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War in Iraq, terrorists in Afghanistan and nukes in North Korea. U.S. policymakers have their agendas full with these obvious threats to national security. But what about domestic issues, like the rising cost of providing health benefits and the increasing ranks of the uninsured?

At least one savvy and experienced political leader thinks health care and the problem of the uninsured need to be added to that list of national concerns--and be targeted for quick action. He's probably not alone.

Garamendi, speaking at Benefits Marketing Mania in Las Vegas, a national conference co-sponsored by the Benefits Marketing Association and the National Association for Critical Illness Insurance, pointed to the steadily increasing portion of the economy devoted to health care--11 percent in the 1990s and 16 percent in 2006.

"Yet the more we spend (providing health care), the fewer we actually have insured," he said. "And as the cost of insurance premiums and care goes up, the fewer the individuals can afford it."

Garamendi also noted that as health-care expenditures reach 19 percent of the economy by 2013 or 2014, the economic structure of the country will be stressed, as so much resource is focused on a single sector of the economy.

What's the solution? Not consumer-directed health plans, which have recently become popular with benefits brokers and their corporate clients, he said. Health Savings Accounts and other platforms for consumer-directed health plans "are really not the answer to controlling costs," or providing more and better health care to the millions of uninsured.

"If you are healthy and wealthy, they are a great product," he said, but they're not a perfect tool for meeting a concern that is national in scope.

Garamendi also attacked consumer-directed health plans as a long-term method for controlling employer benefit costs. He likened the new plans to managed care of the 1980s and 1990s, which caused a brief flattening of health insurance premium costs before petering out.

"I think we have plenty of evidence right now that indicates that these plans will not be successful cost-control vehicles in the long term," he said.

Instead, Garamendi called for the creation of a universal health-care plan in the United States that would provide "strong, considerable and comprehensive care."

"It's time for the United States to catch up with all of the other industrialized countries in having some form of universal health coverage," he said.

Garamendi stopped short of proposing a Canadian-style, single-payer plan or an employer-provided coverage mandate such as those proposed in other states, but he did say that some radical overhaul was necessary and should be resolved within the next five years.

"If we look at our future, going forward," he said, "health care is of profound importance."

Garamendi has a reputation for being on the most liberal edge of insurance and employee-benefits thinking, but as more and more large employers look for ways to rid themselves of health-care costs, his position will likely become more appealing even to the more conservative corporate leaders.

LEN STRAZEWSKI, a professor and benefits expert, is a columnist for Risk & Insurance®.

September 1, 2006

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