By Amy Stansbury
The Evening Sun (Hanover, Pa.), Jan. 12, 2013
Carl Goulden always believed in private health insurance.
“For 40 years I paid into the system,” Goulden said, “and now I feel like a fool.”
Resting on a chair in the back room of his Littlestown flower shop, Carl’s Creations, he recalled his fight against an insurance giant.
Goulden spent most of his life as a factory worker insured by the same large insurance company and, happy with its service, he opted to insure his own business with a subsidiary of that same company when he opened up shop in 1990.
But about five years ago, things changed. Goulden was diagnosed with chronic liver disease and as he watched his insurance premiums skyrocket, he said he realized why he had never before had a problem with the company – he had never been sick.
“They pushed me out,” Goulden said. “I faced the possibility of losing everything I had worked for.”
Now a member of the local organization, Adams Hanover Health Care 4 All PA, Goulden works to share his story with others and to push Pennsylvania past President Obama’s Affordable Care Act toward what the group believes are even stronger health-care reforms.
After his diagnosis, Goulden said, he quickly recognized the need for sweeping changes. His insurance premiums rose from $300 to $3,100 a month. As the company continued to raise its prices, Goulden said, it simultaneously tried to drop his policy.
At first, the insurance agents told Goulden that he was ineligible for continued coverage because his wife didn’t make enough money to qualify as a full-time employee of the business, he said. Goulden fought back, countering that because his wife co-owned the business, she did not earn wages like an employee, but instead shared profits with her husband.
“So two days later they came back and said, “We will keep you, but we have raised your premiums to $3,100 a month,'” Goulden recalled. “I was livid, screaming on the phone.”
Later, he said, the insurance company demanded he submit his federal tax returns to prove that he had a legitimate business.
“The tax returns show how much money I make, so they could use that information to know how much they could charge me in order to push me out,” Goulden said. ” I called legislators and asked, ‘How can they possibly do this?’ And I found out that they can. There is no regulation about what they can require you to submit.”
So before long Goulden was forced to drop his policy and go without insurance, despite his critical medical condition.
If it were not for the Affordable Care Act, also known as Obamacare, Goulden said he would not have insurance today. After going six months without, he was picked up by one of the first provisions of the law to take effect. Enacted in March 2010, the law allows adults with preexisting conditions to join federally funded, high-risk insurance pools until provisions requiring companies offer them coverage go into effect in 2014.
Recognizing what it considers to be both the advantages and shortcomings of the Affordable Care Act, Health Care 4 All PA has launched a statewide educational campaign to inform citizens of what can still be done in health care reform. The group praises the new law for setting regulations on the insurance industry, preventing insurance companies from dropping or excessively raising rates on sick policyholders like Goulden, or refusing to cover people with pre-existing conditions.
On the other hand, say group members, it fails to cover all Americans or institute enough cost-cutting measures to keep individuals and local municipalities out of bankruptcy. A study conducted by the group and a team of independent economists found that a single-payer system would save municipalities throughout Adams County alone about $16 million annually, when compared to current health care spending.
Single-payer health care is the same type of system used by Medicare and Veterans Affairs, as well as most of the world’s other developed countries. Single-payer is a health insurance financing mechanism in which both the collection and reimbursement of funds are the responsibility of one agency – the government. Different from the British system of socialized medicine, physicians and hospitals under a single-payer system can be either publicly or privately owned.
A single-payer system also would guarantee that the entire population is insured, a feat that not even the Affordable Care Act will be able to achieve. Estimates by the Congressional Budget Office predict that 27 million Americans will still be uninsured in 2022, after all of the law’s reforms have been implemented.
Saving lives, saving the system
Dr. Dwight Michael flipped through the pages of a book, pointing to important facts and figures and reading his favorite passages out loud. It was his day off, but Michael could not help but share his research and knowledge about the U.S health care system. There is no doubting the man’s passion. He is ready for reform.
Michael has been a board-certified physician for the past 28 years and is the co-owner of the Gettysburg Family Practice. He was a strong advocate for the Affordable Care Act and now has his eyes set on a single-payer system. He is also a Republican.
“We can’t worry about the politics of it,” Michael said. “We have to save our health care system for itself.”
Working on the frontlines of the nation’s health care system since 1985, he has concluded what he says many Americans refuse to face – the U.S does not have the best health care system in the world.
Health care costs in the U.S account for 17.6 percent of the nation’s Growth Domestic Product. That’s more than any other country in the Organization for Economic Cooperation and Development, a consortium of 34 of the world’s developed and developing countries. The U.S also spends two and half times as much per person on health care than the OECD average, despite the fact that it currently leaves 53 million people without insurance.
If high costs alone were the problem, that might not be enough to make reform necessary, Michael said, but the problem runs deeper. The U.S also consistently ranks near the worst on most quality-of-care indicators when compared with other developed countries.
“I’m embarrassed,” Michael said. “I’m embarrassed that so many other countries do a better job of taking care of their citizens.”
The U.S reports more deaths from treatable illnesses than nearly every other developed country, including France, Japan, Germany, Greece, Ireland, New Zealand, and the United Kingdom, according to the Commonwealth Fund. This nonpartisan private research foundation has conducted public health research for nearly 100 years and regularly evaluates the quality of the world’s health care systems. The most recent scorecard found the U.S has the highest infant mortality rate among the world’s developed countries. It also has one of the lowest “life expectancy at age 60” rates, an indicator used by the Fund to specifically monitor care quality because it removes those who die at an early age of illnesses or accidents not easily combated by the health care system.
“We spend so much money,” Michael said, his face worn from frustration. “And yet our outcomes are still mediocre.”
Priced out of coverage
Seven years was all Janet Landon could take. A registered nurse, Landon spent seven years working for an insurance company processing claims from health care providers. Filing every claim was a fight, she said, because the company rarely allowed her to properly reimburse anyone. Eventually, she decided that denying health insurance to sick people was no longer worth her high salary and she quit.
“I just could not look at myself in the mirror anymore,” she said.
Landon said at the insurance company where she worked, agents would track the claims made by small businesses and threaten to dramatically raise their rates once they noticed treatment for a severe illness.
“They would go to the business and say, ‘Because we see one employee’s child has leukemia, your rates are going to triple,'” Landon said. “So then that company has two choices, accept the triple rates or get rid of the employee.”
At his family practice, Michael said he has experienced such efforts by insurance companies to clear their books of expensive policies. In 2012, his business paid $162,612 in premiums for Michael, four other doctors and 15 additional employees. In a recent estimate by his insurance agent, though, Michael was told the cost would jump to $242,556 this year. The dramatic hike forced Michael to switch providers, he said, but even with a new company he will still pay $24,444 more in 2013 than he did last year.
According to Michael, a family physician’s office like his is often priced out of coverage because they employ a lot of women, who often need more health care, and doctors, who are more comfortable with health care and therefore use it more frequently. And as a small business owner, he says that he is also more susceptible to price increases because his practice isn’t large enough to negotiate more favorable terms.
“Most people don’t understand how this works,” agreed fellow small-business owner Goulden. “When you have a big company with 500 policy holders and one person gets sick, the insurance company can’t play games, but when you are a mom-and-pop business, you are on your own.”
This will change under the Affordable Care Act. A public-insurance option will essentially join together the self-employed, giving them the benefits and leverage of a large company. But that alone will not be enough to save the system, Michael said. Single-payer still offers the best cost savings and quality of care, he said, pointing to his books with persistence.
No perfect system
Michael shrugged his shoulders, sighed, and admitted that he is not afraid to be honest. Certain special interests will undoubtedly be hurt in a health care overhaul, he acknowledged. Entire companies are based around the current model and a change could cause a major shock to the system.
His own profession could see pay cuts as the single-payer insurance fund looks to control costs, a phenomena that has occurred in many other countries with such systems. Doctors in those countries enjoy much lower salaries than their American counterparts. Even when the cost of living and a high U.S Gross Domestic Product are taken into account, specialists in the U.S. are paid $50,000 more than the average in other developed countries, according to the Congressional Research Service.
Japan is notorious for paying its doctors starkly low wages and in Germany doctors have taken to the streets to protest the squeezing of their salaries as well. Of course, doctors in most of those other countries do not have the high costs of medical school and malpractice insurance looming over their heads either, Michael said.
“There will be pain no matter what,” he said. But, he insisted, anything would be better than the pain caused by the current system.
Although a decrease in physicians’ salaries is possible, it is not necessarily inherent in a new system either, Michael said. After a recent look through his practice’s billing records, he discovered three-quarters of the private insurance companies he deals with actually paid less than Medicare, essentially a single-payer system.
“There has just been a tremendous amount of propaganda against the single-payer system,” Michael said. “And I bought it hook, line and sinker until I really looked at it.”
Opponents of a single-payer system in the U.S also worry about the rationing of care as another cost cutting mechanism, although there is little evidence that rationing is widespread or that it has a significant impact on health in single-payer countries. The Commonwealth Fund scorecard shows those countries with a single-payer system score higher than the U.S on nearly every indicator of general health.
“People worry about these death panels and a government rationing of care,” Michael said. “They worry that a single-payer system eliminates their freedom of choice, but a single-payer actually gives more choice. Right now you are locked into a network of providers and can only get what they give you, anyway.”
He said it is only logical to take a good look at which procedures work and which do not before paying for them, and the decision to do so in other countries has not hurt the health of its citizens.
Under a single-payer system, those who can afford experimental or elective procedures can always pay for those themselves or purchase additional private insurance. Health care in the U.S is already essentially rationed, he said, but it is rationed according to income level, as opposed to quality and need.
“We can’t afford to pay for everything for everybody,” Michael said, “and whether insurance companies ration it for their own profit or the government does it is a matter of semantics.”
Single payer in Pennsylvania
“Now is the time,” said Landon. “Now is the time to change the system.”
For the members of Health Care 4 All PA, the new health care law is only one step on the road to a single-payer system. Now that the Affordable Care Act has been passed, Landon said, people realize the existing system is flawed. They hope to educate the public on what they see are the benefits of a single-payer system so that by 2017, the first year states are allowed to make changes to their health care systems under the Affordable Care Act, they can get a single-payer bill passed in the commonwealth.
Under their proposal, the system would be funded by a 3 percent payroll tax for employees and a 10 percent payroll tax for employers. This would reduce health care spending for employees and employers by about 8 percent. Currently, individuals spend 9.1 percent of their income and businesses spend 12.8 of their payroll on health care, according to two public policy research institutes, The Commonwealth Fund and the Kaiser Family Foundation.
Of course, a study or two won’t win over everybody, and the organization is working toward educating the public at church groups and other civic organizations throughout the state. Members acknowledge that in today’s political climate that will not be easy. Single-payer has already been rejected on the national level and efforts to implement the Affordable Care Act in Pennsylvania have been thwarted along the way. In December, Gov. Tom Corbett decided against setting up a state-run health exchange, as is encouraged under the Act. Corbett said he fears such a program would end up costing the state too much money. Although the tight state budget makes a single-payer health care system seem politically unlikely, members of Health Care 4 All PA, like Goulden, are willing to fight.
“Single payer is still the answer,” Goulden said. “Obamacare was a step in the right direction, but it’s not the answer.”
For more information: Email email@example.com or visit healthcare4allpa.org.