Ted McLaughlin : Are We Moving Towards Single-Payer?

Photo by Glyn Lowe Photoworks / Flickr. Image from OtherWords.
The pressures moving the U.S. closer
to a single-payer health care system

There will be a huge pressure to reform Medicaid -- and the only way to reform it adequately is to make it a federally-administered program.

By Ted McLaughlin / The Rag Blog / July 3, 2012

It looks like the Affordable Care Act (Obamacare) is here to stay. After last week's Supreme Court decision, the only way it can be overturned now is for the Republicans to win the White House and both houses of Congress in the coming election (which is very unlikely) -- and even then, they might find public pressure would prevent its repeal.

Right now, a slight majority of people don't like Obamacare. Some have projected this to mean that a majority of Americans would like to see it repealed. That is just not true. One recent poll showed that 79% of Americans like most of the reforms and don't want it all repealed.

The only part they're not crazy about is the individual mandate. But as the program kicks in fully in the next couple of years, people will begin to realize that the individual mandate only applies to between 2% and 5% of the population -- and the program will become more and more popular.

Another fact commonly overlooked is that among those who are against Obamacare, about 22% don't want it repealed but made stronger. These people would like to see a public option at a minimum (and really want a single-payer system like those in other developed countries). When the program was first passed, I was among those opposing it because it didn't go far enough. I was afraid that all it really did was to delay the United States from going to a single-payer health insurance system.

But after a lot of thinking about it, and a few facts coming to light, I'm starting to change my opinion. I now believe that Obamacare might actually hasten America's progress toward a single-payer system, instead of delaying it. That's because the program is responsible for creating (or increasing) three pressures on the health care system as a whole to move toward a single-payer system. These three pressures are:

1. Forcing private insurance companies to pay a bigger percentage of their premiums for real medical care.
2. The continuing decline in employer-based insurance coverage.
3. The refusal of many states to increase Medicaid coverage for the poor.

Let me take these in order. First, in the past the insurance companies have not been required to spend the money they get for real medical care. While government-run Medicare has an overhead expense of 3% to 4%, many of the private insurance companies were putting 30% to 40% of their premiums toward "overhead."

And the more they put into this area (and the less into medical costs for consumers), the more profit they had. This was a primary reason for the record-breaking profits those companies were showing.

Obamacare ended that. A private insurance company must now put at least 80% of its premium income toward actual medical costs of its consumers (and the giant companies must spend at least 85% on medical costs).

The companies tried to get around this by declaring some administrative costs as medical costs (like the money spent paying their salesmen to sell the policies), but the government didn't go for it. They demanded medical costs be actual medical costs (rather than hidden administrative costs). And if an insurance company fails to spend the proper percentage on medical costs, then they must refund a big enough part of premiums received to get them down to the proper percentage (and the first refunds are currently being issued).

While this still allows the insurance companies to make a decent profit, it has put a serious crimp in the outrageous profits they were making (by denying claims and raising premiums). Now if they raise premiums, they must also increase the amount they spend for medical costs (or wind up refunding the raise).

In other words, the large insurance companies no longer have a license to steal -- and they don't like that. Forbes Magazine reports that some insurance companies are already getting out and searching for other, more lucrative, ways to do business -- and this movement out of insurance to other things will probably just continue to grow.

Second, is the move away from employer-based insurance for workers. This started before Obamacare was created (or the recession hit). As the chart above shows, the percentage of Americans covered by employer-based insurance fell from 69.2% in 2000 to about 58.6% in 2010 -- and the trend continues to move downward. If 2010 had the same percentage of coverage as 2000, then 28 million more people would have employer-based insurance than currently have it.

The hope of the writers of Obama's reform program was that the law would stop this decline in employer-based insurance coverage (through tax breaks for businesses, creation of health insurance exchanges, and a penalty charged for companies that don't provide insurance). I think that's mostly wishful thinking. Any business with less than 50 workers will be exempt, which means there is no incentive for small businesses to provide insurance. And as medical costs (and therefore insurance premiums) rise, many other businesses may decide it is cheaper to pay the penalty than to provide insurance coverage.

And those companies choosing the penalty over insurance coverage will just be a short step away from approving of single-payer insurance (which would most likely be funded by employee/employer contributions just like Social Security), as they realize it would be cheaper for them than providing their employees with ever-rising private insurance.

Third, and perhaps the biggest pressure for single-payer insurance, is the Republican state governments refusing to institute the Medicaid reforms called for in the program. The red states in the map above (from ThinkProgress ) are those with Republican leadership. The 10 states in dark red have already said they will not adopt the Medicaid reforms to cover most of the poor (even though the federal government would pay all of the cost for three years and then pay 90% of the cost). And it is extremely likely that the lighter red states will soon follow suit.

That means many millions of Americans who thought they would be getting insurance coverage because of the reforms, will be denied it because the Republicans will just continue the current inadequate Medicaid programs. They will do this because they don't consider medical care to be a right, but only a privilege available to people who can afford it.

For them, their ideology is more important than the lives and health of many millions of their fellow citizens. And they can get away with this because the Supreme Court killed the provision that would have forced the states to reform Medicaid.

Now one of the primary reasons Obamacare was passed was that there are 50 million people in this country without any kind of medical insurance. Some of these will now be able to get private insurance because of the health insurance exchanges and government subsidies. But a large part of this 50 million (the poor and the working-poor) were meant to be covered through Medicaid.

If this doesn't happen, there will be a huge pressure to reform Medicaid -- and the only way to reform it adequately is to make it a federally-administered program (like Medicare). And the easiest way to do that is to let those making less than a certain salary qualify for Medicare (and do away with Medicaid).

This huge swell in Medicare, combined with decreasing employer-based insurance and insurance companies leaving the business, will bring great pressure to go to a government-run single-payer insurance system.

The experience of other countries has shown us that the money spent on medical care overall will then decrease (since we spend much more per capita than any single-payer country). It will also decrease premium costs for both individuals and businesses (since high overhead and huge profits will be eliminated).

The way I see it, Obamacare did not delay going to a single-payer system. In fact, it has probably created (or increased) the pressures propelling us to adopt a single-payer system much sooner. It has to happen. There is no other real solution to our current broken health care system. Obamacare made some improvements, but it didn't fix the broken system. But maybe it is pushing us much closer to the real solution.

[Ted McLaughlin, a regular contributor to The Rag Blog, also posts at jobsanger. Read more articles by Ted McLaughlin on The Rag Blog.]

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David P. Hamilton: Socialized Medicine Works for Me

Universal Health Care Now stencil art recycled vinyl LP clock by artbymags / Margaret Coble
VA health care and Medicare are 'good medicine'

In essence, health care should be a human right, not a commodity. It should not be restricted to those who can afford it and you shouldn’t have to risk your life in the military for it either. This principle is universally acknowledged, except here. The right to health care is the only position with any moral credibility.

By David P. Hamilton / The Rag Blog / February 25, 2009

Having turned 65 and being an army veteran, I am the recipient of two kinds of U.S. government run, single payer health care.

A comparison between the "socialist" care I get now and the much higher costs and relative inefficiency of health care previously provided to me through private insurance speaks strongly to our need for fundamental reform of the US health care system.

In 1964, as a privileged white boy with some college but poor mechanical skills, the army made me administrative personnel, initially as a clerk/typist and later as a “personnel management specialist.” Further fortuitous circumstances landed me at a division headquarters an hour south of Paris, where we very seldom suffered the privations of being “in the field.”

Having an 8 to 5 desk job allowed me to pursue other interests, like socialism and why I opposed the Vietnam War. My desk was lined with controversial books, from “The Communist Manifesto” to Bernard Fall. My commanding officer, reputedly educated as an economist at Abilene Christian College, took note and we debated. My pièce de résistance in this argument was my essay comparing US Army society with a Soviet-style communist society. They both had caste like hierarchical command structures that told you where to go and what to do – even to kill people – without recourse other than jail or desertion. They both supplied all essentials like food, clothing, housing, education, transportation, health care and political indoctrination. Everything else they made available at subsidized prices. There was no meaningful democracy and they both opened your mail with impunity (as happened to me).

Forty three years later, long after taking my last order, I’m still soaking up that army socialism. My primary health care option is the VA Clinic on Montopolis Blvd. in Austin.

There are some negatives about VA health care. The VA is underfunded. I shouldn’t have to go to Temple or San Antonio to get into a veteran’s hospital. They don’t have cutting edge gear. On average, their doctors are probably paid less than doctors are in private practice, hence, according to capitalist thinking, the market dictates second stringers. However, private doctors have told me that working for the VA is well compensated, has good working conditions and may also attract those less materially motivated.

There is also my existential discomfort being in a waiting room full of men, many broken physically and psychologically by their military experiences, who still revel in their military memories as if that had been their finest hour; a “Korea ‘52-‘53” bumper sticker on the back of a wheel chair. Often they have sales of memorabilia in the waiting room -– unit and campaign baseball caps (“Khe Sanh – ‘68”), decoration replicas of all types, but no “Vet for Peace” items. Another negative is the rent-a-cop at the front door who mechanically asks everyone entering if they’re carrying weapons. I always tell him, “Only my mind.” He shows no expression.

But the positives outweigh the negatives. First, VA health care is very cheap. Being relatively middle class, I pay a nominal amount on a sliding scale, but it is very little. Buying two medications regularly under my private health insurance used to cost me $50 a month at the pharmacy. At the VA, those medications cost me $15 for three months and they’re mailed to my house, over a 90% savings. I get bills from the VA for office visits and diagnostic procedures, but they are minuscule compared to what I paid for private health care.

Even better is the speed, integration and comprehensiveness of the care. I can walk in unannounced any day and go to the walk-in clinic. I’ll wait a while, but get to see a doctor about my complaint relatively quickly. I have a regular GP doctor there who calls me in every six months for another check up. They take the initiative to make the appointment and call me – and send me reminder letters – informing me of the time. The supportive lab work is done there too. Many specialists are in house. I now regularly see a rheumatologist there.

When any doctor or nurse working there needs to refer to my complete medical history, they just make a few key strokes and it appears on their computer screen. If they want me to have a blood test or an x-ray (or a sonagram or an EKG) they just hit a few more key strokes and send me down the hall for the procedure. Typically, I’m back in 30 minutes with the results already in their computer. If they want to order a medication, a few more key strokes and it’s ready for me down the hall at the pharmacy. They even have masseurs and nutrition counselors.

The VA is more proactive than my previous private system. Besides the regular physicals, both my doctors at the VA have called me at home after reviewing tests to have me come back in for immediate follow ups. They also honor patient driven care. I refused the first medication recommended by the rheumatologist and wanted guidance on holistic approaches. She acknowledged not having the requisite knowledge to provide that guidance, but loaned me her copy of the Arthritis Foundation’s book on alternative therapies. Then, without complaint, she provided pamphlets describing the various pharmaceuticals available to treat rheumatoid arthritis and let me choose those I was willing to take. If there is a specialist they don’t have in house, they refer you to one in private practice with the VA picking up the tab. In my experience, waiting time to see any of these specialists is less than it is to get such an appointment in private medicine.

There are occasions, however, where one wants cutting edge care or a diagnostic procedure (e.g., CT scan) more quickly or closer than the VA can provide. For that, Medicare, my other “socialist” plan, kicks in. It’s not so great, but beats the alternatives. I pay almost $100 a month for it, but there are no co-payments for office visits. This compares with $300 a month plus co-payments and deductibles under the retired teachers group plan I had previously. Although supplemental insurance from the teacher’s group covering what is not covered by Medicare costs me another $100 a month, my costs are still considerably less than what they were before I turned 65 for the same services.

“The United States continues to spend significantly more on health care than any country in the world. In 2005, Americans spent 53% per capita more than the next highest country, Switzerland, and 140% above the median industrialized country”, according to research from the Johns Hopkins Bloomberg School of Public Health. 47 million Americans, 15% of our population, have no health care coverage at all. As a direct result, the U.S. is 45th in life expectancy, behind Jordan and Bosnia, and 42nd in infant mortality, behind Cuba. These dismal figures are quite simply because we have capitalist, for profit, private health care and countries with lower costs and better outcomes have socialized public health care. The US health care system is a disgrace and should be exhibit A in how the private sector does a far worse job than government at providing essential public services.

Obama might have to spend hundreds of billions annually to establish a government run, single payer system, but it will quickly drive down prices, allow the American public to save hundreds of billions more on their health care costs and will produce better health care outcomes. The only losers would be the owners of the bloated and pampered private health insurance and pharmaceuticals industries. Health care remains one of the only remaining growth industries in the current economy and the factors driving that growth will continue in a public system.

In essence, health care should be a human right, not a commodity. It should not be restricted to those who can afford it and you shouldn’t have to risk your life in the military for it either. This principle is universally acknowledged, except here. The right to health care is the only position with any moral credibility. Some capitalists losing money as a result of the change to a public system is a small price to pay and has no moral equivalence. Our pragmatic president should see that publicly funded health care for all is not only the moral high ground, but also politically popular and the only system that is economically sustainable.

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