"A Tale Of Three Health Plans"

Barack Obama and John McCain are both proposing big changes in the U.S. health insurance system. Americans could end up paying more no matter who's elected.

And Americans asked for it.

Patients and doctors alike have voiced deep dissatisfaction with the way things work now. Instead of having the best health care system in the world, studies say, Americans actually pay more than anybody else -- 16% of gross domestic product compared with 11% in Germany or 10% in Canada -- and get worse care than people in Colombia, Cyprus or Saudi Arabia, among other countries, according to the World Health Organization.

So where's the radical change here? Let's start with McCain's plan for the health insurance offered from employers -- or maybe used to be offered. As expenses soar, employers are rapidly moving away from such plans and shifting costs to workers.

But employers still provide the bulk of Americans' medical insurance, covering more than 158 million Americans. For many U.S. workers, health coverage matters as much as wages. Under McCain's plan, that would change. For the first time, workers would pay income tax on the entire cost of their health care benefits. With the average premium for a family now above $12,000, that could mean a substantial tax increase for the middle class.

But McCain would also provide a medical insurance tax credit of $5,000 per family. So strictly in tax terms, it should be a wash for most American families, according to the Tax Policy Center.

McCain argues that "families should be in charge of their health care dollars and have more control over care." The unspoken premise is that moving the bill from the company to the individual would give people an incentive to control costs themselves.

Reality check: Skeptics say McCain's plan would encourage more employers to drop health coverage -- or drop it for lower-ranking workers -- possibly pushing tens of millions of Americans into the individual insurance market. Some of those workers might be unable to get insurance on their own because of their health status; the industry currently rejects almost a quarter of applicants age 50 and older.

And with the tax credit covering less than half the cost of the typical family premium, many people would be unable to afford coverage. The shift could also mean less money going to actual medical care: Employer-based health insurance plans typically keep administrative overhead to around 15% of costs. For individual policies, it's 30% to 50%.

Obama's alternative would mean radical change, too. He's proposing two big ideas. The first is a new U.S. national health plan, essentially creating a Medicare-style option for people younger than 65 and allowing it to compete in the marketplace with private insurance plans. Employers would have the choice of offering private health coverage or paying about 6% of payroll into the national plan.

Obama would exempt small businesses, which have loudly resisted any health insurance requirement in the past. Instead of compelling their support, he would offer them a tax credit covering up to half the cost of their employees' health care insurance and would trust that the incentive would get the job done, in most cases.

Both the national plan and private insurers would have to take all comers and would charge the same premium regardless of an individual's health status. Parents would be required to have health insurance for their children, and the plan would provide subsidies for low-income families.

What about doing nothing? Experts estimate that, eight years from now, 60 million people would be uninsured and that total spending on health care would eat up 20% of U.S. gross domestic product.

Nader is opposed to big insurance companies, "corporate welfare," and the "dangerous convergence of corporate and government power."

The Nader campaign favors replacing our fragmented, market-based system with a single-payer health plan - where the government finances health care, but keeps the delivery of health care to private non-profits, and allows free choice of doctors and hospitals for patients.

The U.S. health care system has many grave faults that could be remedied by a system of universal coverage, including serious gaps in coverage for: prescription drugs and medical supplies; dental, vision, and hearing care; long-term care; mental health care; preventive care for children; and treatment for substance abuse. A recent study by National Academy of Sciences' Institute of Medicine estimates that 18,000 25- to 64-year-old Americans die every year as a result of lack of coverage. That is 18,000 human beings every year, not counting younger Americans.

Health care should be provided by a national, single-payer health insurance program funded by the federal government and providing comprehensive benefits to all Americans throughout their lives. Under the current system, hundreds of billions of dollars a year are wasted by health-care sellers on billing, fraud and administrative expenses. Excess profits and high CEO (and other executive) salaries at large HMOs and other health-care companies add further costs.

A recent study by David U. Himmelstein, MD and Dr. Woolhandler found that our current system is wasteful and obstructively bureaucratic: Over 24% of every health care dollar goes to paperwork, overhead2, CEO salaries, profits, and other non-clinical costs. Because the U.S. does not have a system that serves everyone and instead has over 1,500 different insurance plans, each with their own marketing, paperwork, enrollment, premiums, rules, and regulations, our insurance system is both extremely complex and fragmented. The Medicare program operates with just 3% overhead, compared to 15% to 25% overhead at a typical HMO.

The impact of overhead on private physicians is also significant. Physicians in the U.S. face massive bureaucratic costs. The average office-based American doctor employs 1.5 clerical and managerial staff, spends 44% of gross income on overhead, and devotes 134 hours of his/her own time annually to billing. Canadian physicians employ 0.7 clerical/administrative staff, spend 34% of their gross income for overhead, and trivial amounts of time on billing (there's a single half page form for all patients, or a simple electronic system).

The Nader campaign finds persuasive a plan based on Physicians for a National Health Program's A National Health Program for the United States: A Physicians' Proposal, first published in the New England Journal of Medicine in 1989, and A National Long-Term Care Program for the United States; A Caring Vision, published in the Journal of the American Medical Association in 1991 (both available at www.pnhp.org).

Under PNHP's proposed plans:

Everyone would be included in a single, comprehensive public plan covering all medically necessary services, including acute, rehabilitative and long-term care, mental-health services, dental care, prescription drugs and medical supplies.

Everyone would have access to personalized care with a local primary care physician, and free choice of doctors and hospitals at all times. In a publicly-financed, universal health care system medical decisions would be left to patients and doctors, not to insurance companies or the government.

Health care sellers would stay private, and the health plan would provide for different payment schemes for health-care sellers, to minimize disruption to the existing system. The payment schemes would be designed to prevent profit motives from unduly influencing physicians, so there would be no structured incentives to recommend too much or too little care.

A transition fund would be established for insurance-company employees whose jobs would be eliminated due to the simplicity of the single-payer system.

Although we can easily provide universal, single-payer health insurance for the same amount that we spend and waste on health care now, public funding will be required to replace the portion now paid for by employers and individuals. Consider PNHP's model: A universal public system would be financed this way: The public financing already funneled to Medicare and Medicaid would be retained. The difference, or the gap between current public funding and what we would need for a universal health care system, would be financed by a payroll tax on employers (about 7%) and an income tax on individuals (about 2%). The payroll tax would replace all other employer expenses for employees' health care. The income tax would take the place of all current insurance premiums, co-pays, deductibles, and any and all other out of pocket payments. For the vast majority of people a 2% income tax is less than what they now pay for insurance premiums and in out-of-pocket payments such as co-pays and deductibles, particularly for anyone who has had a serious illness or has a family member with a serious illness. It is also a fair and sustainable contribution. Currently, over 44.3 million people have no insurance and thousands of people with insurance are bankrupted when they have an accident or illness. Employers who currently offer no health insurance would pay more, but they would receive health insurance for the same low rate as larger firms. Many small employers have to pay 25% or more of payroll now for health insurance - so they end up not having insurance at all.For large employers, a payroll tax in the 7% range would mean they would pay less than they currently do (about 8.5%). No employer, moreover, would hold a competitive advantage over another because his cost of business did not include health care. And health insurance would disappear from the bargaining table between employers and employees.

However, before assessing any income tax, the Nader campaign would tax the corporations polluting the environment, industries manufacturing addictive products, and stock speculation -- in addition to closing corporate tax loopholes. These tax law changes will be more than sufficient to make an income tax surcharge on most individuals unnecessary.

Providing universal health care can only be accomplished through a single-payer system: no country ever achieved universal coverage with private health insurance. President Harry Truman proposed universal health care in 1948 but was rebuffed by Congress. The time to act is yesterday. Let us end our disastrous descent into the corporatization of medicine and its callous consequences.

     Health care insurance is a very important issue to millions of Americans this election year. As I see it , John McCain's plan will only benefit well off Americans. Barack Obama's plan would benefit working class Americans much more but would still have competing multiple health insurance providers. Ralph Nader's Canadian style single payer health plan with physician choice for patients and low administrative costs for physicians would be much more easier and cheaper to implement and maintain than Barack Obama's plan. But Obama is missing one very important point. The Federal government could never afford universal health care in any form while at the same time engaged in war. No major economic or domestic reforms can become reality while America is fighting in Iraq, Afghanistan and Pakistan while threatening war with Iran and Russia. Neither Barack Obama or John McCain are "anti-war" candidates. Ralph  Nader, Cynthia McKinney and Chuck Baldwin are "anti-war" candidates.  War and universal health care cannot co-exist, in my opinion. What do you think?

tags: universal health plan  barack obama  john mccain  ralph nader  politics  takebackamerica  president  us  2008  

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