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Vivian Tran Writing 39C 12/11/12 National Health Insurance or No Insurance? I. Intro

Since the year 2000, employer-sponsored insurance (ESI) has dropped significantly from 69.1 percent to 50.4 percent for employers that were providing insurance for their employees, which leaves an estimated 28 million people uninsured (Gould). Employer-sponsored insurance (ESI) is not as reliable as it once used to be and the increasing number of uninsured Americans proves that. To understand the source of this problem, one must look at how the American health system works. For instance, America relies heavily on private for-profit insurance, who seek revenue gain on selling insurance. Employers turn to private insurance companies to cover the health insurance for their employees; however, as more employers push premium costs onto their employees, ESI becomes unaffordable or even yet, unavailable for low-income workers. The ultimate power resides in private insurance companies who determine health cost in America. The system is designed so insurers can deny care to those in need of it the most, and rely on the premiums of their healthy customers to subsidize their profits and advertising costs, as well as the administrative burdens behind their intense denials of care, (Kakasuleff). The problem is the American federal government has little control over the dynamics of the insurance system; therefore, insurance companies can set any price at which they deem fit, causing the affordability of insurance to be a problem in America. Providing ESI for the majority of the population did not happen overnight, but once it started Americans have become dependent on this system, making difficult for change. Health

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insurance in America has existed since the 1850s, but not many had it until World War II. During World War II, the number of people with health insurance boomed because the 1942 Stabilization Act, which made it illegal for employers to raise wages, but allowed employers to offer health benefits to attract employees in demand (Kelton). The 1942 Stablization Act was the push that leaded America into the era of employer-sponsored health insurance (ESI), which the majority of Americans depends on today for health insurance. As of 2000, 69.2 percent of Americans rely on employer-sponsored health insurance (ESI) (Kelton). However, with the steep drop of ESI in recent years, which mostly effects low-income workers, this system is no longer the most reliable source for health insurance. An alternative solution is needed to reform this system and offer coverage for everyone in America, which includes low-income families that are most often in need of coverage. According to the World Health Organization, France is ranked first in health care, while America is ranked 37th (The French Lesson in Health Care). The French system may be a possible solution to Americas problem. France uses the national health insurance (NHI), where everyone contributes tax to support the entire population with insurance. The difference between the two countries is that the French operates on a non-profit health care system, where the federal government controls the health care system. In France, the primary insurance system is known as national health insurance (NHI). NHI provides for 99.9% of the population and is financed by, by employer/employee payroll taxes, dedicated income taxes, taxes on alcohol and tobacco, and individual out-of-pocket payments; it is free for lowincome families, (Cost Sharing for Health Care: France, Germany, and Switzerland). France does charge a higher tax rate than in America; however, reimbursements are given back to their citizens are high, ranging from 70% to 100%, to make up the differences. In addition to NHI, 90% of France still has private insurance to cover additional medical costs the government does not

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offer, and the premiums that are offered are affordable for the majority of their citizens (Rodwin). NHI aims to protect those who are low-income and/or those who are chronically ill, like patients with cancer, diabetes, high-cholesterol, etc. Unlike the American system, where they fail to protect those who are low-income, middle class, and the health people who become chronically ill due to lack of insurance, the French system protect those who are in need of it the most. Victor Rodwin, a Ph.D. in Health Policy and Management, says NHI is achievable in America without a single-payer system, private insurers can still supply supplementary insurance, if necessary, and America already have programs like Medicaid, all that needs to be done is to expand it. However, Robert Moffit, Ph.D. senior official of the U.S. Department of Health and Human Services (HHS) during the Reagan administration argues that NHI is inefficient because France is facing deficits due to over abuse of the free medical system. However, in comparison to the problems between the health systems in France and America, the bigger issues reside within America. America has been trying to achieve this goal by taking incremental steps toward NHI, but failed in each turn. The reform was first proposed by Truman, Nixon, and then Clinton, but have all been opposed to mainly due to political struggles (Thai). One the other-hand, the Affordable Health Care Act (ACA), proposed by President Obama is the closest reform America has come to any semblance of NHI. Small businesses are more willing to pay the small tax penalty of $2,000 per employee because it is cheaper and more affordable compared to offering private insurance to the employees and their families; however that still leaves 30-35 million uninsured (Morici). All arguments surrounding political, feasibility, and quality patient care issues are valid points to keep in mind. The solution of NHI is not currently feasible because of the political organization in America, and it is not a plan to happen overnight because of its complicated structure. However, there is hope because it may be incrementally incorporated into

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the system in the near future, as ACA is the closest measure America has taken as any semblance to NHI. II. Financing NHI or Health Premiums in America

NHI in France is not free; it is funded by the entire population through taxes, which is much better than the option offered in America, where insurance affordability is a big issue. In France, majority of the taxes used to fund NHI comes from employers. In 2000, roughly half of French NHI expenditures were financed by employer payroll taxes (51.1%) and a general social contribution (34.6%) levied by the French treasury on all earnings, and rest comes from automobile (3.3%), tobacco (3.3%), pharmaceutical taxes (0.8%), and other state subsidies (4.9%) (Rodwin). The general social contribution tax comes from incomes from all types: employees, investments, etc. The majority of Americans depend on either ESI or government-funded insurance programs or left uninsured. However, ESI has become unaffordable as employers to push rising rates onto employees without much increase in their wages. In the last decade, according to a study conducted by the Kaiser Family Foundation, workers contribution rose 180 percent, while their earnings only rose 47 percent, which means their contributions are increasing four times faster than their annual earnings (Survey of Employer-Sponsored Health Benefits, 1999-2012). In the same time frame, ESI dropped a net total of 10.6 percent; the decrease means 28 million Americans became uninsured in just one decade (Gould). Employers cannot afford the haul of rising health premiums, therefore they push it on to employees, whom also find it difficult afford. NHI allows a compromise between the two in which everyone contributes at a reasonable rate to help support the population. The French system allows everyone or 99.9% of their population, to be insured through taxes paid for by employers/employees payroll, alcohol and tobacco tax, and out-of-pocket fees (Cost Sharing for Health Care: France, Germany, and

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Switzerland). America is paying a lot for health care, and yet millions are left uninsured and even more so are left with inadequate health insurance. In France, everyone pays a big portion of their income for health insurance, but then the entire population receives equal medical attention under NHI. It is not to be mistaken though 90% also have private insurance to cover extra medical treatments NHI, otherwise does not cover. Both countries contribute tax towards health insurance, however only France insures their whole population. III. Extent of coverage

First and foremost, NHI coverage is extensive for basic or crucial medical needs for their citizens. Complementary insurance may not be necessary, but most are offered by employers and it mainly covers dental, optical health, and reimbursements. Thomas Buchmueller, a professor on Business Economics and Public Policy at University of Michigan, says, patients are responsible for the payment of the ticket modrateur, a co-payment that equals 30% of the conventional tariff, the fee that is the basis for reimbursement by the public system. Around 70 percent of all

necessary medicals costs are covered by NHI, the other 30 percent comes from out-of-pocket expenditures (Buchmueller). Those who have private insurance, 86 percent of the population, which is funded by employers, are reimbursed back the 30 percent they paid out of pocket or is

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used to fund for better medical goods NHI cannot supply, like contact lens. Those who are lowincome workers, the 16 percent whom cannot afford private insurance, are offered Couverture Maladie Universelle (CMU), a publicly funded complementary coverage, insures, prices that can be charged by providers to CMU beneficiaries are capped and the difference between the price and official tariff is fully reimbursed to the patients, (Buchmuller). Therefore, the out-ofpocket cost for CMU beneficiaries is completely free. Moreover, for those who are chronically ill, coverage improves and all are exempt from out-of-pocket costs. The rules are as follows: when (1) expenditures exceed approximately $100, (2) hospital stays exceed 30 days, (3) patients suffer from serious, debilitating, or chronic illness, or (4) patient income is below a minimum ceiling, thereby qualifying them for free supplementary coverage, (Rodwin). NHI offers protection to those most in need of medical attention. The system works to support those who cannot bear the financial burdens of private insurance and/or those who need medical attention, but cannot afford it. IV. Oppositions to NHI

No current health system in the world is completely flawless. Robert Moffit, a powerful political figure voted The 100 Most Powerful People in Healthcare in Modern Healthcare Magazine, argues supplying citizens with virtually free care because of high rates of reimbursements causes abuse to the system with high demands in doctors, but quality care per patient is sacrificed as a means to support this system. When the demand for doctor care is met by a guarantee of unlimited services, with no costs and no constraints, the result, of course, will be a boom in health care consumption, and that is what France is experiencing, and the end result means a five to eight percent increase per year in medical expenses adding up to the countrys deficit (Moffit). The Frenchs problem is overconsumption, while millions of

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Americans have no health care whatsoever. Their problem is adding to the countrys deficit, but then again all countries across-the-border have been in deficit and are all to some extent, medically related. Whatever problems France is facing, Americas is bigger and it needs to be addressed to immediately. Although having NHI can very beneficial to the whole population, reforming Americas long depended health care source proves to be difficult. America lives in the political structure of checks-and-balances. Some may argue it is to keep one legislative from having too much power, so power is equally distributed within the three branches. However, the structure of the government makes it impossible for America to reach to a consensus on NHI because of the decentralized government. When a health care issue-as well as other issues-emerges on the national agenda, quite a few congressional committees and subcommittees and many members of Congress get involved and become active in such issues, and each have their opinion on how to reform health care (Thai). In reaction to Clintons NHI proposal different interest groups: doctors, business owners, the would-be major contributors of his proposal, lobby against his reform by, [spending] $300 million to stop health care reform as claimed by President Clinton, (Thai). The $300 million were used to donate to political figures, like Representative Jim Cooper of 1994, whom wield substantial power in dictating whether reforms, such as Clintons, will pass. Lobbies from different interest groups will keep legislatives from making a decision to pass NHI. NHI needs a powerful government to handle the ultimate decision on whether the bill shall be passed or the reform will most likely be stuck in limbo and never reach a consensus. V. The Future and the Affordable Health Care Act

Under ACA, effective in 2014, employers are required to, provide affordable health insurance to employees working at least 30 hours per week or pay fines of up to $3,000 per

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employee who instead obtains taxpayer-subsidized insurance on a state exchange, (Tennant). Many companies are shifting hours on their employees gradually lessening them until it is under the 30 hours minimum. Darden is one of the nations top 30 employers, and Under the system Darden is testing, employees are to be scheduled for no more than 28 hours each week, certainly under the 30 hours minimum (Tennant). Employers make it so they can legally make workers ineligible for the companies health insurance and instead turn to government-sponsored insurance, which businesses fund by paying the $2,000 penalty fee. Edward Fensholt J.D., an insurance executive, wrote to the House Committee of Health, Employment, Labor, and Pension, Employers will opt to pay the relatively modest $2,000 per full-time employee penalty for offering no insurance, rather than pay larger subsidies for health insurance for the employees and their dependents, (Tennant). Professor Morici of University of Marylands Robert H. Smith School of Business, suggests, Middle- and upper-income employees displaced from employerbased plans will likely find one of the public options the least expensive and most sensible choice. ACA offer government insurance plans for those who earn more than low-income workers, but not high enough to afford ESI from their employers, ESI that employers are also finding hard to afford. In turn more and more employees will enroll in government-sponsored insurance, which is very similar to NHIs policy with government being the main insurance supplier. Although this will lessen the number of uninsured Americans, 30 to 35 million will still remain uninsured under ACA (Morici). More reforms needs be incrementally implemented into the health insurance system to resemble NHI to cover more people, at which the political system and economic circumstances will allow. ACA is one step closer to where America needs to be for national health insurance. VI. Conclusion

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In order to insure everyone in the population, NHI must be implemented in the nation. It is the only plan anyone has ever seen that insures almost the entire nation. It may not be feasible now because of our governments structure and economic capabilities, but there may still be hope for it one step at a time. ACA takes America one step closer to NHI. France was solely based on private insurance, and so were many European countries until they adopted NHI. It may take America decades or even more so to reach that goal, but it is not unachievable. As a take home message, America needs unity in order to put this plan into action. Majority, if not all, of the American population must see absurdity of our nations health care system, and see big difference NHI can make to this problem. If all of America favors NHI enough, it can certainly be done.

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Work Cited "Cost Sharing for Health Care: France, Germany, and Switzerland." Kaiser Family Foundation, Jan. 2009.Web. 11 Dec. 2012.http://www.kff.org/insurance/upload/7852.pdf "The French Lesson in Health Care." Business Week Magazine. 8 Jul. 2007.Web. 6 Dec. 2012.http://www.businessweek.com/stories/2007-07-08/the-french-lesson-in-health-care "Survey of Employer-Sponsored Health Benefits." Kaiser Family Foundation. 11 Sep. 2012.Web. 11 Nov. 2012.http://facts.kff.org/chart.aspx?ch=2834 Buchmueller, Thomas C.. and Agnes Couffinhal. "Private Health Insurance in France." Organization for Economic Co-Operation and Development, 11 Mar. 2004.Web. 11 Dec. 2012. http://www.oecd.org/france/30455292.pdf Gould, Elsie. "A Decade of Declines in Employer-Sponsored Health Insurance Coverage." Economic Policy Institue. 23 Feb. 2012.Web. 12 Nov. 2012. http://www.epi.org/ publication/bp337-employer-sponsored-health-insurance/ Kakasuleff, Jenny. "Health Care Reform Series: The French health care system." The Examiner. 8 Aug. 2009.Web. 10 Dec. 2012.http://www.examiner.com/article/health-care-reformseries-the-french-health-care-system Kelton, Stephanie. "An Introduction to the Health Care Crisis in America: How Did We Get Here?." Center for Full Employment and Price Stability. Sep. 2007.Web. 14 Nov. 2012. http://www.cfeps.org/health/chapters/html/ch1.htm Moffit, Robert E.. "Perspectives on the European Health Care Systems: Some Lessons for America." The Heritage Foundation. 9 Jul. 2001.Web. 11 Dec. 2012. http://www.heritage. org/research/lecture/perspectives-on-the-european-health-care-systems

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Morici, Peter. "Court Puts U.S. on Path to Single Payer." The Baltimore Sun. 28 Jul. 2012.Web. 11 Dec. 2012.http://www.baltimoresun.com/news/opinion/oped/bs-ed-health-care-morici20120628,0,49509.story Rodwin, Victor G.. "The Health Care System Under French National Health Insurance: Lessons for Health Reform in the United States." American Journal of Public Health 1.93 (2003): 31-37. Web. 6 Dec. 2012. http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1447687/ Tennant, Michael. "Restaurant Giant Cuts Hours to Avoid Employer Mandate." Web. 23 Nov. 2012. The New American.http://www.thenewamerican.com/usnews/healthcare/item/13160-restaurant-giant-cuts-hours-to-avoid-employer-mandate Thai, Khi V., Yuhau Qiao and Sharon M. McMannus. "National Health Care Reform Failure: The Political Economy Perspective." SPAEF 21.2 (1998): 236-259. Web. 12 Dec. 2012. JStor.https://vpn.nacs.uci.edu/+CSCO+1p756767633A2F2F6A6A6A2E77666762652E6 26574++/stable/pdfplus/41426768.pdf?acceptTC=true