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NAVIGATION PNHP RESOURCES
Posted on August 25, 2005

Time for a healthy divorce from employment

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Time for a healthy divorce from employment
By Dr. Susanne King
Berkshire Eagle
Tuesday, August 23, 2005

LENOX - “Employers bracing for health bills” cried the headline in The Berkshire Eagle earlier this month. For the past five years, employee health plan costs in Berkshire County and elsewhere have been rising at double digit rates, and the same is predicted for the coming year. For some small business owners, the rate of rise in health insurance prices has been even steeper. A friend who is a self-insured small business woman told me her insurance tripled over the past five years. She said if her premiums continue to rise, she will be unable to afford health insurance.

Cities and towns have also been struggling to pay for health care for municipal employees, which has led to conflict. Unable to afford the rising cost of health insurance, cities and towns are asking their employees to pay for a greater percentage of the cost of their health care. Property owners are affected as well, since property taxes must be increased to pay for health insurance for municipal employees.

The New York Times reported last year that “health premiums are sapping corporate balance sheets even more than the rising cost of energy.”

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Take the case of General Motors. In 2003, GM’s cost to build a midsize car in the United States included $1,400 for health insurance. However, in Canada, GM was able to manufacture a car for $1,400 less than in the U.S. because Canada has a single payer national health insurance program rather than private insurance tied to employment.

Single payer means that the government collects and dispenses health care funds. In other words, the government is the “single payer” and insurance companies are eliminated. Canada’s single payer, national health care system covers everyone regardless of employment. In a single payer system, huge savings occur because administrative expenses are approximately 3 percent compared to 39 percent when hundreds of American insurance companies are involved. Single payer health care would be like our current Medicare system, except everyone would be covered, regardless of age.

A joint letter signed by the top executives of the Big Three automakers (GM, Ford, and Daimler/ Chrysler) in Canada, said that in addition to providing “essential and affordable health services for all” single payer “significantly reduces total labor costs compared to the cost of equivalent private insurance services purchased by U.S. -based automakers,” and “has been an important ingredient in the success of Canada’s most important export industry (automobiles).”

Canadian national health insurance saved Canadian automakers $4 per hour per worker in 2003 (in U.S. dollars). “High health care costs have created a competitive gap that’s driving investment decisions away from the U.S.,” said the vice chairman at Ford.

Our economy is hurting. In 2003, General Motors spent $4.5 billion on health care, Ford spent $2.8 billion, and Daimler/Chrysler spent $1.4 billion. Every business, big or small, is hurting. Meanwhile, the number of workers insured by their employers is shrinking, and the remaining insured workers are being asked to contribute more to their health care costs, sharing premium costs and having higher deductibles and co-pays.

Employees are hurting. The employer-based private health insurance system in the United States is an unhealthy marriage between employers and private insurance companies. Our system was created after World War II, when wages were frozen, and health care benefits were provided instead of raising wages.

This system has lumbered along, getting more and more unwieldy and expensive, dragging down the competitiveness of our country in a global economy, while workers in every other industrialized nation have national health insurance administered by their governments.

Private health insurance companies are responsible for this unhealthy marriage in our country, which spends twice as much for health care as any country in the world, and yet has poorer health care outcomes than other industrialized countries. What has developed is a system in which our struggling businesses and towns subsidize the profits of insurance companies and drug companies.

In order to maintain their enormous profits, these companies raise the specter of “socialized medicine,” with visions of lines and inferior care. But single payer is not socialized medicine, because health care itself would be provided by privately-owned hospitals and doctors’ offices. The only change would be in the funding and administering of health care by a “single payer” (the government), rather than the current hundreds of insurance payers. The government already pays for more than 60 percent of health care, including Medicaid, Medicare, and the Veterans Administration health care system, as well as paying for public employees’ private health care coverage and giving tax subsidies to private insurance companies.

Government health care spending will increase with the boondoggle that is coming with the privatization of the prescription benefit for Medicare. Why not eliminate the middle men, and use the public funds that are now going through private insurers to actually fund public coverage? Massachusetts has everything to gain by embracing single payer health care.

If towns did not have to subsidize health insurance and drug company profits by paying for health care coverage for employees, they could focus on paying for education, which has suffered from cutbacks in funding because of rising health care costs. And how many business owners and employees matched the salary and benefits of the not-for-profit Massachusetts Blue Cross Blue Shield CEO in 2002, who made more than $3 million?

Automakers have moved manufacturing to Canada, where they take advantage of the single payer national health care system to increase their profits. If we were to have single payer health care in Massachusetts, our system would be an incentive for businesses to move to our state, where the costs of doing business would be lower. What would you save in your business if you did not have to pay for health care insurance premiums for your employees?

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Now is the time to legislate a new system that will divorce health insurance from employment. There are four bills addressing health care reform in the Massachusetts legislature. Only one bill, the single payer Massachusetts Health Care Trust, S. 755, would free businesses, workers and our economy from this tyrannical alliance of health care insurance and employment.

S. 755 is also the only universal and affordable bill. Now is the time to legislate a single payer health care system for our state.