There is a clear window of opportunity for change in our health system, a window that does not come along very often.

In the 1910’s. the American Association for Labor Legislation organized the USA’s first national conference on “social insurance”, which was to have included hospital coverage.  The American Medical Association quashed it.

In 1929 Dallas teachers formed Blue Cross to provide 21 days of hospital coverage for $6.00.  There was extreme opposition, but the “Blues” had their start!  The time was right, and this reform too hold.

In 1935 a national health plan was proposed, but was soundly defeated in Congress.

In the middle 1940’s President Truman sponsored a national health plan. The AMA and many entrenched interests denounced it as “communist” and it was soundly defeated in congress.

In 1965, President Lyndon Johnson signed Medicare and Medicaid into law.  Despite furious opposition, this reform has generally been seen as successful.

In the 1970’s President Richard Nixon sponsored legislation the reorganized prepaid health care plans as HMOs.  HMOs didn’t really take off until the 1990’s.  Nixon also had a reform plan for national health insurance, but was attacked from both the left and the right.

In 1994 the Clinton national health reform plan was quashed.

In 2005 Congress and President Bush added drug benefits through Medicare Part D.

Our current situation shows a need for change.

A recent Kaiser Family Foundation’s health poll revealed that 46% of
voters are “very worried” about health care. Despite this demonstrable
concern, only 8% identified health as one of their two top “issues” in
deciding their vote in the 2006 Congressional elections. Now it is up
to the Presidential candidates, the new Congress and the American
public to bring health care concerns to the forefront, and engage in
meaningful dialogue about various proposals to provide quality health
care to all Americans.

Consider this: America spends twice as much on health care as any other
nation - $1.8 trillion -which is 16% of our country’s GDP- yet
according to a recent Rand Report, we get the right treatment only 55%
of the time. Additionally, the United States ranks 18th on life
expectancy, 35th on a World Health Organization ranking of the health
status of nations, and has the second highest newborn death rate in the
industrialized world.

The Federal government currently spends more on health care than on
Social Security and national defense combined, the next most expensive
items. Expenditures on health care in the United States–already the
highest per person in the world– are predicted to nearly double by
2016, to $4.1 trillion. By the year 2030, with the aging of the Baby
Boom generation, seniors over the age of 65 will double to 71 million,
increasing health care spending in the United States by 25 percent, if
individuals, health care providers and public policies don’t take the
steps necessary to prevent chronic diseases from taking their toll.

Furthermore, with 46.6 million Americans -1 in 6 people in our
country–without health insurance, millions more with minimal coverage,
health insurance premiums rising faster than earnings and inflation,
soaring costs of prescription drugs (with $200 billion spent on
medications last year alone), and the burden of these rising costs on
employers, it is urgent that we develop a strategy to improve our
nation’s health.

Pressure is already bubbling up from the States that are becoming
incubators for innovative plans to make health insurance available and
affordable to their residents.

These state programs as well as plans
being offered by Members of Congress and the 2008 Presidential
candidates is resulting in another great debate on health reform in our
country with a menu of different approaches being proposed including:

1) opening up the Federal Employees Health Benefits Plan (FEHBP) to
more individuals;

2) encouraging states to develop innovative
experiments in coverage;

3) giving tax incentives to help individuals
buy their own policies and to assist small businesses purchase
insurance for their employees;

4) establishing mandates for individual
health insurance coverage;

5) providing universal coverage by
establishing a new plan or by expanding existing government programs
such as Medicare and Medicaid to cover many more people.

**********

What’s the answer?

I expect to see a patchwork of attempted solutions in various states, as Massachusetts, California, New Jersey, New York, and other states move their various attempts.

What trends are most likely to continue?

• fewer large companies will pay for 100% of employee health insurance
• there will be a substantial rise in “consumer driven health care plans” (see the Forrester Research graphic below)
• high deductible health insurance will become the norm
• HMO organizations will be less and less important players
• individual health plans will experience explosive growth
• the tax rules for HSAs, HRAs, and employer-provided health insurance will undergo many changes over the next 5 years
• the health insurance industry will see more changes in the next 10 years than in the last 60…. but will remain the major player by adapting to a more “wellness-orientation”.
• the entrepreneurs who lead through this changing time will build gigantic new business organizations

Topics: Health Insurance |

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