The Universal Cure
November 18, 2003
By EZEKIEL J. EMANUEL and VICTOR R. FUCHS
The public has good reason to be
worried about health
coverage. After five years of relative stability,
premiums, prescription-drug prices and other costs
soared. This year, premiums went up nearly 14
those paid by employees increasing nearly 50 percent
2000. The number of Americans without health
increased more than 5 percent just in the last year.
strikes by workers in Los Angeles and elsewhere
health coverage is the flashpoint of labor discord.
As a solution, many policymakers are
reforms like a Medicare prescription drug benefit and
expansion of the Children's Health Insurance Program.
Unfortunately, more services for some groups may
costs and force reductions in coverage for others.
What we need is a fair proposal that
is simple, efficient
and appealing to disparate constituencies. For more
decade, as members of the medical and economics
communities, we have advocated such an alternative:
universal health care vouchers.
In a morally responsible country,
everyone should have
health insurance. Each family or individual would be
a voucher to purchase a policy that covered basic
including doctor visits, hospitalization, pharmacy
benefits, some mental health and dental care, and
catastrophic coverage. People who want more services,
wider choices of specialists, could pay a premium
This would continue to be a
decentralized system with
existing health plans contracting with providers, but
insurance would no longer be employment-based. That
Americans receive insurance from their employer is a
of World War II wage controls. It has one advantage -
pooling people to reduce premiums - but many
including locking people into jobs so they can
receive health coverage and allowing employers to
insurance providers. It has also become an albatross
businesses. Without costly insurance worries,
could compete for workers by offering higher wages
better working conditions.
A voucher system would also enable
the government to end
Medicaid and phase out Medicare. Having multiple
care systems squanders resources. All Medicaid
would receive vouchers. Each year, those who normally
into Medicare would be enrolled in the voucher plan
instead. Current beneficiaries who preferred
coverage would not be forced to switch, although
total Medicare enrollment dropped sufficiently, the
would be amalgamated into the voucher system.
One consistent concern about vouchers
is that health plans
would have financial incentives to avoid the sick.
requiring each insurance company to offer a basic
with catastrophic coverage would insure that
with greater needs would not be excluded. More
the voucher system would pay insurers part of their
a lump sum and part as a reimbursement fee for actual
services rendered, reducing the incentive for
avoid sick patients.
A national health policy board would
administer the system,
including certifying health plans and insurance
managing the vouchers and payments and collecting and
disseminating data on the quality of care.
The United States now spends about
$1.4 trillion on health
care. The government already pays about 45 percent of
In 2003, the average health insurance premium for a
of four is about $9,000. Using that figure and
numbers, a universal health care voucher system would
about $840 billion, excluding Medicare. That would
substantial sums for individuals to pay for
expenses and services not in the basic package.
More important, using an earmarked
tax to pay for the
vouchers would limit cost increases. The level of the
would determine the value of the voucher. If the
began demanding an increase in the voucher value, it
be directly linked to higher taxes, moderating these
demands and health care inflation.
Obviously, many details need to be
Nevertheless, vouchers hold the promise of securing
support. Democrats have long favored the notion of
universality, while Republicans instinctively favor
plans and have longed for the demise of Medicare and
Medicaid. Businesses want to stop providing health
insurance, and Americans want guaranteed health
With the inexorable explosion in
health care costs and the
increase in the number of uninsured, a crisis seems
hand. The universal health care voucher can secure
widespread support and finally establish a fair,
health care system in the United States.
Ezekiel J. Emanuel, oncologist and
bioethicist, is author
of "No Margin, Nor Mission." Victor R. Fuchs,
emeritus of economics at Stanford, is author of "Who