New U.S. Health Care
Differs Sharply from Brazil and Europe
"In
fact, the reform is to provide universal private health insurance with
government subsidies. … The new American health law is a breakthrough. But the
contrast with European health systems couldn't be greater. … Brazil considers
health a state duty and a human right, to be funded through public
contributions."
The State of Sao Paolo: Much has been said about the health reform recently
approved by the United States. But does the proposal contain? What what does it have
in common and how does it differ from our system?
The reform proposals of
successive U.S. governments are intended to address two problems: the rapid
growth in health expenditures per capita and the increasing numbers of people
without access to health services. For decades, health care spending has grown faster
than inflation, wages and GDP. This skyrocketing growth (from 5 percent of GDP
in 1960 to 17 percent in 2009) is overwhelming the public purse (Medicaid for
the poor and Medicare for the elderly over 65 years old), is increasing medical
expenses paid out of pocket and is making health insurance plans ever-more
expensive. The result is a rise in the number of people excluded.
As in Brazil, health care in
the United States is paid for essentially by the private sector. The government
contributes less than 45 percent of total expenditures on health. In fact, Medicare
is financed out of wage deductions from workers and employers. Medicaid alone is
paid out of taxes. The American state has now decided to look after the elderly and
poor. Those ineligible for public programs and who have no coverage through their
employers have to pay out of their own pocket, which seems consistent with the
individualist philosophy of the society. This contrasts with the sympathetic
vision that prevails in the European Community. The Brazilian Unified Health
System (Sistema Único de Saúde) draws inspiration from European models, but
without the resources needed to fulfill that role.
In the United States up to
now, health insurance has been regulated by the states with hardly any federal oversight.
It was the health insurance contract that set the terms of coverage and allowed
the industry, for example, to deny coverage to people with pre-existing
conditions, exclude insurance for other costs, vary prices among age groups
without restriction, set limits on expenditures, and require a copayment when
the cost of procedures exceeded a person’s income, among other things. In
Brazil, legislation from 1998 prohibits all such limitations.
During his campaign, President
Obama promised to tackle the issues of the exorbitant growth in costs and the
exclusion of many Americans from health care services. The Senate and House of
Representatives approved the reforms, but without addressing all of the
measures that were promised.
The task was predictably difficult,
as attested to by the countless proposals that were rejected, especially in
regard to limiting costs. The problem is that new expenditures for some mean higher
costs for others, which puts insuperable obstacles in the way of effective reform.
Thus, there were few concrete proposals on cost containment approved in the
final legislation.
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The truth is that the bill that
was passed adds costs in the former of higher monthly insurance payments, medical
services, materials and medicines. It remains to be seen of Obama can fulfill
his other objective, which is universal access. The agreed-upon project is an
important step in that direction, because it increases the income cut-off that makes
the poor eligible for Medicaid.
In fact, the reform is to
provide universal private health insurance with government subsidies. Listen
well: this is not universalizing individual health as a duty of the state, as demanded
under the Brazilian Constitution. On the contrary, the American law sets out
the people's duty, what companies must offer in the way of health insurance and
sets fines for noncompliance. It falls on the individual to take financial
responsibility for his or her health insurance.
The law makes health
insurance mandatory and subsidizes monthly payments whenever they rise beyond a
certain percentage of monthly wages. It requires companies to offer plans to
its employees, includes subsidies for smaller firms and contains fines
for non-compliance. It prohibits insurers from denying coverage on the basis of
pre-existing conditions and unilaterally discontinuing policies. It requires
businesses to maintain plans for retirees. It creates insurance exchangesto make it easier to purchase
and compare plans. It sets limits to the variation of monthly fees among age
groups. And it monitors prices adjustments.
The new American health law
is a breakthrough. But the contrast with European health systems couldn't be
greater. In the European community, prevailing systems make it a state duty to
provide health care which is financed by taxes. Brazil considers health a state
duty and a human right, to be funded through public contributions. But as the
state has failed to properly comply with this duty, people choose to purchase
private health plans - without giving up their constitutional rights.
American society made another
choice, using the state to protect the poor and elderly, and making individuals
responsible for their own coverage. The progress that has been made is the
requirement that all people have their own health coverage, which is already state
intervention, and adds components in addition to simply state subsidies. The U.S.
state will now have greater regulatory involvement in the health system, although
it remains essentially in private hands.
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These are choices that all societies
must make. They will be determined on the basis of their histories, beliefs, religions,
cultures, levels of education and wealth. It's hard to say whether this reform
is unequivocally and universally superior and will eventually superimpose itself
on the others. But such an eventuality doesn't appear on the horizon.
*José Cechin is Director of
the Institute of Supplementary Health Studies and a Former Minister of Welfare
And Social Services
