Transcript Problems created by private insurance #1: High cost

Proposals for “Universal” Health Care
or
Back to the Health Care Future
Leonard Rodberg
New York Metro Chapter
Physicians for a National Health Program
February 27, 2007
Why Health Is On the Agenda
A Declining Number of Firms
Are Offering Insurance…
Firms Shift Health Insurance
Costs to Workers
HIGH COST OF HEALTH
INSURANCE PREMIUMS
National Average for Employer-provided Insurance
Single Coverage
Family Coverage
$4,024 per year
$10,880 per year
Note: Annual income at minimum wage = $10,300
Annual income of average Wal-Mart worker = $17,114
Source: Kaiser Family Foundation/HRET Survey, 2005
Number of Uninsured Americans (Millions)
45
40
Rising Number of uninsured
35
30
25
20
1980
1985
1990
1995
2000
Source: U.S. Census Bureau
Bush Plan
• The problem: Employers provide too much insurance,
leading to excessive spending
• Bush’s solution:
– Tax employer-based insurance that is “gold-plated”
– Provide tax deductions (not credits) to allow people to buy their
own insurance. No mandates on anyone.
• The impact (Lewin):
– 9 M fewer uninsured (12 M lose employer coverage, 2 M would
remain uninsured)
– Newly-insured are mainly upper-income
– $62 B in annual federal expenditures
• No reform of individual insurance market: inaccessible to
low- and middle-income families or pre-existing conditions
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Out-of-Pocket Expenses
($ per capita adjusted for purchasing power parity)
U.S .Out-of-Pocket Expenses are
Greater than Those of Other Countries
900
800
700
600
500
Median
400
300
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0
Source: OECD 2006
Physician Visits Per Capita
Hospital Inpatient Days Per Capita
Stephen Colbert on the Bush
Health Plan
“It's so simple. Most people who can't afford
health insurance also are too poor to owe
taxes. But if you give them a deduction
from the taxes they don't owe, they can use
the money they're not getting back to buy
the health care they can't afford.”
New Health Care Proposals
(as of February 27, 2007)
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America’s Health Insurance Plans
Better Health Care Together Campaign
Health Coverage Coalition for the Uninsured
Sen. Ron Wyden, SEIU, Safeway
Federation of American Hospitals
John Edwards
The Good News -and the Bad News
• “Universal health care” is accepted as
the goal.
• This is defined to mean simply
helping the uninsured buy private
insurance.
America’s Health Insurance Plans
“the private insurance protection plan”
and
Federation of American Hospitals
“the private hospital protection plan”
• Expand SCHIP and Medicaid eligibility for
very low-income
• Provide federal and state subsidies and tax
deductibility to encourage everyone else to
buy private insurance
Better Health Care Together
Campaign
“grand coalition”
Members: ATT, Kelly Services, Wal-Mart
SEIU, CWA
Center for American Progress
Principles but no Program:
• Quality affordable insurance coverage for everyone
• Individuals are responsible for maintaining and
protecting their health
• Improved value for health care dollar
• “Shared Responsibility”: Businesses, government,
individuals all contribute.
Health Coverage Coalition for the
Uninsured
“even grander coalition”
Members: UnitedHealth, Blue Cross, Kaiser
AHA, AMA
Chamber of Commerce, NAM, Pfizer
AFL-CIO, SEIU
AARP, Families USA
Could agree only on:
• Expanding coverage as a goal
• Expansion of SCHIP
• Tax credits for children’s insurance
Wyden Healthy Americans Act
“slash and burn”
Supporters: SEIU, Safeway, Families USA
• Eliminate the tax deductibility of employerbased insurance  end employer benefit
• Require individual purchase of insurance
• Transitional payments by employers
• Subsidies to low-income individuals
• Relies on competition to contain costs
John Edwards Plan
“individual mandate with a pretty face”
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Medicaid and SCHIP expansion
Employer mandate (“play or pay”)
Individual mandate with community rating
Government subsidies for low-income
Regional purchasing plans (“Health Markets”)
Government program (“single payer”?) as well as
private plans. (cf Medicare Advantage)
Note: Jacob Hacker plan: Identical content,
different verbiage
Edwards’ Seductive Verbiage
• For everyone: Shared responsibility
• For the fearful: Lets people keep what they have
• For those worried about cost: Everyone will
work together to make the system more efficient
• For single payer advocates: Individuals and
businesses can choose if they want the
government plan; if so, the system will “evolve
toward a single-payer approach.”
(For more, see www.johnedwards.com)
What’s Wrong with an Individual
Mandate (partial list)?
• Will not lead to universal coverage
• Enforcement is anti-public health
• Affordable premium vs
affordable health care
• Employers will drop coverage
(“crowd out”)
• Insurance companies resist community
rating
What’s Wrong with an Individual
Mandate (partial list cont.)?
• Health insurance: a consumer’s nightmare
(copays, deductibles, exclusions, denials, appeals)
• Complexity/humiliation of means testing
• More bureaucracy (“Health Markets”, etc.)
• High cost ($120B Federal + ???B for
individuals)
• No cost control/continuing rising cost
Common Features of these Plans
• Identification of the problem: too many uninsured.
• Their solution: Require everyone to have
insurance
• Employers should contribute but not necessarily
offer insurance
• Their mission: Save private insurers
None of These Plans Will Happen!
• They cost hundreds of billions of dollars
• They benefit only those with low incomes and
those without insurance
Note: Half of middle- and lower-income adults experience serious
problems paying medical bills or insurance premiums.
(Commonwealth Fund 2006) These plans do nothing for them.
• They don’t solve any of the problems
(especially rising costs) that concern everyone
None envisions a real structural change.
A Familiar Headline – But It’s Wrong!
Employer-Based Health Insurance System ‘Collapsing’
(Wall Street Journal, 7/17/06)
• It is the unaffordable, inefficient private
insurance system that is collapsing.
• Employers should contribute their fair share,
just not through private insurance.
• Going backwards to individual purchase of
insurance is not the answer.
SOME
OF Problems
THE PROBLEMS
Some
of the
created by
CREATED private
BY PRIVATE
INSURANCE
insurance
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Excessive administrative costs
Excessive complexity
Continuously rising costs
Lack of coordination, budgeting, and planning
Regressive financing via premiums
Widespread underinsurance and bankruptcy
Interference in physician decision-making
The “hassle factor”
SO HERE’S OUR REAL SINGLE
PAYOR SOLUTION:
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Expand Medicare to cover everyone
Improve the coverage it offers
Eliminate private insurance
Automatic enrollment in Medicare for All
Income-based financing through employers and
employees (“shared responsibility”)
Expand and Improve Medicare for All
Conyers Bill - HR 676
Conclusion
Instead of moving backwards, to a time before there was
employer-based or group insurance, when everyone was on
their own to get health care, we should be moving forward,
to recognize health care as a necessary public good that
should be a public responsibility. We should be expanding
and improving the Medicare program, which we know
provides reliable, cost-effective coverage and has been
doing so for more than forty years. Public Medicare for
All, not private for-profit insurance, is the only path to a
future that will truly provide health care for all Americans.