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In his State of the Union speech on Jan. 23, George Bush proposed a
plan to gut the country's employment-based health insurance system. In an
attempt to force workers to buy their own cheaper and less comprehensive
coverage, it would provide tax breaks up to $7500 for individuals and
$15,000 for families. And workers with employer-provided insurance would
have to pay taxes on any coverage over $15,000.
Some
bosses will dump their plans and force workers to buy individual
coverage, while those keeping their plans can push the cost onto workers.
Funding for the plan will also come from cuts to hospitals serving the
poor. The Employee Benefit Research Institute said the proposal
"would mean the end of employer-based benefits.”
Bush
claims the "gold-plated" plans he would tax encourage overuse
of health care. But high costs are due not to overuse of routine care,
but rather bureaucratic waste, profits, and high-tech care for serious or
critical conditions. Combined with geographic and demographic factors,
even a run-of-the-mill plan can easily exceed the $15,000 limit.
In
fact, rather than being profligate consumers, workers have been paying
ever more for ever less care as bosses have cut back on benefits. They
started by cutting or eliminating coverage for retirees—the group most in
need of care—and by hiking copays, deductibles, and premiums for current
employees.
By
1993 only 36 percent of firms with 200 or more workers provided retiree
insurance, down from 66 percent in 1988. The accounting rule change used
as an excuse for these cuts will soon be extended to the public sector.
A
recent survey of large firms showed 70 percent increased retiree premiums
and two-thirds had caps on firm contributions. In 2004, just 20 percent
offered coverage to those over 65. Since late 2005, several
companies—including GM, Ford, Chrysler, Nissan, Verizon, and Sears—have
announced cuts to retiree benefits. These cuts often affect seniors
who've lost their pension plans and can least afford their own medical
care.
Current
employees face the same dismal picture. The percentage of workers required
to pay all or part of their premiums rose from 46% in 1980 to 78% in
1995. Bosses have been twisting workers' arms to enroll in Health Savings
Accounts, which shift the financial burden to employees.
Almost
half the 47 million uninsured work full-time. Medical bills contribute to
half of personal bankruptcies, even though 75 percent of those in debt
had coverage. Lack of insurance is estimated to cause 18,000 deaths a
year. Of course, the most oppressed workers—Blacks, Latinos, and
immigrants—get the worst care while paying the highest relative cost.
Some
of the soldiers in Iraq joined the military to get health insurance. One
woman told an antiwar rally how her son, killed in Iraq, had enrolled
because his daughter had congenital heart defects and he couldn’t find a
job with health insurance.
Health
care has been a prominent issue in every recent strike, and will once
again be a key item in this year’s auto talks, with GM demanding more
cuts to retiree benefits.
Now
Bush wants to give auto and other bosses a class-wide solution. In an
article titled “U.S. Car Makers Stand to Gain From Bush Plans,” the Wall
Street Journal reported, "White House aides hope [the plan] will
boost the ailing American auto industry.”
Health
Affairs says employers are calling for an "exit strategy" from
their obligations. So Bush's plan—and others analyzed below—is welcome
news to the ruling class, who will no longer have to cut health care one
company at a time.
Bush's
plan will also take money from hospitals to subsidize private insurance,
and his 2008 budget will further slash Medicare, primarily through cuts
to hospitals and doctors.
Bush's
plan would cover at most three to five million of the 47 million
uninsured. The plan also will encourage younger workers to desert
employer-provided plans, leaving them with older and sicker people to
cover—thus pushing even more over the $15,000 limit.
Deborah
Burger, president of the California Nurses Association/National Nurses
Organizing Committee, said the kind of plans that Bush wants workers to
buy encourage people to avoid preventive care, leading to more serious
illness later.
New state plans
The
"free market" slant of Bush's plan is finding an echo in plans
being pushed by both parties in D.C. and in state legislatures.
In
April, 2006, Massachusetts passed a "universal" coverage bill.
But the plan is only universal in that it forces every resident to buy
private insurance or face steep penalties. Money provided for subsidies
(to low-income workers only) is not enough to buy decent coverage. And as
in the Bush plan, that money is taken from funds for care now given to
hospitals and doctors.
The
bill was passed without any estimates of cost. Nine months later, those
who predicted workers wouldn't be able to afford its coverage were proven
correct. The cheapest plan would cost about $360 a month, and workers
would pay up to $5000 for individuals or about $8750 for families in
out-of-pocket expenses. Even these numbers are just guidelines for insurers,
who can charge what they want. Not surprisingly, a survey showed most
bosses in the state favor the plan.
On
Jan. 8, California Gov. Arnold Schwarzenegger put forward a similar plan
mandating purchase of private insurance. He had earlier vetoed a bill to
replace private insurance with a statewide trust fund.
Insurer
UnitedHealth said that Schwarzenegger's plan would "present real
possibilities for our business." While still making billions in
profits, new enrollment for insurers has slowed. Thus, said the Wall
Street Journal, Schwarzenegger’s plan was welcome relief, as it would
“expand the market to four to five million uninsured Californians.”
Consumers
would have to pay up to $10,000 for a family out-of-pocket, and again
hospitals and doctors would be taxed to pay for the plan.
Adding
insult to injury, Schwarzenegger demanded "personal
responsibility," saying "the trim and fit" should be
treated differently from the "obese and inactive." Companies
nationwide have used such rhetoric to deny coverage to those who smoke,
can't lose weight, etc. Some are even fired before they can use benefits:
Last year Wal-Mart told its managers to get rid of overweight, elderly,
and injured workers.
Schwarzenegger's
announcement came the same month as a series in the Los Angeles Times
exposing how California insurers were denying coverage to individuals
with routine ailments or in certain occupations, denying payment for
covered children with cancer, etc., while giving executives billions in
stock options (often illegally backdated).
These
are the insurers bosses expect us to find coverage from!
The
CNA said the plan wouldn’t provide comprehensive or affordable coverage,
and would limit employers' responsibility but not insurers' profits. But Andy
Stern, head of the Service Employees International Union, praised
Schwarzenegger for his "leadership" in "expanding coverage
and making quality care more affordable.”
A
dozen other states are considering similar plans to mandate insurance
purchase, typically without subsidy for anyone on an average
working-class income. And most will likewise cut payment for care. Said
the expert crafting the New Jersey plan, the state should stop “paying
for care” and instead “empower” individuals.
A
bill before Congress encourages each state to come up with its own
pro-business plan. Meanwhile, Oregon Senator Ron Wyden's Healthy
Americans Act would establish a “centrally financed system of private
health insurance.” Its expressed goal—only implicit in Bush’s plan—is to
destroy the employer-sponsored coverage system.
Employers
would have to terminate their health plans and pay the amount saved to
workers in tax-deductible wages. Workers would not be allowed to buy
coverage worth more than a pre-set limit. Wyden estimates his plan will
save bosses $310 billion of the $429 billion they now spend on health
care. Backing Wyden are Families USA, Safeway CEO Steve Burd—and SEIU’s
Stern.
The
architects of the Massachusetts and similar plans have done studies
showing that government-provided insurance would be far more equitable
and efficient, yet in every case have opted for private mandates citing
"political feasibility." The week before Bush’s speech a
coalition of insurers, doctor and hospital groups, drug companies, the Chamber
of Commerce, and AARP came out for tax credits for individual insurance
purchases.
According
to the Wall Street Journal, insurers have lost business as employers cut
benefits to save money, and so insurers have been scrambling for new
revenue. Now they've found it.
Stern hails “new partnership”
At a
January press conference, the head of the Business Roundtable
(representing the country's 160 largest corporations and banks), stood
alongside Stern and the head of AARP. Their joint message, said the
Washington Post: “We stand ready to give you the political cover you need
for a centrist, bipartisan fix for a broken health-care system.”
Hailing
the “new partnership,” Stern said, “America needs a plan. Not a
Democratic or Republican plan, a business or labor plan. An American
plan.” Hailing the Massachusetts and California plans, he thanked
corporate America: “Today we stand united by our love for this country
and our desire to see it prosper.”
The
day after Bush’s speech, a press conference was held to show support for
HR 676, Rep. John Conyers' single-payer bill, which is backed by
Physicians for a National Health Program and 225 labor organizations.
Speakers denounced the state-by-state giveaways to insurers, as well as
the Wyden bill.
However,
the mainstream Democratic Party approach is clear: "I think
Democrats are concerned lest they seem too radical," said Rep. Pete
Stark, chair of the House health subcommittee. "We've got to win
again in 2008, and we don't want to talk about universal coverage or
anything that sounds like socialized medicine."
Meanwhile,
the new Democratic majority just handed Big Pharma a huge gift. While
allowing Medicare to bargain for the first time for lower drug prices, it
will have no enforcement power, as no drug will be excluded from the
program for costing too much.
In
a future article we’ll look in more detail at the roots of the
health-care crisis, the difference between solutions such as single-payer
and socialized medicine, and what labor is doing on this
front.
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