THE PASSAGE of the health insurance reform bill has been heralded with headlines comparing it to landmark legislation from the Civil Rights era. House Speaker Nancy Pelosi said the Senate bill answered the “call of history” and described the legislation as “liberating.” African American representative James E. Clyburn pronounced, “This is the Civil Rights Act of the 21st century.” The legislation was compared to the passage of Medicare and Social Security. President Obama said, “We pushed back on the undue influence of special interests.”
Unfortunately, this bill did no such thing. Its chief beneficiaries are pharmaceutical and insurance companies. They got the deal of the century, gaining 32 million more customers—now required by law to purchase their products—and $447 billion in taxpayer money. The bill gives insurers and drug manufacturers unprecedented economic and political power to increase profits and influence lawmakers.
Even those aspects of the bill that are positive—outlawing the denial of coverage to children for preexisting conditions, for example—aren’t without problems. In an example that portends the future, the New York Times reported: “Just days after President Obama signed the new health care law, insurance companies are already arguing that, at least for now, they do not have to provide one of the benefits that the president calls a centerpiece of the law: coverage for certain children with pre-existing conditions.” The insurers only backed down after the White House, embarrassed by the media spotlight, pressured them to begin coverage within a year.
It didn’t have to be this way. Polls have consistently showed majorities in favor of the government providing health care as a right for all, also known as “single-payer” health care. How is it, then, that the corporations, responsible for the decades-long health care crisis, are still in control of the health care system?
In anticipation of a health care overhaul, an army of lobbyists set up base camp inside the Beltway and immediately unleashed shock and awe amounts of cash on members of Congress. The health care industry has more than 3,000 lobbyists, six lobbyists for every member of Congress. More than 500 are well-connected, former congressional staff members. They spent over $400 million on lobbying, advertising, and campaign contributions. Liz Fowler, a former Wellpoint executive, is Senator Max Baucus’s chief health care adviser. She wrote most of the Senate bill that formed the basis of the law Obama signed.
In fact, the bill is almost identical to a plan written in 2009 by America’s Health Insurance Plans (AHIP). From the beginning, Congress worked closely with Karen Ignagni, the CEO of AHIP and President Obama held private meetings with Billy Tauzin, the former CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), to cut deals.
PhRMA spent an astonishing $40 million in a three-month period to ensure a profitable (for them) drug deal. The legislation forbids Medicare to negotiate drug prices, doesn’t allow drug re-importation from Canada, and brand name drug makers got 12 years of extended patent protection on biologic drugs, one of the most profitable classes of drugs. Even the Medicare “donut hole”—the loophole in Medicare prescription drug coverage that exempts insurance companies from having to pay for thousands of dollars of needed medication—won’t be eliminated until 2020.
AHIP and PhRMA profoundly influenced, partially wrote, bought, and paid for the Senate bill that is now law. It should come as no surprise that just below the surface of every reform measure is an escape hatch for insurers and a trap door for patients.
The legislation does set out to end a few of the insurance industry’s most outrageous practices: denying coverage to those with “pre-existing conditions” or charging them exorbitant rates, rescinding policies when a person becomes ill, and age and gendering rating. The deliberately arcane, subject-to-interpretation language of the 2,074-page bill, plus the proven ability of insurers to game the system, however, won’t entirely eliminate most of these practices. Some won’t be eliminated at all.
There are no regulations on the cost of premiums. Insurers can charge three times more based on age (the “near” elderly) and more for certain health conditions. Provisions allow insurers and employers to more than double charges to employees who fail “wellness” programs because they smoke, are obese, or have high blood pressure, high cholesterol or diabetes. This provision guarantees the continuation of racial, ethnic, and class-based health disparities because the poor and people of color suffer disproportionately from these health conditions.
Insurers can continue to rescind policies for “fraud or intentional misrepresentation”—the pretext for dropping coverage currently used. The bill doesn’t empower a regulatory agency to stop patients from being dropped when they get sick. Gender-rating, the practice of charging higher premiums for women, is not allowed in individual and small-group markets, but in the new insurance exchanges’ larger group plans (more than 100 employees) gender-rating is permitted. Workers in traditionally female occupations like nursing, social work, and clerical work will be forced to pay more money for health care at wages lower than men’s. It amounts to double discrimination.
The Democratic leadership, from President Obama to House Speaker Nancy Pelosi, threw the reproductive rights of women under the bus in order to pass the bill. It was a craven capitulation to anti-abortion, religious fanatics inside the Democratic Party. According to NOW president Terry O’Neill,
Contrary to the talking points circulated by congressional leaders, the bill passed today ultimately achieves the same outcome as the Stupak-Pitts Amendment, namely the elimination of all private as well as public insurance coverage for abortion. It imposes a bizarre requirement on insurance plan enrollees who buy coverage through the health insurance exchanges to write two monthly checks (one for an abortion care rider and one for all other health care). Even employers will have to write two separate checks for each of their employees requesting the abortion rider.
These onerous requirements were designed to make abortion coverage an accounting and legal nightmare and to drive insurers and employers to drop abortion coverage. The bill also allows states to prevent plans offered through their insurance exchanges from covering abortions, something that anti-abortion proponents will now push on a local level.
The anti-abortion zealots got one more concession out of Obama, who was more concerned with placating them than with standing up and defending a woman’s right to choose. He signed an executive order ensuring no federal money would be used for elective abortions even though the Hyde Amendment already guarantees that.
Millions of undocumented immigrants are completely left out of the new health care legislation. That’s one promise President Obama kept when he confirmed in a speech on health care to a joint session of Congress last year, “The reforms I’m proposing would not apply to those who are here illegally.”
The bill, moreover, will cut Medicare expenditures by $500 billion. Some of these cuts are to the Medicare Advantage Plans, Bush’s effort to shift Medicare money to private insurers. But at least $40 billion will be slashed from funds given to safety net payments for hospitals that provide care to the uninsured and underinsured.
The “individual mandate” was the key demand the insurance industry insisted on and won. It forces millions to buy a defective product: expensive, stripped- down health insurance plans with high deductibles and out-of-pocket costs. It criminalizes those who don’t buy health insurance. The Internal Revenue Service (IRS) will punish scofflaws by collecting up to 2 percent of their annual income. The Congressional Budget Office estimates annual premiums in 2016 will range from $7,300 to $7,800 for an individual and for a family from $13,100 to $21,300. The working poor will be ?eligible for taxpayer subsidies to purchase private insurance.
As Steffie Woolhander told Socialist Worker, the mandatory coverage provision will still price many people out of access to health care even if they have insurance:
People will have to spend up to 9.5 percent of their income for policies that cover only 70 percent of health care costs. So you would still be in a situation of having insurance that was so skimpy that you would have difficulty getting care when you needed it... So it’s extremely expensive if you get sick and have to use it once you buy it. That means that many people will still lack access to care—because they won’t be able to afford to use their insurance policy, even if they own it.
Some people may opt to pay the penalty because they still won’t be able to afford the mandatory plan.
The mandate is modeled on Massachusetts’ failed experiment to control health care costs while providing care to everyone. Insurance premiums in the state are the highest in the country and the number of uninsured is going up. That didn’t stop the insurance industry from asking for large premium increases (up to 34 percent), like insurers recently did in California. The temerity of Anthem Blue Cross, a subsidiary of Wellpoint, to raise premiums in California, a state in the midst of a well-documented financial meltdown, caused such an outrage it triggered a congressional hearing.
Medicaid will expand to cover an estimated 16 million people, a positive change. But the expansion of Medicaid could have been enacted without the passage of the larger health care reform bill. The Medicaid program has been consistently underfunded. States in fiscal crisis are cutting people from the rolls, reducing benefits and payments to providers. As a result, more and more doctors refuse to provide medical care to patients with Medicaid coverage. The bill allocates money to the states to expand Medicaid, but state officials are already complaining it isn’t enough to cover the millions of new enrollees who will be eligible. It’s important to remember, too, that Medicaid is not an entitlement and eligibility requirements can be changed and recipients cut from the program.
The bill also establishes the precedent of taxing workers’ employer-provided health care benefits, a change labor unions vowed to resist. Instead, the House of Labor collapsed. Richard Trumka, the president of the AFL-CIO, was summoned to the White House and within days, cut a deal that for the first time would tax workers’ health care benefits. Rose Anne DeMoro, the executive director of National Nurses United, explained the impact of the tax:
Though modified, the tax on benefits remains, a 40 percent tax on plans whose value exceeds $10,200 for individuals or $27,500 for families. With no real checks on premium hikes, many plans will reach that amount by the start date, 2018, rapidly. The result will be more cost shifting from employers to workers and more people switching to skeletal plans that leave them vulnerable to financial ruin.
Most of the bill’s provisions, which will still leave 23 million people without insurance, don’t take effect until 2014. The lag time between the passage and implementation of the bill will allow insurers to find ways to weaken the legislation even further. Wendell Potter, a former executive at Cigna turned whistleblower, warned:
The insurance companies have dozens if not hundreds of lawyers and lobbyists scouring this legislation for any possible loopholes they can take advantage of. They absolutely will look for any way they can to circumvent any part of the legislation that they think might make them spend more money for medical care than they want to spend. One thing in particular is they’ll be trying to manipulate how regulations are written. The industry will spend an enormous amount of money to try to influence how those regulations are written.
What about the opposition to the Senate bill? As sure as night follows day, progressive Democrat Dennis Kucinich, a staunch critic of the bill and a promoter of single-payer up until the eleventh hour, and sometime socialist Sen. Bernie Sanders, fell on their swords and sold out the movement for single-payer. Both made dramatic, unapologetic speeches explaining they had no choice but to vote for the bill. Kucinich, opting for protecting his party over the needs of ordinary people, explained, “We have to be very careful that the potential of President Obama’s presidency not be destroyed by this debate.”
Only Physicians for a National Health Program (PNHP), Health CARE-Now!, and other grassroots, single-payer organizations stood up to the enormous pressure to compromise and publicly opposed the bill to the end.
Leaders in the single-payer movement argued that the legislation doesn’t end the crisis because it doesn’t attack the roots of the problem: the market-based, for-profit insurance system that treats health care as a commodity. In fact, the legislation does the opposite—it increases the insurance and pharmaceutical corporations’ death grip on health care and replicates and reinforces all the discriminatory divisions in the system: sick vs. healthy, old vs. young, women vs. men, citizen vs. undocumented, and rich vs. poor. PNHP put it well in a statement it issued after the vote: “We take no comfort in seeing aspirin dispensed for the treatment of cancer.”