Opinion Editorials, July 2009

Health Care For All that Helps the Economy vs. Health Care Reform that Undermines It

By Kevin Zeese

ccun.org, July 18, 2009
 

The Democrats Put the Health Insurance Industry Ahead of the Economy and Health Care

 
The House health care bill pays for itself on the backs of all but the smallest businesses with a penalty equal to 8% of payroll if they fail to provide health insurance to workers. Does this make sense in the middle of a recession that is already showing signs of a jobless recovery?
 
The decision by the president and Congress to keep the multi-payer health care system, a system based on private health insurance tied to employment, ensures that the bill will have a negative impact on the economy. 
 
Recently an activist from New Jersey, Terri DiMatteo, posted a link on my FaceBook page:
 
First-of-Its Kind Study: Medicare for All (Single-Payer) Reform Would Be Major Stimulus for Economy

Source: www.calnurses.org

Establishing a national single-payer style healthcare reform system would provide a major stimulus for the U.S. economy by creating 2.6 million new jobs, and infusing $317 billion in new business and public revenues, with another $100 billion in wages into the U.S. . . .
 
I was aware of the report but it really struck me again when I compared it to the steps being considered by the Congress to pay for health care:
 
● Cut funding to Medicare, health care for the elderly (they call it ‘efficiency’)
 
● Cut funding to Medicaid, health care for the poor (again ‘efficiency’)
 
● Tax employers who do not provide health insurance
 
● Tax employee health benefits as income
 
● Tax people who do not purchase health insurance
 
● Tax people who make over $250,000
 
● A national value-added (sales) tax of up to 3%
 
And, then there were the high profile press events with President Obama and the industry with vague promises of saving money.  Promises made by such reputable corporations as the insurance and pharmaceutical industries who have consistently showed they put profits before people and who have made promises to control costs in the past that have not occurred.
 
It is too bad President Obama did not take the side of nurses and health care practitioners and use his White House megaphone to highlight how a single payer, national health plan would create millions of jobs and spur hundreds of billions in new business and public revenues.  It would provide health care to all without adding costs.
 
There is no question the U.S. must confront the economic costs of health care.  The United States spends more than $2 trillion on health care every year, more than 18% of the GDP. By 2040, 34 cents of every dollar will be spent on healthcare.  The U.S. spends twice as much per person on health care than countries with single payer systems. For this exorbitant price we get worse results in terms of access to health care and such measures as longevity and infant mortality.  Indeed, according to the National Academy of Sciences approximately 20,000 die annually in the U.S. due to lack of health care.
 
This cost of health care is unaffordable at all levels of government.  State and federal governments are unable to balance budgets with health care costs rising. Medicare and Medicaid are struggling because of these costs. 
 
And, families struggle whether they have insurance or not. The Kaiser Family Foundation found that employer-sponsored health insurance premiums have more than doubled in the last nine years, a rate four times faster than wage increases. The McKinsey Global Institute found that 78% of low wage workers do not receive health benefits from their employers.  Moreover, families in the lowest income category spend 20% of household income on contributions to employer-sponsored health plan premiums.  According to a study in the August issue of the American Journal of Medicine, medical problems contributed to nearly two-thirds (62.1%) of all bankruptcies and more than three-quarters (77.9%) of those had insurance.
 
These financial challenges for government and individuals are occurring while the health insurance industry feeds its gluttonous greed.  Profits at 10 of the country’s largest publicly traded health insurance companies rose 428% from 2000 to 2007, from $2.4 billion to $12.9 billion, according to U.S. Securities and Exchange Commission filings. In 2007 alone, the chief executive officers at these 10 companies collected combined total compensation of $118.6 million – an average of $11.9 million each. That is 468 times more than the $25,434 an average American worker made that year.
 
The health care bills being considered by the Congress will be a gigantic giveaway to the health insurance industry.   They will mandate that people or employers purchase health insurance.  With nearly 50 million uninsured, and the numbers rising with every new report of job losses, this will be a tremendous boon for the insurance industry.  Health insurance premiums have skyrocketed, going up more than 87% over the past six years.  The annual premium for an employer health plan covering a family of four averaged nearly $12,700. The annual premium for single coverage averaged over $4,700.  Forcing Americans to buy insurance will provide the industry with hundreds of billions annually in new revenue.
 
The U.S. must face up to the rising cost of health care but these bills will not do so.  Further, in the middle of a deep recession does it make sense to put in place new taxes on businesses or individuals?   Does it make sense to take money from the poor and elderly to transfer wealth to the insurance industry? 
 
These risks to the fragile American economy are unecessary.  A single payer national health plan would immediately save $400 billion in annual health costs because the insurance industry and bureaucracy it creates makes up 31% of the cost of health care.  It is the only way to provide health care to all Americans without adding to the cost and it will allow us to control the cost of health care in the future.
 
Instead of taking an approach that covers all Americans and expands the economy, Congress is protecting the interests of its campaign donors in ways that threaten the economy.  As a result the American people, businesses and the economy will pay the price – and millions will continue to go without health care.
 
Kevin Zeese is executive director of ProsperityAgenda.US.