Peace and Freedom Party

California's Feminist Socialist Political Party

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Home News News items A killer compromise on healthcare: The incredible shrinking public option

A killer compromise on healthcare: The incredible shrinking public option

by Lois Danks and Megan Cornish
December 2009


Fifty million people in the U.S. lack healthcare; 18 thousand die every year because of it. Other industrialized countries have universal coverage, yet costs in the U.S. are more than twice the average. Intensifying public outrage over this situation forced the present drive for healthcare reform. President Obama and Congress responded, but the result is a profit bonanza for insurance and drug companies, subsidized by workers.

House and Senate bills do nothing to cut costs of health services or drugs. They do little to improve quality of care. The House passed a mini public option that only slightly extends healthcare insurance to those who need it, but forces millions to buy inadequate private insurance. The bill grievously reverses women's access to abortion and blocks many immigrants from getting insurance. The Senate version will be no better.

As it stands, this rotten "reform," like the immigration bills of a few years ago, will be worse than doing nothing. Despite endorsement of the House measure by the AFL-CIO, it should be defeated. A coalition of healthcare and labor activists needs to fight to replace this monster with the quality, affordable, universal healthcare people need.

Profit rules "reform" bills. Public demand for universal health coverage has morphed into "universal profit insurance" for the medical industry! Senate and House bills force everyone to buy insurance or pay a fine, except the very poor. This gives insurance companies 40 million new customers, who must buy plans with high deductibles and poor coverage.

Insurance companies will be barred from denying policies to those with pre-existing conditions, but they can charge up to double the normal rates based on health status and age! Provisions to cover preventive care have a tricky "wellness incentive" to allow charging more to those who don't stay healthy.

Both congressional versions guarantee drug companies 12 years of brand-name profit for every high-tech drug before the much cheaper generics can compete with them. Big pharma has jacked up prices nine percent just this year to compensate for promised future price "restraint." The "doughnut hole" that leaves middle-income seniors on Medicare without drug coverage won't close until 2019!

Public option a sham. This misnamed provision is a cruel deception. Only two percent of the U.S. population could get it; anyone with insurance won't be able to switch. Some 18 million who don't make enough to buy health coverage, but earn too much to get government subsidies, would still be uninsured.

The pool of people in the "public option" will be so small that it will be more expensive than private insurance. Instead of matching payments to Medicare, the plan negotiates rates with private insurers. In the Senate version, states can even opt out, driving costs up more.

The House bill includes a racist provision prohibiting undocumented immigrants not only from the public option but from buying through new health insurance exchanges, even if they pay out of their own pockets.

Abortion restriction and other take-aways. With one hand, the House barred gender discrimination. With the other, it banned any policy receiving public subsidies from providing abortions, even for those who aren't subsidized. This will result in most insurance plans dropping coverage. The brutal measure barring low-income women from getting public assistance for most abortions, in effect since the 1970s, was expanded so that a woman cannot even get an abortion to protect her health.

Insurance lobbyists are wheedling to save the industry's precious exemption from anti-trust laws, and for so-called "tort reform" to limit the amount of money that injured patients and families can win from malpractice lawsuits.

The final insult in the House bill is removal of a provision protecting the ability of states to implement single-payer healthcare. This is universal coverage like Medicare, in which the government pays health and drug providers directly.

Working people will pay and pay. The House bill requires most employers to make insurance available, but doesn't require them to pay for it. The Senate proposal doesn't even mandate employer-provided coverage.

The House funds only half of the costs of its bill with a 5.4 percent tax on the high income - single people with over $500,000 or couples with $1,000,000 in earnings. But since costs aren't being reigned in, $500 billion in cuts to Medicare will pay the balance. Seniors are justifiably angry that their benefits will suffer.

The Senate bill is paid almost entirely on the backs of workers. It levies a 40 percent tax on more expensive "Cadillac" employer-provided plans. Worse, it is indexed to general inflation instead of the much higher health insurance inflation rate. In a few years, most workers would pay tax on their "Chevy" policies!

A slight improvement in both proposals would expand Medicaid. This subsidized coverage for the very poor would include those up to 150 percent of the federal poverty level, which is still only $22,000 for a family of four. But nine percent of costs would shift to states, which are already cash-strapped after years of federal funding cuts. Workers will pay again in higher sales, property and state income taxes.

Getting real reform and universal care. A few positive features remain in the House bill, including an end to lifetime limits on coverage, increased funding for community health centers, and improved access to healthcare by queer people. But even if these survive, they don't justify the massive subsidies to private insurance at working people's expense, bigoted exclusions, and roadblocks to state single-payer healthcare plans.

The U.S. must have a healthcare system that is not rationed by gender, race, income, age, health condition or immigration standing. Only massive organized pressure for either a single-payer or - even better - a nationalized health system like the one Congress enjoys can make this rational dream come true.
 
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