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I ask this question in all sincerity: Why the focus on single payer solutions? What is it about single payer that you find that trumps all other possible reforms?

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October 20, 2009 – Comments (6)

Apparently I express myself alot, but poorly. So I will attempt to answer this question by copying someone elses work. Please note that this was written in 2007, with older data. Since the time of the data which I think was 2002,  the costs of health insurance have doubled. The $4000/capita cost has almost doubled to just under $8000, the family average is well over the $10k cited and the quality of either coverage is severely and substantially less adequate.

The Case For Eliminating Private Health Insurance

by Leonard Rodberg & Don McCanne
CommonDreams.org
July 13, 2007

Private health insurance was an idea that worked during part of the last century; it will not succeed through the 21st Century. With jobs increasingly service-based and short-term, the large employment-based risk pools that made this insurance system possible no longer exist. Medical care has become more effective and more essential to the ordinary person, but also more costly and capital-intensive. The multiple private insurance carriers that emerged during the last century can no longer provide a sound basis for financing our modern health care system.

Alone among the nations of the world, the U.S. has relied upon private insurance to cover the majority of its population. In the mid-20th Century, when medical care accounted for barely 1% of our gross national product, medical technology was limited, and jobs lasted for a lifetime, health care could be financed through such employment-based, premium-financed health insurance. But the time for private insurance has passed.

Health care has now become a major part of our national expenditures. The premium for an individual now averages more than $4,000 per year, while a good family policy averages more than $10,000 per year, comparable to the minimum wage and nearly one-fourth of the median family income. As a consequence, though the US spends far more on health care than any other nation, we leave millions of our people without any coverage at all. And those who do have coverage increasingly find that their plans are inadequate, exposing them to financial hardship and even bankruptcy when illness strikes.

If we believe that everyone should have health care coverage, and that financial barriers should not prevent us from accessing health care when we need it, then it has become clear that the private health insurance system cannot meet our needs. Health care has simply become too expensive to be financed through private insurance premiums.

Supporters of insurance companies claim that they create efficiency through competition. However, the truth is that insurance industry is increasingly concentrated, with three national firms, United Health, Wellpoint, and Aetna, dominating the industry. And the high and rising cost of health care shows that whatever competition there was in the past has not worked to hold down costs.

Supporters of private insurance also claim that it expands consumer choice. However, the choice of plans that these companies offer is not what consumers want; it is the choice of their physician and hospital, exactly the choice that private insurance plans, in the guise of managed care, increasingly deny us.

What has been the response of the health insurance industry to this situation? To protect their markets and try to make premiums affordable, they have reduced the protection afforded by insurance by shifting more of the cost to patients, especially through high-deductible plans. They have also targeted their marketing more narrowly to the healthy portion of the population, so as to avoid covering individuals with known needs for health care. Yet premiums continue to rise each year, increasing by nearly 70% above inflation in just the last six years.

The so-called “universal health care” proposals being put forward by mainstream politicians would simply expand the current system without addressing any of its problems. They would simply mandate that either our employers provide us with coverage or we, as individuals, purchase our own coverage in the private insurance market. These plans cannot work in the face of the high cost of premium-based coverage for even the average person. (Some proposals would offer the option of buying a competing public plan, under the theory that the public program would be more efficient and effective. The flaw here is that the public plan would attract those who are unable to afford private coverage or who are paying high premiums or have no insurance because of pre-existing conditions. Placing these high-cost individuals in a separate government pool would make it unaffordable for most other people. This “death spiral” would cause the public plan to fail.)

The main impetus for renewed interest in health care reform has been the rapid rise in costs over the last few years. Yet, while most of these proposals give lip service to the need to control costs, none actually addresses the problem in a serious way. (The introduction of health information technology and “disease management”, which some of them urge, are mere placebos; they may make politicians feel better, but studies have shown they will do little to reduce costs and may actually increase them.)

Everyone acknowledges that coverage for low-income individuals must be subsidized. But what about the average-income individual and family? If they must now be subsidized as well, we might as well throw in the towel and recognize that a more efficient, more equitable financing system has to be adopted if it has any chance of providing coverage while being affordable to the society. An individual mandate to purchase private insurance cannot provide good coverage while remaining affordable, while employer-provided coverage also can no longer be sustained as the premium costs to the employer become increasingly unaffordable.

The private insurance industry spends about 20 percent of its revenue on administration, marketing, and profits. Further, this industry imposes on physicians and hospitals an administrative burden in billing and insurance-related functions that consumes another 12 percent of insurance premiums. Thus, about one-third of private insurance premiums are absorbed in administrative services that could be drastically reduced if we were to finance health care through a single non-profit or public fund. Indeed, studies have shown that replacing the multiplicity of public and private payers with a single national health insurance program would eliminate $350 billion in wasteful expenditures, enough to pay for the care that the uninsured and the underinsured are not currently receiving.

Such a single payer plan would make possible a set of mechanisms, including public budgeting and investment planning, that would allow us to address the real sources of cost increases and allow us to rationalize our health care investments. The drivers of high cost such as administrative waste, deterioration of our primary care infrastructure, excessive prices, and use of non-beneficial or detrimental high-tech services and products could all be addressed within such a rationalized system.

In sum, we will not be able to control health care costs until we reform our method of financing health care. We simply have to give up the fantasy that the private insurance industry can provide us with comprehensive coverage when this requires premiums that average-income individuals cannot afford. Instead, the U.S. already has a successful program that covers more than forty million people, gives free choice of doctors and hospitals, and has only three percent administrative expense. It is Medicare, and an expanded and improved Medicare for All (Medicare 2.0) program would cover everyone comprehensively within our current expenditures and eliminate the need for private insurance. This is the direction we must go.

Leonard Rodberg is Research Director of the New York Metro Chapter, and Don McCanne, Senior Policy Fellow, of Physicians for a National Health Program. www.pnhp.org

6 Comments – Post Your Own

#1) On October 20, 2009 at 7:09 PM, devoish (97.09) wrote:

TonyJacksonville, FLHeathcare Status: Employer Insured

I work for a medical center, so you would think I would get decent health care benefits with my insurance. Boy was I wrong.

I have had services denied even though my doctor said I needed them. I have also had prescriptions denied because the insurance company said they were not covered in the amounts my doctor wanted me to take them in. In particular, a fungal infection on my toe. My doctor prescribed for me three different medications and each one was denied by the insurance company.

I finally got so frustrated that I just paid the full price out of pocket. My doctor wanted me to take one of the meds once a week for two months and the insurance company would only pay for one pill a month. Not only am I frustrated but so is my doctor. He has the medical degree and yet a clerk in the insurance company is denying me the care my doctor wants me to have. And even though my company picks up the lion's share of the cost, each year my cost share goes up along with the price I pay for services. I want Cheney Care!

)Note from devoish: I think "Cheney care" refers to the care Dick Cheney gets, not something Cheney promotes for Americans.)

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#2) On October 20, 2009 at 7:32 PM, Tagit (46.52) wrote:

Heart cath - $9000 and took all of 5 minutes to complete - Health Care - Needs HELP and is B.S.

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#3) On October 20, 2009 at 7:55 PM, devoish (97.09) wrote:

Taqit, what are you talking about?

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#4) On October 20, 2009 at 9:26 PM, ajm101 (32.83) wrote:

How do you think the odds look?  I thought it might roll after it made it out of committee, but it looks like it's stalled (at least in a form w/  a public option).

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#5) On October 20, 2009 at 11:05 PM, devoish (97.09) wrote:

ajm101,

None of the plans being rolled through Congress offer the savings and efficiency of HR676 Medicare for All.

The Baucus plan is a windfall for the insurers.

A "public option" will likely become a place for insurers to dump expensive people onto the taxpayer without giving up the inexpensive ones. You get sick, your premiums increase, you cannot afford them, your insurer drops you for lack of payment, you are on the taxpayer funded public option which has all the expenses and none of the easy money to pay them with.

A public option defined as Medicare at cost plus 5% is better, but still a place for insurers to dump expenses (us).

The Baucus Plan is no public option or price controls plus a mandate to get insurance and subsidies for the poor means taxpayers get to pay insurers profits and payrolls (23% as compared to Medicare's 4%) in their policys and in their taxes to fund the subsidies. This is the absolutely most expensive way to finance healthcare and the greatest gift to private insurers among the the plans.

Look for a buying opportunity on news that it passed. You will probably need about $25,000 of UNH to cover your first years premium increase.

Minimum coverage requirements are a good idea that will easily go bad if insurers use them to justify higher premiums. So an insurance policy that covers 50% of the expenses you might incur could be required to cover 75% of the expenses yiou might incur. This justifies a 25% increase with an additional 6% (25% profit on the additional premium) profit tacked on.

Not having a minimum coverage means you become one of the stories I have passed on in the last few days. All of them paid for insurance that did not come through.

Electronic health records are a double edged sword. They will save money at the healthcare end and reduce mistakes. They also become a source of records to help the private insurers estimate who they do not want to cover. As soon as they figure out urban populations have high asthma, asthma drugs get a higher co-pay or coverage reduced to 50% from 75% in urban areas. It will be mentioned on page 49 as an asterick linked note telling you look at the notes on pages 116 to 146 of a 153 page document you get after you sign the policy. Or they just close offices in urban areas so people cannot apply. Or close offices in high cancer areas. They are obligated to their shareholders, not their customers.

HR676 is the only plan that is not written by the insurers, for the insurers.

LittleSis says so.

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#6) On October 20, 2009 at 11:07 PM, devoish (97.09) wrote:

Carrie Buffalo Grove, ILHeathcare Status: Employer Insured

I am a 47 year old white female, and 7 years ago, I was healthy and had been hospitalized only for the birth of my child, but something didn't seem right. I had healthcare coverage, went to THREE different physicians and no one new what was wrong with me. I finally went to an Allergist, and he recommended that I take a simple urine test at the outpatient clinic.

I went back to work, until the next morning- The physician contacted me alerting me that my sugar level was close to 800+ and to immediately go to the emergency room, and that I was DIABETIC!!!

For the last 7 years, I have been insulin dependent, but still in good health, and I am still covered by insurance. Just recently, I received a letter from my insurance company stating that for cost purposes I should switch my insulin & diabetic tools to generic brands to save costs. I don't understand, my insurance costs keep rising, but yet I cannot use insulin and the tools that I prefer? I am in total agreement with your organization on how to reconstruct the healthcare in this country. I am also in agreement that all candidates don't have the foggiest idea on what they are proposing to Americans.

If any of the candidates were stricken with an Autoimmune disease or had a family member that is Diabetic, I am sure their views and their voices would change! As a Diabetic, I see things differently! Not one of the candidates on the Democratic or Republican side has connected with me on healthcare, nor have they stimulated a belief for change! I am voicing myself and want to help others with this fatal disease, and I am hoping with more research , maybe one day we will defeat this disease!

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