Hear the echoes of our past trade debates in the recent back and forth about the cancelation notices sent to policyholders by health insurers? A battle of stories has ensued, individuals explaining how they have been harmed — or helped.
Sign a trade agreement, and soon someone will come forward to tell how jobs have been lost. Others will point to the opening of new markets, and jobs gained. What too often gets lost is the benefit to the whole, or how competition from Japan served the interests of American auto consumers and, ultimately, automakers.
The North American Free Trade Agreement has benefited all three partners, in expanded opportunities and even in the United States more jobs created than lost.
Part of keeping your eye on the whole is seeing down the road, say, the economies of Canada, Mexico and this country becoming increasingly integrated, the tearing down of trade barriers, and now pursuing immigration reform, elements of seizing the advantage amid change.
The thinking applies to the Affordable Care Act, especially in weighing the cancelation notices and the disastrous rollout of the federal health insurance exchanges. One of the leading aims of the act involves repairing the broken market in which people purchase health coverage on their own. Many face that problem of the coverage seeming sufficient — until they get hit with an illness. Then gaps in coverage can lead to towering expenses, even financial ruin.
Know that many also fare well in the individual market. Yet the flaws have been long in the making.
The modern idea of health insurance began to take shape in the 1930s, as the quality of medicine advanced and costs started to climb. One innovation was the Blue Cross concept, a network of hospitals offering care in exchange for a small premium payment. It worked best in providing coverage to large groups, for instance, teachers in a city school system, the healthy providing the resources to care for the sick.
All beneficiaries paid the same premium amount, or the “community rate.” They were guaranteed care. The healthy subsidized those who were ill, knowing that they, too, could face such circumstances. This is essentially the system at work in many countries today, with variations in the mix of public and private roles.
No surprise that private firms here saw an opportunity and started to move deeper into health insurance. No surprise, either, that they took a different approach, operating as any business would, or must, aided at key turns by government policies, such as exempting money spent on health insurance from the income tax.
What happened next set the stage for what the Affordable Care Act seeks to address. The business model worked best when insuring those who are mostly healthy, money flowing into the company, less going out. So, increasingly the past few decades, those who are less healthy, coping, for instance, with chronic diseases, have been squeezed out of affordable and adequate coverage.
This hasn’t been a concern for the large majority, those of us with employer-based coverage. The heavy burden has fallen on those who are ailing in some way and buying insurance on their own.
The landscape has shifted from “community rate” to “experience rating,” private insurers reducing their exposure to risk and higher costs.
What the Affordable Care Act attempts to do is move toward a “community rate.” That explains, in part, the cancelation notices, insurers closing policies that do not meet newly established minimum standards.
The stories will vary, from some paying slightly more for better coverage to others paying higher premiums for fewer benefits. The latter are more likely the healthy who have done well over the years as insurers have sought to cover them. Here’s where a functioning federal exchange would help, consumers in position to comparison shop, to see how the federal subsidies work.
Worth emphasis is the benefit to the whole, the market no longer so skewed against the sick, insurers aided by the entry of new customers, the country in a healthier position.
Take the dustup about men paying for maternity care in their health coverage. Many have lampooned the idea. Yet all of us have a stake in healthier mothers and babies. The country compares poorly with its peers in child mortality. Improve outcomes, and the positive ripple effect will be felt broadly.
The idea hardly is new, paying for something that you may not use but supports the common good. As others have pointed out, it holds for public schools, for highways and public transportation, for parks, for Social Security and Medicare, one group subsidizing another. It applies across generations, men and women both having a part in pregnancies, sustaining a health system that served their parents and will serve their children.
So much about illness is accidental. Women don’t choose to be women. Gender is an accident of birth.
President Obama spoke carelessly when he claimed that if you like your coverage, you can keep it. The shortcomings of the individual market for health insurance require big changes, launched by the Affordable Care Act.
The larger value is plain in light of where things are headed. The past decade, the share of Ohioans with health coverage through their employer has slipped from 71 percent to 57 percent. It isn’t likely to change. More of us will be on our own.
Douglas is the Beacon Journal editorial page editor. He can be reached at 330-996-3514, or emailed at firstname.lastname@example.org.