Health Care and the Democrats
What do Democratic presidential hopefuls John Edwards, Hillary Clinton and Barack Obama have in common with Republican rival Mitt Romney? Edwards’ and Obama’s proposals for universal healthcare differ little from the former Massachusetts governor’s "bipartisan" experiment in state healthcare reform, signed into law last year — which in turn embraces key elements of Senator Clinton’s failed 1993 healthcare overhaul.
As the Washington Post noted on July 10, "To move toward universal coverage, Edwards, Clinton and Obama have approaches that borrow from the Massachusetts model. That plan, regarded as one of the nation’s most innovative, took key elements of the 1993 Clinton plan and made them practical politically — so practical that the plan was enacted in 2006 by a Democratic legislature with support from a Republican governor, 2008 presidential candidate Mitt Romney."
This commonality is not obvious from these candidates’ stated intentions, of course.
Edwards unveiled his universal healthcare plan by declaring his empathy with the nation’s 47 million uninsured, in a studied populist flourish: "We have to stop letting the health insurance companies and the big pharmaceutical concerns decide our nation’s healthcare policy," Edwards told the Democratic National Committee on February 2nd.
Clinton has yet to detail her own healthcare proposal. But her website now extols that 1993 colossal failure as a badge of honor: "As First Lady, Hillary introduced a plan to provide full coverage for all Americans, which was defeated after aggressive opposition," while boasting, "Hillary has the experience to take on the insurance companies [to] ensure that all Americans have the health care they need."
Obama boldly informed Time magazine in May, "We’ll investigate and prosecute the monopolization of the insurance industry," adding, "And where we do find places where insurance companies aren’t competitive, we will make them pay a reasonable share of their profits on the patients they should be caring for in the first place."
Romney has predictably accused his Democratic competitors of embracing "socialized medicine" while he relies on "market forces" to correct healthcare disparities.
Partisan rhetoric, bipartisan approach
But the partisan rhetoric blurs the bipartisan approach. The healthcare proposals of all of the leading presidential candidates offer a cash cow to the insurance and pharmaceutical industries in new enrollments — while requiring no compromise on profits in return. The working poor, meanwhile, would shoulder the expense of substandard insurance policies with enormous out-of-pocket costs.
The Massachusetts healthcare reform experiment looms large as a model for the nation’s future among these politicians. But how have Massachusetts’ residents fared under this widely touted plan? Beginning July 1st, the law required all taxpayers to enroll in a health insurance plan. Those who fail to enroll by December 31st will be penalized on next year’s tax returns. Also, while individuals are allowed to enroll in a lower-cost, substandard insurance policy this year, everyone will be required to pay for a policy that includes drug coverage by January 2009, or face further penalties.
At first, the penalty will be relatively small — forfeiting the annual $219 state exemption. But the penalty grows much steeper over the next few years, reaching up to half of a monthly insurance premium for each month a person is uninsured.
The health care premiums on offer are far from affordable. The Liam Maguire’s Irish Pub and Restaurant in Falmouth, for example, now offers its employees a bare-bones policy for $42 per week. By July 1st, just 10 of its 30 workers opted to take up the offer, according to the New York Times. Although they cannot afford these high premiums, however, they are ineligible for state-subsidized health insurance simply because their employer has offered them any plan at all, however expensive.
A healthy 37-year-old earning $35,000 a year is required to pay an annual premium of around $2,100 under the least-expensive plans on offer. But such plans also have deductibles of about $2,000 a year, or roughly 12 percent of the patient’s annual income, before any benefits kick in. Massachusetts is marketing another set of lower-cost insurance policies to its relatively healthy 19-26 year-old population, with monthly premiums ranging between $106 and $220 per month. But many of these plans cap annual benefits at $50,000 — leaving the insured a car accident or illness away from destitution.
Premiums and deductibles for older people, couples, and families are much higher.
Not surprisingly, the July 1st deadline came and went with only 130,000 Massachusetts residents, mainly the poor and previously uninsured, newly enrolled in insurance policies — nearly all in the free or state-subsidized plans. The working poor voted with their feet in non-compliance.
Massachusetts’ employers, meanwhile, have no pressing financial incentive to offer healthcare insurance to their employees. They have the option of paying thousands of dollars annually for healthcare premiums or opting out of coverage, with an annual penalty of just $295 per employee — a much smaller price than their uninsured workers will pay for ignoring the healthcare mandate.
Business leader Sandy Reynolds remarked that business owners could simply reduce their workers’ hours to less than 35-hours per week to escape the insurance requirement for full-time workers.
Nationally, employers have another weapon at their disposal to battle state healthcare reform. The Employee Retirement Income Security Act (Erisa), enacted in 1974, frees the healthcare plans of multi-state corporations that assume the cost of their workers’ health costs (so-called "self-insured" companies) from compliance with state laws. According to the Wall Street Journal, such corporations cover roughly 70 million U.S. workers — half of all workers with employer-provided medical benefits.
As the Journal noted, "Industry groups say Erisa serves a vital function in assuring that business doesn’t have to meet varying state rules. ‘Erisa pre-emption [of state laws] is the crown jewel of health-care coverage by employers,’ says Mark Ugoretz, president of the ERISA Industry Committee, a Washington-based trade group that represents big employers He argues that Erisa bars any state levies that are large enough to force employers to offer benefits."
But no employers have chosen thus far to use Erisa to sue Massachusetts for its new employee healthcare requirements, "possibly reflecting the small size of the penalty," the Journal commented.
The rising chorus for single-payer
"Healthcare for all" has become the mantra of the moment for Democrats, but candidates from both parties lag far behind popular consensus on resolving the healthcare crisis. "There’s not a lot of untested political ideas out there," Harvard health policy professor Robert Blendon recently observed of the 2008 candidates’ healthcare plans.
In a CBS News/New York Times poll released on March 1st, 90 percent of those polled believed fixing the U.S. healthcare system will require at least "fundamental" changes, including 36 percent who thought it would require a "complete overhaul."
In the same poll, two-thirds said the federal government should be responsible for guaranteeing that all Americans have health insurance. Most would be willing to see the cost of their own care go up to achieve this goal. In addition, 59 percent said they were very dissatisfied with the cost of health care in the U.S. overall and another 22 percent were somewhat dissatisfied.
One fourth of insured respondents reported that they have decided to forego a medical test or treatment because their health plan did not cover it. And 47 percent of those polled said they would prefer a single-payer program administered by the government to cover all Americans, compared with 38 percent who prefer to keep the current system.
To be sure, there are minor differences between the Democratic candidates. "Obama’s plan does not require adults to obtain health insurance, a distinction that Edwards has tried to exploit because his aides say that without such a requirement, Obama’s plan would not ensure coverage for everyone," the Post noted.
On the contrary, Edwards’ proposal to require individuals to buy health insurance places more of the burden on working-class people facing falling real wages and rising healthcare costs. According to the Kaiser Foundation, average health insurance premiums have risen 87 percent since 2000, while workers’ earnings have risen just 20 percent.
But the differences are minor, given the scale of the healthcare crisis. The pendulum is swinging left toward single-payer, and neither major political party — for both are beholden to healthcare conglomerates’ campaign dollars — is prepared to address the urgency of popular sentiment. Only a grassroots movement can force them to do so.
SHARON SMITH is the author of Women and Socialism and Subterranean Fire: a History of Working-Class Radicalism in the United States. She can be reached at: email@example.com