By Scott Harris
Between the Lines Radio News, Aug. 24, 2016
The following interview with Dr. Steffie Woolhandler, co-founder of the group Physicians for a National Health Program and a professor at the City University of New York’s School of Public Health at Hunter College, was conducted by Scott Harris and is available as an MP3 file here.
Aetna, based in Hartford, Connecticut and the nation’s third largest insurance company, announced last week that next year it will be pulling out of 11 of 15 states where it offers policies in the Affordable Care Act’s health exchanges. The company says that it has lost $430 million in profits since it began offering individual policies on the ACA exchanges in January 2014. Aetna complained that those purchasing insurance policies are sicker and costlier than expected.
However, news reports and internal company documents indicate that the move to exit Obamacare came in response to the U.S. Justice Department’s decision to block the proposed merger between Aetna and Humana, the nation’s fifth largest insurer. Apart from Aetna, other insurance companies, including United Healthcare, Humana and Blue Cross-Blue Shield also have plans to leave ACA health exchanges in 2017.
Between The Line’s Scott Harris spoke with Dr. Steffie Woolhandler, co-founder of the group Physicians for a National Health Program and a professor at the City University of New York’s School of Public Health at Hunter College. Here, she examines the decision by Aetna to pull out of state ACA exchanges, the problems of coverage created by for-profit medicine and her support for establishing a single-payer, Medicare-for-All system that would provide universal, affordable care to everyone in the U.S. (Rush transcript)
DR. STEFFIE WOOLHANDLER: Well, Aetna’s exodus illustrates what a crazy idea it was to think that you could get to universal coverage through the private health industry. The private health insurance industry makes money by taking your premiums and providing as little care as possible. And they’re only willing to stay in the market as long as they make a profit by doing that, by taking premiums and not paying out too much in care. And then with the ACA, they took the premiums but people were sick and needed the care, and they said “We’re not going to participate. We can’t make a profit and we’re taking our marbles and going home.” So, certainly Aetna pulled out, several of the other major insurers have pulled out of market, a fewer numbers in counties than Aetna just did. And in many parts of the country, there’s only one option under the exchange, and of course that’s not really an option because you have to pay a fine on your taxes if you don’t enroll with the insurance company, so you basically have a “take it or leave it” situation in many parts of the country. There’s currently one big county, Pinal County in Arizona, that has 400,000 people and no insurance company saying they’re going to offer an exchange plan next year.
Now this can change, because the bids on the exchange plans go in October. But it definitely illustrates that this was a crazy idea to think you’re getting to universal health care through profit-seeking, private insurance companies. What we needed to do, what we still need to do is go for a single-payer, Medicare For All type program, where everybody’s in a giant risk pool. Everybody’s in, nobody’s out.
BETWEEN THE LINES: Dr. Woolhandler, what’s the effect of the people looking for insurance on these health exchanges when there is only one company? Does that mean the rates, the premiums paid will go sky high? Is that the net effect here?
DR. STEFFIE WOOLHANDLER: Well, they won’t necessarily go sky high, relative to what they’ve been, which has already been pretty high. They will be higher, there are studies showing that have in markets with only one or two insurance companies vs. markets with three to five insurance companies, the rates are higher. So, yes, the consumer will be paying a higher rate, but the problem of course, is the rates on the Obamacare exchange insurance are very high to begin with. So for someone my age, and I’m in my early in 60s, if I go to buy a bronze plan, which is the cheapest plan available to me in New York state, if I go to buy a bronze plan, I have to take $5,000 out of my pocket and pay the premium. And then if I get sick, I’ve got a $5,000 deductible. I need to take another $5,000 out of my pocket. $10,000 total I’ve paid out of pocket before my insurance pays one penny.
So, it’s an extremely expensive insurance for a middle-income person to be thinking about paying that kind of money out for care. So yes, having a monopoly, as will occur in many counties and states, makes matters worse, it makes the premiums higher. The premiums are quite high even in places like New York, where there’s not a monopoly at this point.
BETWEEN THE LINES: Dr. Woolhandler, as you’ve pointed out, the United States stands alone in the industrialized world of countries that don’t have a universal health care system in place; therefore, we have one of the most expensive systems with an enormous number of people left out. But as I understand it, the ACA, the Obamacare system in place now, has covered an additional 21 million people. But that leaves 29 million or 30 million people still uninsured and many more underinsured even among that number. What can you tell us about the issue of the United States and its unique situation here? Not such a good situation here.
DR. STEFFIE WOOLHANDLER: Well you’re absolutely right with those numbers. Less than half of the uninsured have received coverage so that 20 million have been covered; about 27 million remain uninsured. And to me, as a physician, 27 million uninsured people is not acceptable. And furthermore, even if the Obamacare legislation had been rolled out as initially enacted, if all 50 states had enacted Medicaid, there still would have been tens of millions of people uninsured. And not just in the short term. Over the long term, the Congressional Budget Office is saying 26 million people remain uninsured. So we have not gotten to universal health care and we’re not getting there with the Obamacare legislation, which is why we need to go with Medicare for All.
All other developed countries do use some form of national health insurance. Most of them rely on nonprofit national health insurance. They spend 40 percent less per capita than we do on health care. People in other developed nations, like Canada or the Netherlands, live two to three years longer. So where they have these national health programs, you get more care, better health, and you spend less. You know, the United States is really unique among the developed countries in having a subsidized private insurance system that is extremely expensive and doesn’t cover everyone.
Learn more about the merits and cost of a single-payer health care by visiting Physicians for a National Health Program at pnhp.org.