By ANDREW POLLACK
The following article will appear in the April 2010 edition of Socialist Action newspaper.
In late March, after months of debate, Congress passed, and President Barack Obama signed into law, a bill that progressive columnist Chris Hedges accurately described as “the health-care industry’s version of the Wall Street bailout.”
Rose Ann DeMoro, head of National Nurses United, said the bill “fails to deliver on the promise of a single standard of excellence in care for all and instead makes piecemeal adjustments to the current privatized, for-profit health-care behemoth.” She added that boasts comparing the bill to Social Security and Medicare were “intended to mollify liberal supporters following repeated concessions to the health-care industry and conservative Democrats.”
Some of the failings in the bill cited by DeMoro, Hedges, and other advocates of a single-payer (“Medicare for All”) system were:
• A mandate forcing people without coverage to buy insurance. This is a gift to insurers worth at least $447 billion from government subsidies alone, not to mention the huge sums workers will have to dig out of their own pockets. Policies will cost up to 9.7% of workers’ incomes but cover an average of only 70% of medical expenses. Even if they can afford the premiums, many will meet financial ruin—or be forced to forego care—because of high co-pays and deductibles.
• Premiums will continue to climb. Threats by the Obama administration to create a federal authority to look at insurer rate hikes were dropped. Similarly, limits on out-of-pocket payments are vaguely worded.
• No standard benefits package, meaning no guarantee that patients will get the care needed; instead, a requirement that benefits should be “comparable to” current employer provided plans.
• The much-touted end of denial of claims is also shot through with loopholes, and is subject to review by state governments, many of which, said DeMoro, “have systems now in place that are dominated by the insurance industry.” And insurers may continue to drop coverage for “fraud or intentional misrepresentation”—the main pretext now used.
• Permitting insurers to sell policies across state lines, exempting patient protections passed in more regulated states.
• Allowing insurers to charge three times more based on age and/or certain conditions, and to use marketing techniques to cherry-pick healthier, less costly enrollees. Big companies with a predominantly female workforce can be charged higher gender-based rates at least until 2017.
• Taxing employer-provided health benefits for the first time, starting with “Cadillac Plans,” i.e., those whose value exceeds $10,200 for individuals or $27,500 for families. With no real checks on premium hikes, many plans will rapidly reach that amount by the start date, 2018. Workers will have to switch to plans providing little medical and/or financial protection. And employers will rush to drop coverage completely.
• A windfall for Big Pharma. Obama blocked provisions to give the government more power to negotiate drug prices and gave the name brand drug-makers 12 years of marketing monopoly.
• 23 million residents of the U.S. will remain without any insurance. Pointing to Massachusetts, whose legislation was the model for the bill, Hedges noted that one in six people there say they cannot afford care, and tens of thousands have been evicted from the program because of budget cuts. “The 45,000 Americans who die each year because they cannot afford coverage will not be saved” under the federal bill.
• The bill will cut about $40 billion from Medicare payments to safety-net hospitals, threatening care for tens of millions without insurance who depend on those hospitals.
Discrimination against women and immigrants
National Organization for Women President Terry O’Neill called the bill a “highly flawed, diminished piece of legislation that continues reliance on a failing, profit-driven private insurance system.” Noting that the key to the deal was Obama’s knuckling under to anti-choice fanatics, she said the bill “sends the outrageous message that it is acceptable to negotiate health-care reform on the backs of women.” The bill’s permission of age-rating, she noted, “has a disproportionate impact on women, whose incomes and savings are lower due to a lifetime of systematic wage discrimination.”
O’Neill also denounced the bill’s discrimination against immigrants. Legal residents will face a five-year waiting period before being eligible for Medicaid, and undocumented workers will not even be permitted to use their own money to buy insurance (even though they pay income taxes and Social Security taxes that are used to fund others’ health care.) “These provisions are counterproductive in terms of controlling health care costs; they are there because of ugly anti-immigrant sentiment, and must be eliminated. … Everyone—citizen and non-citizen, undocumented immigrant and visitor—has a fundamental human right to health care.”
In a move typical of Obama’s pandering to the politics of “the center”—read reactionaries—the turning point in securing the bill’s passage was a deal with anti-abortion Democrats, in which Obama signed an executive order reiterating the Hyde Amendment’s ban on use of federal money for abortion. In an implicit admission of how backward this move was, Obama refused to turn the signing of the executive order on this issue into the usual press photo-op.
NOW also objected to Obama’s support for a “conscience clause” through which essential emergency services are denied. If a woman is raped, under this clause she could be denied emergency contraception that she might desperately need.
In a PBS interview with Bill Moyers, Dr. Marcia Angell, editor emeritus of the New England Journal of Medicine, said Obama was “fighting for something that shouldn’t pass. … The bill actually expands and cements insurers’ position as the lynchpin of health care reform. … A lot of people say, ‘Let’s hold our nose and pass it, because it’s a step in the right direction.’ And I say, it’s a step in the wrong direction.” Medicare was being slashed, she said, to subsidize the private health insurance industry. This financial shift explains the bill’s much-touted relief to the Federal deficit.
Single-payer activists such as DeMoro, as well as Physicians for a National Health Program and its state affiliates, noted some positive aspects of the bill:
• Increased funding for community health centers, nearly doubling their current patient volume.
• Reducing but not eliminating the “donut hole” gap in prescription drug coverage for which Medicare enrollees have to pay fully out of pocket.
• Insurance regulations covering members’ dependent children until age 26, new restrictions on limits on annual and lifetime insurance coverage, and some limits to dropping children with pre-existing conditions.
• Permission for individual states to waive some federal regulations to allow adoption of programs like an expanded Medicare. Some activist groups will use this clause to focus on achieving state-level single-payer programs.
• Expansion of Medicaid to cover 16 million additional low income people. But activists note that the program remains significantly under-funded, and so care providers often drop out for inadequate reimbursement. What’s more, the bill’s added federal subsidies to states (which normally bear half of Medicaid’s costs) will expire in 2016.
In fact, the states, which are all facing budget crises in the current Great Recession, are already beginning to slash away at Medicaid and other health-care programs. So when all is said and done, the level of Medicaid-provided health care could be even less than it currently is.
On March 18,, Arizona declared it would no longer fund its children’s health program, leaving nearly 47,000 low-income children without coverage. The state also will roll back Medicaid coverage for childless adults, dropping 310,000 from the rolls. Other states are finding they can’t find the required matching funds without which the Feds don’t contribute their share of Medicaid spending. This is at a time when the recession and high unemployment have driven Medicaid enrollment up dramatically—by 3.3 million people over the last year.
When Recovery Act funding runs out at the end of 2010, states are expected to remove hundreds of thousands from Medicaid. Many governors’ proposed budgets for state fiscal year 2011 already include drastic cuts to Medicaid.
In any case, PNHP and other activists echoed DeMoro when she said, regarding the bill’s positive features: “All of these reforms could, and should, have been enacted on their own without the poison pills that accompanied them.” PNHP noted that even had the bill included a “public option,” it wouldn’t have mattered as “even a robust public option would have foregone 90% of the bureaucratic savings achievable under single payer.” And the public option as designed would have failed in a marketplace where competition involves a race to the bottom, where insurers compete by not paying for care.
Liberals, AFL-CIO cheer Obama
Yet liberals echoed Obama’s claims that the bill was the greatest thing since Social Security or Medicare. And New York Times economics columnist David Leonhardt claimed that the bill is the government’s “biggest attack on economic inequality” in over three decades. “It is the centerpiece of [Obama’s] deliberate effort to end what historians have called the age of Reagan.”
But DeMoro quoted former Labor Secretary Robert Reich as saying, “don’t believe anyone who says Obama’s health-care legislation marks a swing of the pendulum back toward the Great Society and the New Deal. … Obama’s health bill is a very conservative piece of legislation. Unlike Social Security and Medicare, which expanded a public safety net, this bill requires people—in the midst of the mass unemployment and the worse economic downturn since the Great Depression—to pay thousands of dollars out of pocket to big private companies for a product that may or may not provide health coverage in return.
“The administration and its major supporters shut out advocates of more far reaching reform, while vilifying critics on the left. … As more Americans recognize the bill does not resemble the distortions peddled by the right, and become disappointed by their rising medical bills and ongoing fights with insurers for needed care, there will be new opportunity to press the case for real reform.”
The AFL-CIO, on the other hand, called the bill a “momentous step toward comprehensive health care,” “not a baby step or half measure,” and “an opportunity to change history.” This was despite AFL-CIO President Rich Trumka having been summoned to the White House for a last-minute meeting in which he was told that the deal he’d brokered on taxing health-care benefits was off. On Jan. 14, Trumka had announced that he had negotiated an improved formula for determining the threshold at which the 40% excise tax on “Cadillac plans” would kick in. Obama told him that formula would be weakened.
The AFL-CIO claimed victory because the final bill exempts all plans until 2018, not just union-negotiated plans. That at least stops labor from looking like it had protected only its own members and not the working class as a whole. But that will be cold comfort come 2018 for most workers, as health-care inflation puts millions more into the range of the excise tax.
Of the dozens of sponsors of the main single-payer bill, HR676, only two voted against the Obama plan during its first passage in the House a few months ago. Since then, one of them chose early retirement. The other, Dennis Kucinich, who had sworn to oppose the legislation unless there was a public option, switched sides after sharing a ride with the president on Air Force One, and began lobbying aggressively for the bill. Such capitulations by mass organizations and so-called “friends” in office allowed the media to present obstructionist Republicans, and cheerleading racist and homophobic scum, as the only opposition to the Obama plan swindle.
Hedges, citing lobbying and mammoth contributions to the Democrats by insurers and drug makers, said the bill “is another example of why change will never come from within the Democratic Party. The party is owned and managed by corporations. … Change will come only by building movements that stand in fierce and uncompromising opposition to the Democrats and the Republicans. If they can herd Kucinich and John Conyers [676’s author] …onto the House floor to vote for this corporate theft, what is the point in pretending there is any room left for us in the party?”
Meanwhile, Republicans, both elected officials and Astroturf activists, fought against the bill with a venom that would make you think they were holding the fort against socialized medicine. The day of the bill’s passage in the House, members of the embryonic fascist Tea Party movement lined up to yell racial epithets at Rep. John Lewis and others, and to shout homophobic insults at Rep. Barney Frank. In the days after the bill passed, 10 Democratic legislators got federal law enforcement protection after receiving death threats and having their homes or offices vandalized.
New York Times columnist Paul Krugman quoted Newt Gingrich, former Republican speaker of the House, as saying, “They [Democrats] will have destroyed their party much as Lyndon Johnson shattered the Democratic Party for 40 years by passing civil rights legislation.” And Krugman cited “racial hate-mongering” in an op-ed in Investor’s Business Daily, which declared that health reform is “affirmative action on steroids, deciding everything from who becomes a doctor to who gets treatment on the basis of skin color.”
Many media pundits noted the irony in free-market Republicans so viciously opposing a bill that grants hundreds of billions to private corporations. Jon Flanders, a member of the Troy Area Labor Council and a leader of New York labor’s single-payer efforts, explained clearly the sinister shell game behind this supposed irony: “Here is where the true beauty of the two-party capitalist political system kicks in. The problem of spiraling health care costs must be solved within the framework of capitalism, without damaging the material interests of the major corporations in the field…
“The working class must be forced to pick up an increasing portion of the costs of health care. There is always the possibility that this might stimulate a plebeian revolt. … So in the face of that threat of unpleasantness, the two parties have a division of labor. … To the Democrats falls the task of passing the corporate bailout ‘Republican’ bill. … Their problem is how to sell this to their base, with the growing anger against for-profit health insurers complicating matters.
“There is a lot of smoke and mirrors about a public option to divert the masses right up to a vote. But this ploy must be abandoned in the end. The whole enterprise could sink at this stage of the game. This is where the Republicans come in, teabags waving aloft. Pounding the podium in faux-hysteria, they posture as the saviors of the free market, implacable enemies of totalitarian government, the only ones standing in a thin red line against the advance of socialism.
“The Republican tirades work their magic both on their own base and on the base of the Democratic Party. The teabaggers get energized, mobilizing in protest, raising visions of brown-shirted hordes in the minds of the Democratic base. ‘My God, we have to beat these fascists,’ becomes the mantra. Which is exactly the political cover that the leaders of the Democrats need to bring home the bacon, and pass the bailout bill. Which they do, with much congratulation all around by most of the liberals so insistent on a public option only weeks earlier.
“So both parties have strutted on the stage to the satisfaction of their supporters, to all appearances doing what they were elected to do. And the health insurance bailout is accomplished. As a piece of stagecraft, it’s a thing of beauty, as I said at the beginning.”
As soon as the bill passed, employers began taking massive charge-offs against future earnings, claiming huge anticipated losses from elimination of tax subsidies for some retirees’ drug coverage. AT&T’s $1 billion charge is the biggest so far. Yet these companies will actually come out way ahead, said White House senior adviser Valerie Jarrett: “What they’re going to have to write off is nothing compared to the enormous financial benefits to those very same companies by health insurance reform that will bring down their costs substantially.”
She noted correctly that these companies had been legally double dipping under the 2003 Medicare drug law, which subsidized 28% of companies’ drug costs for retirees but allowed the firms to write off 100% of those costs. And she told no lie when she said of the bill: “On balance, business will come out way ahead, and that was one of the president’s objectives.”
The Labor Campaign for Single-Payer said that comparisons of the bill to Social Security “might be true had President Roosevelt turned over the Social Security Administration to Goldman Sachs,” and that comparisons to Medicare “also might be true had President Johnson deliberately designed a plan that excluded millions of senior citizens from coverage.”
The Campaign said that at its National Meeting in early March, “we came to the conclusion that, in the end, the debate between those who maintain that the current legislation is ‘better than nothing’ versus those who believe it will ‘make things worse’ will lead us nowhere. What is important now is to make sure that this incredible movement that has arisen to fight for the right to health care for all in America continues beyond this moment…
“We’ve already won the battle of ideas. During the two-year debate preceding this week’s votes, single-payer Medicare-for-All emerged as the gold standard against which all other reforms were measured. There is no longer any credible dispute over the fact that Medicare-for-All is the most cost-effective and just way to provide quality health care for all in America.”
All of this bodes well, said the Campaign, for increased education and mobilization as the material impact of the bill’s main features kicks in: “The health-care system that will emerge from this legislation is unstable and financially unsustainable. It is headed for crisis, perhaps even before it is fully implemented in 2017. We will explore the impact of the new legislation on collective bargaining and will act in solidarity with workers everywhere who stand up and fight for health care.”
The Campaign, and all other single-payer activists, are hitting the ground running even before the bill’s impact hits home, and are starting now to rebuild the single-payer movement on an even bigger basis. In that process, the exposure of even the most liberal Democrats during this debate as false friends—combined with that party’s attacks on workers over immigration, war, discrimination, and jobs—will hopefully revive sentiment for independent labor political action, without which real health-care reform is impossible.