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THE ETHICS OF UNIVERSAL HEALTH INSURANCE
THE ETHICS OF UNIVERSAL HEALTH INSURANCE
ALEX RAJCZI
Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and certain other countries.
Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America.
© Oxford University Press 2019
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by license, or under terms agreed with the appropriate reproduction rights organization. Inquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above.
You must not circulate this work in any other form and you must impose this same condition on any acquirer.
Library of Congress Cataloging-in-Publication Data
Names: Rajczi, Alex, author.
Title: The ethics of universal health insurance / Alex Rajczi.
Description: New York : Oxford University Press, 2019. | Includes bibliographical references and index.
Identifiers: LCCN 2018052565 (print) | LCCN 2019005831 (ebook) | ISBN 9780190946845 (updf) | ISBN 9780190946852 (epub) | ISBN 9780190946869 (Online Content) | ISBN 9780190946838 (cloth : alk. paper)
Subjects: LCSH: National health insurance. | Health insurance—Moral and ethical aspects.
Classification: LCC RA412 (ebook) | LCC RA412 .R35 2019 (print) | DDC 368.4/2—dc23
LC record available at https://lccn.loc.gov/2018052565
9 8 7 6 5 4 3 2 1
Printed by Sheridan Books, Inc., United States of America
For my mother, my father, and my wife
It is only common sense to recognize that the great bulk of Americans, whether Republican or Democrat, face many common problems and agree on a number of basic objectives.
Dwight D. Eisenhower
ACKNOWLEDGMENTS
This book is not the work of one person, but of many. I am indebted to many colleagues and students at UCLA, Cal State Long Beach, Bowdoin College, the National Institutes of Health, and Claremont McKenna College, where I’ve taught for 15 years. I am grateful for the opportunity to serve on the ethics committees of three hospitals: Kaiser Fontana, Kaiser Ontario, and the University of California, Irvine. Many friends outside academia offered support without knowing it; they provided me with the life away from work that is so important to working well. And of course I am indebted to my family, both Rajczis and Sabeans, for providing that safe harbor without which a flourishing human life would simply be impossible. I owe special thanks to certain people. Some helped spark the ideas in this book or offered their insights on some or all of the manuscript: David Adams, Alex Aznar, Amy Berg, Michael Botta, Mike Diaz, Michael Green, Paul Hurley, Paul Menzel, Allison Scott, Bob Shapiro, Jon Shields, Paul Snell, Sara Stern, Laura Sucheski, Peter Thielke, and Jonathan Wolff. A few spent a truly heroic amount of time on the book, including Cory Davia, John Farrell, Frank Menetrez, and several anonymous
reviewers. I owe a special debt to my research assistant, Jessica Williams, now a professor at the University of Kansas. Jessica had the thankless task of reading a 180-page manuscript by a philosopher and rooting out all his factual errors about health economics, and her contribution was enormous. I regret that I held onto the manuscript for years after Jessica and I worked together, and so I had to write about the most recent developments in health policy on my own. If there is a factual error in this book, you can be sure the fault is mine and not hers. What you don’t see are all the mistakes I would have made without her help.
Once a manuscript is written it must be prepared and guided through publication. I thank my research assistant Amy Berg, now a professor of philosophy, for many hours of help readying the manuscript for submission to publishers. I offer my thanks as well to the many professionals at Oxford University Press, including my editor, Peter Ohlin.
The publication of this book has made me think back on those philosophical heroes who inspired me to love philosophy in the first place. And so, at the risk of sounding grandiose, I want to acknowledge my debt to John Stuart Mill, Bertrand Russell, and Ludwig Wittgenstein. Later, after these figures inspired me to study philosophy, many people supported me as my career unfolded. I’m grateful to my mentors and colleagues at the Department of Bioethics at the National Institutes of Health, who started me on a research path that has led, after 15 years, to this book. I’m grateful as well to the people who gave their time and effort to support my professional career, including the late John Arras, Dan Brock, Zeke Emanuel, Nir Eyal, Aaron Kheriaty, Paul Menzel, Mathew Pauley, Dave Wendler, Dan Wikler, and Debby and Ken Novack. Jon Shields helped me stay the course. Helena de Bres has been a sympathetic soul within the world of philosophy. John Farrell has been an inspiration and good friend for 15 years.
CKNOWLEDGMENTS
The philosopher Gilbert Ryle once said that appreciating the difference between right and wrong involves an inculcated caring, a learned habit of taking certain sorts of things seriously. I have tried my best to embody that kind of caring in this book, and to whatever extent I’ve been successful, it is because of the lessons in love, duty, and perseverance given to me, so generously, by my beloved parents.
Finally, I thank my wife, Emma Sabean. She has been my greatest supporter and tireless editor, and I’ve benefited immeasurably from her unpublished works about John Stuart Mill, her unfailing conscience, and her philosophical insights about the ethics of health care. This book belongs to her as well. She is in part the author of all that is best within it.
NOTE ON SOURCES
This book builds upon my previous work, and I thank several publishers for granting permission to reprint or rework substantial portions of the original publications. John Wiley and Sons permitted use of material from “A Critique of the Innovation Argument Against a National Health Program,” Bioethics, vol. 21, no. 6, July 2007, pp. 316–323. Taylor and Francis Group LLC Books permitted use of material from “Fiscal Objections to Expanded Health Coverage: A Case Study of the ACA,” which was first printed in The Affordable Care Act Decision: Philosophical and Legal Implications, 2014, edited by Allhoff and Hall, pp. 195–208. Material from “Wait Times and National Health Policy” was reproduced from the Journal of Medical Ethics, vol. 40, pp. 632–635, 2014, with permission from BMJ Publishing Group Ltd. “Moral Transformation and Duties of Beneficence” was first published in Sophia, and material and ideas are reprinted by permission from RightsLink Permissions Springer Customer Service Centre GmbH: Springer Nature, Sophia, 2017, advance online publication, June 23, 2017, (doi. org/10.1007/s11841-017-0596-7). Material in the final chapter was first published in “What Is the Conservative Point of View about Distributive Justice?,” Public Affairs Quarterly, vol. 28, no. 4, October 2014, pp. 341–373.
INTRODUCTION
A UNIVERSAL HEALTH INSURANCE SYSTEM guarantees that all citizens will have a reasonable way to obtain health insurance and therefore a certain social minimum of health care. The United States doesn’t have universal health insurance, and that has serious effects. Before the Patient Protection and Affordable Care Act (ACA) became law in 2010, millions of hard-working Americans lacked health insurance, and as a result tens of thousands suffered and died every year. Even with the ACA in place, millions still lack insurance and thousands continue to die.
These facts make a strong case for universal health insurance, but many people see reasons to be skeptical as well. Some Americans worry that universal health insurance will balloon the national debt and create excessive fiscal risk. Other people worry that a particular system asks too much of them, perhaps by increasing their taxes too far or by rendering health insurance unaffordable for them and their families. Still others worry that the ACA or some other system is simply poorly designed— inefficacious, unnecessary, or even counterproductive.
This book examines these three objections to universal health insurance. I find that the ethical principles underlying these concerns are legitimate, and that they might justify opposition to certain poorly designed universal health insurance systems. However, I argue that these principles don’t justify opposition to the many well-designed systems that America might adopt. Addressing these objections is important for two reasons.
One is that they are philosophically rich and interesting, and so exploring them leads to philosophical insights about the ethics of health care. In addition, these issues are some of the principal drivers of actual disagreement about health policy. By responding to these objections, we contribute to the real-world case for universal access to health insurance.
Though this book focuses on the health care debate in America, the points made here have larger import. Examining the American health care debate helps us understand the philosophies that motivate progressives and conservatives and lead them to disagree about social minimum policies. That in turn helps us pinpoint new ways to move forward any debate about the social minimum, including debates about goods other than health care and debates about social minimum policies in other countries.
OUTLINE
Chapter one presents some key factual information on health systems. I describe the American system before and after the ACA. I also describe single-payer systems and the regulatedmarket systems used in countries such as Switzerland and the Netherlands.
Later chapters will discuss whether it is reasonable to reject universal health insurance on the grounds that it is inefficacious, fiscally risky, or excessively burdensome on those who fund the system. I focus on these issues because I think they are of serious philosophical interest, but chapter two argues that these same issues also drive many real-world disagreements about health care in America. If that is right, then by refuting objections grounded in efficacy, fiscal risk, and personal cost, we not only engage with issues of pure philosophical interest but also help advance the real-world case for expanded health insurance coverage in America.
With that preparation behind us, chapter three explores the issue of personal cost. I argue that well-designed universal health insurance systems do not impose excessive personal costs on those who support them. Furthermore, even if some systems did impose excessive personal costs, that would not justify opposition to universal health insurance, since we can instead support universal access systems that impose lower burdens on supporters.
Chapter four takes up issues of efficacy, focusing on the objections that universal health insurance doesn’t promote overall health, stifles important innovation, and creates burdensome waiting lists. I argue that the first objection can be refuted with empirical data and that the second and third objections can be refuted using a combination of empirical data and philosophical analysis.
Chapter five focuses on fiscal risk. I find that a few critics, with atypical views about health economics, might reasonably oppose systems like the ACA on the ground that, in the view of the critics, they create excessive fiscal risk. However, I show that this is not a reasonable opinion for most people to hold and, more importantly, that well-designed universal health insurance systems don’t create fiscal risk that is morally problematic.
Chapter six pulls together the arguments of the previous chapters, explaining how they help advance the overall case for universal health insurance. Chapter seven then lifts off from the work on health care and develops a picture of the conservative point of view about distributive justice and a contrasting picture of the progressive point of view. Having those frameworks helps us understand why adherents of these views—in America or elsewhere—often disagree about social minimum policies. It also allows us to identify areas for future philosophical research that could help resolve the disagreements between conservatives and progressives.
One thing of note is that, in this book, I do not take up the question of whether an ideally just society should have a social minimum in health care and instead simply presuppose that it should. For the most part I will also not take up the question of what exactly goes into that social minimum. I have made these methodological choices because the grounds for a social minimum in health care and other basic goods have already been thoroughly covered by others, including such egalitarian philosophers as Rawls, Dworkin, Nagel, and Waldron, as well as those exploring a more neutral or even “conservative” case for universal health case, such as Allan Buchanan and Paul Menzel.1 My goal is to show that even if we presume that an ideally just society should have a social minimum in health care, we still face philosophically interesting questions about whether people can reasonably oppose particular extensions of the health care social minimum on the ground that those extensions create problems of fiscal risk, inefficacy, or personal cost. These questions are underdiscussed in current philosophical writings, and since they also help drive the real-world debate over health care, answering them allows philosophers to address philosophically rich issues while also advancing the public case for universal health insurance.
A NOTE ON DATA AND CITATION
Once we begin probing issues of fiscal risk, efficacy, and personal cost, we’ll see that we cannot sensibly evaluate the merits of universal health insurance without incorporating data about health care systems. I’ll fully embrace that fact, and I ask readers’ understanding as I lay out data about health care in the first two chapters, turning to philosophical analysis only after that
1. See, e.g., Buchanan’s “The Right to a Decent Minimum of Health Care” and Menzel’s “The Cultural Moral Right to a Basic Minimum of Accessible Health Care,” as well as his article with Donald W. Light titled “A Conservative Case for Universal Access to Health Care.”
factual work is done. I hope that by the end of the book, it will be clear that this factual grounding pays off. Having it will allow us to conclude not merely that America should have universal health insurance if certain factual assumptions turn out to be true, but that we should have it period. When putting forward factual claims about health care, either in the text or in the footnotes, I’ve followed several rules. One is that at certain points I extrapolate from existing data, and the extrapolations are often rough. To avoid looking inept, I was tempted to stop each time and say to the reader, This is a rough extrapolation, but that makes for cumbersome writing. I always try to make reasonable extrapolations, and I also trust my readers to notice and evaluate them. In addition, readers should note that numbers are frequently rounded when the rounding makes no difference to the points made in this book. To make the prose smoother, the rounded figures are often not qualified with hedge words like “about” or “approximately.” The citations contain precise figures.
Some data is deliberately from past years—e.g., data about the state of the American health system before the Affordable Care Act. Other facts were up to date when I wrote the manuscript, but since there is a constant flow of new health care data, some information will no doubt be out of date by the time readers engage with this book. I encourage everyone to seek out the latest information, but it’s also important to note that, barring some major changes to the U.S. health system, the basic facts do not change much year to year, and those smaller changes do not impact the arguments I offer for universal health insurance. For instance, I doubt very much that the moral case for or against universal health insurance depends on the exact number of people suffering and dying from lack of health insurance each year. Instead, the key point is that the number is very large, and my goal is to explain why facts like that matter enough that every country should ensure that all citizens have a reasonable way to obtain health insurance.
THE AMERICAN HEALTH SYSTEM BEFORE THE ACA
Let’s start with the U.S. system as it existed before the ACA. Table 1.1 shows the sources of American health insurance in 2006.
Table 1.1
SOURCES OF INSURANCE IN 2006
Source Number
Employment-based insurance
51%, or 154 million people
Uninsured 15%, or 47 million people
Medicare 14%, or 43 million people
Medicaid and SCHIP 13%, or 38 million people
Individually purchased private insurance 5%, or 15 million people
CHAMPUS, VA, military 1%, or 3 million people
Source: Data from Bodenheimer and Grumbach, Understanding Health Policy, p. 18.
Medicare is the government program that covers almost everyone over age 65, although it covers some under 65 too.2 It does not cover all seniors because standard benefits are available only to those who pay into the Social Security system for 10 years, as well as their spouses, though those not covered by the standard benefits can buy in.
To understand Medicare’s structure, think about how most health transactions work. Three parties are involved: you pay your insurance company, your insurance company pays the doctor, and your doctor provides you with health services. Under Medicare, the government takes on the role of insurer, and the other two parties, you and your doctor, stay the same. (The government does not employ special “Medicare doctors.”) Medicare is essentially a government-run insurance plan.
Medicare beneficiaries sometimes believe that they get back only what they paid in, but that’s not so, for several reasons. First, like all insurance beneficiaries, Medicare recipients who use many services are subsidized by those who use fewer. Second, the benefits collected by Medicare recipients usually exceed their own past contributions.3 Third, Medicare has always been a “pay-as-you-go” program—or, if we want to be precise, a “you-pay-as-I-go” program. Younger workers fund the benefits received by older beneficiaries. When younger workers retire, their benefits will be paid by still-younger workers, and so on.
Medicare has several “parts.” Part A covers hospitalization, temporary visits to nursing homes, and hospice care. Part B covers physician services. Part D covers prescription drugs. This coverage seems expansive, but a 2002 study showed that Medicare covers only 45% of the average beneficiary’s health
2. For eligibility restrictions, see the Medicare, “Eligibility and Premium Calculator.”
3. Steuerle and Rennane, “Social Security and Medicare Taxes and Benefits Over a Lifetime.”
expenses.4 Medicare part C is an alternative form of insurance. Individuals can opt out of traditional Medicare and enroll in part C plans, known as Medicare Advantage Plans. Though still funded by the government, those plans are administered by private companies and provide benefits similar to those offered in parts A and B, and often D as well.
Like Medicare, Medicaid is a government-run insurance plan. Before the ACA, it was not aimed at all low-income people; instead it primarily targeted low-income children and pregnant women, though states could elect to cover more people if they chose.5 The federal guidelines before the ACA required states to cover:
1. Children younger than age 6 and pregnant women whose family income was at or below 133% of the federal poverty line (FPL). (In 2008, FPL was $21,200 for a family of four and $10,400 for a family of one.)6
2. Children 6 to 18 years old whose family income was at or below FPL.
Medicaid also had to cover some low-income parents:
3. Parents whose incomes were below states’ July 1996 welfare eligibility levels (often below 50% FPL).
4. Bodenheimer and Grumbach, Understanding Health Policy, p. 10.
5. Bodenheimer and Grumbach, Understanding Health Policy, p. 12.
6. United States, Department of Health and Human Services, “The 2008 HHS Poverty Guidelines.”
And the program had to cover some other adults:
4. Most of the elderly, disabled, and blind people who were also covered by the federal Supplemental Security Income (SSI) program, a program intended to cover individuals with low income.
Most of the low-income individuals covered by Medicaid were in working families without access to employer-based health insurance and who could not afford insurance on the private market.7
Absent a federal waiver, state Medicaid programs had to cover hospital services, physician services, laboratory work, X-rays, prenatal care, preventive care, nursing home stays, and home health care. Coverage varied substantially between states. Drug coverage was optional but offered by all states to varying degrees.
The State Children’s Health Insurance Program, or SCHIP, is similar to Medicaid.8 It covered uninsured children in families with incomes at or below 200% of the federal poverty level. Note three things about pre-ACA Medicaid. First, states didn’t have to cover most adults without children. Since Medicare doesn’t cover most people under age 65 either, many uninsured people were not covered by any government program, even if they were very poor. Second, the income limits were low, even for adults with children. Thus many adults with children were not covered even if they were very poor. Third, Medicare didn’t (and still doesn’t) cover long-term care, so Medicaid is the primary source of government-sponsored long-term care coverage
7. Kaiser Commission on Medicaid and the Uninsured, “Medicaid: A Primer, 2010,” p. 7.
8. Bodenheimer and Grumbach, Understanding Health Policy, p. 13.
for the elderly. One of every six Medicare beneficiaries was eligible for Medicaid as well.9
The Veterans Administration system and CHAMPUS (a health insurance program for veterans) are a very small portion of U.S. health care, so I won’t discuss them in detail. Before leaving public programs, though, note how expansive they were even before the ACA. Americans sometimes think we have a private-market health system, but the 84 million beneficiaries of Medicare, Medicaid, and veterans’ health programs—28% of the population—were clearly and directly getting their health insurance (though not their health care) from the government. This included almost everyone over age 65.10
Employment-based insurance covered 154 million Americans, or 51% of the population. Only about 60% of employers offered health coverage,11 and employees almost always paid part of the premiums. (That is, they paid part of the premiums directly, and for reasons I’ll discuss later on, most economists believe that the additional “employer contribution” is ultimately deducted from employee wages, so really employees are paying the whole cost of “employment-based” insurance.) Employers frequently offered only one insurance plan. Estimates vary, showing that between 42% and 60% of employees had no choice in plan.12 A study by the Center for
9. Kaiser Commission on Medicaid and the Uninsured, “Medicaid: A Primer, 2010,” p. 10.
10. And these figures are an undercount. The U.S. government offers tax subsidies for the employment-based insurance received by 154 million Americans. It would take us too far afield to discuss these in detail. The point is that everyone who receives insurance through their employer has their health insurance partially subsidized.
11. Kaiser Family Foundation, “Employer Health Benefits: 2009 Summary of Findings.”
12. Trude, “Who Has a Choice of Health Plans?”
