PNHP

The Democrats' Authoritarian Health "Reform" Bill and the Ascendency of Corporatism in the Democratic Party

The Democrats' Authoritarian Health "Reform" Bill and the Ascendency of Corporatism in the Democratic Party

By Miles Mogulescu
The Huffington Post
December 23, 2009

(This is the first of a series of blogs/articles that will try to put the growing disappointment of many progressives at President Obama’s policies into a wider political and theoretical perspective about the divide in the Democratic Party between progressives and corporatists.)

If Barack Obama and today’s Congressional Democrats were passing Social Security for the first time, instead of a creating a public program, they would likely be mandating that every American buy an annuity from a private, profit-driven Wall Street firm like Goldman Sachs (who could keep 15%-20% of their payments for overhead, profits and executive salaries) with the IRS serving as Wall Street’s collection agency. If they were passing Medicare today, they would be mandating that every American buy a health insurance policy from profit-driven companies like Aetna, Humana and Wellpoint that would start paying benefits with 40% co-pays and $10,000 a year deductibles when they turn 65.

Therefore, when Senate “liberals” argue that their health “reform” bill, while compromised, is like the first iterations of Social Security and Medicare and provides a “starter home” that can be added to later, many progressives respond that its foundation is built on quicksand and that it’s not incremental reform but a step in the fundamentally wrong direction.

Democrats and liberals once stood for providing a social safety net through government programs like Social Security, Medicare and unemployment insurance, which were administered by government employees for the benefit of the American people and not by private companies for the benefit of their shareholders and executives who receive multi-million dollar salaries and bonuses. For over 60 years, they stood for the principal that health care should be a right and not a privilege and that Medicare should be extended to all Americans.

Democrats in Congress, under the leadership of Barack Obama, have now turned that principal on its head and made health care neither a right, nor a privilege, but an obligation for individual citizens and a government-mandated profit center for private corporations. For the first time in American history, Democrats are about to pass a bill that uses the coercive power of the federal government to force every American — simply by virtue of being an American — to purchase the products of a private company. At heart, the Democrats’ solution to 48 million uninsured is to force the them to buy inadequate private insurance — with potentially high deductibles and co-pays and no price controls — or be fined by the federal government.

In effect, this represents an historic defeat for the type of liberalism represented by the New Deal and the Great Society and the ascendancy of a new type of corporatist liberalism. As Ed Kilgore recently wrote in an important and provocative article in The New Republic,

“To put it simply, and perhaps over-simply, on a variety of fronts (most notably financial restructuring and health care reform, but arguably on climate change as well), the Obama administration has chosen the strategy of deploying regulated and subsidized private sector entities to achieve progressive policy results. This approach was a hallmark of the so-called Clintonian, ‘New Democrat’ movement, and the broader international movement sometimes referred to as ‘the Third Way,’ which often defended the use of private means for public ends… To put it more bluntly, on a widening range of issues, Obama’s critics to the right say he’s engineering a government takeover of the private sector, while his critics to the left accuse him of promoting a corporate takeover of the public sector.”

Or as David Brooks wrote in The New York Times earlier this summer,

“[Obama and Clinton] Democrats learned never to go to war against the combined forces of corporate America. Today, whether it is on the stimulus, on health care, or any other issue, the Obama administration and the Congressional leadership go out of their way to court corporate interests, to win corporate support and to at least divide corporate opposition.”

The differences between progressive New Deal liberals — what Howard Dean termed the “Democratic wing of the Democratic Party” — and corporatist liberals or “New Democrats” were largely papered over for the past 8 years by common opposition to the free market absolutism and neoconservative foreign policy of the Bush administration. In terms of health care reform, they were papered over by the hopes of many progressive liberals — who were willing to give up fighting for Medicare-For-All as politically “impractical” — of achieving a robust public option as an acceptable compromise in the context of a larger health insurance mandate.

For many of these progressive liberals, the idea of the public option, at least at the beginning, was that it would be so large and successful that it would prove the superiority of government-run health insurance over private profit-driven health insurance and would eventually evolve into a single payer system. They watched, with increasing concern, as a large and robust public option was first turned by House Democrats into a small and puny public option that would insure only a handful of Americans and provide little competition to private insurers, and then as the public option was dumped entirely by Senate Democrats, with no help by President Obama to defend it.

And as they have seen the end result of the Democratic Senate’s health care bill, progressives have started to get angry. Stripped of the public option, progressives could now look through the Democratic health care bill to its essence: the permanent entrenchment of the corrupt private health insurance corporation as the nexus of the American health care system; the authoritarian liberal solution of solving the problem of the uninsured by using the coercive power of the federal government to force citizens to buy inadequate private insurance sold by oligopolies with their profits subsidized by taxpayer dollars; and the increased political power of the of the private health care industry into the indefinite future, fueled by government money that can then be used to lobby the government for more private benefits.

As a result, the past two weeks have seen a revolt from much of the progressive base of the Democratic Party, articulated by people like Howard Dean, Marcos Moulitsas, Keith Olbermann, Ed Schultz, and by organizations like MoveOn, The AFL-CIO, SEIU, and Progressive Democrats of America. The ideological fault line between progressive Democrats and corporatist “New Democrats” has split wide open.

Obama campaigned, at least on the level of political imagery, as a progressive liberal. His campaign slogan was “Yes We Can”, taken directly from the ’60’s era slogan of Cesar Chavez and The United Farm Workers Union, “Si Se Puede”. He evoked the imagery of Martin Luther King and the civil rights movement. He talked about overthrowing the influence of special interests and lobbyists and transforming the way Washington does business. He promised transformative “Change” (although, as some critics pointed out at the time, he left the direction of “Change” so vague that voters of various stripes could read what they wanted into it). That’s why a majority of progressive Democrats supported Obama over Hillary Clinton in the primaries, particularly after the more populist John Edwards withdrew. They didn’t want to see a return to the centrism, corporatism, and triangulation of Clintonism.

But from the moment he was elected, Obama has governed not as a progressive liberal but as a corporatist liberal. Progressive liberals hoped Obama would be like FDR. Instead, he’s been like Bill Clinton on steroids.

Obama’s economic advisors, such as Larry Summers and Tim Geithner, were all drawn from the Wall Street
wing of the Democratic Party. His foreign policy advisors were all liberal hawks like Hillary Clinton or even Bush administration veterans like Robert Gates. From day one, Obama continued Wall Street Republican Hank Paulson’s financial policies of throwing money at the banks while demanding next to nothing in return in terms of making credit available to average Americans and small businesses or creating new jobs.

When it came to health care “reform”, Obama’s strategy was to cut deals with for-profit health care corporations. He cut a deal with big Pharma to continue banning Medicare from negotiating for lower drug prices and to continue banning consumers from buying cheaper drugs from Canada. He cut a deal with the for-profit hospital industry that there would be no effective national public option that might pay them lower rates that the for-profit insurance oligopoly. While he gave mild rhetorical support to the public option, he did nothing to actually fight for it , and, as Russ Feingold has pointed out, Joe Lieberman was really doing Obama’s work in killing it.

Because of Obama’s rhetorical and imaging skills, it has taken until the past week or two, with the death of the public option, for progressives to begin to wonder whether Obama was really their friend. And what’s most remarkable, by teasing them with the hopes of a public option, he’s so far held onto the vote of virtually every Congressional liberal for an essentially authoritarian corporatist health care bill.

So total has been Obama’s success to date in defeating the progressive Democrats and enshrining the corporatist New Democrats, that even progressive talk radio veteran Al Franken and the closest thing to a European-style social democrat to hold national political office, Bernie Sanders, are not only voting for — but are talking up the virtues of — the Senate health “reform” bill. Although nearly 60 members of the House Progressive Caucus signed a letter promising to vote against a health care bill doesn’t have a robust public option, unless, to everyone’s surprise, there’s a big enough revolt over the Christmas holidays among large progressive groups like the AFL-CIO (who’s money and volunteers many Democratic Congresspeople need to get reelected), virtually all of those House Progressives will end up breaking their pledge and voting for a final Congressional Conference bill with no public option, a coercive mandate, and a tax on the “Chevy” health care benefits of union workers.

Only an African American President cloaked in the rhetoric and imagery of progressive change could have pulled off such a rout of progressives and such a virtually unanimous victory for the corporatists in the Democratic Party. The Clintons could never have pulled it off.

That helps explain why many progressive Democrats — myself included — are increasingly in a state of anger and despair. If after millions of progressives worked so hard to elect Barack Obama and a Democratic majority in Congress, the result is an almost total defeat of progressives in the Democratic Party — or at least in the Congressional Democratic Party — where do progressives turn? A progressive primary challenge to Democratic incumbents in 2010, or even to Obama’s reelection in 2012, is probably futile and counterproductive. At the same time, as the 2000 Nader campaign so aptly demonstrated, the winner-take-all American electoral system makes the formation of a third party equally futile.

Historically, strong popular movements, like the labor movement and the civil rights movement, have pressured elected corporate Democrats to enact a measure of progressive change. And, as progressives come to understand the corporatist nature of Obamism, perhaps the best hope is that progressive organizations will be less anxious to be extensions of the White House and return to grassroots organizing. The question is whether Obama — the one-time community organizer — is susceptible to pressure from mass grassroots organizations. If not, the country, as well as Democrats and progressives, may be in for a hard time.

As it increasingly appears that Obama is the President of Wall Street, and not the President of Main Street, he is losing not only the left but the center. It’s a myth that the path to winning the popular center in American politics is moving to the corporate center. If the only political choice given to American voters is using their taxes to help big government subsidize wealthy corporations, or the Republican message of shrinking the size of government and cutting their taxes, many who voted for Obama will return to the fold of the seemingly brain-dead Republican Party. Obama will likely face an even more conservative Congress after the 2010 election and even, like Jimmy Carter, could end up as a one-term President.

The hopes of millions of Obama campaign workers and voters that the Age of Obama would sweep in a new era of progressive change could be dashed. A generation of young voters could be turned off to politics instead of becoming permanent Democrats.

Let’s hope, that with the defeat of the public option at Obama’s hands, the Democratic wing of the Democratic Party wakes up and begins to realize that it has a fight on its hand against the corporatist Democrats, and that Obama might not be its natural ally.

As Kevin Baker wrote in Harpers Magazine last spring, warning of the dangers of a failed Obama Presidency,

“Obama internalized what might be called Clinton’s ‘business liberalism’ as an alternative to useless battles from another time…Clinton’s business liberalism, however, is a chimera…a capitulation to powerful and selfish interest. ..a ‘pragmatism that is not really pragmatism at all, just surrender to the usual corporate interests…

Franklin Roosevelt also took office imagining that he could bring all classes of Americans together in some big, mushy, cooperative scheme. Quickly disabused of this notion, he threw himself into the bumptious give-and-take of practical politics; lying, deceiving, manipulating, arraying one group after another on his side–a transit encapsulated by how, at the end of his first term, his outraged opponents were calling him a “traitor to his class” and he was gleefully inveighing against “economic royalists” and announcing, ‘They are unanimous in their hatred for me–and I welcome their hatred.’

Obama should not deceive himself into thinking that such interest-group politics can be banished any more than can the cycles of Walls Street. It is not too late for him to change direction and seize the radical moment at hand. But for the moment… Barack Obama is moving prudently, carefully, reasonably toward disaster.”

That was spring. Now it’s the winter of our discontent. The moment for Obama to “change direction and seize the radical moment at hand” is fast receding. Will he continue to move “prudently, carefully, reasonably towards disaster?” If not, I worry for the future not only of progressives and Democrats, but of the country. President Palin in 2012?

POSTSCRIPT: As I read the comments, I find too many are taking away the message that everything is now hopeless for bringing about progressive change. That’s not the message I intended to convey. While I’m disheartened in many ways to report on the truth, as I see it, of Obama governing from the corporatist wing of the Democratic Party, my goal with this article is to increase awareness, not to encourage the view that there’s nothing that can be done. The first thing is for progressives to understand the situation with clarity. Then progressive organizations need to move away from trying to ingratiate themselves with Obama and Rahn Emanuel and working hand in glove with the White House and go back to their core mission of building a mass grassroots movement for progressive change. We can’t leave all the grassroots organizing to the populist right and the tea-baggersm who are effectively adopting the old strategies of progressiv
e movements and whose organizing, for the moment, seems to have more energy than that of progressives. To quote the old labor slogan, “Don’t Mourn. Organize.” Or to quote from the beginning of Studs Terkel’s last book, “Hope has never trickled down. It has always sprung up.” Historically, elected corporatist liberals have sometimes enacted progressive change when put under enough pressure by grassroots progressive movements like the labor movement and the civil rights movement.

The Democrats’ Authoritarian Health “Reform” Bill and the Ascendency of Corporatism in the Democratic Party

By Miles Mogulescu
The Huffington Post
December 23, 2009

(This is the first of a series of blogs/articles that will try to put the growing disappointment of many progressives at President Obama’s policies into a wider political and theoretical perspective about the divide in the Democratic Party between progressives and corporatists.)

If Barack Obama and today’s Congressional Democrats were passing Social Security for the first time, instead of a creating a public program, they would likely be mandating that every American buy an annuity from a private, profit-driven Wall Street firm like Goldman Sachs (who could keep 15%-20% of their payments for overhead, profits and executive salaries) with the IRS serving as Wall Street’s collection agency. If they were passing Medicare today, they would be mandating that every American buy a health insurance policy from profit-driven companies like Aetna, Humana and Wellpoint that would start paying benefits with 40% co-pays and $10,000 a year deductibles when they turn 65.

Therefore, when Senate “liberals” argue that their health “reform” bill, while compromised, is like the first iterations of Social Security and Medicare and provides a “starter home” that can be added to later, many progressives respond that its foundation is built on quicksand and that it’s not incremental reform but a step in the fundamentally wrong direction.

Democrats and liberals once stood for providing a social safety net through government programs like Social Security, Medicare and unemployment insurance, which were administered by government employees for the benefit of the American people and not by private companies for the benefit of their shareholders and executives who receive multi-million dollar salaries and bonuses. For over 60 years, they stood for the principal that health care should be a right and not a privilege and that Medicare should be extended to all Americans.

Democrats in Congress, under the leadership of Barack Obama, have now turned that principal on its head and made health care neither a right, nor a privilege, but an obligation for individual citizens and a government-mandated profit center for private corporations. For the first time in American history, Democrats are about to pass a bill that uses the coercive power of the federal government to force every American — simply by virtue of being an American — to purchase the products of a private company. At heart, the Democrats’ solution to 48 million uninsured is to force the them to buy inadequate private insurance — with potentially high deductibles and co-pays and no price controls — or be fined by the federal government.

In effect, this represents an historic defeat for the type of liberalism represented by the New Deal and the Great Society and the ascendancy of a new type of corporatist liberalism. As Ed Kilgore recently wrote in an important and provocative article in The New Republic,

“To put it simply, and perhaps over-simply, on a variety of fronts (most notably financial restructuring and health care reform, but arguably on climate change as well), the Obama administration has chosen the strategy of deploying regulated and subsidized private sector entities to achieve progressive policy results. This approach was a hallmark of the so-called Clintonian, ‘New Democrat’ movement, and the broader international movement sometimes referred to as ‘the Third Way,’ which often defended the use of private means for public ends… To put it more bluntly, on a widening range of issues, Obama’s critics to the right say he’s engineering a government takeover of the private sector, while his critics to the left accuse him of promoting a corporate takeover of the public sector.”

Or as David Brooks wrote in The New York Times earlier this summer,

“[Obama and Clinton] Democrats learned never to go to war against the combined forces of corporate America. Today, whether it is on the stimulus, on health care, or any other issue, the Obama administration and the Congressional leadership go out of their way to court corporate interests, to win corporate support and to at least divide corporate opposition.”

The differences between progressive New Deal liberals — what Howard Dean termed the “Democratic wing of the Democratic Party” — and corporatist liberals or “New Democrats” were largely papered over for the past 8 years by common opposition to the free market absolutism and neoconservative foreign policy of the Bush administration. In terms of health care reform, they were papered over by the hopes of many progressive liberals — who were willing to give up fighting for Medicare-For-All as politically “impractical” — of achieving a robust public option as an acceptable compromise in the context of a larger health insurance mandate.

For many of these progressive liberals, the idea of the public option, at least at the beginning, was that it would be so large and successful that it would prove the superiority of government-run health insurance over private profit-driven health insurance and would eventually evolve into a single payer system. They watched, with increasing concern, as a large and robust public option was first turned by House Democrats into a small and puny public option that would insure only a handful of Americans and provide little competition to private insurers, and then as the public option was dumped entirely by Senate Democrats, with no help by President Obama to defend it.

And as they have seen the end result of the Democratic Senate’s health care bill, progressives have started to get angry. Stripped of the public option, progressives could now look through the Democratic health care bill to its essence: the permanent entrenchment of the corrupt private health insurance corporation as the nexus of the American health care system; the authoritarian liberal solution of solving the problem of the uninsured by using the coercive power of the federal government to force citizens to buy inadequate private insurance sold by oligopolies with their profits subsidized by taxpayer dollars; and the increased political power of the of the private health care industry into the indefinite future, fueled by government money that can then be used to lobby the government for more private benefits.

As a result, the past two weeks have seen a revolt from much of the progressive base of the Democratic Party, articulated by people like Howard Dean, Marcos Moulitsas, Keith Olbermann, Ed Schultz, and by organizations like MoveOn, The AFL-CIO, SEIU, and Progressive Democrats of America. The ideological fault line between progressive Democrats and corporatist “New Democrats” has split wide open.

Obama campaigned, at least on the level of political imagery, as a progressive liberal. His campaign slogan was “Yes We Can”, taken directly from the ’60’s era slogan of Cesar Chavez and The United Farm Workers Union, “Si Se Puede”. He evoked the imagery of Martin Luther King and the civil rights movement. He talked about overthrowing the influence of special interests and lobbyists and transforming the way Washington does business. He promised transformative “Change” (although, as some critics pointed out at the time, he left the direction of “Change” so vague that voters of various stripes could read what they wanted into it). That’s why a majority of progressive Democrats supported Obama over Hillary Clinton in the primaries, particularly after the more populist John Edwards withdrew. They didn’t want to see a return to the centrism, corporatism, and triangulation of Clintonism.

But from the moment he was elected, Obama has governed not as a progressive liberal but as a corporatist liberal. Progressive liberals hoped Obama would be like FDR. Instead, he’s been like Bill Clinton on steroids.

Obama’s economic advisors, such as Larry Summers and Tim Geithner, were all drawn from the Wall Street wing of the Democratic Party. His foreign policy advisors were all liberal hawks like Hillary Clinton or even Bush administration veterans like Robert Gates. From day one, Obama continued Wall Street Republican Hank Paulson’s financial policies of throwing money at the banks while demanding next to nothing in return in terms of making credit available to average Americans and small businesses or creating new jobs.

When it came to health care “reform”, Obama’s strategy was to cut deals with for-profit health care corporations. He cut a deal with big Pharma to continue banning Medicare from negotiating for lower drug prices and to continue banning consumers from buying cheaper drugs from Canada. He cut a deal with the for-profit hospital industry that there would be no effective national public option that might pay them lower rates that the for-profit insurance oligopoly. While he gave mild rhetorical support to the public option, he did nothing to actually fight for it , and, as Russ Feingold has pointed out, Joe Lieberman was really doing Obama’s work in killing it.

Because of Obama’s rhetorical and imaging skills, it has taken until the past week or two, with the death of the public option, for progressives to begin to wonder whether Obama was really their friend. And what’s most remarkable, by teasing them with the hopes of a public option, he’s so far held onto the vote of virtually every Congressional liberal for an essentially authoritarian corporatist health care bill.

So total has been Obama’s success to date in defeating the progressive Democrats and enshrining the corporatist New Democrats, that even progressive talk radio veteran Al Franken and the closest thing to a European-style social democrat to hold national political office, Bernie Sanders, are not only voting for — but are talking up the virtues of — the Senate health “reform” bill. Although nearly 60 members of the House Progressive Caucus signed a letter promising to vote against a health care bill doesn’t have a robust public option, unless, to everyone’s surprise, there’s a big enough revolt over the Christmas holidays among large progressive groups like the AFL-CIO (who’s money and volunteers many Democratic Congresspeople need to get reelected), virtually all of those House Progressives will end up breaking their pledge and voting for a final Congressional Conference bill with no public option, a coercive mandate, and a tax on the “Chevy” health care benefits of union workers.

Only an African American President cloaked in the rhetoric and imagery of progressive change could have pulled off such a rout of progressives and such a virtually unanimous victory for the corporatists in the Democratic Party. The Clintons could never have pulled it off.

That helps explain why many progressive Democrats — myself included — are increasingly in a state of anger and despair. If after millions of progressives worked so hard to elect Barack Obama and a Democratic majority in Congress, the result is an almost total defeat of progressives in the Democratic Party — or at least in the Congressional Democratic Party — where do progressives turn? A progressive primary challenge to Democratic incumbents in 2010, or even to Obama’s reelection in 2012, is probably futile and counterproductive. At the same time, as the 2000 Nader campaign so aptly demonstrated, the winner-take-all American electoral system makes the formation of a third party equally futile.

Historically, strong popular movements, like the labor movement and the civil rights movement, have pressured elected corporate Democrats to enact a measure of progressive change. And, as progressives come to understand the corporatist nature of Obamism, perhaps the best hope is that progressive organizations will be less anxious to be extensions of the White House and return to grassroots organizing. The question is whether Obama — the one-time community organizer — is susceptible to pressure from mass grassroots organizations. If not, the country, as well as Democrats and progressives, may be in for a hard time.

As it increasingly appears that Obama is the President of Wall Street, and not the President of Main Street, he is losing not only the left but the center. It’s a myth that the path to winning the popular center in American politics is moving to the corporate center. If the only political choice given to American voters is using their taxes to help big government subsidize wealthy corporations, or the Republican message of shrinking the size of government and cutting their taxes, many who voted for Obama will return to the fold of the seemingly brain-dead Republican Party. Obama will likely face an even more conservative Congress after the 2010 election and even, like Jimmy Carter, could end up as a one-term President.

The hopes of millions of Obama campaign workers and voters that the Age of Obama would sweep in a new era of progressive change could be dashed. A generation of young voters could be turned off to politics instead of becoming permanent Democrats.

Let’s hope, that with the defeat of the public option at Obama’s hands, the Democratic wing of the Democratic Party wakes up and begins to realize that it has a fight on its hand against the corporatist Democrats, and that Obama might not be its natural ally.

As Kevin Baker wrote in Harpers Magazine last spring, warning of the dangers of a failed Obama Presidency,

“Obama internalized what might be called Clinton’s ‘business liberalism’ as an alternative to useless battles from another time…Clinton’s business liberalism, however, is a chimera…a capitulation to powerful and selfish interest. ..a ‘pragmatism that is not really pragmatism at all, just surrender to the usual corporate interests…

Franklin Roosevelt also took office imagining that he could bring all classes of Americans together in some big, mushy, cooperative scheme. Quickly disabused of this notion, he threw himself into the bumptious give-and-take of practical politics; lying, deceiving, manipulating, arraying one group after another on his side–a transit encapsulated by how, at the end of his first term, his outraged opponents were calling him a “traitor to his class” and he was gleefully inveighing against “economic royalists” and announcing, ‘They are unanimous in their hatred for me–and I welcome their hatred.’

Obama should not deceive himself into thinking that such interest-group politics can be banished any more than can the cycles of Walls Street. It is not too late for him to change direction and seize the radical moment at hand. But for the moment… Barack Obama is moving prudently, carefully, reasonably toward disaster.”

That was spring. Now it’s the winter of our discontent. The moment for Obama to “change direction and seize the radical moment at hand” is fast receding. Will he continue to move “prudently, carefully, reasonably towards disaster?” If not, I worry for the future not only of progressives and Democrats, but of the country. President Palin in 2012?

POSTSCRIPT: As I read the comments, I find too many are taking away the message that everything is now hopeless for bringing about progressive change. That’s not the message I intended to convey. While I’m disheartened in many ways to report on the truth, as I see it, of Obama governing from the corporatist wing of the Democratic Party, my goal with this article is to increase awareness, not to encourage the view that there’s nothing that can be done. The first thing is for progressives to understand the situation with clarity. Then progressive organizations need to move away from trying to ingratiate themselves with Obama and Rahn Emanuel and working hand in glove with the White House and go back to their core mission of building a mass grassroots movement for progressive change. We can’t leave all the grassroots organizing to the populist right and the tea-baggersm who are effectively adopting the old strategies of progressive movements and whose organizing, for the moment, seems to have more energy than that of progressives. To quote the old labor slogan, “Don’t Mourn. Organize.” Or to quote from the beginning of Studs Terkel’s last book, “Hope has never trickled down. It has always sprung up.” Historically, elected corporatist liberals have sometimes enacted progressive change when put under enough pressure by grassroots progressive movements like the labor movement and the civil rights movement.

A doctor's voice: A national health insurance plan makes more sense

By PETER MAHR
Hillsboro (Ore.) Argus, Oregonlive.com
December 30, 2009

As a family physician I must write to convey my frustration and indignation with the Senate health care bill.

It is an immense bill offering minor advances in the access to health care for Americans via private insurance, the expansion of Medicaid and the increase in money for community clinics. But in cementing the role of private insurance as the vehicle for Americans to access necessary health services, the bill wastes billions of dollars a year due to the inefficiency and profit motive inherent in this system.

Furthermore, the bill will still leave millions without any insurance and even more people underinsured. Those who have insurance with affordable premiums will find the cost-sharing (deductibles, co-pays and out-of-pocket expenses) onerous. Those with insurance offering adequate access to health services will pay premiums that are unaffordable.

Finally, by taxing Americans four years in advance of the initiation of subsidies for the purchase of insurance, this bill underestimates the true cost to our country. In the end the bill will mandate that all of us buy into and subsidize the inefficient and expensive private health insurance financing system we have today.

My frustration doubles when I realize that there is a viable, efficient and affordable alternative to health care financing that could be enacted tomorrow. With a system of national health insurance, we could cover 100 percent of Americans at a dramatically reduced cost for families, businesses and our country. Under a national health insurance plan everyone pays into the insurance pool via progressive income or payroll taxes.

Let’s call this our premiums. Then, when we are sick and go to the doctor or have a surgery, the doctor or hospital gets paid from the money in the pool. It is not socialized medicine: Doctors and hospitals continue treating patients as before. They remain private and autonomous.

Since a national health insurance system eliminates the profit motive, as well as the advertising and executive pay associated with private insurance and slashes burdensome and expensive administration on the doctor and hospital level, it would finance access to health care for all while reducing costs dramatically.

Finally, my frustration will pale in comparison to the American people’s anger when they find out what the Senate bill means for them. In the Senate bill, the Congressional Budget Office estimates that a family of four with a household income of $54,000 would be expected to pay 17 percent of their income, or $9,000, on health care costs. On the other hand, a family of four making the median income of $56,000 would pay just $2,900 under a national health insurance plan.

If the American people knew that we could organize our health care financing in an efficient, fair and affordable manner, and reduce their family’s health care costs by a third, they would jump at the chance. If they find out after the fact, when they are paying taxes to subsidize a private insurance system that does not meet their health care needs and puts their personal finances at risk, they will surely be looking for someone to blame.

Are you paying attention, senators?

Peter Mahr of Southeast Portland is a family physician with Physicians for a National Health Program.

http://www.oregonlive.com/opinion/index.ssf/2009/12/a_doctors_voice_a_national_hea.html

A doctor’s voice: A national health insurance plan makes more sense

By PETER MAHR
Hillsboro (Ore.) Argus, Oregonlive.com
December 30, 2009

As a family physician I must write to convey my frustration and indignation with the Senate health care bill.

It is an immense bill offering minor advances in the access to health care for Americans via private insurance, the expansion of Medicaid and the increase in money for community clinics. But in cementing the role of private insurance as the vehicle for Americans to access necessary health services, the bill wastes billions of dollars a year due to the inefficiency and profit motive inherent in this system.

Furthermore, the bill will still leave millions without any insurance and even more people underinsured. Those who have insurance with affordable premiums will find the cost-sharing (deductibles, co-pays and out-of-pocket expenses) onerous. Those with insurance offering adequate access to health services will pay premiums that are unaffordable.

Finally, by taxing Americans four years in advance of the initiation of subsidies for the purchase of insurance, this bill underestimates the true cost to our country. In the end the bill will mandate that all of us buy into and subsidize the inefficient and expensive private health insurance financing system we have today.

My frustration doubles when I realize that there is a viable, efficient and affordable alternative to health care financing that could be enacted tomorrow. With a system of national health insurance, we could cover 100 percent of Americans at a dramatically reduced cost for families, businesses and our country. Under a national health insurance plan everyone pays into the insurance pool via progressive income or payroll taxes.

Let’s call this our premiums. Then, when we are sick and go to the doctor or have a surgery, the doctor or hospital gets paid from the money in the pool. It is not socialized medicine: Doctors and hospitals continue treating patients as before. They remain private and autonomous.

Since a national health insurance system eliminates the profit motive, as well as the advertising and executive pay associated with private insurance and slashes burdensome and expensive administration on the doctor and hospital level, it would finance access to health care for all while reducing costs dramatically.

Finally, my frustration will pale in comparison to the American people’s anger when they find out what the Senate bill means for them. In the Senate bill, the Congressional Budget Office estimates that a family of four with a household income of $54,000 would be expected to pay 17 percent of their income, or $9,000, on health care costs. On the other hand, a family of four making the median income of $56,000 would pay just $2,900 under a national health insurance plan.

If the American people knew that we could organize our health care financing in an efficient, fair and affordable manner, and reduce their family’s health care costs by a third, they would jump at the chance. If they find out after the fact, when they are paying taxes to subsidize a private insurance system that does not meet their health care needs and puts their personal finances at risk, they will surely be looking for someone to blame.

Are you paying attention, senators?

Peter Mahr of Southeast Portland is a family physician with Physicians for a National Health Program.

http://www.oregonlive.com/opinion/index.ssf/2009/12/a_doctors_voice_a_national_hea.html

Single-Payer's Last Stand in the States?

By Greg Kaufmann
Published by The Nation
January 1, 2010

The Progressive Caucus (CPC) is the largest caucus in Congress with 82 members—it dwarfs the often-hyped Blue Dog Democrats with its 52 yapping pups.

Yet the CPC has struggled to get the respect and attention it has strived for—prior to this Congress, it seemed like the mainstream media wouldn’t even refer to it by name, instead using vague descriptions like “the liberal wing of the party.” 

That’s because getting the talented but diverse Caucus to unite and show its legislative muscle has often been described—even by its own members—as herding cats. 

This might be the moment for the Caucus to change all that in dramatic fashion.

The House healthcare bill passed by just five votes—220 to 215. Surely the CPC’s 81 House votes (the 82nd member is a Senator, CPC founder Bernie Sanders) should be viewed as just as powerful as the votes of Ben Nelson or Joe Lieberman in the Senate.

But will a strong majority of the CPC unite around a single provision and insist that it be included in the final bill exchange for their support?

One item worth rallying around—and it hasn’t received a lot of attention—is waiver language that would permit states to implement alternatives to insurance market exchanges, including single-payer systems.

The Senate bill allows states to apply for such waivers in 2017, but that’s arguably too late. States would be required to establish (and invest in) the insurance market exchanges in 2014, making it difficult to develop and provide resources for any alternative model. TheHouse bill doesn’t have any waiver language at all, though CPC members—including CPC co-chairs RaĂșl Grijalva and Lynn Woolsey, and Congressman Dennis Kucinich—fought successfully for similar language in the House Committee on Education and Labor version.

Canada’s healthcare system evolved from a program first established in Saskatchewan. Will states in the US have a similar opportunity to serve as incubators and prove that single-payer can provide comprehensive coverage and reduce costs? The CPC has the power to insist on it—if it chooses to do so.

http://www.thenation.com/blogs/notion/510767/single_payer_s_last_stand

Single-Payer’s Last Stand in the States?

By Greg Kaufmann
Published by The Nation
January 1, 2010

The Progressive Caucus (CPC) is the largest caucus in Congress with 82 members—it dwarfs the often-hyped Blue Dog Democrats with its 52 yapping pups.

Yet the CPC has struggled to get the respect and attention it has strived for—prior to this Congress, it seemed like the mainstream media wouldn’t even refer to it by name, instead using vague descriptions like “the liberal wing of the party.” 

That’s because getting the talented but diverse Caucus to unite and show its legislative muscle has often been described—even by its own members—as herding cats. 

This might be the moment for the Caucus to change all that in dramatic fashion.

The House healthcare bill passed by just five votes—220 to 215. Surely the CPC’s 81 House votes (the 82nd member is a Senator, CPC founder Bernie Sanders) should be viewed as just as powerful as the votes of Ben Nelson or Joe Lieberman in the Senate.

But will a strong majority of the CPC unite around a single provision and insist that it be included in the final bill exchange for their support?

One item worth rallying around—and it hasn’t received a lot of attention—is waiver language that would permit states to implement alternatives to insurance market exchanges, including single-payer systems.

The Senate bill allows states to apply for such waivers in 2017, but that’s arguably too late. States would be required to establish (and invest in) the insurance market exchanges in 2014, making it difficult to develop and provide resources for any alternative model. TheHouse bill doesn’t have any waiver language at all, though CPC members—including CPC co-chairs RaĂșl Grijalva and Lynn Woolsey, and Congressman Dennis Kucinich—fought successfully for similar language in the House Committee on Education and Labor version.

Canada’s healthcare system evolved from a program first established in Saskatchewan. Will states in the US have a similar opportunity to serve as incubators and prove that single-payer can provide comprehensive coverage and reduce costs? The CPC has the power to insist on it—if it chooses to do so.

http://www.thenation.com/blogs/notion/510767/single_payer_s_last_stand

Good news on spending growth is bad news

Health Spending Growth At A Historic Low In 2008

By Micah Hartman, Anne Martin, Olivia Nuccio, Aaron Catlin and the National Health Expenditure Accounts Team
Health Affairs
January 2010
In 2008, U.S. health care spending growth slowed to 4.4 percent—the slowest rate of growth over the past forty-eight years. The deceleration was broadly based for nearly all payers and health care goods and services, as growth in both price and nonprice factors slowed amid the recession. Despite the slowdown, national health spending reached $2.3 trillion, or $7,681 per person, and the health care portion of gross domestic product (GDP) grew from 15.9 percent in 2007 to 16.2 percent in 2008. These developments reflect the general pattern that larger increases in the health spending share of GDP generally occur during or just after periods of economic recession. Despite the overall slowdown in national health spending growth, increases in this spending continue to outpace growth in the resources available to pay for it.
Health care spending by households grew 4.3 percent in 2008, a deceleration from 5.9 percent growth in 2007. Despite the slowdown, households’ health spending growth in 2008 still outpaced adjusted personal income growth of 2.7 percent.
http://content.healthaffairs.org/cgi/content/abstract/29/1/147

Although some members of the media are celebrating the lowest rate of health care spending growth in almost half of a century, a full reading of this report is sobering.
While Congress has been desperately searching for policies to slow the rate of health care spending, not even one of the worst mechanisms for reducing spending – clobbering our economy with a recession – was capable of preventing a further encroachment of our national health expenditures (NHE) on our total gross domestic product (GDP), increasing from 15.9 percent to 16.2 percent of the GDP.
It is difficult to imagine a more effective mechanism of controlling spending than to wallop our paychecks, even if not a first choice of the policy makers. Median household income fell 3.6 percent between 2007 and 2008. Yet household health care spending in 2008 still grew by 4.3 percent, even more than the 3.8 percent inflation rate for that year (which declined to 1.8 percent in 2009).
If a major hit to the economy is not going to bring our NHE under control, then how can we expect the pilot programs and the other weak cost-containment measures in the bills currently in conference to have any real impact?
The only provision that could have a major impact is the proposed Independent Medicare Advisory Board (Sec. 3402 of the Senate bill), but only if its provisions were to apply to our entire NHE. But they won’t. It’s purpose is to “reduce the per capita rate of growth in Medicare spending.” Its independent power to set the rules for Medicare spending is not extended to control over the private insurance plans.
Physicians and hospital administrators are already concerned about Medicare reimbursement rates. With spending growth in the private sector continuing to outpace the growth of the economy, it might be expected that many health care providers would walk away from the close-to-frozen prices established by the public programs, in a quest for the more lucrative rates in the private sector.
The problem of intolerable increases in our health care spending must be addressed, not just for the government, but for all of us – individuals and businesses. The current legislation feeds the rapacious appetite of the private insurance industry while threatening the stability of our most prized public health program – Medicare.
What if we had an improved Medicare program that covered everyone? An independent Medicare advisory board would certainly put the skids on spending, but not to the extent of threatening the stability of the program. Besides, don’t we want our representatives to stand up for us to be sure that our health care is not priced out of our reach? It already is for many of us, and will still be for all too many under the bills before Congress. It wouldn’t be under a single payer Medicare for all program.

Uwe Reinhardt on whether community rating is fair

Is ‘Community Rating’ in Health Insurance Fair?

By Uwe E. Reinhardt
The New York Times, Economix
January 1, 2010

One controversial feature of the health reform bill winding its way through Congress is “community rating.” The term has a mellow ring but is apt to be divisive.

“Community rating” refers to the practice of charging a common premium to all members of a heterogeneous risk pool who may have widely varied health spending for the year. It inevitably makes chronically healthy individuals subsidize with their insurance premiums (rather than through overt taxes and transfers) the health care used by chronically sicker individuals.

The purpose of any insurance, of course, is to do precisely that: redistribute the financial burden from the unlucky to the lucky members of a risk pool.

(Professor Reinhardt then provides calculations for an example of two cohorts, A and B, representing populations segregated into two pools with different risks, as is characteristic of our price-competitive market for individually sold health insurance.)

Would it be “fair” that the healthy individuals of cohort A pay a pure insurance premium of only $2,450 a year, while the sicker citizens in cohort B must pay $6,600? This is, after all, how health insurance now is priced in most states for individuals.

Or does “fairness” require that the two groups be merged into one large national risk pool A & B, whose risk profile is shown in the right-most column of the table. If each member of this merged pool is to pay the same pure premium, then the latter will have to be $4,525 to break even. Such a premium would be said to be “community rated” over these two distinct risk pools.

Relative to their premium in a perfectly risk-segregated market, the community-rated premium of $4,525 will cost members of low-risk cohort A $2,075 more and the sicker members of cohort B $2,075 less than they would have paid in a risk-segregated market. Is that “fair”?

So what should the political leaders of this imaginary country do? It would be interesting to have your reaction. It is, after all, the very question our political leaders are tackling this moment.

Should you choose to respond, would you indicate your age?

(You can post a response by clicking on “Post a Comment” at the end of the full article at the following link. You can also recommend specific responses.)

http://economix.blogs.nytimes.com/2010/01/01/is-community-rating-in-health-insurance-fair/

Posted response of Don McCanne, San Juan Capistrano, CA (response # 9):

One of the more obvious examples of this dilemma is the disagreement as to the premiums that should be charged for the healthier population in their twenties as opposed to the less healthy population, on average, in their fifties and early sixties. Congress has already decided that strict community rating through a single premium for everyone will not apply to age differences, but they remain conflicted as to how much of a transfer will occur from the younger healthier individuals to the older less healthy individuals. They seem to believe that the concept of such a transfer is “fair,” but they are not in agreement as to what level of transfer exceeds their concept of fairness.

My wife and I are in our seventies and benefit from Medicare, a program in which there is a transfer to us from those in their twenties, many of whom are uninsured. Is that fair?

Of course the issue is further complicated by our nation’s very high health care costs since there is a need to transfer from the wealthy to lower income individuals, if, in fact, we agree that we should have a financing system that allows everyone to have the essential health care that they need. The many other complexities introduced by our fragmented health financing system, using public and private sources, complicates the process of finding the right premium for the right coverage, for the right amount of cost sharing, with the right amount of subsidies to support the premiums and the cost sharing.

With our unique health financing system already overburdened with profound administrative waste, it doesn’t seem rational to try to expand coverage by assigning inevitably inequitable premiums to benefit packages within fragmented private plan risk pools. That just adds to the complexities, inequities and administrative waste.

It would be much more efficient and equitable to remove the risk bearing function from the private insurers, thereby eliminating premiums, and replace our dysfunctional health care financing system with a single universal risk pool covering everyone. Each person would pay into the pool their fair share, based on ability to pay, by funding it through progressive taxes.

This could easily be accomplished through an improved Medicare for all. But some may not consider this fair either if they reject the concept of social solidarity, the concept on which community rating is based.

Health care 'overhaul'? The devil's in the details

By Andrew Coates
Rochester City Newspaper
December 29, 2009

As health insurance reform inches towards the president’s desk, the airwaves and editorial pages fill with spin. “Health-care overhaul,” the headlines say. “Still a government takeover of health care,” the Republicans in Congress say. “The culmination of a struggle begun by Theodore Roosevelt,” Vice President Biden says.

Against so much political posturing, Representative Eric Massa has proven himself unique in Congress: someone who sticks to the facts. Last month when he courageously voted against the House bill, he said it would strengthen, not weaken, the hand of the private insurers. The insurance industry is the problem, not the solution, he explained. As the legislation nears final reconciliation, Massa’s analysis remains solid.

The crux of the legislation in Congress is compulsory private insurance. Under the “individual mandate,” a long-held wish of the insurance companies, the government will coerce people to become and remain their paying customers.

If you’re uninsured and you don’t buy health insurance, the Senate bill allows a fine of up to 2 percent of your income, assessed by the IRS. (It’s 2.5 percent in the House bill.) Pay the fine and you’re free to remain uninsured.

If you simply can’t afford a policy, according to the Senate bill, you can avoid paying the fine by applying for a “hardship waiver.” Get the waiver and you’re free to remain uninsured.

Since the legislation does nothing to make insurance affordable, tax money will subsidize private insurance premiums for those who earn up to 400 percent of the federal poverty level. But those earning up to 400 percent of the poverty level would still have to pay up to 9.8 percent of their income for insurance (under the Senate bill). This taxpayer gift to insurance companies will amount to as much as $476 billion – half a trillion dollars – over a decade.

The Senate formula also pushes the onus of health costs onto individual families by imposing a 40 percent tax on high-cost health plans, an incentive to reduce coverage. This will especially impact residents of states with high insurance costs, like our own state; union members with comprehensive benefits; companies that employ women (whose group insurance costs are higher), and plans that cover older employees (whose insurance costs are higher).

The Senate bill also encourages skimpy coverage by allowing the most basic plans to cover only 60 percent of actual health costs on top of growing of out-of-pocket expenses. Prescription drug costs have gone up 9 percent this year. Meanwhile, the insurance industry itself has estimated premium hikes of 79 to 111 percent over the coming decade.

In addition to millions of new customers for insurance companies, the legislation seeks an enormous expansion of Medicaid, with new enrollment of millions of people by expanding eligibility to those who earn up to 150 percent of the federal poverty level. But we know from bitter experience that having Medicaid is no guarantee of access to care, nor will it reduce disparities in care.

If private insurance will remain a defective product and Medicaid will remain a poor program for poor people and the legislation will not reign in costs – where is the reform?

But perhaps most startling is that the major features of the legislation would not begin until 2013, after the next presidential election, and then would take effect gradually over six years more. Such a proposal hardly seems worthy of the name “overhaul” when we remember that Medicare passed in 1965 and was up and running in 1966.

Last month when he voted against the House bill, Congressman Massa explained that he had studied the entire bill and that he understood the health care needs of his district. As the Congressional process lumbers forth, with the pending legislation ever more insurance-industry-friendly, Eric Massa has emerged as a portrait of leadership, courage, and honesty.

It’s time to scrap this pro-insurance-company legislation and start over. A good starting point would be the improvement and expansion of Medicare to cover every person in the United States.

Andrew Coates practices medicine in Albany, where he is assistant professor of medicine and psychiatry at AlbanyMedicalCollege. He is a member of the board of directors of Physicians for a National Health Program.

http://www.rochestercitynewspaper.com/news/opinion/2009/12/COMMENT-Health-care-overhaul-The-devils-in-the-details/

Health care ‘overhaul’? The devil’s in the details

By Andrew Coates
Rochester City Newspaper
December 29, 2009

As health insurance reform inches towards the president’s desk, the airwaves and editorial pages fill with spin. “Health-care overhaul,” the headlines say. “Still a government takeover of health care,” the Republicans in Congress say. “The culmination of a struggle begun by Theodore Roosevelt,” Vice President Biden says.

Against so much political posturing, Representative Eric Massa has proven himself unique in Congress: someone who sticks to the facts. Last month when he courageously voted against the House bill, he said it would strengthen, not weaken, the hand of the private insurers. The insurance industry is the problem, not the solution, he explained. As the legislation nears final reconciliation, Massa’s analysis remains solid.

The crux of the legislation in Congress is compulsory private insurance. Under the “individual mandate,” a long-held wish of the insurance companies, the government will coerce people to become and remain their paying customers.

If you’re uninsured and you don’t buy health insurance, the Senate bill allows a fine of up to 2 percent of your income, assessed by the IRS. (It’s 2.5 percent in the House bill.) Pay the fine and you’re free to remain uninsured.

If you simply can’t afford a policy, according to the Senate bill, you can avoid paying the fine by applying for a “hardship waiver.” Get the waiver and you’re free to remain uninsured.

Since the legislation does nothing to make insurance affordable, tax money will subsidize private insurance premiums for those who earn up to 400 percent of the federal poverty level. But those earning up to 400 percent of the poverty level would still have to pay up to 9.8 percent of their income for insurance (under the Senate bill). This taxpayer gift to insurance companies will amount to as much as $476 billion – half a trillion dollars – over a decade.

The Senate formula also pushes the onus of health costs onto individual families by imposing a 40 percent tax on high-cost health plans, an incentive to reduce coverage. This will especially impact residents of states with high insurance costs, like our own state; union members with comprehensive benefits; companies that employ women (whose group insurance costs are higher), and plans that cover older employees (whose insurance costs are higher).

The Senate bill also encourages skimpy coverage by allowing the most basic plans to cover only 60 percent of actual health costs on top of growing of out-of-pocket expenses. Prescription drug costs have gone up 9 percent this year. Meanwhile, the insurance industry itself has estimated premium hikes of 79 to 111 percent over the coming decade.

In addition to millions of new customers for insurance companies, the legislation seeks an enormous expansion of Medicaid, with new enrollment of millions of people by expanding eligibility to those who earn up to 150 percent of the federal poverty level. But we know from bitter experience that having Medicaid is no guarantee of access to care, nor will it reduce disparities in care.

If private insurance will remain a defective product and Medicaid will remain a poor program for poor people and the legislation will not reign in costs – where is the reform?

But perhaps most startling is that the major features of the legislation would not begin until 2013, after the next presidential election, and then would take effect gradually over six years more. Such a proposal hardly seems worthy of the name “overhaul” when we remember that Medicare passed in 1965 and was up and running in 1966.

Last month when he voted against the House bill, Congressman Massa explained that he had studied the entire bill and that he understood the health care needs of his district. As the Congressional process lumbers forth, with the pending legislation ever more insurance-industry-friendly, Eric Massa has emerged as a portrait of leadership, courage, and honesty.

It’s time to scrap this pro-insurance-company legislation and start over. A good starting point would be the improvement and expansion of Medicare to cover every person in the United States.

Andrew Coates practices medicine in Albany, where he is assistant professor of medicine and psychiatry at AlbanyMedicalCollege. He is a member of the board of directors of Physicians for a National Health Program.

http://www.rochestercitynewspaper.com/news/opinion/2009/12/COMMENT-Health-care-overhaul-The-devils-in-the-details/