Arnold-Care is a Bad Deal

Rose Ann DeMoro, TomPaine.com  

January 16, 2007

Rose Ann DeMoro is executive director of the California Nurses Association.

Sparked by the embarrassment of nearly 47 million uninsured Americans and, more notably, the growing agony of even large business that are staggering under intolerable premium costs, our long national health care scandal is finally beginning to prod our political leaders into action.

Unfortunately, many of the proposals being promoted with such fanfare may well exacerbate the crisis and simply prolong the disgrace.

The latest example comes from California Gov. Arnold Schwarzenegger, who has pledged to achieve “universal” coverage for all the state’s residents with a smorgasbord of every scheme floating around the national policy debate—with the exception of the only one that would actually work: some form of a national health care program or single-payer system, the course taken by every other industrialized country.

Like the Massachusetts law before it, on which it is largely modeled, the Schwarzenegger plan has produced fawning editorials across the country and calls from some politicians in state capitals and on Capitol Hill to use it as a blueprint for other states and Washington.

It has as its centerpiece a mandate forcing every individual buy health insurance or face penalties, along with state subsidies for the low income to buy insurance, a limited tax on businesses who fail to provide health benefits and promotion of health savings accounts.

All the components have a common theme: reinforcement and expansion of the role of the market in health care, the very same market that created the current mess by placing the pursuit of increased revenues and profits ahead of increased access, affordable care and enhanced quality.

Nothing better symbolizes the ascendancy of the market than the mandate on individuals to buy insurance. It stands the central premise of health care on its head—to help people, not to criminalize them. And the Schwarzenegger plan goes beyond Massachusetts, which simply sets tax penalties, by proposing that health insurance become a pre-requisite to getting a job or enrolling your children in school.

Individual mandates shift all the risk from insurers or government onto the back of individuals. Neither the Massachusetts nor the California plan includes limits on premiums or standards to assure the plans have comprehensive or uniform benefits.
With ever-escalating premiums, it’s a safe bet that the average family not eligible for the low-income subsidies will opt for the bare bones plan which, Schwarzenegger has recommended, would specify deductibles of up to $10,000.

Most would thus end up paying for most, if not all, of the health care services they actually use, in addition to the premiums the law would force them to buy. Further, many would simply gamble with their health by limiting medical visits and the prevention that is critical to reducing greater pain and suffering and higher overall healthcare costs down the road.

Someone is making a killing here, and you probably guessed who: California insurers would reap hundreds of millions in profits from the 6.5 million new customers marched into their offices at gunpoint by the state. No wonder Blue Shield of California CEO Bruce Bodaken says of the plan, "There’s a lot to like.”

It reflects a neoconservative political ideology that individuals are solely responsible for their health status, ignoring corporate and commercial factors, from cancer-causing pollution to contaminated agriculture to fast food.

California's model also undermines the social structure of pooled insurance—that healthier and younger individuals help pay the health costs for the less healthy through collective insurance pools. These would ultimately help everyone who will eventually need coverage, while reducing overall health care costs that mount when large numbers don’t have or don’t use health services.

Another stellar example of that free market fundamentalist philosophy is health savings accounts, a side product of the Bush administration's 2003 Medicare drug benefit fiasco.

HSAs are tax-free savings accounts to be used solely for out-of-pocket medical expenses, typically used in combination with a low-cost, high deductible catastrophic health insurance plan, in most cases offered by an employer as a cheaper alternative to the health benefits they currently provide. Like the Bush tax cuts, they ultimately look like another tax break for the wealthy.

HSAs bear strong similarities to individual mandates in encouraging the user to play Russian roulette with their health and discouraging the use of preventive care—hence the euphemism “consumer-driven care,” which could also be termed "lack of meaningful insurance" or "no care."

And, like individual mandates, HSAs do nothing to control rising costs or to reduce administrative waste. In fact, HSAs add a new layer of bureaucracy and profit to yet another well-heeled industry that will of course operate and manage the accounts—the financiers. The banks are scrambling to get into this booming new market and expecting $20 billion in HSA accounts by 2010.

There’s a better way. The opportunity has never been greater to mount a national campaign for real reform for a single payer system, as is embodied in H.R. 676 in Congress or S.B. 840 in California.

Single-payer plans, like Medicare, have everything the market-based plans lack: Americans will be covered with one high standard of benefits and care—as opposed to good care for the wealthy only—and portable. They assure choice of physician and other providers. By removing financial roadblocks to care, they emphasize prevention.

Single-payer plans reduce administrative waste (about three percent in Medicare, vs. over 30 percent with most private insurance), thus producing cost savings. They allow for common sense budgeting in which care, not profit is the primary focus, and they end the disgraceful insurance industry interference with care. And, they are accountable through public oversight.

H.R. 676, introduced by Rep. John Conyers, D-Mich.,, now has 78 congressional co-sponsors, and should get a hearing in the new Congress. California’s SB 840 was vetoed by Schwarzenegger last fall but will be re-introduced.

It’s time we joined the rest of the world in achieving this basic humanitarian right.