California HealthCare Foundation
Press Release
July 9, 2002

A survey released today by the California HealthCare Foundation (CHCF) and The Field Institute finds that large majorities of registered California voters oppose making cuts to health care programs for low-income and disabled Californians…

A majority of voters support the basic tenets of the state’s Medi-Cal program. For example, 77 percent agree that government should provide basic medical coverage to low-income or disabled adults who can’t afford insurance. This proportion increases to 84 percent of voters when asked about government providing medical coverage to the children of low-income families.

When voters were asked whether they would favor or oppose eight possible tax increase proposals as a way for the state to avoid making major cutbacks in medical services to low-income Californians and the disabled, 94 percent support at least one of the eight tax options. Receiving the broadest support were a 5-cents-per-serving increase in state alcohol taxes (78 percent), a 50-cent-per-pack increase in tobacco taxes (74 percent), temporarily increasing the personal income tax rate of the state’s top income earners (over $130,000 or $260,000 for couples) (68 percent), and canceling the scheduled cuts in state motor vehicle registrations fees (53 percent).

On the other hand, just 28 percent of voters support temporarily increasing the state gasoline tax by 5 cents per gallon as a way to preclude major cutbacks in the Medi-Cal budget. In addition, just 34 percent favor temporarily increasing the personal income tax rate for individuals earning more than $37,000 and couples making more than $75,000 for this purpose. Voters oppose temporarily increasing state sales taxes by 1 percent to avoid Medi-Cal budget cuts by a 59 percent to 40 percent margin. Voters are somewhat more divided (50 percent opposed and 45 percent in favor) when asked about temporarily increasing state business income taxes to forestall major Medi-Cal cutbacks.

http://www.chcf.org/press/view.cfm?itemid=19813

Comment: It is refreshing to see a survey that demonstrates strong public support for health care programs for those with the greatest need. In this poll, the support extends to a willingness to pay taxes to support these programs. And, furthermore, the strongest support is for sin taxes and progressive income taxes strongly weighted toward the high end.

The public seems to be getting it right, even if there is an element here of “tax the guy behind the tree.”

Health Affairs July/August 2002

by Steffie Woolhandler and David U. Himmelstein

Most Americans have private health insurance. Citizens of most other wealthy nations have national health insurance. Hence the perception that those nations’ health care systems are public while ours is private. But these labels obscure the predominance of private medical practice and hospitals in Canada and most European countries and the dominance of tax-financed health care in the United States. … Americans now pay higher taxes per capita for financing health care than do any other nation’s citizens.

The huge role of the government in financing American health care is obscured by the fact that nearly one-third of these tax dollars meander through private insurers on their way to the patient’s bedside. What originates as taxes paid by private households ends up as recycled “private” spending in the CMS accounts (Centers for Medicare and Medicaid Services). Insurance firms not only siphon off overhead and profits in the process, they also inflict huge paperwork burdens and costs on providers. We have detailed these costs in the past. For 1999 we estimate that health administration spending was more than $309 billion. At least half of this could have been saved through a shift to national health insurance. Disinterested civil servants, and even skeptics, agree that U.S. health care costs need not rise under national health insurance because administrative savings would roughly offset the increased costs of care for today’s uninsured and underinsured persons.

While national health insurance wouldn’t cost Americans more, it would mean that taxes would pay a bigger share of health care costs and that private insurance and patients would pay a smaller share. Yet government now spends far more on health care-and national health insurance would require a smaller tax increase -than most Americans believe. The step from our current level of tax financing -59.8 percent-to Canada or Australia’s 70 percent is less steep than the CMS figures on public spending imply. About $130 billion per year-the amount of the recent tax cuts-would get us from here to there.

http://www.healthaffairs.org/ (For non-subscribers, the abstract is available.)

Comment: It is crucial to understand that an increase in taxes to fund national health insurance does NOT mean that health care costs are increased. Numerous studies have demonstrated that the administrative savings produced by converting from our inefficient system, which includes the fragmented health plan marketplace, to a single national health insurance program would fund all current care PLUS the voids in care that now exist. Net spending would not increase.

Then why would health care taxes increase? The current inequitable private financing of our heath care system through direct payments, insurance premiums, businesses’ indirect costs of health care transferred to consumer products and services, and a myriad of other hidden costs of health care would be dramatically reduced. This dysfunctional system of funding health care would be displaced by a tax system specifically designed to establish equity in the funding of health care.

Our tax system already funds half again as much as our private funding of health care. But even in the publicly funded sector, we have neglected equity. Perhaps the most egregious example is the regressive nature of the deductibility of employer premium payments. Tax systems have a moral and ethical mandate to establish equity. We should demand equity, not only in the current tax funding, but in the funding of our entire health care system by accepting a modest increase in taxes balanced with a reduction in administrative waste and a reduction in the inequity of private funding. It won’t cost us any more, but it would establish fairness for all of us.

And, oh… yes… Accomplishing this through a national health insurance program would have one additional benefit: comprehensive, affordable health care for everyone.

The Washington Post
July 7, 2002
By Michelle Singletary

My family has health insurance through my job. But what if I were pink-slipped because of some accounting irregularity that caused my company to go bankrupt? What if my company decided that the best way to pump up its stock price was to announce major layoffs?

I’ll tell you what I would do: I’d immediately sign up to continue my coverage through COBRA.

In theory, COBRA is a good law. In practice, most workers can’t afford to pick up the coverage. Only 7 percent of unemployed workers or their families used COBRA in 1999, according to the Kaiser Commission on Medicaid and the Uninsured.

I understand why so many people, faced with the high cost of this coverage, decide not to take advantage of their COBRA rights. If you and your dependents are healthy and money is tight, paying the mortgage or the car loan is your priority.

But life has a way of shifting priorities and problems. Many people who file for bankruptcy protection do so because they can no longer handle the crush of medical bills as a result of a catastrophic illness.

Is it fair that in a country as rich as ours there is anyone who has to worry about being denied health care because of its cost?

Absolutely not. All of us should be concerned, and we should work to change a system in which receiving good health care often comes down to the jobs we hold.

But until things do change, you need to prepare for the worst. In addition to saving at least three months’ living expenses, pump up that bank account to include the possibility that you may have to pay your full health insurance premium.

… if you have a good income, learn to live on less. Stop buying things you don’t need so when a crisis hits — medical or otherwise — you have some financial resources to fall back on, at least for a little while.

http://www.washingtonpost.com/wp-dyn/articles/A31306-2002Jul6.html

Comment: And if you don’t have a good income?

Universal insurance is the only answer.

The Washington Post
July 7, 2002
By Michelle Singletary

My family has health insurance through my job. But what if I were pink-slipped because of some accounting irregularity that caused my company to go bankrupt? What if my company decided that the best way to pump up its stock price was to announce major layoffs?

I’ll tell you what I would do: I’d immediately sign up to continue my coverage through COBRA.

In theory, COBRA is a good law. In practice, most workers can’t afford to pick up the coverage. Only 7 percent of unemployed workers or their families used COBRA in 1999, according to the Kaiser Commission on Medicaid and the Uninsured.

I understand why so many people, faced with the high cost of this coverage, decide not to take advantage of their COBRA rights. If you and your dependents are healthy and money is tight, paying the mortgage or the car loan is your priority.

But life has a way of shifting priorities and problems. Many people who file for bankruptcy protection do so because they can no longer handle the crush of medical bills as a result of a catastrophic illness.

Is it fair that in a country as rich as ours there is anyone who has to worry about being denied health care because of its cost?

Absolutely not. All of us should be concerned, and we should work to change a system in which receiving good health care often comes down to the jobs we hold.

But until things do change, you need to prepare for the worst. In addition to saving at least three months’ living expenses, pump up that bank account to include the possibility that you may have to pay your full health insurance premium.

… if you have a good income, learn to live on less. Stop buying things you don’t need so when a crisis hits — medical or otherwise — you have some financial resources to fall back on, at least for a little while.

http://www.washingtonpost.com/wp-dyn/articles/A31306-2002Jul6.html

Comment: And if you don’t have a good income?

Universal insurance is the only answer.

The New York Times
July 6, 2002
By Milt Freudenheim

With Congressional passage of a Medicare drug benefit still far from certain, about half the states are at least considering joining a Bush administration program that will provide federal matching money to extend drug coverage to elderly people whose incomes are modest but too high for Medicaid.

Some states are shunning the program, however, warning of financial risks for their Medicaid budgets and the low-income people they already serve.

So why are some states concerned? Because under the new federal program, which will provide each participating state a waiver from Medicaid law, there will be a federal subsidy ceiling that will rise no higher, over the five-year span of the waiver, than the total federal contribution for Medicaid that a state received before the new drug program.

In other words, from Washington’s perspective the new program will be “budget neutral”: for each dollar that a state receives under the program, it must find a dollar of savings elsewhere in the government’s contribution to Medicaid.

Cindy Mann, a Medicaid expert at the Kaiser Family Foundation:

“The waivers put all the risks onto the states and the beneficiaries. That is a fundamental change in the way the Medicaid program is normally financed.”

http://www.nytimes.com/2002/07/06/politics/06PLAN.html

Comment: The policy implications are important from two perspectives: the implications for the current Medicaid and Medicare programs, and the implications in the future once we have a universal program of health insurance.

Medicaid is a critically under-funded program. Since states must participate in the funding, the current state budget crises are only compounding the problem. The insistence of the Bush administration that this expansion of prescription coverage be budget-neutral within the Medicaid budget merely pulls more funds away from already critically under-funded Medicaid services. Providers will bail out not because their profits are diminished, but rather because they cannot sustain the increasing losses. Starving a program of funds is a devious method of assuring its demise.

Unfortunately, the administration has established a similar policy for our Medicare program. They insist that any changes be budget-neutral. For instance, they have stated that any new Medicare prescription benefit must be paid for out of reductions to other providers. With a 5.4% decrease in physician payments this year, and more cuts scheduled for each of the next few years, further reductions though the budget-neutrality policy simply cannot be tolerated. Thus Medicare will be further starved of funds, easing the way to the administration’s goal of turning Medicare over to the marketplace. Spartan benefits with unaffordable cost-sharing will be inevitable for the majority of beneficiaries.

What about budget-neutrality once we have a program of universal health insurance? Isn’t one of the promises of a single, universal program that we can control health care costs into the future? Global budgeting promises budget neutrality, with appropriate adjustments for inflation (and for technological expansion, if that is our priority).

Why is global budgeting acceptable in a single payer program, but undesirable in our existing Medicare and Medicaid programs? The answer is very simple. We have more than enough resources to fund comprehensive services for everyone, but first we would have to eliminate the administrative waste characteristic of our current system. Maintaining expenditures at the current 14.7% of our GDP would assure adequate funding for health care forever.

But then why is global budgeting failing for Medicare and Medicaid? The answer is that we have failed to adequately fund the two most expensive risk pools in the nation, Medicare, composed of the high-cost elderly population and those with long-term disabilities, and Medicaid, composed of low-income individuals with greater medical needs. If we are to isolate high-cost individuals in exclusive risk pools, we must fund those pools much more generously than we do the risk pools for the remaining healthy individuals. But we don’t do this. We under-fund Medicare, and critically under-fund Medicaid, while we over-fund private health plans in order to generously support this superfluous industry.

We see where our national policy priorities currently lie. Isn’t it time to re-prioritize?

The Philadelphia Inquirer
July 5, 2002
By James Kuhnhenn
Inquirer Washington Bureau

Almost 10 years after President Bill Clinton tried to overhaul the nation’s health-care system, the American people appear ready to try again.

The plight of the uninsured is edging back into political consciousness, say lawmakers, lobbyists and pollsters, creating fertile ground for a new push toward universal health insurance.

The new direction – away from incremental measures and toward more ambitious goals such as universal coverage – is politically significant, as Republicans and Democrats struggle for control of Congress in November’s elections. Health care could compete with President Bush’s war on terrorism for voters’ attention.

Ayres (Republican pollster Whit Ayres) detected the new trend in public sentiment in a nationwide poll of 1,000 people he conducted March 18-20. He was struck by the response to the question: Would you like to see a government-owned, government-run health-care system in America?

Forty percent of the respondents said yes. “It’s a little higher than I expected,” Ayres said. The poll had a margin of error of 3 percentage points.

Democrats, who had abandoned plans for an ambitious health-care restructuring, are reassessing their strategy of tackling health-care issues in small bites. Those efforts, most notably prescription-drug benefits for seniors and patient-friendly HMOs, have led to huge partisan rows in Congress but no real solutions to help Americans get affordable access to doctors and medicines.

Senate Majority Leader Tom Daschle (D., S.D.):

“You have to address cost, access and quality from a comprehensive point of view. And while we failed 10 years ago, I think you could say we failed in the 10 years since to deal with these issues incrementally. There isn’t any outstanding success story to talk about.”

http://www.philly.com/mld/philly/news/nation/3604633.htm

Comment: It is not surprising to see that a Republican pollster would characterize universal health care coverage as not only a government-run but also a government-OWNED health care system. Americans would surely emphatically reject socialized medicine. Yet 40% supported this, the most extreme version of comprehensive reform!

Ironically, the moderate position now is to support national health insurance while continuing to support our existing private and public ownership of the health care delivery system. Supporting incrementalism while rejecting any consideration of comprehensive approaches has now become an extreme position.

It is now our task to be certain that the public and our political leaders have a clear understanding of the equity, efficiency, and comprehensiveness of a publicly administered program of universal health insurance. In this election season, our politicians must hear this message.

The Philadelphia Inquirer
July 5, 2002
By James Kuhnhenn
Inquirer Washington Bureau

Almost 10 years after President Bill Clinton tried to overhaul the nation’s health-care system, the American people appear ready to try again.

The plight of the uninsured is edging back into political consciousness, say lawmakers, lobbyists and pollsters, creating fertile ground for a new push toward universal health insurance.

The new direction – away from incremental measures and toward more ambitious goals such as universal coverage – is politically significant, as Republicans and Democrats struggle for control of Congress in November’s elections. Health care could compete with President Bush’s war on terrorism for voters’ attention.

Ayres (Republican pollster Whit Ayres) detected the new trend in public sentiment in a nationwide poll of 1,000 people he conducted March 18-20. He was struck by the response to the question: Would you like to see a government-owned, government-run health-care system in America?

Forty percent of the respondents said yes. “It’s a little higher than I expected,” Ayres said. The poll had a margin of error of 3 percentage points.

Democrats, who had abandoned plans for an ambitious health-care restructuring, are reassessing their strategy of tackling health-care issues in small bites. Those efforts, most notably prescription-drug benefits for seniors and patient-friendly HMOs, have led to huge partisan rows in Congress but no real solutions to help Americans get affordable access to doctors and medicines.

Senate Majority Leader Tom Daschle (D., S.D.):

“You have to address cost, access and quality from a comprehensive point of view. And while we failed 10 years ago, I think you could say we failed in the 10 years since to deal with these issues incrementally. There isn’t any outstanding success story to talk about.”

http://www.philly.com/mld/philly/news/nation/3604633.htm

Comment: It is not surprising to see that a Republican pollster would characterize universal health care coverage as not only a government-run but also a government-OWNED health care system. Americans would surely emphatically reject socialized medicine. Yet 40% supported this, the most extreme version of comprehensive reform!

Ironically, the moderate position now is to support national health insurance while continuing to support our existing private and public ownership of the health care delivery system. Supporting incrementalism while rejecting any consideration of comprehensive approaches has now become an extreme position.

It is now our task to be certain that the public and our political leaders have a clear understanding of the equity, efficiency, and comprehensiveness of a publicly administered program of universal health insurance. In this election season, our politicians must hear this message.

Statesman Journal
June 28, 2002
By Susan Tom

Oregon is one step closer to possibly becoming the first state in the country to have universal health care.

Health Care for All – Oregon, sponsors of a proposed initiative that would pay all necessary medical expenses for all Oregon residents, turned in 81,891 signatures Thursday. It needs 66,786 valid signatures to make the November ballot.

Under the Oregon Comprehensive Health Care Finance Plan, a new state government-funded nonprofit corporation would be set up to pay all medically necessary services, including emergency care, dental, vision, mental health, alternative medicine and long term care. No one can be excluded from the plan because of a pre-existing condition.

The plan would be financed with additional income and payroll taxes as well as federal money spent on health care and individual dollars spent on deductibles and co-payments.

http://news.statesmanjournal.com/article.cfm?i=44242

“The legislation to cover some drug benefits under Medicare passed by the US House of Representatives late on June 27 is the most cynical, misguided, disrespectful, insensitive and inappropriate, demeaning political pabulum yet. It requires about a $400 a year premium and $250 a year deductible to be funneled through private insurers. It is “means tested” to allow subsidies to poorer patients (earning less than 175% of poverty level – does anyone know what percentage of people over 65 fall into this category?); leaves a gap in coverage for any pharmacy expenses between $2001 and $3700; and avoids any impact on pharmaceutical costs and pricing. This legislation will markedly change the social insurance model of the Medicare program, provide less than adequate pharmaceutical coverage from even the middle class point of view (involving up to $2350 in out of pocket expenses for medicines alone before the government picks up the full cost), requires an expensive administrative nightmare to not just keep track of pharmaceutical expenditures, but also to intrusively inquire into the level of every beneficiaries’ income, while providing an incredible financial windfall to the insurance and pharmaceutical industries. Everyone interested in a solution to our current health system collapse must use the perversities of this proposal to demonstrate how a single payer, universal coverage, comprehensive health system is the only meaningful reform.”

Comment: For the first $3700 of prescription coverage the Medicare beneficiary must pay a $33/month premium ($396), a $250 deductible ($250), 20% of costs up to $1000 ($150), 50% of costs up to $2000 ($500), and 100% of costs up to $3700 ($1700). The out-of pocket expense is $2996 for a $3700 benefit. Thus the beneficiary is paying 81% to receive a 19% insurance benefit. With the beneficiary providing the primary funding and the insurance company paying nominal cost-sharing, this reverses the ratios of traditional health care insurance. And this is to purchase an insurance product in the private market that the insurance industry has stated will not be offered.

Jeoff Gordon is right. We must use the perversities of this proposal to demonstrate that a comprehensive, universal, single-payer plan is the only meaningful reform.