Pay-go that builds rather than destroys
A pay-go option for health-care reform
By John Geyman
The Seattle Times
July 6, 2009
As Congress recessed for the July Fourth holiday, the debate over health-care reform was reaching a fever pitch. Now the top domestic issue for the Obama administration, the biggest questions are how much a reform bill will cost and how to pay for it, quite aside from how effective a “reform package” will be.
Skyrocketing costs that are out of control are the hallmark of our present system. Yet legislators have already acceded to pressures and dollars from stakeholders in the present system (within which costs are revenue) and are only considering options that “build on the present system.”
After months of work, legislative committees in Congress have brought forth drafts of proposals that the Congressional Budget Office (CBO) is starting to score in terms of cost and effectiveness. As expected, the costs of these incremental proposals are high — the first number of $1.6 trillion over 10 years (while still leaving 36 million Americans uninsured) sent these committees back to the drawing board. At the moment, leading Senate Democrats are hailing $1 trillion over 10 years as potentially doable.
After presiding over huge deficits during their eight years in power, Republicans are now demanding “pay as you go” (pay-go) policies. Together with Blue Dog Democrats, they are threatening to act as spoilers of any health-care-reform bill on its price tag alone.
Given the dimensions of these difficult economic times — including a $1.8 trillion deficit for 2009, $5 trillion in new federal debt over this year and next, and rising unemployment — pay-go makes good sense. And the president is making the case that his health-care plan must pay for itself.
Conventional “wisdom” (as generated by the mainstream corporate media) says that any health-care reform will cost a lot, and that there is no pay-go option. But there is.
Single-payer financing (public financing coupled with a private delivery system, a reformed “Medicare for All”), as embodied in Rep. John Conyers’ bill (HR 676 in the House) with its 83 co-sponsors, will yield savings of some $400 billion a year. That’s enough to assure universal coverage for all Americans while eliminating all co-pays and deductibles — the ultimate pay-go. Single-payer will give us far more efficient, affordable, effective and reliable health care than our present multipayer system. Health insurers have known for years that they can’t compete on a level playing field with single-payer, and have only been surviving by favorable tax policies and other subsidies from the government.
This recent testimony before the U.S. Senate Committee on Commerce, Science and Transportation by Wendell Potter, former head of corporate communications at Cigna, says it all: “I know from personal experience that members of Congress and the public have good reason to question the honesty and trustworthiness of the insurance industry. Insurers make promises they have no intention of keeping, they flout regulations designed to protect consumers, and they make it nearly impossible to understand — or even to obtain — information we need.”
Many studies over the past two decades, including those by the CBO, the Government Accountability Office (GAO) and the nonpartisan Economic Policy Institute, have concluded that single-payer can assure universal coverage and still save money. HR 676 needs to be brought out of the closet and put on the table for CBO scoring against other options being considered in Congress, all of which cost much more and fail to provide universal coverage.
President Obama has brought forward the concept of audacity of hope. Is it too audacious now to hope that the legislators we elect to Congress can see beyond their campaign contributions and the lobbying efforts by corporate stakeholders to require that single-payer be scored?
(Dr. John Geyman is professor emeritus of Family Medicine at the University of Washington, past president of Physicians for a National Health Program, and a member of the Institute of Medicine.)
http://seattletimes.nwsource.com/html/opinion/2009424809_guest07geyman.html
Comment:
By Don McCanne, MD
As expected, Congress ran into problems when they tried to figure out how to pay for health care reform. They stubbornly adhered to the principle that reform must be built on our dysfunctional system of profitable private plans for the healthy and taxpayer-financed public programs for the sick, even though numerous studies have shown that this is the most expensive model of reform.
Before the process began it was already understood that health care has now become so expensive that a health plan with adequate benefits would require massive public subsidies to make it affordable for average-income individuals and families. It is the size of the subsidies that would be required for them to work that would be the budget busters. Now that they are at the point that decisions must be made, they are relying on a process analogous to innovation in the marketplace, shunning their obligation to be responsible public stewards.
For the average American, they are establishing a standard of a bottom-tier package of benefits (a bizarre concept that requires greater out-of-pocket spending for those needing health care than that required of the wealthy with their higher-tiered plans). They are paring back the income eligibility levels such that there would be no subsidy above 300 percent of the poverty level ($32,500 for an individual or $66,000 for a family of four). These numbers simply do not make health care affordable for middle-income Americans when you consider that the Milliman Medical Index is now $16,771 (the average cost of family health care for the healthier sector covered by employer-sponsore plans). That doesn’t even count the taxes that middle-income Americans pay to support the massive government spending on health care programs.
Congress’s “market innovation” for pay-go is to fully fund the waste built into the private insurance model of health care financing, and pay for it out of the pockets of middle Americans who happen to need health care - defeating the very purpose of health care reform.
John Geyman is right. Single payer financing, a reformed Medicare for all, is precisely the pay-go solution that Congress desperately needs if reform is to accomplish the goal of making health care affordable for all. All we need is for President Obama to meet with Baucus, Kennedy, Dodd, Waxman, Reid, Pelosi and a few others to see who is going to give Karen Ignagni the bad news - bad news for her and her industry, but great news for America.