Think again

The ABCs of our health care crisis

By TIM NESBITT

We have more jobs in Oregon than ever before. We also have more Oregonians without health insurance than ever before.

Maybe this is why pollsters report that health care has supplanted jobs and education as the Number One concern of Oregonians.

Our health care crisis is two-fold. Too many people don’t have insurance, and those who have it are paying more than they can afford in premiums, co-pays and deductibles. These two problems are connected, and they’re both problems that our government is going to have to solve.

The jobs problem was different. Three years ago, politicians argued over the best ways to grow jobs and help Oregon climb out of the recession, even though there was not a lot that the state could do to accelerate the pace of economic recovery in the short term. Some efforts helped at the margins. Gov. Kulongoski’s transportation package is producing the jobs that he promised. But, we gained jobs largely because of forces beyond the control of state government.

Yet, the same market forces that produced most of the new jobs during the past three years encouraged employers to strip those jobs of health benefits or shift more of their health care costs to their workers. Employers like Wal-Mart gain an economic advantage over their competitors, like Fred Meyer and Safeway, by chiseling on health benefits. The market is rewarding bad employers for doing the wrong thing and penalizing good employers for doing the right thing. This is why, for the almost two million Oregonians who get their health care from a job, the trends are not our friends. And this is why we need our government to step in.

Look at how our population is divided by health care coverage. For every 100 Oregonians:

A) 52 get their health care coverage from their jobs or a family member’s job.

B) 17 have no health insurance.

C) 11 are disabled or poor enough to qualify for the Oregon Health Plan.

D) 15 are seniors covered by Medicare.

E) 5 pay for their own health insurance.

Category A is shrinking and Category B is growing as employers abandon or reduce their support for health insurance. More than half of all Oregonians without health insurance come from households with a full-time worker. But Category C is shrinking too, because government is running out of money. And, as we pour more of our tax dollars into Category C, we tend to create more incentives for employers to abandon their health plans and tell their workers to sign up for government benefits. This is why some Category C solutions are not sustainable. Gov- ernment pays more, employers pay less, and then government has to pay more again to make up for declining employer support.

Given this scenario, we need to focus on boosting employer coverage in Category A, which could potentially cut in half the number of uninsured in Category B. One way to do that is to require that all employers above a certain size provide health care for their workers or pay into a state fund for health care. Another way: Government can help employers who provide good benefits by offering re-insurance against extraordinary catastrophic costs.

But government needs to supplement employer efforts as well. We just need to be smarter about how we use our tax dollars in Category C. We could expand coverage for children, more than 100,000 of whom are without insurance from their working parents, by raising cigarette taxes to broaden the Oregon Health Plan. Still, this idea, embraced by Kulongoski and a number of state lawmakers, could encourage more employers and workers to abandon health insurance for children, which is why it’s at best a temporary safety net.

California Congressman Pete Stark has a better idea: Expand Medicare (Category D, above) to cover all children. We could do this by increasing the Medicare payroll tax paid by employers and workers by one percent each. This would also help good employers who pay for full family coverage and reduce costs for working families who have to pay high premiums to cover their kids. If the federal government doesn’t do this, states can do it on their own.

The Oregon AFL-CIO drafted such a plan three years ago, estimating that a payroll tax of less two percent shared by employers and workers could guarantee health coverage for every child in Oregon.

These are just steps on the road to universal health care. But they are feasible and effective in the short term, and they will prove that government can help solve our health care crisis.

Plus, these steps lead logically to a more sustainable health care system in which employers finance health care for all working people and government provides health care through Medicare-style programs for the non-working population of seniors, children, the disabled and the unemployed. Such a system will be cheaper (by reducing administrative costs), fairer (by requiring equal support from all employers) and better (by covering everyone).

The only other alternative is Category E above: Pay for your own health insurance.

Tim Nesbitt is former president of the Oregon AFL-CIO. For more information, check out the Oregon AFL-CIO online at oraflcio.unions-america.com