By Philip Caper, M.D.
July 23, 2012
The affirmation of the constitutionality of the Patient Protection and Affordable Care Act, or Obamacare, on June 28 by the U.S. Supreme Court was a big step forward for our country. But parts of the act itself are a step in the wrong direction.
First, the steps forward. For the first time since the enactment of Medicare in 1965, the federal government has taken the position that health insurance should be extended to all Americans and that government has a major role to play in assuring this.
Obamacare aims to accomplish this goal by expanding public programs such as Medicaid and Community Health Centers, and requiring most Americans to buy private insurance or pay a tax penalty. These requirements are enabled by a variety of tax-funded subsidies to employers, employees and individuals.
To its credit, Obamacare also outlaws the most antisocial practices of private insurers — excluding people with a history of illness from coverage, charging outrageously high premiums if they’re sick or retroactively canceling coverage if a health insurance subscriber has the temerity to become ill and actually submit a claim.
But there was one especially troubling step backward that is the source of the unease felt by many health policy experts about the law.
Prior to Obamacare, our private for-profit insurance industry’s future was bleak. Facing the choice of satisfying Wall Street’s incessant demands for profitability or face declining stock prices, they were being forced into a death spiral of ever increasing premiums and ever harsher attempts to limit claims payments by denying services and otherwise restricting coverage to only those with the least probability of becoming ill. Those most vulnerable to illness were being left to fend for themselves.
By requiring tens of millions of healthy Americans to buy private health insurance with the help of federal subsidies, Obamacare has come to the rescue of corporate America once again. This insurance mandate gives the term “corporate welfare” a new and more robust meaning.
While I heartily applaud the intent of expanding health care to all, this means of doing so is actually destructive. From the perspective of our health care system as a whole, health insurance companies provide few if any benefits but do a lot of damage. By shoring up private for-profit health insurance, one of the most dysfunctional parts of our health care system, Obamacare will make health insurance companies much harder to get rid of.
And get rid of them we must. Private for-profit insurance is an extremely expensive and destructive way to expand coverage.
The private insurers’ administrative costs – e.g. money spent on underwriting, marketing, advertising, and big payouts to top executives and shareholders – siphon off 12 percent to 25 percent of our premium dollars. By comparison, the publicly funded Medicare program’s overhead is about 1.4 percent.
But it’s more than just a question of saving money. The U.S. system of private insurance also damages care. Insurers interfere directly with medical decisions involving individual patients. In addition, they so fragment our system of financing health care that they make much more difficult system-wide changes, such as reforming the way we pay doctors and hospitals and rationalizing the distribution of medical resources such as expensive technology.
Like other parasites (tapeworms, for example), health insurance companies don’t set out to do harm. It’s simply a byproduct of what they must do to achieve their primary mission — the creation of wealth for their owners. They’re doing what they must to survive and to thrive. They’re just the wrong tool to get the job done.
While Obamacare represents some progress and provides a platform for future improvements, it leaves much yet to be accomplished. To really have health care for everyone at a cost we can afford, we have to replace private for-profit insurance with nonprofit publicly administered insurance financed through a fair system of taxes. Only then will we have the tools to begin fairly and effectively to control overall system-wide costs, and improve the way medical care is delivered.
We are already paying more than enough for such a system and will continue to do so under Obamacare. It is estimated that the excess costs of relying on private insurance, all totaled, reach at least $400 billion a year in the U.S. — more than $1 billion dollars a year in Maine alone.
That’s a pretty expensive parasite. Removing parasites is often difficult for the doctor and unpleasant for the patient. But both feel a lot better when it’s done.
Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at firstname.lastname@example.org.
PNHP note: The article above is a slightly revised version of the original, which appeared in the July 20 edition of the Bangor Daily News and which can be found here.