In summary, the prudent insurance test helps to answer both questions of justice I mentioned at the beginning: How much should America spend overall on its health care, and how should that health care be distributed among its citizens? The test asks what people would decide to spend on their own medical care, as individuals, if they were buying insurance under fair free-market conditions, and it insists, first, that we as a nation should spend what individuals would spend, collectively, under those conditions; and, second, that we should use that aggregate expenditure to make sure that all have now, as individuals, what they would have then.
Of course some of the decisions I have been discussing would be made differently by different people trying to apply the prudent insurance test. It is very important that any agency charged with those decisions, like the National Health Board, should be made up of representatives of different groups that might be expected to make such judgments differently; it should have doctors and health-care specialists, of course, but it should also have ordinary people of various ages drawn from different parts of the country and, if possible, different ways of life. Such an agency could draw on the experience of countries with “single-payer” government-run health services which have had systematically to ration health care.
In Britain, for example, doctors in the national health system have been forced to allocate scarce resources like renal dialysis machines and organs for transplant, and they have worked out informal guidelines that take into account a potential recipient’s age, general health, life quality, and prospects, as well as prospects for adequate care by family or friends. Though this supposed cost-benefit test is different from the prudent insurance test, the decisions doctors have made under the former presumably reflect their judgments, guided by experience, about the relative value of different kinds of treatment at different ages and in different circumstances, and these are also judgments that a prudent insurer would be required to make.
The prudent insurance test also makes plain why it is so important to consult public opinion before rationing decisions are made. Since rationing should reflect not just technical cost-benefit calculations but also the public’s sense of priorities, consultation is essential. When Oregon sought to establish priorities in health care under Medicaid, it organized a series of “town meetings,” and a “parliament” to discuss the matter, and though the meetings were criticized by some because they were attended by very few of the poor whose health care was being debated, the meetings were nevertheless valuable sources of information about what those who did participate thought would be prudent insurance decisions. Clinton’s Health Security Act should make plain the importance of such discussions at the national level as well.
Still, no matter how much information an agency seeking to apply the prudent insurance test is able to gather, its results must be provisional, open to revision on the basis of further evidence of public preference as well as of medical technology and experience. In that respect, the Health Security Act’s decision to allow supplemental insurance at market prices, with no tax deduction or subsidy, fits the prudent insurance approach particularly well.17 If a very substantial number of people of average income buy supplemental insurance, in spite of its expense, that would suggest that the act’s definition of the basic package, or the board’s elaboration of that definition, was in error and should be changed. If most men bought supplemental coverage providing for routine prostate examinations every year beginning at an age earlier than the act specifies, for example, this would presumably reflect people’s informed judgment that more frequent examinations were prudent in spite of their cost, and this would suggest that the act should be amended to provide them.
Some of the Health Security Act’s explicit coverage decisions seem plainly right according to the prudent insurance test: to exclude most elective cosmetic surgery, for example, since the cost of insuring for wholly elective procedures is often prohibitive, and to include prenatal care and routine child-hood immunizations and checkups. Other specific decisions I mentioned are more debatable, like the possibly ungenerous schedule of routine medical tests and checkups for adults. The prudent insurer test poses another, more complicated, question, however. Does the act make some people pay too much for the coverage it provides? It requires most people to pay for their health care in three ways: through the impact on their wages (and perhaps on their jobs) of requiring their employers to pay 80 percent of the average premium; through their own contributions to those premiums and co-payments and deductibles their plan includes; and through the direct and indirect taxes they pay to provide government subsidies for the unemployed and others who cannot pay for themselves.18 Estimates (even those supplied by the administration) vary about how many people will pay more for health care than they now do if the act is passed. Among those who will pay significantly more, if Clinton’s proposed 75 cent increase in cigarette taxes to help finance the plan is adopted, are smokers; that seems just, on the prudent insurance model, because free-market insurance under fair conditions would presumably include higher premium rates for them. Most of those who will pay more are in higher tax brackets, and that, too, seems fair since they would presumably have less wealth if circumstances were more just.
Still, the danger remains that if the act, or any similar plan, is adopted, some low-wage earners or other relatively poor people will pay more for the health care they are forced to buy—through taxes, the impact on their wages and jobs, and their own contributions—than, given their stringent circumstances, they might prudently wish to spend. That is a genuine problem, but since poor people would have better coverage than most do now, and since those who now pay for coverage would presumably pay less, it is not a practical objection to the act that they would pay less under a fairer plan that is now politically impossible. (It would be a graver objection if the limit on federal subsidies led, as some liberals fear it would, to compromising universal coverage by withholding the full standard package of benefits from some of the poor.) The problem rather underscores what we already know: that even after extensive reform in health care, America will remain a deeply unjust society.
In any case, the Health Security Act seems better, to judge by the prudent insurance test, than any other scheme of reform with as much chance to succeed, and plainly better than the status quo. Some legislators, led by Representative Jim McDermott of Washington and Senator Paul Wellstone of Minnesota, continue to support a national single-payer plan, but almost no one thinks such a radical plan could be adopted. Right-wing Republicans favor plans, like Texas Senator Phil Gramm’s proposal, that leave health care largely as it is, with minimal extension of coverage to the poor. Senator John Chafee of Rhode Island, a liberal Republican, has offered a plan similar in many ways to Clinton’s, but it does not require employers to pay for their employees’ health care, and it proposes that any extension of coverage to those now uninsured be delayed until it can be paid for out of savings from other aspects of reform, including reduced aggregate premium charges and greater efficiency. Representative Jim Cooper, a Tennessee Democrat, has proposed a plan that subsidizes health care for the poor—a family of four earning $21,000, for example, would receive half the cost of the $4,000 annual premium that adequate coverage would cost—but even the Cooper plan’s supporters concede that many families would still be unable to buy adequate coverage on this scheme.19 Clinton’s Health Security Act will undoubtedly be changed, if it is adopted at all, probably in the direction of compromise with supporters of these other suggestions. But its general structure is more promising for justice than any realistic alternative yet proposed.
Some of the most potent criticisms of the Clinton plan, politically, have little to do with justice, but they must nevertheless be acknowledged. Critics insist that the act would create great new bureaucracies in each state and increase rather than decrease inefficiency in health-care provision. They also warn that a state’s decisions about how to divide its population into health-care alliances would be a source of bitter controversy and potential unfairness. An alliance whose jurisdiction includes high-density urban areas would have greater overall health costs than one that does not—it costs $63,000, on average, to treat a baby born with a narcotics addiction—and since an insurer must charge the same premium to everyone within the same alliance, people will be anxious that the state be divided, if possible, in such a way that their alliance includes no large city. The act imposes some restrictions on a state’s freedom to draw alliance boundaries—a city cannot be divided between two alliances, for example—but the broad discretion given to states would almost inevitably produce great political friction and resentment, and might result in substantial injustice as well.
These are also genuine problems, but the twin, competing, goals of universal coverage and cost control cannot be achieved without substantial government intervention, and hence without new federal agency powers and responsibilities, and though dividing the nation into different insurancecost regions does require arbitrary divisions many people will resent, the alternative is either to continue the unfair system of “experience rating,” which means that people pay rates reflecting their individual health risks and that those who need insurance most cannot afford it, or to establish nationwide premium structures which would be extraordinarily inefficient and give vastly more power to national bureaucracies.
The Health Security Act has also been criticized as threatening the health-care research and experimentation that have produced such extraordinary medical advances in recent decades. It is true that many valuable life-saving medical techniques that are now routine were once experimental, and that if expensive experimental procedures are not treated as appropriate under a scheme of universal coverage, many fewer may be performed. That is a further reason for allowing supplemental insurance, which would provide some opportunity for testing new procedures. It also underscores the importance of subsidizing medical research in other ways.20 Not everyone who wants government-subsidized experimental treatment will be able to receive it—the choice should be made on the basis of which treatment provides the most appropriate experimental test—but it is important for the nation (and the world) that some receive treatment rather than none at all.
The political battle over Clinton’s plan will be intense. We should be aware that even more is at stake, in this battle, than a more just system of health care, important though that is. Justice has had a bad time in America in recent decades—too many voters are unwilling to make any significant sacrifice for a more just society. Health-care reform has a reasonable chance of success, nevertheless, because so many voters are frightened by their prospects under the current system. Even those who have adequate insurance now fear losing it in the future, and though universal coverage is redistributive—many people will pay more, directly or indirectly, so that everyone can be covered—it seems appealing because almost everyone can imagine circumstances in which a universal plan would help them in case of disaster.
If, in spite of this political opportunity, America proves incapable of achieving any substantial reform—if the political power of insurance and drug companies and medical associations who think reform would be bad for them proves decisive—then the conventional wisdom that the public cares nothing for social justice will solidify, and presidents will be unlikely to risk challenging that wisdom again for many years. But if reform succeeds—if we finally end the national disgrace of being alone among prosperous nations in cheating citizens of life and health—we may be able to build on this success. We may rediscover a national sense that justice is worth its price in tax and government. We might then win greater justice in education, housing, jobs, and all the other goods and chances we now distribute so unfairly; we might begin to end the even greater disgrace that dooms some of us, at birth, to a bleaker life than the rest of us would think endurable. Abandoning the rescue principle, which insists that medicine is different from everything else, would improve the chance that health-care reform could have this consequence in the long term. Once we accept that health is one among many goods that make life worth living, we will have no justification for denouncing savage inequality in medicine and tolerating it anywhere else.
—December 16, 1993
The rescue principle might hold it unjust for anyone to buy better medical care than everyone can have, and that medical care outside a system of universal coverage should therefore be abolished or, as it is in Canada, seriously discouraged. But the prudent insurance approach begins in a different idea: that no one can complain, on grounds of justice, that he has less of something than someone else does, so long as he has all he would have if society were overall just. Suppose, for example, that if wealth were fairly distributed no one, in view of the cost and the prospects, would prudently insure to provide a liver and bowel transplant for himself even though it might conceivably one day save his life. If so, then justice does not require that such transplants be provided for everyone now, even when some people, unfairly rich, can buy them for themselves. See my article "Justice in the Distribution of Health Care," McGill Law Journal, Vol. 38 (1993), p. 883.↩
Clinton has tried to sharply limit the new taxes that his plan will require, and has delayed some benefits for that reason. For a criticism of this decision, and an appeal for more direct taxation for health-care reform, see Rashi Fein, "A Dangerous Year," The New York Times, October 28, 1993, p. A27. Some health-care economists believe that the Health Security Act would in fact require substantially more, in new taxes, than the administration has so far conceded. But a recent study by an independent research group concluded that the plan is financially sound as it stands, adding that, "It meets the president's requirement of providing universal coverage, and it does so without relying on an increase in broad-based income taxes." See Spencer Rich, "Health Plan Funding Passes Muster," Washington Post, December 9, 1993, p. A4.↩
See The New Republic, December 6, 1993, p. 8.↩
For a summary of the Health Security Act's initiative in supporting research, see the White House publication The President's Health Security Plan, Chapter 19.↩
Would Clinton’s Plan Be Fair?: An Exchange May 26, 1994
The rescue principle might hold it unjust for anyone to buy better medical care than everyone can have, and that medical care outside a system of universal coverage should therefore be abolished or, as it is in Canada, seriously discouraged. But the prudent insurance approach begins in a different idea: that no one can complain, on grounds of justice, that he has less of something than someone else does, so long as he has all he would have if society were overall just. Suppose, for example, that if wealth were fairly distributed no one, in view of the cost and the prospects, would prudently insure to provide a liver and bowel transplant for himself even though it might conceivably one day save his life. If so, then justice does not require that such transplants be provided for everyone now, even when some people, unfairly rich, can buy them for themselves. See my article “Justice in the Distribution of Health Care,” McGill Law Journal, Vol. 38 (1993), p. 883.↩
Clinton has tried to sharply limit the new taxes that his plan will require, and has delayed some benefits for that reason. For a criticism of this decision, and an appeal for more direct taxation for health-care reform, see Rashi Fein, “A Dangerous Year,” The New York Times, October 28, 1993, p. A27. Some health-care economists believe that the Health Security Act would in fact require substantially more, in new taxes, than the administration has so far conceded. But a recent study by an independent research group concluded that the plan is financially sound as it stands, adding that, “It meets the president’s requirement of providing universal coverage, and it does so without relying on an increase in broad-based income taxes.” See Spencer Rich, “Health Plan Funding Passes Muster,” Washington Post, December 9, 1993, p. A4.↩
See The New Republic, December 6, 1993, p. 8.↩
For a summary of the Health Security Act’s initiative in supporting research, see the White House publication The President’s Health Security Plan, Chapter 19.↩