The Struggle for Universal Health-Care Coverage in the U.S.
Conference debates whether its time has come

Fall 2006, Volume 28, Number 1

Jacob Hacker discusses universal health care with Monica Prasad and others at a Jan. 25 conference.

Every 30 seconds in the United States, an American goes bankrupt because of insurmountable medical bills, noted Jacob Hacker, a political scientist at Yale University.

He spoke about the prospects for universal health-care coverage in the United States at a conference on January 25 co-sponsored by the Institute for Policy Research and the Center for International Comparative Studies at Northwestern University. While many are familiar with the statistic that 45 million Americans are uninsured, few realize how truly volatile this population is. Hacker pointed out that more than 82.5 million Americans did not have health insurance at some point over a two-year period. Of those 82.5 million, half were uninsured for longer than nine months, and 85 percent of the uninsured live in a family headed by a wage earner.

“The United States is the only country in the advanced world that doesn’t have a health-care system that fully covers its population,” said IPR Faculty Fellow Monica Prasad, assistant professor of sociology, and the conference organizer. “And the perennial question is why not, and what can we do about it?”

The United States spends more than other advanced industrial nations on health care: 13 percent of its GDP versus less than 10 percent in other countries. Yet it covers only 30 to 40 percent of its population versus 75 to 100 percent in other industrialized nations, Hacker noted.

One reason behind this gap is the unique public/private financing structure of the U.S. health-care system and the over-reliance on employers to provide health-care benefits. “The story of the last 20 years hasn’t been a decline in government benefits, but a decline in private-sector benefits,” Hacker said. “This unique social contract is coming undone.”

Hacker calls this shift in insurance burden from employers and government onto individuals the “Great Risk Shift,” stressing that it affects low-wage earners disproportionately. In 1979, 46 percent of the lowest-paid quintile of American workers had insurance from their own employer. By 1998 that figure had dropped to 26 percent. The gap between the two was a key focus of Clinton’s attempt to reform the health-care system in the early 1990s.

Behind this shift, Hacker detects a fundamental change in ideology and political power, fueled in part by the increasing conservatism of the Republican majority. Republicans favor individual responsibility as a response to the paring down of insurance coverage by American businesses. This is why the right champions solutions such as the establishment of individual health savings accounts (HSAs) that President Bush called for in his State of the Union address in January.

“It is clear that throughout the 20th century and today, health policy politics has tilted toward private-sector solutions, despite all the evidence that the private sector can’t provide health security to Americans at a reasonable cost,” said Fay Lomax Cook, IPR’s director and a conference respondent.
Cook, a professor of human development and social policy, also highlighted polls showing that the American public heavily favors reform—even if it means rolling back some of the Bush tax cuts.
Currently, Hacker fingers two factors that weigh heavily on hopes for reforms: the failure of the Clinton plan and the enormous fiscal constraints imposed by Bush’s tax cuts.

Yet there is hope, Hacker suggested. He identified three promising paths: expanding Medicare to cover additional populations and to allow employers to buy into it; creating a federal plan for catastrophic coverage; and establishing a “cost-swap” in which the federal government would cover those populations costing the most—elderly nursing home patients and the poorest Medicaid recipients—thereby freeing the states to cover more of their residents.

“Each of these three solutions will cost a lot of money,” Hacker cautioned. “But each represents a long-term strategy for building on the best aspects of the present system and responding to the decline in workplace health benefits without presenting a huge threat to existing interests.”

In the absence of a federal response, others have taken the initiative to seek new solutions. Eric Parker, director of the Wisconsin Regional Training Partnership, spoke about how his nonprofit and a local union have mounted an innovative plan that allows small businesses to purchase affordable insurance for either union or nonunion home health-care workers. States such as Massachusetts, Maryland, and Florida have passed their own health-care reforms. Even Wal-Mart, the largest employer in America and the world, has come to realize that it has much to lose if Medicaid is scaled back.

“The great hope for U.S. health care seems to be getting businesses to realize that it is in their interest not to shoulder the burden of health-care costs and to get behind reforms at the national level,” Prasad said.

Jacob Hacker is Peter Strauss Family Associate Professor of Political Science at Yale University and author of The Great Risk Shift: The New Economic Insecurity—and What Can Be Done About It (Oxford University Press, forthcoming 2006).