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Toward true national insurance

IF YOU ARE a young adult, the parent of a young adult, a self-employed worker in the new economy, or one in a low-wage job, you are on the front lines of the health insurance crisis. Once, decent employers provided health insurance as a fringe benefit. But that fringe is unraveling.

If your employer doesn't provide insurance, good insurance is astronomically expensive to purchase. More and more young adults, convinced that they won't get sick, are just doing without. Politicians of all stripes are hearing from constituents.

The Massachusetts Legislature is again wrestling with this issue. Each of the three approaches in play -- the House bill, Governor Romney's plan, and the Senate bill -- bumps into unfortunate fiscal and political realities. The best approach, universal coverage with a single financial pool (Senator Warren Tolman's bill), is not even on the agenda.

Romney claims we can deliver decent family health insurance for $200 a month. That's fantasy. You can achieve that target only with very high out-of-pocket payments, or by severely restricting treatment options. Decent insurance for a family costs more like $600 a month. (That's why the working poor can't afford it.) The governor also likes an ''individual mandate": Compel the uninsured to buy insurance; the poor would get subsidies. But individual insurance is the least efficient way to insure people.

The Senate approach would broaden coverage by shifting more out-of-pocket costs to consumers. Employers could join a state-sponsored pool that allowed very high deductibles and co-pays. This is politically attractive until ordinary people realize the consequences. As health policy it is a devil's bargain. The system is already shifting too many costs to sick people.

The House bill would genuinely expand coverage to nearly everyone, by requiring employers to either provide decent insurance or pay a new tax to finance state-provided insurance. This is the best of a bad lot, but it would retain our current fragmented system with its wasteful administrative costs. And predictably, it runs into fierce opposition from the business community as a whole.

House Speaker Salvatore DiMasi was quoted as wondering why businesses that provide health insurance give political support to those that don't. Mr. Speaker, it's called class solidarity. President Clinton ran into the same problem a decade ago, when he naively expected large corporations that hate government regulation to support universal heath insurance because it would save them money.

Health insurance is the most vivid case of what political scientist Walter Dean Burnham calls a ''politics of excluded alternatives." Polls consistently show that over two-thirds of Americans want universal tax-supported health insurance. Gallup found that 79 percent of Americans want coverage for all, and 67 percent don't mind if taxes are raised to pay for it. Fully 78 percent are dissatisfied with the present system. Medicare, the one part of the system that is true national health insurance (for seniors) is overwhelmingly popular.

There is no hotter political issue, nor one that strikes closer to home. So, if Americans overwhelmingly want national health insurance, why don't we get it? Three huge reasons: political, fiscal, and jurisdictional.

Politically, the immensely powerful private insurance industry would be displaced by national health insurance. Nearly all corporations would rather suffer with the devil that they know (escalating premiums) than the devil they hate (an expanded role for government). Ideologically, something supported by overwhelming majorities is seen as radical. (So was Social Security until it was enacted).

Fiscally, a shift to national health insurance would require about $700 billion that currently goes through the private sector in charges to workers and consumers and shifted to the public sector in the form of taxes. The result would be a far more efficient and reliable system, but many voters would see the increased taxes but not appreciate the savings in premium costs, payroll deductions, or out-of-pocket charges.

Jurisdictionally, states like Massachusetts can perhaps make some piecemeal progress, but it's hard to do this right in one state without pushing the system toward further fragmentation. Medicare works because it's a national program.

The best first step would be public, universal coverage for everyone under age 25, a group relatively cheap to insure. That would be a big political step toward true national health insurance, because it would accustom working-age Americans to the value of a universal system. And if it works for our kids and our parents, why not for everyone?

Robert Kuttner, co-editor of The American Prospect, can be reached at His column appears regularly in the Globe.

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