Seeking insurance solutions
Seeking insurance solutions
David Lazarus Friday, May 14, 2004
This is Cover the Uninsured Week, and it’s been an especially good week for the insurance industry.
Republican and Democratic lawmakers have come out with competing plans intended to provide health insurance for at least a portion of the roughly 44 million Americans — 16 percent of the population — now lacking coverage.
The plans tinker with the existing system and would cost taxpayers a bundle, but critics say they do little to address underlying problems that result in runaway health care costs for consumers and businesses.
They would, however, provide millions of new customers for a politically powerful, $300 billion industry that is deeply opposed to fundamental change in how Americans receive health care.
“The only winner here is the status quo,” said Ida Hellander, executive director of Physicians for a National Health Program, a Chicago advocacy group with more than 10,000 members nationwide. “These plans are simply subsidizing a sick system. They don’t solve the most serious problems.”
On Tuesday, Senate Republicans unveiled their plan for using tax credits and federal funds to help low-income workers purchase insurance. It also includes government-negotiated discounts for purchases of prescription drugs.
On Wednesday, House Democrats trundled out their plan. It, too, relies heavily on tax credits, as well as spending billions to expand coverage to parents of low-income kids.
While both plans would likely help many people obtain at least rudimentary health insurance, neither achieves the goal of universal coverage.
Similarly, they wouldn’t put a halt to insurance premiums that are climbing by about 12 percent a year. Nor would they address the estimated $400 billion spent annually on administrative costs to process a vast number of insurance forms — a quarter of the $1.6 trillion in total health care spending last year.
Taxpayers foot the bill
Then there’s the sticky question of who pays for reforms comprised largely of tax breaks and subsidies. The unspoken answer, of course, is that you’ll be footing the bill — you and all other taxpayers.
“Businesses complain that they can’t keep up with rising health care costs,” Hellander said. “They should be worried about any solution that doesn’t get at the systemic reasons costs keep going up.”
But Cover the Uninsured Week isn’t about finding such solutions. The event — this is its second year — is backed by a broad array of business and labor groups eager to raise awareness about the seriousness of the health care situation. Former Presidents Jimmy Carter and Gerald Ford are the honorary co-chairs.
“We do not advocate a solution,” said Stuart Schear, organizer of Cover the Uninsured Week and spokesman for the Robert Wood Johnson Foundation, the largest U.S. philanthropic organization devoted exclusively to health care. “What we want is to place this issue at the top of the domestic agenda.”
Sen. John Kerry, the likely Democratic nominee for president, spent much of the week discussing health care at campaign rallies. But his words were drowned out by the furor over increasingly ugly events in Iraq.
President Bush’s health care platform largely mirrors the GOP proposals put forward in the Senate.
In an independent analysis of the two candidates’ approaches released last week, Emory University economist Kenneth Thorpe determined that Bush’s plan would cost taxpayers $90 billion over the next decade but provide coverage to only about 2.5 million uninsured Americans.
Kerry’s plan, meanwhile, would reach 27 million people but would cost more than $650 billion.
How plans differ
A key difference between the two platforms, Thorpe found, is that Bush’s plan would primarily affect people who already have some insurance, whereas Kerry’s plan is intended for workers with no coverage.
Karen Ignagni, president of America’s Health Insurance Plans, the leading trade group for the insurance industry, praised lawmakers for seeking this week to make health coverage more affordable.
“We’re finally seeing momentum to address this serious problem,” she said.
But Ignagni rejected any suggestion that lawmakers look not at fiddling with the existing system but instead explore a so-called single-payer system that would guarantee coverage to all citizens, similar to Canada’s state- backed insurance network.
“In Canada, you have doctors who can’t admit patients for surgery without making them wait for months,” she said. “That’s not the system we want to replicate in the United States.”
No, it’s not. Nor is it precisely the system they have up north either. Hellander at Physicians for a National Health Program noted that weeks or months of waiting for treatment in Canada is only for elective surgery for non- life-threatening conditions.
“If you have a life-threatening condition, of course you’ll be treated immediately,” she said.
Refining the system
In any case, the Canadian system is far from perfect. The United States would need to bring its own refinements to the equation to ensure both quality of care and cost controls.
Meanwhile, funding for a single-payer system is certainly within reach. Researchers at Harvard Medical School have determined that slashing administrative costs under a single-payer system would be sufficient to provide coverage for every uninsured American.
Hellander’s group advocates a payroll tax of about 7 percent to replace all other employer expenses for medical costs, and an income tax of about 2 percent to replace employees’ current insurance premiums, co-pays, deductibles and other out-of-pocket expenses.
Cover the Uninsured Week is a fine idea. This is indeed an issue that requires greater public scrutiny. But if we’re serious about solving this problem, we have to be serious about genuine solutions.
That’s not what we saw this week.
David Lazarus’ column appears Wednesdays, Fridays and Sundays. He also can be seen regularly on KTVU’s “Mornings on 2.” Send tips or feedback to dlazarus@sfchronicle.com.