The Insurance Industry Is Hijacking the Uninsured

As Congress discusses a new national health plan, the health insurance industry has offered to voluntarily make reforms such as ending discrimination for age or previous condition. In return they are demanding a universal system in which all Americans will be required by law to purchase insurance from private for-profit companies. Government subsidies would cover those who can’t afford it. This will create a windfall of 46 million new customers.

Preserving Waste

The industry wants to perpetuate one of the most wasteful and ineffective health systems in the world. Our system of private insurance already costs twice as much per person as in any other country, but is rated only 37th in overall performance by the World Health Organization.

Three Parks for Single Payer

Three Parks Independent Democrats has endorsed the Single Payer approach to universal health care. We do not believe that private for-profit insurance should play a major role in the national plan being debated in Congress. We join the NY State Assembly and National Conference of Mayors in supporting the U.S. National Health Insurance Act of 2009, H.R. 676.

Single Payer Deserves a Fair and Open Hearing

As the debate unfolds in Congress, H.R. 676 is buried in the Ways and Means Committee. The result is that the only alternatives under active consideration in the House are plans that are either all private or almost all private. H.R. 676 should be brought out for debate so the case against private insurance can be clearly made.

Polls show that more than half of all Americans would support a public system. Many people are less able to afford their private coverage and employers, public and private, are cutting back on health benefits. The old ways are disappearing.

We Can Have the World's Best Health Care

The United States can have the world’s best health care system, or we can have one built on private for-profit insurance companies -- but not both. We now have a patchwork of over 1,300 health insurance companies each with its own rules and procedures. They waste enormous amounts of money just competing with each other, paying executive bonuses, advertising and of course taking a profit out of every premium dollar. Medicare, a public single payer system, does none of these.

The Public Option
In a Mixed System

In their campaigns for the presidential nomination, Obama, Clinton and Edwards all proposed a mixed system in which each person would have the choice of going with a private company or joining a public plan similar to Medicare. This could be a start provided it were priced to reflect the true administrative cost savings of public plans, it operated under the same rules as private plans, and, the public option was the default plan for new people coming into the system unless someone specifically chose a private plan.

Private Insurance - No Basis for a New System

Health insurance profits come from two sources: collecting more in premiums than are paid in benefits and speculating in the stock market. Neither of these inspires confidence as the foundation of a universal health care system. We have seen it over and over -- if we don’t get sick the insurance companies keep our premiums; if we do get sick they keep them anyway and make us fight to get our medical bills paid. Health care providers then hold us individually responsible for what the insurance won’t cover.

Private Insurance - Good Unless You Use It

Insurance is based on the principle of shared risk. The need for health care, however, isn’t a risk; in today’s world it’s a certainty. Insurance only works if it is never used by the vast majority of people who pay into it. For example automobile theft insurance works because the vast majority of cars are not, in fact, stolen. But, if you live in a neighborhood where a lot of cars are stolen, you either can’t get insurance or it is so expensive that you can’t afford it. Home owner insurance works because most homes are not destroyed by flood. But if you live within fifty miles of the coast, you can’t get insurance and are put in a state sponsored insurance pool. Insurance companies are still refusing to pay for Katrina damage. Insurance only works when most people don’t use it.

Single Payer Is a System
We Can Actually Use

Health care is a positive good at every stage of our lives. It isn’t a risk or something we might not need. Health care is like education: it's an ongoing necessity. It is something we want everyone to have and to use. We need a system that delivers the most health care at the lowest cost, not one based on the assumption that we won’t use it.

How a Single Payer System Works

Our thanks to Physicians for a National Health Program (PNHP) for the following material.

Single-payer national health insurance is a system in which a single public or quasi-public agency organizes health financing, but delivery of care remains largely private.

Currently, the U.S. health care system is outrageously expensive, yet inadequate. Despite spending more than twice as much as the rest of the industrialized nations ($7,129 per capita), the United States performs poorly in comparison on major health indicators such as life expectancy, infant mortality and immunization rates. Moreover, the other advanced nations provide comprehensive coverage to their entire populations, while the U.S. leaves 47 million completely uninsured and millions more inadequately covered.

The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers. Private insurers necessarily waste health dollars on things that have nothing to do with care: overhead, underwriting, billing, sales and marketing departments, as well as huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy. Combined, these wasteful and needless administrative expenses consume almost one-third (31 percent) of Americans’ health dollars.

Single-payer financing is the only way to recapture this wasted money. The potential savings on paperwork, more than $350 billion per year, are enough to provide comprehensive coverage to everyone without paying any more than we already do.

Under a single-payer system, all Americans would be covered for all medically necessary services, including: doctor, hospital, long-term care, mental health, dental, vision, prescription drug and medical supply costs. Patients would retain free choice of doctor and hospital. Doctors would retain autonomy over patient care.

Physicians would be paid on a fee-for-service basis according to a negotiated formula or receive a salary from a hospital or nonprofit HMO / group practice. Hospitals would receive a global budget for operating expenses. Health facilities and expensive equipment purchases would be managed by regional health planning boards.

A single-payer system would be financed by eliminating private insurers and recapturing their administrative waste. Modest new taxes would replace premiums and out-of-pocket payments currently paid by individuals and business. Costs would be controlled through negotiated fees, global budgeting and bulk purchasing.

• Universal, comprehensive coverage
  Only such coverage ensures access, avoids a two-class system, and minimizes expense:
  
  
• No out-of-pocket payments
  Co-payments and deductibles are barriers to access, administratively unwieldy, and unnecessary for cost containment

• A single insurance plan in each region, administered by a public or quasi-public agency
  A fragmentary payment system that entrusts private firms with administration ensures the waste of billions of dollars on useless paper pushing and profits. Private insurance duplicating public coverage fosters two-class care and drives up costs; such duplication should be prohibited

• Global operating budgets for hospitals, nursing homes, allowed group and staff model HMOs and other providers with separate allocation of capital funds
  Billing on a per-patient basis creates unnecessary administrative complexity and expense. A budget separate from operating expenses will be allowed for capital improvements

• Free choice of providers
  Patients should be free to seek care from any licensed health care provider, without financial incentives or penalties

• Public accountability, not corporate dictates
  The public has an absolute right to democratically set overall health policies and priorities, but medical decisions must be made by patients and providers rather than dictated from afar. Market mechanisms principally empower employers and insurance bureaucrats pursuing narrow financial interests

• Protection of the rights of health care and insurance workers
  A single-payer national health program would eliminate the jobs of thousands of people who currently perform billing, advertising, eligibility determination, and other tasks. These workers must be guaranteed retraining and placement.  For example, many of them could be employed in the new single payer system that will enroll and additional sixty four million newly covered members. It would be more economical to simply retire those who could not find jobs as was done for the longshoremen who were displaced by the introduction of container ships.

from the American Journal of Public Health January 2003, Vol 93, No.1