PNHP

Health care reform: The simple, humane solution

Health care reform: The simple, humane solution

By Winthrop C. Dillaway
Guest Columnist
Star-Ledger
May 22, 2009

President Obama has challenged Congress to enact substantive health care reform before the end of 2009. The need is urgent because of the chaotic complexity, unsustainable cost inflation and gross inequities in the current health care system.

Thoughtful policymakers, businessmen, economists, health care professionals and concerned citizens discuss and debate many reform possibilities: individual mandates, employer mandates, community rating, guaranteed issue, public plan options and government subsidies.

One reform proposal, known as single-payer (also referred to as “Medicare for All”), deserves a closer look. Compared to all other proposals, single-payer is simple, economical and humane.

U.S. citizens and policymakers only need to look north to Canada for an example of a single-payer system — universal public health insurance, financed by taxes, with a single-payment system managed by the government. It is not socialized medicine, but rather, socialized insurance. The delivery of health care remains mostly independent from the government with private doctors and private, nonprofit (so-call voluntary) hospitals.

Canadians, with their single-payer system, enjoy guaranteed comprehensive health care with per capita costs of about half as much as in the U.S. At the same time, by most standards, the overall quality of care in Canada is at least as good as in the United States. Notably, Canadians live more than two years longer than U.S. residents.

Why is single-payer health care so affordable? The economic advantage derives from two sources; enormous administrative savings, and the less well-recognized savings that would come from creating a single-risk pool.

First, the single-payer administrative advantage becomes apparent in comparisons of administrative costs in the U.S. (about 31 percent of health spending) and Canada (about 16.7 percent).

In the single-payer system, one public agency eliminates duplications, inefficiencies, costs and confusion. Currently, the U.S. health care system struggles with approximately 1,300 health insurance companies that produce thousands of different insurance plans. These create costs not only at insurance companies, but at the hospitals and doctors’ offices that must generate billions of bills and accounting documents annually to get paid.

The administrative simplicity of a single payer system translates into $350 billion to $400 billion in savings per year. This would suffice to cover all of the uninsured. In addition, it would also provide excellent coverage for the insured — without premiums, deductibles and copays.

Though not as obvious, the second and more important economic advantage comes from the creation of a single-risk pool. Indeed, the cost of “Medicare for All” confuses and worries many. They ask: How can Medicare for all of the U.S. population be affordable if the current Medicare system is so burdened with cost overruns and projected funding shortfalls?

In fact, the answer to this question demonstrates the significant advantage and strength of a single-risk pool. The 80/20 rule helps with the understanding. About 80 percent of the population is healthy at any given time. The remaining 20 percent is utilizing health care and creating most of the health care costs.

Current government programs, especially Medicare (which covers the elderly and the long-term disabled), already cover most of this 20 percent, high-risk population. The private health insurance industry in the United States focuses on the 80 percent low risk, healthier and profitable portion of the risk pool.

The U.S. health care system allows private insurance to deny coverage to high-risk patients. This, of course, constantly enhances profits from the larger, healthier portion of the population and shifts costs to Medicare. Therefore creating a single-risk pool, a “Medicare for all,” assures that the contributions of the healthy go to subsidize the sick, not to enhance private profit.

Single-payer spreads the risk to the largest, most efficient, and most economical pool possible, that is, the entire population. In addition, the creation of a single risk pool makes sense for simplifying management, accountability, information technology, communications, etc.

Yet the greatest advantage of single-payer comes not from its simplicity and economy, but from its inherent equity and fairness. Single-payer means “automatic enrollment.” That immediately and totally eliminates the difficulties and confusions of individual mandates, employer mandates, community rating, guaranteed issue, public options and government subsidies. Automatic enrollment embodies equality and democracy.

The major obstacles to single-payer reform emanate from fierce opposition by enormously wealthy and powerful vested interests, and from the popular misunderstanding about the importance of a single risk pool.

Single-payer would require a major paradigm shift for most of those involved in the current debate. Nevertheless, the results of the presidential election and the current economic crisis make such a shift possible. Only single-payer can resolve the health crisis in a way that is simple, economical, and humane.

Winthrop C. Dillaway III is a physician and faculty member in the Department of Family Medicine at the University of Medicine and Dentistry of New Jersey.

http://blog.nj.com/njv_guest_blog/2009/05/health_care_reform_the_simple.html

Rx and the Single Payer

by Bill Moyers and Michael Winship
CommonDreams.org
Friday, May 22, 2009

In 2003, a young Illinois state senator named Barack Obama told an AFL-CIO meeting, “I am a proponent of a single-payer universal health care program.”

Single payer. Universal. That’s health coverage, like Medicare, but for everyone who wants it. Single payer eliminates insurance companies as pricey middlemen. The government pays care providers directly. It’s a system that polls consistently have shown the American people favoring by as much as two-to-one.

There was only one thing standing in the way, Obama said six years ago: “All of you know we might not get there immediately because first we have to take back the White House, we have to take back the Senate and we have to take back the House.”

Fast forward six years. President Obama has everything he said was needed — Democrats in control of the executive branch and both chambers of Congress. So what’s happened to single payer?

A woman at his town hall meeting in New Mexico last week asked him exactly that. “If I were starting a system from scratch, then I think that the idea of moving towards a single-payer system could very well make sense,” the President replied. “That’s the kind of system that you have in most industrialized countries around the world.

“The only problem is that we’re not starting from scratch. We have historically a tradition of employer-based health care. And although there are a lot of people who are not satisfied with their health care, the truth is, is that the vast majority of people currently get health care from their employers and you’ve got this system that’s already in place. We don’t want a huge disruption as we go into health care reform where suddenly we’re trying to completely reinvent one-sixth of the economy.”

So the banks were too big to fail and now, apparently, health care is too big to fix, at least the way a majority of people indicate they would like it to be fixed, with a single payer option. President Obama favors a public health plan competing with the medical cartel that he hopes will create a real market that would bring down costs. But single payer has vanished from his radar.

Nor is single payer getting much coverage in the mainstream media. Barely a mention was given to the hundreds of doctors, nurses and other health care professionals who came to Washington last week to protest the absence of official debate over single payer.

Is it the proverbial tree falling in the forest, making a noise that journalists can’t or won’t hear? Could the indifference of the press be because both the President of the United States and Congress have been avoiding single payer like, well, like the plague? As we see so often, government officials set the agenda by what they do and don’t talk about.

Instead, President Obama is looking for consensus, seeking peace among all the parties involved. Except for single payer advocates. At that big White House powwow in Washington last week, the President asked representatives of the health care business to reason together with him. “What’s brought us all together today is a recognition that we can’t continue down the same dangerous road we’ve been traveling for so many years,” he said, “that costs are out of control; and that reform is not a luxury that can be postponed, but a necessity that cannot wait.”

They came, listened, made nice for the photo op. and while they failed to participate in a hearty chorus of “Kumbaya,” they did promise to cut health care costs voluntarily over the next ten years. The press ate it up — and Mr. Obama was a happy man.

Meanwhile, some of us looking on — those of us who’ve been around a long time — were scratching our heads. Hadn’t we heard this before?

Way, way back in the 1970’s Americans were riled up over the rising costs of health care. As a presidential candidate, Jimmy Carter started talking about the government clamping down. When he got to the White House, drug makers, insurance companies, hospitals and doctors — the very people who only a decade earlier had done everything they could to strangle Medicare in the cradle — seemed uncharacteristically humble and cooperative. “You don’t have to make us cut costs,” they promised. “We’ll do it voluntarily.”

So Uncle Sam backed down, and you guessed it. Pretty soon medical costs were soaring higher than ever.

By the early ’90s, the public was once again hurting in the pocketbook. Feeling our pain, Bill and Hillary Clinton tried again, coming up with a plan only slightly more complicated than the schematics for an F-18 fighter jet.

This time the health industry acted more like Tony Soprano than Mother Teresa. It bludgeoned the Clinton reforms with one of the most expensive and deceitful public relations and advertising campaigns ever conceived — paid for, of course, from the industry’s swollen profits.

As the drug and insurance companies, hospitals and doctors dumped the mangled carcass of reform into the Potomac, securely encased in concrete, once again they said don’t worry; they would cut costs voluntarily.

If you believed that, we’ve got a toll-free bridge to the Mayo Clinic we’d like to sell you.

So anyone with any memory left could be excused for raising their eyebrows at the health care industry’s latest promises. As if on cue, hardly had their pledge of volunteerism rung out across the land than Jay Gellert, chief executive of Health Net Inc. and chair of the lobbying group America’s Health Insurance Plans, assured his pals not to worry abut the voluntary reductions. “We believe that we can do it without undermining the viability of companies,” he said, “and in effect enhancing the payment to physicians and hospitals.” In other words, their so-called voluntary “reforms” will in no way interfere with maximizing profits.

Also last week, John Lechleiter, the chief executive of drug giant Eli Lilly, blasted universal health care in a speech before the U.S. Chamber of Commerce. “I do not believe that policymakers have yet arrived at a full and complete diagnosis of what’s wrong and what’s right with U.S. health care,” he declared. “And I am very concerned that some of the proposed policies — the treatments, to continue my metaphor — will have unintended side-effects that make our situation worse.”

So why bother with the charm offensive on Pennsylvania Avenue? Could it be, as some critics suggest, a Trojan horse, getting the health industry a place at the table so they can leap up at the right moment and again kill any real reform?

Wheelers and dealers from the health sector aren’t waiting for that moment. According to the non-partisan Center for Responsive Politics, they’ve spent more than $134 million on lobbying in the first quarter of 2009 alone. And some already are shelling out big bucks for a publicity blitz and ads attacking any health care reform that threatens to reduce the profits from sickness and disease.

The Washington Post’s health care reform blog reported Monday that Blue Cross Blue Shield of North Carolina has hired an outside PR firm to put together a video campaign assaulting Obama’s public plan. And this month alone, the group Conservatives for Patients’ Rights is spending more than a million dollars for attack ads. They’ve hired a public relations firm called CRC — Creative Response Concepts. You remember them — the same high-minded folks who brought you the Swift Boat Veterans for Truth, the gang who savaged John Kerry’s service record in Vietnam.

The ads feature the chairman of Conservatives for Patients’ Rights, Rick Scott. Who’s he? As a former deputy inspector general from the Department of Health and Human Services told The New York Times, “He hopes people don’t Google his name.”

Scott’s not a doctor; he just acts like one on TV. He’s an entrepreneur who took two hospitals in Texas and built them into the largest health care chain in the world, Columbia/HCA. In 1997, he was fired by the board of directors after Columbia/HCA was caught in a scheme that ripped off the Feds and state governments for hundreds of millions of dollars in bogus Medicare and Medicaid payments, the largest such fraud in history. The company had to cough up $1.7 billion dollars to get out of the mess.

Rick Scott got off, you should excuse the expression, scot-free. Better than, in fact. According to published reports, he waltzed away with a $10 million severance deal and $300 million worth of stock. So much for voluntarily lowering overhead.

With medical costs rising six percent per year, that’s who’s offering himself as a spokesman for the health care industry. Speaking up for single payer is Geri Jenkins, a president of the California Nurses Association and National Nurses Organizing Committee — a registered nurse with literal hands-on experience.

“We’re there around the clock,” she told our colleague Jessica Wang. “So we feel a real sense of obligation to advocate for the best interests of our patients and the public. Now, you can talk about policy but when you’re staring at a human face it’s a whole different story.”

Bill Moyers is managing editor and Michael Winship is senior writer of the weekly public affairs program Bill Moyers Journal, which airs Friday night on PBS. Check local airtimes or comment at The Moyers Blog at www.pbs.org/moyers. Research provided by editorial producer Rebecca Wharton.

http://www.commondreams.org/view/2009/05/22-4

Don't take no for an answer on single-payer

Letters to the Editor
Daily Gazette (Schenectady, NY)
May 17, 2009

How many police does it take to silence the voice of the American people? We do not as yet know, but Sen. Max Baucus of Montana wishes to add many more simply to assure that they do not even have to consider the only health care plan that would work well.

Why is the Senate not even considering the single-payer health plan, but snidely laughing behind closed doors as they prepare to put another one over on the American people? When are we going to say “enough,” like the French people recently did when their government tried to make them pay for the government’s own ineptness and bad management? Is there not one person who is still a vertebrate in this country?

Last week, the Senate Finance Committee thought it a hilarious joke as they ejected one activist after another because they protested that not even one spokesperson for single-payer health care was permitted to sit at the hearing table. Freedom of speech? Equal representation? Now it is my turn to laugh.

Let us stop cowering. Let us take this country back. Down with wimpy, mewling American citizens. Start drinking your V8, everyone!

C. Alfred Santillo
Sharon Springs, NY

Reform talk dominates WellPoint meeting

CEO envisions a changing market, but activists say insurer is part of problem

By Daniel Lee
Indianapolis Star
Posted: May 21, 2009

Indianapolis-based WellPoint’s annual shareholders meeting Wednesday quickly evolved into a forum on the timely and politically charged topic of health-care reform.

Angela Braly, WellPoint’s chief executive officer, touted the idea of expanding the individual health insurance marketplace — in which WellPoint is a major player — to provide coverage for the estimated 45 million Americans without coverage. Government subsidies would be available for those who meet income guidelines and need help with premiums.

“It’s the private market that drives innovation and payment for value in the marketplace,” Braly told those gathered for the Downtown shareholders meeting. WellPoint, with more than 34 million members, is the nation’s largest commercial insurer in terms of membership.

Shareholder activists at Wednesday’s meeting, however, have a much different vision for health-care reform.

Dr. Rob Stone, a Bloomington physician who heads the advocacy group Hoosiers for a Common Sense Health Plan, called WellPoint and its industry the “biggest barrier” to affordable health care. Stone’s group is for a single-payer health plan, such as Medicare for all.

Two other members of the group, Julia Vaughn and Karen Green Stone, called Susan Bayh’s service as a WellPoint director a conflict of interest given that her husband is Sen. Evan Bayh, D-Ind.

WellPoint said that in an effort to avoid any conflict, its staff does not have any contact with Sen. Bayh. Susan Bayh, sitting with other directors, did not respond to protesters’ questions.

Susan Bayh joined WellPoint’s board in 1998 when the insurer was Anthem Insurance.

After the shareholder meeting, Hoosiers for a Common Sense Health Plan and other advocates held a rally on Monument Circle near WellPoint’s headquarters that featured Bloomington folk singer Carrie Newcomer.

• Call Star reporter Daniel Lee at (317) 444-6311.
http://www.indystar.com/article/20090521/BUSINESS03/905210406/Reform+talk+dominates+WellPoint+s+annual+meeting

Don’t take no for an answer on single-payer

Letters to the Editor
Daily Gazette (Schenectady, NY)
May 17, 2009

How many police does it take to silence the voice of the American people? We do not as yet know, but Sen. Max Baucus of Montana wishes to add many more simply to assure that they do not even have to consider the only health care plan that would work well.

Why is the Senate not even considering the single-payer health plan, but snidely laughing behind closed doors as they prepare to put another one over on the American people? When are we going to say “enough,” like the French people recently did when their government tried to make them pay for the government’s own ineptness and bad management? Is there not one person who is still a vertebrate in this country?

Last week, the Senate Finance Committee thought it a hilarious joke as they ejected one activist after another because they protested that not even one spokesperson for single-payer health care was permitted to sit at the hearing table. Freedom of speech? Equal representation? Now it is my turn to laugh.

Let us stop cowering. Let us take this country back. Down with wimpy, mewling American citizens. Start drinking your V8, everyone!

C. Alfred Santillo
Sharon Springs, NY

Single-Payer in the News and More!

Friends of Healthcare-NOW!:

This email is an update of the past week’s festivities in DC and around the country, as well as reminders about current Healthcare-NOW! campaigns to plug into. Now is the time for single-payer national health care!

————————————————————————

STOP THE INSURANCE INDUSTRY BAIL OUT

Hundreds of nurses, doctors and activists gathered in DC to say STOP THE INSURANCE INDUSTRY BAIL OUT.
http://www.calnurses.org/media-center/in-the-news/2009/may/hundreds-of-nurses-rally-on-capitol-hill-in-national-day-of-action.html

————————————————————————

5 More Arrests

Senator Max Baucus issues another round of arrests of doctors, nurses, and single-payer advocates for standing up to being shut out of the Senate Finance Committee discussion on health care reform.
http://www.guaranteedhealthcare.org/blog/colette-washington-cna-nnoc/2009/05/12/rns-and-doctors-arrested-dc-peaceful-protest-guaranteed

————————————————————————

Woman for New Mexico asks, “Why isn’t Single-Payer on the table?”

At a town hall meeting in New Mexico, Obama is asked “Why isn’t Single-Payer on the table?”
http://www.democracynow.org/2009/5/15/headlines#2

————————————————————————

Single-Payer in the News

The press is responding to the populous support for single-payer. Both Bill Moyers Journal and Diane Rehm are expected to cover single-payer on next week shows. Carla Rautenberg of Ohio reported to HCN that “on her weekly news round-up, Ms. Rehm stated that the show had been “inundated” with calls and emails from Americans demanding that single payer be considered in the health care debate!”

Diane Rehm will give one full hour to single-payer on Monday, May 18th, and Bill Moyers will be discussing single-payer on Friday, May 23rd. Great work to all who contacted them to put single-payer in the news!

An excellent article in the Chicago Sun Times on single-payer here: http://www.suntimes.com/news/terry/1573936,CST-EDT-terry14.article

Contacting main stream media outlets and demanding coverage of single-payer is working. Keep up the great work.

————————————————————————

Details about the House Bill have been reported by the associated press.

“Proposal would require all to have health coverage”
By RICARDO ALONSO-ZALDIVAR and ERICA WERNER
Associated Press, May 14, 2009
http://news.yahoo.com/s/ap/20090514/ap_on_go_co/us_health_overhaul

————————————————————————

Obama and health care industry agree to 2 trillion, but industry waivers on commitment…

On Monday, Obama reported that key industry players will come together to reduce costs over 10 years by $2.5 trillion. But on Thursday, industry officials reported great concern over this commitment: http://www.nytimes.com/2009/05/15/health/policy/15health.html?_r=1&scp=1&sq=industry%20and%20OBama%202%20trillion%20savings%20in%20health%20care&st=cse

————————————————————————

State Legislators Campaign is Growing! Please join us!

Seeking state and regional coordinators to follow up with state legislators for the national campaign to get state legislators to sign onto a letter to President Obama in support of HR 676. Please let us know if you want to get involved at info@healthcare-now.org.

Find out more here:
http://www.healthcare-now.org/campaigns/state-legislators/

————————————————————————

May 30th Day of Action!

Over 30 events planned nationwide on and around May 30th!

Now is the time to be out in the street for single-payer national health care! Check out our May 30th page for more details: http://www.healthcare-now.org/campaigns/may-30th-day-of-action/

————————————————————————

We know that single-payer is the only way to control costs and cover everyone. For-profit motives must be removed from health care. The people are with us. We will get there.

In common cause,

Katie Robbins
Assistant National Coordinator
Healthcare-NOW!

http://www.calnurses.org/media-center/in-the-news/2009/may/hundreds-of-nurses-rally-on-capitol-hill-in-national-day-of-action.html

http://www.guaranteedhealthcare.org/blog/colette-washington-cna-nnoc/2009/05/12/rns-and-doctors-arrested-dc-peaceful-protest-guaranteed-

http://www.democracynow.org/2009/5/15/headlines#2

2009 Milliman Medical Index

2009 Milliman Medical Index

Milliman, Inc.
May 2009
The fifth annual Milliman Medical Index (MMI) measures average annual medical spending for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) program.
The total 2009 medical cost for a typical American family of four is $16,771.
http://www.milliman.com/expertise/healthcare/products-tools/mmi/pdfs/milliman-medical-index-2009.pdf

The Milliman Medical Index (MMI) provides us with a very important measure of health care spending in the United States. For 2009, average annual medical spending for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) program is $16,771. That number should be front and center in our national dialogue on reform. It is important that we understand what it means.
Over 160 million of us receive our health care coverage through an employer. This sector is the healthy workforce and their young healthy families. This is the largest and least expensive sector to insure. It is the sector that we have presented to the private insurance industry either to insure risk or to provide administrative services for self-insured employers.
Group insurance wastes less on non-medical services than does insurance for individuals or small employers. So between the greater efficiency of employer-sponsored plans, and the low-cost, healthy status of the population insured, the spending on this group (represented by the MMI) shows us the best value that we can expect under our current multi-payer system of financing care.
The MMI is nominally broken down into an employer contribution ($9,947), an employee contribution ($4,004), and employee out-of-pocket costs ($2,820). But virtually all economists agree that the employer contribution is paid by the employee in the form of forgone wage increases. So the entire $16,771 represents the average health care costs for a family of four covered by an employer-sponsored PPO. That is what the average family is actually paying today.
Since this is average, those families with greater medical expenses are actually paying more in out-of-pocket costs. So reform proposals need to take into consideration not only the average $16,771 per family, but also the additional costs for those families with greater health care needs.
It is also important to understand that that the combined employer and employee contributions ($9,947 + $4,004 = $13,951) do not represent the premiums paid. Although the average family is defined as a family with an employer-sponsored PPO, the PPO reflects only the fact that the health care system provided discounts for the care provided. The employer and employee contributions represent the actual payments made for health care (minus the out-of-pocket spending). The MMI specifically excludes the non-medical administrative component of health plan premiums.
Read that again. The MMI ($16,771) represents the actual payments to the health care delivery system and excludes the funds retained by the insurance industry for administrative costs and profits.
Many in the policy community believe that health care costs that exceed 10 percent of family income create a financial hardship for that family. Based on the MMI, the average family with an employer-sponsored PPO would have to have an income of $167,710, though adding the administrative costs of private plans plus any additional out-of-pocket spending that might be required would drive that income threshold further upward.
The 2007 median household income was $50,233. Although that does not represent precisely the family of four with employer-sponsored coverage, it does give us a rough perspective of why the numbers no longer work. Any effective reform proposal based on private plans would have to provide taxpayer-financed subsidies for a typical family with an income below $167,000, plus additional subsidies for administrative costs, and even more subsidies for larger than average health care spending. That means that almost the entire workforce would require subsidies.
So what does the MMI tell us? Only an idiot would isolate the largest and healthiest sector of society into the collective employer-sponsored risk pools, assign a package of benefits to each family, assess contributions to be paid based on that package, shift all non-benefit costs to that family, add a hidden charge for wasteful administrative services, and still leave many families exposed to financial hardship. What does that say for those members of Congress who are hashing out this model of health care reform behind those closed doors?
We need a health care financing system that is funded equitably, based on ability to pay, and that uses the power of our own public monopsony to be certain that each of us receives the care that we need. The MMI tells us that it’s time to enact a single payer national health program.

2009 Milliman Medical Index

2009 Milliman Medical Index

Milliman, Inc.
May 2009

The fifth annual Milliman Medical Index (MMI) measures average annual medical spending for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) program.

The total 2009 medical cost for a typical American family of four is $16,771.

http://www.milliman.com/expertise/healthcare/products-tools/mmi/pdfs/milliman-medical-index-2009.pdf

Comment:

By Don McCanne, MD

The Milliman Medical Index (MMI) provides us with a very important measure of health care spending in the United States. For 2009, average annual medical spending for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) program is $16,771. That number should be front and center in our national dialogue on reform. It is important that we understand what it means.

Over 160 million of us receive our health care coverage through an employer. This sector is the healthy workforce and their young healthy families. This is the largest and least expensive sector to insure. It is the sector that we have presented to the private insurance industry either to insure risk or to provide administrative services for self-insured employers.

Group insurance wastes less on non-medical services than does insurance for individuals or small employers. So between the greater efficiency of employer-sponsored plans, and the low-cost, healthy status of the population insured, the spending on this group (represented by the MMI) shows us the best value that we can expect under our current multi-payer system of financing care.

The MMI is nominally broken down into an employer contribution ($9,947), an employee contribution ($4,004), and employee out-of-pocket costs ($2,820). But virtually all economists agree that the employer contribution is paid by the employee in the form of forgone wage increases. So the entire $16,771 represents the average health care costs for a family of four covered by an employer-sponsored PPO. That is what the average family is actually paying today.

Since this is average, those families with greater medical expenses are actually paying more in out-of-pocket costs. So reform proposals need to take into consideration not only the average $16,771 per family, but also the additional costs for those families with greater health care needs.

It is also important to understand that that the combined employer and employee contributions ($9,947 + $4,004 = $13,951) do not represent the premiums paid. Although the average family is defined as a family with an employer-sponsored PPO, the PPO reflects only the fact that the health care system provided discounts for the care provided. The employer and employee contributions represent the actual payments made for health care (minus the out-of-pocket spending). The MMI specifically excludes the non-medical administrative component of health plan premiums.

Read that again. The MMI ($16,771) represents the actual payments to the health care delivery system and excludes the funds retained by the insurance industry for administrative costs and profits.

Many in the policy community believe that health care costs that exceed 10 percent of family income create a financial hardship for that family. Based on the MMI, the average family with an employer-sponsored PPO would have to have an income of $167,710, though adding the administrative costs of private plans plus any additional out-of-pocket spending that might be required would drive that income threshold further upward.

The 2007 median household income was $50,233. Although that does not represent precisely the family of four with employer-sponsored coverage, it does give us a rough perspective of why the numbers no longer work. Any effective reform proposal based on private plans would have to provide taxpayer-financed subsidies for a typical family with an income below $167,000, plus additional subsidies for administrative costs, and even more subsidies for larger than average health care spending. That means that almost the entire workforce would require subsidies.

So what does the MMI tell us? Only an idiot would isolate the largest and healthiest sector of society into the collective employer-sponsored risk pools, assign a package of benefits to each family, assess contributions to be paid based on that package, shift all non-benefit costs to that family, add a hidden charge for wasteful administrative services, and still leave many families exposed to financial hardship. What does that say for those members of Congress who are hashing out this model of health care reform behind those closed doors?

We need a health care financing system that is funded equitably, based on ability to pay, and that uses the power of our own public monopsony to be certain that each of us receives the care that we need. The MMI tells us that it’s time to enact a single payer national health program.

Remind Baucus who he works for

Letters
Missoulian (Mont.)
May 13, 2009

Upton Sinclair once wrote: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

I am reminded of this quote every time Sen. Max Baucus speaks about health care or banking issues. Baucus is a wholly owned subsidiary of the insurance and banking industries, having received more than $6 million from these industries in the last five years. Minding his masters, Baucus joined every Republican senator in voting against a bill to allow bankruptcy judges to amend mortgages to keep unsophisticated consumers from losing their homes. The bill’s sponsor, Sen. Richard Durbin, was so disgusted by the bill’s defeat he said, “At some point, the senators in this chamber will decide the bankers shouldn’t set the agenda for the United States Senate.”

Baucus is resolute in his opposition to publicly financed health care, insisting he wants a “uniquely American solution” to the health care crisis. His “unique” solution is to continue to rely upon health insurance corporations.

Baucus just can’t seem to understand that banks and health insurance companies haven’t exactly been working for the public good the last several years. Senators make $162,000 per year to supposedly represent the people of their state. Obviously, that salary isn’t enough for Baucus.

We, the little people of Montana, have been outbid for Baucus’ services. The only way Baucus will vote for Montanans is if enough voters call him and insist that he work for them instead of the highest bidder. Until then, he will continue to not understand the problems of the people he only nominally represents.

Richard Buley
Missoula