Priorities for Reform from the Legislative Letter

Priorities for Reform from the Legislative Letter

The legislative letter states: “The serious problems with health care in America ”š ever-rising costs, limited access, inconsistent quality, and waste and inefficiency”š converge in the states. The effects of these problems stress state budgets, exhaust family resources, result in lost worker productivity, stifle entrepreneurial spirit, and literally cause tens of thousands of deaths each year.

Our disjointed health care system has formed a choke-hold on our economy, limiting job growth and economic development. We cannot fix the economy without fixing health care.”

State legislator’s key priorities for reform include:

  • 1.“Choice of a quality public health insurance plan that is available to businesses, individuals, and families.”  This will provide Americans with more choice, which the public overwhelmingly supports (73%), and create competition in the highly consolidated health insurance industry.  
    • a.In 36 states, three or fewer health insurers dominate the market, reports the Economic Policy Institute.i According to Federal Trade Commission guidelines, as The Urban Institute reports, 34 states have health insurance “markets highly concentrated and therefore of anti-trust concern.” These conditions enable insurance companies to not only “pass on health care costs to purchasers but to increase profitability at the same time” even while health care costs increase markedly faster than inflation.ii  
    • b.73% of "voters overwhelmingly want everyone to have a choice of private health insurance or a public health insurance plan," according to a January 2009 Lake Research Partners public opinion poll.iii
    • c.Private insurance spends two-and-a-half times more on administrative expenses than public programs, according to the Commonwealth Fund.iv
  • 2.“Strengthening and expanding the Medicaid program with the help of enhanced federal support so that it can serve all low-income Americans.”
    • a.Almost 59 million Americans who can’t afford insurance are covered by Medicaid.v  It is the bedrock of the health care safety net.  
    • b.Medicaid is one of the best and most cost-effective ways for states to broaden access to health care coverage.  It brings in valuable federal dollars that have an economic multiplier effect on state  
  • 3.“Guaranteeing affordability for individuals and businesses.”
    • a.Medical bills are blamed for 60% of personal bankruptcies in the US, according to a Robert Wood Johnson Funded study.  Having insurance does not necessarily protect families from the threat of bankruptcy, as 75% of these families had health insurance.vii
    • b.A 2008 Kaiser Family Foundation poll found that almost half of Americans reported delaying or foregoing needed medical care because of its cost.viii
    • c.Faced with rising premiums, employers are shifting costs to workers by increasing deductibles and worker premiums.  Premiums for family coverage have doubled in ten years and 35% of workers in small businesses (3 to 199 employees) face a $1,000 deductible, up from 21% in 2008.  Less than half of small firms with 3 to 9 workers now offer coverage.ix
  • 4. “Eliminating racial, ethnic, gender, and rural health disparities.”
    • a.People of color in the US are less likely than whites to receive routine medical care as well as quality health care services.x  
    • b.People of color are more likely than whites to be uninsured — 33.5% of Hispanics, 20.9% of African-Americans, and 12.2% of Whites lack health insurance.xi
    • c.Disparities in access to quality health care result in poorer health and a shorter lifespan.  African-Americans are more likely than whites to die from complications caused by diabetes, 47 per 100,000 people to 22 per 100,000 people for whites.xii  And, the life expectancy for African-Americans is five years shorter than it is for whites.xiii
  • 5. “Ensuring shared responsibility among employers, individuals and government in financing health care.”
    • a.All Americans and sectors of the economy have a stake in health care, and in ensuring we achieve a sustainable, affordable and quality health care system.  An accessible and quality health care system will ensure the continued economic competitiveness of Americans businesses and workers in the international community, and support the entrepreneurial spirit of the American economy.
  • 6.“Cost containment strategies that eliminate waste and inefficiency and improve quality, especially for people with chronic illnesses.”
    • a.Quality and costs are inextricably linked.  78% of all health care costs are spent on people with chronic health care conditions.  20% of Medicare beneficiaries account for 2/3rds of Medicare spending.xiv  Improving preventive care and treatment for chronic illnesses can reduce the escalating growth of health care costs.
    • b.The Institute of Medicine estimates that medical errors cost $17 billion to $29 billion each year.xv
    • c.According to the Commonwealth Fund, US administrative costs - as a share of total health care spending - are 30% to 70% higher than peer countries, including those with mixed public/private systems, which have universal coverage, better access to care, and better health outcomes.xvi

i Economic Policy Institute, April 2009, Why a public insurance plan is essential for health reform,
ii Urban Institute, 2008, Can a Public Insurance Plan Increase Competition
and Lower the Costs of Health Reform?,
iii Lake Research Partners, January 2009, Voter support for a public health insurance plan,
iv Commonwealth Fund, 2003, American Health Care: Why So Costly?
v  Kaiser Family Foundation, Total Medicaid Enrollment, FY2006,
vi  Families USA, Medicaid: An Important Part of an Economic Stimulus Package,
vii  Reuters, June 2009, Medical bills underlie 60 percent of U.S. bankrupts: study,
viii Kaiser Family Foundation, 2008, Americans Rank Health Care Near the Top of Their Economic Woes,
ix Kaiser Family Foundation, 2008, 2008 Employer Health Benefits Survey,
x Institute of Medicine, 2002, Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care,
xi Kaiser Family Foundation, 2007, Uninsured Rates for the Noneldery by Race/Ethnicity,
xii Kaiser Family Foundation, 2005, Number of Diabetes Deaths per 100,000 Population by Race/Ethnicity,
xiii  Arizona Daily Star, August 2007, US now trails 41 other nations in life expectancy,
xiv National Chronic Care Consortium, 2003, Check List for Chronic Care Reform,
xv  The Commonwealth Fund, 2008, Who Pays for Medical Errors?,
xvi  The Commonwealth Fund, 2008, Why Note the Best? Results from the National Scorecard on US Health System Performance,