Hawaii's "crowd out" crowds out children

Posted by on Monday, Oct 20, 2008

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Hawaii ending universal child health care

By Mark Niesse
The Miami Herald
October 17, 2008

Hawaii is dropping the only state universal child health care program in the country just seven months after it launched.

Gov. Linda Lingle’s administration cited budget shortfalls and other available health care options for eliminating funding for the program. A state official said families were dropping private coverage so their children would be eligible for the subsidized plan (Keiki Care).

“People who were already able to afford health care began to stop paying for it so they could get it for free,” said Dr. Kenny Fink, the administrator for Med-QUEST at the Department of Human Services. “I don’t believe that was the intent of the program.”


Although Hawaii’s Keiki Care for uninsured children was promoted as a program that would ensure that all children had health care coverage, it never would have achieved universality, partly because of various eligibility and enrollment issues. Also the coverage was not as comprehensive as coverage under Medicaid. Nevertheless, it did provide limited coverage for about 2,000 of the state’s uninsured children (out of an uncertain number estimated between 3,500 and 16,000).

In designing incremental reform measures, many in the policy community insist that programs must be designed to prevent crowd out. Crowd out is a phenomenon in which individuals will drop out or be pushed out of an existing program, such as employer-sponsored coverage, in order to be enrolled in another program, such as Keiki Care. Administrators who wish to minimize spending in public programs frown upon crowd out.

Although this program is only seven months old, and, to be eligible, children must have been uninsured for at least six months, it is unlikely that crowd out was a significant contributor to the very modest enrollment rates.

Most economists consider crowd out to be undesirable because the numbers of individuals crowded out of existing coverage are subtracted from the total in the alternative program to determine the net gain in numbers covered. That might be important if your only goal were to increase the numbers with coverage, but aren’t there other desirable goals? Hint: In 1966, was it really detrimental that Medicare crowded out coverage in the private insurance sector for those over 65?

Keiki Care is yet another example of an incremental program designed to approach the goal of universal coverage a single step at a time. Although these programs are reported as successes, the long-term trend is that almost all measurements continue to demonstrate deterioration in affordability and coverage.

As long as we continue down the path of patch-work incremental reform, we are going to continue to hear alarms sounded over crowd out, adverse selection, moral hazard, medical loss ratios, investor return, lack of price transparency, high premiums due to excess regulation of private plans, and on and on, and we will never reach our goal of affordable health care for everyone.

It’s time to dump the perverse policies that serve the interests of others, and adopt policies that would serve the interests of patients – a single payer national health program.

Underinsurance in Massachusetts

Posted by on Friday, Oct 17, 2008

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

The Impact of Health Reform on Underinsurance in Massachusetts: Do the insured have adequate protection?

By Sharon K. Long
Urban Institute
October 2008

In an attempt to protect individuals from underinsurance, as part of that health reform effort Massachusetts established a standard for “minimum creditable coverage” (MCC) that outlines the key benefits that must be included in an individual’s health insurance plan if it is to satisfy the state’s new individual mandate for health insurance coverage. The required benefits, which are intended to protect those with insurance from high health care costs, include preventive and primary care, prescription drugs, a maximum on the annual deductible and a maximum on out-of-pocket spending, among other things.

In brief, underinsurance means that an individual’s health insurance does not adequately protect him or her from high health care costs in the event of a serious illness or accident. A complete assessment of the adequacy of insurance coverage requires detailed information on the coverage and cost-sharing provisions of the individual’s health insurance plan. Given the data available in our survey, we are limited to a narrower focus that considers the individual’s out-of-pocket (OOP) heath care costs. (Note that this is OOP costs for health care beyond the premium that the individual pays to purchase private coverage.) High OOP health care costs provides a conservative, lower-bound estimate of underinsurance as it only captures inadequate insurance coverage for those who had high health care costs in the last year. Consequently, this measure of underinsurance does not include any of the individuals with similar health insurance coverage who did not have high health care costs during the year.

We follow the approach used by Schoen et al. (2005, 2008) and use two standards to assess underinsurance:

(1) Having OOP costs of 10 percent or more of family income–a threshold that has been used in prior studies of underinsurance, and

(2) Having OOP costs of 5 percent or more of family income for low-income families (defined as those with family income less than 200 percent of poverty)–a threshold for financial risk that is consistent with cost-sharing provisions in the State Children’s Health Insurance Program (SCHIP).

Given the limitations of our data, the measure of underinsurance reported here provides a conservative measure of the extent of underinsurance in Massachusetts.

Drop in Underinsurance. In fall 2006, at least 4 percent of all working-age adults with full-year insurance coverage in Massachusetts were underinsured under the first definition of underinsurance (10 percent or more of family income in OOP health care costs) and at least 7 percent were underinsured under the second definition. Under health reform, the share of insured adults who were underinsured under both definitions dropped by about 2 percentage points between fall 2006 and fall 2007, down to about 3 percent and 6 percent underinsured, respectively.


Results restated in a summary by The Commonwealth Fund:

In fall 2006, 7.3 percent of all Massachusetts adults were underinsured (using the definitions above: out-of-pocket costs equal to 10% or more of income for higher-income people, 5% or more for lower-income people). After the enactment of health reform, that share declined to 5.6 percent.


Many news reports now tout the success of the Massachusetts health care reform program in reducing the numbers of the uninsured, even though falling far short of universal coverage. This new report also suggests that the rate of underinsurance may have declined, an important point since it was feared that efforts to make the plans more affordable would defeat the financial security that the plans should provide.

Massachusetts already had higher regulatory standards for their insurance products, but to be certain that coverage would be adequate under this program, they established a standard for “minimum credible coverage,” with benefits “intended to protect those with insurance from high health care costs.” How well has that worked?

Using estimates that omit many instances of underinsurance, this study shows that the rate of underinsurance is still over three-fourths of the rate that existed before the program was initiated. A program that eliminates less than one-fourth of the problem targeted should not be considered a successful program.

Of particular concern is that those individuals who are currently healthy, the majority of all insured, were not considered to be underinsured even if their coverage is not adequate to protect them against financial hardship should they develop significant medical problems in the future. Since one of the most important functions of insurance is to protect against unforeseen losses, the incidence of underinsurance is far greater than this study would indicate.

Massachusetts really needs to take another look at the single payer model of reform. By design, single payer includes everyone and eliminates the financial hardships of underinsurance. Their current reform model will always fall short of those goals.

Medicaid reform for the clairvoyant

Posted by on Tuesday, Oct 14, 2008

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Florida’s Medicaid Reform: Informed Consumer Choice?

By Teresa A. Coughlin, et al
Health Affairs
October 14, 2008

Until recently, Medicaid recipients within a state typically had access to the same set of benefits. Recent federal changes, however, move Medicaid in a new direction by allowing states to offer different benefit packages to different Medicaid recipients and to emphasize consumer choice and personal responsibility.

Under reform, participating plans are now allowed to offer different benefit packages and impose different levels of cost sharing for nonpregnant adult enrollees, subject to state approval. Although plans must include all mandatory Medicaid benefits and most optional benefits, services can vary in amount, duration, and scope.

As a result, enrollees are newly required to consider differences in benefit packages when making a choice of plans. They must also consider other plan differences such as preferred drug lists, provider networks, and prior authorization requirements.

After Florida implemented reforms, a sizable minority of recipients were not even aware that they were enrolled in a reform plan, and many did not understand how their plan worked.


Medicaid was designed as a welfare program to pay for all necessary care for those who could not otherwise afford it. The program has not worked as well as it should, primarily because of chronic underfunding. Access has been impaired because of the lack of providers willing to participate in a program that often doesn’t even pay overhead expenses.

With the problem defined as such, the most obvious solution would be to increase funding to a level that would pay expenses and provide fair compensation. That is not a realistic solution since welfare programs are highly vulnerable to political efforts to control government spending.

Another solution would be to remove the welfare stigma by eliminating Medicaid and enrolling the participants in a program with comprehensive benefits that would cover all of us. We do keep talking about that, but political inertia continues to prevail.

So now we have an element in our society which suggests that we should shift the spending decisions to the individual, not only for Medicaid beneficiaries, but for all of us. Since almost none of us could afford the costs of significant health problems, we still need to rely on risk pooling. Understanding that, the consumer-directed advocates then suggest that our choice be amongst various health plans as a proxy for decisions on health spending.

With a market of various plans from which to choose, all we need to know is what unknown major acute or chronic disorder we will develop next year, if any. Once we know that, we can choose a plan that includes the specialists who have expertise in our undetermined problem. We can choose a plan with a hospital that provides the specific services that we will need and will be accessible to us. We can choose a plan that includes in its formulary the unknown expensive drugs that we will need. Finally, if we were to develop an expensive problem, we can avoid plans with high deductibles and other cost sharing provisions that might wipe out our personal assets.

What nonsense! Since none of us can predict the future, we cannot possibly choose the precise plan that eventually we may or may not need. Yet we are already headed down that path. The individual market is rife with these ridiculous choices, and employers are headed in that direction as they shift to high deductible plans and small individual cash accounts that could never pay for major medical problems.

Haven’t we had enough of these screwball ideas? We already have the money to pay for comprehensive, high quality care for everyone. Let’s throw out the crackpots and establish our own program that actually would work: a single payer national health program.

(Please do not confuse my use of “screwball” and “crackpot” as insensitive terms that in the past have been used inappropriately to describe unfortunate individuals with mental health problems. Here the terms simply refer to cruel, inhumane, and sometimes greedy humanoid life forms that may be found groveling around in Washington, D.C.)

Nobel Laureate Paul Krugman on single payer

Posted by on Monday, Oct 13, 2008

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

One Nation, Uninsured

By Paul Krugman
The New York Times
June 13, 2005

Harry Truman tried to create a national health insurance system. Public opinion was initially on his side: Jill Quadagno’s book “One Nation, Uninsured” tells us that in 1945, 75 percent of Americans favored national health insurance. If Truman had succeeded, universal coverage for everyone, not just the elderly, would today be an accepted part of the social contract.

But Truman failed. Special interests, especially the American Medical Association and Southern politicians who feared that national insurance would lead to racially integrated hospitals, triumphed.

Sixty years later, the patchwork system that evolved in the absence of national health insurance is unraveling. The cost of health care is exploding, the number of uninsured is growing, and corporations that still provide employee coverage are groaning under the strain.

So the time will soon be ripe for another try at universal coverage. Public opinion is already favorable: a 2003 Pew poll found that 72 percent of Americans favored government-guaranteed health insurance for all.

But special interests will, once again, stand in the way. And the big debate among would-be reformers is how to deal with those interests, especially the insurance companies. These companies played a secondary role in Truman’s failure but have since become a seemingly invincible lobby.

Let’s ignore those who believe that private medical accounts – basically tax shelters for the healthy and wealthy – can solve our health care problems through the magic of the marketplace. The intellectually serious debate is between those who believe that the government should simply provide basic health insurance for everyone and those proposing a more complex, indirect approach that preserves a central role for private health insurance companies.

A system in which the government provides universal health insurance is often referred to as “single payer,” but I like Ted Kennedy’s slogan “Medicare for all.” It reminds voters that America already has a highly successful, popular single-payer program, albeit only for the elderly. It shows that we’re talking about government insurance, not government-provided health care. And it makes it clear that like Medicare (but unlike Canada’s system), a U.S. national health insurance system would allow individuals with the means and inclination to buy their own medical care.

The great advantage of universal, government-provided health insurance is lower costs. Canada’s government-run insurance system has much less bureaucracy and much lower administrative costs than our largely private system. Medicare has much lower administrative costs than private insurance. The reason is that single-payer systems don’t devote large resources to screening out high-risk clients or charging them higher fees. The savings from a single-payer system would probably exceed $200 billion a year, far more than the cost of covering all of those now uninsured.

Nonetheless, most reform proposals out there – even proposals from liberal groups like the Century Foundation and the Center for American Progress – reject a simple single-payer approach. Instead, they call for some combination of mandates and subsidies to help everyone buy insurance from private insurers.

Some people, not all of them right-wingers, fear that a single-payer system would hurt innovation. But the main reason these proposals give private insurers a big role is the belief that the insurers must be appeased.

That belief is rooted in recent history. Bill Clinton’s health care plan failed in large part because of a dishonest but devastating lobbying and advertising campaign financed by the health insurance industry – remember Harry and Louise? And the lesson many people took from that defeat is that any future health care proposal must buy off the insurance lobby.

But I think that’s the wrong lesson. The Clinton plan actually preserved a big role for private insurers; the industry attacked it all the same. And the plan’s complexity, which was largely a result of attempts to placate interest groups, made it hard to sell to the public. So I would argue that good economics is also good politics: reformers will do best with a straightforward single-payer plan, which offers maximum savings and, unlike the Clinton plan, can easily be explained.

We need to do this one right. If reform fails again, we’ll be on the way to a radically unequal society, in which all but the most affluent Americans face the constant risk of financial ruin and even premature death because they can’t pay their medical bills.


With today’s announcement that Paul Krugman is the 2008 recipient of the Nobel Prize, it seems appropriate to distribute once again one if the most important articles he has ever written, and the message could not be more timely.

Although economics is considered to be an amoral science, Paul Krugman and Uwe Reinhardt have proven to us that even economists can have a heart.

Celebrate Paul Krugman’s award by sharing his single payer article with others. Economics with a heart. Now isn’t that something.

McCain and Obama perceptions of health financing flaws

Posted by on Friday, Oct 10, 2008

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Candidates Disagree On Primary Flaws Of Health Care Financing

By Don McCanne
The Huffington Post
Off the Bus
October 10, 2008

John McCain and Barack Obama both recognize that there are serious problems with our health care system, and that the voters want something done about it. They would both use public policies to modify the private health insurance market to accomplish their goals. Although it would seem that their goals are similar, the specifics are quite different because they have started from very dissimilar perceptions of the primary flaws in health care financing.


As we near election time, we are seeing numerous reports, some excellent and some distorted, on how effective the McCain and Obama proposals would be in reducing the numbers of uninsured. Rather than digressing into disputes over the details of these analyses, it would be more instructive to step back and look at the fundamental goals of each proposal.

Rather than repeating the theme here, it would be simpler to read the brief article at the link above.

Lewin analysis of candidates' proposals

Posted by on Thursday, Oct 9, 2008

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

McCain and Obama Health Care Proposals: Cost and Coverage Compared

The Lewin Group
October 8, 2008

In this study, The Lewin Group estimated the cost and coverage impacts (for 2010-2019) of the health reform proposals introduced by Senators McCain and Obama. Our key findings are that the McCain proposal would reduce the number of uninsured from a projected number of 48.9 million people in 2010 by 21.1 million people if fully implemented in that year. The Obama plan would reduce the number of uninsured by 26.6 million people. The McCain proposal would result in a net increase in federal spending (i.e., net of offsets) of $2.05 trillion over the 2010 through 2019 period compared with a net federal cost of $1.17 trillion under the Obama plan over this same ten-year period.

The Candidates’ Proposals

The McCain proposal would expand coverage through private insurance and decrease regulation of health insurance markets. His plan would provide a refundable tax credit of $2,500 for single filers and $5,000 for families that have private health insurance from an employer or as an individual in the non-group market. Insurers would be permitted to sell insurance across state lines, thus sidestepping state minimum benefit and insurance rating regulations.

The McCain proposal would establish federally subsidized high-risk pools called the Guaranteed Access Program (GAP) to cover those denied coverage due to health status. The Campaign indicates that half of the losses under the GAP would be paid with an assessment on private insurance with the federal government providing the remaining half.

The Obama proposal would expand coverage through public and private insurance and increase federal regulation of insurance markets. His proposal would expand Medicaid eligibility to include all very low-income adults and would provide premium subsidies for people with low to moderate incomes. Insurers would be prohibited from denying coverage or setting insurance premiums on the basis of health status. Also, the Obama plan would provide small employers with a tax credit for the purchase of insurance and would create a federally subsidized reinsurance program to cover “catastrophic health” expenses in employer plans.

Senator Obama’s plan would also create a “National Exchange” offering a selection of private health insurance options comparable to those now offered to members of Congress and federal workers. The exchange would be open to individuals, the self-employed and small employers. In addition, the Obama proposal would create a new publicly-operated insurance program called the “National Plan” that would be available as an alternative to private coverage in the National Exchange.

Unlike the McCain plan, the Obama proposal would establish a minimum standard of covered benefits.


The release of this report from The Lewin Group has provoked a debate on whether it accurately reflects the numbers of individuals that would gain coverage under the McCain and Obama proposals respectively. Although this debate is legitimate, it misses the most important point. We don’t really care how many people nominally have health insurance; we want to know whether or not people are protected from financial hardship should they need health care.

The McCain proposal aims to make premiums for private health plans affordable by deregulating the market. Premiums can be kept low by (1) creating a market of underinsurance products (limited benefits and greater cost sharing, especially through high deductibles), and by (2) insuring only low risk individuals who can pass medical underwriting standards.

The Lewin report makes the assumption that when the McCain plan is fully implemented in 2010 the number of individuals with private employer coverage will decrease from 157 million to 148 million. That level of decrease might be true at the beginning of the program, but incentives are likely to cause a further dramatic decline in employer-sponsored coverage. If an individual can obtain a very inexpensive plan in a deregulated market, and the government is going to provide a $2500/$5000 tax credit, why would an employer want to continue to offer an expensive comprehensive plan, and why would an employee pass up a pay increase offered by the employer for those who decline coverage?

Once a large number of healthy employees move into the individual market, the employer-sponsored plans will be subject to adverse selection. The spiraling costs of premiums will cause employers to terminate their plans, especially since a President McCain’s proposal would have opened up the individual market to plans with affordable premiums, albeit underinsurance plans.

Since the deregulated market insures only healthy individuals, the individuals who actually need health will have to look elsewhere for coverage. Sen. McCain understands this, and that is why he has proposed the Guaranteed Access Program (GAP) to insure these individuals with greater needs.

This is where there is a problem with defining the success of a reform proposal by the numbers of insured individuals. The very large number of individuals purchasing underinsurance plans are healthy, but most of the spending is on the smaller group with needs that will be forced to obtain coverage under GAP. The Lewin Group estimates that of those with chronic health conditions who are currently uninsured, only 24 percent would be covered by the McCain proposal. These are people who most desperately need coverage, yet three-fourths of them would remain uninsured.

How does McCain propose to pay the high costs of those who do make it into GAP? Half would be paid by federal subsidies (taxes), but the other half would be paid by assessments on individual private insurance plans. Suddenly the cheap premiums for these underinsurance products aren’t so cheap anymore since half of the excess costs of the high-risk pools are moved back into the underinsurance pools. What will happen to the enrollment rates for these underinsurance products when the premiums are jacked back up to unaffordable levels?

When people tell you that the McCain plan is almost as good as the Obama plan in reducing the number of uninsured, you now have a response. The McCain proposal provides nominal coverage with uninsurance plans for those who are healthy, but it doesn’t pay the bills for those who actually need health care.

Presidential debate – health care as a right

Posted by on Wednesday, Oct 8, 2008

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

The Second Presidential Debate

October 7, 2008

Tom Brokaw: Is health care in America a privilege, a right, or a responsibility?

John McCain: I think it’s a responsibility…

Barack Obama: Well, I think it should be a right for every American…


Asking whether health care is a privilege or a right often leads to a not very productive ’tis so, ’tis not debate. But when the question is asked with the added choice of responsibility, and then answered, the answers can be very revealing.

If you believe that health care should be an individual responsibility, you might design reform based on a relatively unregulated market of private health plans.

If you believe that health care should be a right, you might design reform based on social solidarity with government guaranteeing that all of us receive the care that we need.

Proposals floated during political campaigns are rarely the final definitive proposals, especially with an issue as complex as our dysfunctional health care financing system. But it is important to understand the fundamental beliefs of those who we would elect to establish new policies addressing the problems that we face. A system that honors the right for everyone to obtain the health care that they need will look very different from a system that assigns the responsibility for obtaining health care to the individual.

What reform does business want?

Posted by on Tuesday, Oct 7, 2008

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Business Cool Toward McCain’s Health Coverage Plan

By Kevin Sack
The New York Times
October 6, 2008

American business, typically a reliable Republican cheerleader, is decidedly lukewarm about Senator John McCain’s proposal to overhaul the health care system by revamping the tax treatment of health benefits, officials with leading trade groups say.

The officials, with organizations like the U.S. Chamber of Commerce, the Business Roundtable and the National Federation of Independent Business, predicted in recent interviews that the McCain plan, which eliminates the exclusion of health benefits from income taxes, would accelerate the erosion of employer-sponsored health insurance and do little to reduce the number of uninsured from 45 million.

Officials with eight business trade groups contacted by The New York Times predicted the McCain plan would raise costs and force some employers to stop providing health benefits.

A recent survey of 187 corporate executives by the American Benefits Council and Miller & Chevalier, a consulting firm, found that three-fourths felt the repeal of the tax exclusion would have a “strong negative impact” on their workers. Only 4 percent said they would provide additional pay to fill any gaps.


Where does American business really stand on health care reform?

Employers remain very concerned about rising health care costs. Because of our failure to reform our health care financing system, employers have been responding by shifting more responsibility to their employees. There has been an increase in the use of high-deductible health plans, which slow the rate of premium increases for the employer, but makes health care less affordable for the employees by requiring greater out-of-pocket payments when health care is accessed. Many employers now have decided not to offer health plans; the rate of coverage through employer-sponsored plans has continued to decline, especially amongst small businesses.

The McCain proposal is designed to relieve employers of the responsibility of providing employer-sponsored plans, both by eliminating the tax benefit for the employees and by offering individuals tax credits for purchasing plans in the individual market. It is not only the Obama camp that recognizes the erosion of health coverage that this would cause, the business community recognizes it as well. Most American businessmen are concerned about the welfare of their employees. They really don’t want a solution that would have a “strong negative impact” on their employees.

So would business be more supportive of the Obama proposal? The most important component of his proposal is to offer a market of quality plans similar to those used by federal employees. But isn’t that what they have now? Isn’t that precisely why the business community is seeking relief? Even Barack Obama understands that these plans are too expensive, and many would still have to go without coverage.

The American business leadership certainly understands the single payer model. One of the most important principles for a successful business is to reduce waste, and that is precisely what the single payer model does, by design. Adopting a single payer system would allow us to cover everyone, and would allow us to finance it equitably through a single universal risk pool.

When we desperately need sound business principles to drive health care financing, it really seems silly to digress into a not-very-intellectual debate over free markets and the government, as if they were two distinct entities between which a choice had to be made. Nebulous debates lead to nebulous results (and is probably the reason why conservatives keep drawing us into that debate).

Some leaders in the business community must be ready to support sound business principles in revamping our highly flawed health care financing system. An intellectual debate over ideology might make for an interesting pastime, but first we have to get our dollars in order. Every businessman understands that.

Over 5,000 US physicians have signed an Open Letter calling on the Presidential candidates and Congress to “stand up for the health of the American people and implement a non-profit, single payer national health insurance system.” The letter is being circulated by Physicians for a National Health Program, a single-payer advocacy group. Excerpts from the appeal will be published in full-page advertisements in the Oct. 13th editions of The New Yorker and The Nation magazines.

What is radical is not the content of the letter. It reviews that the Republican strategy of using tax incentives to help people buy health insurance on the private market will leave more Americans without adequate insurance and the Democratic strategy of mandates and incremental expansion of public programs has repeatedly failed on the state level. It reminds our political leaders that a single payer health care reform could realize administrative savings of more than $300 billion annually – enough to cover the uninsured and to eliminate co-payments and deductibles for all Americans.

What is radical is the fact that so many physicians, traditionally a conservative group, are coming out in public support of single payer health care. The strong physician support for this letter, with signers including some of the most prominent names in American medicine, reflects physicians’ growing realization that continued reliance on the private insurance industry is bad for both patients and doctors. The letter’s release follows a survey in the Annals of Internal Medicine this spring that shows 59 percent of U.S. physicians support national health insurance, a jump of 10 percentage points from five years ago.

Doctors are trained to make a diagnosis and prescribe the most effective treatment. This letter sends a strong message to our political leaders that the most effective treatment for what ails our health care system is single payer national health insurance.

Way off on health care reform

Posted by on Monday, Oct 6, 2008

You would think that John McCain would have gotten it right on his health care plan for the country, after his own experience with four malignant melanomas and multiple surgeries. You would think that experience would have inspired him to propose a plan that covers everyone, and do so affordably, both for the individual and for our country. You would think that health care would be a high priority for him, and that even if economics is not his strong suit, he would have done his homework.

McCain’s central idea for health care reform is his solution for every issue: let the markets determine the outcome, with unfettered competition as the driver. Ironically, he continues to tout this philosophy even as Wall Street crumbles around us, and financial companies look for bailouts from the government.

McCain would raise taxes for working people, by taxing their health insurance benefits. This would lead to younger healthy workers opting out of employer insurance, which would raise employer health insurance costs for the remaining workers, leading to more and more employers terminating coverage for their employees. Working individuals would be thrust into the private insurance market.

Navigating the private insurance market is not only daunting, but it can be dangerous for your health. Age and health status are factors the insurance companies look at to determine whether they will take the risk of insuring an individual, and they try to weed out anyone who is sick or likely to get sick. They want your premiums, but they don’t really want to pay out any money for health care. So workers who now have insurance in group plans through their employers will have to fend for themselves in the private market, and may not be able to get insurance.

McCain wants “to restore control over our health care system to the patients themselves,” and he thus proposes a tax credit of $2,500/ person for the purchase of health insurance. When cheaper policies cost $6,500/person and carry deductibles of $1,000, with co-payments every time you try to access benefits, $2,500 is a paltry sum if you actually have to use your insurance. This is health insurance in the private market: increasing costs for fewer benefits.

McCain also proposes decreasing the regulation of health insurance, allowing people to buy insurance from companies that don’t operate in their states. This would benefit only the insurance companies, who would be able to avoid state legislation requiring certain necessary health benefits, like mammograms. And doctors would have even more paperwork, more administrative costs, and more headaches than they do now, as they try to deal with even more insurance companies.

Health care costs would rise because of increased administrative costs for private insurance companies, as it is more expensive to underwrite policies for individuals than it is for groups. We already spend $350 billion in unnecessary administrative costs because of the private insurance industry.

Four economists reported their analysis of the McCain plan in the journal “Health Affairs,” concluding that it would radically transform the U.S health insurance landscape, with little impact on the number of the uninsured, while raising costs, reducing benefits, and leaving people with fewer consumer protections.

The problems with our health care system are extremely serious. Projected health care spending for 2008 is almost $2.4 trillion, which is close to $8,000 per person. This represents 16.6 percent of the gross domestic product in the United States. In spite of our spending on health care, which is twice that of any other industrialized country in the world, 46 million Americans remain uninsured. Many more are underinsured and have to pay so much in out-of pocket costs that they forego needed health care, even though they have health insurance.

According to a Commonwealth Fund study, there was a 60 percent increase in the number of the underinsured between 2003 and 2007. The underinsured tend to defer preventive care, choosing not to get mammograms or have their cholesterol checked. Underinsured adults with chronic conditions are not filling their prescriptions. Being underinsured affects personal health, as well as the cost of providing health care in our country, since not getting needed health care only means bigger health care bills down the road when the problems are more serious.

I agree with Senator McCain that it is time for a radical change in our health care system, and I agree that health insurance should be divorced from employment. But radical reform is useful only if it addresses the problems in our current health care system, and McCain’s plan does not do that.

A national single-payer health program, administered by the government rather than private insurance companies, would cover everyone, provide more comprehensive benefits, and do so without raising health care costs. With the $350 billion saved in administrative costs, everyone could have health insurance coverage. And national health insurance has a proven track record in other countries, where health care costs are lower and people live longer. Single-payer health care reform is the only meaningful reform, and is now supported by 15,000 members in Physicians for a National Health Program.

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Physicians for a National Health Program's blog serves to facilitate communication among physicians and the public. The views presented on this blog are those of the individual authors and do not necessarily represent the views of PNHP.

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