Payroll, income taxes would cover costs
By David Wenner
The Patriot-News (Harrisburg, PA)
Tuesday, October 18, 2005
A grassroots organization yesterday proposed tearing down the health insurance system in Pennsylvania and building a new one that would cover everyone.
The proposal calls for universal coverage through a single-payer system that would pay 100 percent of medical and prescription drug costs while involving no direct charges to patients.
It would cost an estimated $43 billion annually and be funded through a 10 percent tax on business payrolls and a three percent tax on personal income.
Supporters says the winners would be state residents and businesses who can’t afford the high cost of health care, and the losers would be drug companies and health insurers.
Drug companies would lose because the system would obtain bulk discounts on drugs, and insurers would lose because they would no longer be needed, said Steve Larchuk, a Pittsburgh-area lawyer and a leader of Pennsylvania Healthcare Solutions Coalition, which has proposed the system.
The insurance industry, including Pennsylvania’s four Blue Cross-Blue Shield plans, will fight to preserve the existing system, Larchuk said.
“I expect the Blues will fight to the death to stop any kind of health care reform. But that’s a battle we have to fight sooner or later; and if we’re unwilling to fight that battle, we might as well hand the keys to the Capitol to the Blues right now,” he said.
Charlie Crystle, a Lancaster business owner and member of the coalition board, predicted businesses will support the single-payer system because the proposed payroll tax would be less than they now pay to provide health insurance for workers.
Larchuk said organizers have been working at the grassroots level for about a year, and avoiding involvement of politicians because the issue is so political.
The idea of universal, single-payer health insurance isn’t new.
Proposals exist in several states, Larchuk said.
Yesterday, supporters began visiting state legislators and passing out a draft of a bill to create the single-payer system.
Amy Kelchner, a spokeswoman for Gov. Ed Rendell’s Office of Health Care Reform, said Rendell is interested in any proposal to provide universal health insurance.
The administration recently received a federal grant it will use to explore universal coverage, she said.
The Pennsylvania Medical Society, the lobbying group for doctors, received the proposal yesterday and wasn’t ready to comment, spokesman Chuck Moran said.
State Sen. Pat Vance, R-Cumberland, a leader on health care issues in Pennsylvania, also said she had just heard of the proposal and hadn’t formed an opinion.
Cliff Shannon, president of SMC Business Councils and a leading advocate for health insurance reform in Pennsylvania, said no reform will succeed unless it includes a way to limit the cost of health care.
An uncapped, mandatory tax on businesses would have “no chance” of acceptance from businesses, he said.
Mike Fiachetti, a senior vice president for Highmark Blue Shield, said that with the high cost of health care, it’s no surprise that people are proposing a single-payer system.
But he said there’s no “silver bullet” solution for out-of-control health care costs.
“This all sounds good on paper, but there are so many things missing, it’s hard to even comment,” he said.
DAVID WENNER: 255-8172 or dwenner@patriot-news.com