Eliminating private health insurance our only good option
BY NICHOLAS SKALA AND QUENTIN YOUNG, M.D.
The Chicago Sun Times
April 30, 2007
Rod Blagojevich wants to be remembered as Illinois’ “health care governor,” and his focus on our state’s millions of uninsured and underinsured is commendable. Unfortunately, he has come up with the wrong prescription. Blagojevich would hike taxes to pay insurance companies for meager benefits. But eliminating private insurers altogether would save enough to provide health care for all Illinoisans for no more than we’re spending now.
Illinois has only two options for health reform: preserve private insurance companies (and the huge systemic waste they generate), or scrap them and use the savings to cover everyone. Sadly, Blagojevich has joined President Bush, former North Carolina Sen. John Edwards, Massachusetts Gov. Mitt Romney and California Gov. Arnold Schwarzenegger in offering the private insurance route.
The better approach would be to replace insurance companies with Medicare-like universal public health insurance, a system that has afforded the rest of the industrialized world better health for half our per-capita cost (or less).
The Blagojevich approach has little hope of remedying our state’s health crisis: Decent coverage would remain unaffordable for most Illinoisans while costs would continue to rise. Despite the governor’s promises of affordable insurance, the only way to get inexpensive policies is to strip them down with huge co-payments and deductibles. In Massachusetts, the first state to experiment with such a scheme, a 56-year-old making $30,000 annually will have to spend $7,164 in premium and deductible payments before insurance kicks in, and still pony up 20 percent of hospital costs after that.
Such skimpy plans are insurance in name only. Beleaguered Illinois families would remain unable to get care and as costs continue to rise, employers will push more and more middle-class families from more comprehensive plans into the new, paper-thin coverage.
The only way to simultaneously expand coverage and lower costs is through a single-payer system: “Medicare for All Illinois.” The state single-payer bill (HB 311) introduced by Representatives Mary Flowers and Mike Boland has garnered considerable support. But this plan would terminate, rather than sustain, private health insurers.
Every other developed nation has some form of public health insurance, yet most spend less than half per person than we do. Nearly a third of our $2.3 trillion in health spending this year will go for administration. In their drive to enroll healthy (and therefore profitable) patients and screen out the sick, private insurers waste vast sums on marketing, billing, underwriting, utilization review and other activities that enhance profits but divert resources from care. The paperwork they inflict on doctors and hospitals costs hundreds of billions more each year. In contrast to the roughly 20 percent overhead of insurance companies, Canada’s single-payer program runs for 1 percent overhead. And Canada’s hospitals and doctors face little paperwork burden.
Illinoisans get scant return for our outsized spending. Brits and Canadians have lower rates of nearly every chronic disease. Americans have higher infant mortality and shorter life expectancy than people in most other industrialized countries.
Harvard researchers have shown that streamlining our health finances through a single public payer — a kind of “Improved Medicare for All” — could save Illinois more than $13 billion a year, enough new money to provide comprehensive benefits for all the people in Illinois. Through rational planning and the elimination of wasteful duplication, it also would establish a stable, long-term cost control mechanism, ensuring that the new benefits are sustainable in the future.
A single-payer system is the only economically viable reform option. Yet opposition from insurance and drug industry giants continues to intimidate lawmakers and even aspirants to the presidency. We need leaders committed to the health of all people of Illinois.
Nicholas Skala is co-founder of Health Care for All Illinois; Dr. Quentin Young is national coordinator of Physicians for a National Health Program.