Dollars and cents of new health care legislation

November 6, 2009

Patients not profitWhile protesters have been occupying House Speaker Pelosi’s office, demanding a health care system that serves “Patients not Profit”, the House of Representatives is preparing to vote on the market-based health care bill introduced last week by Speaker Pelosi. It is not expected that the House leadership will allow a lengthy floor discussion, but the most recent news reports suggest that the promised vote on Rep. Anthony Weiner’s (D-NY) single payer amendment may be allowed. Meanwhile, Speaker Pelosi has presented the leadership’s additions to the bill in a so-called Manager’s Amendment, stating that this would strengthen provisions for “excluding insurers who put profits over patients from an affordable marketplace that will serve tens of millions of Americans.”

Does that mean the protesters demands have been met? Is this health care bill bringing us closer to realizing our human right to health care? Let’s recall that according to international legal standards, the human right to health requires that “health facilities, goods and services must be affordable for all. Payment for health-care services…has to be based on the principle of equity.”

The House bill aims to achieve affordability by subsidizing the purchase of an insurance policy for those earning between 150% and 400% of the federal poverty level, provided they don’t have employer-based insurance. In practice, this means someone with an income at the upper end of this scale would pay $5300 a year in premiums and up to $2000 a year in cost-sharing, amounting to around 17% of their income. At the bottom end of the scale, health care costs would be around 6-7% of a person’s income – which is still higher than a general income tax increase proposed by single payer health insurance bills.  Many immigrants would get no support at all, and anyone unable to afford such an insurance plan would be subject to a penalty payment, since everyone will be mandated to purchase insurance.  

Is this affordable? Maybe for some, but probably not for others. Is it equitable? Giving lower-income people greater subsidies seems like a reasonable starting point, yet even if those subsidies were sufficient, and even if everyone who needed them was eligible, it is not clear that this money would actually buy access to health care, as opposed to access to coverage.

Each person’s subsidy would go directly to an insurance company, which would continue to control an individual’s access to care, covering certain treatments but not others, allowing the visit to one doctor but not another, or denying claims altogether. Different groups of people would get different coverage and therefore different access to care, depending on their ability to pay. People would not get health care based solely on their health needs, but based on their income or wealth, age, and immigration status.

Let’s take the example of those without income, or extremely low incomes up to 150% of the poverty level. The House bill would expand the public Medicaid program to cover these groups, which is certainly a welcome measure. But is it enough to ensure access to care? Medicaid has comprehensive coverage benefits, often better than private insurance plans, yet it can be difficult for people to find a doctor who accepts Medicaid patients, since providers can make much more money treating privately insured patients. Once again, access to coverage doesn’t necessarily mean access to care. So why does the House bill favor a Medicaid expansion? Here’s the New York Times’ analysis: “This change saves money. It is less expensive for the federal government to cover low-income people under Medicaid than to provide them with subsidies to buy private insurance.”

So if it’s cheaper to pay the entire bill for a person’s comprehensive Medicaid benefits than to pay a percentage of another person’s more skimpy private coverage, then why don’t we all get Medicaid? Or Medicare, for that matter, which has higher reimbursement rates to doctors but remains much more cost-effective than private plans?

This is where the proposed market-based reform plan unravels: it is less affordable, less equitable, and more expensive than public health insurance programs. And Democrats know it, even Speaker Pelosi knows it. That’s why the Manager’s Amendment includes a pathetic attempt at reviewing – not capping – premiums charged by insurers in the federally regulated marketplace, the Exchange. But insurers have already threatened to increase premiums if Congress passes a version of the Democrats’ bill – because they can!  There’s nothing in the current bills to prevent them from increasing premiums at will, and taxpayer’s subsidies would have struggle to keep up with that, as growing cost concerns in Massachusetts demonstrate. So what about Pelosi’s last ditch effort to prevent insurers from putting “profits over patients”? It should come as no surprise to her that corporations are legally required to do just that: to make money for their shareholders by prioritizing profits over providing access to care. Indeed, the only way for insurers to stay in business is to avoid paying for health care whenever they can.

It is this market mandate to limit access to care that is the target of the “Patients not Profit” civil disobedience campaign, which has led to over a hundred arrests at sit-ins in front of insurance companies’ offices. The protesters find it unacceptable that reform efforts continue to treat health care as a commodity, not a right, and that this will result in, according to The LA Times, a bonanza for the insurance industry. No half-hearted regulatory mechanisms can address this. In fact, the only regulation that could trump the profit mandate and remove arbitrary restrictions to care would be public control of prices, coverage benefits and eligibility, and this would spell the end of for-profit and even not-for-profit market-based insurers as we know them.

Most reformers who are now trying to push this health reform effort over the finish line are well aware that leaving the market in control of our access to health care will not take us closer to realizing the human right to health care. In a recent interview, Drew Altman, President of the influential Kaiser Family Foundation, reflected on the United States’ obligation to guarantee everyone’s access to health care and concluded that this “is fundamentally about redistributing wealth in our country; that, ultimately, it means, as some of us who have to have more, have to pay, you know, a little bit more, so that others who have less can have health care.”

Such an equitable pooling of resources, which would enable us to establish a universal and unified health insurance program, requires a sense of social solidarity from all of us, a commitment to take care of everyone rather than jostling for the best position in an inherently unequal market that is artificially sustained by subsidies. This is what real democracy should be about.

A democratic society should protect everyone’s rights and dignity by meeting their fundamental needs. We can do this by “building institutions by people for the benefit of people” whose function it is to finance and administer education, health care, fire services, due process, etc. Such institutions cannot be for-profit corporations, which serve only private interests; rather, they must be publicly mandated to serve the common good. Public services such as schools, fire departments, and courts already strive to do this, and in all other industrialized democracies, health care too is financed and administered as a public good, just as Amnesty International USA has called for, in order to enable everyone to be as healthy as they can be.

In a healthy democracy, the protection of people’s rights should not depend on their income – the rich don’t get to vote twice, they can’t pay fire fighters to save their house but not their neighbor’s, and they can’t buy a visit to a doctor while others suffer from untreated illnesses. Or can they?

In today’s democracy, access to health care can be bought, and the proposed reform measures are not going to change that. This is in violation of basic human rights, according to which our fundamental needs must be met regardless of income and wealth.

But let’s suppose we were ready to agree on our responsibility to care about each other, the community we live in, and society as a whole. If we were ready to help meet each others’ needs and protect each other’s rights, we could express this solidarity through financing health care collectively. If we’re ready to do that, we could ask Speaker Pelosi and our representatives to drop the plan that forces us to buy an insurance product whose benefits and price we can’t control.  Instead, let’s focus in on an option that allow us to share contributions and benefits in a national health program that delivers health care not as a commodity, but as a public good.

Anja Rudiger is a Guest Contributor.