Map of life expectancy at birth from Global Education Project.

Monday, September 17, 2007

Half a solution to half a problem . . .

does not equal 1/4 of a solution. Today Hillary Clinton announced her big health care reform plan, which looks a lot like Obama's and Edwards's and oh yeah, nobody's actually saying it but they all look a whole lot like the legislation that is now in the process of implementation here in the People's Republic of Massachusetts.

The basic idea is:

1) Push a little bit -- not too hard -- to encourage employers to offer health care insurance to more people, or at least discourage them from dropping people at the rate they are now. In Massachusetts, this ended up being a trivial penalty of $295/year per employee, but that may end up being increased. As far as I can tell so far, Clinton has yet to specify the amount employers would be required to contribute but given what we know about Who Runs Congress (answer: K street lobbyists for large corporations) it's unlikely to be much. Also, the definition of "providing insurance" is not clear, in that the possible amount of the employee contribution to the premium and the deductibles, co-pays, benefit and coverage limits that define acceptable insurance need to be spelled out.

2) Create subsidies on a sliding scale to let people above current means thresholds who are not affluent enough to purchase insurance to buy into public insurance programs. In the Massachusetts case this basically means the state Medicaid plans, in a federal reform this would be an expanded version of Medicare. Here, we're getting the revenue from raising the cigarette tax (yet again) and theoretically, drastically scaling back the so-called "free care" pool which compensates hospitals for treating uninsured people, on the theory that there won't be uninsured people in the future. These are moving parts that have to fit together, and they don't. At the federal level, there isn't any free care pool to drain anyway, so we're talking tax increases. HRC and the other dems want to rescind some of the Bush tax cuts on the wealthy, which is fine, but of course we already have other uses for the money.

3) Impose a mandate on individuals that they must be insured. If they can't get it from an employer, they have to go out and buy it. In order for this to work, insurers have to be mandated to use some form of community rating, i.e. not to charge people based on their individual medical history or health status, but based on a larger pool. In Massachusetts they are allowed to discriminate by age, but that's it. Insurers have to offer so-called "affordable plans," which in the case of young people can be very stripped down, with annual benefit limits and high co-pays and deductibles. People who don't buy at least a minimum approved plan get fined.

What's wrong with this picture? It forces people to buy insurance, but in many cases, it's insurance they can't afford, which won't actually provide the coverage they need if they should suffer a catastrophic illness or accident. It leaves the system of competing private insurers in place, doing most of the same nasty stuff they already do -- consuming 25% or more of the health care dollar on marketing, administration and profit, and trying to maximize the latter by using the former two components to avoid enrolling riskier people and avoid paying for services. It does absolutely nothing to achieve rational allocation of resources and constrain costs. The financing is insufficiently progressive so that the already beleaguered middle class ends up paying more than it can afford for a lousy insurance product.

The end result is that it doesn't work, just as the Massachusetts reform isn't going to work, according to our friends Steffie Woolhandler and David U. Himmelstein. Among other points they make:

Why has progress been so meager? Because most of the promised new coverage is of the "buy it yourself" variety, with scant help offered to the struggling middle class. According to the Census Bureau, only 28 percent of Massachusetts uninsured have incomes low enough to qualify for free coverage. Thirty-four percent more can get partial subsidies - but the premiums and co-payments remain a barrier for many in this near-poor group.

And 244,000 of Massachusetts uninsured get zero assistance - just a stiff fine if they don't buy coverage. A couple in their late 50s faces a minimum premium of $8,638 annually, for a policy with no drug coverage at all and a $2,000 deductible per person before insurance even kicks in. Such skimpy yet costly coverage is, in many cases, worse than no coverage at all. Illness will still bring crippling medical bills - but the $8,638 annual premium will empty their bank accounts even before the bills start arriving. Little wonder that barely 2 percent of those required to buy such coverage have thus far signed up.

While the middle class sinks, the health reform law has buoyed our state's wealthiest health institutions. Hospitals like Massachusetts General are reporting record profits and enjoying rate increases tucked into the reform package. Blue Cross and other insurers that lobbied hard for the law stand to gain billions from the reform, which shrinks their contribution to the state's free care pool and will force hundreds of thousands to purchase their defective products. Meanwhile, new rules for the free care pool will drastically cut funding for the hundreds of thousands who remain uninsured, and for the safety-net hospitals and clinics that care for them.

If president Clinbamdwards gets this passed, and it fails, as it is going to fail in Massachusetts, it will set the cause back another decade and do grievous harm to the Democratic Party. Actually, what ultimately passes will be even worse, of course -- less progressively financed, more grievously underfinanced, even more generous to the insurance and drug companies -- so it will fail even more spectacularly.

We need universal, comprehensive, single payer national health care. Nothing less, nothing else. Anybody who won't say so is a coward.

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