National Health Insurance: Introduction

For 90 years, reformers in the United States have argued for the passage of a national health insurance program, a government guarantee that every person is insured for basic health care. Yet in 2004 the United States remained the only industrialized Western nation lacking such a guarantee.
The subject of national health insurance has seen five periods of intense legislative activity, alternating with times of political inattention. From 1912 to 1919, 1946 to 1949, 1963 to 1965, 1970 to 1974, and 1991 to 1994, it was the topic of major national debate. In 1916, 1949, 1974, and 1994, national health insurance was defeated and temporarily consigned to the nation's back burner. Guaranteed health coverage for two groups—the elderly and some of the poor—was enacted in 1965 through Medicare and Medicaid; and health insurance for some low-income children was legislated in 1997. National health insurance means the guarantee of health insurance for all the nation's residents. The principal goal of any national health insurance proposal is to arrange universal health care financing. The issues of how physicians and hospitals are paid, how health care is organized, and how costs are controlled are not necessarily included in a national health insurance plan. Nonetheless, because of the close relationship among health care financing, provider reimbursement, organization of health care, and cost containment, many national health insurance proposals do concern themselves with those topics. However, the essence of any national health insurance plan is its mode of financing health care.
The controversies that erupt over universal health care coverage become simpler to understand if one returns to the four basic modes of health care financing outlined in : out-of-pocket payment, individual private insurance, employment-based private insurance, and government financing. There is general agreement that out-of-pocket payment does not work as a sole financing method for costly contemporary health care. National health insurance involves the replacement of out-of-pocket payments by one, or a mixture, of the other three financing modes.
Under government-financed national health insurance plans, funds are collected by a government or quasi-governmental fund, which in turn pays hospitals, physicians, health maintenance organizations (HMOs), and other health care providers. Under private individual or employment-based national health insurance, funds are collected by private insurance companies or HMOs, which then pay providers of care.
Historically, health care financing began with out-of-pocket payment and progressed through individual private insurance, then employment-based insurance, and finally government financing (for Medicare and Medicaid). In the history of U.S. national health insurance, the chronologic sequence is reversed. Early attempts at national health insurance legislation proposed government programs; private employment-based national health insurance was not seriously entertained until 1971, and individually-purchased universal coverage was not suggested until the 1980s (). Following this historical progression, we shall first discuss government-financed national health insurance, followed by private employment-based and then individually purchased universal coverage.
Table 15–1. Attempts to Legislate National Health Insurance.


1912–1919 American Association for Labor Legislation
1946–1949 Wagner–Murray–Dingell bill supported by President Truman
1963–1965 Medicare and Medicaid passed as a first step toward national health insurance
1970–1974 Kennedy and Nixon proposals
1991–1994 A variety of proposals introduced, including President Clinton's plan



Government-Financed National Health Insurance
The American Association for Labor Legislation Plan
In the early 1900s, 25%–40% of people who became sick did not receive any medical care. In 1915, the American Association for Labor Legislation (AALL) published a national health insurance proposal to provide medical care, sick pay, and funeral expenses to lower-paid workers—those earning less than $1200 a year—and to their dependents. The program would be run by states rather than the federal government, and would be financed by a payroll tax–like contribution from employers and employees, perhaps with an additional contribution from state governments. Payments would go to regional funds (not private insurance companies) under extensive government control. The funds would pay physicians and hospitals. Thus the first national health insurance proposal in the United States—because the money was collected by quasi-public funds—can be considered a government-financed program (; ).
In 1910, Edgar Peoples worked as a clerk for Standard Oil, earning $800 a year. He lived with his wife and three sons. Under the AALL proposal, Standard Oil and Mr. Peoples would each pay $13 per year into the regional health insurance fund, with the state government contributing $6. The total of $32 (4% of wages) would cover the Peoples family.
The AALL's road to national health insurance followed the example of European nations, which often began their programs with lower-paid workers and gradually extended coverage to other groups in the population. Key to the financing of national health insurance was its compulsory nature and its coverage of large segments of the population; mandatory payments were to be made on behalf of every eligible person, thereby ensuring sufficient funds in the program to pay for that proportion of people who fell sick.
The AALL proposal initially had the support of the American Medical Association (AMA) leadership, and major initiatives to pass the program took place in several states. However, the AMA reversed its position and the conservative branch of labor, the American Federation of Labor, along with business interests, opposed the plan (). The first attempt at national health insurance failed.
The Wagner–Murray–Dingell Bill
In 1943, Democratic Senators Robert Wagner of New York and James Murray of Montana, and Representative John Dingell of Michigan introduced a national health insurance bill into Congress. The Wagner–Murray–Dingell bill was organized as an expansion of the social security system that had been enacted in 1935. Employer and employee contributions to cover physician and hospital care would be paid to the federal social insurance trust fund, which would in turn pay health providers.
In the 1940s, Edgar Peoples' daughter Elena worked in a General Motors plant manufacturing trucks to be used in World War II. Elena earned $3500 per year. Under the 1943 Wagner–Murray–Dingell bill, General Motors would pay 6% of her wages up to $3000 into the social insurance trust fund for retirement, disability, unemployment, and health insurance. An identical 6% would be taken out of Elena's check for the same purpose. One-fourth of this total amount ($90) would be dedicated to the health insurance portion of social security. If Elena or her children became sick, the social insurance trust fund would reimburse their doctor and hospital.
Edgar Peoples, in his 70s, would also receive health insurance under the Wagner–Murray–Dingell bill, because he was a social security beneficiary.
Elena's younger brother Marvin was permanently disabled and unable to work. Under the Wagner–Murray–Dingell bill he would not have received government health insurance unless his state added unemployed people to the program.
As discussed in , government-financed health insurance can be divided into two categories. Under the social insurance model, only those who have paid into the program, usually through social security contributions, are eligible for the program's benefits. Under the public assistance (welfare) model, eligibility is based on a means test; those below a certain income may receive assistance. In the welfare model, those who benefit may not necessarily contribute, and those who do contribute (usually through taxes) may not benefit (). The Wagner–Murray–Dingell bill, like the AALL proposal, was a social insurance proposal. Working people and their dependents were eligible because they made social security contributions, and retired people receiving social security benefits were eligible because they paid into social security prior to their retirement. The permanently unemployed were not eligible and were required to seek charity care at public hospitals or to have their care paid for by a state welfare program.
In 1945, President Harry S Truman, in embracing the general principles of the Wagner–Murray–Dingell legislation, became the first U.S. president to strongly support national health insurance. After Truman's surprise election in 1948, the AMA organized a massive and expensive campaign to defeat the Wagner–Murray–Dingell bill. The AMA succeeded, and in 1950 national health insurance returned to obscurity (; ).
Medicare & Medicaid
In the late 1950s, less than 15% of the elderly had health insurance (see ), and a strong social movement clamored for the federal government to come up with a solution. The Medicare law of 1965 took the Wagner–Murray–Dingell approach to national health insurance and narrowed it to coverage of people over 65 years of age. Medicare was financed through social security contributions, federal income taxes, and individual premiums. Congress also enacted the Medicaid program in 1965, a public assistance or "welfare" model of government insurance that covered a portion of the low-income population. Medicaid was paid for by general federal and state taxes.
In 1966, at age 66, Elena Peoples was automatically enrolled in the federal government's Medicare Part A hospital insurance plan, and she chose to sign up for the Medicare Part B physician insurance plan by paying a $3 monthly premium to the Social Security Administration. Elena's son, Tom, and Tom's employer helped to finance Medicare Part A; each paid 0.5% of wages (up to a wage level of $6600 per year) into a Medicare trust fund within the social security system. Elena's Part B coverage was financed in part by federal income taxes and in part by Elena's monthly premiums. In case of illness, Medicare would pay for most of Elena's hospital and physician bills.
Elena's disabled younger brother, Marvin, age 60, was too young to qualify for Medicare in 1966. Marvin instead became a recipient of Medicaid, the federal–state program for certain groups of low-income people. When Marvin required medical care, the state Medicaid program paid the hospital, physician, and pharmacy, and a substantial portion of the state's costs were picked up by the federal government.
Medicare is a social insurance program, requiring individuals or families to have made social security contributions to gain eligibility to the plan. Medicaid, in contrast, is a public assistance program that does not require recipients to make contributions, but instead is financed from general tax revenues. Because of the rapid increase in Medicare costs, the social security contribution has risen substantially. In 1966, Medicare took 1% of wages, up to a $6600 wage level (0.5% each from employer and employee); in 2004, the payments had risen to 2.9% of all wages. The Part B premium has jumped from $3 per month in 1966 to $66.60 per month in 2004.
The 1970 Kennedy Bill & the Single-Payer Plan of the 1990s
Many people felt that Medicare and Medicaid were a first step toward national health insurance. European nations started their national health insurance programs by covering a portion of the population and later extending coverage to more and more people. Medicare and Medicaid seemed to fit into that tradition. Shortly after Medicare and Medicaid became law, the labor movement, Senator Edward Kennedy of Massachusetts, and Representative Martha Griffiths of Michigan drafted legislation to cover the entire population through a national health insurance program. The 1970 Kennedy–Griffiths Health Security Act followed in the footsteps of the Wagner–Murray–Dingell bill, calling for a single federally operated health insurance system that would replace all public and private health insurance plans ().
Under the Kennedy–Griffiths 1970 Health Security Program, Tom Peoples, who worked for Great Books, a small book publisher, would continue to see his family physician as before. Rather than receiving payment from Tom's private insurance company, his physician would be paid by the federal government, perhaps through a regional intermediary. Tom's employer would no longer make a social security contribution to Medicare (which would be folded into the Health Security Program) and would instead make a larger contribution of 3% of wages up to a wage level of $15,000 for each employee. Tom's employee contribution was set at 1% up to a wage level of $15,000. These social insurance contributions would pay for about 60% of the program; federal income taxes would pay for the other 40%.
Tom's Uncle Marvin, on Medicaid since 1966, would be included in the Health Security Program, as would all residents of the United States. Medicaid would be phased out as a separate public assistance program.
The Kennedy–Griffiths Health Security Act went one step further than the AALL and Wagner–Murray–Dingell proposals: It combined the social insurance and public assistance approaches into one unified program. In part because of the staunch opposition of the AMA and the private insurance industry, the Health Security Program went the way of its predecessors: political defeat.
In 1989, the Physicians for a National Health Program offered a new government-financed national health insurance proposal. The plan came to be known as the "single-payer" program, because it would establish a single government fund within each state to pay hospitals, physicians, and other health care providers, replacing the current multipayer system of private insurance companies and HMOs (). Several versions of the single-payer plan were introduced into Congress in the early 1990s, each bringing the entire population together into one health care financing system, merging the social insurance and public assistance approaches ().
Table 15–2. Categories of National Health Insurance Plans.


1. Government-financed health insurance plans Money is collected through taxes or premiums by a public or quasi-public fund that reimburses health care providers.
2. Employer-mandated private health insurance plans The government requires employers to pay for all or part of private health insurance policies for their employees.
3. Individual-mandated private health insurance plans The government requires individuals to purchase private health insurance, with subsidies for low-income people.
4. Mixed plans Government-financed insurance for the elderly and the poor, employer-mandated private insurance for the employed and their dependents, individual-mandated private insurance for people without employment.



Employment-Based National Health Insurance
In response to Democratic Senator Edward Kennedy's introduction of the 1970 Health Security Act, President Richard M. Nixon, a Republican, countered with a plan of his own, the nation's first employment-based, privately administered national health insurance proposal (). For 3 years, the Nixon and Kennedy approaches competed in the congressional battleground; however, because most of the population was covered under private insurance, Medicare, or Medicaid, there was relatively little public pressure on Congress. In 1974, the momentum for national health insurance collapsed, not to be seriously revived until the 1990s.
The essence of the Nixon proposal was the employer mandate, under which the federal government requires (or mandates) employers to purchase private health insurance for their employees.
Tom Peoples' cousin Blanche was a receptionist in a physician's office in 1971. The doctor did not provide health insurance to his employees. Under Nixon's 1971 plan, Blanche's employer would be required to pay 75% of the private health insurance premium for his employees; the employees would pay the other 25%.
Blanche's boyfriend, Al, had been laid off from his job in 1970 and was receiving unemployment benefits. He had no health insurance. Under Nixon's proposal, the federal government would pay a portion of Al's health insurance premium.
No longer was national health insurance equated with government financing. Employer mandate plans preserve and expand the role of the private health insurance industry, while government-financed plans reduce or elim-inate private health insurance. Thus the Nixon proposal changed the entire political landscape of national health insurance, moving it toward the private sector. In later years, Senator Kennedy embraced the employer mandate approach himself, fearing that the opposition of the insurance industry and organized medicine would kill any attempt to legislate government-financed national health insurance.
During the 1980s and 1990s, the number of people in the United States without any health insurance rose from 25 to over 40 million (see ). About three-quarters of the uninsured were employed or were dependents of employed persons. The rapidly rising cost of health insurance premiums made insurance unaffordable for many businesses.
In response to this crisis in health care access, President Bill Clinton submitted legislation to Congress in 1993 calling for universal health insurance through an employer mandate. Like the proposal introduced by President Nixon, the essence of the Clinton plan was the requirement that employers pay for most of their employees' private insurance premiums ().
A variation on the employer mandate type of national health insurance is the voluntary approach. Rather than requiring employers to purchase health insurance for employees, employers are given incentives such as tax credits to cover employees voluntarily. However, the attempt of some states to implement the voluntary approach has failed to significantly reduce the numbers of uninsured workers.
Another voluntary innovation is the medical savings account (MSA) proposal, backed by the AMA, conservative Republicans, and non–managed care private insurers. MSAs can be offered by employers as an alternative to other coverage. For example, an employer may pay a modest premium for a family insurance policy with a $4000 per year deductible and place $1800 per year in the family's MSA. The family must pay the first $4000 of medical expenses each year and can use the money in the MSA to help make these payments. Families using no health services may keep the money for future years. The supporters of MSAs wish to make them tax deductible if the money is used for medical expenses. MSA proponents contend that patients would exercise greater restraint in their health care expenditures if they could financially benefit from seeking less health care. The Health Insurance Portability and Accountability Act of 1996, the Balanced Budget Act of 1997, and the Medicare Prescription Drug Improvement and Modernization Act of 2003 included legislative language allowing tax-deductible MSAs (also called health savings accounts or HSAs) for some employees and Medicare beneficiaries. However, few people have entered these programs.
Healthy people would tend to choose MSAs because they could keep the MSA money not spent on health care, whereas people with chronic illnesses would be unlikely to choose MSAs because the funds in the MSA would not cover their medical expenses below the deductible. If millions of healthy health insurance plan enrollees switched to MSAs, leaving health plans with a sicker and costlier population, health plans would be forced to raise their premiums by an estimated 60% (). MSAs divide the population into low-risk and high-risk pools; low-risk people no longer would subsidize high-risk people, and the latter would see an unprecedented increase in their health insurance costs. Since the great majority of health care expenses are concentrated in a small number of acutely or chronically ill people, the incentive created by MSAs for families to restrain health care services would have little impact on the nation's health care costs.
Individually Purchased National Health Insurance
In 1989, a new species of national health insurance appeared, sponsored by the conservative Heritage Foundation: an individual mandate. Just as many states require motor vehicle drivers to purchase automobile insurance, the Heritage plan called for the federal government to require (or mandate) all U.S. residents to purchase individual health insurance policies. Tax credits would be made available on a sliding scale to individuals and families too poor to afford health insurance premiums (). Some liberal organizations and policy analysts, although opposing converting the entire system into a program of individual insurance mandates, have supported individual mandates as a piece of a multifaceted approach to covering the uninsured. An individual mandate with tax credits would target a portion of the uninsured population, such as self-employed persons, while government programs would be expanded for other uninsured people, and employers would be expected to sponsor coverage for the majority of the population ().
Tom Peoples received health insurance through his employer, Great Books. Under the Heritage plan, Tom would be legally required to purchase health insurance for his family. Great Books would be obligated to offer a health plan to Tom and his coworkers but would not be required to contribute anything to the premium. If Tom purchased private health insurance for his family at a cost of $4000 per year, he would receive a tax credit of $800 (ie, he would pay $800 less in income taxes). Tom's Uncle Marvin, formerly on Medicaid, would be given a voucher to purchase a private health insurance policy.
With individual mandate health insurance, the tax credits vary widely in their amount and characteristics. In a generous case, a family would receive a $5000 tax credit, subsidizing most of its health insurance premium. If the family's tax liability is less than the value of the tax credit, the government would pay the family the difference between the family's tax liability and $5000. A serious problem is that many employers providing job-based insurance might stop offering the insurance, knowing that their employees could receive the individual tax credits. Since many insured—in addition to uninsured—people would receive tax credits, the proposal's cost per newly insured person would be $4900, considerably higher than the $2100 (calculated in year 2000) cost of an average individual health insurance policy. Most tax credit proposals, for example, the Bush Administration's plan, provide considerably less money than the above example (). A well-designed analysis of the tax credit concept found that nearly all uninsured people, particularly older and sicker people, would pay higher health care costs if they took advantage of currently proposed tax credits than if they remained uninsured ().
Secondary Features of National Health Insurance Plans
The primary distinction among national health insurance approaches is the mode of financing: government versus employment-based versus individual-based health insurance. A plan may contain a mixture of these modes; eg, the 1993 Clinton plan merged government financing (Medicaid and Medicare) for the poor and the elderly, an employer mandate for working people, and an individual mandate for those without jobs who are ineligible for Medicare or Medicaid. However complex a national health insurance plan may be, it can always be broken down into one or more of these three financing modes.
The complexity of national health insurance plans frequently stems from their secondary characteristics, ie, those features of the plan that modify or add to the basic financing mechanism (). What are some of these secondary features?
Table 15–3. Features of National Health Insurance Plans.


Primary feature
How the plan is financed Government, employer mandate, or individual mandate?
Secondary features
Benefit package Which services are covered?
Patient cost sharing Does the plan require deductibles or copayments, or both?
Effect on existing programs Do Medicare, Medicaid, and private insurance arrangements continue in their current form?
Cost containment Are cost controls introduced, and, if so, what type of controls (see )?


Benefit Package
Elena Peoples is a beneficiary of Medicare Parts A and B, which cover her for most hospital and physician services, but not for outpatient medications or long-term care. Elena's brother Marvin receives Medicaid, which pays for most hospital and physician services plus many outpatient medications and long-term care.
An important feature of any health plan is its benefit package. Most national health insurance proposals cover hospital care, physician visits, laboratory, x-rays, physical and occupational therapy, inpatient pharmacy, and other services usually emphasizing acute care. Outpatient medications and long-term care are often not included, and mental health services may be covered with a restricted number of visits per year. Chiropractic care and acupuncture may or may not be part of the package. In the past, many private insurance plans and Medicare failed to cover routine preventive care, but most HMOs and most national health insurance proposals now include clinical preventive services.
Patient Cost Sharing
In 1972, Tom Peoples turned on his television and caught a debate between advocates of the Kennedy and Nixon national health insurance plans. One big difference between the plans attracted his attention. Under the Nixon plan, he would pay 25% of his insurance premium, the entire cost of the first 2 days of the hospital bill, a $100 deductible for each family member on doctor bills, and 25% coinsurance on all medical bills up to $5000 in a year. In contrast, the Kennedy plan would take about 1% of Tom's wages in a social security tax, but charge Tom no deductibles or coinsurance payments when he needed care.
Patient cost sharing involves payments made by patients at the time of receiving medical care services. It is sometimes broadened to include that portion of health insurance premiums paid by the employee rather than by the employer. Naturally, the breadth of the benefit package influences the amount of patient cost sharing: The more services not covered, the more patients must pay out of pocket. Many plans impose patient cost sharing requirements on covered services, usually in the form of deductibles (a lump sum each year), coinsurance payments (a percentage of the cost of the service), or copayments (a fixed fee, eg, $10 per visit or per prescription). In general, proposals based on individual mandates or tax credits have high levels of cost-sharing, eg, a $5000-per-year deductible; government-financed plans tend to reduce patient cost sharing.
Effects on Medicare, Medicaid, & Private Insurance
As a senior citizen in 1993, Elena Peoples always worried about her Medicare plan. There was so much talk about cutting this and cutting that out of Medicare. In the publications she received from senior citizen organizations, Elena read that some plans, like the single-payer plan, would eliminate Medicare and Medicaid, making them part of a single universal health care system. Other plans would keep Medicare separate. President Clinton's plan was somewhere in between, with the option for states to fold Medicare into purchasing cooperatives. She did not know which she preferred, but was worried about any possible change.
Any national health insurance program must interact with existing health care programs, whether Medicare, Medicaid, or private insurance plans. Single-payer proposals make the most far-reaching changes: Medicare, Medicaid, and private insurance are eliminated in their current form and are melded into the single insurance program. Individual mandates would have a major impact on private insurance: By moving from employment-based insurance (the dominant current financing mode) toward individually mandated insurance, major disruptions would take place in the health insurance market. Medicare and Medicaid would be less affected. Employer mandates, which extend rather than supplant employment-based coverage, tend to have the least effect on existing dollar flow in the health care system.
Cost Containment
Tom Peoples' son Chris was doing a report for his 1994 high school civics class; health care costs was his topic. Confused by the rhetoric, he talked to his dad one night. "I remember a debate back in 1972," offered Tom. "It was the Nixon people against Ted Kennedy's people. The Nixon folks said there were only two ways to keep costs down: Make people pay more out of pocket, and pay doctors to keep you healthy through those things called HMOs. The Kennedy people said that wouldn't work. You needed to slap a budget on the whole health care system and make the patients, doctors, and hospitals live within that budget, because that's all the money there's going to be."
"That sounds just like what they're saying in 1994," ventured Chris. "The HMO advocates say that if people have to pay more for their health insurance premiums, they'll choose cheaper plans. And with a big coinsurance, they'll go to the doctor less. The cheapest health plans will be HMOs that stop paying doctors more for doing more tests and more surgeries. Health plans will compete by offering cheaper premiums than other plans and the costs will go down. They call it 'managed competition.' "
"Sounds like a modern version of the Nixon philosophy," interjected Tom. "But does anyone nowadays say what Kennedy was saying?"
"You bet," said Chris. "The single-payer people argue that managed competition has never been tried anywhere and we need a global budget to control health care costs. But the managed competition folks say a global budget means rationing and government bureaucracy. I don't know what I think."
By increasing people's access to medical care, national health insurance has the capacity to cause a rapid increase in national health expenditures, as did Medicare and Medicaid (see ). By the 1990s, policymakers recognized that an increase in access must be balanced with measures to control costs.
Different national health insurance proposals have vastly disparate methods of containing costs. Individual- and employment-based proposals tend to use patient cost sharing and managed competition as their chief cost control mechanisms (see ). In contrast, government-financed plans look more to global budgeting to keep expenditures down. Single-payer plans, which concentrate health care funds in a single public insurer, can more easily establish a global budgeting approach than can plans with multiple private insurers.
Which National Health Insurance Plan Is Best?
Historically, in the United States the government-financed road to national health insurance—now called the single-payer proposal—is the oldest and most traveled of the three approaches. Advocates of government financing cite its universality: Everyone is insured in the same plan simply by virtue of being a U.S. resident. Its simplicity creates a potential cost saving: The 25% of health expenditures spent on administration could be reduced, thus making available funds to extend health insurance to the uninsured. Employers would be relieved of the burden of providing health insurance to their employees. Employees would regain free choice of physician, choice that is being lost as employers are choosing which health plans (and therefore which physicians) are available to their workforce. Health insurance would be delinked from jobs, so that people changing jobs or losing a job would not be forced to change or lose their health coverage. Single-payer advocates, citing the experience of other nations, argue that cost control only works when all health care moneys are channeled through a single mechanism with the capacity to set budgets (). While opponents accuse the government-financed approach as an invitation to bureaucracy, single-payer advocates point out that private insurers have average administrative costs of 14%, far higher than government programs such as Medicare with its 2% administrative overhead. A cost-control advantage intrinsic to tax-financed systems in which a public agency serves as the single payer for health care is the administrative efficiency of collecting and dispensing revenues under this arrangement.
Single-payer detractors charge that one single government payer would have too much power over people's health choices, dictating to physicians and patients which treatments they can receive and which they cannot, resulting in waiting lines and the rationing of care. Opponents also state that the shift in health care financing from private payments (out-of-pocket, individual insurance, and employment-based insurance) to taxes would be unacceptable in an antitax society. Moreover, the United States has a long history of politicians and government agencies being overly influenced by wealthy private interests, and this has contributed to making the public mistrustful of the government.
The employer mandate approach—requiring all employers to pay for the health insurance of their employees—is seen by its supporters as the only way to raise enough funds to insure the uninsured without massive tax increases (though employer mandates have been called hidden taxes). Because most people under age 65 now receive their health insurance through the workplace, it may be less disruptive to extend this process rather than change it.
The conservative advocates of individual-based insurance and the liberal supporters of single-payer plans both criticize employer mandate plans, saying that forcing small businesses—many of whom do not insure their employees—to shoulder the fiscal burden of insuring the uninsured is inequitable and economically disastrous; rather than purchasing health insurance for their employees, many small businesses may simply lay off workers, thereby pitting health insurance against jobs. Moreover, because millions of people change their jobs in a given year, job-linked health insurance is administratively cumbersome and insecure for employees, whose health security is tied to their job. Finally, critics point out that under the employer mandate approach, "Your boss, not your family, chooses your doctor"; changes in the health plans offered by employers often force employees and their families to change physicians, who may not belong to the health plans being offered.
Advocates of the individual mandate assert that their approach would free employers of the obligation to provide health insurance, and would grant individuals a stable source of health insurance whether they are employed, change jobs, or become disabled. There would be no need either to burden small businesses with new expenses and thereby disrupt job growth, or to raise taxes substantially. While opponents argue that low-income families would be unable to afford the mandatory purchase of health insurance, supporters claim that income-related tax credits are a fair and effective method to assist such families ().
The individual mandate approach is criticized as inefficient, with each family having to purchase its own health insurance. To enforce a requirement that every person buy coverage would be even more difficult for health insurance than for automobile insurance. Moreover, to reduce the price of their premiums, many families would purchase low-cost, high-deductible coverage with a scanty benefit package (called by some "bare-bones insurance"), thereby leaving lower-income families with potentially unaffordable out-of-pocket costs. The voluntary tax credit approach would insure a small number of the uninsured at great cost.
Regrettably, the national health insurance debate will not be decided by logic or rational persuasion. In 1994, most observers predicted that Congress, with the leadership of President Clinton, would legislate some form of national health insurance or would at least take a major step toward universal coverage. No legislation was passed. The public was besieged with, and confused by, slick and often inaccurate television advertisements produced by such powerful interest groups as the Health Insurance Association of America. Special-interest groups spent over $100 million to influence the outcome of the legislation ().
Health care is a trillion dollar-plus business, and those dollars represent income or profits for health insurers, HMOs, hospitals, nursing homes, pharmaceutical manufacturers, physicians, and other health caregivers. At the same time, these billions represent costs for powerful business interests that pay a portion of their employees' health insurance. Every stakeholder in the health care economy has a keen interest in preserving or bettering their financial position. In the money-driven political environment in the United States, powerful interest groups will play a major role in shaping any future national health insurance program.
To overcome the moneyed interest groups would require an electorate mobilized in support of a particular national health insurance plan, but such an electorate does not exist in the United States. In 2000, 56% of the public supported national health insurance financed by tax money, down from 66% in 1992 (). In the same year, only 30% trusted the government to do the right thing (). The strength of the public's antitax and antigovernment sentiments erodes support for the overall concept of national health insurance.
The concept of national health insurance rests on the belief that everyone should contribute to finance health care and everyone should benefit. People who pay more than they benefit are likely to benefit more than they pay 10 years down the road when they face an expensive health problem. The achievement of national health insurance in the United States may depend on the development of such community-minded attitudes.
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