A key indicator of the health crisis facing our nation is the rising number of Americans who lack quality health coverage. This year nearly one in four individuals will either be under-insured, or without any health plan whatsoever - and we know the devastating consequences of that. Prevention isn’t addressed, diagnoses are missed, and care is deferred. This contributes to more severe illness, long term disabilities, higher costs, medical bankruptcies, and - too often - lives shortened or lost.
I am pleased to see that many people now recognize that prevention is one key factor to help reduce costs. Yet we must do far more, for the scale of the problem is seen in the rapid escalation of health insurance premiums - up a staggering 89 percent since 2000 - far outpacing inflation and wage gains. In Maine, the annual premium for the most heavily subscribed policy in the small group insurance market is $5,400 for individual coverage, and over $16,000 for a family plan. And if a family of four must purchase a policy in our individual market, they can expect an annual premium of over $24,000!
A major factor in such pricing is the lack of competition which exists today. Last March, the Government Accountability Office (GAO) released a report that I requested, along with Senators Bond, Durbin, and Lincoln. The GAO’s report highlights an alarming trend of consolidation in small group insurance markets. The combined market share of the five largest carriers represented 75 percent or more in 34 of 39 states surveyed, and 90 percent or more in 23 of these states, including my state of Maine. Today, a majority of our nation’s uninsured - 52 percent - are self-employed, or work for a small business with fewer than 100 employees (or are economically dependent on someone who does). And, while 99 percent of large firms offer health coverage, less than half of our smallest businesses are able to provide this critical benefit.
It is clear we have a difficult task ahead of us to provide the health system which Americans want - including a choice of affordable coverage options. Substantial commitments will be made in this effort - as individuals take personal responsibility to obtain coverage - as government assists those of modest means - and as employers work to provide workers with the quality health benefits they expect. So Americans should rightly expect that the health insurance industry will respond with a variety of affordable options for quality coverage. I believe that with as many as 70 million new customers for comprehensive coverage - and millions more seeking higher quality, lower cost options - the response to comprehensive health reform will be overwhelming.
Yet some propose that government must play a much greater role. Not simply as standard-setter and regulator - not just in providing assistance to those struggling to afford a policy - but as a provider of coverage to all. The fact is, embarking down that path before even implementing reforms could compromise the competition and innovation which we are pressing to enhance. Providing a government plan raises a number of questions about how to realize benefits from such a plan without the many adverse effects a public plan can create.
This certainly explains why so much controversy surrounds the issue of a public plan. I think it is clear a public plan is no panacea to the problems of health insurance today. We are on the cusp of seeing broad reforms enacted - for the first time - to assure that health plans better serve the public. That can preserve both choice and innovation.
Yet when we enact those reforms - and extend subsidies to those in need - Americans must find that affordable coverage is available to them. That is why the application of a carefully designed public plan option can play a role if private plans fail to provide competitive pricing. A fallback provision can ensure that the health insurance industry delivers the affordable plans Americans need. And by requiring private plans to provide pricing in a timely manner, we can ensure that - where it may be required - such a fallback plan is available to a state’s residents from day one.
There should be no mistake about it: successful health reform relies on far more than spending. It requires a commitment to broad reform of the insurance plans on which we rely to preserve life and health. And we must strive to see that every American can obtain that coverage.
Senator Snowe is a senior member on the Senate Finance Committee.
