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Yes, We Can! Can We?

Yes, We Can! Can We?

The Next Failure of Health Care Reform

By VINCENT NAVARRO
Counterpunch
March 6, 2008

A major problem–if not the major problem–for many people living in the U.S. is the difficulty of accessing and paying for medical care when they are sick. For this reason, candidates in the presidential primaries of 2008–the Democrats more often than the Republicans–have been recounting stories about the health-related tragedies they have encountered in meetings with ordinary people around the country (an exercise conducted in the U.S. every four years, at presidential election time). These stories tell of the enormous difficulties and suffering faced by many people in their attempts to get the medical care they need. I have been around long enough–I was senior health advisor to Jesse Jackson in the Democratic primaries of 1984 and 1988–to know how frequently Democratic candidates, over the years, have referred to such cases. The only things that change are the names and faces in these human tragedies. Otherwise, the stories, year after year, are almost the same.

In the Democratic Party primaries of 1988, for example, candidate Michael Dukakis talked about a young single mother who had two jobs and still could not afford medical insurance for herself and her children. In 1992, Bill Clinton did the same, changing the story only slightly. This time it was the case of a woman with diabetes who could not get health insurance because of her chronic condition. And now, in the 2008 primaries, Hillary Rodham Clinton (whom I worked with on the White House Health Care Reform Task Force in 1993) describes a similar case. This time it is a single woman, with two daughters, who cannot pay her medical bills because her congenital heart defect makes it impossible for her to get medical insurance coverage. And Barack Obama describes similar cases, with the eloquence that characterizes all of his speeches. He frequently refers to his own mother, who had cancer and had to worry not only about her illness but about paying her medical bills.

All these cases are tragic and are representative of a situation faced by millions of people in the U.S. every year. But, I am afraid that unless the winning Democratic candidate, once elected president (and I hope he or she will be), develops a more comprehensive health care proposal than any of those put forward in the primaries so far, we will see the same situation continue. Democratic candidates in the 2012 primaries, and in the 2016 primaries, will still be referring to single mothers with chronic health conditions who cannot pay their medical bills. The proposals put forward by Obama and Clinton underestimate the gravity of the problem in the U.S. medical care sector. The situation is bad and is getting worse: the number of people who are uninsured and underinsured has been growing since 1978.

Let’s start with the uninsured, those people who do not have any form of health benefits coverage. There were 21 million uninsured people in the U.S. in 1972. By 2006, that number had more than doubled to 47 million. And this increase has been independent of economic cycles. The number of uninsured grew by 3.4 million from 2004 to 2006, even as a resurgent economy raised incomes and lowered poverty rates. Meanwhile, during those years, the Democratic Party establishment distanced itself from any commitment to resolving these problems. Even though the 1976, 1980, 1984, 1988, and 1992 Democratic Party platforms included calls for health care benefits coverage for everyone (what is usually referred to as “universal health care”), that call was usually made without much conviction. In the primaries of 1988, when I was involved in preparing the Democratic platform, Dukakis (the winner of the primaries) resisted including universal health care in the party platform. He was afraid of being perceived as “too radical.” He had to accept it, however, because Jesse Jackson agreed to support Dukakis (Jackson had 40% of the Democratic delegates at the Atlanta convention) only if the platform included this call for universal care.

Then, in 1992, Bill Clinton (who borrowed extensively from Jackson’s 1988 proposals) put the call for universal health care at the center of his program. But, once president, his closeness to Wall Street and his intellectual dependence on Robert Rubin of Wall Street (who became his Secretary of the Treasury) made him leery of antagonizing the insurance industry. It was President Clinton’s unwillingness to confront the insurance companies that led to his failure to honor his commitment to work toward a universal health care program (see my article “Why HillaryCare Failed” unch, November 12, 2007). The type of reform President Clinton called for was a health insurance­ based model called “managed care,” in which insurance companies remain at the center of health care. An alternative approach could have been to establish a publicly funded health care program (which was favored by the majority of the population) that would cover everyone, providing medical care as an entitlement for all citizens and residents. This could have been achieved, such as by expanding the federal Medicare program to cover everyone. To do so, however, would have required neutralizing the enormous power of the insurance companies with a massive mobilization of the population against them and in favor of a comprehensive and universal health care program.

But President Clinton’s loyalty to Wall Street prevailed. His administration’s top priorities were reduction of the federal deficit (at the cost of reduced public social expenditures) and approval of NAFTA (without amending President George H. W. Bush’s proposal, which Clinton had inherited, and refusing to address the concerns of the labor and environmental movements). These actions antagonized and demoralized the grassroots of the Democratic Party. Clinton lost any power to mobilize people for the establishment of a universal health care program. This frustration of the grassroots, and especially the working class, also led to the huge abstention by the Democratic Party base in the 1994 congressional elections and the consequent loss of the Democratic majority in the House, the Senate, and many state legislatures. At the root of this disenchantment with the Clinton administration was its unwillingness to confront the insurance companies and Wall Street. Could that happen again?

The health care mess (Nixon dixit)
Before addressing this question, let’s look at the problems people face in the U.S. But first, I should stress that the country has sufficient resources to provide comprehensive, high-quality medical care to everyone who needs it. The U.S. spends 16% of its GNP on medical care, almost double the percentage spent by Canada and most countries of the European Union (E.U.) on providing universal, comprehensive health care coverage to their populations. We in the U.S. spend $2.1 trillion on medical care, making the medical care sector one of the largest economies in the world (if the medical care sector were a country, rather than a massive sector within a country). And it has been estimated that this spending will reach 20% of GNP in a few years (7 years according to some, 12 years according to others). Lack of money is not the root of the medical care problem in the U.S. We spend far, far more than any other developed country, and far more than what we would need to provide comprehensive health care coverage for everyone. The frequently heard argument that the U.S. cannot afford universal, comprehensive care has no credibility. It is a poor rationale for keeping the situation as it is.

Despite the huge amount of money spent on medical care, the situation of the U.S. medical care sector is a disgrace. Even Richard Nixon, in an unguarded moment, defined it as a mess. And as noted above, it has gotten much worse since Nixon was president: in 2006, 47 million Americans did not have any form of health benefits coverage, and 108 million had insufficient coverage. And people die because of this. Estimates of the number of preventable deaths vary, from 18,000 per year (estimated by the conservative Institute of Medicine) to a more realistic level of more than 100,000 (calculated by Professor David Himmelstein of Harvard University). The number depends on how one defines “preventable deaths.” But even the conservative figure of 18,000 deaths per year is six times the number of people killed in the World Trade Center on 9/11. That event outraged people (as it should), but the deaths resulting from lack of health care seem to go unnoticed; these deaths are not reported on the front pages, or even on the back pages, of the New York Times, Washington Post, Los Angeles Times, or any other U.S. newspaper. These deaths are so much a part of our reality that they are not news. How can this be tolerated in a country that claims to be a civilized nation?

The Democratic candidates’ proposals
The proposals put forward by the current Democratic candidates for president, Barack Obama and Hillary Clinton, will improve the situation. They will diminish somewhat the number of those not covered by health insurance and will reduce the level of undercoverage. But the major problems will remain unresolved, including the problems the candidates have referred to during their campaigns. People will still experience incomplete coverage, and many millions will continue to be uninsured and underinsured. Not even the mandatory health insurance called for by Hillary Clinton will resolve these problems. Her plan proposes that, just as a car driver in the U.S. must have car insurance, so a citizen or resident will have to have health insurance. The problem with this mandate is not only–as Obama has pointed out–the matter of enforcement (note that according to some estimates, up to 20% of car owners drive without car insurance), but the assumption behind the policy. The assumption is that most people who are not insured are “free-riders,” people who could afford to buy insurance but choose not to, and choose to let someone else pay for their care when they get sick. But the vast majority of people who are uninsured are people who cannot afford to pay for it. It’s as simple as that. Massachusetts passed a mandate of this sort (under Governor Mitt Romney), but 198,000 people still remain uninsured. The subsidies and tax incentives proposed to help the uninsured pay for health insurance premiums under plans of this type are insufficient.

Another proposed mandate (put forward by Clinton more strongly than by Obama) is that all employers must provide insurance coverage to their employees–a policy proposed by President Nixon back in the 1970s. But with this proposal, unless you force employers to provide comprehensive coverage at an affordable cost to everyone, the problem will still not be resolved. An even greater problem with the employer mandate, however, is that it continues to tie health benefits to employment, which is a perverse system and a nasty one. The reason employers, in 1948, pushed to make health care benefits dependent on employment (in the nefarious Taft-Hartley Act) was that this was a way of controlling workers. The Taft-Hartley Act forced the labor force to get health care benefits through collective bargaining agreements that are highly decentralized and are negotiated at the place of employment. In the U.S., workers who lose their jobs lose not only wages, but also health benefits coverage for themselves and their family. And if these workers want to keep their insurance, they have to pay prohibitive premiums. So, a worker will think twice before striking. This is one reason why the U.S. has fewer working days lost to strikes than other developed countries. Until recently, employers have been the major force–besides the insurance companies–for keeping the current system of funding and managing health care. This system, then, is based on an alliance between employers and the insurance industry.

It is this alliance that is responsible for the biggest problem of health care benefits: undercoverage. Most people believe that because they have health insurance, they will never face the problem of being unable to pay their medical bills. They eventually find out the truth–that their insurance is dramatically insufficient. Even for families with the best health benefits coverage available, the benefits are much less comprehensive than those provided as entitlements in Canada and in most E.U. countries. And paying medical bills in the U.S. is a serious difficulty for many people. In fact, inability to pay medical bills is the primary cause of family bankruptcy, and most of these families have insurance. Furthermore, 20% of families spend more than 10% of their disposable income on insurance and medical bills (the percentage is even higher for those with individual insurance: 53%). In 2006, one of every four Americans lived in families that had problems in paying medical bills. And most of them had health insurance.

The inhumanity of this situation is made evident by the fact that nearly 40% of people in the U.S. who are dying because of terminal illness are worrying about paying for care–how their families are going to pay the medical bills, now and after they die. No other developed country comes close to these levels of insensitivity and inhumanity. Meanwhile, the federal government parades around the world as the great defender of human rights, ignoring the fact that among the developed democratic nations, the U.S. is the most deficient in human rights. The basic right of access to health care in time of need does not exist in the U.S. The United Nations Human Rights Declaration includes this right in a prominent position, but this is a declaration that the U.S. Congress has never signed. It should come as no surprise that the world’s people do not believe the U.S. government is a great defender of human rights abroad, since it does not guarantee even basic rights at home.

And here again, things are getting worse. The percentage of uninsured and underinsured has been increasing. The proportion of people with employer-based health benefits coverage declined from 67.8% among the non-elderly in 2000 to 63% in 2006–even though the economy was booming during those years. In the same period, the number of adults without coverage increased by 8.7 million, and from 2004 to 2006 the number of children without coverage increased by 1 million.

Why does this situation persist in the U.S.?
For any society, medicine is a mirror of the power relations in that society. And nowhere is the lack of human rights more evident than in the house of medicine. In the U.S., insensitivity toward human needs goes hand-in-hand with enormous profits made from that suffering. The root of the problem, as noted earlier, is not lack of money but the channels through which that money is managed and spent. The problem is the privatization of the funding of medicine that allows profits to boom. The insurance and pharmaceutical industries enjoy the highest rates of profit in the U.S. Just last year, insurance industry profits reached $12 billion, and pharmaceutical industry profits $49 billion, the highest in the U.S. and in the world. According to Fortune Magazine, health-related industries are among the most profitable industries in the country. A lot of money is being made from people’s suffering. This scandalous situation is easy to document. For example, lanzoprasol, a gastric secretion ­reducing medicine widely used in the U.S., costs $329 in Baltimore, U.S.A.; the same medicine (same number of doses) costs $9 in Barcelona, Spain! And the current Bush administration signed legislation for a program that, in theory, covers drug costs for elderly people, but in practice this is an enormous rip-off. It forbids the government to negotiate with the drug industry on the cost of drugs–that is, the price of their products. What this means is that the federal government pays the prices dictated by pharmaceutical companies.

Now, one might well ask, Why does this continue? Why hasn’t our government done something about it? Is it that the government could not provide comprehensive health benefits coverage? It certainly could. All E.U. governments do so. All provide publicly funded, comprehensive health care coverage to their entire population. And on this side of the Atlantic, Canada (which once had a system identical to ours, health insurers included) also provides this entitlement to all its citizens. In Canada in the 1960s, a social democratic government in Saskatchewan did a very logical thing. My good friend, Dr. Samuel Wolfe, who was then Chief Health Officer of Saskatchewan, proposed to the province’s social democratic government that rather than paying premiums to insurance companies, people would pay earmarked taxes to a public trust fund, controlled by their representatives. This trust fund would negotiate with doctors and hospitals for the payments they would receive for the care they provided. This saved a lot of money by bypassing the insurance companies. The Saskatchewan Health Plan provided comprehensive care to everyone in the province at a much lower cost than before. Soon, the other provinces adopted similar plans, establishing Canada’s nationwide health plan that now covers everyone. The overhead for the public system in Canada is only 4%, compared with 30% in the U.S. insurance industry–30% that goes to marketing, administration (a lot of paper shuffling goes on in U.S. health care), and the salaries of extremely well-paid executives and insurance lobbyists. One of the best-paid individuals in this country is William McGuire, CEO of an insurance company–United. He makes $37 million a year, plus $1.7 billion in stock options. And all of this money comes from premiums paid by people, many of whom have insufficient coverage.

The insurance companies have enormous power, both in Washington and in most state legislatures. In Maryland, for example, a former governor arranged for candidates for Insurance Commissioner to be interviewed by the insurance associations before he made his final selection. But, insurance industry influence is strongest in Washington. In the U.S., money is the milk of politics. The electoral process is also privatized. And the insurance companies pay a lot of money to candidates. According to the Center for Responsive Politics, the insurance industry has contributed $525,188 to Hillary Clinton, $414,863 to Barack Obama, and $274,724 to John McCain. As a consequence, not one of the candidates is asking for a publicly funded system. The major players in medical care in the U.S.–insurance companies, drug companies, professional associations, etc. (the list is long)–have given a lot of money to the candidates. The splendid document called the U.S. Constitution, which begins “We the people ” should have a footnote “and the insurance companies, the drug companies, ” The U.S. Congress is indeed the best Congress money can buy (for a further discussion of how money corrupts the electoral system, see my article “How to Read the U.S. Primaries: Guide for Europeans,” unch, February 13, 2008). The privatization of the electoral process (with most of the money that pays for campaigns coming from economic, financial, and professional interests, and from 30% of the nation’s highest-income earners) corrupts the democratic process. I am not implying that politicians are corrupt (although some are). I am willing to admit that most are honorable persons. But the need to constantly raise funds for their campaigns (election and re-election) corrupts the democratic system. And the unwillingness of most members of Congress to change this situation makes them accomplices in that corruption. Such practices are illegal in most democratic countries.

And people know all about this. In surveys, 68% of people believe the U.S. Congress does not represent their interests, but the interests of the financial and economic groups that fund political campaigns. But the establishments, including the political, media, and academic establishments, want everyone to believe that the reason we don’t have a universal health program is that people don’t want it. They would like people to believe that Congress legislates what people actually want. Meanwhile, the long list of public policies that people want but do not get from their government is growing: 65% of people want a publicly funded health care system similar to that in Canada, a system that in academic language is called single-payer. In a single-payer system, the government, rather than the insurance companies, negotiates with providers–doctors, hospitals, nurses, etc.–for the provision of medical care. We already have a system of this type in Medicare (with an administrative overhead of only 4%, compared with the 30% in the insurance system). By eliminating the huge administrative expenses, we could provide comprehensive health care coverage for everyone without spending an extra penny.

The possibilities for major change

Obama and Clinton are ready to admit that single-payer may be better than any other alternatives. Obama spoke out in favor of it at one time:

“So the challenge is, how do we get federal government to take care of this business? I happen to be a proponent of a single payer health care program. I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14% of its Gross National Product on health care cannot provide basic health insurance to everybody. And that’s what Jim is talking about when he says everybody in, nobody out.”

“A single payer health care plan, a universal health care plan. And that’s what I’d like to see. And as all of you know, we may not get there immediately. Because first we have to take back the White House, we have to take back the Senate, we have to take back the House.” (Barack Obama in 2003 before the Illinois AFL-CIO)

But, something happened on the way to Washington. The train derailed. Now Obama claims that his declaration was taken out of context. And Hillary Clinton, in 1993, told me that while single-payer might be the most logical model, it was politically infeasible.

I hope both candidates will reconsider. At this time, neither candidate’s proposal will resolve the health care crisis we are facing. And in 2012, candidates will still be talking about single mothers who cannot pay for medical care for themselves or their children. The candidates of 2008 should be asking for government mandates rather than individual mandates. It is not people who should be mandated to get insurance. It is the government that should be mandated to provide insurance for everyone as an entitlement.

The need to mobilize
Obama has been able to capitalize on the anti-establishment mood in the country. And he has inspired many. While I believe that large numbers of people–the grassroots of the Democratic Party who support him–do want change and are firmly anti-establishment, I am concerned that they are putting too much faith in one individual. Without diminishing what candidate Obama has achieved, the fact is that he has already shown himself to be adaptable to the political context. He was once against the war in Iraq. But, in Congress, his votes on Iraq have been indistinguishable from those of Hillary Clinton. And in health care, his rather disappointing proposal will not resolve the problems. I am very worried that once in power, he will not have the courage to confront the extremely powerful lobbies primarily responsible for the lack of health care coverage and the undercoverage of the American people. It happened with Bill Clinton’s administration and it may happen again. Contrary to what Obama and others have said, the main problem with Hillary Clinton’s Task Force in 1993 was not its secrecy (although secrecy was indeed a problem) but a conceptual framework based on an insurance model–managed care–that was pushed on the political, media, and academic establishments by the insurance companies. The ideologues of managed care were clearly in charge of the Task Force. It could happen again.

To prevent this, there is a need to mobilize. History is not made by extraordinary figures but by ordinary people who can move mountains when they believe in a cause and get organized. It has happened all over the world, and it has happened in the U.S. We saw it in the establishment of the New Deal, Social Security, unemployment insurance, job creation, minimum wage, and subsidized housing, among other programs. These were not just the outcome of President Roosevelt’s position, but the result of huge social agitation and mobilization. As usually happens in historical moments of societal change, government leaders were not so much leading as trying to catch up with what millions of people were demanding. Similarly, the Great Society Programs–Medicare, Medicaid, Environmental Protection Agency, NIOSH, OSHA, and many other examples of progressive legislation–were the outcome of massive mobilizations. Candidate John Kennedy’s proposals for change were rather moderate, and his domestic policies, once he was elected, were also disappointing. But the mobilization triggered by his election was followed by many more, such as Appalachian coal miners’ strikes against their working conditions, the splendid civil rights movement led by Martin Luther King, and the ant­Vietnam War movement led by student groups. They all established a political climate in which progressive legislation could occur. History, indeed, does not repeat itself. But it offers us pointers on where to go. And it should be obvious that change will not occur unless there is a huge mobilization to complete the unfinished agenda of civil rights: a full development of social rights, with the human right to access to health care at the center.

To achieve that right, we need reforms more substantial than those put forth by either Democratic candidate. The splendid slogan first used by the great trade union leader Cesar Chavez, founder of the United Farm Workers of America, was Yes, We Can! This should guide the call for establishing the right to health care. But, for that to happen, the current holders of the slogan must heighten their expectations and become more ambitious in their proposals. This is what the electorate expects from them in their promises of change

Dr. Vicente Navarro is Professor of Health Policy, Public Policy, and Policy Studies at the Johns Hopkins University. He has written extensively on economics, health, and social policy, and has been advisor to many governments and international agencies. His books have been translated into many languages. He was the founder and president of the International Association of Health Policy, and for almost forty years has been Editor-in-Chief of the International Journal of Health Services. He is also a founding member of Physicians for a National Health Program. The views expressed in this article are his own, but are shared by millions across the United States

Some 241 thousand Dutch have no medical insurance

(Health reform was passed in the Netherlands in 2006. Hundreds of thousands of Dutch are now uninsured (see below). More recent reports also note that another 240,000 people have defaulted on paying their premiums, for a total of about 3 percent of the population with no or defaulted coverage).

Mnistry of Health Welfare and Sport, The Netherlands
Newsitem, 10 May 2007

On 1 May 2006, some 241 thousand people in the Netherlands were not insured for the costs of medical care. This 1.5 percent of the Dutch population.

People with a foreign background are relatively more likely not to be insured than native Dutch people. Many families with children are also not insured for medical costs. The percentage of uninsured among benefit claimants on the other hand was relatively low, according to figures form Statistics Netherlands. The new figure of 241 thousand is higher than previously published estimate of 182 thousand on 5 July 2006. This is because a more accurate method was used.

More than 4 percent of people in the Netherlands with a foreign background did not have medial insurance, compared with less than 1 percent of native Dutch people. People from countries other than Turkey, Morocco, Suriname, the Netherlands Antilles and Aruba were more likely not to be insured. Moreover, the percentage of uninsured among first generation immigrants is four times as high as that among the second generation.

Many children not insured

Around 40 thousand children do not have medical insurance. This is surprising, as no premium has to be paid for underage children. These uninsured children are members of families in which the parents are not insured for medical costs. Nearly 60 percent of uninsured children have a native Dutch background.

On 1 May 2006, 0.7 percent of benefit claimants did not have medical insurance. This is less than half the average for the total population. The percentage among people on income support is also lower than average for the total population, namely 1.0 percent.

About half of people without medical insurance are in their twenties and thirties. Men are slightly more likely not to be insured than women. Of all people without medical insurance, 57 percent are men.

Single payer supporters advance their plan

By MARIA BRANDECKER
Legislative Gazette Staff Writer
Mon, Mar 3, 2008

Citing the recent Democratic upset victory in a special Senate election and the theme of change that is central to the candidacies of the same party’s presidential primary candidates, at least one supporter of a single payer health care system sees now as an opportune time to advocate for health care reform in New York.

It was Albany County Legislator Phillip G. Steck who pointed to the Senate race and the primary season, though he doesn’t necessarily agree with the presidential candidates’ health care proposals, as reasons why now is a fitting time to call on the state’s political leaders to make a change.

Steck was among advocates for a single payer health care system who held a press conference last Wednesday in Albany to voice their support for making the change in how people in New York and the rest of the country pay for their medical care. They say a single-payer system would achieve exactly as the name implies, providing health care for the entire population by centralizing funding under one source, for example the government.

The advocates said that having a centralized system for health care would ensure that all citizens receive coverage of all medical services by eliminating eligibility limitations for private and public health insurance. The advocates argued that health care should be a right of all citizens not a commodity for insurance companies to profit from and that establishing a single payer system is the way to achieve this goal.

Also speaking at the press conference were Hunger Action Network of New York State Executive Director Mark Dunlea, New York State Academy of Family Physicians Executive Vice President Vito F. Grasso and Dr. Tony Mason, vice chairman of the Capital District Chapter of Physicians for National Heath Program.

The advocates are urging the state Legislature and New York’s representatives in Washington to support the U.S. National Health Insurance Act, a federal universal health care bill (H.R.676) introduced in Congress and Assemblyman Felix Ortiz’s, D-Brooklyn, proposed resolution, (K.779) in the Assembly, in support of H.R.676.

The legislation would enact a single payer system that supporters say would decrease the control private insurance companies have over the health care system. According to the advocates, having one source that controls health care would create an equal opportunity for all citizens throughout the state and country to receive the type of health care they desire and need. The advocates would like to see the single payer system instituted on a state and national level.

Dunlea said the single payer system is one of the methods being studied by the Task Force on Universal Health Care that was established by the governor in 2007. The task force is conducting a cost-benefit analysis of a state single payer system, Dunlea said.

The advocates say a single payer system would benefit consumers and the economy by centrally regulating insurance costs and therefore lowering costs for patients. Patients would also be guaranteed a greater variety of options in choosing service providers and physicians and would no longer be limited to the type of insurance they are eligible for based on income, they said.

Businesses and medical institutions would also save money on taxes, Steck said. Steck said the high expense of providing health insurance is stifling many businesses.

Grasso said the Academy of Family Physicians recently re-evaluated its view on health care reform in response to the escalating costs of health insurance. “Tampering with the existing system is no longer an option because this approach has consistently failed in the past,” Grasso said.

Grasso said a single payer system would provide comprehensive reform and decrease systematic problems in the present “fragmented” health care system. Centralizing health care would make systematic problems easier to control and address when they do occur, Grasso said.

One of the main reasons the academy supports single payer system is its belive that it could lead to a reduction in the amount of staff needed to complete extra paper work, such as confirming patients’ eligibility for enrollment and authorization for receiving certain services, which Grasso says is not cost efficient for businesses. On average doctors must hire 2.5 staff people just to fill out paper work, Dunlea said. Grasso argued the extra paper work is unnecessary because it has “nothing to do with the quality of care patients are provided.”

“The [existing] system impedes the ability of patients to advocate for themselves and to obtain the quality of care the consistency of care that they deserve and believe they are getting,” Grasso said.

Mason added that a single payer health care system would strength the working relationship between patients and doctors. Often when patients switch jobs under the current system, Mason explained, they are forced to also switch providers and physicians placing both parties at a disadvantage. This is also a problem when physicians drop out of a particular service provider.

“Patients are restrained by income or by limits imposed by the insurance company,” Mason said. He said patients should have more freedom in choosing service providers and physicians. The single payer system would eliminate preferred physician lists, out-of-area limitations and other restrictions on choosing a doctor, as well as co-payments, Mason said.

“The only real question is not whether single payer makes the most sense for taxpayers, for business, for consumers and for doctors, it’s whether the politicians are willing to put the interests of those groups ahead of the interests of the insurance companies,” Dunlea said.

The advocates said changing the system is a difficult task due to the fact that a substantial amount of capital that is available in the health care system is under the control of private insurance companies and that this capital is an essential part of the health care system. Steck said that are ways to incorporate this capital, as well as employees of private insurance companies into a new system.

Absent from the press conference was Assembly Health Committee Chairman Richard Gottfried, D,WF-Manhattan, who sponsoring bill A.07354, a piece of legislation that calls for a universal health care system in New York and currently has 85 co-sponsors in the Assembly. Sen. Eric Schneiderman, D,WF-Manhattan, a member of the Senate’s Health Committee is sponsoring a same-as bill (S.3107).

Do health benefits reduce wages?

The Mandate Wars, In California And Beyond

By Rick Kronick
Health Affairs Blog
March 6, 2008

Unfortunately, analysis of purchasing behavior provides two diametrically opposed views of affordability. On the one hand, most moderate-income workers (people in families between 300 percent and 400 percent of FPL) have employer-sponsored insurance. On the other hand, hardly anyone without employer-sponsored insurance at 300 percent to 400 percent of FPL chooses to purchase non-group coverage.

There are many reasons that most moderate-income workers are covered by insurance, while hardly any moderate-income who are not covered by employer-sponsored insurance choose to purchase coverage on their own. These reasons include: the fact that non-group insurance is a much less good buy than group coverage; the fact that people with health problems often cannot buy non-group coverage at any price; differences in tax treatment (although premiums are fully deductible for the self-employed, and relatively few self-employed purchase coverage, so tax treatment is far from the whole story); and the possibility of self-selection in which people who most value insurance manage to find jobs that offer coverage. Part of the difference is no doubt due to confusion about who is really paying the bill — although most economists would swear that employer contributions to insurance are really paid for by workers in the form of foregone wages, the very high coverage rates for moderate income workers suggests that many economists swear too much. Regardless of the reasons for the difference, the very high coverage rates for moderate-income workers and the very low purchase rates among moderate-income workers who do not have employer sponsored insurance provide diametrically opposed views of affordability, and complicate the discussion about the level of income at which a person can fully afford insurance.

http://healthaffairs.org/blog/2008/03/06/the-mandate-wars-in-california-and-beyond/

And…

Who Really Pays for Health Care?

The Myth of “Shared Responsibility”

By Ezekiel J. Emanuel, MD, PhD; Victor R. Fuchs, PhD
JAMA
March 5, 2008

When asked who pays for health care in the United States, the usual answer is “employers, government, and individuals.” Most Americans believe that employers pay the bulk of workers’ premiums and that governments pay for Medicare, Medicaid, the State Children’s Health Insurance Program (SCHIP), and other programs.

However, this is incorrect. Employers do not bear the cost of employment-based insurance; workers and households pay for health insurance through lower wages and higher prices. Moreover, government has no source of funds other than taxes or borrowing to pay for health care.

With prominent politicians, business leaders, and experts supporting shared responsibility, it is hardly surprising that most Americans believe that employers really bear most of the cost of health insurance.

Shared responsibility is a myth.

This is not a point merely of economic theory but of historical fact. Consider changes in health insurance premiums, wages, and corporate profits over the last 30 years. Premiums have increased by about 300% after adjustment for inflation. Corporate profits per employee have flourished, with inflation-adjusted increases of 150% before taxes and 200% after taxes. By contrast, average hourly earnings of workers in private nonagricultural industries have been stagnant, actually decreasing by 4% after adjustment for inflation. Rather than coming out of corporate profits, the increasing cost of health care has resulted in relatively flat real wages for 30 years. That is the health care cost–wage trade-off.

http://jama.ama-assn.org/cgi/content/full/299/9/1057

Comment:

By Don McCanne, MD

Everyone agrees that health benefits provided by the employer are part of the employee compensation package. And there is considerable evidence that employees do accept lower wages in order to be able to participate in the employer’s health benefits program.

Yet when employees are left on their own to secure their health insurance, they do not purchase it. Rick Kronick lists several reasons for this, but the most important is that the premiums for private insurance coverage siphon off too much out of the family budget, creating problems for funding other essentials such as food, housing, and transportation. Those receiving employer-sponsored coverage do not have to include a decision about potential health care costs in their budgeting decisions.

Should all employees be granted higher wages in return for accepting the responsibility of purchasing their own health coverage? Perhaps we should ask that question in a somewhat analogous situation. Should retirees be allowed to decline Medicare coverage in order to increase their very modest Social Security benefits?

No. Everyone should have affordable access to reasonably comprehensive health care services, regardless of income.

There is a very important reason to acknowledge that health benefits are a part of the employee’s compensation. Most policy analysts believe that health care costs over 10 percent of an individual’s total income constitute a financial hardship. The premium for employer-sponsored family coverage now averages over $12,000. That means that the family income needs to be $120,000, just to pay the premium. If the family also has medical needs, the out-of-pocket expenses would require an even larger income.

Both the Republican and Democratic proposals call for making health insurance affordable through a system of tax subsidies. But all proposals fall far short on the estimates of the amount of tax funds that would be required, for two reasons. The first is that the subsidies will have to be much larger if financial hardship is to be avoided. The second is that the target population that would need to receive graduated subsidies is much larger; it includes not only low-income individuals, but also the entire middle-income population, extending into the higher-income sector.

It is simply not rational to build reform on the obsolete model of private health plans. At $2.4 trillion, we already have enough funds to pay for comprehensive care for everyone. We simply need to establish a single risk pool that is equitably funded through the tax system, and then use that to pay for care for everyone.

(Because of other commitments, there will be no qotd messages for the next two weeks.)

Consider signing PNHP's letter to the candidates

An Open Letter to the Candidates on Single Payer Health Reform

Physicians for a National Health Program

America’s health care system is failing. It denies care to many in need and is expensive, error-prone, and increasingly bureaucratic. The misfortune of illness is often amplified by financial ruin. Despite abundant medical resources, care is often inadequate because of the irrationality of our insurance system. Yet our political leaders seem intent on reprising failed schemes from the past, rejecting the single payer national health insurance model that is the sole hope for affordable, comprehensive coverage.

Leading Republicans propose tax incentives to encourage the uninsured to buy coverage, but these subsidies fall far short of the cost of adequate insurance. For cost control, they suggest high co-payments and deductibles. Yet these selectively burden the sick and poor, discourage preventive and primary care, and have little effect on costs, since seriously ill patients – who account for most health spending – quickly exceed their deductibles and are in no position to forego expensive care.

Most leading Democrats offer a mandate model for reform. Under this model, the government would require people (or their employers) to buy private coverage, while offering an expanded Medicaid-like program for the poor and near-poor.

Variants of the mandate model, first proposed by Richard Nixon, were passed with great fanfare in Massachusetts (1988), Oregon (1989) and Washington State (1993). All died quiet deaths. As costs soared, legislators backed off from enforcing the mandates or funding new coverage for the poor. Massachusetts’ recent reform, which largely excuses employers from the mandate but imposes steep fines on the uninsured, appears poised to follow a similar path. Of the middle-income uninsured who are required to pay the full premium for coverage, few have signed up. Meanwhile, the state has already announced a $147 million shortfall in funding for subsidies for the poor.

Mandates and tax incentives can add coverage only by increasing costs. They augment the role (and profits) of private insurers, whose overhead is four times Medicare’s, and whose efforts to avoid payment impose a costly paperwork burden on doctors and hospitals. The cost cutting measures often appended to such reforms — computerization, care management and medical prevention — have repeatedly failed to yield savings.

In contrast, single payer reform could realize administrative savings of more than $300 billion annually — enough to cover the uninsured, and to eliminate copayments and deductibles for all Americans. It would also slow cost increases by fostering coordination and planning.

Political calculus favors mandates or tax incentives, which accommodate insurers, drug firms and other medical entrepreneurs. But such reforms are economically wasteful and medically dangerous. The incremental changes suggested by most Democrats cannot solve our problems; further pursuit of market-based strategies, as advocated by Republicans, will exacerbate them. What needs to be changed is the system itself.

We urge our political leaders to stand up for the health of the American people and implement a non-profit, single payer national health insurance system.

https://pnhp.org/letter/letter.php#form

Comment:

By Don McCanne, MD

If you would like to join us in sending this message to the presidential candidates then use the link above to add your name to the list of those endorsing this letter. Your name and city will be posted as a signer to the letter.

(At the bottom of the message is the sentence, “Click here to sign the letter and join or donate to PNHP.” You should click this only if you also are interested in joining or donating to PNHP, but this is not a requirement for your endorsement of the open letter.)

Opinions of New Hampshire Doctors Contrast with Presidential Candidate Plans for Healthcare Reform

Click here to read the report.

For Immediate Release:
December 17, 2007

Contacts:
Dr. Seddon Savage, President, NH Medical Society 603-646-9215; Dr. Gary Sobelson, 228-0071; Dr. Beth Smith, 229-5200; Palmer Jones, Executive Vice President, NHMS, 224-1909; Janet Monahan, Deputy Executive Vice President NHMS, 224-1909

A recent survey of New Hampshire doctors regarding the United States healthcare system suggests that many are ready for change. While they have divergent opinions about some of the directions that change should take, there is consensus on many issues that may be surprising. The 514 physicians who responded to the survey, which was sponsored by the NH Medical Society and executed by the University of New Hampshire Survey Center, appear to be demographically representative of New Hampshire physicians. 29% percent of the respondents were primary care physicians and 71% specialists, surgeons, or in other types of practice.

The survey found that 81% of responding physicians agree healthcare should be “available to all citizens as part of the social contract, a right similar to basic education, police and fire protection”, with 94% of primary care doctors endorsing this view. Two thirds of New Hampshire doctors, including 81% of primary care clinicians, indicated they “would favor a simplified payor system in which public funds, collected through taxes, were used to pay directly for services to meet the basic healthcare needs of all citizens”. Only one third of physicians indicated support for an employer-based system or agreed that “the free market system is the best way to create a high quality, equitable, affordable and accessible healthcare system”. The doctors were split on individual responsibility for purchasing healthcare.

73% of the physicians indicated they do not believe “insurance companies provide important services that add value to the health care system” and 80% disagreed that “competition and profit within the insurance industry drive innovation, quality, or efficiency”. 86% indicated that administrative and paperwork burdens interfere with their ability to serve patients well and 77% (93% of primary care physicians) indicated that there should be greater equity in reimbursement of different specialties for time spent in providing care to patients. Despite these challenge however, 88% percent of New Hampshire physicians agree that, “putting aside paperwork and administrative challenges”, they “experience deep satisfaction in the practice of medicine”.

The doctors disagreed with some common cost containment practices; 92% agreed that the current practice of “denying or limiting access to needed care in non-futile situations in order to preserve profits is unethical” and 96 % disagreed with statement that “denying insurance to those with pre-existing conditions is an appropriate means of controlling costs”. Most agreed, however, that control of healthcare costs must include some limits on availability of services (88%) and that the US healthcare system would benefit from planning of services to match need (93%). Nearly all (97%) agreed “health outcomes are improved when patients receive coordinated care of chronic illness in a primary care medical home”.

Physician opinions, as reflected in the survey, are not entirely resonant with key features of many of the proposals for healthcare reform offered by current Presidential candidates. While the candidate’s plans differ from one another, most would preserve a central role for private insurance companies, maintain a regulated market-based system, make employers or individuals responsible for purchase of health insurance, and restrict publicly funded healthcare to specific groups.

Whatever the structure and funding of the healthcare system, however, the survey finds that doctors believe “the health of individuals can be enormously affected by their personal behaviors and choices”(98.6%) and that “psychosocial and socioeconomic factors are important contributors to health status in the United States” (97.7%). The results of the survey are expected to shape advocacy efforts by the New Hampshire medical community related to public health and the healthcare system.

Consider signing PNHP’s letter to the candidates

An Open Letter to the Candidates on Single Payer Health Reform

Physicians for a National Health Program

America’s health care system is failing. It denies care to many in need and is expensive, error-prone, and increasingly bureaucratic. The misfortune of illness is often amplified by financial ruin. Despite abundant medical resources, care is often inadequate because of the irrationality of our insurance system. Yet our political leaders seem intent on reprising failed schemes from the past, rejecting the single payer national health insurance model that is the sole hope for affordable, comprehensive coverage.

Leading Republicans propose tax incentives to encourage the uninsured to buy coverage, but these subsidies fall far short of the cost of adequate insurance. For cost control, they suggest high co-payments and deductibles. Yet these selectively burden the sick and poor, discourage preventive and primary care, and have little effect on costs, since seriously ill patients – who account for most health spending – quickly exceed their deductibles and are in no position to forego expensive care.

Most leading Democrats offer a mandate model for reform. Under this model, the government would require people (or their employers) to buy private coverage, while offering an expanded Medicaid-like program for the poor and near-poor.

Variants of the mandate model, first proposed by Richard Nixon, were passed with great fanfare in Massachusetts (1988), Oregon (1989) and Washington State (1993). All died quiet deaths. As costs soared, legislators backed off from enforcing the mandates or funding new coverage for the poor. Massachusetts’ recent reform, which largely excuses employers from the mandate but imposes steep fines on the uninsured, appears poised to follow a similar path. Of the middle-income uninsured who are required to pay the full premium for coverage, few have signed up. Meanwhile, the state has already announced a $147 million shortfall in funding for subsidies for the poor.

Mandates and tax incentives can add coverage only by increasing costs. They augment the role (and profits) of private insurers, whose overhead is four times Medicare’s, and whose efforts to avoid payment impose a costly paperwork burden on doctors and hospitals. The cost cutting measures often appended to such reforms — computerization, care management and medical prevention — have repeatedly failed to yield savings.

In contrast, single payer reform could realize administrative savings of more than $300 billion annually — enough to cover the uninsured, and to eliminate copayments and deductibles for all Americans. It would also slow cost increases by fostering coordination and planning.

Political calculus favors mandates or tax incentives, which accommodate insurers, drug firms and other medical entrepreneurs. But such reforms are economically wasteful and medically dangerous. The incremental changes suggested by most Democrats cannot solve our problems; further pursuit of market-based strategies, as advocated by Republicans, will exacerbate them. What needs to be changed is the system itself.

We urge our political leaders to stand up for the health of the American people and implement a non-profit, single payer national health insurance system.

https://www.pnhp.org/letter/letter.php#form

Comment:

By Don McCanne, MD

If you would like to join us in sending this message to the presidential candidates then use the link above to add your name to the list of those endorsing this letter. Your name and city will be posted as a signer to the letter.

(At the bottom of the message is the sentence, “Click here to sign the letter and join or donate to PNHP.” You should click this only if you also are interested in joining or donating to PNHP, but this is not a requirement for your endorsement of the open letter.)

Minnesota physicians prefer single payer

Most Minnesota doctors like single-payer health care, academic study finds

By Andy Birkey
Daily Planet February 27, 2008
Dr. Dick Adair, a 65-year-old physician, said that the current system is not only having an impact on patients, but also on physicians. “The financial burden of caring for uninsured people is driving some doctors out of primary care and into better-paying specialties, at a time when we need more primary care doctors,” he said.

In his years as a physician, he has seen a sharp change in how physicians look at health care. “Having lunch with other doctors used to mean listening to conservatives griping about the government. Now lunchroom talk is that single-payer would be a good idea,” said Adair.

A recent survey through the University of Minnesota and St. Olaf College found that 64 percent of Minnesota’s physicians support a single-payer system much like the Minnesota Health Plan. Another 25 percent said that health savings accounts were the way to go, and only 12 percent thought that the current system of managed care was adequate.

On a national level, (Dr. Elizabeth) Frost said that a single-payer system would be ideal. “I support a single-payer system specifically, instead of a universal insurance patchwork like [Sen. Hillary Clinton] and [Sen. Barack Obama], because it makes so much more sense,” she said. “The problem with the bureaucracy of the myriad insurance companies is that each differs from each other, and their ultimate goal is to deny claims and save money.” In a single-payer system, “the ultimate goal would be to provide not deny.”

(Dr. Ann) Settgast agreed. “As a physician, my job would become simpler as I could make medical decisions based on my expertise and the patients’ best interests — not based on regulations [from insurance companies] that often do not have these interests in mind,” she said. “The single-payer solution is the only choice that makes sense given my motivation to provide the highest-quality care to each of my patients.”

http://www.tcdailyplanet.net/article/2008/02/25/most-minnesota-doctors-single-payer-health-care-academic-study-finds.html

Comment:

By Don McCanne, MD

When you hear that the AMA is opposed to single payer reform, keep in mind that it represents only a minority of American physicians, and within their organization there is a diversity of opinion.

What is reassuring is that several studies have now shown that a majority of physicians do support single payer national health insurance. What is also reassuring is that only 12 percent of these physicians believe that the current system of managed care is adequate. They recognize that reform is essential. And they don’t accept as adequate the patchwork proposed by the leading Democratic candidates.

"Why Not Single Payer?" Parts 1-4

Part 1: Response to Paul Krugman and the Leading Democratic Presidential Contenders

Miles Mogulescu
The Huffington Post
Posted October 10, 2007 | 03:10 AM (EST)

Faster than you can say the word “Sicko” and turn around 3 times, the Democrats’ promise of health care for all has gone from “Universal Medicare For All” to “Individual Insurance Mandate”. In Monday’s New York Times, Paul Krugman defends that reversal in an article entitled “Why Not Single Payer?”

The possibility, after the 2008 elections, of a Democratic-controlled Congress which could pass Medicare For All (a/k/a Universal Single Payer Health Insurance) and a Democratic President who would sign it, could bring about the best chance to enact Medicare For All since Harry Truman first proposed it in 1948.

Yet without firing a shot and with no debate, the leading Democratic Presidential Contenders—Hillary Clinton, John Edwards and Barack Obama—as well as a good part of the Washington progressive infrastructure of think tanks and lobbying groups—have given up the fight for Medicare For All. Instead they propose variations of an Individual Mandate plan developed over the past 15 years by the “moderate” corporate wing of the Republican Party, a version of which Mitt Romney enacted in Massachusetts and which Arnold Schwarzenegger is proposing in California as an alternative to the single payer plan which the Democratic California legislature passed last year that he vetoed.

The thing is, I can’t quite figure out why the Democrats are in such rapid retreat from Medicare For All before the first battle has even been joined. Is it another example of the political cowardice by which the only Iraq resolutions that can pass the Democratic controlled Senate are a Republican-driven bill condemning MoveOn.Org. and praising Gen. Petraeus and another declaring the Iranian Revolutionary Guards a terrorist organization? Is it because the Democratic candidates are afraid of being accused by Republicans of supporting socialized medicine? (If so, it won’t help because Giuliani, Thompson, and Romney—whose Massachusetts plan Hillary largely imitates—all quickly claimed that Hillarycare 2.0 is socialized medicine, anyway.) Is it because they’ve been bought off by insurance companies and drug companies or fear that too many other Congress and Senate members have?

Or is it because they think that the insurance companies and drug companies are just too politically powerful to take on: Therefore the only way to insure most Americans is to make a deal with the devil that requires profit-making insurance companies to waive pre-existing conditions and charge everyone similar premiums regardless of age or health, in exchange for Congress delivering them 50 million guaranteed new profit-making customers, partly subsidized by the government?

Paul Krugman’s NY Times column is one of the first direct attempts by a liberal former supporter of single payer to try to make the case for adopting the Individual Mandate approach instead. According to Krugman, “basically it looks like something that could actually happen in the next administration, while enacting a single-payer plan…excellent as those plans are, might take a very long time.”

First, Krugman argues than an Individual Mandate would not require a big tax increase, although he admits (thus defeating his own argument) that taxes which most people would pay for single payer would most likely be lower than premiums that an Individual Mandate would require them to pay out of their pockets to buy insurance. Second, he argues than an Individual Mandate won’t make people feel that they’re “being forced into a government plan”. But the essence of an Individual Mandate plan is that the federal government forces the uninsured to buy health insurance. It involves even more government coercion than Medicare For All.

Finally, he argues that the Democrats’ proposals generally include a Medicare-like public insurance alternative which individuals may buy into and which “would evolve into single-payer over time.” Krugman never quite explains how this piece of alchemy will occur. Moreover, he admits that this is the part of the Democrats’ plan that the insurance industry will fight “tooth and nail”. If the Democrats have already surrendered on Medicare For All without firing a shot, isn’t it likely that the public alternative (the “socialized medicine” part) will be the first part of the plan to be compromised away when the legislative battles start in Congress and the insurance lobby starts exercising its muscle with its hundreds of lobbyists and tens of millions of dollars in campaign contributions?

In short, I find Krugman’s notion that an Individual Mandate is somehow more politically pragmatic than Medicare For All unconvincing and I don’t buy his argument that it’s a backdoor way to eventually get there. I even wonder how strongly he believes his own arguments. Only last January, in critiquing Schwarzeneggers’s Individual Mandate plan for California as a complicated “Rube Goldberg” device, Krugman argued that “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.” If you then add a public Medicare-like alternative that individuals can buy into, you need a fourth bureaucracy to administer that system.

Thus, when Hillary Clinton claims that her plan requires no new government bureaucracy, she’s not being candid with the voters. That lack of candor will quickly be exploited by the Republicans and the insurance and drug lobbies. While Republicans are wrong that her plan amounts to “socialized medicine”, such charges will still ring true since, in fact, her plan will require intrusive government regulation of the private insurance industry and coercive action to be sure that all citizens are obeying the individual mandate to buy health insurance. That’s one of the big reasons why, once the debate really starts, an Individual Mandate will not necessarily be a popular plan with the voters—Using the political pragmatism test, it stands a better chance of being rejected by the public and meeting the same fate as Hillarycare 1.0 than does Medicare For All, for which the political arguments are simple and clean.

Whatever Clinton might claim, Hillarycare 2.0 in fact requires a highly intrusive government presence in the lives of both businesses and individuals. As with Hillarycare 1.0, this is likely to be the biggest club that Republicans and their insurance company allies will use to defeat her or another Democrat as they did in 1994, unless so many compromises are made to water down the plan that insurance and drug companies decide it’s in their interest to accept the 50 million new mandatory government subsidized customers to pad their bottom lines. (Remember that with private insurance, approximately 30% of the healthcare dollar goes to administration, executive salaries and profits, compared to 2%-3% for Medicare; when all the political deals are finally cut, the private insurance and drug industries might find a new government subsidy for their bottom line an attractive deal.) If an Individual Mandate plan is more politically expedient than Medicare For All, it’s not for any of the reasons which Krugman cites and not because it’s likely to be more politically popular with the voters. The real reason is that with a few backroom political compromises, it could become a that plan the insurance and drug industries could learn to love.

END OF PART 1

Part 2: What’s Wrong With The Clinton / Obama / Edwards Health Care Plans

Miles Mogulescu
The Huffington Post
Posted November 2, 2007 | 04:23 AM (EST)

In Part 1 of this multi-part Huffpost series on the health care debate, I criticized the leading Democratic candidates — Hillary Clinton, Barack Obama, and John Edwards — for surrendering, without firing a shot, to the insurance and drug companies by opposing universal single payer health care.

In this second installment, I elaborate on the difference between universal single payer health care and the Clinton/Obama/Edwards universal insurance mandate plans and argue that universal mandates are bad social policy.

First, let’s define our terms:

“Universal Single Payer Health Care” (aka “Medicare For All”): From the moment that you’re born until the moment that you die, you will be covered by single quasi-public non-profit health insurer that will pay for both preventative care and for all necessary medical procedures and medications. You choose whatever doctor you want to see and you and your doctor decide on the care you need. It won’t matter whether you’re employed or not or whether your employer offers health coverage. You can never be denied insurance.

“Universal Insurance Mandate:” If you like your employer’s health plan, you can keep it. If your employer doesn’t provide health insurance and you don’t qualify for Medicaid, the government will make you pay for your own health insurance out of your own pocket. If you’re too poor to afford the premiums, at tax time every year the government will give you a credit to reimburse you for part of last year’s premiums. If you’re middle class, the government tax credits may be too small to make the insurance really affordable, or you may have to buy a less expensive high deductible policy in which you have to pay for your doctor visits out of your own pocket, unless you get really sick and need major surgery or an extended hospital stay. You and your doctor will still have to fight with your insurance company on whether it will cover procedures your doctor thinks are necessary. If you try to avoid buying your own insurance or think you can’t afford it, the government will penalize you.

To be fair, the Clinton/Obama/Edwards plans have some positive points. By banning “pre-existing conditions”, they would allow people to buy insurance who are simply uninsurable now. By requiring insurance companies to charge the same premiums regardless of age or health, they would make insurance more affordable to middle aged people. (Conversely, they would make insurance more expensive for younger people.) By providing tax credits, they would help lower middle class people afford at least lower priced, high deductible “catastrophic” policies. Most of the plans include a Medicare-like public alternative that individuals may purchase and whch competes with private insurance.

But overall, a universal insurance mandate is bad public policy compared to universal single payer health care. Some of the reasons:

1. It’s a colossal waste of money. While the administrative cost of Medicare is about 2-3 percent, approximately 30 percent of private insurance premiums go to overhead, profits and executive salaries. In 1999, the last year for which I could find numbers, health care administrative costs totaled $294.3 billion or $1,059 per capita, compared to $307 per capita in Canada. With insurance premiums having climbed 87 percent in the past decade, it would be a fair guess that administrative costs now exceed $400 billion per year. That’s more than enough to cover all of the uninsured without raising taxes.

2. Universal mandates punish the middle class who make too much to receive government subsidies, but too little to afford the cost of health insurance that the government will coerce them into buying. Massachusetts passed a state universal mandate program in 2006 which proponents of a universal mandate point to as the model for a national plan. According to recent a study by the Greater Boston Interfaith Organization, the premium for the minimum insurance plan is unaffordable for households earning between 300%-500% of the poverty level. Premiums for the minimum plan are free for those earning up to 150 percent of the federal poverty level of $10,210 for individuals and $13,960 for couples. Premiums are reduced for those earning up to three times the poverty level. Those earning more than that (i.e more than $30,630 for individuals, $41,880 for couples) must pay 100 percent of the premiums themselves. Premiums range from $1464 per year for young adults to $9600 per year for those over 55. So a 55-year-old couple earning $42,000 a year would have to pay $19,200 a year in premiums, nearly 46 percent of their pre-tax income, for a plan with deductibles of $2,000 per individual and $4,000 per family and out-of-pocket expenses of up $5,000 per year for individuals and $7,500 for families. A government mandate requiring people to pay these kinds of premiums, even if a national plan had somewhat higher subsidies, is effectively a huge hidden tax increase for the middle class and a huge boondoggle for the private insurance companies to whom the government delivers large numbers of new customers.

3. The universal mandate plans assume that most people will continue to be covered by their employers and therefore they won’t have to reach into their pockets to pay the full cost of meeting the government mandate. But employer-based health insurance is a dying dinosaur. Each year fewer employers offer insurance. Between 2000 and 2006, the percentage of employers offering some type of health insurance declined from 64.2 percent to 59.7 percent and it continues to decline. Even many people whose employers now provide health insurance are underinsured — according to a Consumer Reports survey, 29 percent of people with health insurance are “under-insured,” with coverage so meager that they often postpone medical care because of cost. Moreover, as insurance premiums escalate at a far greater rate than inflation or wage increases, more and more employers increase their employee’s share of premiums, raise deductibles and co-pays and reduce benefits. If you lose your job, you lose your insurance. In the larger picture, leaving the burden of health insurance on employers makes American companies less competitive in the world economy, compared to other capitalist democracies where the government pays for health care. Recently, Toyota named the savings in health care costs as the main reason for deciding to open a new auto plant in Canada rather than the U.S.

4. Large numbers of people opting for lower-cost, high deductible plans will lead to many middle class people avoiding preventive care and necessary treatment until they are already very sick, leading to worse health outcomes and in the long-run resulting in higher costs from waiting to treat preventable diseases until they become serious. If, after paying thousands of dollars a year in premiums, a middle class family has to pay $2,000-$4,000 in deductibles before their insurance kicks in, many won’t go to the Doctor until it’s an emergency. For example, someone with a chest infection won’t seek care, thus infecting others, and possibly ending up in the hospital with pneumonia. Men won’t get their PSA checked, women won’t get pap smears and breast exams, people won’t get colonoscopies, thus leading to cancers not being found at the early treatable stage.

5. The strongest argument by progressives who support a universal mandate is that the plan would include a Medicare-like public alternative that would compete with private insurance and, because it would so clearly be superior to private insurance, would eventually evolve into a single payer system. If this plan is modeled on Medicare, it would be a fairly generous plan in which you can choose your own doctor, in which most treatments your doctor recommends are covered, and in which deductible
s and co-pays are low. This means that, even after greatly reducing the administrative costs associated with private insurance, it will still be expensive compared to high deductible plans. This leads to “adverse selection.” The young and healthy would opt for the cheaper plans. The people who will buy the Medicare-like plan will be those who think their health care costs are likely to exceed their premiums — in other words, the older and sicker. Far from slowly evolving into a single payer system, as its progressive supporters like Paul Krugman argue, the Medicare-like plan is likely to become more and more expensive as time passes, making it less and less affordable and forcing more and more people back to bare bones private insurance.

Part 3: The Clinton/Obama/Edwards Individual Mandates Represent a Losing Political Strategy

Miles Mogulescu
The Huffington Post
Posted December 3, 2007 | 09:59 AM (EST)

Hillary Clinton is busy in Iowa bashing Barack Obama for offering a health care plan that doesn’t punish uninsured people who won’t pony up their own money out of their own pockets to buy their own health insurance. She points out (rightfully) that if, under Obama’s plan, the Federal government doesn’t force everyone to buy health insurance, millions of uninsured people may decide not to pay for their health insurance and remain uninsured—Thus, Hillary charges, Obama’s plan fails to provide for Universal Health Insurance for all Americans.

Meanwhile, John Edwards criticizes Hillary’s plan on the same grounds. Her plan is vague and elusive on the details, calling for a Federal Mandate, but not specifying what the penalty will be on uninsured citizens who ignore the Mandate. If there’s no penalty, or the penalty is small (under Massachusett’s Universal Mandate plan the penalty is currently $295 per year) then Hillary’s plan doesn’t guarantee Universal Health Insurance either. In addition, Hillary’s plan does not cover 12-15 million illegal immigrants who will continue to flood emergency rooms, driving up premiums for everyone else. Even one of Hillary’s principal health care advisers, MIT economic professor Jonathan Gruber, acknowledges that Hillary’s plan will not include everybody, stating that “Any system that does not have a single payer will not have 100 percent coverage.”

At least John Edwards has the political courage to put some teeth into his plan for the federal government to force the uninsured to buy their own health insurance: Citizens will have to provide proof of health insurance when they seek care or file their Federal tax returns. If they don’t have health insurance, the Federal government will sign them up for a minimum basic plan and take the premiums out of their taxes or garnish their wages. However, Edwards, Obama, and Clinton all avoid spelling out what a minimum plan would cover, what the deductibles and co-pays would be, how much the premiums would cost, and how poor you will have to be for your premiums to be subsidized by the government.

The whole dust-up among Clinton, Obama and Edwards makes clear why Individual Mandate plans—far from being more politically pragmatic than Single Payer/”Medicare For All” plans—are likely to end up being as big a political disaster as Hillary’s 1994 health reform fiasco.

When the Republican Presidential candidate starts attacking the Democratic nominee for trying to compel middle class Americans to buy health insurance that they can’t afford, the Democrat’s poll numbers may start to dive. “If you’re a family making over $40,000 a year so you aren’t poor enough for subsidies and you don’t have health insurance, the Democrats will force you to sign up and keep your tax return or garnish your wages for thousands of dollars, since the average policy costs $10,000 for a family of four.” This is what the Washington consultants think is smart, pragmatic politics for Democrats? The health care issue, which should be a big Democratic advantage on the ‘08 elections, could suddenly turn into liability.

Even if a Democrat wins the Presidency, when it comes time to get a specific proposal through Congress, it will become clear to the voters either that their plan only pretends to cover all the uninsured but doesn’t, or it represents a massive backdoor tax on the uninsured middle class who will be forced by the Federal government to pony up thousands of dollars which they can’t afford to buy their own individual insurance policies. The most affordable of these policies, which realistically will still cost thousands of dollars a year, will of necessity have high deductibles and co-pays. This will force policyholders to forego preventive care and delay going to the doctor until they are really sick and may need major and expensive care. It may even lead to their early death from conditions like breast and prostate cancer that could have been treated if diagnosed earlier. (For some of the other serious problems with Universal Mandate plans as social policy, see Part 2 of this series on the Huffington Post.

Getting major health care reform through Congress (particularly the Senate, with 60 votes needed to end a filibuster) will require a massive popular mobilization. If history proves anything, it’s that Washington only enacts major social change if prodded by large scale social movements such as the union movement, the civil rights movement, and the anti-war movement. Without such movements, there would be no social security, no Civil Rights Act, and we might still be fighting in Vietnam. Why should progressives put such an effort into organizing a mass movement around Universal Mandate plans that will prove unpopular, will not really offer Universal Health Care, will put a huge financial burden on the uninsured middle class, and subsidize the private insurance industry? If we’re going to organize the kind of massive mobilization that will be necessary to really change the health care system in America, then let’s do it for a progressive plan that really works.

HR 676, the “Medicare For All” bill introduced in Congress by Rep. John Conyers, already has 78 congressional co-sponsors. It would cover all Americans from birth until death for all medically necessary treatments and drugs, as well as preventive care. As with Medicare, people can chose their own doctor and determine the best course of care in conjunction with him or her. The 30% of the health care dollar—over $400 billion this year—that goes to pay administrative costs of insurance companies, doctors, and hospitals, as well as insurance company marketing cost, executive salaries and profits, would be reduced to less than 5%, which alone would be enough to cover all of the uninsured. Medicare For All would be paid for by taxes, but would cost most Americans less in the aggregate than they are already paying in premiums, deductibles, co-pays, and forgone wages that are used for employer-provided health care. Unlike Clinton’s, Edward’s and Obama’s plans, it would be truly universal.

A mass movement has already begun to organize around Medicare-For-All. HR 676 has been endorsed by over 235 union organizations in 40 states, including 60 Central Labor Councils, as well as many citizens and religious organization. In California, SB 849, which would have provided for a single payer system for the State’s 37 million citizens, passed both houses of the California Legislature, only to be vetoed by Gov. Schwarzennegger. It was backed by over 400 organizations and unions including the League of Women Voters, the Consumers Union, the California Catholic Conference, the California Nurses Association, the California Teachers Association, AFSCME and the SEIU, and numerous cities and counties. Many other states are building large coalitions favoring Medicare For All
.

With a mass mobilization still in its infant stages, several polls show that a majority of Americans are ready to support Medicare For All. A CBS News poll on September 14-16, 2007 asked, “Which do you think would be better for the country: having one health insurance program covering all Americans that would be administered by the government and paid for by taxpayers, or keeping the current system where many people get their insurance from private employers and some have no insurance?” 55% chose “One Program For All” (up from 47% in February, 2007) and 29% chose the “Current System” (down from 38% in February). (Back in January, 2007, according to an NBC News/Wall Street Journal Poll, 53% said they would be willing to pay higher taxes so that everyone can have health insurance, while 40% disagreed.)

So why are the leading Democratic candidates afraid to support Medicare For All and are instead offering up inferior, and politically less viable, proposals for Universal Mandates? When it comes to health care, Andrew Sullivan’s recent description of Hillary Clinton, unfortunately seems to apply to Barack Obama and John Edwards as well. “Her liberalism is warped by what you might call a Political Post-Traumatic Stress Syndrome. Reagan spooked people on the left, especially those, like Clinton, who were interested primarily in winning power. She has internalized what most Democrats of her generation have internalized: They suspect that the majority is not with them, and so some quotient of discretion, fear or plain deception is required to advance their objectives”.

As the above polls suggest, the Democratic candidates need not be so fearful when it comes to Health Care. Even if they are, progressives do not need to follow them in their fear and timidity. Only a progressive grassroots movement has the power to help a Democratic President get meaningful health care reform through Congress, given the millions of dollars in campaign contributions and the arm twisting of corporate lobbyists that will be mobilized against real reform by the insurance and drug industries and other corporate special interests.

So here’s the deal for our Democratic frontrunners: Run on your Universal Mandate plans if you must. You’ve probably gotten yourself so locked into them that it’s hard to change course in the middle of a political campaign. At least you’ll keep health care reform on the political front burner. We’ll even give you money and work on your campaign, because the country and the planet cannot afford another 4 years of a Republican in the White House.

But if you’re elected President, we’re not going to lend the force of our progressive movement to supporting your Universal Mandate plans. We’ll be organizing millions of people behind Single Payer Health Care/Medicare-For-All, the only type of plan that can actually guarantee quality, Universal Health Care to all Americans.

Part 4: In Partial Defense of Obama Against Clinton’s Attacks on His Health Care Plan

Miles Mogulescu
The Huffington Post
Posted February 4, 2008 | 01:36 PM (EST)

In this ongoing multipart Huffpo series entitled “Why Not Single Payer?” I’ve written extensively about why Single Payer/Medicare For All represents both better social policy and better political strategy than the healthcare plans advanced by the leading Democratic candidates, including both Hillary Clinton and Barack Obama (whom I enthusiastically support for numerous reasons other than his Healthcare plan. Among these is Obama’s ability to encourage popular movements which could push change beyond his own campaign proposals.).

However, as a single payer advocate, I find Obama’s healthcare plan to be politically superior, and certainly more honest, than Clinton’s.

First, let’s be clear on one thing: Despite the rhetoric, neither Clinton’s nor Obama’s plan guarantees Universal Health Care for all Americans. Hillary is being less than candid when she proclaims “My opponent will not commit to Universal Healthcare. I do not believe we should nominate any Democrat who will not explicitly support universal health insurance.”

Hillary is using a deceptive rhetorical slight of hand. “Universal health insurance,” which is at the heart of Clinton’s plan, is not the same as “Universal Healthcare” which can only be guaranteed by a single payer system under which all Americans are automatically covered for all medical care by a single, taxpayer funded, not for profit health insurer from birth until death. (Even one of Hillary’s top health care advisors, MIT Prof. Jonathan Gruber acknowledges that Clinton’s plan will not include everybody, admitting that “Any system that does not have a single payer will not have 100% coverage”.)

Clinton’s “Universal health insurance” is a plan under which, if your employer doesn’t provide health insurance or you don’t have a job, the government mandates that you must buy health insurance out of your own pocket. If your income is less than a certain level (which level Hillary’s plan glaringly does not specify) you will retroactively receive a tax refund or tax credit, on a sliding scale, after April 15th of the following year to reimburse you for part of the premium which you already laid out in the prior year. If you fail to buy your own health insurance, the federal government will penalize you.

Again, glaringly, Clinton’s plan does not spell out what the penalties will be. It should be noted, however, that if the penalties are small, the plan will not be Universal because many people will take the penalty, rather than pay thousands of dollars in insurance premiums that they cannot afford. That’s what is happening in Massachusetts under the Romney plan on which Hillary is modeling her plan. If the penalties are large — for example, if the government can garnishee your wages, keep your tax refund, or charge you a large fine — many middle class people who make too much to receive subsidies but too little to afford the premiums will see their standard of living go down.

While, notably, Clinton has not specified an enforcement mechanism in her plan, on Sunday she stated that “I think there are a number of mechanisms” [for enforcing a mandate, including] “going after people’s wages”. Clinton plan punishes the uninsured middle class which makes too much money to qualify for a tax subsidy but too little to afford a meaningful insurance policy which averages $5,000 for an individual and $12,000 for a family of four.

Obama responds, “It’s not that people don’t want health care, it’s that can’t they can’t afford it”. Unless and until health insurance costs come down to a level that everyone can afford, Obama would not punish people for not buying insurance.

Obama circulated a mailer last week which criticized Hillary’s plan, showing a photo of a couple sitting at a kitchen table, stating truthfully “Hillary’s health care plan forces everyone to buy insurance, even if you can’t afford it”. In response, the Clinton campaign convened a conference call of health care policy advisors to denounce the mailer. One of the advisors, Len Nichols, denounced the leaflet and photo, stating, “It is as outrageous as having Nazis march through Skokie, Illinois. I just find it disgusting that this kind of imagery is being used to attack the only way to get to universal coverage.”* (The Clinton campaign and Nichols later apologized for the remark.)

In fact, Obama’s mailer demonstrated why Clinton’s individual mandate plan is a political loser for Democrats. If Clinton’s campaign freaks out so badly at relatively mild criticism from Obama, imagine what it will face from Republicans if Hillary is the nominee in the fall. Already, the Republican National Committee put out a press release saying “Hillary Clinton wants to garnis
hee your wages”. Here’s what the Republicans will be saying in the fall: “If you’re an uninsured family making over $40-$50,000 a year so you aren’t poor enough for subsidies but can’t afford insurance, Hillary will garnishee thousands of dollars of your wages since the average policy for a family of 4 is around $12,000.” That should be enough to scare off millions of middle class families earning less than $100,000, and make them think twice about voting for a Democrat.

The growing failure of Romney’s Massachusetts plan will give ample evidence to back these Republican charges. In Massachusetts, premiums are subsidized for people earning up to 3 times the poverty level (i.e. up to $30,630 for individuals and $41,880). If you make more than that, you have to pay the full cost of insurance, which ranges from $1464 a year for young adults to $9600 a year for those over 55. At those prices, it’s no surprise that only 7% of the 244,000 uninsured Massachusetts citizens who are mandated to buy unsubsidized insurance had signed up by last Dec. 1, although fines for each uninsured individual will be $2,000 in 2008.

So Obama is right to criticize Clinton for putting forward a plan that would penalize the uninsured middle class, unless and until the cost can be brought down to an affordable level. Hillary’s plan is morally wrong, and it’s a political loser.

Obama’s plan is in most other ways similar to Clinton’s. Both plans would prevent insurance companies from denying coverage based on pre-existing conditions, provide community rating under which risk is shared by limiting the premium difference between the healthy and less healthy and the young and old, and provide subsidies for the less well off to buy insurance. They also both provide for a public plan to compete with private insurance. If enacted by Congress (absent the mandate), these plans will help millions of people obtain health insurance who don’t now have it. Obama’s plan has an additional provision that will lower premiums more than Clinton’s plan would. 80% of health care costs cover the care for the sickest 20% of the population. Obama’s plan provides for the Federal government to reimburse insurers for part of the cost of catastrophic care if they use that reimbursement to lower premiums.

Nevertheless, neither Obama’s nor Clinton’s plan will provide truly Universal Healthcare for all Americans. At a cost of a little more than $100 billion a year each, financed largely through letting Bush’s tax cuts for the wealthy lapse, neither plan can make health insurance affordable for all Americans. That can only be done through a single payer/Medicare For All plan which would save approximately $350-$400 billion dollars a year by eliminating the nearly 1/3 of health care costs that go to paying the overhead, advertising, executive salaries, and profits of private health insurers, and the cost of employees in Doctor’s offices and hospitals required to process claims from multiple insurers (as opposed to 3%-4% overhead for Medicare.)

That’s why I still find it disappointing that Obama — who has a sophisticated understanding of the single payer concept — did not have the political courage to join the 78 Congressional co-sponsors of HR 676, the Medicare For All bill introduced in Congress by Rep. John Conyers. But unlike Clinton, at least Obama is not hostile to single payer. In the South Carolina debate, Clinton angrily accused Obama of having once been a supporter of single payer, as though he had once been a Communist. Obama responded that if he were designing a health care system from scratch, he would support single payer, but that since many people are happy with their current health insurance, he thought it was better for the time being to build on the present system. I disagree with Obama. The present system of employer-based health insurance is collapsing under its own weight and an attempt to build on this shaky foundation will also collapse, if not right away, then within a few years.

Despite Obama’s political calculation to the contrary, the combination of a President with Obama’s extraordinary leadership skills and a budding mass movement already supporting HR 676 (which includes over 235 union organizations in 40 states, including 60 Central Labor Councils, as well as many citizens and religious organizations) the American people can be convinced to support Medicare For All. A CBS News poll in September asked “Which do you think would be better for the country: Having one health insurance program covering all Americans that would be administered by the government and paid for by taxpayers, or keeping the current system where many people get their insurance from private employers and some have no insurance?” 55% chose “One Program For All” and 29% chose the “Current System”.

If Obama is elected President, there will be a strong and serious mass movement supporting HR 676. A President Obama is less likely to meet such a movement with hostility than would a President Clinton. Morever, if Obama manages to pass something resembling his plan, when it fails to provide Universal Healthcare, and when increasing numbers of employers drop or reduce their health benefits within a few years, it is conceivable that Obama could support an evolution towards a single payer system in his second term.

Moreover, in California, a similar coalition just defeated an individual mandate plan proposed by Gov. Schwarzenneger and the Democratic Speaker of the California Assembly with only a single State Senator supporting the bill in Committee. In contrast, a year ago both houses of the California Legislator passed SB 840 which would have created a single payer system for the state’s 37 million citizens, had it not been vetoed by Gov. Schwarzenneger. If California gets a Democratic Governor in 2010, it could be the first state to enact single payer healthcare on a state level. To succeed, it will need a series of waivers from the Federal government and the ability to use Federal healthcare funds towards the cost of the State system. Whatever the fate of Obama’s national plan, it is unlikely that a President Obama would try to block a state from experimenting with its own single payer system which, if successful, could provide the model for the rest of the country. (Canada’s single payer system started first in the Province of Saskatchewan under a Conservative government, before expanding to cover the entire country.)

So, as a supporter of single payer/Medicare For All, I find it disappointing that Obama did not have the audacity to support single payer. Nevertheless, his program is better than Hillary’s coercive individual mandate plan. It will certainly be easier to run on against the Republicans in the fall, and to potentially gain enough popular support to get through Congress without too many crippling compromises. Maybe I’m being naïve, but, in the long-run, the fact that Obama understands single payer and is not hostile to it as a concept, gives me hope that we might get there, or close to there, over the course of an 8 year Obama Presidency.

For that to happen, it will take a mass movement in support of single payer health. Obama speaks eloquently of the fact that real social change is hard and starts from the bottom up through organized movements, not from the top down from a government that institutionalizes fundamental social change only when forced to from below. A mass movement for single payer healthcare has already begun to take shape. My hope is that an Obama Presidency will help give it the space to flourish, and to push Universal Healthcare beyond the bounds of Obama’s more modest proposals.

*Nichols is head of the Health Policy Program of the New America Foundation, which helped advise Romney, Schwarzennegger and Clinton on their health plans. His predecessor at NAM was Lauri
e Rubiner, a former aide to Bob Dole who was assigned by Dole in 2003 to devise a competing plan to Hillary Clinton’s first health reform plan. She developed the idea of individual mandates, which had roots in conservative economist Milton Friedman, Richard Nixon’s attempts to counter Democratic efforts to enact single payer, and the conservative Heritage Foundation. After leaving her Senate posts, she went to NAM where she further developed the individual mandate idea and helped lay the basis for Romney’s Massachusetts plan. In 2005, Rubiner became Hillary Clinton’s legislative director (a post she just left) where she was instrumental in developing Hillary’s individual mandate plan. In the next installment of this “Why Not Single Payer?” Huffpo series, I will trace the history of individual mandates as a conservative Republican idea that has ironically been adopted by leading Democrats, including Hillary Clinton.

“Why Not Single Payer?” Parts 1-4

Part 1: Response to Paul Krugman and the Leading Democratic Presidential Contenders

Miles Mogulescu
The Huffington Post
Posted October 10, 2007 | 03:10 AM (EST)

Faster than you can say the word “Sicko” and turn around 3 times, the Democrats’ promise of health care for all has gone from “Universal Medicare For All” to “Individual Insurance Mandate”. In Monday’s New York Times, Paul Krugman defends that reversal in an article entitled “Why Not Single Payer?”

The possibility, after the 2008 elections, of a Democratic-controlled Congress which could pass Medicare For All (a/k/a Universal Single Payer Health Insurance) and a Democratic President who would sign it, could bring about the best chance to enact Medicare For All since Harry Truman first proposed it in 1948.

Yet without firing a shot and with no debate, the leading Democratic Presidential Contenders—Hillary Clinton, John Edwards and Barack Obama—as well as a good part of the Washington progressive infrastructure of think tanks and lobbying groups—have given up the fight for Medicare For All. Instead they propose variations of an Individual Mandate plan developed over the past 15 years by the “moderate” corporate wing of the Republican Party, a version of which Mitt Romney enacted in Massachusetts and which Arnold Schwarzenegger is proposing in California as an alternative to the single payer plan which the Democratic California legislature passed last year that he vetoed.

The thing is, I can’t quite figure out why the Democrats are in such rapid retreat from Medicare For All before the first battle has even been joined. Is it another example of the political cowardice by which the only Iraq resolutions that can pass the Democratic controlled Senate are a Republican-driven bill condemning MoveOn.Org. and praising Gen. Petraeus and another declaring the Iranian Revolutionary Guards a terrorist organization? Is it because the Democratic candidates are afraid of being accused by Republicans of supporting socialized medicine? (If so, it won’t help because Giuliani, Thompson, and Romney—whose Massachusetts plan Hillary largely imitates—all quickly claimed that Hillarycare 2.0 is socialized medicine, anyway.) Is it because they’ve been bought off by insurance companies and drug companies or fear that too many other Congress and Senate members have?

Or is it because they think that the insurance companies and drug companies are just too politically powerful to take on: Therefore the only way to insure most Americans is to make a deal with the devil that requires profit-making insurance companies to waive pre-existing conditions and charge everyone similar premiums regardless of age or health, in exchange for Congress delivering them 50 million guaranteed new profit-making customers, partly subsidized by the government?

Paul Krugman’s NY Times column is one of the first direct attempts by a liberal former supporter of single payer to try to make the case for adopting the Individual Mandate approach instead. According to Krugman, “basically it looks like something that could actually happen in the next administration, while enacting a single-payer plan…excellent as those plans are, might take a very long time.”

First, Krugman argues than an Individual Mandate would not require a big tax increase, although he admits (thus defeating his own argument) that taxes which most people would pay for single payer would most likely be lower than premiums that an Individual Mandate would require them to pay out of their pockets to buy insurance. Second, he argues than an Individual Mandate won’t make people feel that they’re “being forced into a government plan”. But the essence of an Individual Mandate plan is that the federal government forces the uninsured to buy health insurance. It involves even more government coercion than Medicare For All.

Finally, he argues that the Democrats’ proposals generally include a Medicare-like public insurance alternative which individuals may buy into and which “would evolve into single-payer over time.” Krugman never quite explains how this piece of alchemy will occur. Moreover, he admits that this is the part of the Democrats’ plan that the insurance industry will fight “tooth and nail”. If the Democrats have already surrendered on Medicare For All without firing a shot, isn’t it likely that the public alternative (the “socialized medicine” part) will be the first part of the plan to be compromised away when the legislative battles start in Congress and the insurance lobby starts exercising its muscle with its hundreds of lobbyists and tens of millions of dollars in campaign contributions?

In short, I find Krugman’s notion that an Individual Mandate is somehow more politically pragmatic than Medicare For All unconvincing and I don’t buy his argument that it’s a backdoor way to eventually get there. I even wonder how strongly he believes his own arguments. Only last January, in critiquing Schwarzeneggers’s Individual Mandate plan for California as a complicated “Rube Goldberg” device, Krugman argued that “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.” If you then add a public Medicare-like alternative that individuals can buy into, you need a fourth bureaucracy to administer that system.

Thus, when Hillary Clinton claims that her plan requires no new government bureaucracy, she’s not being candid with the voters. That lack of candor will quickly be exploited by the Republicans and the insurance and drug lobbies. While Republicans are wrong that her plan amounts to “socialized medicine”, such charges will still ring true since, in fact, her plan will require intrusive government regulation of the private insurance industry and coercive action to be sure that all citizens are obeying the individual mandate to buy health insurance. That’s one of the big reasons why, once the debate really starts, an Individual Mandate will not necessarily be a popular plan with the voters—Using the political pragmatism test, it stands a better chance of being rejected by the public and meeting the same fate as Hillarycare 1.0 than does Medicare For All, for which the political arguments are simple and clean.

Whatever Clinton might claim, Hillarycare 2.0 in fact requires a highly intrusive government presence in the lives of both businesses and individuals. As with Hillarycare 1.0, this is likely to be the biggest club that Republicans and their insurance company allies will use to defeat her or another Democrat as they did in 1994, unless so many compromises are made to water down the plan that insurance and drug companies decide it’s in their interest to accept the 50 million new mandatory government subsidized customers to pad their bottom lines. (Remember that with private insurance, approximately 30% of the healthcare dollar goes to administration, executive salaries and profits, compared to 2%-3% for Medicare; when all the political deals are finally cut, the private insurance and drug industries might find a new government subsidy for their bottom line an attractive deal.) If an Individual Mandate plan is more politically expedient than Medicare For All, it’s not for any of the reasons which Krugman cites and not because it’s likely to be more politically popular with the voters. The real reason is that with a few backroom political compromises, it could become a that plan the insurance and drug industries could learn to love.

END OF PART 1

Part 2: What’s Wrong With The Clinton / Obama / Edwards Health Care Plans

Miles Mogulescu
The Huffington Post
Posted November 2, 2007 | 04:23 AM (EST)

In Part 1 of this multi-part Huffpost series on the health care debate, I criticized the leading Democratic candidates — Hillary Clinton, Barack Obama, and John Edwards — for surrendering, without firing a shot, to the insurance and drug companies by opposing universal single payer health care.

In this second installment, I elaborate on the difference between universal single payer health care and the Clinton/Obama/Edwards universal insurance mandate plans and argue that universal mandates are bad social policy.

First, let’s define our terms:

“Universal Single Payer Health Care” (aka “Medicare For All”): From the moment that you’re born until the moment that you die, you will be covered by single quasi-public non-profit health insurer that will pay for both preventative care and for all necessary medical procedures and medications. You choose whatever doctor you want to see and you and your doctor decide on the care you need. It won’t matter whether you’re employed or not or whether your employer offers health coverage. You can never be denied insurance.

“Universal Insurance Mandate:” If you like your employer’s health plan, you can keep it. If your employer doesn’t provide health insurance and you don’t qualify for Medicaid, the government will make you pay for your own health insurance out of your own pocket. If you’re too poor to afford the premiums, at tax time every year the government will give you a credit to reimburse you for part of last year’s premiums. If you’re middle class, the government tax credits may be too small to make the insurance really affordable, or you may have to buy a less expensive high deductible policy in which you have to pay for your doctor visits out of your own pocket, unless you get really sick and need major surgery or an extended hospital stay. You and your doctor will still have to fight with your insurance company on whether it will cover procedures your doctor thinks are necessary. If you try to avoid buying your own insurance or think you can’t afford it, the government will penalize you.

To be fair, the Clinton/Obama/Edwards plans have some positive points. By banning “pre-existing conditions”, they would allow people to buy insurance who are simply uninsurable now. By requiring insurance companies to charge the same premiums regardless of age or health, they would make insurance more affordable to middle aged people. (Conversely, they would make insurance more expensive for younger people.) By providing tax credits, they would help lower middle class people afford at least lower priced, high deductible “catastrophic” policies. Most of the plans include a Medicare-like public alternative that individuals may purchase and whch competes with private insurance.

But overall, a universal insurance mandate is bad public policy compared to universal single payer health care. Some of the reasons:

1. It’s a colossal waste of money. While the administrative cost of Medicare is about 2-3 percent, approximately 30 percent of private insurance premiums go to overhead, profits and executive salaries. In 1999, the last year for which I could find numbers, health care administrative costs totaled $294.3 billion or $1,059 per capita, compared to $307 per capita in Canada. With insurance premiums having climbed 87 percent in the past decade, it would be a fair guess that administrative costs now exceed $400 billion per year. That’s more than enough to cover all of the uninsured without raising taxes.

2. Universal mandates punish the middle class who make too much to receive government subsidies, but too little to afford the cost of health insurance that the government will coerce them into buying. Massachusetts passed a state universal mandate program in 2006 which proponents of a universal mandate point to as the model for a national plan. According to recent a study by the Greater Boston Interfaith Organization, the premium for the minimum insurance plan is unaffordable for households earning between 300%-500% of the poverty level. Premiums for the minimum plan are free for those earning up to 150 percent of the federal poverty level of $10,210 for individuals and $13,960 for couples. Premiums are reduced for those earning up to three times the poverty level. Those earning more than that (i.e more than $30,630 for individuals, $41,880 for couples) must pay 100 percent of the premiums themselves. Premiums range from $1464 per year for young adults to $9600 per year for those over 55. So a 55-year-old couple earning $42,000 a year would have to pay $19,200 a year in premiums, nearly 46 percent of their pre-tax income, for a plan with deductibles of $2,000 per individual and $4,000 per family and out-of-pocket expenses of up $5,000 per year for individuals and $7,500 for families. A government mandate requiring people to pay these kinds of premiums, even if a national plan had somewhat higher subsidies, is effectively a huge hidden tax increase for the middle class and a huge boondoggle for the private insurance companies to whom the government delivers large numbers of new customers.

3. The universal mandate plans assume that most people will continue to be covered by their employers and therefore they won’t have to reach into their pockets to pay the full cost of meeting the government mandate. But employer-based health insurance is a dying dinosaur. Each year fewer employers offer insurance. Between 2000 and 2006, the percentage of employers offering some type of health insurance declined from 64.2 percent to 59.7 percent and it continues to decline. Even many people whose employers now provide health insurance are underinsured — according to a Consumer Reports survey, 29 percent of people with health insurance are “under-insured,” with coverage so meager that they often postpone medical care because of cost. Moreover, as insurance premiums escalate at a far greater rate than inflation or wage increases, more and more employers increase their employee’s share of premiums, raise deductibles and co-pays and reduce benefits. If you lose your job, you lose your insurance. In the larger picture, leaving the burden of health insurance on employers makes American companies less competitive in the world economy, compared to other capitalist democracies where the government pays for health care. Recently, Toyota named the savings in health care costs as the main reason for deciding to open a new auto plant in Canada rather than the U.S.

4. Large numbers of people opting for lower-cost, high deductible plans will lead to many middle class people avoiding preventive care and necessary treatment until they are already very sick, leading to worse health outcomes and in the long-run resulting in higher costs from waiting to treat preventable diseases until they become serious. If, after paying thousands of dollars a year in premiums, a middle class family has to pay $2,000-$4,000 in deductibles before their insurance kicks in, many won’t go to the Doctor until it’s an emergency. For example, someone with a chest infection won’t seek care, thus infecting others, and possibly ending up in the hospital with pneumonia. Men won’t get their PSA checked, women won’t get pap smears and breast exams, people won’t get colonoscopies, thus leading to cancers not being found at the early treatable stage.

5. The strongest argument by progressives who support a universal mandate is that the plan would include a Medicare-like public alternative that would compete with private insurance and, because it would so clearly be superior to private insurance, would eventually evolve into a single payer system. If this plan is modeled on Medicare, it would be a fairly generous plan in which you can choose your own doctor, in which most treatments your doctor recommends are covered, and in which deductibles and co-pays are low. This means that, even after greatly reducing the administrative costs associated with private insurance, it will still be expensive compared to high deductible plans. This leads to “adverse selection.” The young and healthy would opt for the cheaper plans. The people who will buy the Medicare-like plan will be those who think their health care costs are likely to exceed their premiums — in other words, the older and sicker. Far from slowly evolving into a single payer system, as its progressive supporters like Paul Krugman argue, the Medicare-like plan is likely to become more and more expensive as time passes, making it less and less affordable and forcing more and more people back to bare bones private insurance.

Part 3: The Clinton/Obama/Edwards Individual Mandates Represent a Losing Political Strategy

Miles Mogulescu
The Huffington Post
Posted December 3, 2007 | 09:59 AM (EST)

Hillary Clinton is busy in Iowa bashing Barack Obama for offering a health care plan that doesn’t punish uninsured people who won’t pony up their own money out of their own pockets to buy their own health insurance. She points out (rightfully) that if, under Obama’s plan, the Federal government doesn’t force everyone to buy health insurance, millions of uninsured people may decide not to pay for their health insurance and remain uninsured—Thus, Hillary charges, Obama’s plan fails to provide for Universal Health Insurance for all Americans.

Meanwhile, John Edwards criticizes Hillary’s plan on the same grounds. Her plan is vague and elusive on the details, calling for a Federal Mandate, but not specifying what the penalty will be on uninsured citizens who ignore the Mandate. If there’s no penalty, or the penalty is small (under Massachusett’s Universal Mandate plan the penalty is currently $295 per year) then Hillary’s plan doesn’t guarantee Universal Health Insurance either. In addition, Hillary’s plan does not cover 12-15 million illegal immigrants who will continue to flood emergency rooms, driving up premiums for everyone else. Even one of Hillary’s principal health care advisers, MIT economic professor Jonathan Gruber, acknowledges that Hillary’s plan will not include everybody, stating that “Any system that does not have a single payer will not have 100 percent coverage.”

At least John Edwards has the political courage to put some teeth into his plan for the federal government to force the uninsured to buy their own health insurance: Citizens will have to provide proof of health insurance when they seek care or file their Federal tax returns. If they don’t have health insurance, the Federal government will sign them up for a minimum basic plan and take the premiums out of their taxes or garnish their wages. However, Edwards, Obama, and Clinton all avoid spelling out what a minimum plan would cover, what the deductibles and co-pays would be, how much the premiums would cost, and how poor you will have to be for your premiums to be subsidized by the government.

The whole dust-up among Clinton, Obama and Edwards makes clear why Individual Mandate plans—far from being more politically pragmatic than Single Payer/”Medicare For All” plans—are likely to end up being as big a political disaster as Hillary’s 1994 health reform fiasco.

When the Republican Presidential candidate starts attacking the Democratic nominee for trying to compel middle class Americans to buy health insurance that they can’t afford, the Democrat’s poll numbers may start to dive. “If you’re a family making over $40,000 a year so you aren’t poor enough for subsidies and you don’t have health insurance, the Democrats will force you to sign up and keep your tax return or garnish your wages for thousands of dollars, since the average policy costs $10,000 for a family of four.” This is what the Washington consultants think is smart, pragmatic politics for Democrats? The health care issue, which should be a big Democratic advantage on the ‘08 elections, could suddenly turn into liability.

Even if a Democrat wins the Presidency, when it comes time to get a specific proposal through Congress, it will become clear to the voters either that their plan only pretends to cover all the uninsured but doesn’t, or it represents a massive backdoor tax on the uninsured middle class who will be forced by the Federal government to pony up thousands of dollars which they can’t afford to buy their own individual insurance policies. The most affordable of these policies, which realistically will still cost thousands of dollars a year, will of necessity have high deductibles and co-pays. This will force policyholders to forego preventive care and delay going to the doctor until they are really sick and may need major and expensive care. It may even lead to their early death from conditions like breast and prostate cancer that could have been treated if diagnosed earlier. (For some of the other serious problems with Universal Mandate plans as social policy, see Part 2 of this series on the Huffington Post.

Getting major health care reform through Congress (particularly the Senate, with 60 votes needed to end a filibuster) will require a massive popular mobilization. If history proves anything, it’s that Washington only enacts major social change if prodded by large scale social movements such as the union movement, the civil rights movement, and the anti-war movement. Without such movements, there would be no social security, no Civil Rights Act, and we might still be fighting in Vietnam. Why should progressives put such an effort into organizing a mass movement around Universal Mandate plans that will prove unpopular, will not really offer Universal Health Care, will put a huge financial burden on the uninsured middle class, and subsidize the private insurance industry? If we’re going to organize the kind of massive mobilization that will be necessary to really change the health care system in America, then let’s do it for a progressive plan that really works.

HR 676, the “Medicare For All” bill introduced in Congress by Rep. John Conyers, already has 78 congressional co-sponsors. It would cover all Americans from birth until death for all medically necessary treatments and drugs, as well as preventive care. As with Medicare, people can chose their own doctor and determine the best course of care in conjunction with him or her. The 30% of the health care dollar—over $400 billion this year—that goes to pay administrative costs of insurance companies, doctors, and hospitals, as well as insurance company marketing cost, executive salaries and profits, would be reduced to less than 5%, which alone would be enough to cover all of the uninsured. Medicare For All would be paid for by taxes, but would cost most Americans less in the aggregate than they are already paying in premiums, deductibles, co-pays, and forgone wages that are used for employer-provided health care. Unlike Clinton’s, Edward’s and Obama’s plans, it would be truly universal.

A mass movement has already begun to organize around Medicare-For-All. HR 676 has been endorsed by over 235 union organizations in 40 states, including 60 Central Labor Councils, as well as many citizens and religious organization. In California, SB 849, which would have provided for a single payer system for the State’s 37 million citizens, passed both houses of the California Legislature, only to be vetoed by Gov. Schwarzennegger. It was backed by over 400 organizations and unions including the League of Women Voters, the Consumers Union, the California Catholic Conference, the California Nurses Association, the California Teachers Association, AFSCME and the SEIU, and numerous cities and counties. Many other states are building large coalitions favoring Medicare For All.

With a mass mobilization still in its infant stages, several polls show that a majority of Americans are ready to support Medicare For All. A CBS News poll on September 14-16, 2007 asked, “Which do you think would be better for the country: having one health insurance program covering all Americans that would be administered by the government and paid for by taxpayers, or keeping the current system where many people get their insurance from private employers and some have no insurance?” 55% chose “One Program For All” (up from 47% in February, 2007) and 29% chose the “Current System” (down from 38% in February). (Back in January, 2007, according to an NBC News/Wall Street Journal Poll, 53% said they would be willing to pay higher taxes so that everyone can have health insurance, while 40% disagreed.)

So why are the leading Democratic candidates afraid to support Medicare For All and are instead offering up inferior, and politically less viable, proposals for Universal Mandates? When it comes to health care, Andrew Sullivan’s recent description of Hillary Clinton, unfortunately seems to apply to Barack Obama and John Edwards as well. “Her liberalism is warped by what you might call a Political Post-Traumatic Stress Syndrome. Reagan spooked people on the left, especially those, like Clinton, who were interested primarily in winning power. She has internalized what most Democrats of her generation have internalized: They suspect that the majority is not with them, and so some quotient of discretion, fear or plain deception is required to advance their objectives”.

As the above polls suggest, the Democratic candidates need not be so fearful when it comes to Health Care. Even if they are, progressives do not need to follow them in their fear and timidity. Only a progressive grassroots movement has the power to help a Democratic President get meaningful health care reform through Congress, given the millions of dollars in campaign contributions and the arm twisting of corporate lobbyists that will be mobilized against real reform by the insurance and drug industries and other corporate special interests.

So here’s the deal for our Democratic frontrunners: Run on your Universal Mandate plans if you must. You’ve probably gotten yourself so locked into them that it’s hard to change course in the middle of a political campaign. At least you’ll keep health care reform on the political front burner. We’ll even give you money and work on your campaign, because the country and the planet cannot afford another 4 years of a Republican in the White House.

But if you’re elected President, we’re not going to lend the force of our progressive movement to supporting your Universal Mandate plans. We’ll be organizing millions of people behind Single Payer Health Care/Medicare-For-All, the only type of plan that can actually guarantee quality, Universal Health Care to all Americans.

Part 4: In Partial Defense of Obama Against Clinton’s Attacks on His Health Care Plan

Miles Mogulescu
The Huffington Post
Posted February 4, 2008 | 01:36 PM (EST)

In this ongoing multipart Huffpo series entitled “Why Not Single Payer?” I’ve written extensively about why Single Payer/Medicare For All represents both better social policy and better political strategy than the healthcare plans advanced by the leading Democratic candidates, including both Hillary Clinton and Barack Obama (whom I enthusiastically support for numerous reasons other than his Healthcare plan. Among these is Obama’s ability to encourage popular movements which could push change beyond his own campaign proposals.).

However, as a single payer advocate, I find Obama’s healthcare plan to be politically superior, and certainly more honest, than Clinton’s.

First, let’s be clear on one thing: Despite the rhetoric, neither Clinton’s nor Obama’s plan guarantees Universal Health Care for all Americans. Hillary is being less than candid when she proclaims “My opponent will not commit to Universal Healthcare. I do not believe we should nominate any Democrat who will not explicitly support universal health insurance.”

Hillary is using a deceptive rhetorical slight of hand. “Universal health insurance,” which is at the heart of Clinton’s plan, is not the same as “Universal Healthcare” which can only be guaranteed by a single payer system under which all Americans are automatically covered for all medical care by a single, taxpayer funded, not for profit health insurer from birth until death. (Even one of Hillary’s top health care advisors, MIT Prof. Jonathan Gruber acknowledges that Clinton’s plan will not include everybody, admitting that “Any system that does not have a single payer will not have 100% coverage”.)

Clinton’s “Universal health insurance” is a plan under which, if your employer doesn’t provide health insurance or you don’t have a job, the government mandates that you must buy health insurance out of your own pocket. If your income is less than a certain level (which level Hillary’s plan glaringly does not specify) you will retroactively receive a tax refund or tax credit, on a sliding scale, after April 15th of the following year to reimburse you for part of the premium which you already laid out in the prior year. If you fail to buy your own health insurance, the federal government will penalize you.

Again, glaringly, Clinton’s plan does not spell out what the penalties will be. It should be noted, however, that if the penalties are small, the plan will not be Universal because many people will take the penalty, rather than pay thousands of dollars in insurance premiums that they cannot afford. That’s what is happening in Massachusetts under the Romney plan on which Hillary is modeling her plan. If the penalties are large — for example, if the government can garnishee your wages, keep your tax refund, or charge you a large fine — many middle class people who make too much to receive subsidies but too little to afford the premiums will see their standard of living go down.

While, notably, Clinton has not specified an enforcement mechanism in her plan, on Sunday she stated that “I think there are a number of mechanisms” [for enforcing a mandate, including] “going after people’s wages”. Clinton plan punishes the uninsured middle class which makes too much money to qualify for a tax subsidy but too little to afford a meaningful insurance policy which averages $5,000 for an individual and $12,000 for a family of four.

Obama responds, “It’s not that people don’t want health care, it’s that can’t they can’t afford it”. Unless and until health insurance costs come down to a level that everyone can afford, Obama would not punish people for not buying insurance.

Obama circulated a mailer last week which criticized Hillary’s plan, showing a photo of a couple sitting at a kitchen table, stating truthfully “Hillary’s health care plan forces everyone to buy insurance, even if you can’t afford it”. In response, the Clinton campaign convened a conference call of health care policy advisors to denounce the mailer. One of the advisors, Len Nichols, denounced the leaflet and photo, stating, “It is as outrageous as having Nazis march through Skokie, Illinois. I just find it disgusting that this kind of imagery is being used to attack the only way to get to universal coverage.”* (The Clinton campaign and Nichols later apologized for the remark.)

In fact, Obama’s mailer demonstrated why Clinton’s individual mandate plan is a political loser for Democrats. If Clinton’s campaign freaks out so badly at relatively mild criticism from Obama, imagine what it will face from Republicans if Hillary is the nominee in the fall. Already, the Republican National Committee put out a press release saying “Hillary Clinton wants to garnishee your wages”. Here’s what the Republicans will be saying in the fall: “If you’re an uninsured family making over $40-$50,000 a year so you aren’t poor enough for subsidies but can’t afford insurance, Hillary will garnishee thousands of dollars of your wages since the average policy for a family of 4 is around $12,000.” That should be enough to scare off millions of middle class families earning less than $100,000, and make them think twice about voting for a Democrat.

The growing failure of Romney’s Massachusetts plan will give ample evidence to back these Republican charges. In Massachusetts, premiums are subsidized for people earning up to 3 times the poverty level (i.e. up to $30,630 for individuals and $41,880). If you make more than that, you have to pay the full cost of insurance, which ranges from $1464 a year for young adults to $9600 a year for those over 55. At those prices, it’s no surprise that only 7% of the 244,000 uninsured Massachusetts citizens who are mandated to buy unsubsidized insurance had signed up by last Dec. 1, although fines for each uninsured individual will be $2,000 in 2008.

So Obama is right to criticize Clinton for putting forward a plan that would penalize the uninsured middle class, unless and until the cost can be brought down to an affordable level. Hillary’s plan is morally wrong, and it’s a political loser.

Obama’s plan is in most other ways similar to Clinton’s. Both plans would prevent insurance companies from denying coverage based on pre-existing conditions, provide community rating under which risk is shared by limiting the premium difference between the healthy and less healthy and the young and old, and provide subsidies for the less well off to buy insurance. They also both provide for a public plan to compete with private insurance. If enacted by Congress (absent the mandate), these plans will help millions of people obtain health insurance who don’t now have it. Obama’s plan has an additional provision that will lower premiums more than Clinton’s plan would. 80% of health care costs cover the care for the sickest 20% of the population. Obama’s plan provides for the Federal government to reimburse insurers for part of the cost of catastrophic care if they use that reimbursement to lower premiums.

Nevertheless, neither Obama’s nor Clinton’s plan will provide truly Universal Healthcare for all Americans. At a cost of a little more than $100 billion a year each, financed largely through letting Bush’s tax cuts for the wealthy lapse, neither plan can make health insurance affordable for all Americans. That can only be done through a single payer/Medicare For All plan which would save approximately $350-$400 billion dollars a year by eliminating the nearly 1/3 of health care costs that go to paying the overhead, advertising, executive salaries, and profits of private health insurers, and the cost of employees in Doctor’s offices and hospitals required to process claims from multiple insurers (as opposed to 3%-4% overhead for Medicare.)

That’s why I still find it disappointing that Obama — who has a sophisticated understanding of the single payer concept — did not have the political courage to join the 78 Congressional co-sponsors of HR 676, the Medicare For All bill introduced in Congress by Rep. John Conyers. But unlike Clinton, at least Obama is not hostile to single payer. In the South Carolina debate, Clinton angrily accused Obama of having once been a supporter of single payer, as though he had once been a Communist. Obama responded that if he were designing a health care system from scratch, he would support single payer, but that since many people are happy with their current health insurance, he thought it was better for the time being to build on the present system. I disagree with Obama. The present system of employer-based health insurance is collapsing under its own weight and an attempt to build on this shaky foundation will also collapse, if not right away, then within a few years.

Despite Obama’s political calculation to the contrary, the combination of a President with Obama’s extraordinary leadership skills and a budding mass movement already supporting HR 676 (which includes over 235 union organizations in 40 states, including 60 Central Labor Councils, as well as many citizens and religious organizations) the American people can be convinced to support Medicare For All. A CBS News poll in September asked “Which do you think would be better for the country: Having one health insurance program covering all Americans that would be administered by the government and paid for by taxpayers, or keeping the current system where many people get their insurance from private employers and some have no insurance?” 55% chose “One Program For All” and 29% chose the “Current System”.

If Obama is elected President, there will be a strong and serious mass movement supporting HR 676. A President Obama is less likely to meet such a movement with hostility than would a President Clinton. Morever, if Obama manages to pass something resembling his plan, when it fails to provide Universal Healthcare, and when increasing numbers of employers drop or reduce their health benefits within a few years, it is conceivable that Obama could support an evolution towards a single payer system in his second term.

Moreover, in California, a similar coalition just defeated an individual mandate plan proposed by Gov. Schwarzenneger and the Democratic Speaker of the California Assembly with only a single State Senator supporting the bill in Committee. In contrast, a year ago both houses of the California Legislator passed SB 840 which would have created a single payer system for the state’s 37 million citizens, had it not been vetoed by Gov. Schwarzenneger. If California gets a Democratic Governor in 2010, it could be the first state to enact single payer healthcare on a state level. To succeed, it will need a series of waivers from the Federal government and the ability to use Federal healthcare funds towards the cost of the State system. Whatever the fate of Obama’s national plan, it is unlikely that a President Obama would try to block a state from experimenting with its own single payer system which, if successful, could provide the model for the rest of the country. (Canada’s single payer system started first in the Province of Saskatchewan under a Conservative government, before expanding to cover the entire country.)

So, as a supporter of single payer/Medicare For All, I find it disappointing that Obama did not have the audacity to support single payer. Nevertheless, his program is better than Hillary’s coercive individual mandate plan. It will certainly be easier to run on against the Republicans in the fall, and to potentially gain enough popular support to get through Congress without too many crippling compromises. Maybe I’m being naïve, but, in the long-run, the fact that Obama understands single payer and is not hostile to it as a concept, gives me hope that we might get there, or close to there, over the course of an 8 year Obama Presidency.

For that to happen, it will take a mass movement in support of single payer health. Obama speaks eloquently of the fact that real social change is hard and starts from the bottom up through organized movements, not from the top down from a government that institutionalizes fundamental social change only when forced to from below. A mass movement for single payer healthcare has already begun to take shape. My hope is that an Obama Presidency will help give it the space to flourish, and to push Universal Healthcare beyond the bounds of Obama’s more modest proposals.

*Nichols is head of the Health Policy Program of the New America Foundation, which helped advise Romney, Schwarzennegger and Clinton on their health plans. His predecessor at NAM was Laurie Rubiner, a former aide to Bob Dole who was assigned by Dole in 2003 to devise a competing plan to Hillary Clinton’s first health reform plan. She developed the idea of individual mandates, which had roots in conservative economist Milton Friedman, Richard Nixon’s attempts to counter Democratic efforts to enact single payer, and the conservative Heritage Foundation. After leaving her Senate posts, she went to NAM where she further developed the individual mandate idea and helped lay the basis for Romney’s Massachusetts plan. In 2005, Rubiner became Hillary Clinton’s legislative director (a post she just left) where she was instrumental in developing Hillary’s individual mandate plan. In the next installment of this “Why Not Single Payer?” Huffpo series, I will trace the history of individual mandates as a conservative Republican idea that has ironically been adopted by leading Democrats, including Hillary Clinton.

Focusing on coverage, or costs?

The Cost-Coverage Trade-off

Ezekiel J. Emanuel, MD, PhD
JAMA
February 27, 2008

According to recent polls, many Americans consider health care reform the No. 1 domestic issue. Presidential candidates, other politicians, health policy experts, labor leaders, business groups, and others have responded with numerous reform proposals. And somehow in the clamoring, health care reform has become equated exclusively with expanding coverage to the 47 million uninsured Americans.

This is a mistake. As serious as it is, the problems of the uninsured and lack of coverage are symptoms, not the underlying problem. …the diagnosis and treatment need to focus on health care costs. The fundamental problem arises because of a cost-coverage trade-off. Without controlling health care costs, any attempt at universal coverage will be transient.

Warnings that costs are too high and cannot go higher are a perennial and recurrent theme dating back to at least the 1970s. But costs always increase, and the system has thus far accommodated them. This time, however, things may be different.

…employers and workers are simply finding premiums too high. Providing family health care coverage to 1 worker is like hiring a second worker at minimum wage. A cost of approximately $12 000 per year for family health insurance–about a quarter of the median income–seems to constitute a cost “brick wall” that begins to make health insurance coverage unaffordable despite other positive economic factors.

The cost-coverage trade-off does not mean that cost control and universal coverage should occur sequentially. Waiting to cover all Americans until costs are controlled is like blaming the victim. The uninsured are not driving health care cost increases. Moreover, lack of insurance adversely affects their health and economic well-being. Cost control and universal coverage must occur simultaneously. Expanding coverage and then worrying about controlling costs, as was done in Massachusetts, is not a tenable policy. Without policies to restrain cost increases over time, universal coverage will not be sustainable.

What is a serious cost control plan? True cost control means reducing how much health care cost increases from year to year, to about 1% more than overall economic growth. Vague promises of savings from cutting waste, enhancing prevention and wellness, installing electronic medical records, and improving quality are merely “lipstick” cost control, more for show and public relations than for true change. Reducing the waste from insurance underwriting, sales, and marketing costs is valuable but constitutes a 1-time savings. Furthermore, because these costs are in large part a consequence of selling insurance individually to more than 6 million businesses, they can be achieved only by completely revamping employer-based insurance. Cost control will require comprehensive reform of both employer-based insurance and the dysfunctional health care delivery system that will take years of sustained effort.

…there are real political advantages from focusing on costs. The politically powerful constituencies whose support is integral to any health care reform really care about rising health care costs. Employers worrying about global competition, state governors handcuffed by rising Medicaid bills, and the 85% of insured Americans all care about rising premiums, deductibles, co-payments, and prescription drug prices. Because of self-interest, costs can motivate these groups in ways that covering the uninsured has not. In the strange calculus that is American politics, the more politically salient issue of costs may provide a better way to achieve the comprehensive reforms necessary to cover the uninsured than the hitherto futile direct moral appeal.

http://jama.ama-assn.org/cgi/content/full/299/8/947

Comment:

By Don McCanne, MD

Ezekiel Emanuel is certainly correct when he states that we must focus on health care costs as we expand health care to everyone. He is also correct when he implies that current political proposals such as electronic medical records, wellness programs, quality incentives, and disease management programs would not have any significant impact on controlling spending. But he is wrong when he implies that there is no reform proposal that would both control costs and cover everyone.

A single payer national health program is specifically designed to include everyone automatically, and to slow the rate of growth in spending, while shifting funds from wasteful administrative services to more beneficial health care services.

He concedes that reducing the waste of the insurance industry is “valuable,” but then he dismisses it as a “1-time savings.” Since it is a fundamental structural change in the health care financing system, it is not a one-time savings, but rather it is a change that shifts the curve of the health care spending down to a new lower trajectory – permanently. All of the other cost-saving features of the single payer model each have the effect of further lowering this trajectory.

Although he mentions that cost control will require comprehensive reform, his own model, which he developed with Victor Fuchs, doesn’t seem to address the cost issue that he says (and we agree) is so important. They would establish a voucher system for purchasing private insurance and fund it with a regressive value-added tax (VAT). They would control spending by providing only a “basic” plan for everyone, but allow individuals to purchase services or coverage beyond the basic plan.

Victor Fuchs and I participated in a panel debate at Stanford. I asked him if providing a walker would be a basic service for a patient with disabling osteoarthritis of the hip, whereas hip replacement surgery would be an option for those willing (and able) to pay for it. He emphatically insisted that hip replacement surgery is a basic benefit, even though it is an elective surgery. My point is that all reasonable beneficial health care services should be covered, and we should not be distracted by the fictional concept that there is an inexpensive, lower tier of services that would satisfactorily address the health care needs of all of us, with an opt-up for extra services. That lower tier includes most of our health care services and products (excluding vanity cosmetic surgery and the like), and it is very expensive.

Dr. Emanuel also states in his article, “…health reform proposals by presidential candidates or others should be critically evaluated primarily on whether they establish a financing structure and incentives for the delivery system reform that really control costs. If they lack a serious plan, they are not credible reforms.”

Physicians for a National Health Program (www.pnhp.org) has advanced a highly credible reform proposal. Anyone else?