^{Posted on March 7, 2007}

Universal Health for Insurance Companies

by DrSteveB
Daily Kos
Thu Mar 01, 2007

Last week I outlined the generic components of so-called mandated or mandatory plans. This week we will, with the help of Professor Len Rodberg briefly outline some of specific national proposals that have been in the news lately:

America’s Health Insurance Plans
Better Health Care Together Campaign
Health Coverage Coalition for the Uninsured
Sen. Ron Wyden with SEIU & Safeway
Federation of American Hospitals
John Edwards

What they share is the goall to keep the insurance companies healthy… lets see how that works.

First a note about Len. Len is not only a great guy, but has been involved in numerous progressive health care reforms from numerous single payer plans going back at least to the Dellums bill (look it up), to early promotion of Community Health Centers, to compiling and analyzing of hospital statistics statewide. He is the only Urban Studies professor I know of with a PhD in Physics (seriously).

As we noted last week, “Universal” Health Care is back in the political arena, for the first time since Hillary-care crashed and burned in 1993-1994. This is mostly due to the fact that costs rising far faster than inflation: From 2000 to 2006 health insurance premiums have one up 87%, compared to 20% for overall inflation and 18% for workers earnings. In our primarily employer-based coverage system more companies are either dropping coverage altogether, or raising the amount paid by employees (contributions to premium, copays, deductibles, reduced coverage).

The national average premium cost for employer-provided insurance is now up to $4,024 per year for single coverage and $10,880 per year for family coverage. Compare that to an annual income at minimum wage of $10,300 and the alleged average annual of a Wal-Mart worker of $17,114. If you have to buy your own, even at the reduced group rate that companies get, there’s not much left over for food and housing.

Not surprisingly the numbers of uninsured have been going up dramatically: from 22 million in 1975, we broke 30 million in 1985, 40 million in 1995, and are now around 46-47 million.

So what about those plans…

The Good News: “Universal health care” is accepted as the goal.
The Bad News: This is defined to mean using tax dollars to help the uninsured buy private insurance from the existing high-overhead middlemen of the for-profit insurance companies.

1. America’s Health Insurance Plans & Federation of American Hospitals

- aka: “the private insurance & private hospital protection plan.”
Expand SCHIP and Medicaid eligibility for very low-income
Provide federal and state subsidies and tax deductibility to encourage everyone else to buy private insurance
In other words: Use taxes to cover some more of the poor high risk, then give more tax dollars to the unnecessary middlemen private for-profit industry that eats up 31% overhead, compared to 4-13% achieved in direct plans.

2. Better Health Care Together Campaign

aka: “The Grand Coalition”
Members: ATT (big biz), Kelly Services (temp company), Wal-Mart (bigger biz), SEIU & CWA (unions), Center for American Progress
Principles but no Program:
a. Quality affordable insurance coverage for everyone
b. Individuals are responsible for maintaining and protecting their health
c. Improved value for health care dollar
d. Shared Responsibility Businesses, government, individuals all contribute. By business they mean both employers and the private for-profit health care industry.
Widely covered press Conference, but no real specifics.

3. Health Coverage Coalition for the Uninsured

aka: “The Even Grander Coalition”
Members: UnitedHealth, Blue Cross & Kaiser (insurers), American Hospital Association, American Medical Association, Chamber of Commerce & National Association of Manufacturers (biz lobbyists), Pfizer (pharmaceutical company), AFL-CIO (well national anyway; many states, councils and locals have been endorsing Conyers HR-676 “Medicare for All”single payer), SEIU (well Stern anyway, many locals endorsing Conyers HR-676 “Medicare for All”, AARP, Families USA (well Pollack anyway; he’s still feeling too burned by 1994)
Coalition was so “Grand” that they could agree only on:
a. Expanding coverage as a goal
b. Expansion of SCHIP
c. Tax credits for children’s insurance

4. Senator Wyden’s Healthy Americans Act

aka: “Employer coverage is dying, so let’s kill it faster”
Supporters: SEIU, Safeway, Families USA
Eliminate the tax deductibility of employer-based insurance with goal to ends employer-based health coverage.
Requires individual purchase of insurance
Transitional payments by employers
Subsidies to low-income individuals
Relies on competition between private insurers to contain costs (but unclear how this would happen since no evidence that health insurers work that way… they only compete for who can get the healthy and wealthy).

5. John Edwards Plan

I give him some credit for at least making a relatively specific proposal.
but some do call it “individual mandate with a pretty face”
essentially same as Jacob Hacker plan from Econimic Policy Institute (EPI)
Interestingly Edward’s also offered a mandate plan when he ran in 2000.
Employer mandate (“play or pay”)
Individual mandate with community rating
Government subsidies for low-income
Regional purchasing plans (“Health Markets”)
Choice of Government program (which is DISHONESTLY referred to as single-payer; shame on them) as well as Private Plans.
Claim: For everyone: Shared responsibility
Claim: For the fearful: Lets people keep what they have
Claim: For those worried about cost: Everyone will work together to make the system more efficient
Claim: For single payer advocates: Individuals and businesses can choose if they want the government plan; if so, the system will “evolve toward a single-payer approach.”
No cost control!!!
Requires additional taxes and expenditure above what we pay already
by comparison: Single-Payer costs about 5% LESS than current expenditures to cover everybody with high-quality coverage and no out-pocket expenses. That what you can do with the $350 Billion in savings by cutting out the 31% bloat of the unneeded middlemen of the private for-profit insurers.

So, once again… What’s Wrong with an Individual Mandate?

Well among other things:

Will not lead to universal coverage. Comparison to mandatory auto insurance where at least 10% don’t have.
Enforcement is anti-public health
Affordable premium vs half-decent coverage: can’t leave private for-profit insurers in the middle and still have both, as Massachussetts is discovering. Feds discovered this when tried to have Medicare Manged Care and privates could not make enough profit and dropped out, until offered 11% higher payments than regular Medicare!
Employers will drop coverage (“crowd out”) if play or pay cutpoint is set at affordable level.
Insurance companies resist community rating (same premium rate for everybody regardless of pre-existing conditions or risk) and mandatory coverage(have to take everybody regardless of pre-existing conditions or risk)
Leaves in place the consumer nightmare of copays, deductibles, exclusions, denials, appeals.
Expands the complexity (and humiliation) of Medicaid’s humiliation of means testing (not so easy for the majority of workers who are not on straight regular salary; usually require income tax return to be shown).
Add new layers of bureaucracy such as the “Health Markets”.
Additional high cost of about $120 Billion in Federal tax money and some unknown still for individuals.
No cost control, just continuing rising costs!

Len goes on to argue that none of these plans will happen, because:

They cost hundreds of billions of additional dollars
They benefit only those with low incomes and those without insurance, who are politically weak.
Does nothing for the 50% of middle- and lower-income adults who have insurance but still experience serious problems paying medical bills or insurance premiums.
Does nothing for the people with insurance and still going into bankruptcy. 50% of bankruptcies due to medical bills and 75% of those folks had health insurance.
Does nothing for the 12-18% of folks who are underinsured.
They don’t solve any of the problems (especially rising costs) that concern everyone
None envisions a real structural change.

In the 1940s and 1950s America moved forward with employer-based group health care coverage.

Going backwards to individual purchase of insurance is not the answer.

What is common to these plans is that they identify the wrong problem and then offer the wrong solution:

Identification of the problem: too many uninsured.
Their solution: Require everyone to have insurance
Employers should contribute but not necessarily offer insurance
Their real mission: Save the private insurers

The problem really is the Private For-Profit Insurance Industry:

None of these plans does much about what is the real problem
Excessive administrative costs
Excessive complexity
Continuously rising costs
Lack of coordination, budgeting, and planning
Regressive financing via premiums (premium is the same if you are rich or poor)
Widespread underinsurance and bankruptcy
Interference in physician decision-making
The hassle factor paperwork at every level, filing claims, automatic or phony denials, re-submitting claims…

Solution:

Expand Medicare to cover everyone: The hassle difference between folks who use Medicare is astounding.
Improve the coverage it offers (drugs, dental, mental)
Eliminate private insurance
Automatic enrollment in Medicare for All
Income-based financing through employers and employees (yeah for “shared responsibility”), preferably through progressive income and corporate taxes, but possibly via deduction taxes (e.g., ~8% corporate; ~2.5% on individuals).

For more on how single-payer works: peviously I outlined and described in some depth how single payer works, and debunked some of the myths propagated against single payer.

Something else all those so-called “politically practical compromise plans” have in common.

They are all are just inside the beltway elites and lobbyists talking to each other (the same ones over and over, as you may have noticed).
None actually has any grassroots support.
The one plan with a grassroots movement behind it is Rep. John Conyers HR-676 “Medicare for All”.

HR 676 has been endorsed by over 235 union organizations in 40 states including 60 Central Labor Councils and Area Labor Federations and 17 state AFL-CIOs (KY, PA, CT, OH, DE, ND, WA, SC, WY, VT, FL, WI, WV, SD, NC, MO & MN), as have many other civic and religious organizations. Including several locals of SEIU.

The bill garnered nearly 78 co-sponsors in the last Congress, more than any other reform proposal, including the chairman of Ways and Means (Rangel, D-NY) and the chair of Ways & Means health subcommittee (Pete Stark, D-CA). At least three of the newest members of Congress made support for single payer national health insurance a key issue in their campaigns. Senator Kennedy has been the Senate sponsor in past years.

HR 676 would institute a single payer health care system in the U.S. by expanding a greatly improved Medicare system to every resident: It would cover every person in the U. S. for all necessary medical care including prescription drugs, hospital, surgical, outpatient services, primary and preventive care, emergency services, dental, mental health, home health, physical therapy, rehabilitation (including for substance abuse), vision care, hearing aids, chiropractic and long term care. HR 676 ends deductibles and co-payments. HR 676 would save billions annually by eliminating the high overhead and profits of the private health insurance industry and HMOs.

HR 676 has been endorsed by 235 union organizations in 40 states including 60 Central Labor Councils and Area Labor Federations and 17 state AFL-CIOs (KY, PA, CT, OH, DE, ND, WA, SC, WY, VT, FL, WI, WV, SD, NC, MO & MN), as have many other civic and religious organizations.

So, here is what YOU can DO now:

1. Ask your congressperson to sign-up as a co-sponsor of HR-676!

You can look-up your elected officials here

2. Get any organization you belong to — civic, religious, labor, community, etc. to pass an HR-676 endorsement resolution:

Here is how to do that via Physicians for a National Health Program.
or here hereif you prefer via a non-physician group.

Just do it!