Column: Texas’ Uninsured Situation Is At A Crisis Point

By Jack Bernard

With one-fifth of the nation's medically uninsured, Texas has by far the largest healthcare insurance problem in the U.S.

Two years ago, the Texas Alliance for Health Care (which includes the Texas Medical Association) issued a report, "The Impact of Uninsurance on Texas' Economy." It stated that there were 5 million Texans without insurance and that number would grow to over 6 million by 2040 if there was no change. It also stated that the cost of uncompensated care (63% due to the medically uninsured) to Texas hospitals/MDs would rise to over $12 billion by 2040 from $3.5 billion in 2019. Of course, to offset these loses, costs to insured Texas patients will rise.

The quickest and easiest way to alleviate the problem is to have Texas expand Medicaid, like 38 red and blue states have done. But due to Texas GOP politics, this will not happen any time soon.Texas sets public hearings, tries to convince federal government to extend health funding

On the federal level, President Biden is advocating for Medicare to be permitted to enroll people under 65, but on a strictly voluntary basis. This is known as the "public option." Obama had included this concept in his original Affordable Care Act (Obamacare), but it was pulled out after healthcare special interest groups pressured moderate Democrats.

A major U.S. hospital magazine recently had a column regarding the public option. I agreed with its premise, that healthcare providers (hospitals, MDs, etc.) may make less money under Medicare versus private pay. However, the issue is more important and complex than just provider reimbursement. The voluntary public option could be a positive first step towards Medicare for All, as described below.

In Canada, for example, one of their most popular governmental programs is single-payer healthcare. It is also known as Medicare. But for some strange and illogical reason (i.e., U.S. politics), in the U.S. our Medicare only covers seniors.

Back in 1970, Canada and the U.S. both spent 6% of gross domestic product on healthcare. However, in 2019, Canada with a single-payer system only spent 11% of their GDP on healthcare versus 17% here. The difference goes for other essential items, like infrastructure and education.

In Canada, where all people are totally covered by their Medicare, per capita costs are also much lower ($5,418 per capita) than they are in the U.S. ($11,071). And we currently have 29 million non-elderly people with no insurance at all (and many more underinsured) while they have none. Obviously, full expansion of Medicare, along with accompanying budgeting and rate setting, is the only long-term solution to both our access problems and ongoing health-care cost containment crisis. But that's not to say that it will be easy.Low-income Texans struggle to find doctors after Planned Parenthood booted off Medicaid

Politically, Medicare for All is a poor short-term item to push versus a public option, which still preserves private insurance and will not alienate those on corporate plans. The biggest technical obstacle is that voluntary Medicare enrollment will mean that the sicker people will enroll, the folks who need more expensive care. This "cherry picking" (called "adverse selection" by insurance people) will cause Medicare premiums to rise for all enrollees longer term. This rise in expenses could force the U.S. into finally doing what it should have done in the 1960s -- provide Medicare for all of its citizens in order to contain costs.

Why will going to Medicare contain systemic costs? Because Medicare has an overhead of 2% versus 12% for private insurance companies, insurance can be run more efficiently. Said another way, more of the premium will go towards patient care versus marketing and administrative expenses. And that's good for everyone except the insurance companies and their wealthy CEOs.

Progressives already know single payer is the answer. But, at least theoretically, cost containment should bring around moderates and maybe even a few conservatives to the real solution … Medicare for All.

But we should note that before Obama ran for the presidency, he was openly in favor of single payer (as was Trump at one time). Obama subsequently indicated that he changed his position (to promote the Affordable Care Act, which expands the role of private insurance) because we have to work with the system that is currently in place. That is D.C. code for he could not handle the politics … the influential insurance/pharma/provider lobby that opposes real reforms. And that's why Biden is going push the public option, as opposed to single payer, short-term which is better morally and technically.

The Texas uninsured situation is at a crisis point. Therefore, all Texans should hope that the next president will advocate for single payer, with substantial bipartisan support. But that will not happen unless voters pressure legislators into doing what's right versus what the special interests want.

Jack Bernard is a retired corporate executive who worked extensively with hospital systems throughout Texas.