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New Approaches to Financing Iowa Health Insurance & Health Care

A New Approach: Financing Health Care While Limiting Health Risk

In order to test more firmly consumers' openness to change, we offered a short description of an alternative health care system that postulates a combination of individual, business, and government involvement in paying for health insurance for all. The main planks of the conceptual model are:

• All Iowans would be responsible for having a catastrophic insurance policy for the coverage of major medical expenses.
• With statewide participation, the average premium was estimated to be $150 per family of four.
• Low-income Iowans would get help if needed.
• Employers would no longer pay for health insurance, but would instead pay a contribution of $3,000 per year ($250 per month) into medical savings accounts for each employee. Employees could choose to contribute more from their own funds.
• Employees would use these accounts to pay for ordinary health care expenses such as doctor visits, routine tests, and prescription drugs.
• Excess money would roll over each year and earn untaxed interest.

Respondents were told that helping businesses control costs and stabilize expenses while still providing a genuine benefit for employees was the key concept behind the proposal.

This significant departure from the current system of health care financing wins near majority support.

A near majority (49%) thought they would be better off in this kind of a health care financing system (including 34% who say they would be a little better off and 15% who would be a lot better off). Slightly fewer, 42%, thought they would be worse off (19% a little worse off and 23% a lot worse off). Those who are uninsured are more likely to see benefit in this system, with 68% saying they would be better off, compared to 47% of those who are currently insured.

Interpretation

The purpose of assessing interest in this potential reform model was not to gauge the depth of Iowans' approval or disapproval of each of its key facets. Rather, it was to continue to explore Iowans' openness to the idea of system change. Our previous research had established that support for any given reform proposal will come down to how a proposal answers the question: "What's in it for me?" This reform model includes health insurance, provider choice, the means to finance access both to low-level and to catastrophic medical care, and support for low-income persons. We wanted to see if it elicited among Iowans across social, economic and ideological lines a positive answer to the question "what's in it for me?"

What we see in the reactions to this model and insured Iowans' openness to coverage, benefit, and health care delivery changes is a willingness to consider even radical reform of the health care financing system. This is not surprising as insured and uninsured Iowans have already undertaken, on their own, change in how they use health care because of increasing cost pressures. In short, they have acted as consumers do when faced with cost pressures: they have attempted to change behaviors to control their exposure to increasing costs and will likely continue to do so in the future. Clearly, when purchasing non-health care goods and services, households can lower their exposure to increasing prices by substituting a less expensive mix of items, i.e., in the case of groceries, by consuming home-cooked meals rather than dining out or by eating less food. While consumers may be able to reduce their total household health care consumption by going to the doctor less often, putting off non-emergency medical care, or even by substituting complementary and alternative medicine for allopathic or osteopathic medicine, they are generally cognizant that decisions to reallocate or reduce health care spending involve potentially grave negative consequences from which they seek adequate protection. We believe the provisions of this conceptual model, which includes both funding for access to small dollar and preventative care as well as risk protection in the form of catastrophic health insurance coverage, explains why this conceptual reform model gains cautious initial support.