Lack of health insurance coverage is a large and growing problem for millions of American families. Rising health care costs and economic insecurity continue to threaten the bedrock of the health insurance system - employer-sponsored coverage - while states’ fiscal situations and the escalating federal deficit complicate any efforts at reform. Providing health insurance coverage to the millions of uninsured remains a major health care challenge for the nation and understanding the current health insurance environment, who the uninsured are, and why they are uninsured is critical when considering health care reform. This paper aims to define the problem of the uninsured, providing an overview of the uninsured in America and the roles and limits of private and public insurance. Following this discussion, the paper describes the current health insurance environment and examines the prospects for improving coverage.

Until very recently, the lack of health insurance has been viewed primarily as a problem of financial risk for uninsured individuals. This article documents far broader adverse effects, drawn from the work of the Institute of Medicine (IOM) Committee on the Consequences of Uninsurance. It also synthesizes the Committee’s key findings, conclusions, and recommendations.

In early 2004, following 3½ years of study, the IOM Committee on the Consequences of Uninsurance recommended that “...the President and Congress develop a strategy to achieve universal insurance coverage and establish a firm and explicit schedule to reach this goal by 2010.” The Committee presented 5 principles to be used to assess various proposals for extending coverage or to guide the design of a new strategy, specifying that health care coverage should be universal, continuous, affordable to individuals and families, and affordable and sustainable for society.

American policymakers and health policy analysts have a love-hate relationship with job-based health insurance. The policy press routinely runs articles about the demise of the current system of voluntary employer-sponsored health insurance coverage. Conservatives argue that it ought to be replaced with individually-purchased insurance, such as tax-favored spending accounts (see Mark Pauly’s article this issue). Liberals assert that government insurance ought to supplant it.

Meanwhile, as the debate rages on about the future of employer coverage, states and the federal government pass legislation buttressing and building on the existing employment-based system. Most recently, California has passed an employer mandate requiring employers to cover their workers (and many other states have contemplated similar legislation) and Maine has adopted a universal coverage initiative that includes a voluntary small employer insurance program offered through a state agency (Dirigo Health Care).

Not so very long ago - in historical terms - the politics of Medicare were thought to be stable and well-established. Medicare’s 1965 enactment culminated an epochal political battle that spanned fifteen years and involved mass mobilization, millions of dollars in lobbying expenditures (including the development of such techniques as “grass-roots lobbying” and targeted direct mail), and bitter partisan controversy. By the late 1980s those seemed to be distant birthing pains long since overshadowed by the program’s robust health and popularity. Medicare politics had devolved into a model of pluralist “normalcy” in which a relatively specialized and autonomous group of subject-matter experts in the federal bureaucracy, the Congress, and affected interest groups largely made policy by negotiating among themselves, primarily on issues of provider reimbursement. Even the extraordinary events involving the 1988 enactment of the “Medicare Catastrophic Coverage Act” legislation (which, among other things, established good coverage for prescription drugs), and the ensuing public firestorm that led to its partial repeal in 1989, could be seen as an aberrational deviation from a more placid pattern.

If the evolution of American health policy (in both its purposeful and its accidental forms) is compared to the children’s game of Crack the Whip, then there is no question that the Medicaid program is the tail of the line. When those at the head of the line (e.g., employer-based insurance, Medicare, managed care plans, and pharmaceutical companies) start to move. Medicaid receives whatever shocks and unintended consequences result, and when the line “begins to run wildly in any direction,” it receives them faster and harder than the players at the center.

Shocks also come from other sources. When the economy slumps, an epidemic arises, or a path in another part of the system becomes a cul-de-sac, new twists and turns occur, with Medicaid absorbing much of the change.

Millions of Americans are dependent on what is often called the “safety net.” These loosely-organized networks of health and social service providers serve the many Americans who are uninsured, dependent on public coverage, or for a variety of reasons unable to access other private systems of care. The Institute of Medicine (IOM) report, America’s Health Care Safety Net: Intact but Endangered, called attention to both the fragility and the resilience of this health care safety net. The IOM report underscored the critical importance of the safety net to the health and well-being of millions of individuals and called for efforts to strengthen it and improve the nation’s ability to monitor its viability. Given this central role, any health care reform efforts need to be fully informed by an understanding of what the safety net includes, how it is financed, and how it is responding to a series of challenges it now faces.

Even Americans who have only a vague knowledge of health policy know that the U.S. is different. We do not have “socialized medicine,” like our European or Canadian neighbors. We believe that health care is not rationed here, and that, unlike citizens of other nations, we do not have to wait in long queues when we need medical care. We believe that U.S. health care is the best in the world.

At the same time, the U.S. spends more on health care - both per capita and as percentage of gross domestic product (GDP) - than other nations do. One in six non-elderly Americans has no health insurance, and voluminous studies show that lack of health insurance has a dramatic effect on both access to care and on health status. Furthermore, on many of the most important indicators of population health, such as infant mortality and life expectancy, the U.S. scores worse than do other nations.

As indicated in the title, the focus of this essay is on where we should go from here and not the how, which is addressed by other authors in this issue. I am assuming that there is probably a general consensus as to where we should be heading with health care reform, but there may well be some strong differences as to how this can or should be attained.

In the summer of 1966, a year after the enactment of “Medicare,” I listened to Harry Becker, then the Executive Director of the New York Academy of Medicine, discuss the significance of the new health legislation and further changes that were likely in the near future. His analysis was that, after numerous attempts over many years, the United States was finally on the verge of implementing universal health insurance for all Americans. The next step would be health insurance for children, “Kiddicare.”

Health reform proposals tend to be rich with details and dimensions. The primary goal of health reform is typically to extend health coverage to people who lack it. Yet even the most similar of plans differ in terms of exactly who is targeted for assistance, the means by which assistance is delivered, and the type of health coverage promoted. Moreover, the Byzantine nature of the existing U.S. health system means that any reform plan can appear complex. The plan that aims for a new, simple health system will require radical changes to achieve it, while the plan that strives to be the least disruptive will have extensive rules that target assistance while maintaining the existing sources of coverage. Indeed, some have argued that the complexity inherent in meaningful reform is an impediment to reform itself.

Health care reform is an important issue in the 2004 presidential elections and is receiving serious attention from the Democratic and Republican candidates. Changes in the economy that fuelled increased productivity and depressed job growth have also shifted more of the costs of medical care and insurance onto employees. The rising costs of insurance premiums and health care are far outpacing the general inflation rate and workers’ wages. Meanwhile, state governments reacted to widening budget deficits from 2001 to 2003 by reducing Medicaid eligibility and benefits. These changes in employer-based health insurance and government policy have contributed to the largest rise in the share of Americans without health insurance in a decade. In 2002, the uninsured numbered 43.6 million and, according to the Congressional Budget Office, 57 to 59 million non-elderly people are uninsured at some point over the course of a year.

Critics of the gaps in our nation’s health insurance decry the absence of a health insurance “system” and the resulting “patchwork” of private and public insurance that leaves so many Americans unprotected. There is no question that these gaps are unconscionable; but they are also no accident. They are the result of policy and political choices with substantial consequences for those who remain uncovered. In my view, (based on experience as well as the excellent scholarship of others) the fundamental political barrier to universal coverage is that our success in insuring most of the nation’s population has “crowded out” our political capacity to insure the rest. This paper will explain how we arrived at the mix of private and public insurance we now have, how that mix impedes efforts to achieve universal coverage, and how “crowd-out” affects strategy for improving coverage in the future.

Despite a consensus across the political spectrum that the problem of the chronically uninsured is in dire need of solution, little progress has heen made. Public spending goes to topping up coverage for the elderly, already heavily subsidized under Medicare, or helping people temporarily without insurance because of international trade dislocations, so that it is clear that something is lacking in the case for significantly reducing the number of uninsured persons. In this paper I suggest that there have been two missing ingredients: a strategy for breaking the political deadlock around this issue, and information about the benefits of coverage sufficient to persuade kindly but skeptical taxpayers that they should be willing to pay to help solve this problem.

This article begins with a discussion of these two problems. It then outlines a strategy based on income-related or conditioned refundable tax credits for private and public insurance, coupled with a plan to assemble persuasive information that may move things forward.

Human clinical research trials, by which corporations, universities, and research scientists bring new drugs, devices, and procedures into the practice and marketplace of medicine, have become a huge business. The National Institutes of Health (NIH) doubled its spending over the past five years, while in the private sector the top twenty pharmaceutical companies have more than doubled their investment in research and development over a roughly comparable period. To date, some twenty million Americans have participated in clinical research trials that now are as common in the private practice setting as in academia.

For many years human clinical trials received relatively little public attention. In the wake of several well-publicized research abuses, Congress created in 1974 the National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research to formulate recommendations to protect human research subjects. The Commission’s 1979 Belmont Report helped to guide the Institutional Review Boards (IRBs) that review the ethics of federally funded research.

Health care costs have been rising steadily in most industrialized countries. These increases are driven primarily by technological advances and, to a lesser degree, by aging of the population. Many factors make it unlikely that market forces alone will limit increases in the costs of health care. These unremitting increases make health care rationing appear both necessary and inevitable.One of the least controversial mechanisms for rationing could be to allow patients to make their own choices as to which kinds of care they would be willing to forgo. This is appealing because it preserves individual freedom of choice regarding health care in a way that other rationing mechanisms often do not. Rationing by patient choice, however, can only happen if patients recognize that resources are limited and need to be conserved, and are willing to forgo marginal benefits.

The number and the scale of transboundary public health concerns are increasing. Infectious and non-communicable diseases, international trade in tobacco, alcohol, and other dangerous products as well as the control of the safety of health services, pharmaceuticals, and food are merely a few examples of contemporary transnationalization of health concerns. The rapid development and diffusion of scientific and technological developments across national borders are creating new realms of international health concern, such as aspects of biomedical science, including human reproductive cloning, germ-line therapy, and xenotransplantation, as well as environmental health problems, including climate change, biodiversity loss, and depletion of the ozone layer. Growth in international trade and travel, in combination with population growth, has served to increase the frequency and intensity of health concerns bypassing or spilling over sovereign boundaries.

Although health has traditionally been seen an area of limited multilateral cooperation, there is growing awareness that contemporary globalization has led to the proliferation of cross border determinants of health status and is undermining the capacity of nation states to protect health through domestic action alone.

Government’s responsibility to safeguard the public’s health through law has been part of the social contract since ancient times. Cicero declared salus populi suprema lex esto - “the safety of the people is the supreme law”. Disraeli proclaimed that protecting the public’s health is the first duty of the statesman. Of the ten most important public health achievements of the 20th century in the US., seven are directly related to legal interventions, including legislative interventions. As new and existing risks to health risks emerge internationally, governments have consistently used the law as a tool to define the goals of public health, direct public health authorities to accomplish these goals, and equip them with the power and resources to do so.

Tobacco control represents a salient example of how law can be used to ensure health. Like other public health laws, tobacco control laws have historic grounds. Government and other policymakers have enacted laws to control tobacco use for hundreds of years. The Russian church forbade tobacco use as an “abomination.”