Health Care Reform—Not a Dead Issue
From the Archives (originally published on May 10, 1997)
Michael S. Dukakis delivered this address to the Kenna Club at Santa Clara University in California on Feb. 28, 1997.
We had a great debate about health care in 1993 and 1994 that did not produce much. This was not the first time the United States debated the issue of universal health care. The first Presidential candidate to suggest seriously that all Americans, especially all working Americans, ought to be guaranteed health insurance was Theodore Roosevelt, in the Bull Moose campaign of 1912, in which Woodrow Wilson defeated him. Franklin Roosevelt made a calculated political judgment that, with everything else on his plate during the New Deal, universal health care was just too much. Not until Harry Truman did a President propose legislation that in effect would have been a universal Medicare plan, financed under the Social Security system. Truman made this attempt at universal health care over and over, every year, and failed. John Kennedy found himself unable to get Medicare out of committee.
Not until Lyndon Johnson won that landmark victory in 1964, with a huge Democratic majority in the House and Senate, did we finally get Medicare, and then only after some major compromises with the A.M.A., Blue Cross & Blue Shield and others. Congressman Wilbur Mills, chairman of Ways and Means, stepped in courageously at the last minute to make its passage possible. When the Medicare bill passed in 1965, people assumed it would be only a matter of a few years before we completed the job. Richard Nixon, no left-leaning liberal, proposed universal health care in 1971; Gerald Ford did it again in 1975 and Bill Clinton in 1993. Four Presidents, two Republicans and two Democrats, have proposed universal health care in the course of the last half century. We still do not have it.
So where are we in 1997? We have a health care system that is spending more per capita than any other in the world, about twice as much as any other industrialized nation. Other nations insure everybody; we have 41 million without insurance, 90 percent of whom are working or are members of working families. Seven million of these are in California alone. The rate of increase in health care costs is diminishing somewhat, but it is still rising at twice the rate of inflation. In the 1970's and 80's it rose at three and four times that rate.
Fortunately, the quality of health care in this country is high. But as the industry consolidates and larger and larger corporate structures begin to take over the delivery of primary care through H.M.O.'s and a variety of group care plans, we are hearing more and more complaints from people about quality and responsiveness. And the number of uninsured people is going up at the rate of a million a year.
On Feb. 24, The New York Times reported that one quarter of New York City residents under the age of 65 now have no health insurance. Most of them hold full time jobs. With the rise in health care costs, said the article, some companies have stopped offering coverage, and low-income working families are increasingly vulnerable. The number of children without insurance has risen twice as fast as the number of adults.
I want not merely to focus on the question, what are we going to do about it, but also to ask who is paying for all this? In this country uninsured people who get so sick that they can't stand generally end up in the emergency room. That is very expensive health care, about $500 for just going through the door. A hospital with any brains will jack up its room rates and its charges so as to cover the cost of free care, which is then passed on through raised premiums to employers and employees. Since 75 percent of the employers in this country provide health insurance, we end up with responsible employers paying also for the workers of other employers who are not given coverage. What a strange employer mandate that turns out to be!
How long is the business community going to tolerate this? Some people in the business community hate mandates for whatever reason. But when, as a practical matter, three quarters of the nation's employers have to pay this bill—and in California 15 percent of every premium dollar is paying for free care—should not the business community insist that all employers and employees contribute? This will allow for better care when it is needed, early, for those 41 million without any primary care, and it will reduce premiums.
The state of Hawaii figured this out over 20 years ago. Since 1974 all employers and employees have been required to contribute to health insurance. It is simple and works well. It is fully privatized; the government does not run it. Health costs in Hawaii are 30 percent less than in California, and that in a state whose cost of living is perhaps exceeded only by Alaska's. Health outcomes in Hawaii are the best in America—the highest life expectancy, the lowest infant mortality. And Hawaiians spend 40 percent less time in the hospital, thanks to universal primary care. About 60 percent of them are covered by Blue Cross & Blue Shield, about 22 percent by Kaiser Permanente. The rest are scattered among a number of other insurers. Coverage is quite comprehensive. Insurers and H.M.O.'s charge the same rate for small or medium-sized companies, avoiding the system where the little guy pays twice as much as the big employer. And there is no cherry picking; insurers cannot refuse anybody who walks in the door.
That is the Hawaiian system, all contained in about 12 pages in the statute book, not 1,300 pages, as was the case with the Administration's proposal. And there are no alliances or H.I.D.C.'s, those huge structures that were to mediate between employers and employees and the market. Mario Cuomo used to say that if you can't explain a bill to your mother, don't send it to the Legislature. I could hardly explain those alliances to my graduate students!
This is a tough issue; if it weren't, four Presidents would not have failed.
The President and First Lady and many others worked very hard on health care reform, and they deserve a lot of credit for it. But we all received a reminder that it is important to keep things simple. This is a tough issue; if it weren't, four Presidents would not have failed. But in 1997 we are spending over a trillion dollars on health care, and over 40 million of our fellow citizens remain uninsured, with a high percentage of them children. This is not worthy of America.
I hope the President and Congress can move forward in a bipartisan fashion. They did so on the Kennedy-Kassenbaum bill at the end of the last session, a modest step that will at least help people who are already insured to hang on to their insurance. The President has included in his budget this year a proposal for insuring all people who are involuntarily unemployed. We have already done that in my home state, and it works well.
I hope we can persuade the Congress to insure all children nationwide. I am proud to say that in Massachusetts just this past year we did that. Virtually all uninsured children in the state will be covered by health insurance, which will be paid for with a 25-cent increase in the cigarette tax. I think the legislators in Sacramento should take a serious look at insuring every child in California. It will still leave too many people without coverage, but it will guarantee health care for California's children and help welfare reform as well. In the 1980's, running one of the best welfare-to-work programs in the country, I learned that one of the great disincentives to getting off welfare and going to work, especially for single parents, was the fear that their children would lose Medicaid. Insuring every young person in this country for 25 cents on a pack of cigarettes will eliminate that disincentive.
But the states cannot do health care reform by themselves. Hawaii is blessed by its isolation. When we passed our universal health care bill in Massachusetts, New Hampshire not surprisingly tried to lure away our businesses by telling them they would not have to put up with an employer mandate there. In the state of Washington, some people referred to that state's employer mandate as the Northem Idaho Development Act! Only the President and the Congress can solve this problem.
We face a big challenge in this country. We must give working middle-class families some sense of security and well-being in a turbulent and competitive economy. This depends heavily on the assurance of health care. We are paying more than enough for health care in America, but we are spending our health care dollars wastefully and in a way that is very unfair to responsible employers and their employees. We are approaching the 21st century. Isn't it about time that we guaranteed all working Americans and their families decent and affordable health care?