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POLICY/POLITICS: Health insurance without health care by Claudia Chaufan

Claudia Chaufan teaches sociology of health and medicine and health policy at UC Santa Cruz,. and is Vice President of California Physicians Alliance, the California Chapter of Physicians for a National Health Program, which argues for a single payer system. What does she think of ArnieCare–which looks like it suffered a fatal blow in a California Senate committee yesterday? You can guess but read on….

Doesn’t everybody agree that the American health care system is broken, that too many are often an illness away from bankruptcy or go without medical care altogether – and up to 18, 000 die each year for that reason? If so, have some of us lost our senses when opposing the “Health Care Security and Cost Reduction Act”, or ABX1 1, according to the New York Times, a “bipartisan blueprint to bring near-universal coverage to the most populous state”? Are we driven by ideology, callously ignoring that this “ambitious” legislation has the potential to expand health coverage to 3.6 million Californians without raising any taxes or creating new ones?

Some would argue that we are. But be warned: when something is too good to be true, it is probably not true. For instance, some of us are concerned with the fantasy numbers of Governor Swcharzenegger and Assembly Speaker Fabian Nunez, proponents of the bill, who, if they at all bothered estimate the costs of the bill, conveniently stopped their estimates by the fourth year. As legislative analyst Elizabeth G. Hill pointed out, assuming that the $250 premium level proposed by the bill is realistic (Hill thinks it is not), revenues will cover the costs of the first year of operation of the program, but by the fifth year annual costs will exceed revenues by $300 million. So in the best case scenario, five years from now we will be facing the same, or worse, problems we do today.

Other opponents of the bill, including the California Physicians
Alliance, a group of physicians supporting a social insurance,
single-payer model of reform, believe that what ABX1 1 indicates, in
addition to a belief in voodoo mathematics, is a tendency to commit the
capital sin in health policy: confusing health insurance with medical
care.

How so? Well, complying with a mandate to insure oneself against
unpredictable events, such as car accidents, does not guarantee
protection from costs incurred by those accidents: it only guarantees
compliance with the law, and protection against third party liability
claims. But unless driver’s insurance policies are truly comprehensive
one still faces the costs of fixing one’s car and of covering one’s
medical expenses. And comprehensive policies are not cheap. Likewise,
affordable, bare-bones health-care policies, if mandated, as does ABX1
1, will only help “consumers” comply with the law, but are likely to
leave them in the cold with their medical bills.   

Under our current system, heavily dependent on private insurers,
paying for medical care is insurers’ greatest “cost”. So like any other
reasonable business, whose ultimate goal is not to control costs of
medical care but costs of running their business, while maximizing
profits, insurers take great pains to incorporate sophisticated clauses
into their contracts to make sure that they will not have to pay more
for medical care than they collect in premiums, while leaving enough
spare change for CEOs’ salaries and shareholders’ stocks. And because
no regulations can force insurers to do business at a loss, however
much ABX1 1 boasts it will force insurers to sell policies to everybody
regardless of “pre-existing conditions”, it will not – it cannot –
force them to sell policies that will not meet their profit maximizing
goals. So, conveniently, ABX1 1 says nothing about how much “consumers”
will have to pay for policies offering more than “basic coverage”. In
fact, it does not even state what counts as “basic coverage”. Nor does
it compute out of pocket costs –deductibles, co-pays, co-insurance —
as “costs”.

But can’t the private sector produce policies that are affordable
and cover the medical care we need when we need it? The simple answer
is no. It can’t, and won’t, precisely because insurers have no
incentive, nor the capacity, to bring down the prices of medical care.
Their only incentive is to pay for as little as medical care as they
can get by with. So they do have the incentive to bring down the price,
not of medical care, but of policies – or “coverage”, as some like to
call them.  This is the sole point of the increasingly bewildering
“choice” of “consumer products” whose goal is to pass the buck back to
our pockets through deductibles, co-pays, co-insurance, and restricted
lists of providers (“preferred providers”). And it is the reason why
insurers cater to the healthier and younger, likely to need less care.
And these policies work fine, so long as you remain young, and never
get sick. The trouble is: who wants “choice” of policies? What people
want and need is choice of doctors and medical services.

Which is why only a system based on the principle of social
insurance, that spreads the risk over a large pool – all Californians,
or even better, all Americans – to which all participants contribute an
affordable proportion of their income, and where individuals are
guaranteed real choice, not of policies but of medical services,
constitutes meaningful universal health care reform. 

This legislation exists: it is the single-payer model proposed by
SB840, which last summer was vetoed by Gov. Schwarzenegger, who opted
for ABX1 1, presumably to assure that “every Californian has access” to
health insurance. But when it comes to health care, we will be on our
own.

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RitaStephenAnn Malone, RNMGPeter Recent comment authors
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Rita
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Stephen
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The basic question to ask is “do you want health or health care?” The two concepts couldn’t be different. We tend to think health care produces health, but show me the evidence on a population basis. The US deserves both health and health care but has neither. A universal health care system that is not profit care is unlikely to happen as long as there is a health care insurance industry around whose profits in 2005 exceeded $100 billion. Such industries with astronomical profits do not go away because they buy the influence they need for obvious reasons. Yes, some… Read more »

Ann Malone, RN
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Many nurses here in MA and across the U.S. share Ms. Chaufan’s concerns. Including me. I’ve worked as a nurse for 15 years and have been active with reform groups (state and nat’l) that represent a wide spectrum. From these long years of activism (which actually began 25 years ago when my sister developed schizophrenia and on the day her private insurance coverage ran out McLean Hospital discharged her, still actively psychotic … that event was just the beginning of her “troubles with the system” and our family’s long fight for needed care), I’ve come to some sobering observations that… Read more »

MG
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MG

Disregard the fact that provider delivery systems (particularly in regions of Northern California) where there is little to no competition have been one of the biggest driver of costs the last years in CA. Everyone has culpability in regards to the soaring costs of care.

Peter
Guest
Peter

What do people expect when all these state “reforms” are only designed to keep the juggernaut of cash flow going and growing, not to provide affordable healthcare. Politicians won’t hurt the corporations/guilds that support them – hence we get insurance but no healthcare. Insurance at the least is supposed to provide peace of mind. Healthcare insurance can’t even provide that.
“It can’t, and won’t, precisely because insurers have no incentive, nor the capacity, to bring down the prices of medical care.”
Single-pay anyone?