Originally published in the Berkshire Eagle.
“Employers pushed costs for health on workers,” The New York Times revealed this month, citing a survey released by the Kaiser Family Foundation, a non-profit research group. Although the cost of an average insurance policy rose 3 percent, the worker’s share of the cost of a family policy jumped 14 percent. Workers are absorbing more of the costs of health insurance premiums as well as facing higher deductibles, thus paying a larger share of their overall health care costs.
Helen Darling, president of the National Business Group, says that companies expect their costs to go up more under the new health care law, the Patient Protection and Affordable Care Act (PPACA), which requires them to provide more benefits. She says businesses “can’t afford to subsidize what’s happening.” Meanwhile, in 2009, profits increased 56 percent for the nation’s five largest health insurers to $12.2 billion. Insurance company CEO compensation keeps rising as well. Stephen Helmsley, CEO of United Health Group, received an income of $107.5 million last year.
Not only are health insurance companies squandering our hard-earned health care premiums on profits, they are often doing so illegally. The California Department of Insurance is seeking fines from PacifiCare, a subsidiary of United Health Group, for nearly one million violations of state law from 2006-2008. The attorney for the Department of Insurance stated, “It’s a story of intense corporate greed.”
With the passage of the new health care law (PPACA), health insurers can only spend 15 percent of premiums from large groups, and 20 percent of premiums from individual policies on administrative expenses. As might be expected, health insurers are gaming the system by pushing as many of their administrative expenses as possible to the medical side so they can preserve CEO salaries and profits, while beleaguered businesses and struggling workers continue to fill the coffers of the health insurance industry.
The for-profit private insurance system, with its multiple insurance plans and micro-management, creates an additional administrative burden for providers of health care, consuming another 12 percent of the premium dollars, which brings total administrative costs up to 32 percent of insurance premiums. Doctors spend hours on paperwork every day.
A national single-payer health insurance program, like an improved Medicare system for everyone, would save $400 billion a year by eliminating the private health insurance industry. According to a recent report from the U.S. House Committee on Energy and Commerce, Medicare administrative expenses are less than 1.5 percent, which means that 98.5 percent of premiums are actually spent on health care. Businesses would be freed from paying rising health insurance costs or passing them on to their workers, because health insurance coverage would not be tied to employment. Everyone would have health insurance coverage, paid for by a modest payroll tax, which would be less than current health care premiums.
In 2009, President Obama stated, “I want to cover everybody. Now the truth is unless you have a single-payer system in which everyone’s automatically covered, you’re probably not going to reach every single individual.” He’s right. Official estimates this week from the Census Bureau show a dramatic spike in the number of Americans without health insurance in 2009 to a record 50.7 million. The rise in the number of uninsured was almost entirely due to a sharp decline in the number of people with employer-based coverage, which has declined for the ninth consecutive year.
In 2014, when PPACA is finally implemented, 23 million Americans will remain uninsured. In Massachusetts, 295,000 citizens still do not have insurance four years after the passage of our own state reform bill. Health insurance must be divorced from employment, and a single-payer program established to cover everyone in a cost-effective manner.
In Massachusetts, there will be a non-binding referendum on the ballot in 14 districts in November, including districts 2 and 4 in the Berkshires. Question 4 reads, “Shall the representative from this district be instructed to support legislation that would establish health care as a human right regardless of age, state of health or employment status, by creating a single payer health insurance system like Medicare that is comprehensive, cost effective, and publicly provided to all residents of Massachusetts?”
By voting “yes” on question 4, voters will send a clear message to our state government, proclaiming their support for single-payer health care reform.
Susanne L. King, M. D., is a Lenox-based practitioner.