Uwe Reinhardt: Universal healthcare in U.S. requires $100 billion a year

The Journal of the American Medical Association (JAMA) recently interviewed Uwe Reinhardt, the James Madison Professor of Political Economy at the Woodrow Wilson School, on the subject of healthcare and insurance coverage reform in the United States. The interview, "Assessing US Health Insurance Coverage," appears in the March 14 edition of JAMA.

In the interview Reinhardt contends that the Bush administration's proposed tax code reform - which would allow a standard deduction of $7,500 for individuals and $15,000 for families who obtain health insurance on their own or through an employer - "still perpetuates an inequity that's always been in that code — namely, that high-income people benefit more."

One of the states that has been "imaginative" in carving out new health insurance policies, according to Reinhardt, is Massachusetts. "They do a little bit of everything: expanding the public programs, making vouchers available to low-income people to buy private insurance, reorganizing the insurance market, and then the revolutionary thought of mandating health insurance, which is essential for this to work." In his estimation, however, the state's plan is underfunded.

In discussing universal health insurance coverage as a potential option to the current employer-based system which leaves many Americans without affordable coverage, Reinhardt contends that "political leaders would jointly have to put $100 billion a year of government money into any proposal for genuine universal coverage, and that allocation has to increase at about 7% to 8% per year. Anything short of that isn't really getting the full job done." Reinhardt adds that billions of dollars are wasted each year in heathcare spending - unnecessary procedures being one example. The "money we waste in health care would cover the uninsured more than twice over."

Reinhardt concludes, "We've been at this for 60 years now. There is hardly any excuse any more for inaction. I think the Massachusetts plan, coupled with $100 billion of federal funds, would get most of it done. People ask, 'wouldn't $100 billion break the bank of the nation?' Well, it's just a little over half of a year in Iraq."