The rationing debate last played out during the recession in the
early '90s, when states settled on managed care to rein in
health-care costs. But managed-care cost controls later were eased
amid a public backlash. Meanwhile, during the boom times of the
later '90s, states added populations and optional services to their
Medicaid programs, the federal-state health insurance program for
the poor.
The result: State health-care costs are growing at their fastest
rate in a decade -- 9% a year, according to the Kaiser Commission on
Medicaid and the Uninsured, a Washington, D.C.-based
health-policy institute. At the same time, states are struggling
with budget shortfalls totaling an estimated $15 billion. And the
Urban
Institute, a Washington, D.C., think tank, warns that if
the nation's unemployment rate rises to, say, 6.5% (a little more
than a percentage point), states may have to absorb nearly two
million more people into Medicaid.
Congress has a unique opportunity, at
a time of immediate need, to change federal tax policy governing
health insurance coverage. It can give displaced workers the
assistance they need to acquire private health insurance for
themselves and their families. It would also change the dynamics of
current health care policy and establish patient choice and market
competition in the provision of health insurance.
However, had the terrorist attacks of September 11 not happened,
Congress would still be wise to address what is a changing world
for many Americans.
During the economic boom of the late '90s, unemployment was at
4.2 percent; it's lowest level in 29 years. This boom resulted in
strong growth, low unemployment, low inflation, high corporate
profits and soaring stock prices.
Fed Chairman Alan Greenspan
delivered a speech to the 35th Annual Conference on Bank
Structure and Competition in Chicago crediting technology as the
impetus for the unprecedented boom.
That rise in technology also accelerated the growth of two
classes of workers: the self-employed independent contractor and
the temp worker. By mid-1999 they comprised more than 25 million
workers. The new, flexible economy shattered the old arrangement of
spending an entire career with one company.
In this new economy temp workers, or contract employees are
usually not given benefits. Workers are left to purchase health
care on the individual market, which is usually very expensive
ranging from $500 to $700 a month. Most cannot afford too. The
self-employed fare slightly better being able to deduct up to 50
percent of their health care costs.
Establishing patient choice and market competition would be a
boon to the health-care industry, the economy, and individual
rights.
Other signs of a changing labor market:
Daniel Pink, a former speechwriter for Vice President Gore who
now runs FreeAgentNation.com,
a hub of information for all types of non-traditional workers,
says, "Freedom is a path to security, not a detour from it."
This is a great opportunity. It should not be missed.