Private health insurance companies—regulate them or eradicate them?

July 11, 2008

On June 19th, twenty of us from Gainesville, Florida traveled to Jacksonville to protest my health insurance company, Blue Cross Blue Shield. The effort was part of a nationwide protest of insurance companies, led by the coalition Healthcare NOW: Cigna in Philadelphia, Aetna in Hartford, Humana in Louisville, and many more. The biggest demonstration occurred in San Francisco, outside the meeting of “America’s Health Insurance Plans,” the insurance lobbying group dedicated to blocking health care reform. Malinda Markowitz, a leader in the National Nurses Organizing Committee, explained the protest: “These insurance companies… profit by denying care to our patients–not by providing it. The American people are ready for guaranteed healthcare, through great bills like Rep. John Conyers’ HR 676, and we will no longer let insurers and politicians block progress.”

In Jacksonville, passing drivers honked vigorously when they saw our signs, “Health Care YES, Insurance Companies NO” and “Honk if you’re mad at your insurance company.” We met lots of new friends, union members in Jacksonville who are supporting national health insurance. Bunny Baker, a Machinist, said that a Blue Cross representative called the union hall to say he understood why we might protest other insurance companies, but “We’re the good guys, we’re nonprofit.” She told him that Blue Cross was denying vital care to a friend of hers, making it hard to tell the difference. For my part, my Blue Cross premiums have gone up 57% in the last 3 years, so it’s clear that even a “nonprofit” health insurance company is incapable of providing coverage affordably. We need national health insurance!

So I was interested when on July 8th I received emails from four separate national groups promoting a new campaign for health care reform. One was titled “An historic day for health care,” and indeed it did seem to be. The new coalition is called “Health Care for America Now” (HCAN) and according to the New York Times it will spend $40 million on ads and organizing leading up to the election.

MoveOn.org Political Action wrote: “Today, for the first time ever, all the major grassroots groups in America that work on health care are coming together to take on the HMOs and private insurance companies.” The linked HCAN website declared “Which side are you on?”–“for a guarantee of quality affordable health care for all” or “for leaving us on our own to buy private health insurance.” http://healthcareforamericanow.org

It sounded promising. We certainly need to ‘take on’ the insurance industry. Our private insurance system is the reason U.S. health care is the most expensive in the world, not to mention inaccessible and stingy. The most comprehensive bill in Congress, HR 676, authored by Rep. John Conyers (D-Michigan), would kick out the insurance company middlemen. It would redirect towards care the money currently wasted on insurance company profits and paperwork. It would follow the lead of countries around the world which provide healthcare as a right.

But it turns out that for HCAN “taking on” the insurance companies doesn’t mean taking them out of our health care. Indeed, under HCAN’s plan, we would still be buying private health insurance. A brief inspection of the Health Care for America Now website reveals just the kind of tiresome incrementalism that hobbles U.S. struggles for national health care.

In fact, the plan espoused by the HCAN coalition seems to be very close to what Barack Obama and Hillary Clinton advocated all through the primary–regulate private insurance companies more, provide a mind-boggling patchwork of income-based subsidies (creating another layer of paperwork, tests and qualifications), and provide a public insurance alternative as a last resort. Worse, it continues to waste the money that could cover everyone. “The HCAN proposal forgoes most of the $350 billion annually in administrative savings possible under single payer national health insurance,” writes David Himmelstein of Physicians for a National Health Program (PNHP) http://www.pnhp.org/blog/2008/07/09/a-policy-response-to-health-care-for-america-now/

“The private insurance industry, as it functions today, clearly must be replaced with a system that works” says Don McCann, Senior Health Policy Fellow with PNHP. “So what is the solution proposed by the HCAN coalition? Let’s replace the private insurance industry with… the private insurance industry.”

There were other warning signs. In a press conference launching HCAN, Arlene Holt Baker of the AFL-CIO stated, “If we fail to enact comprehensive reform in the next Congress, employment-based health benefits–the backbone of our health system–will disappear in short order.” Most trade unionists have figured out by now: Job-based health benefits are precisely the problem. They burn up our power at the bargaining table, undermine our ability to speak out at work, make strikes even more risky and miserable, and lock us into jobs long past the date we might have been able to retire. Furthermore, if we’re too sick to work, we’ll lose our insurance, at just the moment we need it the most. Feminists chime in that job and marriage-based insurance makes a woman unnecessarily dependent on her husband–and his employer–for her health care. This is especially true if she is working part-time or raising children full-time. With true national health insurance, your health care doesn’t depend on what job you have, whether you have a job, or your marital status. This should be the goal. Instead, this campaign seems to be rallying us to salvage the current rotten arrangement.

It’s worth asking how we got to the point where groups that want to continue our private insurance system describe themselves as “taking on” the health insurance industry and advocating “guaranteed” health care. The movement to get private insurance out of our health care system has gained momentum as insurance costs have risen. Michael Moore’s film SiCKO introduced a whole new audience to the reality of well-functioning national health care systems in other countries. Unions all over the country have been signing onto HR 676–called a “single-payer” bill because the government (the ‘single-payer’) pays all healthcare costs. HR 676 has been endorsed by 33 state AFL-CIOs and 397 union organizations in 48 states. The U.S. Conference of Mayors signed on June 23. The funding mechanism, similar to that of Medicare, turns out to cost nearly everyone much less than they’re paying now, but allows for full coverage for the whole U.S. population. Around 90 members of Congress are signed on. Meanwhile, insurance company rate hikes and denials hit more and more people.

As a result, ‘taking on’ insurance companies is suddenly popular. Groups like MoveOn, which a few years ago would only talk about extending coverage to children, have changed their tune. But they still don’t get it. It’s not about extending our expensive and unreliable private insurance system to 47 million uninsured, it’s about abolishing a system that requires you to have “insurance” to get care. Private insurance companies make money by avoiding sick people. If you want everyone to get the care they need, you don’t regulate such entities, you eradicate them.

Traditional Medicare did just that for a market that the insurance companies didn’t want anyway: people 65 and over. The problems with Medicare were introduced by private insurers and HMOs, which have tried to entice away more profitable subsets of the elderly (only to dump them when they get expensive). As a practical matter, the Medicare experience teaches us that coverage and costs only get worse when private insurers are involved. HR 676 would essentially extend traditional Medicare to everyone, starting at age zero–and entirely eliminate the role of private insurance companies.

Contrast that to HCAN, which would leave insurance companies in place. “We need coverage that meets our families’ health care needs and is affordable, based on a sliding scale” their website states. “We need government to be an advocate for us and set and enforce the rules so insurance companies put our health care before their profits.” But a sliding scale means we have to prove our income–usually every year. And insurance companies are simply machines for making profit. Faced with new regulations, they just break the law until such time as they get caught, or can rewrite the law.

No wonder most people prefer Michael Moore’s admirably brief health care proposal: “1. Every resident of the United States must have free, universal health care for life. 2. All health insurance companies must be abolished. 3. Pharmaceutical companies must be strictly regulated like a public utility.”

Perhaps, you might say, well, it takes all kinds: There will always be the radical groups and then the more liberal groups. At least they’re doing something. What’s the objection?

My first objection is that the liberal groups in this case are cloaking themselves in radical language (‘taking on the insurance companies,’ ‘guaranteed affordable quality healthcare for all’) concealing their goals and suggesting they have more fight in them than they really do. They’re even using a confusingly similar name. The main coalition that’s been fighting for HR 676 is called “Healthcare NOW.” The new coalition is called “Health Care for America Now.” This trickery cuts off people who want fundamental change from those who are organizing for it, and diverts donations to what PNHP’s David Himmelstein calls “a placebo.”

My second objection is that HCAN is compromising away what people in the U.S. truly want, instead of joining the already existing fight to get it. For example, in a 2003 ABC News/Washington Post poll, 62 percent said they’d prefer a plan “in which everyone is covered under a program, like Medicare, that’s run by the government and funded by taxpayers.” Those who compromise the public’s interests always sell their watered-down programs by saying the public finds them more palatable. In reality, these compromises are more palatable to the nonprofit foundation complex many of these organizations represent. The majority in the U.S. want the insurance companies out–anything less is less than inspiring, and will lose support rather than gaining it.

My third objection is that their approach won’t work, even to get the measly reforms they seek. To win any kind of progress, there needs to be some threat. The gathering of organizations under the HCAN banner serves to reassure the insurance industry, not threaten it. And so reassured, the industry will continue to purchase politicians and conduct its murderous business as usual. It certainly won’t be put on the defensive.

The HCAN approach toys with, but then discards, the best leverage we have in the health care fight: The popular demand that insurance companies be kicked out of our health care system entirely. Eventually they will be, but it will be despite, not because of, the anemic plans of “Health Care for America Now.”

Go to http://www.Healthcare-now.org for the real deal. Go to Physicians for a National Health Program for great explanations and analysis: http://www.pnhp.org. Go to http://www.guaranteedhealthcare.org for the nurses’ take on the situation

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