Consumer Preferences for Health Care Reform Options

Article excerpt

This study uses the 1992 Health and Retirement Study to examine consumer preferences for four health care reform options: tax-financed national health insurance, personally subsidized Medicare extensions, publicly subsidized nursing home insurance, and tax credits for health insurance purchases. Males, non-Caucasians, the self-employed, those in excellent health, and those who reside in the Northeast favor national health insurance, while those with high levels of liquid and non-liquid assets tend to disfavor it. Males and those with higher expectations of living in nursing homes tend to favor personally subsidized Medicare extensions to cover nursing homes and home health care. Those with higher expectations of living in nursing homes also favor publicly subsidized nursing home insurance. Relatively little support for subsidized nursing home insurance is found among males and those with high levels of liquid and non-liquid assets. The self-employed tend to support tax credits for health insurance premiums.

Many alternatives for financing health care in the United States have been proposed. Currently, modifications of the radical health care financing reforms of the 1960s, Medicare and Medicaid, are in question. The feasibility of a universal health care plan for all persons in the nation is a primary theme of the continuing debate over health care reform. While there is a general consensus that reform is necessary, the nature of that reform is unclear.

Health insurance coverage is currently the primary means for access to medical services when unexpected medical crises arise and for everyday health concerns. The high costs of health insurance and medical services has led to reliance on (1) employer-provided health insurance coverage, and (2) federal- and state-funded Medicare and Medicaid programs. However, increasing numbers of people find themselves without access to medical services (Posey 1995). This lack of access to medical services is due partially to the inability of employers or federal and state governments to finance the rising costs of health care. The key question is, "What options are available for financing health care?"

In September 1995 proponents of Medicaid reform proposed that the federal government reduce its obligations to finance health care, cutting $182 billion in costs by reforming the Medicaid program (Haveman 1995). The changes suggested were (1) to give nursing homes more flexibility to discharge senior citizens without their consent; (2) to allow states to require spouses of nursing home residents to sell their homes, cars, and other assets to finance the nursing home care; (3) to require adult children to pay for the nursing home care of their parents; (4) to institute annual federal and state block grants to replace the current system of open-ended federal matching; and (5) to encourage states to develop innovative ways of providing services for low-income persons.

At the same time reformations were proposed, efforts to reform Medicare had begun. Dollar amounts for possible savings from Medicare reform were estimated at $270 billion over a seven-year period (Pianin and Rich 1995). The proposed alternatives of Medicare reform included five specific changes: (1) minimizing the growth of reimbursements to medical providers, (2) increasing premiums for physician insurance and increasing the annual deductibles of Medicare beneficiaries, (3) allowing people insured by Medicare to switch to managed care plans, (4) increasing the age of eligibility from 65 to 67 years, and (5) increasing premiums according to income for persons with incomes greater than $100,000.

Changes in Medicare and Medicaid have been fragmented, and there were short-term strategies for reforming the health care system. These changes typically addressed the needs of particular subgroups of the population, such as the elderly and poor. Because political support for completely overhauling the health care system is difficult to obtain, comprehensive reform of health care has been a secondary objective. …