Why Do We Need Health Insurance Anyway?

            Despite the seemingly endless barrage of articles stimulated by the equally endless efforts of the Trump administration to kill the Affordable Care Act, relatively little attention has been paid to why we need health insurance in the first place. Liberal Democrats assert that health care is a “right” and right-wing Republicans maintain that it’s a “privilege” and that the only business government has with health care is to facilitate the business of medicine. Some of the disagreement among the parties stems from differing assumptions about just exactly what health insurance is for. Is it to protect people in the event of catastrophe—a devastating car accident that results in multiple operations and an extended hospitalization, or metastatic cancer that triggers several rounds of chemotherapy, radiation therapy, and numerous hospital stays? Or is to maintain individual and public health—ensuring that people receive immunizations and cancer screening, along with treatment of high blood pressure and high cholesterol? We can begin to answer the question by looking at the example of one group in American society with universal coverage, the older population.

            Medicare (and its sister program, Medicaid, providing insurance coverage for poor people) went into effect on July 1, 1966, after what was effectively a 30-year battle. Franklin Roosevelt wanted the government to provide health insurance for everyone, but couldn’t make much headway with his idea; Truman campaigned actively for health insurance for all Americans, but his plan failed. Finally, after decades of wrangling, Congress and President Lyndon Johnson agreed to begin with those in greatest need: people who were either old, poor, or both. Medicare had the immediate effect of boosting the number of older people hospitalized—suddenly, they stopped neglecting that chronic cough that turned out to be lung cancer or decided to get medical attention for that stomach pain that proved to be an ulcer. The likely effect (though to be fair, it’s hard to disentangle the effect of Medicare from the effect of other concurrent changes) is that older people began to live longer—a lot longer. But what was really striking were the countless indirect ways in which Medicare promoted the health of the entire older population: for example, by promising to pay for effective technology, it stimulated the development of incredibly successful interventions such as the pacemaker and the artificial hip.

When we compare the health of Americans to that of their counterparts in other developed nations, we find, rather shockingly, that everyone else is generally better off than we are—if they are under 65. Among older people, the stark differences between the U.S. on the one hand and Europe, Australia, and Japan on the other hand vanish. The only plausible explanation is that older people in the U.S. all have health insurance, rendering them comparable to older people in other parts of the world.

            From a population perspective, ensuring that everyone has health insurance is desirable because health is desirable. Good health is like education: without it, we are not productive, creative, prosperous, or happy.  Health insurance is the means to assure good health, so just as public education is a means to a skilled labor force. Environmental regulations are the means to assuring a safer, more healthful country.

            From an individual perspective, health insurance is critical to well-being because it’s the gateway to good health. It’s simply not true that we can expect to stay perfectly healthy as long as we eat well, exercise, and lead a virtuous life. We never know when disease will strike, whether in the form of cancer or heart disease or a chronic neurologic disorder such as Alzheimer’s disease or multiple sclerosis. No matter how cautiously we drive, we cannot guarantee that a drunk driver won’t unexpectedly plow into us, causing no end of medical problems if we survive the crash. Nor can we expect that the cost of even routine medical care will be affordable: a plain x-ray, used to diagnose pneumonia and other lung conditions, typically costs hundreds of dollars when you add up the cost of the procedure and the cost of a radiologist’s reading. 
          Everyone needs basic medical care and it’s not just “catastrophic care” that is expensive. Hence, the rationale for covering each and every American isn’t just that health insurance only works when everyone shares the risk—though it is true that the only way to keep premiums manageable is for everyone, the sick and the healthy, to have coverage, rather than confining coverage to those who are known to be sick and are guaranteed to use huge amounts of service. The rationale for covering everybody is that health care is essential if we are to have enough energetic, healthy, educated workers to provide the services and the innovations that we all need, and the only way to make sure that everyone has access to health care is to provide insurance.

          Health care, and the insurance coverage to pay for it, isn’t a right, nor is it a privilege. But it is critical to promoting a strong, vibrant, capable citizenry.