Instead, risk-based subsidies -- paid out of general tax revenue -- should be used. Such an approach would ensure that high-risk patients get the care they need at an affordable price. At the same time, and equally welcome news, low-risk patients could see their insurance costs drop as their dollars are no longer required as a subsidy.
This approach, as outlined in a Council on Medical Service report approved by the House of Delegates during the AMA's Interim Meeting in November 2007, is consistent with the Association's plan for reducing the number of uninsured.
That plan has three pillars. First, it allows income-related, refundable tax credits or vouchers for the purchase of health insurance, which those with low incomes could receive in advance. Second, it lets individuals, rather than employers or governments, choose their coverage. Third -- and this is where risk-based subsidies come in -- it has fair rules of the game that include market regulations and protections for high-risk patients.
Risk-based subsidies would create incentives for insurers to cover high-risk patients by setting up high-risk pools, risk-adjustment funds or reinsurance arrangements that mitigate health plans' financial risk. Thus, plans wouldn't have an incentive to cherry-pick healthier patients, and could give high-risk patients lower rates as well.
The Council on Medical Services in 2003 had already stated that risk-based subsidies could be financed through general tax revenue, rather than premium surcharges. But their new report makes clear that those subsidies are preferred to existing ways of covering high-risk patients, and answers a question often raised about the AMA's individual-focused approach -- how would it address high-risk, high-cost patients?
Work is already under way to show that risk-based subsidies would make health coverage available to those patients. For example, at least 32 states operate high-risk pools, with at least five of those states operating demonstration projects funded through federal grants. The AMA has pledged its support to such projects.
Everyone, whatever their health situation, needs and deserves access to affordable health insurance. Risk-based subsidies, as part of the AMA's plan to cover the uninsured, will go a long way toward making sure that such access is secured.
What the AMA says here is, in my opinion, a good start. But it doesn't go far enough, since the proposal still focuses too much on individuals rather than on the collective. As opposed to the US, governments in other developed countries get this, which is why so many have opted to include everybody under a single public health care program, either for a province, such as Canada, or a country, such as France. In these countries the role of the government, other than administrating claims, consists of trying to lower the long-term mean of the outcome (that is, the costs). They do this by implementing provincial or national policy measures, such as vaccines and anti-smoking campaigns.
Is America's reluctance to join in because of the word 'collective' up there?
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