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On Nov. 7 the U.S. House of Representatives passed a
health-care “reform” bill whose central plank was a massive giveaway to
private insurers. It included a “public option” plan that would compete
in an insurance exchange dominated by the profiteers, and would cover
only a fraction of the number projected in earlier versions of the
bill.
On Christmas Eve the Senate passed its own bill, which
pays even less lip service to reining in insurers’ profiteering and
patient dumping.
The final bill, after reconciliation between House and
Senate versions, is certain to hew closely to the latter. CNN reported
on Dec. 28 that House Democrats were already signaling they were ready
to drop the public option, and in general to lean toward the Senate
version, using as an excuse the fact that no Republicans had voted for
the Senate bill, and that it had passed only after moderate Democrats
succeeded in forcing more and more pro-insurer provisions into the
bill.
The key supporters of a single-payer (Medicare for All)
plan, Physicians for a National Health Program (PNHP) and National
Nurses United, issued press releases detailing the problems with the
Senate bill (and corresponding problems in the House version). These
include:
• Cuts of $43 billion in Medicare payments to safety-net
hospitals (i.e., the nonprofit institutions relied on
disproportionately by the poor and/or uninsured), threatening the care
of the 23 million who would remain uninsured. This problem will be
exacerbated as the budget crisis facing states leads to more cuts in
state aid to hospitals.
• The bill would not control costs, and its insurance
“exchanges” would in fact increase waste, adding a new level of
bureaucracy.
• A mandate to either purchase insurance or pay a penalty
as high as 2.5% of one’s income (the House version). In addition,
between $447 billion and $605 billion in public dollars (Senate and
House versions respectively) would be given to private insurers in the
forms of subsidies to help people forced to buy insurance. Yet even
with those subsidies, millions would be unable to afford insurance. The
Congressional Budget Office estimates that a family of four with
household income of $54,000 would pay 17% of their income on health care.
The number of underinsured (i.e., those who can afford
only barebones policies not covering many badly-needed services) and
medical bankruptcies would increase. The least expensive plans would
cover only 60% of necessary care, and patients would have to pay the
balance. As costs continue to soar, more families would face
co-payments and deductibles so high they would forego needed care.
Insurers have already predicted that the cost of premiums would rise
since they are being required to stop excluding pre-existing conditions
and cancelling coverage for sick patients.
• The new 40% tax on “Cadillac” health plans would
encourage employers to reduce benefits, shift costs to employees,
promote high-deductible plans, and lead to more self-rationing of care
and medical bankruptcies, especially as more plans are labeled
“Cadillac” each year as costs rise. A survey in September found 30% of
employers said they would reduce employment if their health costs go
up, and 86% said they would pass the higher costs on to employees.
The tax would also hit hardest those
already facing price discrimination by insurers, i.e., workers in firms
that employ more women and older and sicker employees, and those in
states with big cities that have higher costs—all of whom have “Cadillac”
plans that are high cost only because insurers won’t insure them
without sky-high premiums. Within three years, the tax would apply to
nearly 20% of all workers with employer-provided health coverage in the
country.
The NNU added that the Senate amendment exempting certain
“high risk” occupations from this tax covers only male-dominated
occupations: mining, construction, police, and firefighting.
The New York Times op-ed columnist Bob Herbert noted that
the legislators and insurers promoting this Cadillac tax are not just
oblivious to suffering, but actually intend the tax to force people to
forego health care or to pay more out-of-pocket: “The idea is that
rather than fork over 40% in taxes on the amount by which policies
exceed the threshold, employers (and individuals who purchase health
insurance on their own) will have little choice but to ratchet down the
quality of their health plans.
“Proponents say this is a terrific way to hold down costs.
If policyholders have to pay more out of their own pockets, they will
be more careful—that is to say, more reluctant—to access health
services.” But many with serious illnesses will forego care, leading to
much expensive treatment later—if it can be afforded at all.
• The bills’ supposed protection against insurer denials
and abuse are shot through with loopholes. There are supposedly bans on
exclusion for pre-existing conditions and on cancellations for
sickness. But insurers would be allowed to more than double charges to
employees who fail “wellness” programs because they have diabetes, high
blood pressure, high cholesterol readings, or other medical conditions.
Insurers may continue to rescind policies for “fraud or
intentional misrepresentation”—the main pretext insurance companies now
use to cancel coverage. Insurers would be permitted to sell policies
“across state lines,” using as a standard the state with the fewest
regulatory protections for patients. And there would be minimal
oversight of all these practices.
• The legislation protects pharmaceutical company profits
and patents.
• The bills allow insurers to continue age discrimination.
Older enrollees can be charged four times more than younger enrollees,
and those with certain medical conditions will also be charged more.
• Enrollees would be required to prove citizenship in
order to receive subsidies, and non-citizens would be required to bear
the full cost of purchasing insurance.
• Reduced reproductive rights for women: The Stupak
amendment to the House bill prohibits use of any public funds for
abortion. The Senate version forces women to pay ahead of time into a
separate fund connected to their plan. Given the unexpectedness of most
unwanted pregnancies, this measure severely curtails the ability to use
insurance to obtain an abortion. NOW said the Senate bill “amounts to a
health insurance bill for half the population and a sweeping
anti-abortion law for the rest of us.”
• Funding for Medicare services provided by for-profit
plans would be cut by $43 billion. Supposedly designed to halt profiteering
by the for-profits, these cuts will in fact enrage seniors who got a
few sweeteners above and beyond traditional Medicare coverage to entice
them into such plans—sweeteners that instead should have been expanded
and extended to all seniors under public auspices.
PNHP had already denounced the House bill, calling it “a
massive bailout of the profit-making health industries.” The
physicians’ group called on Congress “to start from scratch. Improving
and expanding Medicare to all would save over $400 billion annually on
insurance overhead and bureaucracy,” enough to cover all the uninsured.
While noting that the Senate bill includes some “salutary
provisions” like an expansion of Medicaid and increased funding for
community clinics, it noted that these provisions had been the focus of
earlier, separate legislation, and could be enacted on their own rather
than being lumped into a pseudo-reform “designed to fail.”
Some liberal commentators claim the Senate bill is a
flawed but necessary first step, citing the example of Social Security.
But, replied PNHP, where Social Security established a public
institution that grew over time, the Senate bill proscribes any such
new public institution. “Social Security’s first step was not a mandate
that payroll taxes which fund pensions be turned over to Goldman
Sachs!”
National Nurses United pointed out that “the bill seems
more likely to be eroded, not improved, in future years,” noting that
all the compromises made this year were “to the right.” PNHP and NNU
pledged to continue the fight for single-payer.
Role of Democrats
Liberals directed their anger at “Blue Dog” Democrats for
siding with Republicans in making the bills even more pro-insurer. But
the most liberal Democrats, plus the “independent” and supposedly “socialist”
Senator Bernie Sanders, played an even more insidious role in helping Obama put over his pro-insurer strategy.
Sanders—as well as Representative John Conyers, author of
the most prominent single-payer bill, HR 676—voted in favor of the
final bills in the Senate and House respectively. And although nearly
60 members of the House Progressive Caucus promised to vote against a
bill without a “a robust public option,”
virtually all of them are expected to end up voting for a reconciled
bill with no public option, a coercive mandate, and a “Cadillac” tax.
Sanders also helped structure the last-minute porkbarreling that gave special favors to Senators
who had threatened No votes. These deals came after a half-hearted
attempt by Sanders to introduce his single-payer substitute amendment.
In a parliamentary maneuver to kill the Democrats’ main bill, Tom
Coburn of Oklahoma demanded a full reading of the 770-page amendment
before debate could proceed. Rather than take this opportunity to let
the American people finally hear some details about single-payer,
Sanders gave up after three hours and withdrew his amendment.
Profiteers gleeful
In the days following passage of the Senate bill, shares
of health-care company stocks soared. “Things have turned out pretty
well for the industry,” said one analyst. “In particular, all versions
of a government-run health plan have largely been eliminated.” What’s
more, a proposed $6.7 billion industry tax is likely to be phased in
only gradually beginning in 2011, which gives insurers time to raise
prices.
PNHP columnist Don McCanne
pointed out that even the requirement forcing insurers to hike the
percent of revenues spent on actual care would not necessarily lead to
provision of more needed (especially primary and preventive) care. The
Senate bill would require insurers to spend at least 80% on medical
care or “quality improvements,” while the House bill specifies 85%.
Said McCanne: “But companies
could game the system by broadly defining medical costs. And spending
limits alone may not stop insurers from raising rates. When New York State tried to limit
non-medical care spending, many insurers companies complied—but still
instituted double-digit rate increases.
Furthermore, even this 80% or 85% leaves private insurers
spending less on care and more on administration than does Medicare,
and does nothing to end the huge administrative burden on physicians
and hospitals forced to waste precious time and money interacting with
hundreds of separate insurers.
But there’s more, says McCanne:
“By fixing the insurers’ cut, they can no longer reach down into the
funds allocated for patient care.” Instead, “to increase their own net
revenues they are highly incentivized to
dramatically increase spending on health care! They will encourage
every imaginable program that they can label as patient care: more
expensive information technology systems, more costly high-tech
services regardless of demonstrated value, higher-priced brand drugs
instead of generics, six-figure biologics and cancer drugs, rewarding
increased frequency and intensity of services, and, the clincher,
blinders to the massive fraud that would be rewarded under this
system!”
These are just the kind of escalating costs described
earlier that make private insurance ever-more unaffordable.
On March 5 to 7, the Labor Campaign for Single-Payer
Healthcare will hold its next national meeting, at which National
Nurses United will kick off a discussion of next steps in the fight for
single-payer. Hopefully, that discussion will include ideas on breaking
the Democratic Party influence that has to date kept unions from
mobilizing in a serious way for genuine health-care reform.
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