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Proposals for Universal Health Care
or
Back to the Health Care Future
Leonard Rodberg
Urban Studies Dept, Queens College
And
NY Metro ChapterPhysicians for a National Health Program
April 14, 2007
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Psst! Wanna see my health plan?
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Why Health Is On the Agenda
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A Declining Number of Firms
Are Offering Insurance
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Firms Shift Health Insurance
Costs to Workers
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Number of Uninsured Americans (Millions)
1980 1985 1990 1995 2000
45
40
35
30
25
20
Source: U.S. Census Bureau
Rising Number of uninsured
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0
10
20
30
40
50
60
70
80
90
100
Unite
dStates
Australia
Austria
Belgium
Canada
CzechRepublic
Denm
ark
Finlan
d
France
Germ
any
Greece
Hung
ary
Iceland
Ireland
Italy
Japan
Korea
Luxembourg
Mexic
o
Netherlands
NewZe
aland
Norw
ay
Portu
gal
Slovak
RepublicSp
ain
Sweden
Switzerland
Turkey
Unite
dKingdom
Percent
Population Covered by Public System
The Outlier Nation:
Our Public System Covers Fewer
Source: F. Colombo and N. Tapay, Private Health Insurance in OECD Countries, OECD 2004
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0
5
10
15
20
25
30
35
40
Unite
dStates
Australia
Austria
Belgium
Canada
CzechRepublic
Denm
ark
Finland
France
Germ
any
Greece
Hung
ary
Iceland
Ireland
Italy
Japan
Korea
Luxembourg
Mexico
Netherlands
NewZealand
Norw
ay
Portu
gal
Slovak
Republic
Spain
Sweden
Switzerland
Turkey
Unite
dKingdom
Percent
Private Health Insurance Percent of Total Cost
While Private Insurance Dominates
Source: F. Colombo and N. Tapay, Private Health Insurance in OECD Countries, OECD 2004
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U.S. Health Costs are 70% Greater
than the Median of Other Countries
Unite
dS
tates
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THE MAJORITY OF AMERICANS
HAVE PRIVATE INSURANCE
Total Population
Private health insurance- Employer-provided
- Individual
Public health insurance
Medicare Medicaid
Uninsured
Million %
288 100.0%
174 60.5 %160 55.6%
14 4.9%
72 25.0%
41 14.2%31 10.8%
42 14.6%
Source: National Center for Health Statistics, 2003
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BUT IT PAYS MUCH LESS THAN
HALF THE COST
2004Personal Health Expenditures
Private Funds
Private health insurance- Self-funded plans
- Insurance company plans
Out-of-pockets payments
Other private funds
Public Funds* Medicare Medicaid
Other public expenditures
$ Billion %$ 1,753 100%
$ 965 54%
$ 658 37%$340 19%
$318 18%
$ 236 13%
$ 70 4%
$ 789 46%$ 309 18%$ 293 17%
$ 187 11%
* Does not include tax subsidy for private insurance. See Woolhandler & Himmelstein, HealthAffairs 2002Source: Centers for Medicare and Medicaid Services, 2006
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HIGH COST OF HEALTH
INSU
RANCE PREMIU
MSNational Average for Employer-provided Insurance
Single Coverage $4,024 per year Family Coverage $10,880 per year
Note: Annual income at minimum wage = $10,300
Annual income of average Wal-Mart worker = $17,114
Source: Kaiser Family Foundation/HRET Survey, 2005
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The Good News --
and the Bad News
Universal health care is accepted as
the goal. It is defined simply as requiring that
the uninsured buy private insurance.
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The Massachusetts Plan Individual Mandate: Uninsured people must buy
their own health care or face financial penalties.
Sliding subsidies for uninsured up to 300% of thefederal poverty level.
Employer Fair Share Assessment: Fee of $295per year per worker for businesses not covering
their employees. Medicaid expansions: Children up to 300% of
poverty.
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Personal
Responsibility
Incremental
Expansion
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Wyden Healthy Americans Act
slash and burn
Supporters: SEIU, Safeway, Families USA
Eliminate the tax deductibility of employer-based insurance end employer benefit
Require individual purchase of insurance
Transitional payments by employers
Subsidies to low-income individuals
Relies on competition to contain costs
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John Edwards Planindividual mandate with a pretty face
Individual mandate with community rating
Employer mandate (play or pay)
Medicaid and SCHIP expansion Subsidies for low-income
Regional purchasing plans (Health Markets)
Offers government program (single payer?) aswell as private plans. (cf Medicare Advantage)
Note: Jacob Hacker plan: Identical content,different verbiage
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Edwards Seductive Verbiage For everyone: Shared responsibility
For the fearful: Lets people keep what they have
For those worried about cost: Everyone will
work together to make the system more efficient
For single payer advocates: Individuals and
businesses can choose if they want thegovernment plan; if so, the system will evolve
toward a single-payer approach.(For more, see www.johnedwards.com)
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Ten Top Reasons Why an
Individual Mandate is Bad Policy10. Enforcement is bad for public health
9. Insurance companies will resist and
undermine community rating andguaranteed issue
8. Will not lead to universal coverage
7. If premium is affordable, health care isnot (copays, deductibles)
6. Complexity/humiliation of means testing
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Ten Top Reasons Why an
Individual Mandate is Bad Policy5. Even more bureaucracy (Health Markets)
4. Private health insurance will be a continuing
consumers nightmare (copays, deductibles,exclusions, denials, appeals)
3. Increases the cost of the system, most going to
private insurance companies2. No cost control: continually rising cost
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And the Top Reason Why an
Individual Mandate is Bad Policy1. It doesnt reform the system at all. It would not
help any of us who think were insured.-- Half of middle- and lower-income adults experience seriousproblems paying medical bills or insurance premiums.(Commonwealth Fund 2006)
-- Three-fourths of those who declare medical bankruptcy hadinsurance (D.Himmelstein et al, Health Affairs, 2005)
It doesnt solve any of the problems (especially risingcosts) that concern everyone.
It is not a real structural change.
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Choice: Whats Wrong With Offering a
Public Plan vs. a Private Plan? Purchaser cannot predict future health needs, and
so has no basis for choosing plan
Purchaser cannot know the impact of private planrestrictions until illness hits
Private plans want to avoid (i) sick people and (ii)paying for illness
Deceptive/seductive insurance companyadvertising compared to govt advertising
A level playing field is impossible
It is not single payer!
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THE EVIDENCE FROM MEDICARE
Since 1997, the US has conducted a head-to-headcomparison between private insurance (Medicare
Choice+, now called Medicare Advantage) andpublic Medicare.
The result:
Private insurance companies require a subsidy of at
least 15% just to stay in the business. Fewer than 1 in 6 Medicare-eligibles choose the
private insurance option.
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Common Features of these Plans They identify the problem as too many uninsured.
Their solution: Require everyone to haveinsurance
Employers contribute but dont necessarily offerinsurance
These plan dont reform the structure at all True objective of these plans:
Save the private insurance industry
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A Familiar Headline But Its Wrong!
It is the unaffordable, inefficient private
insurance system that is collapsing.
Employers should contribute their fair share,
just not through private insurance.
Going backwards to individual purchase of
insurance is not the answer.
Employer-Based Health Insurance System Collapsing
(Wall Street Journal, 7/17/06)
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Some of the Problems created by
private insurance
SOME OF THE PROBLEMS
CREATED BY PRIVATE INSURANCE
Excessive administrative costs
Excessive complexity
Continuously rising costs
Lack of coordination, budgeting, and planning
Regressive financing via premiums
Widespread underinsurance and bankruptcy
Interference in physician decision-making
The hassle factor
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SO HERES THE SOLU
TION: Expand Medicare to cover everyone
Improve the coverage it offers
Eliminate private insurance
Expanded and Improved
Medicare for AllConyers Bill - HR 676
-- The single payer solution --
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HOW WOULD MEDICARE FOR
ALL WORK? Everyone would receive a Medicare card
assuring payment for all needed care
Complete free choice of doctor and hospital Doctors and hospitals remain independent,
negotiate fees and budgets with Medicare
Progressive taxes go to Medicare Trust Fund Public agency processes and pays bills
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SOME IMPLICATIONS OF
MEDICARE FOR ALL The same coverage for everyone:No means
testing; coverage would not depend on
income, employment or age Medicaid would no longer be needed
Hundreds of billions of dollars in
administrative costs would be saved Costs would be controlled through capital
planning and quality reviews conductedthrough the single insurer
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How Would It Be Paid For?
One Example:
Revenue Sources for
Single PayerProgram
Employer Payroll
Tax (8.17%)
33%
Federal
Government
(existing)
34%
Other
8%
State and Local
Govt (existing)
10%
Employee Payroll
Tax (3.78%)
15%
Note: Payroll tax on incomes above $7,000 and below $200,000 only.Source: Health Care for All Californians Act: Cost and Economic Impacts Analysis, The Lewis Group, January 19, 2005
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Billing and Insurance Costs
Account For More Than 20% of
All Health Care Costs
BIR = Billing- and insurance-related costs; profit and marketing costs
not included
Source: James G. Kahn et al, The Cost of Health Insurance Administration in California: Estimates forInsurers, Physicians, and Hospitals,Health Affairs, 2005
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Covering Everyone and Saving Money
through Medicare for AllAdditional costs
Covering the uninsured and poorly-insured +6.4%
Elimination of cost-sharing and co- pays +5.1%
SavingsBulk purchasing of drugs & equipment -2.8%
Reduced hospital administrative costs -1.9%
Reduced physician office costs-
3.6%Reduced insurance administrative costs -5.3%
Primary care emphasis & reduce fraud -2.2%
Net Savings -4.3%
Source: Health Care for All Californians Plan, Lewin Group, 2005
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WHY IS SUCH A NATIONAL HEALTH
PROGRAM POSSIBLE TODAY? Private insurance is not addressing the fundamental
problems of cost, choice, access and quality.
Everyone is affected: the uninsured, theunderinsured, and everyone else who is
insecurely insured.
Employers who provide insurance want to be relievedof the burden of rising costs and unfair competitionfrom employers who don't offer insurance.
Small businesses want to offer insurance to theiremployees but cant afford it.
Every other industrialized country has done it.
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PHYSICIANS FOR A NATIONAL
HEALTH PROGRAM (PNHP) says:Who needs insurance companies anyway? Limited reforms that keep private insurance in place
have been tried and failed.
If we get rid of the insurance companies, we can havea Medicare for All system that is:
- Simpler
- Less costly
-Better for our health
- Equitable, and
- Covers everyone
Lets do it!
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A Final Word
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