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The Role of Government

Our Government’s Expanding Role in Providing Health Care

One overarching critical question about health care reform is, “What exactly should government’s role be in the American health care system?”

This is a complex question, and your answer to this question—perhaps more than any other aspect of the issue—probably determines how you feel about the Patient Protection and Affordable Act (PPACA). Whatever else the new law does or doesn’t do, one thing is certain: It significantly changes the government’s role in U.S. health care.

Let’s consider the possibilities—all of which exist in varying degrees and combinations around the globe:

  • Minimal Role—Governments of less-developed nations often play a minimal role in regulating and providing health care.
  • Safety Regulator—For safety and health, governments at the regional or national level often license health care providers and regulate medicine and medical devices.
  • Purchaser and Partial Provider of Health Care Services—Governments, including the U.S. federal government, often provide health insurance benefits as employers. Governments may also directly provide or pay for medical services to certain groups of people, such as the elderly, active military personnel, or veterans.
  • Marketplace Regulator—In some nations, government tightly regulates the business practices of the health care system and even requires residents to purchase health insurance.
  • Primary or Sole Provider of Health Care—Elsewhere, governments operate national health care systems, often funded directly by taxation. Also known as single-payer systems, the government in these systems is the sole provider of health insurance coverage and may also manage many aspects of health care delivery. Health care providers may be government employees, and hospitals government-run.

Most Americans recognize the need for some level of medical safety regulation. It also makes sense for government agencies to provide employees with health insurance benefits, just like many private-sector employers.

Before PPACA, U.S. and state governments played the roles of safety regulator, purchaser and partial provider, and limited marketplace regulator. The new health care reform law, if fully implemented, will drastically change the government’s role in health care.

Lawmakers originally wanted the federal government to become the central provider of health insurance. As enacted, the health care law does not go this far, but it does make government into a large-scale regulator of the health care marketplace. Because PPACA threatens market-based competition, quality, and innovation, while limiting choices and options for American consumers, it is, arguably, a dramatic first step towards a single-payer system in which the government could become the sole provider of health care insurance and services.

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