Proposals for Universal Health Care or Back to the Health Care Future

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Proposals for Universal Health Careor Back to
the Health Care Future

• Leonard Rodberg
• Urban Studies Dept, Queens College
• And
• NY Metro Chapter
• Physicians for a National Health Program
• April 14, 2007

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Psst! Wanna see my health plan?
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Why Health Is On the Agenda
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A Declining Number of Firms Are Offering
Insurance
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Firms Shift Health InsuranceCosts to Workers
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Rising Number of uninsured
Number of Uninsured Americans (Millions)
45
40
35
30
25
20
1980
1985
1990
1995
2000
Source U.S. Census Bureau
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The Outlier Nation Our Public System Covers
Fewer
United States
Source F. Colombo and N. Tapay, Private Health
Insurance in OECD Countries, OECD 2004
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While Private Insurance Dominates
United States
Source F. Colombo and N. Tapay, Private Health
Insurance in OECD Countries, OECD 2004
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U.S. Health Costs are 70 Greater than the Median
of Other Countries
United States
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THE MAJORITY OF AMERICANS HAVE PRIVATE INSURANCE

• Total Population
• Private health insurance
• - Employer-provided
• - Individual
• Public health insurance
• Medicare
• Medicaid
• Uninsured

• Million
• 288 100.0
• 174 60.5
• 160 55.6
• 14 4.9
• 72 25.0
• 41 14.2
• 31 10.8
• 42 14.6

Source National Center for Health Statistics,
2003
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BUT IT PAYS MUCH LESS THAN HALF THE COST

• 2004
• Personal Health Expenditures
• Private Funds
• Private health insurance
• - Self-funded plans
• - Insurance company plans
• Out-of-pockets payments
• Other private funds
• Public Funds
• Medicare
• Medicaid
• Other public expenditures

• Billion
• 1,753 100
• 965 54
• 658 37
• 340 19
• 318 18
• 236 13
• 70 4
• 789 46
• 309 18
• 293 17
• 187 11

Does not include tax subsidy for private
insurance. See Woolhandler Himmelstein,
HealthAffairs 2002
Source Centers for Medicare and Medicaid
Services, 2006
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HIGH COST OF HEALTH INSURANCE PREMIUMS

• National Average for Employer-provided
  Insurance
• Single Coverage 4,024 per year
• Family Coverage 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

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The Good News --and the Bad News

• Universal health care is accepted as the goal.
• It is defined simply as requiring that the
  uninsured buy private insurance.

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The Massachusetts Plan

• Individual Mandate Uninsured people must buy
  their own health care or face financial
  penalties.
• Sliding subsidies for uninsured up to 300 of the
  federal poverty level.
• Employer Fair Share Assessment Fee of 295 per
  year per worker for businesses not covering their
  employees.
• Medicaid expansions Children up to 300 of
  poverty.

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Personal Responsibility
Incremental Expansion
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Wyden Healthy Americans Actslash and burn

• Supporters SEIU, Safeway, Families USA
• Eliminate the tax deductibility of employer-based
  insurance ? end employer benefit
• Require individual purchase of insurance
• Transitional payments by employers
• Subsidies to low-income individuals
• Relies on competition to contain costs

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John Edwards Planindividual mandate with a
pretty face

• Individual mandate with community rating
• Employer mandate (play or pay)
• Medicaid and SCHIP expansion
• Subsidies for low-income
• Regional purchasing plans (Health Markets)
• Offers government program (single payer?) as
  well as private plans. (cf Medicare Advantage)
• Note Jacob Hacker plan Identical content,
  different verbiage

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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)

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Ten Top Reasons Why anIndividual Mandate is Bad
Policy

• 10. Enforcement is bad for public health
• 9. Insurance companies will resist and
  undermine community rating and guaranteed
  issue
• 8. Will not lead to universal coverage
• 7. If premium is affordable, health care is
  not (copays, deductibles)
• 6. Complexity/humiliation of means testing

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Ten Top Reasons Why anIndividual Mandate is Bad
Policy

• 5. Even more bureaucracy (Health Markets)
• 4. Private health insurance will be a continuing
  consumers nightmare (copays, deductibles,
  exclusions, denials, appeals)
• 3. Increases the cost of the system, most going
  to private insurance companies
• 2. No cost control continually rising cost

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And the Top Reason Why an Individual Mandate is
Bad Policy

• 1. It doesnt reform the system at all. It would
  not help any of us who think were insured.
• -- Half of middle- and lower-income adults
  experience serious problems paying medical bills
  or insurance premiums. (Commonwealth Fund 2006)
• -- Three-fourths of those who declare
  medical bankruptcy had insurance (D.Himmelstein
  et al, Health Affairs, 2005)
• It doesnt solve any of the problems (especially
  rising costs) that concern everyone.
• It is not a real structural change.

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Choice Whats Wrong With Offering a Public Plan
vs. a Private Plan?

• Purchaser cannot predict future health needs, and
  so has no basis for choosing plan
• Purchaser cannot know the impact of private plan
  restrictions until illness hits
• Private plans want to avoid (i) sick people and
  (ii) paying for illness
• Deceptive/seductive insurance company advertising
  compared to govt advertising
• A level playing field is impossible
• It is not single payer!

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THE EVIDENCE FROM MEDICARE

• Since 1997, the US has conducted a head-to-head
  comparison between private insurance (Medicare
  Choice, now called Medicare Advantage) and
  public Medicare.
• The result
• Private insurance companies require a subsidy of
  at least 15 just to stay in the business.
• Fewer than 1 in 6 Medicare-eligibles choose the
  private insurance option.

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Common Features of these Plans

• They identify the problem as too many uninsured.
• Their solution Require everyone to have
  insurance
• Employers contribute but dont necessarily offer
  insurance
• These plan dont reform the structure at all
• True objective of these plans
• Save the private insurance industry

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A Familiar Headline But Its Wrong!

• 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.

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Some of the Problems created by private insurance
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SO HERES THE SOLUTION

• Expand Medicare to cover everyone
• Improve the coverage it offers
• Eliminate private insurance
• Expanded and Improved Medicare for All
• Conyers Bill - HR 676
• -- The single payer solution --

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HOW WOULD MEDICARE FOR ALL WORK?

• Everyone would receive a Medicare card assuring
  payment for all needed care
• Complete free choice of doctor and hospital
• Doctors and hospitals remain independent,
  negotiate fees and budgets with Medicare
• Progressive taxes go to Medicare Trust Fund
• Public agency processes and pays bills

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SOME IMPLICATIONS OF MEDICARE FOR ALL

• The same coverage for everyone No means
  testing coverage would not depend on
• income, employment or age
• Medicaid would no longer be needed
• Hundreds of billions of dollars in administrative
  costs would be saved
• Costs would be controlled through capital
  planning and quality reviews conducted through
  the single insurer

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How Would It Be Paid For?One Example
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Billing and Insurance Costs Account For More Than
20 of All Health Care Costs
BIR Billing- and insurance-related costs
profit and marketing costs not included
Source James G. Kahn et al, The Cost of Health
Insurance Administration in California Estimates
for Insurers, Physicians, and Hospitals, Health
Affairs, 2005
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Covering Everyone and Saving Money through
Medicare for All

• Additional costs
• Covering the uninsured and poorly-insured
  6.4
• Elimination of cost-sharing and co-pays
  5.1
• Savings
• Bulk purchasing of drugs equipment
  -2.8
• Reduced hospital administrative costs
  -1.9
• Reduced physician office costs
  -3.6
• Reduced insurance administrative costs
  -5.3
• Primary care emphasis reduce fraud
  -2.2
• Net Savings
  -4.3

Source Health Care for All Californians Plan,
Lewin Group, 2005
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WHY IS SUCH A NATIONAL HEALTH PROGRAM POSSIBLE
TODAY?

• Private insurance is not addressing the
  fundamental problems of cost, choice, access and
  quality.
• Everyone is affected the uninsured, the
  underinsured, and everyone else who is
• insecurely insured.
• Employers who provide insurance want to be
  relieved of the burden of rising costs and unfair
  competition from employers who don't offer
  insurance.
• Small businesses want to offer insurance to their
  employees but cant afford it.
• Every other industrialized country has done it.

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PHYSICIANS FOR A NATIONAL HEALTH PROGRAM (PNHP)
says

• Who needs insurance companies anyway?
• Limited reforms that keep private insurance in
  place have been tried and failed.
• If we get rid of the insurance companies, we can
  have a Medicare for All system that is
• - Simpler
• - Less costly
• - Better for our health
• - Equitable, and
• - Covers everyone
• Lets do it!

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A Final Word