The health sector is entering a dramatic new era in which people are demanding more control over decisions involving their health care and medical coverage. The Internet allows them easy access to a wealth of medical information that was available only to professionals as recently as a few years ago. As they become more empowered with information, they want access to the care and services that they believe will improve their health ? and even save their lives.
But public policy has lagged behind, stuck in the Industrial Age. For too many people, private and public sector bureaucracies still are in charge of choices and spending decisions. Tax policy that ties health insurance to the workplace has left many Americans with job-based coverage only one choice of health plan ? the one that their employer has picked for them.
And more than 43 million Americans are without any health insurance because they are shut out of the system. They earn too much to qualify for public programs, make too little to have the good, high-paying jobs that provide health insurance, and many don?t earn enough to afford coverage on their own.
Fortunately, new options now are available. A ruling by the U.S. Treasury Department?s Internal Revenue Service in 2002 gave employers new options through Health Reimbursement Arrangements. HRAs allow employers to restructure their health benefits in a way that lets employees become partners rather than adversaries in managing their health costs.
And in 2004, another new option became available ? Health Savings Accounts. HSAs give consumers even more control over their health spending decisions ? and provide them an incentive to spend wisely and save for future health care needs.
HRAs and HSAs are two of the tools in a consumer-driven health system that are giving people more choice and control over their health coverage, and they are providing new incentives for the health sector to offer innovations in financing and care delivery.
But many problems remain. The United States has been struggling for decades to find a way to provide its uninsured citizens with access to health insurance. Legislators at the federal and state level have created and expanded government health care programs designed to cover more and more people. But decades of expansion of government programs failed to measurably change the fact that about one in seven Americans still lacks coverage.
With so many Americans without health insurance, it seems clear that we need to search for other solutions. Rather than further expanding government programs, we look to the private sector for new answers.
? The idea of providing refundable tax credits to the uninsured to help them purchase health insurance is gaining acceptance across the political spectrum. To make the distribution of the subsidies even more direct, new ?health certificates? also could be offered to help individuals and families purchase private health insurance.
If these new financing mechanisms are enacted, they will enable an army of consumers to shop for the health policies that best suit their personal needs. And they will force the insurance industry to cater to them, not to a distant bureaucracy.
Widespread individual ownership of health insurance would be a fundamental and positive change in our health system, and refundable tax credits and health certificates are the tools to make that happen.
? In addition, these newly empowered consumers need a place to buy affordable coverage. They need to be able to buy their health insurance through new groups, such as churches, professional associations, labor unions, and other associations. These groups could offer health insurance on the same terms that big companies can today. They can arrange for policies that suit the needs ? and the pocketbooks ? of their members and allow them to buy insurance that they can take with them from job to job.
? States also need to take an honest look at their own efforts to fix the health care marketplace and see where they have backfired.
Many states have passed legislation mandating what medical goods and services must be included in insurance policies sold to their residents. They have been trying to achieve the perfect insurance policy ? but it?s one that fewer and fewer people can afford.
In addition, many states have regulated their insurance markets by telling insurance companies what they can charge and by telling insurers that they must sell policies to people even after they get sick. That?s like saying that you can wait to buy homeowner?s insurance after your house is on fire ? at the same price as your neighbor who has been paying premiums for years. Clearly, states must revisit these policies that have driven up the cost of health insurance, putting it out of the reach of millions of citizens.
We are on the road to a transformation in our health care system. New tools are giving consumers more choice and control and are helping to reshape the insurance industry around the needs of people, not bureaucracies. But more policy changes are needed to bring the uninsured into the fold.
Empowering consumers with new resources will lead to bold, dramatic changes in our health care system that will be transformative in solving many of the problems with cost and access that plague our system today.