By Dave Lindorff
Attorneys General from 13 states--all of them Republicans--are saying that they are going to sue to block the health insurance reform bill if, when it is finally passed, it still includes a measure giving Nebraska an extra $100 million in Medicaid funds. They charge that this "bribe" was used to get Nebraska's conservative Democratic Senator Ben Nelson to join fellow Democrats to get the Senate's version of the bill passed.
They're right to sue. Nebraska shouldn't get more funds than the rest of the country to finance hospital care for its poorest residents, and Nelson shouldn't be able to extort the Senate. But the question is why aren't Democratic attorneys general threatening to sue over this execrable bill?
Residents of states with higher-than-average health care costs--states like California, New York, Florida, and Connecticut, for example--will be hit hard if the bill passes, because it includes a heavy tax on health plans that cost employees and employers more than a combined $12,000 per year per person. In these and many other states, because of the higher charges by doctors and hospitals, many of which are teaching institutions or public institutions that provide more tertiary care and that treat much larger numbers of low-income patients, and all of which have much higher real-estate costs and wage rates for staff, insurance plans are inevitably also costlier. Yet the residents of those states and their employers will end up getting socked with taxes as high as 40% on those plans that are over the limit. The result, experts say, is that many employers in these states will simply reduce coverage to bring the plans in under the limit.
Also slammed by this tax will be unionized workers--most of them again concentrated heavily in relatively union-friendly states like California, New York and much of the northeastern US--who over long years and many bitterly fought contract battles--have negotiated better-than-average health insurance coverage. The fruits of their struggles, which often included tough strikes and lockouts, and deals that involved forgoing bigger pay increases in return for better health coverage, could be erased by this legislation if the bill is passed as written.
And what about the so-called "near poor"? Under the plan as it stands, everyone would be required to buy health insurance, or face a stiff fine of as much as $1200 from the IRS for a family. People earning less than 133% of the federal poverty level (that would currently be approximately $13,000 a year for individuals or $30,000 a year for a family of four, except in Hawaii and Alaska where the numbers are slightly higher), and less than four times the federal poverty level ($40,000 for an individual or $88,000 for a family of four), would be given a subsidy to help them buy that insurance. But they would be expected to pay as much as 12% of their income out of pocket for coverage, up to a limit of $5000 for an individual and $10,000 for a family. (I'm just trying to imagine how that would hit a family earning $88,000 a year. First of all, it seems clear to me that many hard-pressed families will look at the costs, just decide can't afford it, and pay the IRS penalty.)
But the number of people who could lose insurance coverage under this legislation could be much greater.
The right has done a much better job of analyzing the health reform bills in House and Senate, with most of the left holding its collective nose and backing the measures, apparently thinking that things can be "fixed later." (We saw how well that idea worked when liberal Democrats went along with President Bill Clinton's and the GOP's trashing of welfare programs back in the early 1990s. "We'll fix it later" was the mantra, but it never got fixed, and millions families are suffering today because of that Democratic treachery.) But the reality is that because of the mandates and penalties in both versions, and the relatively limited penalties for not providing coverage, many employers will probably end up reducing, or worse, dropping health coverage for their employees and taking the penalties, leaving workers stuck with having to buy crummy coverage through the new "insurance exchanges" envisioned in the bills. The Congressional Budget Office estimates that some 10 million workers who currently have employer-provided health care will lose it, but other experts predict that the number could be much higher.
Democratic states whose residents stand to be hurt by this legislation should be preparing to sue to protect their residents. Unions (most of whom have been backing this legislation when they should have been marching on Washington in protest), should instead be threatening to sue if it passes.
Eventually, of course, they will. The courts will be tied up for years in challenges to the inequities and constitutional violations contained in this legislation. Meanwhile, though, Americans are going to get socked with higher tax bills, higher insurance premiums, higher medical bills, and poorer coverage.
What is maddening is that none of this had to happen.
We could have had health coverage for everyone, and at much lower cost than today, by simply expanding Medicare to cover everyone. The reason we don't have Medicare for all is because, with the exception of Dennis Kucinich (D-OH), John Conyers (D-MI) and a few other members of the House, and Bernie Sanders (I-VT) in the Senate, neither the ruling Democrats in Congress, nor President Obama, ever had the integrity and guts to point out that Medicare for All would be a net savings for almost everyone. Yes, expanding Medicare would mean higher taxes for everyone, but the net financial impact, after factoring in the elimination of many hugely expensive current federal, state, county and municipal health care programs such as Medicaid, veterans care, charity care, etc., an end to private insurance premiums paid by employers and individuals, and the end to workers compensation and embedded health costs such as medical coverage riders in car and home insurance policies, would be positive, not negative.
Nobody had the integrity and guts to point out that in countries that have a version of Medicare for all, like Canada, Taiwan or many of the European countries, total health care costs both as a percentage of GDP, and on a per-capita basis, are half as much or even a third as much as they are in the US.
Medicare is routinely trashed by the right, and by business lobbies, which claim it is going bust, and certainly as presently funded, it is underfunded, particularly with the Baby Boomer population about to be enrolled. But bear in mind that the heavy lifting of insuring everyone in the country has already been done. The one-in-seven Americans currently covered by Medicare are by far the costliest segment of the population. Within Medicare, the reality is that 10 percent of the recipients account for 90% of the costs of the program. More broadly, I suspect that the elderly account for half or more of the total health care costs of the entire population. That is, it would probably cost only twice as much to cover everyone with Medicare as it costs today to cover just those over 65. Since total Medicare costs were just under $500 billion in 2009 (representing about 80% of actual medical costs for care of the elderly), then that means the total cost of health care for the elderly that year was approximately $600 billion. Expanding the program to cover everyone, and to cover them in full, instead of just 80%, would thus be about $1.2 trillion a year. Given that the actual cost of medical care in the US in 2009 was about $2.5 trillion, this figure is probably accurate, because countries that have a version of Medicare for All have health care costs of roughly half what they are in the US.
That is to say, expanding Medicare both to cover everyone in the US, and to cover each person in full, instead of only in part, would result in a net savings to Americans of $1.2 trillion to $1.3 trillion a year!
How can this be, you might ask? Well first of all, remember that programs like Medicaid ($400 billion a year), veterans care ($100 billion a year), and charity care delivered by hospitals to the indigent ($400 billion a year) would be eliminated as redundant. So would premiums for mandated workers' compensation insurance paid by employers, and the hundreds of billions paid in premiums by workers and employers for private insurance coverage. Also, costs would be hammered as government set the rates for doctors, hospitals, and drugs.
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