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Obama should seize moment to push for Medicare for All, doctors group says

Obama should seize moment to push for Medicare for All, doctors group says

Dr. Quentin Young comments on Massachusetts election, next steps for health reform

FOR IMMEDIATE RELEASE     
Jan. 22, 2010   

Contact:
Mark Almberg, (312) 782-6006, cell: (312) 622-0996, mark@pnhp.org
Quentin Young, M.D., (312) 782-6006

A spokesman for a national physicians’ group says it would be a mistake for President Obama to conclude from Tuesday’s vote in Massachusetts that he needs to “tack more toward the right,” as some pundits have advised, or to aim for a scaled-back set of piecemeal reforms. Instead, the spokesman says, the president and Congress should immediately move to expand the popular Medicare program to cover everyone.

“President Obama and Congress should seize this moment to change course and re-inspire the U.S. public with a plan that is simple, clear, workable, fiscally responsible, comprehensive and truly universal  — namely, single-payer Medicare for All,” said Dr. Quentin Young, national coordinator of Physicians for a National Health Program.

Young dismissed suggestions by some that the House should adopt the Senate bill as it presently reads, send it to the president’s desk, and have Congress improve upon it later. “The Senate bill is rotten,” he said. “It’s a huge financial handout to the for-profit insurers and big drug companies. If passed, it will still leave at least 20 million uninsured and millions more unable to afford the care they need.

“Yesterday’s Supreme Court decision removing bans on corporate contributions in candidate elections will only make this fatally flawed bill even more difficult to improve upon,” he said. “It’s too laden with concession after concession to the private health industry to serve as a starting point.”

“Instead, we need to start anew and build on a system that we know works well, is cost-efficient and that could quickly be extended to cover everybody,” Young said. “That’s the Medicare program, which was implemented within one year of its enactment in 1965 and now covers about 45 million people, mainly seniors and the totally disabled.”

“Extending Medicare to cover the entire population would result in $400 billion savings annually by eliminating the administrative waste — the unnecessary paperwork and bureaucracy — inflicted on the U.S. economy by the private health insurers,” he said. “That would be enough to ensure high-quality coverage for everybody.”

Young said it would be a mistake to interpret the election of Republican Scott Brown to the late Sen. Edward Kennedy’s seat as a rejection by voters of fundamental health reform. Many independents and Democrats voted for Brown or stayed home because of mounting economic insecurity and their belief that the health reform process led by the Democrats had been corrupted by the big insurance and drug companies, he said. Union voters were especially angry with the proposed excise tax on workers’ health plans.

“It was more of a protest vote,” he said.

Young pointed to a 2008 ballot initiative in 10 legislative districts in Massachusetts, including one that overlaps with Brown’s state senatorial district, that asked voters if they support “legislation creating a cost-effective, single-payer health insurance system that is available to all residents, and oppose laws penalizing those who fail to obtain health insurance,” i.e. an individual mandate.

“Seventy-three percent of Massachusetts voters in these districts voted for a single-payer program and against the individual mandate, a hallmark of their own state’s plan,” Young said. “The Massachusetts plan is now in financial trouble. It’s fair to assume that those who voted this way in 2008, like many others in exit polls this week, believe the bills in Congress don’t go far enough toward real reform.”

“Nationwide,” he said, “polls show about two-thirds of the U.S. population would favor a Medicare-for-All approach, and a solid majority of physicians now support efforts to establish national health insurance.”

Young also pointed to the robust movement in several states, including California and Vermont, where physicians, among others, are pressing for single payer at the state level.

Nearly 1,000 health professional students and their allies rallied on the steps of the State Capitol in Sacramento, Calif., on Jan. 11, in support of S.B. 810, a single-payer bill that was reintroduced Thursday in the Legislature, he said. Similar bills were approved twice by California lawmakers in recent years, only to be vetoed by Gov. Arnold Schwarzenegger.

In Vermont, some 300 citizens bearing thousands of petition signatures flooded the chambers of the State Capitol in Montpelier on Jan. 12, calling for enactment of a similar proposal there. Many participants said the national bills were completely inadequate to address the state’s urgent health care needs, Young said.

A bold policy shift to single payer on the national level is more plausible than many people think, given the public’s support for such an approach, he said, and given the Medicare program’s “44-year track record of proven success.”

Whatever deficiencies the Medicare program presently has could be easily remedied in a streamlined, better-funded single-payer system, he said. “In fact, single-payer Medicare for All would yield enormous efficiencies and savings through measures like bulk buying and negotiated fees, benefiting everyone and making the program sustainable for future generations. It would also be a much-needed boon to our economy.”

“The president and Congress, if they truly stand up against the insurance and drug companies and press for single-payer Medicare for All, will find a public and a medical community ready and willing to support them,” he said.

*****

Physicians for a National Health Program (www.pnhp.org) is an organization of 17,000 doctors who advocate for single-payer national health insurance. To contact a physician-spokesperson near you, visit www.pnhp.org/stateactions  or call (312) 782-6006.

Insurers face consequences whether or not reform fails

If Bills Fail, a Quandary for Insurers

By Reed Abelson
The New York Times
January 21, 2010

With the possible collapse of the Congressional health care effort, health insurers might seem to have reason to celebrate. The legislation threatened to remake much of their business, with the prospect of burdensome government regulation and less profit from selling coverage to individuals and small businesses.

But now, in the possible absence of forced change to their business, the insurers still face the daunting challenge of selling a product that is increasingly out of reach for more Americans as the cost of medical care — and thus premiums — continues to climb.

Moreover, the industry’s main business of selling coverage through employers has largely stalled, while the weak economy has speeded the loss of customers as people lose their jobs and their health insurance.

“People are still being crowded out of the market because they can’t afford it,” said Sheryl R. Skolnick, a health care analyst for Pali Capital in New York.

But without the aid of the government through some provisions of the legislation, some policy analysts say the insurers might be hard pressed to rein in the fees charged by hospitals and doctors.

“They’ve lost all the leverage reform would have given them,” said Len Nichols, a health care economist for the New America Foundation, a policy research organization that supports an overhaul.

And the insurers say they know they cannot fix many of the problems in the health care system without the support of the government.

For insurers, the largest risk may be that without a government-led overhaul, their industry faces an even bleaker future should medical costs and premiums continue to soar, perhaps eventually prompting draconian changes from the government.

By the time Congress dares to try again to overhaul health care, some analysts predict, the problems with the system might be so acute that Washington might regulate the insurers more heavily than has been considered for the current legislation — or flirt even more with the idea of the federal government becoming directly involved in providing insurance.

“It’s going to come back to the forefront again,” predicted Matthew Borsch, an analyst at Goldman Sachs who follows the industry and says the insurers face an increasingly daunting environment.

http://www.nytimes.com/2010/01/22/health/policy/22insure.html?hp=&pagewanted=all

Comment: 

By Don McCanne, MD

We have stated repeatedly that health care costs are now so high that private insurers are no longer capable of providing health plans with affordable premiums if those plans are to be effective in preventing financial hardship in the face of medical need. Private health plans are an obsolete method of financing health care.

The health care reform process began with the goals of covering everyone and controlling health care costs. That would have been a straightforward task had they agreed to establish a single payer national health program. Instead it was decided to build reform on the foundation of our existing private insurance industry that is approaching obsolescence.

Keep in mind what health care now costs for our healthiest sector – the healthy workforce and their young healthy families. The average costs for a family of four is now $16,771 (Milliman Medical Index). This does not include insurer administrative costs. Considering that median household income is $50,303 (2008), the premium that must be charged for a private plan with adequate benefits, plus the out-of-pocket expenses, are totally out of reach for the average family.

The private insurance industry has survived to this point primarily for two reasons. Most important is that they have been able to sell their products to the healthiest of us – group plans for the healthy workforce, and individual plans for those who pass underwriting requirements. Also the tradition of employer sponsorship of plans has provided a revenue source that has been tolerated by workers who forgo their wage increases.

But the cost of these plans have reached a threshold such that employees are no longer tolerating stagnation of their wages, and employers are no longer tolerating the costs of their combined employee wage and benefit packages. Insurance plan innovations designed to slow the premium increases to keep them competitive have shifted costs to employees who actually need health care. The backlash against these unanticipated costs is sure to accelerate.

The insurance industry had no choice but to turn to the government for solutions that would ensure its survival. As Congress patched the reform proposal together, it became immediately obvious that the private insurance model was not capable of covering everyone, so they gave up on the goal of universal coverage. As they continued to work on the problem of high costs, the limitations of the private insurance model left them with wish-they-would-work policy options that would have very little impact on cost containment.

With abandonment of the two primary goals for reform, Congress was left with the job of patching together policies that would keep the insurance industry in play, as if protecting the private insurers was the primary goal in the first place. To greatly expand their market, the insurers would have to accept patients who actually needed health care, ending disqualification for preexisting disorders. To prevent adverse selection, everyone would be mandated to purchase health plans.

That would provide the plans with the market that they need, but it left one more problem. To make premiums affordable, even with subsidies, health care costs would have to be controlled. The insurers insist that the government must control the costs, but that does not work in a model designed to leave the private insurers in charge of health care financing.

If no reform is enacted, the entire insurance industry goes into the death spiral of ever higher premiums. If the Senate version is enacted, the insurers would get a temporary reprieve through the government subsidies, but it would not be long before rising costs would again be unbearable for the payers. The golden age of America’s private health insurance industry is about to end, whether or not a bill passes.

The Massachusetts election has given us a brief window in which we can step back and ponder, “What on earth are we doing!?” We can do it right. We can dismiss the obsolete model of private insurance plans and enact an equitably-financed, improved Medicare that really would include all of us, and provide an effective mechanism for slowing health care spending.

Consequences of the Privatized Funding of Medical Care and the Privatized Electoral Process

By Vicente Navarro, M.D.
American Journal of Public Health, Jan. 14, 2010 

The current state of health care reform in the United States reveals the enormous limitations of democracy in this country, unparalleled in the western world. Why is there such a large gap between what people want from their representatives in Congress – including universal access to health care as a matter of right – and what they get? 

To answer this question, we first need to look at what is happening in the U.S. medical care sector. I think it’s fair to say that what we see there is also unparalleled in the western world. Forty-seven million people are without any form of health insurance coverage (and a million more are added each year) and 102 million have insufficient coverage (and many aren’t aware of how limited their coverage is until they find out that an illness or needed test is not covered).1 The clearest indicator of the inhumane system of funding and organizing medical care in the United States is that 40 percent of people in the terminal stages of illness say they are worrying about how to pay their medical bills.2 No other major country comes even close to this level of inhumanity. 

The root of the problem is the privatization of the funding and organization of medical care. Most of the funds are collected and services administered by private insurance companies. This system is rooted in the Taft-Hartley Act (the same act that forbade the working class to act as a class, by forbidding sympathy strikes that would allow workers from different employment sectors to strike to defend their class interests). Taft-Hartley shifted the responsibility for working people’s health benefits coverage to highly decentralized collective bargaining agreements, which explains the great variability in coverage. One consequence is that when American workers lose their jobs, they lose not just income but health benefits for themselves and their families. It is not surprising that the United States has the fewest working days lost to strikes. Workers are afraid to make trouble in the workplace, because getting fired could mean losing medical care for their families.3 

It has been a traditional demand of the labor movement to get rid of the consequences of the Taft-Hartley Act. The demand for universality of health care, with every American having the right to access care, has been a constant in the labor and progressive movements. The majority of Americans agree with this demand, but they are unlikely to get it.4 

The reason for this gap between what people want and what people get is, again, privatization – a privatized electoral process, in which most campaign funding of candidates for political office comes from private sources. That private money does not mainly come (as myth would have it) from multitudes of average Americans sending in $50. The great majority comes from huge economic interests (components of the “Corporate Class”), including the insurance, pharmaceutical, and medical equipment companies; the professional associations; and other components of the medical-industrial complex. The six key members of the Senate Finance Committee, chaired by Sen. Max Baucus (D-Mont.), have received support from these interests. They received a million dollars each.5 

To further compound the problem created by a privatized electoral process, U.S. democracy is a nonproportional type of democracy— that is, the population is not represented in Congress in proportion to the size of the electorate. Each state is represented by two senators, regardless of its size, which gives enormous power (as the country’s founders intended) to rural, conservative states. The six key senators on the Finance Committee represent rural states that, in sum, include only about 3 percent of the U.S. population, and these senators have the future of health care reform in their hands. 

Democracy in the United States is indeed extremely limited. The opening of the nation’s founding document, the U.S. Constitution, suggests that it is “We the People . . .” who make decisions, but it should include a footnote saying “or Corporate America.” Furthermore, those who do decide are not fully representative of the population. Still, the United States is not a dictatorship, but a democracy so tilted in favor of corporate and conservative interests that an enormous effort is required to create change. The election of President Obama seemed to be such a change and a sign of hope, because this was the trademark of his campaign. But since coming into office, he seems to have been poorly advised on his strategy for implementing the promised change. He has made several big mistakes. 

OBAMA’S MISTAKES 

1. An emphasis on the issue of economic viability of the system, stressing that medical expenditures (private and public) are increasing too rapidly and enlarging the federal deficit. This message has been repeated in many different ways, emphasizing that a primary goal of health care reform is to reduce the federal deficit. Most of the reforms the administration is calling for (which will, undoubtedly, cost money) will be funded by increasing the efficiency of the current public and private programs. People’s well-founded skepticism about Congress explains why so many (including Medicare beneficiaries) have expressed their concern about the meaning of “increasing the efficiency,” which they interpret to mean reducing their benefits. It is not surprising that the major opposition to the Obama reform proposal comes from the beneficiaries of these public programs, especially Medicare. 

2. The concern about costs and the need to improve efficiency expressed together with an emphasis on covering the uncovered as a moral problem that needs to be resolved. This is indeed a moral issue. But, when Obama adds that he plans to pay for this expansion of coverage by increasing the efficiency of current programs, he is calling on people’s compassion, with the possibility of most people (who do have coverage) seeing their benefits reduced to take care of the uncovered. We have plenty of experience (with antipoverty and other means-tested programs) to show that compassion is not a good motivator. Solidarity (I take care of you on the condition that you take care of me) is a much better motivator. 

What Obama should have done is expand and improve the Medicare Program to all Americans. This would resolve the problems of the uncovered and of everyone else. The call for a universalism mandated by government (not a mandate that individuals must buy their own health insurance, just as they have to buy car insurance) is far more ambitious (and more realistic) than a gradual path to universalism, which is likely to fail. 

3. Antagonizing the left. Achieving a universal right to health care requires a huge mobilization, comparable to that which got Obama elected. For this the president needs the left. Obama could not win only by mobilizing the left, but he could not win without it. He has antagonized the left by excluding single-payer health care from the negotiating table. I can understand why he changed his mind and decided not to support the single-payer option, but I cannot understand (because it was a tactical error) why, after saying that all options would be included, he excluded the single-payer option – the alternative preferred by the trade unions, the major social movements (such as the civil rights, feminist, and green movements), and others who were the core of his support and are the grassroots of the Democratic Party. To make things worse, he is ready to eliminate even the public option, which is seen as a way of introducing the single-payer option through the backdoor. So, it is not surprising that the left is feeling frustrated, angry, and
demoralized (and did not show up at the town hall meetings). 

All of this reminds me of what I saw during and after my time on the Clinton White House health care reform task force (as the “token single-payer expert”). Clinton had won the election of 1992 with a commitment to provide universal coverage. But once in office, he gave priority to reducing the federal deficit (not even in his campaign program), under pressure from Wall Street through Treasury Secretary Robert Rubin, and to approving the North American Free Trade Agreement, which was opposed by the trade unions and the majority of the Democratic Party. This antagonized the left of the party, and large numbers of Democratic voters stayed home in the 1994 congressional elections. The “Gingrich Revolution” was a consequence of this abstention of the Democratic grassroots. The Republicans received about the same number of votes in 1994 as in 1990 (the preceding nonpresidential election year). There was no increase in the Republican vote, but rather a decline in the Democratic vote. I am afraid that the same could happen in 2010. 

Vicente Navarro is with Johns Hopkins University, Baltimore, Md. Correspondence should be sent to Vicente Navarro, M.D., Ph.D., Professor of Health Policy, The Johns Hopkins University, 624 N. Broadway, Rm 448, Baltimore, MD 21205 (e-mail: vnavarro@jhsph.edu). 

This article was accepted November 11, 2009. doi: 10.2105/AJPH.2009.187633 

References

1. Hellander I. The deepening crisis in U.S. health care: a review of data, Spring 2008. Int J Health Serv. 2008;38(4): 607–623. 

2. Ann Intern Med. 2000; :132– 145. 

3. Navarro V. Dangerous to Your Health. Capitalism in Health Care. New York, NY: Monthly Review Press; 1993. 

4. Washington Post/ABC News. 2008. 

5. Kaiser RG. So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government. New York, NY: A Knopf; 2009. 

http://ajph.aphapublications.org/cgi/content/abstract/AJPH.2009.187641v1?maxtoshow=&HITS=10&hits=10&RESULTFORMAT=&author1=waitzkin&searchid=1&FIRSTINDEX=0&sortspec=relevance&resourcetype=HWCIT

Whistleblower reveals how insurers can game healthcare bill

By Brad Jacobson
The Raw Story
Wednesday, January 20th, 2010

Though Senate bill cuts ‘pre-existing conditions,’ it still allows insurance companies to create ‘pre-existing’ categories to raise rates

The Democrats’ healthcare overhaul, billed as a monumental game-changer for Americans’ health insurance coverage, provides numerous loopholes for health insurance companies which will allow them to raise rates to protect profit margins, a health insurance whistleblower says.

Wendell Potter, a twenty-year veteran of the insurance industry and former vice president of communications for Cigna, warns that current healthcare legislation does nothing to prevent the insurance industry from continuing its ongoing practice of increasingly shifting healthcare costs to consumers.

A form of bait-and-switch, such practices often set up individuals, families and small businesses for inadequate or unaffordable access and a continued looming threat of financial ruin. The overlooked element, Potter says, is that insurance companies will be able to claim they are reducing premiums by forcing more Americans to pay higher deductibles and offering less coverage.

“We talk a lot about affordability, and we talk about affordability of insurance premiums,” Potter told Raw Story in a nearly hour-long interview. “But when you talk about affordability, you need to talk about affordability of premiums plus out-of-pocket expenses.”

He said that there’s been a lot of discussion on how the Congressional Budget Office scored this legislation and what it says this legislation will cost the country in the long run, but little to no focus on how the legislation will directly impact individual Americans.

Potter pointed out, for example, that many plans — even after consumers received proposed government subsidies to help pay for them — would come with high deductibles that prohibit people from using their insurance or cause them the kind of financial hardships that healthcare reform was purported to prevent.

“What worries me,” he said, “is people who are forced to buy coverage and all they can afford to buy is a high deductible. And if they get really sick then they have to pay so much out of their own pockets that they’re going to be filing for bankruptcy and losing their homes.”

In the Senate bill, in particular, Potter noted, some people will be buying insurance that will only cover roughly 60 percent of their medical costs if they get sick.

“There are a lot of people who don’t have insurance now because they can’t afford premiums,” he said. “They certainly couldn’t afford premiums plus the out-of-pocket expenses in today’s market.”

Potter asserted that the current legislation will, in large part, simply move millions of people from being uninsured to underinsured, or from insured to underinsured. Citing a 2007 study by the Commonwealth Fund, he said there are already over 25 million Americans who fall into the category of the underinsured.

Potter also noted the deleterious effect of cost shifting on small businesses. Many small business owners will earn just enough to be denied subsidies.

“After a certain income level, there are no subsidies,” Potter explained. “But you still have to buy coverage. And I’m concerned that after you get above the median level of income, you’ll find that a lot of people who don’t get subsidies will probably be forced to buy coverage. But the only coverage they’ll be able to buy will make them underinsured.”

There’s also no prohibition in the legislation against insurance companies moving more and more people into high-deductible plans. Such plans, Potter argued, will help insurers’ bottom lines because fewer policyholders will actually avail themselves of their insurance.

“When you have a benefit plan that requires people to pay a lot out of their own pocket, a lot of these people will never get to the point of using their insurance because they won’t go to the doctor or pick up their medicines to satisfy the deductible,” Potter told Raw Story.

“I see nothing in this legislation that essentially would protect people from losing their homes or filing for bankruptcy,” he added.

How insurance companies can still game the system

While prohibitions on such practices as denying healthcare to people with pre-existing conditions remain in the legislation, Potter noted that the Senate bill, in particular, provides the insurance companies with “all the flexibility they need” to more than make up for any profits lost due to new reform measures and to prevent people from accessing coverage.

He pointed out, for example, that “health factors” such as chronic diseases and age would continue to play into how much individuals can be charged in premiums and how many of them may be forced into high deductible plans.

“What they will be doing, what they can in the Senate bill, is charge people significantly more if they have certain health factors,” Potter said. “And it would be pretty much up to the industry to decide what those health factors are. You could have high blood pressure, high cholesterol, diabetes. You could be overweight, have a history of tobacco use. There definitely would be a wide range of things that the insurance industry would be able to look at and determine whether or not to charge you more.”

He also noted that the Senate bill would allow insurance companies to charge people who are older up to three times as much as those who are younger and, in the House bill, two times more than a younger person.

“And of course when people get older they develop more health factors,” Potter said. “So that is another way to get around the loss of revenue. Plus, of course, they would be able to get new revenue coming in from people who are younger and don’t have health factors that they charge more for.”

Moreover, he said, “They still would be getting a new revenue stream from people who are younger. So they’ll be getting significantly more in revenue. And those people are quite profitable too because they don’t file many claims.”

To justify this practice, Potter explained, insurers would claim that they’re providing lowered or discounted premiums to healthier people. But, in reality, premiums across the board are set so high that healthier people wouldn’t actually be receiving anything that could be considered a discount.

“Healthier people would be paying pretty much a standard rate at the end of the day,” said Potter, while the chronically ill and the aged would be paying exceptionally more on top of the already pricey standard rate.

Medical-loss ratio

The former insurance executive also says another element of the healthcare overhaul is receiving too little attention: the medical-loss ratio, which determines what percentage of health insurance premiums are spent on actual medical costs. The difference of just a few percentage points can mean billions of dollars to the insurance industry.

“We’re talking about big-time money here,” said Potter. “The insurance industry doesn’t want to have any restrictions on the medical-loss ratio. So they’ll be doing all they can to keep it from being enacted if possible.”

Some members of Congress, led by Sen. Al Franken (D-MN), proposed an amendment to require that 90 percent of consumer premiums go to medical costs, but Potter doesn’t think that’s likely to happen and said insurers will fight tooth-and-nail to set any minimum as low as possible. The Congressional Budget Office said that the 90 percent figure was too high and would basically drive insurers out of business, recommending 80-85 percent instead. Democrats are expected to embrace the
lower figures in their final bill.

Potter cautioned that legislators need to keep an eye on how insurance companies define medical and administrative expenses. And he said that legislation should require companies to explain what they’re spending money on and what percentage in dollar amounts they’re spending.

“You can set the medical-loss ratio, but you need to make sure that it’s clearly understood what the components of the administrative expenses are,” Potter explained. “Because they can shift stuff around from one bucket to another and claim that what they’re actually spending is beneficial to the patient when it may not be.”

For example, he said they can easily meet an 85% standard if the definition enables them to categorize such items as disease management programs as paying for medical care. Currently, money spent on disease management programs is counted toward administrative costs.

Potter also noted that insurance companies have kept the issue of the medical-loss ratio — something little understood by the American public — “pretty much just a conversation between them, their shareholders and the analysts who cover them. They don’t talk about it anywhere else.”

Potter raised this complex but critical issue during his Senate testimony in June.

“Every decimal point makes a big difference,” he added. “We’re talking in the billions.”

http://rawstory.com/2010/01/whisteblower-reveals-health-insurers-game-insurance-bill/

What Massachusetts Got Right

By Robert Scheer
TruthDig, Jan 20, 2010

The president got creamed in Massachusetts. No amount of blaming this disastrous outcome on the weaknesses of the local Democratic candidate or her Republican opponent’s strengths can gainsay that fact. Obama’s opportunistic search for win-win solutions to our health care concerns and our larger economic problems is leading to a lose-lose outcome for the president and the country.

The two issues that mattered on Election Day were the economy, which Obama has sold out to Wall Street—as quite a few disgruntled voters pointed out—and his plea to save health care reform, which the voters who had backed him for the presidency with a huge majority now spurned. It is significant that it was the voters of Massachusetts who have now derailed the Democrats’ efforts to revamp the country’s health care system by denying them the necessary 60th vote in the Senate, for these voters know the subject well.

The federal proposal is based on their own state’s model requiring people to obtain health insurance without the state doing anything to effectively control costs through an alternative to the private insurance corporations. Lacking a public option, the cost of health care in Massachusetts, already the highest in the nation at the time of the plan’s implementation, has spiraled upward. Services have been curtailed, and many, particularly younger people, feel they are being forced to sacrifice to pay for a system that doesn’t work.

Instead of blindly following the failed Massachusetts model, Obama should have insisted on an extension of the Medicare program to all who are willing to pay for it. He squandered the opportunity to bring about meaningful health care change that the public would have supported had it been kept simple and just. Instead, Obama gave away the store to medical profiteers. They, in turn, hopelessly muddied the waters with well-funded scare advertising tactics that principled leadership on Obama’s part could have thwarted.

A mere seven months ago, The New York Times/CBS poll found that 72% of Americans “supported a government-administered insurance plan—something like Medicare for those under 65—that would compete for customers with private insurers.” Even half of those identified as Republican said they would back such a public plan, as would three out of four independents and 90% of Democrats. Instead of heeding that call by endorsing a serious extension of Medicare, along with increased subsidies for those who could not afford it, Obama played to the conservatives in Congress—and they rolled him.

If he wasn’t prepared to make a breakthrough in health care, and that meant a reform program that would begin sooner rather than later, he should have put it on a back burner. The furor over a very unsatisfactory plan drew attention from the far bigger crisis concerning the meltdown of the nation’s economy. By accepting and indeed expanding the Bush administration’s strategy of throwing money at Wall Street, Obama ceded the populist label to the Tea Party Republicans who now pretend that a banking mess brought about by their radical deregulatory philosophy is not of their making.

It is the economy, stupid, and the sooner Obama grasps that, the better for his and the nation’s prospects. A new Wall Street Journal/NBC poll finds that “Americans ranked job creation and economic growth as their clear top priority for the federal government, well above national security and deficit reduction. Health care, Mr. Obama’s top domestic priority in 2009, now ranks fourth, closely trailing the deficit and government spending.”

Of course, the public is right. In the midst of the worst economic crisis in 70 years, why waste enormous political capital battling to pass a health care plan that is modeled on a proven failure in Massachusetts, as voters there clearly registered? Meanwhile, the president has dropped the ball in the effort to make bankers act responsibly by forcing them to forego outrageous bonuses and help homeowners stay in their homes.

Again quoting the message of that Wall Street Journal/NBC poll: “The president’s focus on health care amid heightened job concerns could be hurting his ratings. At the one-year mark of his presidency, 35% of Americans said they were ‘quite’ or extremely’ confident he had the right priorities to improve the economy, down from 46% at midyear.” The Journal noted that a majority disapproved of the government’s response to the financial crisis, adding, “The related problem for Mr. Obama is the public’s lingering anger about the bailouts of 2008 and 2009, which helped boost bank profits even as unemployment grew—a toxic political problem.”

To salvage his presidency, Obama must reverse course and make solving the “toxic political problem” of Wall Street greed that’s bankrupting the country his highest priority. 

http://www.truthdig.com/report/item/what_massachusetts_got_right_20100120/

Anger over Health Care Bill Creates Uncertain Future

By Jane Slaughter
Labor Notes, January 20, 2010

A Massachusetts local union president called it before the January 19 vote for senator: Ive never seen this much anger at the Democrats from union people, said Jeff Crosby, president of a General Electric factory local near Boston, as he prepared a last-minute leaflet to hand out in the plant. Its worse than NAFTA.

Top union leaders had bargained a compromise [1] slowing down the health care benefits tax President Obama insisted on, but it was not enough to placate union membersand othersinfuriated that Obama had broken his campaign promise not to tax benefits.

Crosby said his members were threatening to vote Republican to stop the tax, since 60 Democratic senators and no Republicans had voted for it. In Massachusettsspecial election they chose empty-suit Republican Scott Brown over a Democrat bound to cement the benefits tax in place.

In a Suffolk University poll conducted a week before the election, union-household voters in Massachusetts reported only 45 percent support for the Democratic candidate; union voters nationally backed Obama by 60 percent in 2008.

According to those on a January 14 conference call with AFL-CIO President Rich Trumka, Massachusetts state fed President Bobby Haynes exploded in anger, blaming top union leaders for a terrible health care bill and for losing the Massachusetts electionand thus the Dems60th Senate seat, needed to ensure the health care bills passage (and the rest of labors agenda, labor law and immigration reform).

Obama took a hands-off approach to the content of the bill as it crept through Congress. He didnt insist on a public option nor a strong employer mandate to provide insurance. It was hard not to notice that the only issue on which he took a hard stand was taxing benefits.

At his meeting with a dozen labor leaders at the White House January 11, Obama was firm that a tax on benefits was a must-havedespite his campaign promise to the contrary. We have a lot of video clips,said Machinists President Thomas Buffenbarger.

Although the benefits tax was not the only issue on Massachusetts votersminds (the faltering economy was the No. 1 concern in the Suffolk poll), it was one of the clearest examples of the Obama administrations tilt away from working class voters, beginning with the bank bailout.

Trumka too had predicted that the health care mess would backfire on Democrats. In a January 11 speech [2] at the National Press Club, he said, In 1992, workers voted for Democrats who promised action on jobs, who talked about reining in corporate greed, and who promised health care reform. Instead, we got NAFTA, an emboldened Wall Streetand not much more. [In 1994] there was no way to persuade enough working Americans to go to the polls when they couldn’t tell the difference between the two parties.

NAFTA, which dealt a heavy blow to U.S. manufacturing, was voted up by Congress in 1993 after intense cajoling by President Clinton, garnering the votes of 102 House Democrats. Clinton lost the Democratic majority in Congress the next yearand never got it back.

LETS MAKE A DEAL

As the likely House-Senate compromise took shape in early January, it appeared certain that if the bill passed, people with good (or just expensive) benefits would face a steep 40 percent tax likely to push them into inferior plans.

So labor leaders reached a deal [3] with White House negotiators January 14 that accepted the tax theyd previously declared unacceptable. The deal announced by Trumka and his counterparts at Change to Win and the National Education Association would have exempted those in union-negotiated plans and state and local employees from the tax until 2018.

It also would have raised the threshold at which the tax kicked in for many other plans: those containing significant numbers of women, older workers, or retirees age 55 and up, or those in high-cost states, the latter affecting more than 38 million workers. Those provisions would have delayed those groupshit as well.

Trumkas goal was to exempt as many people as possible, union and non-union, from ever paying the tax, though only the velocity of health care cost inflation would have proved how successful he was.

Most of the 31 million insured employees who would be hit by the excise tax are not union members,Trumka noted before the deal was struck. But in the end unions bought extra time for their members at the cost of making themselves look self-interested. The deal will create awkward moments for union health care activists whove spent years trying to build broad coalitions.

STILL OPPOSED

Not all top union leaders backed the compromise plan. Buffenbarger told Labor Notes his members at Boeing, Lockheed Martin, and General Dynamics were already over the $23,000 threshold at which the tax would originally kick in.

No bill is better than this bill,Buffenbarger said. We don’t care what the amount is that they peg it to: because of inflation, whatever number will be gobbled up pretty quickly.

Firefighters President Harold Schaitberger said his union didnt ask for the bills special, higher threshold for first responders, $26,000 rather than $23,000. The provision was worthless, he said, because most of his members are pooled in larger municipal plans, with no mechanism to segregate them out. Were not going to buy into a special deal for us,Schaitberger said.

The SteelworkersLeo Gerard backed the compromise, telling Labor Notes he was thinking about Senator Jim DeMint, that right-wing nut from one of the Carolinas,whos said he wants to make health care Obamas Waterloo.

We have to do everything to make sure we get a good bill so we can move forward with the rest of the presidents agenda as quickly as possible,Gerard said.

Insiders say Trumka sold his compromise by arguing that health care reform had to get done so Congress could tackle long-delayed labor law reformthe Employee Free Choice Act.

Labors weakness throughout the health care reform process put a question mark over EFCA anyway, and even the question mark lay in tatters after the Massachusetts election.

Buffenbargerwho backed Hillary Clinton in the primarieswas a pessimist in any case. Were not going to get EFCA anyway,he said. Its an election year. No way theyre going to touch it.

TURN TO THE STATES

One bright spot could emerge from this winters health care debacle: union members not pushed into the arms of the tea-partiers could become convinced that Medicare for Allis the only solution.

It may mean more people are apt to be engaged on single payer because theyre getting hit themselves,said Lenny Potash, a retired AFSCME member and co-chair of the Labor Taskforce for Universal Healthcare [4] in Los Angeles.

Activists in California and Vermont have already begun serious work on state single-payer efforts.

The Vermont Workers Center [5] turned out 350 people to legislative hearings January 12 to testify for the states single-payer bill. Senator Bernie Sanders was followed by union nurses.

The center, the states Jobs with Justice affiliate, began organizing in earnest last year: a rally of 1,000 at the State Capitol on a work day; organized committees in every county; a dozen regional hearin
gs. The result, says co-chair Traven Leyshon, is that we have changed whats politically possible. As recently as September the legislature said they couldn’t be bothered with single payer.

All Democratic candidates for governor next fall say they support single payer (though Leyshon recalls former Governor Howard Dean, who was always for single payer till the day he became governor). The Democrats and the Progressive Party together have a veto-proof two-thirds majority in both houses.

A new single-payer bill, just introduced by a Progressive legislator, includes a just transition for insurance company workers and others who would lose their jobs under a single-payer system. The legislation was written so as to survive legal challenges.

SINGLE PAYER IN ONE STATE

California activists will back a single-payer bill starting this month, though Governor Arnold Schwarzenegger, whos in his last year, is certain to veto it for the third time (similar bills passed in 2006 and 2008). The campaign kicked off January 11 with 1,000 members of the California Health Professional Student Alliance and others rallying in Sacramento.

Michael Lighty of the California Nurses Association [6] explained that winning single payer is a multi-year project: heavy education this year, electing a Democratic governor who wont veto single payer this fall, passing a new bill, taking the measure to the voters in a referendum. The media campaign alone could cost as much as $20 million.

What about the cost, in a state thats broke? Cate Engel of the Labor Taskforce for Universal Healthcare said the bill ultimately would save California billions of dollars, by reducing administrative costs and using the states mammoth purchasing power to force drug and equipment prices down.

What about California unions that havent backed single payeror ditched the idea before the fight even began, citing political viability? Well, said Lighty, we saw what happened on the national level when they went for public option over single payer because of viability.

Bill Bryce is the Jobs with Justice organizer in Detroit. Hes shaking his head over the lost opportunities of 2009the year when Obama rode in on a wave of hope for change and corporations were in disgrace because of the financial fiasco.

Youre the president, you appear on TV and say, I have a suggestion, lets tax Wall Street bonuses at 50 percent and defray the cost of health care,’Bryce said. If this was not the time to take on the insurance companies and the banks, just when will that time come?

Source URL: http://www.labornotes.org/2010/01/anger-over-health-care-bill-creates-uncertain-future
Links:
[1] http://blog.aflcio.org/2010/01/14/health-care-tax-union-leaders-outline-big-improvements-for-all-working-families
[2] http://www.aflcio.org/mediacenter/prsptm/sp01112010.cfm
[3] http://www.labornotes.org/blogs/2010/01/victory-or-pretzel
[4] http://laborforsinglepayer.com
[5] http://www.workerscenter.org
[6] http://www.calnurses.org

http://labornotes.org/2010/01/anger-over-health-care-bill-creates-uncertain-future

Coakley's Loss: Pie in the President's Face

By William Greider
The Nation, January 20, 2010

Barack Obama went to Boston to rally voters and got a pie in the face. He lost his innocence as the valiant young president and also lost his sixty-vote majority in the Senate. Now we will find out what the man is made of–either a true political leader or just another show horse. Dozens of explanations are being offered for why the Dems were humiliated in Massachusetts. Democrats incline to grab easy answers. The president, if he is tough enough, will instead face the hard message of this political fiasco.

The special election displayed monumental miscalculations by which Obama has governed, both in priorities and political-legislative strategies. It may seem perverse and unfair, but the president’s various actions for reform generated a vaguely poisonous identity. Amid the general suffering, Obama is widely seen as collaborating with two popular villains–the me-first bankers and over-educated policy technocrats of the permanent governing elite. Obama made nice with the bankers and loaded up his administration with Harvard policy wonks who really don’t know the country. These malignant associations gain traction because people see there are grains of truth in observable reality.

On Sunday, I listened on the radio to Obama’s soaring speech at Northeastern University and remembered again why his oratory first took the nation to the mountaintop. His attack lines lashing bankers and insurance companies were fluid and tough, shouted repetitively over the rising cheers. His diction was loosely colloquial. He dropped the hard g’s to get down with the folks. Too little, too late, I figured. He is still masterful, but this is performance, not substance. People grasp the difference between the two. This gulf will imprison Obama as a stereotype for weakness, a joke on late-night TV, if he doesn’t change.

The humiliation, I decided, could become a good thing for this presidency if it forces Obama to rethink his political strategy and rearrange his governing order. For all his brains and talent, for all the brainy people around him, the Obama White House seems tone-deaf and blind on many aspects of the popular reality. Too full of itself to listen closely. Too condescending to recognize the rage and fear are about more than right-wing frothers.

On healthcare, Obama played coy while his White House aides cut private deals with the drug industry and other sectors. The legislative process was drawn out month after month in an addled bargaining marathon with hostile Republicans (who stiffed him in return) and industry-leaning Democrats (who got whatever they demanded). The liberal base was conned, ignored and bullied, as its vital issues were one by one discarded. Labor unions were stroked and intimidated by the White House, then double-crossed as Obama’s reform extracted greater costs from union members than it demanded from the drug makers. People at large were confused, then frightened. They could not understand what reform would do for them, and some of their doubts were well-founded. The longer it went on, the more people wondered why Democrats weren’t talking about their problem–jobs and incomes.

Obama’s mild-mannered faith in bipartisan deal-making seemed strangely out of touch. Didn’t he realize Republicans were going to maul him at every turn?

The bankers, meanwhile, did their own tap dance on the new president, putting a paw on his shoulder while gobbling up public resources. Obama kept holding meetings with them, urging them to do the “right thing.” They practically laughed in his face.

People were meanwhile agitated by the swelling budget deficits and easy prey for right-wing propaganda. Instead of explaining the economic necessity of deficit spending in a straightforward way, Obama adopted these worries as his own. He has promised to reduce spending, but he cannot deliver on this if he truly expects recovery.

Obama’s style became an inadvertent formula for sapping the life out of the political majority that elected him, deflating the reach of reform and turning off the electoral base that came together in 2008. Democrats are being told (and telling themselves) that they over-reached, but what became clear as the months dragged on is the Democratic party under-achieved, and so did its president.

Obama’s most disturbing quality is that he evidently intended this from the start. Soaring rhetoric notwithstanding, he managed the presidency as a pragmatist in search of the possible. The real goals for change were minimalist, not visionary. This has to change and soon, if he is to revive his presidency.

Obama, in other words, has to change himself. That may sound too wishful and maybe it is. But we know he is a brilliant politician, astute in his political vision. The great politicians, when faced with new circumstances, revise themselves. We will see if Obama can.

First, he has to clear out the cobwebs of his hopeful aspirations and take on the fight. To do so, he also has to clear away a lot of the people around him. If Rahm Emmauel was the chief strategist, the guy who made the private deals and told the senators what they could accept, he failed big-time and should be replaced. Find a new manager whose thinking was not shaped by cynical triangulation in the Clinton era.

The president chose Larry Summer and Timothy Geithner to speak for the administration on the economy. Can you imagine finding anyone less convincing? Both are active advocates of the Wall Street status quo, neither has any feel for what’s happening in the country. The bean counters led the president into the trap he now faces. Permissive bailouts created flush financial giants that sit on their profits and ignore the public need for lending. Dump the bean counters now.

Obama’s turn-around speech would declare–honestly–that he misjudged the situation. The damage is far worse than he originally realized. Some deeper structural changes are required. The political opposition is more than ever blindly resistant than he had hoped. But now Obama can promise to govern nose-to-nose against the political forces blocking everything he attempts. He may not prevail, he concedes. But he is going to throw himself at them and he asks the people to join him in the fight.

If comprehensive healthcare reform is out of the question, Obama Democrats can break it down into smaller pieces and try to pass worthy measures one by one. A bill to prohibit insurance companies from banning people with pre-existing ailments? Pass it the House and try to pass it in the Senate. If Republicans want to filibuster, make them filibuster. A measure to allow cheaper drug imports from Canada? Let Republicans vote against that. Repealing the antitrust exemption for insurance companies–Democrats support it. Democrats need to start a fight on taxes too. Do Republicans want to tax Wall Street banks or not? Obama has proposed it, let’s have a roll call. The attack strategy will focus on all the reforms people want and need and create a new political dynamic.

At the same time, Obama has to change the subject by refocusing reform actions on jobs and the structure of the faltering economy. Do something concrete and visible. If it doesn’t work, try something else. If it’s real, people will respond. If it doesn’t succeed, people will understand. A governing agenda that creates a sense of action and shared commitment does not require cerebral policy wonks. Go anywhere in America and you will hear fresh thinking about how to get the country out of the ditch.

Obama needs to locate some seasoned politicians and bring them into the White House–people with a less cynical view of the Democratic party and deep experience in how to mobilize substantive political support. That includes the active citizens who do not mess with elections because they consider them a waste of energy. People who want big change are
all over this country, nurturing new ideas and waiting to be asked.

Barack Obama is a cool character, not given to impulsiveness. But he needs to accept that the political assumptions with which he began his presidency are malfunctioning. I can’t be sure he will be brave enough to change things. I do say he cannot wait for his second term.

http://www.thenation.com/doc/20100201/greider

Coakley’s Loss: Pie in the President’s Face

By William Greider
The Nation, January 20, 2010

Barack Obama went to Boston to rally voters and got a pie in the face. He lost his innocence as the valiant young president and also lost his sixty-vote majority in the Senate. Now we will find out what the man is made of–either a true political leader or just another show horse. Dozens of explanations are being offered for why the Dems were humiliated in Massachusetts. Democrats incline to grab easy answers. The president, if he is tough enough, will instead face the hard message of this political fiasco.

The special election displayed monumental miscalculations by which Obama has governed, both in priorities and political-legislative strategies. It may seem perverse and unfair, but the president’s various actions for reform generated a vaguely poisonous identity. Amid the general suffering, Obama is widely seen as collaborating with two popular villains–the me-first bankers and over-educated policy technocrats of the permanent governing elite. Obama made nice with the bankers and loaded up his administration with Harvard policy wonks who really don’t know the country. These malignant associations gain traction because people see there are grains of truth in observable reality.

On Sunday, I listened on the radio to Obama’s soaring speech at Northeastern University and remembered again why his oratory first took the nation to the mountaintop. His attack lines lashing bankers and insurance companies were fluid and tough, shouted repetitively over the rising cheers. His diction was loosely colloquial. He dropped the hard g’s to get down with the folks. Too little, too late, I figured. He is still masterful, but this is performance, not substance. People grasp the difference between the two. This gulf will imprison Obama as a stereotype for weakness, a joke on late-night TV, if he doesn’t change.

The humiliation, I decided, could become a good thing for this presidency if it forces Obama to rethink his political strategy and rearrange his governing order. For all his brains and talent, for all the brainy people around him, the Obama White House seems tone-deaf and blind on many aspects of the popular reality. Too full of itself to listen closely. Too condescending to recognize the rage and fear are about more than right-wing frothers.

On healthcare, Obama played coy while his White House aides cut private deals with the drug industry and other sectors. The legislative process was drawn out month after month in an addled bargaining marathon with hostile Republicans (who stiffed him in return) and industry-leaning Democrats (who got whatever they demanded). The liberal base was conned, ignored and bullied, as its vital issues were one by one discarded. Labor unions were stroked and intimidated by the White House, then double-crossed as Obama’s reform extracted greater costs from union members than it demanded from the drug makers. People at large were confused, then frightened. They could not understand what reform would do for them, and some of their doubts were well-founded. The longer it went on, the more people wondered why Democrats weren’t talking about their problem–jobs and incomes.

Obama’s mild-mannered faith in bipartisan deal-making seemed strangely out of touch. Didn’t he realize Republicans were going to maul him at every turn?

The bankers, meanwhile, did their own tap dance on the new president, putting a paw on his shoulder while gobbling up public resources. Obama kept holding meetings with them, urging them to do the “right thing.” They practically laughed in his face.

People were meanwhile agitated by the swelling budget deficits and easy prey for right-wing propaganda. Instead of explaining the economic necessity of deficit spending in a straightforward way, Obama adopted these worries as his own. He has promised to reduce spending, but he cannot deliver on this if he truly expects recovery.

Obama’s style became an inadvertent formula for sapping the life out of the political majority that elected him, deflating the reach of reform and turning off the electoral base that came together in 2008. Democrats are being told (and telling themselves) that they over-reached, but what became clear as the months dragged on is the Democratic party under-achieved, and so did its president.

Obama’s most disturbing quality is that he evidently intended this from the start. Soaring rhetoric notwithstanding, he managed the presidency as a pragmatist in search of the possible. The real goals for change were minimalist, not visionary. This has to change and soon, if he is to revive his presidency.

Obama, in other words, has to change himself. That may sound too wishful and maybe it is. But we know he is a brilliant politician, astute in his political vision. The great politicians, when faced with new circumstances, revise themselves. We will see if Obama can.

First, he has to clear out the cobwebs of his hopeful aspirations and take on the fight. To do so, he also has to clear away a lot of the people around him. If Rahm Emmauel was the chief strategist, the guy who made the private deals and told the senators what they could accept, he failed big-time and should be replaced. Find a new manager whose thinking was not shaped by cynical triangulation in the Clinton era.

The president chose Larry Summer and Timothy Geithner to speak for the administration on the economy. Can you imagine finding anyone less convincing? Both are active advocates of the Wall Street status quo, neither has any feel for what’s happening in the country. The bean counters led the president into the trap he now faces. Permissive bailouts created flush financial giants that sit on their profits and ignore the public need for lending. Dump the bean counters now.

Obama’s turn-around speech would declare–honestly–that he misjudged the situation. The damage is far worse than he originally realized. Some deeper structural changes are required. The political opposition is more than ever blindly resistant than he had hoped. But now Obama can promise to govern nose-to-nose against the political forces blocking everything he attempts. He may not prevail, he concedes. But he is going to throw himself at them and he asks the people to join him in the fight.

If comprehensive healthcare reform is out of the question, Obama Democrats can break it down into smaller pieces and try to pass worthy measures one by one. A bill to prohibit insurance companies from banning people with pre-existing ailments? Pass it the House and try to pass it in the Senate. If Republicans want to filibuster, make them filibuster. A measure to allow cheaper drug imports from Canada? Let Republicans vote against that. Repealing the antitrust exemption for insurance companies–Democrats support it. Democrats need to start a fight on taxes too. Do Republicans want to tax Wall Street banks or not? Obama has proposed it, let’s have a roll call. The attack strategy will focus on all the reforms people want and need and create a new political dynamic.

At the same time, Obama has to change the subject by refocusing reform actions on jobs and the structure of the faltering economy. Do something concrete and visible. If it doesn’t work, try something else. If it’s real, people will respond. If it doesn’t succeed, people will understand. A governing agenda that creates a sense of action and shared commitment does not require cerebral policy wonks. Go anywhere in America and you will hear fresh thinking about how to get the country out of the ditch.

Obama needs to locate some seasoned politicians and bring them into the White House–people with a less cynical view of the Democratic party and deep experience in how to mobilize substantive political support. That includes the active citizens who do not mess with elections because they consider them a waste of energy. People who want big change are all over this country, nurturing new ideas and waiting to be asked.

Barack Obama is a cool character, not given to impulsiveness. But he needs to accept that the political assumptions with which he began his presidency are malfunctioning. I can’t be sure he will be brave enough to change things. I do say he cannot wait for his second term.

http://www.thenation.com/doc/20100201/greider

Insurers face consequences whether or not reform fails

If Bills Fail, a Quandary for Insurers

By Reed Abelson
The New York Times
January 21, 2010
With the possible collapse of the Congressional health care effort, health insurers might seem to have reason to celebrate. The legislation threatened to remake much of their business, with the prospect of burdensome government regulation and less profit from selling coverage to individuals and small businesses.
But now, in the possible absence of forced change to their business, the insurers still face the daunting challenge of selling a product that is increasingly out of reach for more Americans as the cost of medical care — and thus premiums — continues to climb.
Moreover, the industry’s main business of selling coverage through employers has largely stalled, while the weak economy has speeded the loss of customers as people lose their jobs and their health insurance.
“People are still being crowded out of the market because they can’t afford it,” said Sheryl R. Skolnick, a health care analyst for Pali Capital in New York.
But without the aid of the government through some provisions of the legislation, some policy analysts say the insurers might be hard pressed to rein in the fees charged by hospitals and doctors.
“They’ve lost all the leverage reform would have given them,” said Len Nichols, a health care economist for the New America Foundation, a policy research organization that supports an overhaul.
And the insurers say they know they cannot fix many of the problems in the health care system without the support of the government.
For insurers, the largest risk may be that without a government-led overhaul, their industry faces an even bleaker future should medical costs and premiums continue to soar, perhaps eventually prompting draconian changes from the government.
By the time Congress dares to try again to overhaul health care, some analysts predict, the problems with the system might be so acute that Washington might regulate the insurers more heavily than has been considered for the current legislation — or flirt even more with the idea of the federal government becoming directly involved in providing insurance.
“It’s going to come back to the forefront again,” predicted Matthew Borsch, an analyst at Goldman Sachs who follows the industry and says the insurers face an increasingly daunting environment.
http://www.nytimes.com/2010/01/22/health/policy/22insure.html?hp=&pagewanted=all

We have stated repeatedly that health care costs are now so high that private insurers are no longer capable of providing health plans with affordable premiums if those plans are to be effective in preventing financial hardship in the face of medical need. Private health plans are an obsolete method of financing health care.
The health care reform process began with the goals of covering everyone and controlling health care costs. That would have been a straightforward task had they agreed to establish a single payer national health program. Instead it was decided to build reform on the foundation of our existing private insurance industry that is approaching obsolescence.
Keep in mind what health care now costs for our healthiest sector – the healthy workforce and their young healthy families. The average costs for a family of four is now $16,771 (Milliman Medical Index). This does not include insurer administrative costs. Considering that median household income is $50,303 (2008), the premium that must be charged for a private plan with adequate benefits, plus the out-of-pocket expenses, are totally out of reach for the average family.
The private insurance industry has survived to this point primarily for two reasons. Most important is that they have been able to sell their products to the healthiest of us – group plans for the healthy workforce, and individual plans for those who pass underwriting requirements. Also the tradition of employer sponsorship of plans has provided a revenue source that has been tolerated by workers who forgo their wage increases.
But the cost of these plans have reached a threshold such that employees are no longer tolerating stagnation of their wages, and employers are no longer tolerating the costs of their combined employee wage and benefit packages. Insurance plan innovations designed to slow the premium increases to keep them competitive have shifted costs to employees who actually need health care. The backlash against these unanticipated costs is sure to accelerate.
The insurance industry had no choice but to turn to the government for solutions that would ensure its survival. As Congress patched the reform proposal together, it became immediately obvious that the private insurance model was not capable of covering everyone, so they gave up on the goal of universal coverage. As they continued to work on the problem of high costs, the limitations of the private insurance model left them with wish-they-would-work policy options that would have very little impact on cost containment.
With abandonment of the two primary goals for reform, Congress was left with the job of patching together policies that would keep the insurance industry in play, as if protecting the private insurers was the primary goal in the first place. To greatly expand their market, the insurers would have to accept patients who actually needed health care, ending disqualification for preexisting disorders. To prevent adverse selection, everyone would be mandated to purchase health plans.
That would provide the plans with the market that they need, but it left one more problem. To make premiums affordable, even with subsidies, health care costs would have to be controlled. The insurers insist that the government must control the costs, but that does not work in a model designed to leave the private insurers in charge of health care financing.
If no reform is enacted, the entire insurance industry goes into the death spiral of ever higher premiums. If the Senate version is enacted, the insurers would get a temporary reprieve through the government subsidies, but it would not be long before rising costs would again be unbearable for the payers. The golden age of America’s private health insurance industry is about to end, whether or not a bill passes.
The Massachusetts election has given us a brief window in which we can step back and ponder, “What on earth are we doing!?” We can do it right. We can dismiss the obsolete model of private insurance plans and enact an equitably-financed, improved Medicare that really would include all of us, and provide an effective mechanism for slowing health care spending.

Will President Obama salvage his centerpiece?

George Stephanopoulos' Exclusive Interview with President Obama

ABC News
January 20, 2010

President Obama:  I would advise that we try to move quickly to coalesce around those elements of the package that people agree on. We know that we need insurance reform, that the health insurance companies are taking advantage of people. We know that we have to have some form of cost containment because if we don’t, then our budgets are going to blow up and we know that small businesses are going to need help so that they can provide health insurance to their families. Those are the core, some of the core elements of, to this bill.

Later…

President Obama:  If you ask the American people about health care, one of the things that drives them crazy is insurance companies denying people coverage because of preexisting conditions. Well, it turns out that if you don’t — if you don’t make sure that everybody has health insurance, then you can’t eliminate insurance companies — you can’t stop insurance companies from discriminating against people because of preexisting conditions. Well, if you’re going to give everybody health insurance, you’ve got to make sure it’s affordable. So it turns out that a lot of these things are interconnected.

http://blogs.abcnews.com/george/2010/01/transcript-george-stephanopoulos-exclusive-interview-with-president-obama.html

Comment: 

By Don McCanne, MD

It looks like there are four choices: 1) walk away and accept the status quo, 2) use alternative political maneuvers to move the bill through Congress,  3) attempt to salvage at least a portion of the less controversial components of the current proposal, or 4) start over. Let’s look at these.

1) Walk away

Far too many individuals and businesses are no longer capable of paying the very high costs of our health care system. The existing spending controls in government and in the marketplace show no evidence of ameliorating the excessive growth of our total national health expenditures. The status quo is unacceptable. On this everyone agrees, so we cannot walk away.

2) Move the bill through Congress anyway

The strategy that has been advanced to pass the bill relatively intact would be to have the House approve the Senate version, and then make corrections in a budget reconciliation process. We can forget this approach since the bill managers’ head count in the House has come up far short of the votes needed. Also, cramming the bill through before Sen. Kirk is replaced by Scott Brown has been rejected by President Obama and other Democratic leaders. But the overriding reason why this bill will not clear Congress intact is that a majority of Americans are very displeased with it – that includes all conservatives, most liberals, and a majority of moderates. Sometimes we question the collective wisdom of Congress, but they’re not that dense.

3) Salvage a portion of the legislation

Crafting a health care financing system and integrating it with the health care delivery system creates a dysfunctional system if it is done piecemeal. That’s what we’ve been doing over the past century, and it’s obvious where that has led. As President Obama said, “it turns out that a lot of these things are interconnected.”

President Obama and some members of Congress would still like to salvage the centerpiece of this legislation – making health insurance markets work for us. They would like to do that without including the policies that offended so many in Massachusetts and throughout the nation – new taxes, and an individual mandate to purchase private insurance. If there is no mandate then there is less need for the taxes that would be required to pay for the private insurance subsidies. Of course, without a mandate, many more will be left uninsured, but that seems to be the price that many members of Congress are willing to pay simply to pass something that looks like reform.

President Obama shows that he understands the greatest difficulty with reforming the private insurance market as a stand-alone process. The insurer abuses that he wants to eliminate were there for a reason. They are designed to reduce the amount of health care that the insurers fund. Once the insurers are required to cover all risks, insurance premiums increase. With no mandate, many of the healthy will decide they cannot afford the higher premiums and will remain uninsured. The adverse selection that would result could send our entire private insurance industry into a death spiral of skyrocketing premiums.

Obviously, as we’ve been saying all along, the centerpiece based on private insurance plans is inherently a dysfunctional model that can never achieve efficiency, equity, universality, and affordability for all of us.

That said, there are some measures in this legislation that could be salvaged and enacted on an emergency basis until we finish the task of delivering a just health care system for all. As prime examples, we should move immediately to expand Community Health Centers and to reinforce our primary care infrastructure. We should also recover the overpayments to the Medicare Advantage plans that are wasted on excess administration and investor profits. There are many other beneficial measures that could be enacted without requiring that they be part of an omnibus bill.

4) Start over

The policy work has already been done. We know what we need – an improved Medicare for all national health program. President Obama and most of the Democrats in Congress know that as well.

Even the conservatives certainly understand that it would work for all of us and that, once enacted, it would be in place forever because of its popularity. Since they can’t oppose it based on its sound policies, they simply oppose it based on their ideological opposition to social solidarity. That is perhaps the saddest reality in this whole debate.

Single Payer on Stronger Constitutional Ground

Insurance Mandate Feeds GOP's Attack on Legal Front

By JESS BRAVIN
The Wall Street Journal
January 11, 2010

WASHINGTON — As congressional Democrats try to iron out differences in the House and Senate health-care bills, Republicans are attacking the legal premise of the legislation, saying Congress has no power to make people carry health insurance or pay a penalty or tax.

Constitutional-law scholars say that if the health-care overhaul becomes law, it could give courts an opportunity to test the limits of congressional authority in areas that haven’t been examined since the New Deal era. However, courts usually defer to lawmakers, and Democrats could smooth the way further by using language in the final version that clearly asserts Congress’s power under the Constitution to levy taxes — which the House bill already does.

Sen. John Ensign, a Nevada Republican, tried last month to hold up the bill on grounds that Congress lacked authority to enact it. The move failed, with 60 Senate Democrats and independents outvoting 39 Republicans.

Last week, the Texas attorney general, Republican Greg Abbott, wrote that a federal mandate to carry health insurance “threatens individual liberty.” Florida Attorney General Bill McCollum, a Republican running for governor, held a press conference in December to make the same point.

Democrats dismiss the Republican arguments as a last-ditch effort by the minority party to block the majority’s will. They say the plan is grounded in basic powers the Constitution grants Congress: to regulate interstate commerce, collect taxes and “provide for the general Welfare.”

Since the New Deal era, the Supreme Court has broadly interpreted congressional authority under the Commerce Clause. Congress has successfully invoked that power to limit the amount of wheat farmers can grow, ban racial discrimination at restaurants and prosecute medical patients for raising marijuana to alleviate their symptoms.

But the court has never considered a federal program structured like the health overhaul, which would require people without insurance to buy it or face a tax or penalty. The nonpartisan Congressional Research Service said in July that it was a “challenging question” whether the commerce power extends that far.

Democrats and their allies say that despite its novelty, the insurance mandate falls within the definition of interstate commerce. The Senate bill cites data to show the importance of the health-care industry to the national economy and the damage caused by leaving millions of Americans uninsured.

Requiring the uninsured to buy coverage will “create economies of scale” and “is essential to creating effective health-insurance markets,” the bill says.

Republicans argue that while Congress can regulate economic activity, the failure to buy insurance amounts to inactivity — and the Constitution doesn’t give Congress power to regulate that.

“Anything we have ever done, somebody actually had to have an action before we could tax or regulate it,” Mr. Ensign said on the Senate floor.

Democrats say that failing to buy insurance is a form of economic activity, because it shifts costs to others in the marketplace through higher insurance premiums, and onto the public when the uninsured use emergency rooms to obtain primary care.

The Senate bill imposes a penalty of up to $750 for people who fail to comply with the insurance mandate. Although it would be collected by the Internal Revenue Service, Senate Democrats avoided calling it a tax.

The House version explicitly includes a “tax on individuals without acceptable health-care coverage.”

Congress has broad power to tax — and courts have been highly deferential to the way it is exercised.

In 1919, the Supreme Court upheld a federal narcotics law even though a key provision — imposing a $1-per-year tax on heroin dealers and requiring that sales of the drug be registered with the commissioner of internal revenue — clearly did little to boost the public treasury.

Opponents said the tax was just a smoke screen for a crackdown on what the court called “dope fiends.” The ruling, by Justice William Day, held that simply having “another purpose as well as raising revenue” didn’t make the law unconstitutional.

Although the bottom line of both health-care bills may be similar, the clear use of the taxing power might make the House bill harder to attack, said Yale law professor Jack Balkin.

Randy Barnett, a Georgetown University law professor, said neither version is really a tax, and therefore falls outside congressional power. “You’re fining people for failing to enter a private insurance contract,” he said.

Mr. Barnett argued that Congress would be on stronger constitutional ground had it taken a far more radical approach to restructuring the health-care system, such as raising taxes and creating a single payer for all Americans akin to the Medicare program that covers the elderly and disabled.

“Given the precedent of Medicare, courts are likely to uphold Congress if it imposes an income tax to pay for a government health-care system,” Mr. Barnett said.

Write to Jess Bravin at jess.bravin@wsj.com
Printed in The Wall Street Journal, page A4

Health insurance companies masters of risk avoidance

Letter to the Editor
Gazette Times (Corvallis, Ore.)
Thursday, January 21, 2010

Sixty percent of all our health care costs are directly or indirectly taxpayer money. Because premiums paid by employers are tax-deductible, insurance companies receive a taxpayer subsidy to cover employees. Actuarially, working people are among our healthiest. Others, who want to purchase health insurance outside the workplace must, first, demonstrate health, then pay exorbitant rates. Seniors, who are at the greatest risk for high health care costs, are covered by the taxpayer through Medicare.

Poor people and those on disability are covered by the taxpayer. Actuarially, poor people are among our sickest. People who don’t have insurance and accrue huge un-payable bills are covered by ALL of us, but only after they declare bankruptcy.

For every dollar insurance companies spend carefully calculating who NOT to cover and canceling policies of those who become unexpectedly ill, they earn five extra dollars in profits. They are the masters of making money off healthy people, with taxpayer subsidies, while the taxpayer cares for those who are ill.

Every other developed country in the world starts the discussion with a basic understanding that health care is a human right and insurance companies should not profit from offering a package of essential health care services. Ironically, they cover everybody, at less cost, with better results.

On our current path, the financial barrier to accessing care causes 45,000 excess deaths every year, bankrupts individuals, and threatens the solvency of our government.

As proposed, the “individual mandate” with more taxpayer subsidies to for-profit insurance companies is NOT going to solve the problem and costs will continue to sky rocket because we don’t have a system. Publicly financed, single payer health care is the only fiscally conservative solution to our health care crisis.

Paul Hochfeld, M.D.
Corvallis

http://www.gazettetimes.com/news/opinion/mailbag/article_da39642e-0663-11df-8bac-001cc4c002e0.html