President Obama and the Democrats have finally thrust aside the obstructionist Republicans and passed health reform. Declaring “a new season in America,” Obama has promised that coverage will be extended to more than 30 million people. Some repulsive practices of insurers will be curbed with new regulations. While most reforms will not be implemented until years down the road, some changes this year will benefit children, young people, and the elderly.
The bill may stand out as ”progress” for many when compared to more consistent free market and pro-corporate policies of the past few decades. It is the most sweeping social legislation since the 1965 Medicare Act, prompting an avalanche of headlines calling it ”historic.”
The New York Times pointed out the bill “is the federal government’s biggest attack on economic inequality since inequality began rising more than three decades ago” (23 March 2010).
Yet the legislation is thoroughly pro-corporate and severely flawed. All the small positive measures are tied to a massive scheme of spending, mandates, and regulations that will prop up the corrupt private insurers and maintain the profitability of the entire private health industry.
While a layer of low-income workers are likely to get some relief, it will be temporary and terribly insufficient at best. The pain and suffering for millions of families will be prolonged for years on the basis of this bill.
The root cause of the health care crisis is the distortion caused by the for-profit system. Obama’s legislation is fundamentally flawed because it leaves this system intact.
The bill will not achieve universal coverage in the richest country on the planet. In 2018, at least 23 million people will still lack some form of coverage. Thousands of people will continue to die every year simply because they cannot afford the outrageous cost of care.
Additionally, coverage for many people will be extremely limited. The bill will expand Medicaid by 16 million people, but these state-run systems are horribly underfunded and do not cover many health needs.
Instead of real universal coverage as many had hoped, the bill simply enacts a law in 2014 that requires everyone to buy private insurance. For the first time it will be illegal to not buy the insurance companies’ ”defective products.” If you do not, you will eventually be fined upwards of $750, or more for families. This will provide millions of new customers to the private insurers, propping up and entrenching their role in the system.
New regulations are proposed to keep the insurance industry more ”accountable.” But these regulations are full of holes. Private insurers will maintain their ability to dominate and game the system for profits at the expense of care.
Michael Moore, director of the health care documentary Sicko, explained the major limits and loopholes of the ban on denying coverage for pre-existing conditions.
“So if you’re Aetna, and you’ve got a patient who maybe needs, you know, a $100,000 operation, what would you do? Would you pay out the $100,000 operation because the law says you have to? Or do you break the law but just get a $100-a-day fine? Because, let’s see, after a year that would be $36,500 versus a $100,000 operation” (Democracy Now! 23 March 2010).
The bill also forbids the use of any federal money to buy insurance plans that cover abortions for women, thus maintaining the right to choose as a privilege of the rich and selling out women without a single Republican vote!
The bill is extremely expensive, with a cost of $940 billion over ten years. It will be paid for with cuts in government funding to Medicare Advantage and tax increases on incomes of $200,000 or more starting in 2013. But, in 2018 it will impose a regressive tax on quality health plans, many of which were won through union struggles.
What will this new spending fundamentally achieve? The U.S. already has the most expensive health care system in the industrialized world, spending 16% of GDP on health care compared to 11% in France. The U.S. spends over $6,700 per person on health care, while France spends about half that.
But when the World Health Organization last ranked health care systems around the world in 2000 when health care was much cheaper and covered more people in the U.S. France was ranked first while the U.S. Ranked 37th, just before Slovenia.
The heavily privatized, for-profit system in the U.S. is simply dysfunctional and it cannot be reformed to provide everyone quality care. Critics have called it a ”non-system” because, in spite of $2 trillion in annual spending, there is no rationally planned use of resources in the interest of quality care.
Instead, the system is dominated by a patchwork of competing corporations that use their resources to skim profits at every turn. To cover operating costs, hospitals are forced to spend extra resources battling a mess of different insurers over every item of every patient bill. This is wasteful.
Instead of propping up the parasitic private insurance industry, it should have been swept aside by a ”single-payer” system. This would replace the 1,300 insurers with a single government program to finance all health care needs. More than $400 billion a year could be saved according to Harvard studies (www.pnhp.org).
This would be the first step towards ending for-profit health care and guaranteeing everyone with quality, comprehensive care.
A Back-Door Bailout
But, the Obama Administration, the Democratic Party, and the Republicans are all beholden to the corporate interests that dominate the health care system. The Democrats took single payer “off the table,” to quote Sen. Max Baucus, the legislator who helped craft the final legislation and who collected nearly 25% of all his 2008 election campaign contributions from the health industry (opensecrets.org).
The most radical reform proposed by the Democrats was some kind of ”public option” to compete with private insurers. Despite polls showing that a majority of the public supported the public option, the Senate Democrats passed legislation in December with a filibuster-proof majority that killed off even a tiny mouse of a public option.
Without a substantial public option, all the insurance subsidies provided to low-income people totaling more than $447 billion will go directly to the private insurers in a back-door bailout. With more employers dumping coverage and more people unable to afford care, the ”market” for health care “products” is certainly more profitable when propped up with tax dollars and mandates.
Private hospitals and drug makers will also get more business as a result of new government intervention in health care. The New York Times wrote that drug makers “may have the clearest reason to celebrate” and not just because of new customers (21 March 2010).
The drug makers campaigned in support of Obama’s reform because Obama promised them he would not end Bush era legislation that pays inflated rates for Medicare drugs, contrary to election promises. Overturning that legislation would be a bigger step toward dramatically lowering prescription drug costs for Medicare users but it would put Obama at odds with the drug makers and their Wall Street backers.
Obama did not openly and directly intervene in the health care battle until late in the game. But, when he finally pulled the reins on his party, he showed he could push through reform without Republican support. If he wanted to, he probably could have passed a more far-reaching bill. But Obama chose to put forward a very timid, pro-corporate reform.
This should speak volumes about the nature of the Obama administration and the Democratic Party. They pretend to stand for “change” in elections against the Republicans. But, in reality, the Democrats are a reliable party of Corporate America.
It’s going to take a powerful, independent grassroots movement to fight for quality, comprehensive health care for all. Part of that struggle needs to include building an independent political movement as an alternative to the two parties that defend this dysfunctional Wall Street-backed system.
As of August 2009, Business Week pointed out that:
“Much more of the battle than most people realize is already over. The likely victors are insurance giants such as UnitedHealth Group, Aetna, and WellPoint. The carriers have succeeded in redefining the terms of the reform debate to such a degree that no matter what specifics emerge in the voluminous bill Congress may send to President Obama this fall, the insurance industry will emerge more profitable… Insurance CEOs ought to be smiling.”