Government involvement in health insurance unsustainable


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There is no disputing the fact that health-care costs in the United States are excessive and continue to grow at an unsustainable rate. Based upon data from the Centers for Medicare and Medicaid Services, health-care costs in the United States were $28 billion (5.2 percent of GDP) in 1960 and had grown to $2.2 trillion (16.2 percent of GDP) in 2007.

There are many reasons why our health-care costs are excessive, and a clear understanding of those causes is essential to formulating an effective plan for reducing them. A complete discussion of all relevant factors is beyond the scope of one guest opinion, so I will limit my focus to the past involvement of government, and proposed further governmental involvement.

Government subsidization of civilian health-care costs began in 1930, when the Veterans Administration was founded. Medicare and Medicaid were enacted in 1965. The State Children’s Health Insurance Program was created in 1997. Medicare Part D was established in 2003. In total, the government, federal, and state, currently spends 46 percent of our health-care dollars, according to the Centers for Medicare and Medicaid Services.

Governmental involvement has also included the institution of regulations and mandates that have affected health insurance and the delivery of health care. In 1942, Congress authorized tax-deductible, employer-purchased health-care plans. The Health Maintenance Organization Act was passed in 1973. In 1986, Congress enacted the Emergence Medical Treatment and Active Labor Act.

Keeping in mind that the era of modern medicine is little more than 100 years old, and government has been involved throughout most of that history. The goals of government have been laudable — to ensure fairness and control costs — but have those goals been realized? Or, as is often the case, has government involvement had unintended effects that have worsened, not improved, the problems it has tried to address?

It is obvious that prior government involvement has not prevented an unsustainable rise in health-care spending. One cannot be certain whether our health-care costs would be more or less without past government involvement, but hopefully we can agree that continuing our current course is not a prudent option.

The nonpartisan Congressional Budget Office has reached the same conclusion: “Under current law, the federal budget is on an unsustainable path.”

The U.S. Department of the Treasury holds a similar perspective. By their estimates, expenditures on Medicare, Medicaid, and Social Security could consume all of federal revenue by 2080.

Unfortunately, the current proposals for addressing our health-care problems do not adequately address these long-term, fiscal concerns.

One of the most disheartening aspects of the current debate regarding health-care reform is that we seem poised to squander yet another opportunity to effect meaningful, and fiscally responsible, change. As I hope I have made clear, I am not arguing in favor of the status quo, as our current path is simply unsustainable.

Our current health-care system is complex, but I do believe that reform is possible if the problems with which we are faced are clearly understood and honestly addressed.

Christopher Peters is an Iowa City resident.

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