Divergent views show what is at stake in outcome

“Health savings accounts will help [individuals] build wealth,” says Michael Cannon, director of health policy studies at the Washington, D.C.-based Cato Institute.

Cannon’s remark drew audible scoffs from the audience—state legislators, legislative staff and other interested parties, including the AFT and other AFL-CIO-affiliated unions attending the National Conference of State Legislatures’ Health Committee symposium on universal healthcare during the group’s annual meeting in July in Salt Lake City. Almost four dozen AFT leaders and staff attended the annual event during which legislative agendas for coming sessions are set.

“We were told 20 years ago that 401(k)s would build wealth,” John McDonough, executive director of Health Care for All, Massachusetts’ leading consumer health advocacy organization, shot back.

The exchange demonstrates the great divide between the two schools of thought on how to address the nation’s healthcare crisis. But more importantly, it reinforced the convictions of AFT delegates to the union’s national convention, held just one week before the annual meeting of state legislators, that their views were on target. Delegates overwhelmingly passed a resolution calling on the union to continue to build coalitions with other organizations and educate members about healthcare costs and access until a national health insurance plan is adopted in the United States.

Healthcare reform: Two schools of thought

Cannon, who opened his remarks by declaring that the Cato Institute “played no small role in the defeat of the Clinton health plan,” believes the solution to the healthcare crisis—the soaring cost of insurance and prescription drugs— is deregulation of the industry and the restoration of “market incentives.” Furthermore, he maintains that the United States should move to the “casualty model of health insurance” under which consumers would contract with insurance companies for specific coverages. “This will make consumers more price sensitive,” said Cannon, formerly a domestic policy analyst for the U.S. Senate Republican Policy Committee under Sen. Larry Craig (R-Idaho).

If President Bush is re-elected in November, the administration will continue its push for HSAs starting with the Federal Employees Health Benefits Program, Cannon noted. As for state legislatures, Cannon said they can “strengthen HSAs” by making consumers’ insurance premiums tax deductible.

McDonough, on the other hand, advocates for a single-payer system. But that, he said, “is not politically feasible” because it would require a stable revenue stream supported by taxes. Therefore, the former Massachusetts legislator said, “What we should try to emulate is getting everybody covered. Most [industrialized] nations have universal coverage with multipayer systems.”

About a dozen state legislatures, McDonough said, have done a lot on affordable coverage but noted a retrenchment during the state budget crisis in all states, except Hawaii. In 1982, Hawaii’s Legislature mandated all employers to insure all individual workers who work more than 20 hours a week. As a result, over 80 percent of workers in that state have employer-sponsored insurance.

As for HSAs—a priority of the Bush administration—McDonough called them “the latest ‘snake oil’ cure.” HSAs “are put forward as the salvation of the system,” but what they would really do is “stick workers with incredibly high health cost sharing,” McDonough said. The result? Not the price-conscious consumer, as Cannon maintained. Rather, McDonough said, healthcare consumers would forgo care, which could translate into higher rates of absenteeism from work, not to mention the risk of developing a more serious medical condition—meanwhile, infecting other people.

“In countries with universal coverage, governments are running the store,” said McDonough. In the United States, “there’s no one running the store, and that’s why people are looting it.”