PNHP

Opposing views: State plans miss the point

Opposing views: State plans miss the point

Neither state goes far enough. People will still lack care.

By Don McCanne
USA Today

Americans need more than affordable insurance; they need affordable health care. California Gov. Arnold Schwarzenegger plans to copy the Massachusetts reform in shrinking the numbers of uninsured people by forcing them to buy stripped down, bare-bones policies.

With premiums for family coverage now averaging $10,000 a year, the only way that states can make premiums affordable is to strip down the plans, which then forces policyholders to pay out of pocket when they get sick. High deductibles, co-payments and benefit reductions are destroying the financial protection that insurance should provide.

Half of U.S. bankruptcies are a result, in part, of medical illness or medical bills. Three-quarters of Americans who are forced into medical bankruptcy had health insurance at the onset of the illness that bankrupted them. Worse, suffering and death can occur when patients cannot afford the care that their private insurance does not cover.

The big winners in the Schwarzenegger and Massachusetts health plans are private health insurance firms. The new insurance mandates will hand them billions in wasteful administrative fees that do not occur in government insurance programs such as Medicare. Private insurers will continue their cream-skimming, enrolling primarily the low cost, healthy workforce and their families, while leaving the costs of the unprofitable sick and elderly to the taxpayers.

State health programs are interdependent on federal programs such as Medicare, Medicaid and the Veterans Affairs’ system, and are regulated by federal laws. The states alone cannot enact the structural changes that would be required to cover everyone and control costs. They are limited to building on the existing system by tweaking it to nominally expand coverage to the uninsured.

Money is not the problem. We already are spending enough on health care to provide high-quality, comprehensive services for everyone. But our inefficient, private-sector insurance bureaucracies have failed and need to be replaced with single-payer national health insurance. Every other developed nation has covered its citizens through some form of non-profit national health insurance.

Don McCanne, M.D., is a senior health policy fellow of Physicians for a National Health Program.

Paul Krugman on Schwartzenegger's State Health Plan

Golden State Gamble

By PAUL KRUGMAN
Published: January 12, 2007
New York Times

A few days ago. Gov. Arnold Schwarzenegger unveiled an ambitious plan to bring universal health insurance to California. And I’m of two minds about it.

On one side, it’s very encouraging to see another Republican governor endorse the principle that all Americans are entitled to essential health care. Not long ago we were wondering whether the Bush administration would succeed in dismantling Social Security. Now we’re discussing proposals for universal health care. What a difference two years makes!

And if California – America’s biggest state, with a higher-than-average percentage of uninsured residents – can achieve universal coverage, so can the nation as a whole.

On the other side, Mr. Schwarzenegger’s plan has serious flaws. Maybe those flaws could be fixed once the principle of universal coverage was established – but there’s also the chance that we would end up stuck with those flaws, the way we ended up stuck with a dysfunctional system of insurance tied to employment.

Furthermore, in the end health care should be a federal responsibility. State-level plans should be seen as pilot projects, not substitutes for a national system. Otherwise, some states just won’t do the right thing. Remember, almost 25 percent of Texans are uninsured.

To understand both what’s right and what’s wrong with Mr. Schwarzenegger’s plan, let’s compare what he’s proposing with the plan he rejected. Last summer, the California Legislature passed a bill that would have created a single-payer health insurance system for the state – that is, a system similar to Medicare, under which residents would have paid fees into a state fund, which would then have provided insurance to everyone.

But the governor vetoed that bill, which would have bypassed private insurance companies. He appears to sincerely want universal coverage, but he also wants to keep insurance companies in the loop. As a result, he came up with a plan that, like the failed Clinton health care plan of the early 1990s, is best described as a Rube Goldberg device – a complicated, indirect way of achieving what a single-payer system would accomplish simply and directly.

There are three main reasons why many Americans lack health insurance. Some healthy people decide to save money and take their chances (and end up being treated in emergency rooms, at the public’s expense, if their luck runs out); some people are too poor to afford coverage; some people can’t get coverage, at least without paying exorbitant rates, because of pre-existing
conditions.

Single-payer insurance solves all three problems at a stroke. The Schwarzenegger plan, by contrast, is a series of patches. It forces everyone to buy health insurance, whether they think they need it or not; it provides financial aid to low-income families, to help them bear the cost; and it imposes “community rating” on insurance companies, basically requiring them to sell insurance to everyone at the same price.

As a result, the plan requires a much more intrusive government role than a single-payer system. Instead of reducing paperwork, the plan adds three new bureaucracies: one to police individuals to make sure they buy insurance, one to determine if they’re poor enough to receive aid, and one to police insurers to make sure they don’t discriminate against the unwell.

The plan’s supporters say that it would save money all the same. Those who are currently uninsured would receive preventive care, which is often cheaper than waiting until they show up in emergency rooms. Insurers would spend less money trying to weed out high-risk clients and more money actually paying for health care: the plan would require that insurers spend at least 85 percent of premiums on health care, considerably more than most of them do now.

Still, why all the complexity? The smart, well-intentioned economists who devised the plan think they’re being more politically realistic than single-payer advocates – that it’s necessary to placate the insurers. But that’s what Bill and Hillary Clinton thought, too – only to find that their plan’s complexity confused the public, while the insurance industry went all-out to defeat it anyway.

So am I for or against the Schwarzenegger plan? That’s a tough question. As a practical matter, however, I suspect that the real question is what to do after the plan founders from its own complexity. And the answer is, damn the insurers – full speed ahead.

Paul Krugman on Schwartzenegger’s State Health Plan

Golden State Gamble

By PAUL KRUGMAN
Published: January 12, 2007
New York Times

A few days ago. Gov. Arnold Schwarzenegger unveiled an ambitious plan to bring universal health insurance to California. And I’m of two minds about it.

On one side, it’s very encouraging to see another Republican governor endorse the principle that all Americans are entitled to essential health care. Not long ago we were wondering whether the Bush administration would succeed in dismantling Social Security. Now we’re discussing proposals for universal health care. What a difference two years makes!

And if California – America’s biggest state, with a higher-than-average percentage of uninsured residents – can achieve universal coverage, so can the nation as a whole.

On the other side, Mr. Schwarzenegger’s plan has serious flaws. Maybe those flaws could be fixed once the principle of universal coverage was established – but there’s also the chance that we would end up stuck with those flaws, the way we ended up stuck with a dysfunctional system of insurance tied to employment.

Furthermore, in the end health care should be a federal responsibility. State-level plans should be seen as pilot projects, not substitutes for a national system. Otherwise, some states just won’t do the right thing. Remember, almost 25 percent of Texans are uninsured.

To understand both what’s right and what’s wrong with Mr. Schwarzenegger’s plan, let’s compare what he’s proposing with the plan he rejected. Last summer, the California Legislature passed a bill that would have created a single-payer health insurance system for the state – that is, a system similar to Medicare, under which residents would have paid fees into a state fund, which would then have provided insurance to everyone.

But the governor vetoed that bill, which would have bypassed private insurance companies. He appears to sincerely want universal coverage, but he also wants to keep insurance companies in the loop. As a result, he came up with a plan that, like the failed Clinton health care plan of the early 1990s, is best described as a Rube Goldberg device – a complicated, indirect way of achieving what a single-payer system would accomplish simply and directly.

There are three main reasons why many Americans lack health insurance. Some healthy people decide to save money and take their chances (and end up being treated in emergency rooms, at the public’s expense, if their luck runs out); some people are too poor to afford coverage; some people can’t get coverage, at least without paying exorbitant rates, because of pre-existing
conditions.

Single-payer insurance solves all three problems at a stroke. The Schwarzenegger plan, by contrast, is a series of patches. It forces everyone to buy health insurance, whether they think they need it or not; it provides financial aid to low-income families, to help them bear the cost; and it imposes “community rating” on insurance companies, basically requiring them to sell insurance to everyone at the same price.

As a result, the plan requires a much more intrusive government role than a single-payer system. Instead of reducing paperwork, the plan adds three new bureaucracies: one to police individuals to make sure they buy insurance, one to determine if they’re poor enough to receive aid, and one to police insurers to make sure they don’t discriminate against the unwell.

The plan’s supporters say that it would save money all the same. Those who are currently uninsured would receive preventive care, which is often cheaper than waiting until they show up in emergency rooms. Insurers would spend less money trying to weed out high-risk clients and more money actually paying for health care: the plan would require that insurers spend at least 85 percent of premiums on health care, considerably more than most of them do now.

Still, why all the complexity? The smart, well-intentioned economists who devised the plan think they’re being more politically realistic than single-payer advocates – that it’s necessary to placate the insurers. But that’s what Bill and Hillary Clinton thought, too – only to find that their plan’s complexity confused the public, while the insurance industry went all-out to defeat it anyway.

So am I for or against the Schwarzenegger plan? That’s a tough question. As a practical matter, however, I suspect that the real question is what to do after the plan founders from its own complexity. And the answer is, damn the insurers – full speed ahead.

AHRQ Disparities Report

2006 National Healthcare Disparities Report

U.S. Department of Health and Human Services
Agency for Healthcare Research and Quality
December 2006

Being uninsured has a large negative impact on almost all aspects of health care quality and access. In fact, among adults, the negative effects of being uninsured are typically larger than the effects of race, ethnicity, income, and education. Multivariate analyses suggest that uninsurance is an important mediator of racial, ethnic, and socioeconomic disparities, although race, ethnicity, and socioeconomic position often have independent effects as well.

http://www.ahrq.gov/qual/nhdr06/nhdr06report.pdf

Comment:

By Don McCanne, MD

Martin Luther King Jr said it:

“Of all the forms of inequality, injustice in health care is the most
shocking and inhumane.”

Realtors face health care crisis

Realtors, Other Small-Business People Face Health Care Crisis

National Association of Realtors
January 10, 2007

Small business employers and the self-employed, including real estate firms and agents, are facing a growing challenge in accessing and providing affordable health insurance, Pat Vredevoogd Combs, president of the National Association of Realtors, told a congressional panel today (U.S. Senate Health, Education, Labor and Pension Committee – Senator Edward Kennedy (D-Mass.), chairman and Senator Michael Enzi (R-Wyo.), ranking member).

“As we sit here, 28 percent of the nation’s 1.3 million Realtors do not have any health insurance. This is nearly double the percentage of uninsured members in 1996. If we add family members to the total, the final estimate for the Realtor family is close to 886,000 individuals,” stated Combs. “We are ready to work with you to fix an insurance delivery system that is not meeting the needs of working Americans,” she pledged.

Making health care insurance available and affordable for Realtors and for all Americans employed by small businesses is a top priority of NAR. “We believe it is important to find a solution to the health insurance crisis that has plagued small businesses. We don’t have all the answers on how to do it, but we do know it must be done,” said Combs.

http://www.realtor.org/press_room/news_releases/2007/realtors_other_small_business_people.html

Comment:

By Don McCanne, MD

How to do it? Sen. Kennedy supports Medicare for all, while Sen. Enzi supports offering lowest-common-denominator, stripped-down coverage through association health plans. One would provide everyone with affordable health care, and the other would provide the right to purchase affordable health insurance that leaves health care unaffordable.

Which do the Realtors really want?

Jacob Hacker's "Health Care for America"

Health Care for America

A proposal for guaranteed, affordable health care for all Americans building on Medicare and employment-based insurance

by Jacob S. Hacker
The Economic Policy Institute
EPI Briefing Paper #180
January 11, 2007

As health care costs have skyrocketed and the proportion of Americans with stable benefits has eroded, health insecurity has become a shared American experience, felt by those who thought they had it made as well as those just struggling to get by.

This growing problem is pushing health care reform back onto the agenda of American politics after more than a decade of neglect. And yet, nothing guarantees that this debate will end differently than previous battles.

To avoid the dismal fate of previous reform campaigns, a successful agenda must take seriously the political constraints and organizational realities that have hamstrung reform efforts in the past. Limits on public budgets, resistance to measures that might be seen as taking away what Americans already have, and the embedded realities of the present system all stand squarely in the path of grand policy redesigns–from single-payer national health insurance, to individual mandates requiring that everyone purchase private coverage, to a universe of individualized Health Savings Accounts. Instead, the most promising route forward is to build on the most popular elements of the present structure–Medicare and employment-based health insurance for well-compensated workers–through a series of large-scale changes that are straightforward, politically doable, self-reinforcing, and guaranteed to produce expanded health security.

Health Care for America embodies this strategy. It would extend insurance to all non-elderly Americans through a new Medicare-like program and workplace health insurance, while creating an effective framework for controlling medical costs and improving health outcomes to guarantee affordable, quality care to all. It is at once comprehensive, realistic, consistent with American values and beliefs, and grounded in the best elements of the present system. It combines employer and personal responsibility with a strong public commitment to ensuring that American workers and their families and American employers can afford coverage. It promises better care, lower costs, more choice, healthier citizens, and immensely stronger guarantees for workers and their families. And it promises real savings for employers and state governments–without unraveling existing sources of health security, without forcing workers to obtain coverage on their own, and without pressuring patients into Health Savings Accounts or tightly managed health maintenance organizations (HMOs).

What Health Care for America would do is simple: every legal resident of the United States who lacks access to Medicare or good workplace coverage would be able to buy into the “Health Care for America Plan,” a new public insurance pool modeled after Medicare. This new program would team up with Medicare to bargain for lower prices and upgrade the quality of care so that every enrollee would have access to either an affordable Medicare-like plan with free choice of providers or to a selection of comprehensive private plans.

At the same time, employers would be asked to either provide coverage as good as this new plan or, failing that, make a relatively modest payroll-based contribution to the Health Care for America Plan to help finance coverage for their workers. At a stroke, then, no one with a direct or family tie to the workforce would remain uninsured. The self-employed could buy into the plan by paying the same payroll-based contribution; those without workplace ties would be able to buy into Health Care for America by paying an income-related premium. The states would be given powerful incentives to enroll any remaining uninsured.

http://www.sharedprosperity.org/bp180.html

For the PDF version of “Health Care for America:”
http://www.sharedprosperity.org/bp180/bp180.pdf

Comment:

By Don McCanne, MD

Jacob Hacker is gifted, really (though some might contend that “gifted political scientist” is an oxymoron). Jacob Hacker cares about people. He knows that we must do something to make health care accessible and affordable for everyone.

His proposal does not break new ground in health policy. He has merely combined various concepts that have been under consideration for some time. What is very different about this proposal is that the design features comply with the perceptions of most Americans as to how they want our health care to be financed. It is just possible that he may have crossed the threshold of political feasibility.

There are some very good features in his proposal. It establishes a new and improved Medicare that competes with the existing private plans in the employer-sponsored and individual markets. Employers and individuals who are concerned about replacing their private plans with a government-run program would have the option of continuing with their current standard coverage. It is estimated that about half would switch to the Health Care for America program. It is likely that, with time, the public program would establish its superiority resulting in a massive shift in enrollment. That would bring us very close to a single payer system without having to dump it on the nation all at once. When you read his report, you will recognize that there are many other features that would help to ensure an equitable and affordable system for all.

From the perspective of a single payer advocate, there are some problems. Leaving the private insurers in place perpetuates the administrative waste of those insurers and the administrative burden on the providers. Intense regulatory oversight of the private insurers would be even more imperative since they would increase their efforts to game the system through surreptitious favorable selection and other clandestine market expediencies. The public program would likely concentrate lower-income individuals initially, risking a political transformation into a welfare program. Also his plan includes features of both an employer mandate and an individual mandate, each with its own policy problems, though he does ameliorate the impact to a certain extent with some of the other features of his plan. From a single payer perspective, it would be far better to totally cut the link between financing and coverage. A system of equitable tax funding of the entire risk pool is more efficient than a system of premiums linked to the individual. Other potential problems are evident in the report.

This is a very important contribution to the national dialogue on reform. The report should be downloaded since it will surely become a prominent part of our debate.

Since PNHP’s mission is to inform rather than to negotiate compromise, we will continue to point out specific policies in his model that could be improved. That said, Jacob Hacker’s proposal is a very welcome addition at a time that all options should be on the table. It is such a compelling model that it may shove all others off of the table – except single payer – then we can get down to a serious discussion about reform that really works.

On the Governor's Health-Care Plan

More insurance is not the answer

By Deborah Burger
San Francisco Chronicle
Thursday, January 11, 2007

While Gov. Arnold Schwarzenegger deserves credit for finally responding to the state’s imploding health-care crisis, his plan as designed has major flaws, most notably forcing the uninsured to buy what for many will mostly likely be substandard, unaffordable health plans that primarily serve to further enrich big insurers.

Some provisions in the governor’s package are welcome — notably the intent to end the disgraceful denials of coverage based on age or health status, and his pledge to assure access to health services for the undocumented.

However a plan that begins by criminalizing the uninsured with no controls on skyrocketing premiums and, at this point, no standards on what those health plans will include, is a train wreck waiting to happen. Let us hope that the state would establish uniform and comprehensive benefits for all.

In a state where health insurance typically runs up to $12,000 a year for a family of four, it’s a safe bet that many will gamble with their health and opt for the cheapest plan available. As defined by the governor’s proposal, those plans would require families to spend up to $10,000 a year in out-of-pocket medical costs. In other words, the average consumer will have to pay for presumably all of their health services in addition to the premiums the law will force them to pay.

If it sounds as if someone is making out like a bandit, that bandit has a name – the insurance industry. Insurers will gain millions while consumers will receive little in return. A mandate on individuals to buy insurance is the centerpiece of the Massachusetts health plan as well. The experience there to date does not recommend this approach. Many people are choosing not to sign up, even with the tax penalties, because they cannot afford the plans, and due to funding problems, the state has cut back on public education about the program. That’s in a state with 500,000 uninsured as compared to California’s 6.5 million uninsured.

A second area of concern is the proposal to shift some $2 billion in tax funds that now goes to hospitals to cover indigent care and use it to buy coverage for the uninsured. It takes money used for direct delivery of care, and hands it to insurance companies, which take 25 percent to 30 percent off the top for wasteful administrative expenses.

Moreover, the proposal has an ugly underside: Because 70 percent of those funds go to public hospitals and clinics, the proposal will starve the public sector of desperately needed revenue, hastening the closure or privatization of more public facilities. This could have a particularly deleterious effect on low-income communities where most public hospitals are located.

That demonstrates the biggest fundamental problem with the governor’s entire package: A market-based system always puts increased revenues and profits over the health and well-being of those patients it is supposed to serve. As was the clear intent of a number of the free-market architects of the plan, it reinforces and expands the role of the market in health care, the very source of the present crisis. If the governor’s goal is truly universal health coverage, improved quality and effective cost controls, the state should embark on the same tried-and-true course taken by every other industrialized nation, either a national health system, or a single-payer approach as embodied in the single-payer bill, SB840 authored by state Sen. Sheila Kuehl. Kuehl’s bill was vetoed by the governor last year. It will be reintroduced this year.

Under a single-payer system, such as Medicare, one public entity collects all the financing and pays for all medical services through the existing private-care delivery system, with adequate funding for our doctors, hospitals, clinics, and other care.

It’s the only plan that assures everyone is covered with one high standard of benefits and care, as opposed to good care for the wealthy only. It assures choice of physician, reduces administrative waste, provides commonsense budgeting, and ends insurance industry interference in the form of high premiums, high deductibles and denials of care.

Americans spend twice as much per person on health care as the other 21 wealthiest countries, yet World Health Organization data shows Americans live the shortest time in good health and have poorer patient outcomes in category after category from infant mortality to life expectancy to doctor visits.

Being number 21 is hardly good enough. By enacting the single-payer Kuehl bill this year, we could finally have the plan Californians need and deserve.

Deborah Burger, R.N., is the president of the California Nurses Association.

A second, third and fourth opinion on healthcare

By Sheila James Kuehl
LA Times
January 9, 2007

Sen. Kuehl (D-Santa Monica) chairs the state Senate Health Committee.

IF ATTENTION IS the precursor to action, something might finally be done in Sacramento about the dismal state of healthcare insurance in California.

Four healthcare proposals are now before the Legislature, including one crafted by Gov. Arnold Schwarzenegger, which will be spotlighted in his State of the State address tonight.

Unfortunately, that plan and two others — state Senate President Pro Tem Don Perata’s SB 48 and Assembly Speaker Fabian Nuñez’s AB 13 — are short-term solutions that have the potential to expand coverage but at the end of the day can’t be relied on to achieve what 80% of Californians say they want: a government guarantee of access to affordable healthcare coverage in the state.

In SB 48, all employers could either spend a percentage of their payroll toward employee health insurance or pay an equivalent amount into a healthcare trust fund, which would offer plans from private insurers. Insurance companies that wanted to participate in the fund would be required to restrain administrative expenses and provide a basic level of benefits. Working individuals would be required to purchase coverage for themselves and their dependants via their employers or the fund; out-of-pocket costs would be limited. For the unemployed, the plan would also expand children’s eligibility for the existing Healthy Families program.

AB 13 covers otherwise uninsured employees and their dependents through a purchasing pool paid for by employers that have two or more employees and do not offer healthcare coverage. As with the trust fund in Perata’s bill, this pool would offer healthcare coverage from private insurance companies. Workers offered coverage from their employers would be required to accept it unless premiums and out-of-pocket costs exceeded a certain level, in which case they could buy insurance from the pool. Individuals and the self-employed could buy into the pool, which would offer several plans, each of which would provide a minimum set of benefits. As with the Perata bill, the Healthy Families plan would be expanded to offer more public healthcare for the poorest children.

In their present forms, these bills are limited because they emphasize covering the employed and because they mandate that insurance will be funded by a percentage of wages, which may not be enough for all workers in the state, much less all Californians. Nor do these bills specify what is meant by basic coverage, which may mean that the insurance that is offered isn’t adequate.

Schwarzenegger’s plan, which was unveiled Monday, doesn’t do anything to solve these problems and creates some new ones. His plan mandates that every individual have insurance (not just every worker), yet it doesn’t ensure that coverage will be comprehensive and affordable.

Schwarzenegger also calls for increasing reimbursements paid to providers under public programs by billions of dollars. Like Perata and Nuñez, the governor would expand the Healthy Families program to help pay for insurance for the poorest children in the state.

How does he pay for it? Individuals and employers will contribute, but employers are required to spend only 4% of payroll to insure their employees, or contribute the same amount to a state fund. This is not sufficient to purchase insurance for the working uninsured, who will be required to have it. This means that the governor’s plan can at best provide high-cost, low-benefit plans for many Californians; it limits what employers pay but not what individuals must pay or what insurance companies can charge.

A portion of the funding for the plan would also come from federal money that is at this point only “hoped for.” There also would be a tax on providers, such as doctors and hospitals, and the governor would redirect public money now spent on poor people in hospitals to insurance companies. This would create an immediate problem for hospitals, which are already closing because of inadequate reimbursement from private insurance companies.

Finally, the governor would adopt President Bush’s plan for individual health savings accounts by requiring employers to “allow” employees to put away money, pretax, to pay for unreimbursed medical expenses. These accounts effectively shift the costs and liability of healthcare away from insurance companies and onto consumers. Such a plan would not benefit people who are already too strapped to meet current expenses, and it does nothing to expand coverage or affordability.

The fourth proposal before the Legislature is SB 840, which I wrote last year. It is the only proposal that establishes universal, affordable, comprehensive health insurance for all Californians and guarantees the right of each patient to choose his or her doctor.

SB 840 would replace insurance companies with a statewide trust fund that collects premiums paid by employers and individuals, who together would share the responsibility for funding the program. The creation of a single state fund reduces the administrative portion of California’s healthcare costs from nearly 30% to under 10%. With everyone in one pool, which spreads the risk as widely as possible, no one would be denied coverage for a preexisting condition. Individuals would be free to change jobs, start a business, go to school or start a family without losing coverage or doctors they trust.

SB 840 mandates truly comprehensive coverage; it keeps down the overall cost of healthcare; and it specifically limits the out-of-pocket costs to individuals.

The governor says he will not sign a universal insurance bill. Nevertheless, the Legislature will continue to develop the plan as the only long-term, universal solution to the health crisis.

I’m committed to working with all stakeholders — the governor, the Legislature, medical professionals, labor, business and consumers — to craft real healthcare reform this session. I believe that SB 840 provides the best way to meet the goal of universal healthcare for Californians.

Any other incremental reform must move us toward that goal.

Working to extend health care

Column by Kevin Eigelbach
Cincinnati Post
January 01, 2007

Dr. Donald L. Rucknagel has a very unscientific theory about why people – other than those with a vested interest in the present system – oppose government-funded health insurance:

In addition to the 12 already discovered, there are two cranial nerves in the human brain. Mention the words government or taxes, and the two nerves shut the brain down.

It’s the only explanation. The arguments for single-payer, universal health care are just too compelling.

In his 78th year, the former director of the Sickle Cell Center at Children’s Hospital has found the most important work of his life: lobbying for the Health Care For All Ohioans Act.

The act would set up a system of free medical care for all residents, with a patient’s choice of doctors, paid for by a combination of taxes and savings:

A 3.5 percent payroll tax paid by employers.

A 3 percent gross receipts tax on businesses.

A 6.2 percent addition to the state income tax for those making more than $90,000 a year, plus a 5 percent surtax on gross income for those making more than $200,000 a year.

$11.6 billion in cost savings from having all claims paid by a single payer, plus the savings from making preventative care more accessible.

From the office inside his home in downtown Cincinnati, Rucknagel’s helping the Single-Payer Action Network of Ohio collect 143,000 signatures supporting the Act, plus raising money to lobby for its passage.

If the General Assembly doesn’t pass the act, the group plans to collect 143,000 more signatures and put the issue on the November ballot. It’s a moral issue, Rucknagel says, quoting Martin Luther King Jr.: “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”

He can tell you story after story about how people without health insurance use the hospital emergency room as their primary care physician. This drives up costs because emergency room care costs more, and because the patients have often put off care until their condition is harder to treat.

Rising costs drive companies to stop paying for their employees’ health insurance. This creates more uninsured people, further driving up costs, and so on.

“What good is it to have all this medical care if people can’t afford it?” Rucknagel asked.

Selling the Act to the 60 percent of Ohio employers who still provide health insurance shouldn’t be hard, he said, because they would pay less than they now do. The harder sell will be to the wealthy and to the health-insurance companies, which see this as a step toward national health insurance.

That’s exactly what it is, Rucknagel says.

All progressive movements begin in the states. “The states are the laboratories of democracy,” he said. California and Ohio have the best shot at creating a system that other states can emulate, he said.

Imagine living in an Ohio with this health-care system: You wouldn’t have to check if you’re covered for a procedure before you have it. You wouldn’t have to worry that your doctor didn’t prescribe you something your insurance wouldn’t pay for.

You wouldn’t fear changing jobs because you’d lose your health insurance. You wouldn’t have health care co-pays and deductibles that threatened to bankrupt you.

Sound good? You can find out more at www.spanohio.org. Or call Rucknagel at (513) 931-3459.

Staff reporter Kevin Eigelbach writes on religion for The Post. Write him at keigelbach@cincypost.com.

Top 10 for a More Perfect Union

Editor’s Cut

By Katrina Vanden Heuvel
The Nation

The “thumping” taken by the Republican Congress on election day was not just a rejection of K Street corruption and the catastrophe in Iraq. It was a call to action on issues that are more immediately relevant to people’s lives. House Speaker Nancy Pelosi will begin to answer that call by pushing a “100 Hours” agenda–including common-sense legislation to increase the minimum wage, cut interest on student loans and open the way for Medicare to negotiate prescription drug prices.

That’s a good beginning, but it’s only a down payment on a broader agenda. As Bill Moyers writes in this issue, progressives now have the opportunity to develop a new vision that returns power to the American people for the first time in generations. Moyers is right that to-do lists don’t add up to a vision. But Democrats must show they are serious by passing bold measures that define a new “people’s agenda.” With that in mind, here are ten existing pieces of legislation that deserve to be passed by our new Congress. Some of these bills are eminently passable, a few are related to the “100 Hours” agenda and others can be seen as long-term goals. But all would help return our nation to the path to a more perfect union (note: Bill numbers may change in the new Congress).

1. Healthcare for All

More than 47 million Americans are now living without health coverage. Representative John Conyers’s United States National Health Insurance Act (HR 676) would create a single-payer healthcare system by expanding Medicare to every resident. All necessary medical care would be covered–from prescription drugs to hospital services to long-term care. There would be no deductibles or co-payments. Funding would come from sources including savings from negotiated bulk procurement of medications; a tax on the top 5 percent of income earners; and a phased-in payroll tax that is lower than what employers currently pay for less comprehensive employee health coverage. With seventy-eight Congressional co-sponsors, and the endorsement of more than 200 labor organizations as well as healthcare groups, there is muscle and momentum behind this bill. To get involved, check out www.Healthcare-Now.org.

excerpted from longer article

Jacob Hacker’s “Health Care for America”

Health Care for America

A proposal for guaranteed, affordable health care for all Americans building on Medicare and employment-based insurance

by Jacob S. Hacker
The Economic Policy Institute
EPI Briefing Paper #180
January 11, 2007

As health care costs have skyrocketed and the proportion of Americans with stable benefits has eroded, health insecurity has become a shared American experience, felt by those who thought they had it made as well as those just struggling to get by.

This growing problem is pushing health care reform back onto the agenda of American politics after more than a decade of neglect. And yet, nothing guarantees that this debate will end differently than previous battles.

To avoid the dismal fate of previous reform campaigns, a successful agenda must take seriously the political constraints and organizational realities that have hamstrung reform efforts in the past. Limits on public budgets, resistance to measures that might be seen as taking away what Americans already have, and the embedded realities of the present system all stand squarely in the path of grand policy redesigns–from single-payer national health insurance, to individual mandates requiring that everyone purchase private coverage, to a universe of individualized Health Savings Accounts. Instead, the most promising route forward is to build on the most popular elements of the present structure–Medicare and employment-based health insurance for well-compensated workers–through a series of large-scale changes that are straightforward, politically doable, self-reinforcing, and guaranteed to produce expanded health security.

Health Care for America embodies this strategy. It would extend insurance to all non-elderly Americans through a new Medicare-like program and workplace health insurance, while creating an effective framework for controlling medical costs and improving health outcomes to guarantee affordable, quality care to all. It is at once comprehensive, realistic, consistent with American values and beliefs, and grounded in the best elements of the present system. It combines employer and personal responsibility with a strong public commitment to ensuring that American workers and their families and American employers can afford coverage. It promises better care, lower costs, more choice, healthier citizens, and immensely stronger guarantees for workers and their families. And it promises real savings for employers and state governments–without unraveling existing sources of health security, without forcing workers to obtain coverage on their own, and without pressuring patients into Health Savings Accounts or tightly managed health maintenance organizations (HMOs).

What Health Care for America would do is simple: every legal resident of the United States who lacks access to Medicare or good workplace coverage would be able to buy into the “Health Care for America Plan,” a new public insurance pool modeled after Medicare. This new program would team up with Medicare to bargain for lower prices and upgrade the quality of care so that every enrollee would have access to either an affordable Medicare-like plan with free choice of providers or to a selection of comprehensive private plans.

At the same time, employers would be asked to either provide coverage as good as this new plan or, failing that, make a relatively modest payroll-based contribution to the Health Care for America Plan to help finance coverage for their workers. At a stroke, then, no one with a direct or family tie to the workforce would remain uninsured. The self-employed could buy into the plan by paying the same payroll-based contribution; those without workplace ties would be able to buy into Health Care for America by paying an income-related premium. The states would be given powerful incentives to enroll any remaining uninsured.

http://www.sharedprosperity.org/bp180.html

For the PDF version of “Health Care for America:”
http://www.sharedprosperity.org/bp180/bp180.pdf

Comment:

By Don McCanne, MD

Jacob Hacker is gifted, really (though some might contend that “gifted political scientist” is an oxymoron). Jacob Hacker cares about people. He knows that we must do something to make health care accessible and affordable for everyone.

His proposal does not break new ground in health policy. He has merely combined various concepts that have been under consideration for some time. What is very different about this proposal is that the design features comply with the perceptions of most Americans as to how they want our health care to be financed. It is just possible that he may have crossed the threshold of political feasibility.

There are some very good features in his proposal. It establishes a new and improved Medicare that competes with the existing private plans in the employer-sponsored and individual markets. Employers and individuals who are concerned about replacing their private plans with a government-run program would have the option of continuing with their current standard coverage. It is estimated that about half would switch to the Health Care for America program. It is likely that, with time, the public program would establish its superiority resulting in a massive shift in enrollment. That would bring us very close to a single payer system without having to dump it on the nation all at once. When you read his report, you will recognize that there are many other features that would help to ensure an equitable and affordable system for all.

From the perspective of a single payer advocate, there are some problems. Leaving the private insurers in place perpetuates the administrative waste of those insurers and the administrative burden on the providers. Intense regulatory oversight of the private insurers would be even more imperative since they would increase their efforts to game the system through surreptitious favorable selection and other clandestine market expediencies. The public program would likely concentrate lower-income individuals initially, risking a political transformation into a welfare program. Also his plan includes features of both an employer mandate and an individual mandate, each with its own policy problems, though he does ameliorate the impact to a certain extent with some of the other features of his plan. From a single payer perspective, it would be far better to totally cut the link between financing and coverage. A system of equitable tax funding of the entire risk pool is more efficient than a system of premiums linked to the individual. Other potential problems are evident in the report.

This is a very important contribution to the national dialogue on reform. The report should be downloaded since it will surely become a prominent part of our debate.

Since PNHP’s mission is to inform rather than to negotiate compromise, we will continue to point out specific policies in his model that could be improved. That said, Jacob Hacker’s proposal is a very welcome addition at a time that all options should be on the table. It is such a compelling model that it may shove all others off of the table – except single payer – then we can get down to a serious discussion about reform that really works.

On the Governor’s Health-Care Plan

More insurance is not the answer

By Deborah Burger
San Francisco Chronicle
Thursday, January 11, 2007

While Gov. Arnold Schwarzenegger deserves credit for finally responding to the state’s imploding health-care crisis, his plan as designed has major flaws, most notably forcing the uninsured to buy what for many will mostly likely be substandard, unaffordable health plans that primarily serve to further enrich big insurers.

Some provisions in the governor’s package are welcome — notably the intent to end the disgraceful denials of coverage based on age or health status, and his pledge to assure access to health services for the undocumented.

However a plan that begins by criminalizing the uninsured with no controls on skyrocketing premiums and, at this point, no standards on what those health plans will include, is a train wreck waiting to happen. Let us hope that the state would establish uniform and comprehensive benefits for all.

In a state where health insurance typically runs up to $12,000 a year for a family of four, it’s a safe bet that many will gamble with their health and opt for the cheapest plan available. As defined by the governor’s proposal, those plans would require families to spend up to $10,000 a year in out-of-pocket medical costs. In other words, the average consumer will have to pay for presumably all of their health services in addition to the premiums the law will force them to pay.

If it sounds as if someone is making out like a bandit, that bandit has a name – the insurance industry. Insurers will gain millions while consumers will receive little in return. A mandate on individuals to buy insurance is the centerpiece of the Massachusetts health plan as well. The experience there to date does not recommend this approach. Many people are choosing not to sign up, even with the tax penalties, because they cannot afford the plans, and due to funding problems, the state has cut back on public education about the program. That’s in a state with 500,000 uninsured as compared to California’s 6.5 million uninsured.

A second area of concern is the proposal to shift some $2 billion in tax funds that now goes to hospitals to cover indigent care and use it to buy coverage for the uninsured. It takes money used for direct delivery of care, and hands it to insurance companies, which take 25 percent to 30 percent off the top for wasteful administrative expenses.

Moreover, the proposal has an ugly underside: Because 70 percent of those funds go to public hospitals and clinics, the proposal will starve the public sector of desperately needed revenue, hastening the closure or privatization of more public facilities. This could have a particularly deleterious effect on low-income communities where most public hospitals are located.

That demonstrates the biggest fundamental problem with the governor’s entire package: A market-based system always puts increased revenues and profits over the health and well-being of those patients it is supposed to serve. As was the clear intent of a number of the free-market architects of the plan, it reinforces and expands the role of the market in health care, the very source of the present crisis. If the governor’s goal is truly universal health coverage, improved quality and effective cost controls, the state should embark on the same tried-and-true course taken by every other industrialized nation, either a national health system, or a single-payer approach as embodied in the single-payer bill, SB840 authored by state Sen. Sheila Kuehl. Kuehl’s bill was vetoed by the governor last year. It will be reintroduced this year.

Under a single-payer system, such as Medicare, one public entity collects all the financing and pays for all medical services through the existing private-care delivery system, with adequate funding for our doctors, hospitals, clinics, and other care.

It’s the only plan that assures everyone is covered with one high standard of benefits and care, as opposed to good care for the wealthy only. It assures choice of physician, reduces administrative waste, provides commonsense budgeting, and ends insurance industry interference in the form of high premiums, high deductibles and denials of care.

Americans spend twice as much per person on health care as the other 21 wealthiest countries, yet World Health Organization data shows Americans live the shortest time in good health and have poorer patient outcomes in category after category from infant mortality to life expectancy to doctor visits.

Being number 21 is hardly good enough. By enacting the single-payer Kuehl bill this year, we could finally have the plan Californians need and deserve.

Deborah Burger, R.N., is the president of the California Nurses Association.