Health care 'overhaul'? The devil's in the details

By Andrew Coates
Rochester City Newspaper
December 29, 2009

As health insurance reform inches towards the president's desk, the airwaves and editorial pages fill with spin. "Health-care overhaul," the headlines say. "Still a government takeover of health care," the Republicans in Congress say. "The culmination of a struggle begun by Theodore Roosevelt," Vice President Biden says.

Against so much political posturing, Representative Eric Massa has proven himself unique in Congress: someone who sticks to the facts. Last month when he courageously voted against the House bill, he said it would strengthen, not weaken, the hand of the private insurers. The insurance industry is the problem, not the solution, he explained. As the legislation nears final reconciliation, Massa's analysis remains solid.

The crux of the legislation in Congress is compulsory private insurance. Under the "individual mandate," a long-held wish of the insurance companies, the government will coerce people to become and remain their paying customers.

If you're uninsured and you don't buy health insurance, the Senate bill allows a fine of up to 2 percent of your income, assessed by the IRS. (It's 2.5 percent in the House bill.) Pay the fine and you're free to remain uninsured.

If you simply can't afford a policy, according to the Senate bill, you can avoid paying the fine by applying for a "hardship waiver." Get the waiver and you're free to remain uninsured.

Since the legislation does nothing to make insurance affordable, tax money will subsidize private insurance premiums for those who earn up to 400 percent of the federal poverty level. But those earning up to 400 percent of the poverty level would still have to pay up to 9.8 percent of their income for insurance (under the Senate bill). This taxpayer gift to insurance companies will amount to as much as $476 billion - half a trillion dollars - over a decade.

The Senate formula also pushes the onus of health costs onto individual families by imposing a 40 percent tax on high-cost health plans, an incentive to reduce coverage. This will especially impact residents of states with high insurance costs, like our own state; union members with comprehensive benefits; companies that employ women (whose group insurance costs are higher), and plans that cover older employees (whose insurance costs are higher).

The Senate bill also encourages skimpy coverage by allowing the most basic plans to cover only 60 percent of actual health costs on top of growing of out-of-pocket expenses. Prescription drug costs have gone up 9 percent this year. Meanwhile, the insurance industry itself has estimated premium hikes of 79 to 111 percent over the coming decade.

In addition to millions of new customers for insurance companies, the legislation seeks an enormous expansion of Medicaid, with new enrollment of millions of people by expanding eligibility to those who earn up to 150 percent of the federal poverty level. But we know from bitter experience that having Medicaid is no guarantee of access to care, nor will it reduce disparities in care.

If private insurance will remain a defective product and Medicaid will remain a poor program for poor people and the legislation will not reign in costs - where is the reform?

But perhaps most startling is that the major features of the legislation would not begin until 2013, after the next presidential election, and then would take effect gradually over six years more. Such a proposal hardly seems worthy of the name "overhaul" when we remember that Medicare passed in 1965 and was up and running in 1966.

Last month when he voted against the House bill, Congressman Massa explained that he had studied the entire bill and that he understood the health care needs of his district. As the Congressional process lumbers forth, with the pending legislation ever more insurance-industry-friendly, Eric Massa has emerged as a portrait of leadership, courage, and honesty.

It's time to scrap this pro-insurance-company legislation and start over. A good starting point would be the improvement and expansion of Medicare to cover every person in the United States.

Andrew Coates practices medicine in Albany, where he is assistant professor of medicine and psychiatry at AlbanyMedicalCollege. He is a member of the board of directors of Physicians for a National Health Program.