Barry Gordon talks with Don McCanne, M.D., former president and current Senior Health Policy Fellow of the Physicians for a National Health Program, about the problems with the new Bush proposals and the recent Schwarzenegger plans for healthcare and the advantages of a single-payer system, as Barry has long touted.
Click here to listen (mp3)
By Elisa Ung
The Philadelphia Inquirer
January 28, 2007
Under preliminary proposals, all New Jersey residents would be required to have health insurance – and could enroll in plans subsidized by the state.
Depending on federal dollars, (State Sen. Joseph) Vitale said he hoped to begin with an expansion of the state’s FamilyCare program, which insures nearly 700,000 low-income children and families.
Later in the year, separate legislation would be aimed at insuring around 600,000 residents who cannot afford private insurance but make too much to qualify for FamilyCare or Medicaid, he said.
… “we’re trying to come out with what we will call a universal system,” said (New Jersey Governor John) Corzine.
http://www.philly.com/mld/inquirer/news/local/states/new_jersey/16561176.htm
By Don McCanne, MD
Quick! Which was the first state to enact a universal system?
Those of you who have been working on health care reform for many years likely came up with Hawaii. Yet you don’t hear much anymore about Hawaii’s universal system. Why is that?
Soon after the enactment of Hawaii’s health insurance law in 1974, those lacking insurance dropped to 2 percent. Now it’s about 10 percent. Enough said.
Media coverage of reform efforts tout those states that have already enacted universal systems, and discuss those that are in the process of doing so. It is unfortunate that these fictional stories of universality are appearing in news articles when they should be on the opinion pages as we-wish-it-were-true columns.
Gov. Corzine does seem to understand. They will duplicate the minimalist efforts of other states, and then use the fictional but politically-expedient label of “universal system.” But whom are they trying to please?
Let’s dump the semantic games. Let’s get on with adopting policies that would automatically provide comprehensive coverage for everyone. We really do know how to do it.
WEB EXCLUSIVE
By Eve Conant
Newsweek
Jan 29, 2007
Jan. 29, 2007 – President Bush’s State of the Union address may not have done much to improve his popularity. But it did succeed in jump-starting debate over one of the leading–and most contentiously lobbied issues–on his domestic agenda: health-care reform. In his speech, the president proposed offering tax subsidies to encourage more people to buy their own health insurance. The goal: to provide equal treatment to those who buy insurance on their own, and those who get it through their employers. Under the Bush plan, the administration estimates that 80 percent of workers with employer-based health plans would pay lower taxes–while 20 percent of those with more costly workplace plans (branded “gold-plated” by Bush) would see a tax hike, unless they decreased their coverage.
Democrats on Capitol Hill, along with labor unions and consumer groups, pilloried the Bush plan, arguing his proposal would do little to help America’s nearly 47 million uninsured–and could wind up hastening the demise of employer-provided healthcare. (In his weekly radio address, Bush called the criticism “reflexive” partisanship and called on Congress to cooperate with him to find a solution.)
But it wasn’t just folks in Washington who were upset. Nathan J. Wilkes of Greenwood Village, Colo., was so worried about the possible effects of Bush’s proposal on his ability to provide coverage for his chronically ill son that he decided to travel to the capital to make some noise. A computer network security expert who earns over $100,000, Wilkes works for a private firm outside of Denver which fits into the large-group insurance category and is allowed to shop around for different providers each year. But when his son Thomas, born with severe hemophilia, developed a resistance to treatment at age 1, Wilkes’s claims soared; his company’s insurance provider, Wilkes says, soon began hiking premiums 40 to 55 percent each year, and introduced a lifetime cap of $1 million for all employees and their families–including Thomas. Soon, Wilkes says, no other insurance companies would offer to cover the company. Worried he would no longer be able to provide coverage for his son, Wilkes turned to state and local groups for help. Physicians for a National Health Program took up his cause, and brought him to Washington, where he hoped to persuade Congress to reject the Bush plan in favor of universal health- care legislation. Wilkes spoke to NEWSWEEK’s Eve Conant about his trip. Excerpts:
NEWSWEEK: You have a good income and your employer gives you and your family comprehensive health insurance. So why are you so worried about coverage that you’ve come to D.C. to lobby for universal coverage?
Nathan Wilkes: Why am I worried? My son will no longer be insured in a month’s time. His claims have increased health-care costs for everyone I work with. My company is very socially responsible, but because of our high claims, no other insurance company will touch us. We’re trapped with the same provider, which keeps raising prices and last year introduced a $1 million lifetime cap on coverage. Even if my son has no injuries, we’ll hit that cap in the next one to three months. With hemophilia, the problem is internal bleeding. We know it’s happening if he complains of pain, or stops using one of his arms or legs. Even if we treat him at home the cost for medicine can run up to $3,600 every few hours. Because of insurance limits we’re often advised to delay treatment–to see if his injuries will clear up on their own–simply to avoid getting closer to the million-dollar mark. The aim of private insurance is to weed out high-cost patients like my son.
And what happens when you delay treatment?
Sometimes it works out fine. Other times he gets worse. Even at our most frantic we have to worry about the cap. We’re told he may have permanent nerve and joint damage because of the times we’ve had to delay treatment. We do everything we can, but he’s a 3-year-old, he wants to walk around and try to jump off the couch.
Did you watch the State of the Union? What do you think of Bush’s health proposals?
His strategy is to manipulate the tax code to make it appear as if you’re insuring more people, when in fact, you’re not addressing the real problems of the private insurance system: cost, access and the underinsured. Continuing with private insurance just feeds the monster. This won’t bring down the cost of drugs or reduce the overhead and profits taken in by the insurance companies. It only serves to free up more money in the consumer market to feed back into a broken system.
What will you do when your son’s insurance runs out?
The race has started; it’s like an hourglass with a finite amount of sand. We have to think of something else, but all our options would give us only a year at most. I’m told I can quit my job and try to join a larger company so my son’s chronic illness won’t be noticeable to their insurance company. But that might only buy a little bit of time. My wife could try to get a job, but that would mean the cost of putting three children in day care, including one who is ill and needs intensive supervision. I can’t get on Medicare or Medicaid because I make too much money. I’ve also been advised to divorce my wife, so that she and the kids might qualify. But that creates another set of bureaucratic problems. The best option is Colorado’s high-risk pool insurance (individual insurance for the uninsurable), but that also has a $1 million cap. That could last us a year, or, if my son has any bleeding in his head, could last a few days. One of my last options is to lobby for universal health care; I think I’m a decent example of what is wrong with private insurance in the U.S.
You’re one of those people with what Bush described as a “gold-plated” insurance policy, right?
I find that a pretty offensive term. Calling what I have gold-plated is just a way to shift attention away from real problems. My employer has done [its] best, so that we have minimum or no copay. But over the years, they’ve been forced to shift more of the burden on my co-workers and me. Gold-plated just means more attention on preventive care, which avoids the really costly problem of people only getting treatment in the emergency room. I’ve been insured my whole life, but we’re going to lose it because private insurance is about making profits, not keeping people healthy.
There’s a lot of political momentum on health coverage right now, but in the past that momentum has fizzled out. Do you think there’s a difference this time around?
My son has hemophilia and is immunosuppressed from his chemotherapy treatments [chemotherapy, in some extreme instances, is used to fight the immune system’s resistance to hemophilia treatment]. He’s the kind of person that is supposed to be first in line in the emergency room. Instead, we wait for hours in packed emergency rooms where the uninsured are piled in to get basic care. I think what we’re seeing in Washington now is a different momentum. If you keep piling snow on a mountaintop, there will eventually be an avalanche. This issue has been pushed under the rug before, but every other industrialized nation has some form of national health care. The system now is nothing short of an abomination. I think there might be enough political will now for a radical change.
URL: http://www.msnbc.msn.com/id/16874285/site/newsweek/
By Pete Stark
USA Today
January 29, 2007
President Bush is to be commended for finally recognizing the needs of 47 million Americans denied health care for lack of insurance. His proposal would do little to help them. In a few years it would raise taxes for 160 million workers who receive group health insurance benefits.
The president’s plan would limit the tax deduction to $7,500 for an individual’s health insurance premium. The high rate of medical inflation would soon cause an income tax increase for most Americans.
Employers would cancel group plans. Workers could buy individual policies, which have higher costs and more limited access than group plans do. The suggestion that employers would pass on the group insurance savings in higher wages does not pass the smirk test.
Granted, the Bush plan would make the tax code more equitable. But so would eliminating the mortgage interest deduction. Who is to say home equity adds more to life quality than adequate health care?
There are many offsetting inequities in the Bush plan:
* Tax deductions are regressive and provide much greater benefit to the wealthy than to the poor. In Bush’s plan, a high-income person who is currently uninsured would receive nearly $6,000, while a low-income individual would receive $1,200.
* The individual insurance market discriminates against those who are sick or at risk of becoming so. Currently, employers cover both healthy and sick, spreading risk to reduce costs. Individuals, however, would be at the mercy of insurance companies that use family history, genetic indicators, age, occupation and illness as reasons to jack up rates — or exclude coverage altogether. Millions of Americans would therefore see their premiums increase substantially.
Much like Iraqi weapons of mass destruction, “gold-plated” health insurance is a figment of the president’s imagination. The problem with our health system is not that Americans can afford to use too much health care; it’s that too many can’t afford any.
Bush’s proposal would destroy the very system through which the vast majority of people get their coverage today and fail to replace it with an alternative means of obtaining quality care. It doesn’t deserve Congress’ consideration.
Rep. Pete Stark, D-Calif., is chairman of the health subcommittee of the House Ways and Means Committee.
By Elisa Ung
The Philadelphia Inquirer
January 28, 2007
Under preliminary proposals, all New Jersey residents would be required to have health insurance – and could enroll in plans subsidized by the state.
Depending on federal dollars, (State Sen. Joseph) Vitale said he hoped to begin with an expansion of the state’s FamilyCare program, which insures nearly 700,000 low-income children and families.
Later in the year, separate legislation would be aimed at insuring around 600,000 residents who cannot afford private insurance but make too much to qualify for FamilyCare or Medicaid, he said.
… “we’re trying to come out with what we will call a universal system,” said (New Jersey Governor John) Corzine.
http://www.philly.com/mld/inquirer/news/local/states/new_jersey/16561176.htm
By Don McCanne, MD
Quick! Which was the first state to enact a universal system?
Those of you who have been working on health care reform for many years likely came up with Hawaii. Yet you don’t hear much anymore about Hawaii’s universal system. Why is that?
Soon after the enactment of Hawaii’s health insurance law in 1974, those lacking insurance dropped to 2 percent. Now it’s about 10 percent. Enough said.
Media coverage of reform efforts tout those states that have already enacted universal systems, and discuss those that are in the process of doing so. It is unfortunate that these fictional stories of universality are appearing in news articles when they should be on the opinion pages as we-wish-it-were-true columns.
Gov. Corzine does seem to understand. They will duplicate the minimalist efforts of other states, and then use the fictional but politically-expedient label of “universal system.” But whom are they trying to please?
Let’s dump the semantic games. Let’s get on with adopting policies that would automatically provide comprehensive coverage for everyone. We really do know how to do it.
WEB EXCLUSIVE
By Eve Conant
Newsweek
Jan 29, 2007
Jan. 29, 2007 – President Bush’s State of the Union address may not have done much to improve his popularity. But it did succeed in jump-starting debate over one of the leading–and most contentiously lobbied issues–on his domestic agenda: health-care reform. In his speech, the president proposed offering tax subsidies to encourage more people to buy their own health insurance. The goal: to provide equal treatment to those who buy insurance on their own, and those who get it through their employers. Under the Bush plan, the administration estimates that 80 percent of workers with employer-based health plans would pay lower taxes–while 20 percent of those with more costly workplace plans (branded “gold-plated” by Bush) would see a tax hike, unless they decreased their coverage.
Democrats on Capitol Hill, along with labor unions and consumer groups, pilloried the Bush plan, arguing his proposal would do little to help America’s nearly 47 million uninsured–and could wind up hastening the demise of employer-provided healthcare. (In his weekly radio address, Bush called the criticism “reflexive” partisanship and called on Congress to cooperate with him to find a solution.)
But it wasn’t just folks in Washington who were upset. Nathan J. Wilkes of Greenwood Village, Colo., was so worried about the possible effects of Bush’s proposal on his ability to provide coverage for his chronically ill son that he decided to travel to the capital to make some noise. A computer network security expert who earns over $100,000, Wilkes works for a private firm outside of Denver which fits into the large-group insurance category and is allowed to shop around for different providers each year. But when his son Thomas, born with severe hemophilia, developed a resistance to treatment at age 1, Wilkes’s claims soared; his company’s insurance provider, Wilkes says, soon began hiking premiums 40 to 55 percent each year, and introduced a lifetime cap of $1 million for all employees and their families–including Thomas. Soon, Wilkes says, no other insurance companies would offer to cover the company. Worried he would no longer be able to provide coverage for his son, Wilkes turned to state and local groups for help. Physicians for a National Health Program took up his cause, and brought him to Washington, where he hoped to persuade Congress to reject the Bush plan in favor of universal health- care legislation. Wilkes spoke to NEWSWEEK’s Eve Conant about his trip. Excerpts:
NEWSWEEK: You have a good income and your employer gives you and your family comprehensive health insurance. So why are you so worried about coverage that you’ve come to D.C. to lobby for universal coverage?
Nathan Wilkes: Why am I worried? My son will no longer be insured in a month’s time. His claims have increased health-care costs for everyone I work with. My company is very socially responsible, but because of our high claims, no other insurance company will touch us. We’re trapped with the same provider, which keeps raising prices and last year introduced a $1 million lifetime cap on coverage. Even if my son has no injuries, we’ll hit that cap in the next one to three months. With hemophilia, the problem is internal bleeding. We know it’s happening if he complains of pain, or stops using one of his arms or legs. Even if we treat him at home the cost for medicine can run up to $3,600 every few hours. Because of insurance limits we’re often advised to delay treatment–to see if his injuries will clear up on their own–simply to avoid getting closer to the million-dollar mark. The aim of private insurance is to weed out high-cost patients like my son.
And what happens when you delay treatment?
Sometimes it works out fine. Other times he gets worse. Even at our most frantic we have to worry about the cap. We’re told he may have permanent nerve and joint damage because of the times we’ve had to delay treatment. We do everything we can, but he’s a 3-year-old, he wants to walk around and try to jump off the couch.
Did you watch the State of the Union? What do you think of Bush’s health proposals?
His strategy is to manipulate the tax code to make it appear as if you’re insuring more people, when in fact, you’re not addressing the real problems of the private insurance system: cost, access and the underinsured. Continuing with private insurance just feeds the monster. This won’t bring down the cost of drugs or reduce the overhead and profits taken in by the insurance companies. It only serves to free up more money in the consumer market to feed back into a broken system.
What will you do when your son’s insurance runs out?
The race has started; it’s like an hourglass with a finite amount of sand. We have to think of something else, but all our options would give us only a year at most. I’m told I can quit my job and try to join a larger company so my son’s chronic illness won’t be noticeable to their insurance company. But that might only buy a little bit of time. My wife could try to get a job, but that would mean the cost of putting three children in day care, including one who is ill and needs intensive supervision. I can’t get on Medicare or Medicaid because I make too much money. I’ve also been advised to divorce my wife, so that she and the kids might qualify. But that creates another set of bureaucratic problems. The best option is Colorado’s high-risk pool insurance (individual insurance for the uninsurable), but that also has a $1 million cap. That could last us a year, or, if my son has any bleeding in his head, could last a few days. One of my last options is to lobby for universal health care; I think I’m a decent example of what is wrong with private insurance in the U.S.
You’re one of those people with what Bush described as a “gold-plated” insurance policy, right?
I find that a pretty offensive term. Calling what I have gold-plated is just a way to shift attention away from real problems. My employer has done [its] best, so that we have minimum or no copay. But over the years, they’ve been forced to shift more of the burden on my co-workers and me. Gold-plated just means more attention on preventive care, which avoids the really costly problem of people only getting treatment in the emergency room. I’ve been insured my whole life, but we’re going to lose it because private insurance is about making profits, not keeping people healthy.
There’s a lot of political momentum on health coverage right now, but in the past that momentum has fizzled out. Do you think there’s a difference this time around?
My son has hemophilia and is immunosuppressed from his chemotherapy treatments [chemotherapy, in some extreme instances, is used to fight the immune system’s resistance to hemophilia treatment]. He’s the kind of person that is supposed to be first in line in the emergency room. Instead, we wait for hours in packed emergency rooms where the uninsured are piled in to get basic care. I think what we’re seeing in Washington now is a different momentum. If you keep piling snow on a mountaintop, there will eventually be an avalanche. This issue has been pushed under the rug before, but every other industrialized nation has some form of national health care. The system now is nothing short of an abomination. I think there might be enough political will now for a radical change.
URL: http://www.msnbc.msn.com/id/16874285/site/newsweek/
Physicians for a National Press Conference and the California Nurses Organization/National Nurses Organizing Committeeās press conference at the National Press Club in Washington, D.C., January 24, 2007.
Participants:
Michael Lighty | Director Public Policy – CNA/NNOC
Deborah Burger, RN | President, CNA
Oliver Fein, MD | Chair – PNHP NYC Metro
Nathan Wilkes
Kay Tillow | All Unions Committee For Single Payer Health Care-HR 676
James Winkler | Co-Chair – Healthcare NOW | General Secretary – United Methodist General Board of Church & Society
Rep. Dennis Kucinich | D-OH
Click here for the press release of this event
Physicians for a National Press Conference and the California Nurses Organization/National Nurses Organizing Committeeās press conference at the National Press Club in Washington, D.C., January 24, 2007.
Participants:
Michael Lighty | Director Public Policy – CNA/NNOC
Deborah Burger, RN | President, CNA
Oliver Fein, MD | Chair – PNHP NYC Metro
Nathan Wilkes
Kay Tillow | All Unions Committee For Single Payer Health Care-HR 676
James Winkler | Co-Chair – Healthcare NOW | General Secretary – United Methodist General Board of Church & Society
Rep. Dennis Kucinich | D-OH
Click here for the press release of this event
By Julie Appleby
USA Today
January 29, 2007
Insurers say they rarely revoke policies, and generally do so only because of misleading or omitted information on applications. One large insurer, Blue Cross of California, says it revokes less than one-half of 1% of all individual policies each year. Requiring complete medical details and honesty on the part of applicants, insurers say, is necessary to control costs and weed out fraud.
(Karen Pollitz of the Institute for Health Care Research and Policy at Georgetown University) says the individual market has some very complicated rules that applicants and insurers can get caught up in. At the root of the problem, she says, is that the market works best for people who are healthy.
“You’re eligible for insurance when you don’t need health care and not eligible when you do,” she says. “Are people gaming? Maybe they are. Why were they gaming to begin with? They lost other coverage and need new coverage.”
“Our objective as an industry is to provide as affordable a product as possible,” says Mohit Ghose of America’s Health Insurance Plans, the industry association. “We have to rely on the medical record information supplied by the applicant.”
http://www.usatoday.com/printedition/news/20070129/1a_cover29.art.htm
By Don McCanne, MD
Who is the bad actor here? Is it the insurer that rejects a claim and rescinds an insurance policy based on a look-back at the application process to see if an error, omission of false statement can be discovered that would allow the insurer to back out of this agreement? Or is it the insured individual who either made an honest error or omission, or, out of desperation for coverage, avoided full disclosure on the medical history form?
Well, the worst actor in this process is the least visible. A health policy that inevitably results in some insured individuals being denied benefits, no matter the reason, is a flawed policy. So the real villains are the policymakers.
Mohit Ghose of America’s Health Insurance Plans (AHIP) states that their objective is to provide affordable insurance products, and that means that they must exclude individuals with an unfavorable medical history. But our policies must be designed to meet the needs of everyone, including those requiring more health care. If our policymakers required insurers to cover everyone through guaranteed issue, which a few states do, then insurance premiums for adequate coverage become unaffordable for many average-income individuals.
Our policymakers do recognize that the current system is not working. Unfortunately, their current efforts are totally off target. Although it is health care that has become unaffordable, they have narrowed their goals to making health insurance affordable, as if universal coverage would solve the problem of high health care costs. It can’t, because once you include those with health care needs, you can make premiums affordable only by creating plans that establish ever greater financial barriers to actual health care.
Keep in mind the quote from Wellpoint’s Blue Cross of California: “We believe that the cost of covering someone whose health can be predicted to require costly care should not be subsidized by someone with minimal health care needs.” This is an explicit statement that the nation’s largest health insurer does not believe in the crucial insurance function of pooling risk, and that concept is reinforced by AHIP.
Our policymakers do understand that establishing a single, universal risk pool and funding it through equitable tax policies would make health care affordable for everyone. If they would eliminate the private insurers and establish that risk pool for all of us, then we would no longer have to be concerned about identifying the bad actors of health insurance rescission.
Minneapolis/St.Paul Star Tribune Editorial
Published: January 28, 2007
For Americans who hope the United States might one day have a health care system that makes sense, this is an exciting time. Massachusetts has adopted a plan to achieve universal coverage, and California Gov. Arnold Schwarzenegger has pledged to do the same in the nation’s most populous state. Last week President Bush committed himself to a radical overhaul of federal tax subsidies in a bid to hold down health care costs and expand insurance coverage.
Yet the closer you look at these ambitious plans, the more you see they are mere patchworks. In Massachusetts, which will require most residents to buy private insurance, policies are coming on the market with higher prices and less coverage than experts hoped. Economist and columnist Paul Krugman points out that the Schwarzenegger plan will require big new state bureaucracies to regulate insurance companies and police individual behavior. As for the president’s plan, even the White House admits it will cover only 5 million of the nation’s 46 million uninsured; that’s because it relies on tax deductions, which aren’t much use to low-income families who represent the bulk of the uninsured population.
It’s good to see political leaders think boldly. But the lesson is that they aren’t thinking boldly enough. It’s time for the United States to think about just making the leap to single-payer insurance.
This radical notion would seem unthinkable, except that every other civilized nation already has thought about it and embraced it — from conservative societies such as Japan and Australia to nanny states such as Germany and France. Every one of them covers more people, produces better medical outcomes, wastes less revenue on overhead and marketing, and spends less money than the United States.
The biggest argument against a single-payer system is it’s “politically unrealistic” in a free-market society like the United States. We think that gives too little credit to the impatience and common sense of American voters. But then we won’t know until a leader has the courage to find out.
Another voice /Health care
By DAVID DYSSEGAARD KALLICK
The Buffalo News
1/29/2007
Tuesday, prominent community leaders in Buffalo will hold a public hearing on the Berger Commission’s proposals to close hospitals as a way to reduce health care spending. The hearing will help sort out what savings are realistic, and at what cost to workers, patients and communities. More important still, the hearing, organized by the Coalition for Economic Justice, will focus attention on solutions to the broader health care crisis.
The current insurance system just isn’t working. There are 2.8 million New Yorkers who don’t have insurance. For people who do have insurance, health care is too expensive; no item in the family budget is rising faster.
As important as the effect on families, though, is the effect on economic growth. The convoluted way we finance health care is one of our nation’s biggest job-killers. Responsible companies that pay for health care are being crushed by the rising cost of insurance.
The best solution would be a national single-payer plan. But if Washington doesn’t move, New York should look into a state-based single-payer system.
Virtually all of the world’s advanced economies have universal coverage. There are models that integrate choice of doctor, private insurance on top of the basic government plan and the ability to pay to skip ahead of a queue.
Can we afford it? The United States spends about 16 percent of gross domestic product on health care. Compare that with 7.7 percent in the United Kingdom, 7.9 percent in Japan and 9.9 percent in Canada. Universal insurance is much less expensive.
It’s encouraging to see states like Massachusetts and California moving forward on universal coverage. But their models cost billions more, while a single-payer system would cost billions less than current spending. According to one estimate, cutting out administrative costs would allow a single-payer system in New York to reduce spending by 19 percent, a savings of $23 billion.
Short of a single-payer plan, there are other sensible ways New York can improve coverage. Bulk purchasing of prescription drugs on behalf of government programs, the uninsured and private groups would help lower one of the most problematic health care costs.
In addition, current law forces businesses that provide insurance to pay a surcharge that helps pay for emergency room visits by uninsured people. Employers who pay for coverage wind up subsidizing employers that don’t. It would be better to reverse that situation, or to pay for uncompensated care out of the state’s general revenues.
Gov. Eliot Spitzer has proposed to guarantee access to health insurance for all uninsured children in the state, and to get all adults who are eligible for Medicaid actually enrolled. At Tuesday’s hearing, local residents, workers and policy experts can push the state to take those first steps, and then to push even further.
David Dyssegaard Kallick is senior fellow at the Fiscal Policy Institute. The hearing is at 6:30 p.m. Tuesday in Trinity Episcopal Church on Delaware Avenue.
By Marcia Angell
Guest Columnist
Boston Globe
January 29, 2007
Today the Globe launches a rotating seat on the op-ed page. Each guest columnist will appear each Monday for six weeks, before the next columnist takes over.
THE GREATEST source of insecurity for many Americans is the soaring cost of health care. Leaving jobs can mean losing health insurance, and even when insurance is offered, many workers turn it down because they can’t afford their growing share of the premiums.
Businesses are having trouble, too. Those that provide good health benefits see more of their revenues siphoned off by the health insurance industry, with a resulting loss of competitiveness (General Motors spends far more on health benefits than Toyota).
Insurance is not the same thing as health care — not by a long shot. Private insurers maximize profits mainly by limiting benefits or by not covering people with health problems. The United States is the only advanced country in the world with a health care system based on avoiding sick people.
It’s not surprising, then, that health care reform is at the top of the political agenda. Most current proposals de-couple health benefits from employment and encourage individuals to buy their own insurance. The fact that they were ever coupled is a historical accident; there is no logical reason for it. Yet, employment-based insurance has been the only practical option for people not old enough for Medicare or poor enough for Medicaid, since the individual insurance market is notoriously treacherous.
In his State of the Union address, President Bush proposed tax deductions for individuals who venture into that market and buy insurance on their own. Family premiums above $15,000 and single premiums above $7,500 would be taxed. This is a gesture, not a plan. It is just one more example of the conceit, shared by many on the right, that nearly any problem can be solved by jiggering the tax code. In fact, many of the uninsured don’t pay taxes at all, and many more would find their small tax relief greatly outweighed by the price of insurance.
More serious proposals are coming from the states, with Massachusetts in the lead. These aim for universal coverage by requiring uninsured individuals to purchase health insurance, under pain of — you guessed it — tax penalties, with state subsidies for the poor and near poor. In Massachusetts, there will be a token contribution by employers who don’t provide health benefits, but most of the cost will be borne by individuals. A new state agency, the Commonwealth Health Insurance Connector, is charged with seeing that insurers offer adequate benefit packages at reasonable premiums.
Though well-intentioned, plans like these all have the same fatal flaw: They offer no workable mechanism to control costs, mainly because they leave the private insurance industry in place. Yet, soaring costs are the fundamental problem ; lack of coverage follows from that. Already the Massachusetts Connector is having difficulty holding premiums down to the levels forecast when the plan was enacted. Even if they are held down at the start, there is little to stop insurers from raising them afterward , shrinking benefits, or both. It will take a large and costly bureaucracy to ride herd on all the ways to game this system. Perhaps the biggest risk is that failure will give universal care a bad name, just as the failure of the Clinton plan did 13 years ago. (That plan, too, made the mistake of giving the private insurance industry a central role.)
We need to change the system completely and get the insurance industry, as well as employers, out of it. Private insurance companies offer little of value, yet skim off 15 to 25 percent of the health care dollar for profits and overhead. It would make much more sense to extend Medicare to everyone. That could be done gradually by dropping the eligibility age a decade at a time, while phasing out the insurance companies. The loss of insurance jobs would probably be more than offset by job gains in other industries no longer saddled with health costs.
Medicare is not perfect, but its problems are readily fixed. It is far more efficient than private insurance, with overhead of less than 4 percent, and since it is administered by a single public agency, controlling costs would be possible. Unlike private insurers, it cannot select whom to cover or deny care to those who need it most.
It is time to stop tinkering at the margins. Medicare for all is the only reform that has a prayer of providing universal coverage while containing costs.
Dr. Marcia Angell is a senior lecturer at Harvard Medical School and former editor-in-chief of the New England Journal of Medicine.
