Monday, March 30, 2009

Public Card vs. Private/Profit Card in Health

"Public" Option Vs "Private" [PROFIT] Option: Peoples' Health Care at Stake

by Phil E. Benjamin

There is a clear plan emanating from the new Administration's approach to national health care issues. It is an approach that is not what Single Payer and National Health Service advocates had hoped for. But, it is an approach that closely resembles Obama's campaign promises.

This approach flies in the face of the advice from almost every liberal and/or progressive health policy research group that supports universal coverage. But, it is a reality that we face. How do we explain these phenomena and what do we do about it?

On the one hand it is clear that the Administration has no intention of taking on the corporate interests in health care HEAD ON. On the other hand there is an understanding that they must do something to alleviate the crisis in health care. Corporate health interests will be curtailed; the issue is how much. Health policy people know that there is not one solution to the health care crisis. One policy directive cannot and will not stand on itself; there is simply too much intertwining of issues.

The other clear understanding is that in 2010, congressional elections are looming. A repeat of the 1992-94 Clinton failures on health care, which gave us the Newt Gingrich Congress of 1994-2000 and another generation of corporate greed, i.e., Reaganism, is not an option. A set of policy directions are being finalized in the House and Senate with the clear White House involvement. These policy directions, each covering an aspect of the health crisis, can swing between full government responsibilities, the "Public Card," to a very large role for insurance carriers: the "Private" card.

[Note: The failure in the late 1970s to pass the National Health Insurance and Labor Law Reform cleared the way for mass dissatisfaction with Jimmy Carter, and the Reagan period was born. Going back10 years before that, the passage of Medicare and Medicaid in 1965 would have assured the election of Democrats in the 1968 elections had not the Democrats stood behind and widened the Vietnam War. Coincidently, labor law reform is being demanded again by organized labor; the Employee Free Choice Act - EFCA]


The first step was taken when the Administration made the State Children's Health Insurance Program a permanent part of the health care landscape. While that move was anticipated; it was still a very important step. The Bush Administration had specifically vetoed this approach since it played the "Public" government card and not the "Private" insurance company card. SCHIP is where the "line in the sand" was drawn by the right wing and their for-profit agenda. This is a big point in the "Public" option column.

Laid off Workers and COBRA

The increasing crisis of unemployed workers and their inability to pay for the continuation of health insurance benefits, COBRA, that, by law, must be offered to them, had to be addressed. Less than 8% of those eligible bought COBRA. Partial Solution under the Stimulus Plan: the federal government will now reimburse the employer or health insurer for 65% of the cost of COBRA. The remaining 35% of COBRA's cost is still formidable. In hard numbers: COBRA for family coverage is about $1,000 a month; and, about $400 a month, for individual. With the federal support those numbers are reduced to: About $350 and $125 a month. This begins on March 1st, 2009. But, if a person became unemployed on and after September 1, 2008, and refused coverage, since it was too expensive, then those same workers can requalify for COBRA as of March 1, 2009. This is a check mark in the "Public" Option column, but the heavy hand of the "Private" card is ever present.

Problem: The high cost of COBRA is driven by the cost of health insurance and drug companies. Those "Private" Card costs will need to be curtailed. These costs are unnecessarily excessive and will put too high a price for this "Private" card to be maintained.

In another very important move, workers collecting UNEMPLOYMENT INSURANCE can now qualify for Medicaid. This is a major step forward. This is playing the "Public" card perfectly.

Medicare Buy In at 55 Years of Age

Lowering the Medicare eligibility age to 55 years, proposed by the most powerful U.S. Senator, Finance chair, Max Baucus, is playing the "Public" card to some extent. But the "Public" option card would be greater if the Medicare program were reformed to be more like its framers intended, and not the partially privatized program that has developed over the years; especially with Bush's misnamed "Medical Modernization Act of 2003." Eliminating the mis-named "Medicare Advantage" insurance company programs; federalizing the price of drugs leads Medicare back to its federal mandate and is a peoples' demand that makes complete sense.

The problem will be the cost of the "Buy In." That fee has yet to be determined, but it must be affordable. There is a fear that the fee will be "means tested"; which could lead to means testing for all of Medicare. This would be a big step backward away from the "Public" column.

For "Social Solidarity" principles to prevail, as in France, "means testing" for any services is a killer. To put the rich in line, a clear progressive income tax is necessary. The greed of AIG, Citibank and other parts of Corporate America sets the stage for this tax policy direction.

Increasing Eligibility for Medicaid

Baucus has proposed elevating the Federal Poverty Level [FPL] so that millions of people, including many working poor people, can access Medicaid. That is a good thing; and, plays the "Public" card well. These regulations must be accompanied by new requirements requiring physicians to treat Medicaid recipients.

The Federal Employee Health Benefits Plan [FEHBP]

The strong rumor is that the Administration, in fulfilling its promise of universal access, will bring everyone else under the "principles" of the FEHBP. Not the Program itself.

The FEHBP is quite popular with federal employees, including postal workers. Over 80% of federal employees choose Blue Cross/Blue Shield, from a host of insurance options.

The rumor is that the Administration is also looking at Massachusetts program. That program covers over 50% of the uninsured in Mass., but there are serious funding problems. The mix of "Public" and "Private" is very much alive there. The FEHBP is heavy on the "Public" side, but the "private" side is still present, and, that presence is very costly to provide for all eligible people. Keeping the "Private" card in this program has made affordability a key issue.

A strong "Public" Option within the FEHBP, a Medicare option, would make the most "competitive" sense.

Our Role

There is a clear and present need for health care activists to continue the pressure as each of these aspects of the Administration's national health program unfolds. For years, decades, there have been coalitions formed around each of those programs. They will and should be continued, but coalitions between these groups are paramount. The street heat created by these grass roots organizations and the labor movement will be the difference.

For example, in a totally ill conceived idea, the Administration put forward a proposal that returning veterans should use their own health insurance coverage for service related illnesses and injuries; and, not the VA hospital system. That was clearly a shift toward the "Private" and not the "Public" Card. Following the hue and cry from every veteran's organization against that policy proposal; the Administration withdrew the idea.

The Republicans will oppose every health policy move that the Administration makes. Their strategy will be to stonewall anything happening before the 2010 Congressional elections. On the other hand, the Democratic majorities in the House and Senate and control of the White House should not be wasted.

But, now, a newly created caucus, the Blue Dog Democrats, have joined the fray to defeat the strong "Public" card. This falls right in with the Republican goals. These Democrats perspective is clear. Their messages is working people and their health care needs be damned; corporate interests in health care must served.

These policy moves sets up a war between a clear role for government, the "Public" card; and, a continuation for the private health insurance and drug companies, the "Private" card.

Clearly, the issue of costs, i.e., the excessive price of the "Private" option charged by these profiteers for their participation, continues to be the 500-pound gorilla in Congress and the White House. The struggle for the clearly less expensive "Public" Option and against the "Private" option will be carried out by hand-to-hand combat on each health proposal.

In Monday's NY Times Letters to the Editor, a few very salient points were made:

"As policymakers in congress and elsewhere debate the nation's health insurance options, especially for he nearly 50 million insured in our country, it appears that the main argument against Medicare-like coverage is that private insurers would be unable to compete with government on costs, and might be drive from the market. Isn't that like saying we should not strive for a peaceful planet because it would be bad for the armaments industry? Am I missing something?"

"What is at issue here is not how to support private health insurance companies. The issue is how to best provide quality, affordable health care for all."

And from a practicing physician in private practice for over 35 years: "Medicare and private insurance fees are the same: most private insurers base their fees on those paid by Medicare. But it is much more difficult to collect these fees from private insurance companies than from Medicare. The H.M.O.s require that I submit and resubmit claims several times. And, then they even have the chutzpah to offer a lower payment soon, rather than contractually agreed-upon payment sometime in the future. I prefer Medicare, which mostly pays promptly and with far fewer hassles for me and my staff." [PS the updated term for these HMOs is the mis-named Madison Avenue term, Medicare Advantage.

Printing a preponderance of pro-Public Card option letters for the NY Times is rather unusual. They tend to adopt the market –based system.

Health Service Issues Need Attention

While these crucial financing and system-wide issues are being debated and struggled over; there are many others below the radar that need addressing: primary care build up; community health centers financing and expanding; reforming the cash cows coffers of the large not-for-profit medical centers; training more physicians and nurses; and, the continuing anti-racist, anti-sexist struggle.