Death of the Health Insurance Industry

(or death of the way things are currently done)



by

Contributor Rebecca Stamm

With presidential elections looming, the debate on healthcare reform is once again in the headlines. Every candidate has their opinion and their ideas of how to reform the system.

American citizens want to be able to choose a doctor they can trust and respect; they also want coverage that is adequate and affordable. With premiums rising between 13-25 % per year, our current system is incapable of providing that. But to understand the debate about reform you need to have some knowledge of the terminology that is being used in these debates. There are a few different systems that are currently being discussed. The first, Private Insurance, is the system that we are on now. The second, Socialized Medicine, is a system where the doctors and the hospitals work directly for the government and are paid by the government. This system is similar to the VA. Another, National Health Insurance or Single Payer, is a system that is managed by the public and the services provided remains in the private sector.

Our current system of spending more for lower quality has left 46 million uninsured and 50 million more with insufficient coverage. Those 96 million people are hard working middle class citizens. Lower income citizens are cared for through Medicare/aid and the higher income citizens can afford to purchase a decent plan. Private insurance has proven itself to be an ineffective means of providing care. They waste money on outrageous executive salaries, they have to worry about profit margins for the stockholders, they maintain very expensive sales and marketing departments, and there is overhead to run the company. Private insurance knowingly drives up the cost for the consumer, while forcing the provider to lower the cost of their services, and pocketing the difference.

Hospitals are forced to maintain a costly administrative staff to deal with the bureaucracy created by the insurance industry. All of these problems (and many more) are eating up a third of the money we spend on healthcare. We spend two times as much on our healthcare (about $7,000 per capita) than other developed nations. In short, the insurance industry is responsible for using up a whopping 30% of our healthcare dollars.

Private insurance has also created much of the mess that is associated with Medicare/aid. Healthy people use very little of the premiums that they pay in and that helps to pay for the sick people. Insurance companies cherry pick the healthy patients and provide them with coverage. Once they become sick, the patients’ premiums sky rocket and they drop out of the plan. This leaves programs like Medicare/aid to cover only the sick people and creates huge deficits in their budgets.


Single payer national insurance will solve these problems. Representatives Kucinich (D-OH), Conyers (D-MI), and McDermott (D-WA) are working on a bill, HR 676, which provides America with an intelligent solution to our health care crisis. The proposal provides all American citizens with a comprehensive medical plan which includes primary and preventative care, inpatient/outpatient services, ER services, prescription drugs, long term care, mental health services, dental coverage (excepting cosmetic), hearing, and vision coverage. It even provides for substance abuse treatments and chiropractic services. There are no deductibles, co-pays or other out of pocket expenses. This plan is also portable and will allow you to see any doctor anywhere in the United States.

It sounds good so far but many will raise the question of how we will pay for such a plan. We all know that nothing is free. The good news is that the majority of the funding is already there. Right now we pay 64% of healthcare costs through our taxes. Those funds cover citizens that are on Medicare/aid, the VA, public employees, and teachers, elected officials, the military, and tax subsidies to employers for offering insurance to employees. The citizens are currently paying 17% for healthcare out of their pockets. Employers that offer insurance pay 19% of the cost out of their profits. In fact, 25% of their payroll is dedicated to the cost of health care.

Under a single payer system, we will be saving the $350 billion dollars wasted by the insurance industry per year. Along with those savings, the payroll taxes for employers will be reduced to about 7% saving them 12% of their profits. Citizens will contribute about 2% of their payroll taxes. The plan actually gives the average citizen a 10% raise. They will increase taxes on personal income for the top 5% of income earners, and place a small tax on stock and bond transactions to accommodate for any differences in funding.

The plan will not affect a doctor’s income. There will be reduced malpractice costs and overhead to run their offices. Licensed practitioners will be paid a fee based on the service that they provide. Some physicians will be paid a salary. Hospitals will be given a budget that will be determined by the regional, state, and national board. The plan will be managed by the National Board of Universal Quality and Access, and will be comprised of elected officials with extensive knowledge of the health care industry.


Private insurance will be allowed to cover anything that the national plan doesn’t. It will, under no circumstances, be allowed to compete with the national plan. Competition from private insurers will create a deficit of healthy people in the national plan. This deficit will cripple the plan and we’ll end up back at square one. The only thing that the current bill doesn’t provide for is the retraining and placement of those currently working in the private insurance sector. This is a serious flaw that will need to be considered before the bill is passed.

Whether we like it or not, the government is determined to overhaul our system of delivering healthcare in this country. There are a number of ideas being proposed that could be devastating to the average middle class family. You have to ask yourself if you want a system like Gov. Mitt Romney’s (R-MA) and Gov. Arnold Schwarzenegger’s (R-CA) that forces citizens into expensive policies that are written by insurance companies. These policies will cost a single person $4,000 per year with a $2,000 deductible including co-payments. This law will fine people a $1,000 and up for not purchasing a plan they’re unable to afford. When you consider that the median income is around $29,000 per year, the cost of a policy like this will be devastating to hard working Americans.

There is little to no regulation written into these types of bills to stop the insurance companies from basing the cost of coverage on risk factors. So, future costs are guaranteed to skyrocket. Is this a plan that will help the citizens or is this a plan that will only serve to make the insurance company stock holders wealthier? With plans like this, we’re still forcing Americans to choose between their health and other basic necessities. A single payer program means death to the insurance industry and I’m grabbing my shovel.

They’ve had a nice run but all profitable things may end. Let's just hope they made enough money to retire gracefully. It’s time to seriously consider a single payer plan. It’s time to consider HR 676.

Sources:
Physicians for a National Health Program
House of Representatives Bill 676
Who's Afraid of Corporate Medicine?

Who's Afraid of Corporate Medicine?

In the most recent Democratic Presidential Debate in New Hampshire, it was said and hardly heard when Candidate Dennis Kucinich screamed the most common sense yet most financially opposed medical plan, the single payer plan. Basically, an extension of Medicare to all Americans, it is a plan that would cut out the middle man, which is opposed by the sacred cows as Big Pharma, the AMA and insurance companies have effectively touted it as a death knell for quality medicine in America.

What they don't point out is that the death knell went in years ago as we are by far the worst quality medical providing nation of all industrialized nations. Yes, the best is available, but only to the rich but the real measure is the availability to all. On this the US loses in every category to countries like Costa Rica (population 3-million; avg. per capita income - $300/month) and Castro's Cuba (recently highlighted in Michael Moore's Sicko). The numbers are clear when by every measure America appears to be a third world nation.

We are 48th in life expectancy and the United States is tied with Hungary, Malta, Poland and Slovakia with a death rate of nearly 5 per 1,000 babies. A little embarrassing to those of us who still care about little things like children and living. Supposedly our constitution guarantees the "inalienable rights of life, liberty and the pursuit of happiness" ; however, it seems rather difficult to exercise these rights when you are dead.

Of course, many Americans have swallowed hook, line and sinker, the notion that insurance companies, pharmaceutical companies and medical professional have a natural right to living like kings on the highest medical profits in the world. It's not hard to believe America falls for it after the billions that are tacked onto our medical care in the form of lobbying and advertising by the monster that our medical establishment has become.

Some facts to consider:

• Medicare spends a lower percentage on administration of medical care than any single provider in the world at close to 1%.
• A record 46.6 million Americans, including 8.3 million children, have no health insurance at all.
• If allowed to actually negotiate with drug providers they could cut drug costs by 48% just as the Veteran's administration does; a fact few realize as our congress pushed this through literally in the middle of the night as Big Pharma twisted arms and threatened political lives during a prolonged vote. That's right; the median price difference for the 20 drugs most frequently used by seniors is 48.2 percent.
  

Some relevant questions:

• If the US offered a free education to those who can perform, would there be any shortage of medical professionals?
• If the US, a country of 300-million people cut out the middle man could we not cut out the middle man and save that 30+% of profit that is tacked onto our medical costs and put that money back in our pockets?
• If we had a single payer i.e simply offering Medicare to all US citizens, couldn't we be at least as efficient as Cuba or Costa Rica?
• If we treated people before they got sick wouldn't we live longer - as "an ounce of prevention is worth a pound of cure"?
• Would we really miss any of the doctors, Pharma and insurance executives who might quit if we deprived them of guaranteed 6 figure incomes and replaced them with people driven by a love of helping people?
• Would either doctors or patients miss the current bureaucracy of processing medical insurance claims and the fear that some executive will say, "no" to your life?
• Would it somehow make us less American to get something back for the tax dollars we put in?

To paraphrase our former President, Richard Nixon, "you're not going to have America's healthcare system to kick around forever."

GOP Incumbents Up For Re-election Or Retirement, Double Dems

The composition of the Senate going into the 2008 election will include 49 Republicans, 49 Democrats, and two independents (Bernie Sanders of Vermont and Joe Lieberman of Connecticut, who both caucus with Democrats). Of the seats up for election in 2008, 21 are held by Republicans and 12 by Democrats.

Above and Map Source: Wikipedia, 2007

It should be noted that any analysis political scientists do leads to one major conclusion, the Republicans have the most to lose in 2008. Statistically the change in the Senate alone, stands to beat the take over of US Congress by the "Contract of America" led by Newt Gingrich in 1994.

As this is a Presidential election year also, election fund-raising will be spread thinner than perhaps ever in history, as consistently Republicans have to spend almost double the amount spent by Dems in order to win by a thin margin.

With so many running for President as well, the competition for political money is at a fever pitch. And, as never before, middle lass Americans are expected to contribute more money because of the very organized and convenient machines developed for the internet.

As there are no statistical models for us to use in forecasting the cost per vote this time, both sides are in overdrive.

Vermont and Iowa already seem to suggest a huge margin of victory for the Dems in the Presidential races and as history dictates, the congress should follow suit.

Of course people like Tom Delay (disgraced GOP'er) are still gloating about the good ole days, and Newt even says he is likely to run for President in 2008 on 90.9 KCBI's "Jerry Johnson Live". Needless to say, his diehard supporters, all 10 of them, are pumped. We will see what Fred Thompson, Rudy Giuliani and John McCain have to say about that as Newt doesn't seem to have much chance of attracting anyone other than those who have read Meine Kampf twice, despite Newt's distancing himself from Bush, "Bush reminds me of Carter".

He will no doubt run on "values" despite his forced resignation for hypocrisy while trying to bring down Clinton. Maybe, there will be a new dictionary soon that will help him to redefine what most Americans think "values" are.

As the Dems in congress recently caved on war funding in order to get an increase in the minimum wage, many are accusing them of breaking promises. The real test will be in the next funding round in the fall. If they end this war or significantly pull back to a supervisory role, Dems will regain the faith of those who wanted everything now.