Like the creature from the Black Lagoon, the health insurance monster has returned, creeping back onto the public stage. After President Clinton’s jury-rigged pen to contain the monster collapsed in 1994, it never really went away. Political leaders tried to ignore the beast or deal piecemeal with its ravages, but it pushed more unsuspecting civilians into the uninsured pit, devoured more family budgets, squeezed even giant corporations’ ability to compete globally, and raised fear and insecurity among the populace.
Now its depredations have become too loathsome to ignore for even cautious politicians and business executives – who still are inclined to see the monster as one of their own. After a rebuff in the fall elections, when voters ranked health care as one of their top concerns, President Bush offered a plan that almost certainly would not deliver his promise of “quality, affordable health care for all Americans.”
Recently, chief executives like Lee Scott of Wal-Mart – under attack for its skimpy health insurance coverage of employees – and Steve Burd of Safeway – which endured a long strike by southern California grocery workers to cut their health insurance – joined progressive leaders like Service Employees Industrial Union (SEIU) President Andy Stern, head of the nation’s largest health workers union, to call for major changes in the health care system. Under fire from both other labor unions and many citizen health care groups for joining with strange bedfellows on behalf of very broad principles, Stern argues that “the most essential change is to get everyone in a system where they have health care,” then work to improve it.
Although the war in Iraq is likely to dominate the already energetic Democratic presidential primary race, health care is emerging as the leading domestic issue in both parties. Shortly after announcing his candidacy, John Edwards laid out a comprehensive health care plan. Barack Obama said that the nation should provide universal insurance coverage by the end of the next president’s term, though so far he has mostly advocated for minor and politically easy reforms, like computerizing health records. Republican candidate Mitt Romney signed a flawed plan for universal health care when he was governor of Massachusetts, and California Gov. Arnold Schwarzenegger, after vetoing statewide single-payer legislation passed last year, has his own health insurance plan.
There’s reason for hope when leaders across the political spectrum recognize the problem. But there’s no guarantee that such agreement will lead to a good solution. For more than a decade, conventional wisdom has dictated that only incremental steps should be taken. Now more politicians are willing to consider bolder steps – but the right is still determined to push its agenda. And many progressive reformers are cautious about pursuing their ideals, as they continue to nurse scars from the fight business interests waged against the Clinton plan.
“Overwhelmingly, people are trying to find incremental responses instead of a national response,” says Marilyn Clement, national coordinator of Healthcare-NOW, a coalition advocating a public insurance program as the single payer of health care bills. “They are still putting forward the same proposals as last summer, such as ‘The first step is to get national health care for children.’ Well, that’s good, but we won the election. It’s time to escalate our hopes.”
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The first crucial step is to define the problem. For many people, it’s the rising number of Americans without health insurance, now nearly 47 million. But equally problematic is the decline in quality and scope of coverage for those who have insurance. And much of the public ranks the cost of health care as their top medical and economic concern. Focusing primarily on insuring everyone won’t necessarily solve those problems. Indeed, the skyrocketing cost of health care is the main reason that the ranks of the uninsured continue to grow. Faced with rising insurance premiums, businesses have been trying to cut costs by evading responsibility for providing health insurance, leading Stern to declare that “the employer-based health care system is dead.”
But the more fundamental problem is our reliance on private, for-profit corporations to provide health insurance – the real monster in this saga. They’re the main reason for rising costs (making health insurance in the United States about twice as expensive as in most industrial countries), for the growing number of uninsured, and for the inferior health results for the average American. In 2004, the United States spent $6,100 per capita on health care, compared to $2,250 per capita on average by the countries in the Organization for Economic Cooperation and Development, which have national health insurance programs. Because public expenditures cover 60 percent of American health care costs, U.S. taxpayers are paying more than the cost of national health insurance, but not receiving it.
“How much can a new system depend on private insurance companies to provide affordable, good health care for everyone?” asks Roger Hickey, co-director of Campaign for America’s Future, a Washington, D.C.-based progressive advocacy group. “That should be the debate.”
Now the country is faced with two radically different proposals for reform. The first, pushed by conservatives and embraced by Bush in his new plans, would make individuals more responsible for buying their own health insurance. While giving them tax breaks to help pay the premiums, it would push them in the direction of lower-cost, less comprehensive plans (partly by taxing employer-provided insurance as income). As part of this strategy, conservatives have also undermined Medicare, first, by subsidizing private insurance companies to provide Medicare insurance and, second, by establishing a prescription program only available through private insurers.
The Bush strategy would be a boon for wealthy and healthy individuals, as well as employers and insurance companies, but it would ultimately leave most Americans paying more for less health security. The harsh edges of the plan could be softened – by regulating the insurance companies’ attempts to charge more or deny coverage to people seeking insurance, or by offering tax credits or direct subsidies to the poor instead of tax deductions. But these changes still embody what economist Jared Bernstein, of the progressive think tank the Economic Policy Institute, calls YOYO (“You’re On Your Own”) economics.
The diametrically opposite alternative is to recognize that “we’re in this together” (WITT, in Bernstein’s schema) and move towards social insurance, or a plan like Medicare. In this case, the federal government – through a public agency – would provide comprehensive insurance. It would be financed directly by progressive taxes on individuals and business, unlike the current system, which provides $200 billion a year in economically regressive and largely unrecognized tax deductions to subsidize employer-based health insurance. The public insurance agency would then bargain with health care providers, drug companies and others to control prices and improve quality of care.
The Bush YOYO strategy assumes that when health care consumers – otherwise known as patients – confront costs of medical care, they’ll consume less, and overall medical costs will go down. But Americans already spend more out-of-pocket on health care and use doctors and hospitals less than citizens of almost every other industrialized country. Yet, while the overall health cost in the United States is much higher, the outcomes – by virtually every measure of health – are worse. U.S. health care costs more mainly because of private insurance: Overhead at insurance companies runs close to 20 percent of total revenues, compared to less than 4 percent for Medicare. When the extra administrative costs imposed on providers are counted, the overall overhead that private insurance imposes on the system eats up about one-third of what Americans spend on health care. Eliminating those costs, as proposed by Rep. John Conyers (D‑Mich.) and supported by Ohio Rep. and Democratic presidential candidate Dennis Kucinich, could finance most of a Medicare expansion to cover all Americans much more comprehensively than the program does now.
MOST PROGRESSIVE REFORMERS acknowledge that Medicare for everyone would best slay the health crisis monster, but many strategists worry that trying to eliminate the private insurers will provoke a withering counterattack. Consequently, many current proposals try, as Hillary Clinton did in 1993, to preserve a more regulated role for the insurance companies and at the same time expand public programs, on the model of Medicare, to provide a competitive alternative to private insurers.
Edwards’ plan would require employers to cover employees or help pay for their insurance (what’s widely known as “pay or play”). Everyone would have to buy insurance, taking advantage of tax credits, expanded programs such as Medicaid and the State Children’s Health Insurance Program, or new regional “health markets” that would provide a choice of competitive private plans and a public plan. Along the same lines, but with a simpler design and more robust public component, Yale political scientist Jacob Hacker proposes that everyone not in Medicare be covered either by insurance at work or a public insurance pool, including both regulated private plans and a Medicare-like plan.
Both these proposals move in the direction of Medicare for all, but strike a compromise with the existing system, losing the potential for better efficiency and more equity in the bargain. Why not push for universal Medicare (aka, a “single payer” plan)? Proponents of compromises say Medicare for all is a political non-starter. Americans, they argue, are suspicious of government, like choices and often like the private insurance they already have. And besides, they say, the insurance industry – along with most business interests and political conservatives – would launch a scorched earth campaign against such a proposal.
“There are a lot of dedicated, smart people who have made the judgment that taking some steps toward a comprehensive system with a public health care plan is better than waiting for the perfect system,” says Hickey, whose organization supports Hacker’s proposal. The labor movement, which was divided over support of a single-payer system in the ’90s, seems even more cautious now. “The political will isn’t there now, but it could get there for single-payer,” says AFL-CIO health care lobbyist JoAnn Volk. A close union ally adds, “Most of the labor movement has already accommodated to the reality that we’re not going to get a pure single-payer system. They have made the judgment that it’s just not within the range of possibility.”
SEIU’s Stern – who has argued that the United States needs an “American” plan, and not a foreign model like Canada’s single-payer system – says, “First we should create [a health care system] in which everyone is covered, then we can figure out how to rationalize it. It will cost more money than if we did it the other way [i.e, pursing the best alternative], but I think we have more chance of getting it done. The perfect cannot be the enemy of the good.”
ALTHOUGH A SMALL but rebounding movement for some form of Medicare-for-all exists, some progressive groups that would be its natural partisans are reluctant to commit themselves to a specific plan. William McNary, president of USAction, a national group of statewide citizen organizations, notes that many of their allies are splintering over proposals. “Things are fracturing,” he says, “it would be best for us to line up behind principles,” and not a plan. Jim Dean, chairman of Democracy for America, a liberal movement within the Democratic Party, thinks the United States is ripe for universal health care, but worries about both infighting over the best plan and the specter of corporate attacks. He wonders, “Can we figure out a way to talk about this so as not to get bogged down, sway, with “Harry and Louise” commercials [that the insurance industry used against President Clinton’s plan]?”
But there’s no guarantee that insurance companies won’t launch a war against these compromises, especially any that curtail insurance industry profits. And corporations that support universal health insurance will almost certainly oppose any plan that doesn’t seriously reduce their financial responsibility, which would threaten to shift costs to individuals. “Everyone says they’re for universal health care,” says Don Bechler, chair of the California Universal Health Care Organizing Project. “But the fundamental question is, ‘Who pays?’ Is [universal health care going to be] a sliding scale health care plan where everyone is entitled to first class health care, or a flat tax to sell junk insurance?”
When Clinton tried to finesse such political opposition by making insurance companies central to his plan, he suffered merciless attacks. No plan worth having will win without a massive grassroots organizing and education campaign. And Medicare for all is the one most likely to do so, while simultaneously strengthening progressives politically.
The American people are at least open to the argument. In a 2003 Washington Post poll, one of the few to pose alternatives fairly, 62 percent of respondents said they would prefer a universal health insurance program like Medicare, run by the government, to the current health insurance program. And support for the Medicare program remained nearly as high even if it limited the choice of doctors or led to waiting lists for non-emergency procedures.
Eventually, Medicare-for-all advocates might have to settle for a compromise. But the opportunity for major change in the health care system doesn’t come around very often. Since any change will require a massive effort, why not fight for the best?
David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy.