Legislative Committee Clears Two Differing Approaches To Health Care Reform

By DIANE LEVICK
Hartford Courant Staff Writer
March 14 2007

A bill to create a single health insurer in Connecticut – an anathema to the industry – won half-hearted approval Tuesday from a legislative panel, which also passed a reform bill the industry favors.

The Insurance and Real Estate Committee, in a 12-7 vote, approved a bill aimed at creating a “single-payer” system to ensure coverage for all Connecticut residents not on Medicare.

Several Democrats on the committee, including committee Co-chairman Brian J. O’Connor, said they were voting for the Connecticut Saves Health Care bill simply to keep reform debate going despite misgivings about potential job loss in the insurance industry.

State Rep. Christopher R. Stone, D-East Hartford, who voted yes Tuesday, said he wouldn’t support the bill on the House floor.

The bill’s proponents, though, scored the vote a victory because it showed a major shift in the climate for universal health care and keeps the single-payer idea afloat.

The Connecticut Saves Health Care program would replace the current system of employer-based and individually purchased policies, taking away much of the role of private health insurers. However, they wouldn’t be prevented from selling supplemental coverage.

The insurance committee is known for preserving the role of insurance companies in health care, but “what they’ve said today with their vote is the system is broken and we need to change it,” said Phil Sherwood, legislative director of the Connecticut Citizen Action Group. “I think that rang loud and clear.”

Legislators of both parties, however, voiced worries about insurance industry jobs in Connecticut, should there be a switch to a single-payer system.

State Sen. Louis C. Deluca, R-Woodbury, the committee’s ranking member, said Iowa has become as big or bigger a mecca for insurers than Connecticut because of legislators’ actions here over the years.

“We continually give them reasons not to be here,” he said. “I believe this would be another one.”

Keith Stover, a lobbyist for the Connecticut Association of Health Plans, warned that “If Connecticut wants to maintain its pre-eminence as an insurance state, I would think that passage of single-payer would be about the worst possible message you could send to the industry.

“It’s a lot of families that are supported by the insurance industry, a lot of mouths are fed, a lot of children put through college, and the idea that people are willing to just chuck that is extremely disturbing.”

But state Rep. John C. Geragosian, D-New Britain, praised the single-payer concept, saying, “Insurance companies don’t add any value in this [current] system” and that “it’s time to take some bold action” to solve the health care crisis.

Stover blanched at that, saying after the meeting that “essentially every innovation in health insurance, from chronic disease management to consumer-driven health plans, etc., all come from the minds here in Hartford, in Connecticut.”

Tuesday’s vote was a “victorious first step toward comprehensive change,” said Juan A. Figueroa, president of the Universal Health Care Foundation of Connecticut, which had pushed the single-payer bill.

The vote, he said, “acknowledges that incremental steps are not the way to fix our state’s broken health care system.”

The vote for a single-payer system also drew praise from Council 4 of the American Federation of State, County and Municipal Employees, the largest AFL-CIO union in the state, and from Citizens for Economic Opportunity, a labor-community coalition.

But a single-payer system is “potentially unsustainable” from a funding standpoint, said Eric George, associate counsel at the Connecticut Business and Industry Association, which has “grave concerns” about the idea.

The state already under-funds Medicaid payments to hospitals, driving hospitals to make up a part of the shortfall through reimbursements from private insurers, George said. In a single-payer system, health care providers wouldn’t have private insurers to fall back on, he said.

The insurance committee removed funding provisions from the bill because there was no consensus, measures that would have levied a 50 percent surcharge on the state income tax and an 8 percent payroll tax on employers of a certain size. The bill now goes to the Senate.

The committee also passed a revised version of the Healthy Steps bill, which Stover said “provides the most rational framework for ongoing discussion” and relies on a market-based system.

The bill, which now heads to the House, would create a new Health Care Reform Commission to develop a more affordable health plan for small employers of 50 or fewer employees.

The state would contract with a private nonprofit organization that would serve as an insurance purchasing pool for previously uninsured individuals and small employers to buy coverage.

The Connecticut Connector program would offer three kinds of health plans, including a high-deductible plan linked with a health savings account.

Legislators removed from the bill a proposed 3 percent tax on revenue of health care providers in Connecticut that would have helped to fund some of the provisions. Doctors protested the tax at a committee hearing last week.

The bill would provide tax credits at varying levels to small employers that provide health insurance that meets or exceeds the standards set for the affordable plan to be developed.

The measure also calls for expansion of the state’s Husky insurance program, and increased reimbursement to doctors, dentists and hospitals from insurers serving Medicaid members.

Contact Diane Levick at dlevick@courant.com.

Copyright 2007, Hartford Courant

The Nation
[from the March 26, 2007 issue]

Editorial

The need to expand access to affordable healthcare is rapidly emerging as the top domestic policy issue in the 2008 presidential race. And no wonder: With the number of uninsured now up to nearly 47 million, and more than one-third of that total consisting of households with family incomes of $40,000 or more, lack of health insurance has become a concern not just of the poor but also of the middle class. Moreover, soaring medical costs–increasing in large part because at least one of every five healthcare dollars goes to administrative costs and insurance company profits–are a worry even to those who have some form of insurance. More than half of personal bankruptcies today are caused by illness or medical debts.

There’s no mystery about the fix Americans want: Nearly two-thirds of those surveyed in a recent New York Times/CBS poll say the government should guarantee health coverage for all Americans. Half said they’d willingly pay as much as $500 a year more in taxes to pay for universal coverage. To do that, this country needs to establish a single-payer system–one inspired by Canada and other developed countries but distinctly American in approach. There’s already legislation, with seventy-eight co-sponsors–the United States National Health Insurance Act (HR 676)–that would accomplish this by expanding and improving the existing Medicare system. The popularity of such an approach, endorsed March 6 by the AFL-CIO executive council, is illustrated by the ease with which California legislators passed a single-payer plan last year–only to have Governor Schwarzenegger veto it. In late February, the plan was introduced again, as part of a reform-from-below push that is seeing states tackle the healthcare crisis.

Ultimately, however, America needs a national fix.

Americans have lost hope that the Bush Administration will do anything to address the national healthcare crisis. Only 24 percent of those in the New York Times/CBS poll said they were satisfied with Bush’s handling of the issue. And that number will surely shrink with recent revelations about the deplorable conditions at the Army’s Walter Reed Hospital–another reminder of this Administration’s incompetence. But so far most of the major presidential candidates have failed to take advantage of Bush’s low standing to advance bold proposals.

Among the candidates, Congressman Dennis Kucinich has a long record of embracing single-payer proposals. Unfortunately, he is a lonely leader. The front-running Democratic contenders remain vague and cautious. Senator Barack Obama says, “I am absolutely determined that by the end of the first term of the next President, we should have universal healthcare in this country.” Senator Hillary Clinton says she would enact “health insurance for every child and universal healthcare for every American”–with specifics “yet to come.” Former Senator John Edwards moves beyond rhetoric to a plan: He would require everyone to have insurance and require employers either to provide coverage or pay into a fund to provide it. But although he reaches out to labor on other issues, Edwards is unwilling to embrace HR 676, which has earned support from nine international unions, seventeen state federations and sixty-three central labor councils.

Voters have to demand more if they want more. Obama at least recognizes the frustration of Americans for whom meaningful healthcare reform has been a dream deferred at least since the collapse of the Clinton Administration’s bureaucratic proposals of the mid-1990s. The Clinton plan rejected single-payer and embraced a complicated hybrid that relied too heavily on the same insurance companies that had failed to make healthcare affordable and accessible. “We can’t afford another disappointing charade in 2008, 2009 and 2010,” says Obama. He’s right. But he and his fellow front-runners should recognize that as long as they avoid talking about single-payer and continue to tinker around the edges of the current system, they are players in the charade.

by David Moberg
In These Times
03/7/07

Like the creature from the Black Lagoon, the health insurance monster has returned, creeping back onto the public stage. After President Clinton’s jury-rigged pen to contain the monster collapsed in 1994, it never really went away. Political leaders tried to ignore the beast or deal piecemeal with its ravages, but it pushed more unsuspecting civilians into the uninsured pit, devoured more family budgets, squeezed even giant corporations’ ability to compete globally, and raised fear and insecurity among the populace.

Now its depredations have become too loathsome to ignore for even cautious politicians and business executives — who still are inclined to see the monster as one of their own. After a rebuff in the fall elections, when voters ranked health care as one of their top concerns, President Bush offered a plan that almost certainly would not deliver his promise of “quality, affordable health care for all Americans.”

Recently, chief executives like Lee Scott of Wal-Mart — under attack for its skimpy health insurance coverage of employees — and Steve Burd of Safeway — which endured a long strike by southern California grocery workers to cut their health insurance — joined progressive leaders like Service Employees Industrial Union (SEIU) President Andy Stern, head of the nation’s largest health workers union, to call for major changes in the health care system. Under fire from both other labor unions and many citizen health care groups for joining with strange bedfellows on behalf of very broad principles, Stern argues that “the most essential change is to get everyone in a system where they have health care,” then work to improve it.

Although the war in Iraq is likely to dominate the already energetic Democratic presidential primary race, health care is emerging as the leading domestic issue in both parties. Shortly after announcing his candidacy, John Edwards laid out a comprehensive health care plan. Barack Obama said that the nation should provide universal insurance coverage by the end of the next president’s term, though so far he has mostly advocated for minor and politically easy reforms, like computerizing health records. Republican candidate Mitt Romney signed a flawed plan for universal health care when he was governor of Massachusetts, and California Gov. Arnold Schwarzenegger, after vetoing statewide single-payer legislation passed last year, has his own health insurance plan.

There’s reason for hope when leaders across the political spectrum recognize the problem. But there’s no guarantee that such agreement will lead to a good solution. For more than a decade, conventional wisdom has dictated that only incremental steps should be taken. Now more politicians are willing to consider bolder steps — but the right is still determined to push its agenda. And many progressive reformers are cautious about pursuing their ideals, as they continue to nurse scars from the fight business interests waged against the Clinton plan.

“Overwhelmingly, people are trying to find incremental responses instead of a national response,” says Marilyn Clement, national coordinator of Healthcare-NOW, a coalition advocating a public insurance program as the single payer of health care bills. “They are still putting forward the same proposals as last summer, such as ‘The first step is to get national health care for children.’ Well, that’s good, but we won the election. It’s time to escalate our hopes.”

The first crucial step is to define the problem. For many people, it’s the rising number of Americans without health insurance, now nearly 47 million. But equally problematic is the decline in quality and scope of coverage for those who have insurance. And much of the public ranks the cost of health care as their top medical and economic concern. Focusing primarily on insuring everyone won’t necessarily solve those problems. Indeed, the skyrocketing cost of health care is the main reason that the ranks of the uninsured continue to grow. Faced with rising insurance premiums, businesses have been trying to cut costs by evading responsibility for providing health insurance, leading Stern to declare that “the employer-based health care system is dead.”

But the more fundamental problem is our reliance on private, for-profit corporations to provide health insurance — the real monster in this saga. They’re the main reason for rising costs (making health insurance in the United States about twice as expensive as in most industrial countries), for the growing number of uninsured, and for the inferior health results for the average American. In 2004, the United States spent $6,100 per capita on health care, compared to $2,250 per capita on average by the countries in the Organization for Economic Cooperation and Development, which have national health insurance programs. Because public expenditures cover 60 percent of American health care costs, U.S. taxpayers are paying more than the cost of national health insurance, but not receiving it.

“How much can a new system depend on private insurance companies to provide affordable, good health care for everyone?” asks Roger Hickey, co-director of Campaign for America’s Future, a Washington, D.C.-based progressive advocacy group. “That should be the debate.”

Now the country is faced with two radically different proposals for reform. The first, pushed by conservatives and embraced by Bush in his new plans, would make individuals more responsible for buying their own health insurance. While giving them tax breaks to help pay the premiums, it would push them in the direction of lower-cost, less comprehensive plans (partly by taxing employer-provided insurance as income). As part of this strategy, conservatives have also undermined Medicare, first, by subsidizing private insurance companies to provide Medicare insurance and, second, by establishing a prescription program only available through private insurers.

The Bush strategy would be a boon for wealthy and healthy individuals, as well as employers and insurance companies, but it would ultimately leave most Americans paying more for less health security. The harsh edges of the plan could be softened — by regulating the insurance companies’ attempts to charge more or deny coverage to people seeking insurance, or by offering tax credits or direct subsidies to the poor instead of tax deductions. But these changes still embody what economist Jared Bernstein, of the progressive think tank the Economic Policy Institute, calls YOYO (“You’re On Your Own”) economics.

The diametrically opposite alternative is to recognize that “we’re in this together” (WITT, in Bernstein’s schema) and move towards social insurance, or a plan like Medicare. In this case, the federal government — through a public agency — would provide comprehensive insurance. It would be financed directly by progressive taxes on individuals and business, unlike the current system, which provides $200 billion a year in economically regressive and largely unrecognized tax deductions to subsidize employer-based health insurance. The public insurance agency would then bargain with health care providers, drug companies and others to control prices and improve quality of care.

The Bush YOYO strategy assumes that when health care consumers — otherwise known as patients — confront costs of medical care, they’ll consume less, and overall medical costs will go down. But Americans already spend more out-of-pocket on health care and use doctors and hospitals less than citizens of almost every other industrialized country. Yet, while the overall health cost in the United States is much higher, the outcomes — by virtually every measure of health — are worse. U.S. health care costs more mainly because of private insurance: Overhead at insurance companies runs close to 20 percent of total revenues, compared to less than 4 percent for Medicare. When the extra administrative costs imposed on providers are counted, the overall overhead that private insurance imposes on the system eats up about one-third of what Americans spend on health care. Eliminating those costs, as proposed by Rep. John Conyers (D-Mich.) and supported by Ohio Rep. and Democratic presidential candidate Dennis Kucinich, could finance most of a Medicare expansion to cover all Americans much more comprehensively than the program does now.

MOST PROGRESSIVE REFORMERS acknowledge that Medicare for everyone would best slay the health crisis monster, but many strategists worry that trying to eliminate the private insurers will provoke a withering counterattack. Consequently, many current proposals try, as Hillary Clinton did in 1993, to preserve a more regulated role for the insurance companies and at the same time expand public programs, on the model of Medicare, to provide a competitive alternative to private insurers.

Edwards’ plan would require employers to cover employees or help pay for their insurance (what’s widely known as “pay or play”). Everyone would have to buy insurance, taking advantage of tax credits, expanded programs such as Medicaid and the State Children’s Health Insurance Program, or new regional “health markets” that would provide a choice of competitive private plans and a public plan. Along the same lines, but with a simpler design and more robust public component, Yale political scientist Jacob Hacker proposes that everyone not in Medicare be covered either by insurance at work or a public insurance pool, including both regulated private plans and a Medicare-like plan.

Both these proposals move in the direction of Medicare for all, but strike a compromise with the existing system, losing the potential for better efficiency and more equity in the bargain. Why not push for universal Medicare (aka, a “single payer” plan)? Proponents of compromises say Medicare for all is a political non-starter. Americans, they argue, are suspicious of government, like choices and often like the private insurance they already have. And besides, they say, the insurance industry — along with most business interests and political conservatives — would launch a scorched earth campaign against such a proposal.

“There are a lot of dedicated, smart people who have made the judgment that taking some steps toward a comprehensive system with a public health care plan is better than waiting for the perfect system,” says Hickey, whose organization supports Hacker’s proposal. The labor movement, which was divided over support of a single-payer system in the ’90s, seems even more cautious now. “The political will isn’t there now, but it could get there for single-payer,” says AFL-CIO health care lobbyist JoAnn Volk. A close union ally adds, “Most of the labor movement has already accommodated to the reality that we’re not going to get a pure single-payer system. They have made the judgment that it’s just not within the range of possibility.”

SEIU’s Stern — who has argued that the United States needs an “American” plan, and not a foreign model like Canada’s single-payer system — says, “First we should create [a health care system] in which everyone is covered, then we can figure out how to rationalize it. It will cost more money than if we did it the other way [i.e, pursing the best alternative], but I think we have more chance of getting it done. The perfect cannot be the enemy of the good.”

ALTHOUGH A SMALL but rebounding movement for some form of Medicare-for-all exists, some progressive groups that would be its natural partisans are reluctant to commit themselves to a specific plan. William McNary, president of USAction, a national group of statewide citizen organizations, notes that many of their allies are splintering over proposals. “Things are fracturing,” he says, “it would be best for us to line up behind principles,” and not a plan. Jim Dean, chairman of Democracy for America, a liberal movement within the Democratic Party, thinks the United States is ripe for universal health care, but worries about both infighting over the best plan and the specter of corporate attacks. He wonders, “Can we figure out a way to talk about this so as not to get bogged down, sway, with “Harry and Louise” commercials [that the insurance industry used against President Clinton’s plan]?”

But there’s no guarantee that insurance companies won’t launch a war against these compromises, especially any that curtail insurance industry profits. And corporations that support universal health insurance will almost certainly oppose any plan that doesn’t seriously reduce their financial responsibility, which would threaten to shift costs to individuals. “Everyone says they’re for universal health care,” says Don Bechler, chair of the California Universal Health Care Organizing Project. “But the fundamental question is, ‘Who pays?’ Is [universal health care going to be] a sliding scale health care plan where everyone is entitled to first class health care, or a flat tax to sell junk insurance?”

When Clinton tried to finesse such political opposition by making insurance companies central to his plan, he suffered merciless attacks. No plan worth having will win without a massive grassroots organizing and education campaign. And Medicare for all is the one most likely to do so, while simultaneously strengthening progressives politically.

The American people are at least open to the argument. In a 2003 Washington Post poll, one of the few to pose alternatives fairly, 62 percent of respondents said they would prefer a universal health insurance program like Medicare, run by the government, to the current health insurance program. And support for the Medicare program remained nearly as high even if it limited the choice of doctors or led to waiting lists for non-emergency procedures.

Eventually, Medicare-for-all advocates might have to settle for a compromise. But the opportunity for major change in the health care system doesn’t come around very often. Since any change will require a massive effort, why not fight for the best?

By Jennifer L. Boen
Fort Wayne News-Sentinel
Thu, Mar. 08, 2007

The stories told by the uninsured and underinsured reverberate in the mind of emergency room doctor Robert Stone, who works in Bloomington: People delay care because they don’t have health insurance or skip or stop taking medications because they can’t afford them. A less serious medical problem becomes catastrophic because of the delays or lack of medication.

Nationally, 46.6 million people are uninsured, according to 2005 U.S. census data; 860,000 of those are Hoosiers. Many health-care providers, consumers and their families are calling for a change and will address the problem at a public forum on Monday titled “Citizen’s Hearing on Healthcare for All.”

Stone, who co-founded Hoosiers for a Commonsense Health Plan, is keynote speaker at the event. The organization is promoting the health-care reform agenda laid out by Physicians for a National Health Program. The groups seek universal, comprehensive coverage for everyone through a single-payer health insurance system that is publicly financed but privately delivered. Rather than employer-based health insurance, all people would participate in a plan that would give access to all — similar to the way Medicare works for people 65 and older.

“This is not socialized medicine,” with doctors and hospitals government-owned, Stone said.

A Medicare-like system for all would require raising taxes, but those taxes would take the price of premiums, which continue to escalate for employers and employees, he said.

A 2003 study by Harvard Medical School and the Canadian Institute for Health Information found 31 percent of U.S. health-care dollars are spent on administration and overhead, compared to 17 percent in Canada.

“Medicare runs about 3 percent overhead,” compared to insurance companies’ 20 percent to 30 percent overhead, Stone said.

Park Center President/CEO Paul Wilson calls U.S. health care a “non-system.” “The confusion and fragmentation is so expensive and so wasteful. It’s a real tragedy we spend so much money on health care, and we leave so many people out.

“We see huge numbers of people who don’t have any insurance or don’t have mental-health coverage,” Wilson said about the community mental health center. “What we’ve developed in this country is all kinds of stopgap measures. People in their most vulnerable time running across town to the (township) trustee’s office, or to a church for help.”

The ASK clinic is one of several free clinics in Allen County.

“The numbers here just keep going up,” said ASK director Eve Bratton. “It used to be the generational poor we saw. Then it became people laid off from their jobs. Now we’re seeing people still in college and people among the middle class. We’re seeing sicker people. It’s not uncommon for me to see blood pressures of 260/120 (normal pressure is 120/80), because people can’t take their medicine, and they delay care.

“The health-care system is absolutely collapsing, and people are falling through the safety net,” Bratton said.

Dr. Matthew Farber is an ophthalmologist and surgeon with Allen County Retinal Surgeons. “In talking with physicians, some say things such as, ‘I don’t know if people are going to be happy waiting for care as in Canada,’ which has a single-payer system.

But the reality, Farber says, is even though U.S. health-care spending was nearly $2 trillion in 2004 and is expected to reach $4 trillion by 2015, “In the end, it’s not as if people live longer here,” compared to Canada.

Americans want new medicines and life-saving technologies, yet also want to preserve the free-market system and competition. For example, three medicines are used to treat glaucoma, Farber said. All are costly, and the companies who make them “don’t compete by trying to get a bigger (sales) share by lowering the price. Sure we want the pharmaceutical industry to come up with new therapies, but in the end, there can be only so much spent on pharmaceuticals.”

For too long, the health-care system has not promoted or reimbursed doctors for preventive medicine. Now a growing epidemic of diabetes, chronic lung disease, high blood pressure and other conditions, along with the largest segment of the population entering their senior years, is overwhelming the system.

“There aren’t any easy answers,” Farber said, “but the current system isn’t working. We have to get Congress to be willing to stand up and try and improve things.”

The economic ramifications of health-care costs are far-reaching, Stone said. Big industries wanting to compete internationally find themselves at a disadvantage because of American health insurance costs. People running small businesses cannot afford to pay premiums. Wilson says he has found 7,200 health insurance plans exist in the United States. “It’s bizarre, craziness. I suppose we could have a more wasteful system — but I don’t know how.”