The current debate about “healthcare reform” centers around one and only one issue: whether there will be a “public interest” option (currently called the “public option” in the media). There are a host of distractions offered by the Republicans in Congress and their acolytes in the paid media. Let me first deal with some of these distractions, myths, and lies, and then discuss the public interest option.
DISTRACTIONS, MYTHS, and LIES
MYTH: People are going to lose their power to choose. Truth: Today, very few have the absolute power to make their own healthcare decisions.
Only people healthy and wealthy enough to pay for medical care without using insurance have 100% freedom to make their own health care choices. That’s a small minority.
Your choices are greatly reduced once you depend on any insurance company to pay your bills. No matter which insurance company you purchase a plan from, that insurance company decides which doctors they will pay for, which treatments they will pay for, which pharmaceuticals they will pay for, and whether they will keep you as a customer from year to year.
Beware: insurance companies organize customers (they call them “risks”) into “risk pools.” They work like this: You and others who apply when you do get put into a risk pool and are charged a premium based on the risk that pool represents. Over time, people in that pool get sick, make claims, and increase the overall risk represented by that pool. In response, the insurance company raises the rates for everyone in that pool. Once the rates get high enough, all the healthy folks in that pool leave and buy a different policy with another insurance company and start all over again. Those that are too ill to qualify for a new plan with another insurance company are left behind in that risk pool, and their rates rise uncontrollably until the sick can no longer afford insurance or can no longer qualify for a new policy, and join the ranks of the uninsured. No matter how healthy or young you are, this story only ends one of two ways: you either pay enormous premiums or lose your insurance.
Well, there is a third option. You can be bankrupted by healthcare expenses and then qualify for a public option such as Medicaid. In this situation, a public option is viewed by the insurance industry as a good thing because it only insures those too poor to buy private insurance. Keep that in mind: a public option is good as long as it serves non-customers.
Most people obtain private health insurance coverage through their employer under a group plan. If you obtain your coverage this way, you have no choice in who the insurance company is, what they cover, or how much you pay. In fact, if you are in a higher level position with a company that provides group coverage, you might not have a choice to opt out of health insurance, unless you can prove you are otherwise covered. You MUST have health insurance. So much for choice.
The great thing about a group plan is that you can’t lose this kind of insurance. That is, as long as you’re healthy enough to work and your job hasn’t been exported overseas by a company trying to reduce its costs by laying you off. Now if the company survives after you lose your job, you can continue on that group plan for several months as long as you pay the full premium (COBRA). That’s right, as soon as your income goes to zero, you can keep your insurance as long as you can afford to pay three to four times what you had been paying when you had a job.
But even that is not your worst-case scenario. If the company files for bankruptcy or goes out of business, the insurance company calls “King’s X” and cancels the group policy (even though all the people who were in the group would happily continue to pay their premiums) and you don’t even get the choice of continuing with that coverage.
So as long as you’re healthy enough to work and you’re employer is healthy enough to keep you, you can have health insurance. Once either of those conditions fails, you’re on your own. And that takes you back to where we started: Try to purchase a private policy (if you are “insurable”), purchase from your state’s high-risk pool coverage (bad coverage, high premiums), or go broke paying healthcare expenses and wind up on one of the public options such as Medicaid.
Again, the insurance industry has no problem with you being able to “choose ” a public option, as long as you’re poor or present such a high risk that they no longer want you for a customer. A Public option is good as long as it serves non-customers. (A mantra so simple, even a caveman can remember it.)
So this argument that health insurance reform will eliminate choice is fraudulent, at best. The vast, vast majority of Americans have little or no choice at all under our current system. There’s nothing left to lose.
DISTRACTION: Under the President’s proposal, 119 million people will lose the coverage they have now through their work. This teeters on being a lie, but let’s give Sam Johnson the benefit of our serious doubts about him and treat it as a distraction. Under the President’s proposal, no one is required to change insurance companies. Period. What Sam and his ilk, who by the way has received 20% of his 2010 reelection funds from the healthcare industry, really mean is this:
1. If there is a public interest option, a non-profit entity covering people’s health insurance needs.
2. If the entity is non-profit, it will charge less than the PAC-filling, for-profit insurance companies.
3. If companies can buy equal insurance at a lower price, they might well choose (right, choice is for companies and politicians, not for people) to drop their for-profit carrier in favor of the lower cost non-profit.
But that’s a fraudulent argument as well. Every year employers re-bid their health insurance agreements and every year they either chose to stay with the current provider or move to a lower-cost provider. You, as the employee lucky enough to have one of the ever-diminishing number of full-benefit jobs, have no choice whatsoever. If your employer uses Blue Cross this year and you like your doctor who happens to accept Blue Cross, next year you may find yourself insured by United Healthcare and your doctor might not accept United Healthcare insurance. Still think you have a choice?
LIE: Healthcare reform will provide government benefits to illegal immigrants. This is an insidious lie. Sam Johnson and his fellow fear-mongering liars are so desperate to please their PAC overlords that they will jab their filthy hands into their constituents’ deepest fears and prejudices to fight this off. They know they can’t win by telling the truth, so they lie. Which in turn causes their supporters to lie because they’re too ignorant to do anything more than regurgitate whatever swill the Republican misleadership feeds them.
But here’s the truth: The President’s proposal does not cause any new dollars to be spent on healthcare for anyone, whether here legally or not.
DISTRACTION: Healthcare reform will mean that abortions are publicly funded through the public option. Again, the President has made clear that no new federal dollars are to be spent on reforming the health insurance industry. If that’s true, no matter how restrictive your views of women’s rights to self-determination, this little nugget, thrown out by Sam Johnson as an afterthought (thought?) is a distraction. Maybe it’s a lie. Yes, it’s a lie.
MYTH: If the President’s initiative fails, all will be great in the land of the “haves” and no worse for the “have nots.” That’s half true. If you don’t have health insurance now, whether public or private, defeating the President’s proposal will not make your life any worse. But if you do have employer-sponsored private health insurance now, your life is going to get a lot worse, particularly if you’re over age 60 or have a chronic illness.
Do you remember defined-benefit retirement plans? That’s where your employer (maybe you, too) make a contribution to a retirement plan that will pay you a fixed benefit upon your retirement. Those were the standard form of retirement 20 years ago and now they are being eliminated as fast as a bankruptcy judge can say “You’re OUT!!” Now retirement has been privatized through 401(K) and similar plans. How much will you collect on retirement? It’s anybody’s guess. Privatized retirement plans implode every eight years due to fluctuations in the stock market. No one retires anymore. They just work until they can’t and then try to subsist off of Social Security until they either die or go into a nursing home, when that public option health insurance kicks in again.
Here’s another nostalgic nugget: Do you remember having a secure job? People used to talk about those. My dad even had one. But they don’t exist anymore. As soon as your job can be done by someone for less pay, it’s no longer your job. That’s true whether that less-costly worker is in the US or elsewhere. You are expendable.
Do you think corporate employers take a different view toward health insurance? Do you really think they’ve eliminated retirement plans, sick leave, and job security but intend to hold on to group health insurance? Of course not! Companies are dropping group coverage as quick as they can using our current economic plight as cover for harsh decisions. When they drop their group coverage, there’s no COBRA—you are on your own. But what if you can’t qualify for health insurance on your own after your employer drops their group coverage (which they are going to do)? Who knows—but you better not let untreated health problems get in the way of your job or you’ll lose that too.
So, if the President’s initiative fails, the “haves” will soon enough join the ranks of the “have nots.”
LIE: Health insurance reform is all about taking my tax dollars to provide health care for the lazy and the uneducated—in other words, the poor. We’ve all heard our obnoxious brother-in-law say “Why should I have to pay for somebody else’s health care?”
First, equating financial disadvantage to moral decrepitude is an idea as old as beating one’s wife and selling people into slavery. And it’s just as ignorant. People have written entire books on this topic (see “Rich Christians in an age of Hunger”) so I’ll leave that argument to them—I simply felt the need to point out the ugliness hidden such rhetorical parries.
Second, you already are. When a young person with no money gets a cough, where do they go? To school or work—they sure don’t go to a doctor. When a fever joins that cough where do they go? Back to school or back to work. And when that fever and cough develop into H1N1 where do they go? You guessed it, back to work or back to school. And when they collapse on the floor, where do they go? To the emergency room where what could have been treated for $100 at a private physician’s office will be treated with $2,000 worth of emergency care. What could have been isolated to a single case of the flu turns into an above-the-fold health scare.
We currently provide health care insurance for a high percentage of the poor. Children are on CHIPS, others are on Medicaid, the elderly are on Medicare, military retirees are on Champus, Congressmen are on—wait, let’s leave that for later. The poor are covered and, yes, you’re paying for it. And you’re buying the most expensive, least effective medical care available.
Health insurance reform is all about rescuing that vast majority of us whose financial profile classifies us somewhere in that long spectrum between poor and rich. As you’ve seen, the poor are covered by public options (because the insurance companies don’t want them), the elderly are covered by a public option (because, again, the insurance companies don’t want them), retired military are covered by a public option (because, right, the insurance companies don’t want them), prisoners are covered by a public option (do you see a pattern?), retired politicians are covered by a public option, federal drug-sniffing dogs are covered by a public option, even ferrets in the National Zoo in Washington D.C. are covered by a public option. Who does that leave out? YOU!!
LIE: Health insurance reform will cost taxpayers over a trillion dollars. There are two problems with that statement. First, in the world of federal budgets, costs are projected over multiyear periods, say 5 years or 10 years. So even if the estimate were correct, that would be a trillion dollars over 10 years, not a trillion dollars every year. A trillion dollars over 10 years is $100 billion per year, which is less than 1% of our national economy, which can be counted on to grow at least 2.5% a year.
But whether the number is a trillion a year or a 100 billion a year—they’re both wrong. All of the plans in Congress would pay for any outlays through offsetting savings in other areas. So the real cost is ZERO.
LIE: Health insurance reform amounts to a government takeover of health care. This takes us back to where I started when I mentioned the importance of a public interest option. The big fear is that if corporate America had to compete with a government run insurance program, corporate America would lose because they just aren’t up to the task. (This argument is from the same folks who tell us government can’t run anything properly which is why we have to privatize our public highway system.) Corporate America, in the eyes of FOX “News” and Sam Johnson, not only can’t compete with foreign companies, they can’t even compete against the same federal government they vilify as being wasteful, incompetent, and corrupt.
But, let’s assume that’s all true. Go to www.fec.gov and look at who is donating to congressional reelection campaigns for 2010. Or, just take my word for it. Over 20% of the money being thrown into the 2010 election cycle is from companies and individuals in the healthcare industry, and 90% of that is coming from health insurance companies. Knowing how money can make the worst ideas seem positively brilliant, what do you think are the real odds of a bill that contains a real public option landing on the President’s desk? It’s not going to happen. We need it to happen, desperately, but it will not happen in this go-round.
Without a public option in a health care reform bill (the result of a genuine triumph of Republican noise and mayhem over thoughtful debate and the public good), corporate America will have nothing to fear, not even fear itself.
THE PUBLIC INTEREST OPTION
We cannot yield control in this debate to those whose lifestyles are supported, in part, by the injustice of our current system of paying for healthcare. We must bring greater intensity, greater passion, and greater imagination to bear on this problem than do Sam, most Republican legislators, and a few wolves in blue-sheep’s clothing. The stakes are too high, the result is too important, and the goal is too near for us to pull up short now and cede this debate.
A lot of pundits, prognosticators, pollsters, and politicians are writing the obituaries for a public interest option. I, too, just a few short paragraphs ago, explained why I think Congress will face this great opportunity and blink.
But that doesn’t have to be the end of it. As I said throughout 2008, we should not expect to solve all the problems with the way we fund health care in the US in a single bill. Right now, the demographics of our country favor making some significant changes. As our population ages and as corporate America continues to drop health insurance benefits, thereby stranding more and more people, our public will strengthen and we will be ready to take our next steps. For the reasons I offer below, I believe that the most important next step is a public interest option.
Private Health Insurance Companies Are Profit-Seeking Corporations
A foundational notion of our economic system is that when one provides a service, one must receive fair compensation for that service. By extension, to the extent that private insurance companies provide a valuable service, they must be able to collect fair compensation for that service.
Sellers price their goods and services in order to make the most money. Sometimes that means that certain people are priced out of the market for various goods and services. For example, Rolls Royce has priced their cars such that I can’t afford one. There’s no great injustice being thrust upon me: I can buy a less expensive car or do without a car. Either way, I’ll live.
There are two types of services without which people cannot be fully vested in their constitutionally guaranteed rights to life and liberty: health care and legal services.
A full discussion of legal services is outside the scope of what we are considering here. But keep in mind that the law of the land is that when a person’s freedom is in jeopardy, when a person is facing jail time, our government guarantees that person an attorney, free of charge. One’s right to liberty is considered sacred in our legal system.
How much more sacred is a person’s life? Even incarcerated people are constitutionally guaranteed basic health care.
The amount that people have to pay for healthcare vary so widely that we have come to rely on a vast arm of the financial services industry to help us hedge against the risk of unaffordable healthcare expenses. This arm of the financial services industry is the health insurance industry.
Private Health Insurance Leaves the Middle Class Behind
The problem with a system that is made up only of private insurers is that these private, for-profit companies price their services in order to make the most money, not create the greatest public benefit. Because of that, they have priced their services beyond the reach of many individuals. There are four large groups of people who, as a rule, cannot afford private health insurance: The very poor, the middle class, the unemployed, and the elderly. Many of the very poor are eligible for Medicaid coverage and the elderly are covered by Medicare. The unemployed can be covered through COBRA benefits, if they can afford the premiums. That leaves the middle class.
As a rule, a person in the middle class cannot afford private health insurance unless he or she is young and healthy and can qualify for an individual, major medical policy.
We must have a public option. There is only one issue standing between the legislative pileup we have now and there being a bicameral bill passed and placed on President Obama’s desk: The Public Option. All the other issues are feints designed to draw our attention from the real debate.
Hospitals, doctors, pharmaceutical companies, employers, friends, and neighbors all want everyone to be covered by health insurance. That’s why all of the above support most of the President’s initiatives. A country in which everyone has health insurance makes everyone’s life easier. Everyone’s.
A mandate from Congress that everyone must buy health insurance or pay a fine is great news for the insurance industry. (I can’t imagine working in an industry where everyone in the country is forced to buy my product or pay a fine. Only the insurance industry gets this kind of break.) Insurance companies certainly like the idea. Who wouldn’t?
An old insurance company maxim is that “there is no such thing as a bad risk, just a bad rate.” Insurance companies will insure anything, anywhere, anytime, as long as they get to set the rate. Congress will mandate that everyone purchase health insurance or pay a fine. That works for the insurance companies because they will pick up the millions of young people who are currently uninsured, but whose healthcare costs are near zero. Congress will also require health insurance companies to insure all comers and, in so doing, take on some additional financial risk. No problem there, either. They’ll just charge more for the additional actuarial risk.
So institutionally, there’s no debate over whether we want universal healthcare: We want it and the powerful lobbies want it. How powerful are the lobbies? For the upcoming Congressional election in 2010, one of every five dollars contributed to Sam Johnson comes from people and PACs associated with healthcare. Source: Publicly filed campaign finance report data available at www.fec.gov. If Congress enacts the health care equivalent of mandatory auto insurance laws, everyone who is exposed to the financial risk of the uninsured or who will begin to collect premiums from the now uninsured comes out a big winner.
If all the institutional players are in favor of universal health insurance, what is all the fuss?
That danged Public Option.
You see, the President has hired some folks who understand that if demand goes up and supply remains the same, prices will go up. They also understand that when buyers are forced to purchase something or pay a fine if they don’t, then sellers can charge a “stay out of jail” premium, which generates enormous profits. This works beautifully for the sellers because every other profit-motivated seller has a bottom line price below which they will not go or their profits will vanish, their stock options will become worthless, and their CEO’s will writhe in the penury of the otherwise unemployable.
With mandatory coverage, there will be little control over the cost of insurance. What about free market competition, I hear you cry. For the free market to work, the market must be free. An essential element of a free market is buyers being able to choose not to buy and sellers being able to choose not to sell. Here, buyers have to buy, or face jail time. And sellers have to sell, but at prices they set. That is not a free market—it’s open season!
Consider this: What if there were only one seller of bananas and buyers had the choice of buying bananas from this one monopolistic seller or not buying any bananas at all? Sure the price of bananas would be higher than if we had, say, twenty sellers, but the price would not be infinitely high. The banana seller would have to keep prices within range of buyers’ abilities to pay so that the seller himself would not be forced to eat nothing but his own bananas.
But what if we change the market dynamics a little? What if we have one seller of bananas and everyone in the country were required to either buy bananas or go to jail? We’d expect the price of bananas to become outrageously high. Why is that? Because in the first scenario, people could chose between buying a banana and buying something else that would bring them equal satisfaction. The banana seller would have to compete with all other uses of the buyers’ money. But in the second example, the banana seller only has to compete with the buyer’s desire to stay out of jail. Most of us would pay all the money we have for a banana if that would keep us out of jail. Having 1,000 banana sellers would hardly change this outcome at all.
The U.S. Senate is prepared to force us into such an untenable market, not a free market, where we will either have to buy health insurance, or, ultimately, face going to jail . (Make no mistake—if the government can impose a fine, they can impose jail time, even if the only prescribed penalty is a fine. That may not seem just, but it’s true all the same.)
Enter Team Obama. They understand that if people have the option of not being covered, a lot of folks will take that option and end up on the public dole for health care or bankrupt, as is the case today. So the option to remain financially incapable of paying for one’s own healthcare must be eliminated. But rather than throw us into the lion’s den, so to speak, they want to offer a public option whereby people can purchase health insurance from a non-profit entity that will not be able to take oligopolistic, nay feudal, advantage of the American people.
What’s wrong with that?
Easy: In the perverted minds of insurance executives, PUBLIC OPTION = (future) SINGLE PAYER.
Their logic goes like this: A non-profit entity, whether run by the government or not, will be able to take on the same risks for a lower rate. In other words, such an entity would be able to offer coverage at lower prices and would have every incentive to do so. Eventually, this non-profit insurance company would capture 100% of the market, the insurance companies would die, and we’d have a single payer system. They’re not that far off, but, they’re off nonetheless.
If only we had an example of single-payer health insurance, we could look into that space and see whether private insurance companies died off. If they had, we know the insurance executives (the same geniuses who invented credit-default swaps) are right. If we could find a single-payer market where private companies still thrive, we’d know the insurance executives are wrong.
We don’t have to look far.
Medicare covers every person in the United States over the age of 65, with the exception of military retirees who have a separate program for themselves. Medicare is a single-payer system, with a limited customer base: mainly people over 65. And have private insurance companies died out? No! Every major insurance company sells “med-i-gap” policies (that cover the difference between what medical providers charge and what Medicare pays) and long-term care insurance (that covers home health and nursing home care for folks that don’t want to depend on Medicaid).
So it’s clear that we must have a public option and a public option will not only protect us from predatory pricing, it will provide rich profits to the insurance companies who sell premium coverage above and beyond what the public option provides.
A lot of us view the current healthcare debate with a mixed sense of excitement that we are finally going to make some progress and a sense of foreboding knowing that we’re not going to fully reform our unjust, inefficient system. But having a roadmap for future progress will help us prepare for the next debate. We’ll take what we can get this year. That will narrow the issues for the next iteration of this debate. And in that iteration, we must all focus our efforts on achieving what the vast majority of Americans want: universal coverage at affordable prices.
|
ProgressPolitics.com: 2000 Texans tell Democrats "Git ‘er Done" regarding Health Insurance Reform and a Public Option. 2000 reform supporters from across Central Texas attended a rally with Congressperson Lloyd Doggett in Austin this past weekend to show unwavering commitment for health insurance reform and a STRONG and ROBUST Public option! 
