qotd: A. W. Gaffney: “Malinsurance” may drive reform

New Politics
Summer 2014

Beyond Obamacare
Universalism and Health Care in the Twenty-first Century

By A. W. Gaffney

Among those working towards more fundamental health care change (for
instance, as I'll discuss below, a single-payer system), an assessment
of the overall impact of the ACA is a frequent cause for disagreement.
Is the law a (possibly wobbly) step in the right direction to be
embraced and expanded, a harmful compromise to be denounced and
discarded, or something in between? My own sense here is that global
assessments are problematic and not that helpful: the massive law does
many different things for many different people, and so is better
dissected (and criticized) with respect to its specific effects and
shortcomings rather than rejected or championed en toto.

Now if eliminating the problem of uninsurance was our only goal, it
seems that the ACA would be at least be a clear step in the right
direction. Unfortunately, however, there is another phenomenon that has
been evolving for some time, that the ACA neither created nor fixed but
to some extent codifies, and which confers a highly inegalitarian
element to our health care system: underinsurance. Underinsurance is
often defined as having insurance but still having substantial
out-of-pocket costs for medical care (i.e. greater than 10 percent of
family income after premiums); it's clearly a growing problem, and it is
by no means eliminated by the ACA. The plans on the exchanges, for
instance, incorporate high levels of cost sharing, or copays,
deductibles, and coinsurance. They are graded into four metallic tiers
based on their actuarial value (i.e. the percent of your health care
expenses that insurance covers), beginning at a paltry 60 percent for
the "bronze plans." Putting aside the deeply inegalitarian concept of
dividing a population into different grades of metal (the allusion to
Plato's Republic has somehow not yet been made), such plans fulfill the
long-held concern of health policy "experts" that patients need more
"skin in the game" (i.e. cost exposure), such that they don't
whimsically procure medically unnecessarily procedures and diagnostic
studies. Families will be subject to as much as $12,700 annually in
additional out-of-pocket costs for health care (after premiums are paid)
to keep the dreaded "moral hazard" of "free care" at bay.

Putting aside what happens to the level of strictly defined
"underinsurance," I would argue that there is a larger problem on the
rise, which one might call "malinsurance," namely insurance that
compromises the physical and economic health of the bearer. Malinsurance
encompasses an even broader scope of problematic insurance plans:
insurance where the price of the premiums impinges on a reasonable
standard of living; insurance with unequal and inferior coverage of
services, drugs, or procedures; insurance with "cost sharing" that
forces individuals to decide between health care and other necessities;
insurance with inadequate and inequitable access to providers or
facilities; and insurance that insufficiently protects against financial
strain in the case of illness.

Today, many (if not most) of us could in some ways be considered
underinsured, while most (or maybe all) of us might be considered
malinsured. This will, unfortunately, remain the case in coming years,
even with the full and unimpeded enforcement of the ACA.

Moving Forward: A Single-Payer Solution?

A "single-payer system" is probably the best-studied alternative for the
United States. Conceptually, it is quite simple: national health
insurance, with a single entity (the government) providing health
insurance for the country. Its core principles (as generally agreed upon
within the single-payer movement) can be briefly summarized. First,
everyone in the country would be covered by national health insurance.
Second, the system wouldn't impose "cost sharing," so health care would
be free at the point of care, with underinsurance thereby eliminated
(assuming an adequate level of funding). Third, it would drastically
reduce spending on health care administration and bureaucracy through
elimination of the fragmented multi-payer system, and also through the
global budgeting of hospitals. It would also contain costs through
health care capital planning, and through other measures like direct
negotiations with pharmaceutical companies over drug prices. Putting
this together, a single-payer system would constitute a markedly
egalitarian turn in American health care. Access to health care would be
made not only universal but also equal, with free choice of provider and
hospital to everyone in the country, provided as a right.

The confluence of several of the following dynamics (and many others)
may, for instance, create a political opening for such a project in the
coming years.

First, dissatisfaction with our health care system will almost certainly
rise, which I think will occur as we become more and more a "copay
country," with high-deductible, high-premium, and narrow-network health
plans becoming the new normal. One could imagine considerable public
outrage and mobilization against this new commodified status quo, just
as there was against corporatized HMOs in the 1990s.

Second, though politics at the federal level may remain inhospitable to
the cause for some time, single-payer campaigns at the state government
level may provide an opening for the construction of more limited
single-payer state systems, while also providing an opportunity for
grassroots organizing and movement building that would, in turn,
strengthen the larger national campaign.

Third, support for a single-payer system among physicians (which already
has majority support in some polls) might be translated into more vocal
outrage in coming years. In particular, as patients pay more and more
out-of-pocket at the time of care, physicians will increasingly be
forced into the role of "merchants of health," basing medical decisions
not only on clinical evidence, but on their patients' income and wealth.
I believe—and deeply hope—that such class-based medicine will be
rejected by the profession.

Fourth, and perhaps most important, a broader mobilization against the
politics of inequality now seems to be in the making. As it is perceived
that the excessive costs of American health care are actually
contributing to the problem of inequality—for instance, insofar as high
premiums indirectly reduce income or as cost sharing directly consumes a
greater portion of already stagnant wages—one can imagine that the drive
for a single-payer system might become closely linked with a much
larger, and more powerful, political mobilization.

http://newpol.org/content/beyond-obamacare

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Comment by Don McCanne

As A. W. Gaffney points out in this article, underinsurance or
"malinsurance" may drive us to demand single payer as we mobilize
against the politics of inequality. The entire article is well worth
downloading and reading when you have a free moment.


Note on word usage: Gaffney's neologism, "malinsurance," is sometimes
used to refer to medical malpractice insurance. To avoid confusion, we
should continue to use the already established term, "underinsurance,"
as the label for the rapidly expanding menace of inadequate health care
coverage.