion in public programs such as workers compensation and in the amount you pay for medical in home and auto policies. These savings will especially help many who don't like the prospect of change: small business, cash strapped states, doctors, etc. The effect on public and private health insurance is both significant and calculable.

Worker's compensation is a major part of the social safety net. It's also unloved by employers who bare its full cost. If every employee had health insurance, there would be no need for a business to pay for the medical portion of this program. In 2003 the last year for available data, the National Academy of Social Insurance found total worker's compensation medical benefit payments were $25.7 billion or half the cost of the total program. Add in the cost of administration, and business' savings would be significant. For good measure, throw in the savings to taxpayers for the medical portion of the federal and state employee programs.

Home and auto owner policies insure against medical claims, among other risks. It's difficult to assess just how much is involved, but it is substantial. For example, auto policies charge for medical protection both directly and as part of personal liability coverage. If everyone had health coverage, these premiums and the associated admin expense would go away.

Medical liability insurance would not need to cover medical costs. The administration's failure to point out the effect on medical malpractice costs is a glaring political error.

The second general area, and perhaps largest benefit, is the increase in productivity due to a healthier public. While it is difficult to gauge the exact result of providing each person with access to affordable healthcare, the prospect is certainly worth exploring. Examples include:

Reduced Sick Days. Each day worked adds to both business and individual income and reduces sick pay – if any.

Improved School Attendance. The health of school children has a direct bearing on not only their school attendance, but also on their caregiver's availability for work.

Longer Lifespan. The Congressional Budget Office has delighted conservatives with its warnings that improved health care would mean greater Social Security and related costs. It's a measure of our obsession with cost that no one has called CBO down on this. Most people, I think, would consider living longer a benefit. If nothing else, a longer life means more time that someone can participate and contribute to the economy and to public insurance programs – a factor CBO ignores.

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