News & Opinion

California Nurses Statement on Gov. Health Plan

January 8, 2007

For Immediate Release

Contact: Charles Idelson, 510-273-2246

 

The California Nurses Association today said it welcomed the decision of Gov. Arnold Schwarzenegger to address the state’s escalating healthcare crisis. But, said CNA President Deborah Burger, the sum of his proposals may ultimately amount to “little more than a fresh coat of paint on a collapsing house.”

 

CNA commended portions of the governor’s plan that would require health plans to end denials of coverage based on age or health status and assurance of health services for the undocumented. But, overall, “the package has a number of gaping holes,” said Burger.

 

These begin with the call to “criminalize the uninsured by forcing them to buy insurance, a plan that shifts the costs and risk from the insurers to individuals, won’t work for millions of Californians, and is a huge gift to the insurance industry,” said Burger.

 

“What we don’t see is any discussion of what type of health coverage people will buy. There are no limits on skyrocketing health premiums, no requirements on what will be included in the required plans, and a new call to deregulate existing public protections.”

 

Consequently, Burger said, “it’s likely many Californians will end up with cut-rate plans that discourage people from using their health coverage, have huge out-of-pocket costs, and expose them to financial ruin in the event of a serious illness or accident.”

 

Burger also criticized the proposal to shift some $2 billion in tax funds currently in tax money that now goes to hospitals to cover indigent care and use it to buy insurance for the uninsured. “It takes money used for direct delivery of care, and hands it to the insurance industry, losing off the top the 25% to 30% now consumed by the insurers’ administrative waste. It is also likely to escalate privatization of healthcare by reducing revenues for public hospitals and clinics, leading to more closures of public facilities.”

 

Additionally, she added, the plan fails to address price gouging by the pharmaceutical industry. The bill enacted last year provides for only voluntary reductions by the drug companies.

 

Much of the plan resembles the Massachusetts health plan, where only 300,000 are uninsured compared to California’s 6.5 million, and which is already experiencing problems in funding and assuring people sign up, Burger noted.

 

“Ultimately, this won’t fix what’s wrong with our healthcare system – the reliance on the market that will continue to put its profits and revenues above the health and well being of Californians.

 

“If the governor is truly committed to a goal of universal coverage, effective cost controls, and improving the quality of care, he should join us in supporting a single-payer system, the only way to achieve those goals.” A single-payer bill, SB 840 by Sen. Sheila Kuehl, was vetoed by the governor last year. It will be reintroduced this year.

Bush Plots Health-Care Push

Employer-Plan Tax Change May Aid Coverage for the Needy

 

By JOHN D. MCKINNON and DEBORAH SOLOMON
Wall Street Journal, January 16, 2007; Page A6

 

WASHINGTON -- With health-care costs emerging as one of voters' biggest domestic concerns, President Bush is considering promoting a tax-code change making it easier for people to buy health insurance for themselves in the open market, rather than relying on employers.

 

The president's coming State of the Union address and annual budget proposal are likely to include other ideas for easing the crunch, Republicans close to the White House said. Those would build on the administration's efforts to encourage states to create special insurance pools for lower-income individuals and small businesses. The administration also is likely to make another push for expanding health savings accounts. The accounts, first authorized in 2003, allow people to save tax-free for health-care needs provided they choose low-cost, high-deductible coverage.

 

The ultimate idea is to expand health-care coverage while reducing cost pressures, in part by giving people more of a financial incentive to be smart shoppers.

 

Mr. Bush's emphasis on health issues comes as cost and coverage complaints are drawing attention in Washington -- and in state capitols throughout the country. As employers shift health coverage burdens to employees, state governors -- namely Republicans Mitt Romney of Massachusetts and Arnold Schwarzenegger of California -- as well as the new Democratic Congress have paid more attention to the issue, putting new pressure on the president to join the debate.

 

The examination of health care comes as Mr. Bush looks to define a domestic agenda in the final two years of a presidency that increasingly is being overshadowed by Iraq and hemmed in by newly empowered Democrats. In a recent op-ed in The Wall Street Journal, Mr. Bush listed "affordable health care" among "the biggest issues facing the American people" along with energy security and comprehensive immigration reform. He added "I look forward to working with Congress on these difficult issues." White House spokesman Tony Fratto declined to comment on specific proposals under consideration but said: "The President has said that for all Americans, we must confront the rising cost of care, strengthen the doctor-patient relationship, and help people afford the insurance coverage they need."

 

While President Bush advocated some health-care changes last year -- an expansion of health savings accounts and computerization of patient records -- they were more modest than what is currently under consideration.

 

The big new idea this year could involve tax changes around employer-provided plans. While officials said major decisions are still being made, the White House tax proposal likely would cap some taxpayers' ability to exclude employer-provided health care from their income, as part of an effort to broaden availability of health-care insurance.

 

Currently, health-care benefits aren't subject to federal income tax, no matter how generous the benefit -- a factor many economists have said has contributed to health-care inflation. The Bush administration is considering a change that would tax some executives' "gold-plated" plans and possibly even affect some rank-and-file union members with particularly generous benefits. The savings would be used to pay for tax credits for lower-income people who buy their own health insurance or for state insurance pools, or both. The effect could be relatively small now but could grow over time.

 

The current policy of excluding employer-provided health insurance benefits from employees' tax returns costs the government more than any other tax policy -- about $900 billion between 2006 and 2010, counting all health-related breaks. That is more than either the mortgage-interest deduction or the various breaks for retirement savings. Thus, even tinkering around the edges of the exclusion could produce large amounts of revenue for subsidizing coverage for lower-income people.

 

Some of the administration's possible proposals, particularly the changes to the tax code, are likely to meet resistance from Democrats, who worry about further undermining the market for employer-provided coverage and driving up costs for those who remain in the system.

 

Helping states fix the problem of the uninsured could attract bipartisan support. Democrats said much depends on whether the Bush administration backs up its rhetoric with money. A few Democrats -- as with their Republican counterparts -- are willing to encourage a shift from employer-provided plans to state-sponsored ones.

 

State insurance pools have begun to appear in states such as Massachusetts in recent years, using funding from the federal government's insurance programs for low-income people, such as Medicaid. The trend has been fueled by looser federal restrictions on how funds from low-income health entitlement programs can be used. Experts have said they expect the administration to continue that in the coming reauthorization of one of the federal programs, the State Children's Health Insurance Program.

 

Mr. Bush's proposals likely will be the starting point for a Washington debate on health-care coverage plans.

 

Tomorrow, a bipartisan group including Sen. Jeff Bingaman (D., N.M.) and Sen. George Voinovich (R., Ohio) plans to introduce legislation that would provide grants to states to craft their own plans for helping the uninsured.

 

Last week, Massachusetts Sen. Edward Kennedy, who chairs the Health, Education, Labor and Pensions Committee, called for eventually expanding Medicare to all Americans, regardless of age, starting with people 55 to 65, and those younger than 20. Currently, Medicare generally guarantees health-care coverage to those age 65 and older.

 

Political experts have said the focus on health care reflects the effect that soaring costs are having on voters, particularly aging Baby Boomers, who are using more health care and worrying about costs. Polls show that, increasingly, people tend to rank health care among the biggest financial woes they face, says Karlyn Bowman, a polling expert at the American Enterprise Institute.

 

Write to John D. McKinnon at This email address is being protected from spambots. You need JavaScript enabled to view it.3 and Deborah Solomon at This email address is being protected from spambots. You need JavaScript enabled to view it.4

 

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Medicare for All: The Only Sound Solution to Our Healthcare Crisis

 

By Guy T. Saperstein, AlterNet
January 16, 2007
http://www.alternet.org/story/46550/

We all know that America's healthcare system is collapsing. Andy Stern has written that America's employer-based health insurance system is "dead." Auto executives troop to the White House complaining that they are not competitive with foreign automakers because they pay $1,500 per car for health insurance. Some of the biggest laughs in movies come when America's healthcare system is ridiculed. Politicians, even Republicans, are offering solutions.

 

 

In the Greenberg Quinlin poll of November 2006 voters, 22 percent ranked healthcare as the most important issue; likewise, MoveOn.org recently polled its members, received over 100,000 responses, and healthcare ranked as the No. 1 concern.

 

To add substance to these observations, consider the following: Not only are 47 million Americans uninsured (approximately 18.5 percent of the insurable market), 41 percent of Americans with incomes of $20,000 to $40,000 did not have health insurance for at least part of 2005, up from 28 percent in 2001; 53 percent with incomes under $20,000 lack health insurance.

 

The number of people without health insurance rose 16.6 percent from 2001 to 2005; average health insurance premiums for a family of four are $10,880, which exceeds the annual gross income of $10,712 for a full-time, minimum-wage worker; lack of insurance causes 18,000 excess deaths a year; people without health insurance have 25 percent higher mortality rates; and, 59 percent of uninsured people with chronic conditions such as asthma or diabetes skip medicine or go without care.

 

There are additional costs to the haphazard U.S. healthcare system: More than 50 percent of the U.S. population has medical debt problems; between 1981 and 2001, medical-related bankruptcies increased an astounding 2,200 percent and 55 percent of personal bankruptcies are now caused by illness or medical debts, despite the fact that over 75 percent of the bankrupts had health insurance at the onset of bankruptcy and illness.

 

Contrary to popular conceptions, the average medical bankrupt was a 41-year old woman with children, some college education; over half owned homes and over 80 percent were in the middle or working classes.

 

But for the insured, the United States has the best quality healthcare in the world, right? Wrong.

 

The World Health Organization ranks healthcare systems based on objective measures of medical outcomes: The United States' healthcare system currently ranks 37th in the world, behind Colombia and Portugal; the United States ranks 44th in the world in infant mortality, behind many impoverished Latin American countries. While infant mortality in the United States is skewed toward poor people, who have rates double the wealthy, the top quintile of the U.S. population has infant mortality rates higher than Canadians in the lowest quintile of wealth.

 

Out of 30 developed nations, life expectancy in the United States ranks 21st; life expectancy in the United States is 4.6 years less than Japan, 2.1 years less than France and 2.6 years less than Canada. The United States has fewer physicians, nurses and hospital beds than most developed nations. In the United States, 28 percent say it is "difficult to get care"; in most European countries, Japan, Australia and New Zealand, 15 percent say that. In terms of continuity of care (i.e., five-plus years with the same doctor), the United States is the worst of all developed nations. By every objective measure, the United States has a second-rate healthcare system.

 

OK, the U.S. healthcare system is not performing very well, but that must be a funding problem, right? Wrong.

 

The United States has the most expensive healthcare system on the planet. Even including the 47 million uninsured, the U.S. healthcare system costs almost double per capita what single-payer systems in Europe, Japan and Canada cost; in the United States, healthcare costs were $5,635 per person in 2005.

 

By contrast, in Japan, with life expectancy 4.6 years more than the United States (presumably a cost-increasing factor), healthcare costs were $2,139 per person; in the United Kingdom, $2,232; Sweden (the ultimate "welfare state"), $2,520; France, $2,903; and, Canada, $3,001.

 

And, this is not just an individual problem; this is a national problem. Healthcare system costs in the United States are 16 percent of GNP (and currently increasing 14 percent per year); no other country in the world has healthcare costs which exceed 11 percent of GNP and the average among developed nations is 9 percent. As noted above, these high costs are making the U.S. uncompetitive in many areas.

 

Why is the U.S. healthcare system so expensive? Administrative costs, marketing and profits account for 22 to 31 percent of the U.S. healthcare dollar (I recently heard Edward Kennedy say these costs were 33 percent, but I have not seen documentation of that number). By contrast, overhead costs in single-payer systems (including Medicare) typically are 3 percent.

 

In America's for-profit private insurance healthcare system, medical technicians must contend with hundreds of different forms, billing procedures, regulations and requirements from hundreds of insurance companies; U.S. healthcare companies spend money for advertising and marketing; and, the U.S. healthcare system is based on profit. Since 1970, the number of medical doctors in the United States has increased 40 percent, while the number of medical administrators has increased almost 3,000 percent.

 

We are paying for a massive, inefficient bureaucracy. The increasing cost of prescription drugs also is increasing the healthcare bill, and U.S. drug costs are the highest in the world; Americans pay 30 percent to 80 percent more for prescription drugs than citizens of any other country.

 

You might think that this excess money goes into developing new drugs, but you would be wrong: Only 13 percent of drug costs go to research and development, and little of that goes for pioneering new drugs to deal with life-threatening conditions; 51 percent goes to marketing, administration and profits.

 

Recently, one of my adult sons went to a medical office for testing. On completing the tests, he was handed a bill. The bill had two prices: One was the insurance price, $969.25, the second was the "cash pay price," $678.00 -- exactly 30 percent less than the insurance price. What more do you need to know about the excessive cost and inefficiency of the American private health insurance system than that it costs 30 percent more than the underlying medical services are worth?

 

The public understands this. In the California Field Poll released on Jan. 3, 2007, California voters were asked why healthcare costs are increasing: The No. 1 reason given by voters was "high profits" (65 percent); the number two reason was "waste, fraud and inefficiencies in the current system" (60 percent).

 

The answer to this problem is not simply "universal health insurance." "Universal healthcare" that does nothing more than bring more people into the most expensive and inefficient private insurance-based healthcare system on the planet would accelerate the total collapse of the system for everyone.

 

No credible economist thinks America can sustain healthcare costs exceeding 20 percent of GNP (itself a gigantic burden and drag on economic growth) and adding 47 million more people to the current decrepit system would bring the United States to the 20 percent threshold. Since the costs of our private insurance system currently are rising at the rate of 14 percent per year, the system is unsustainable, by any rational economic analysis.

 

Howard Dean recently identified healthcare as an emerging top-tier political issue and endorsed single-payer, saying at a Democracy Alliance conference in Miami, "It is obvious we are going to need to work toward some form of single-payer system, just like every other industrialized nation. In the next two years, we should expand Medicare and Medicaid to cover every uninsured person under 25." Dean is an M.D., by the way.

 

Surely the healthcare system which every other industrialized nation in the world relies on, which is both less expensive and offers improved medical outcomes, and which many think is the only viable and sustainable healthcare system, deserves serious consideration by American progressives and the public, but, to date, single-payer is not being researched and evaluated in America.

 

I am not arguing that the perfect must be the enemy of the good; there may be intermediate steps that could be taken, rather than proposing that America swallow the big enchilada in one bite. Clearly, Howard Dean's proposal to cover everyone under 25 is a step down the incremental path, and, as he suggested, probably not even a very expensive one.

 

What is unacceptable would be to have a political debate which could change healthcare in America for the next 20-30 years, or more -- in the process helping to decide elections -- without sound progressive ideas and input and without serious consideration of single-payer.

 

The biggest objection to single-payer I have heard from Democrats is not that single-payer is not a good system, or even the best system, but that it will be attacked as socialized medicine and therefore is not politically viable. Of course, a single-payer system is not socialized medicine.

 

Medicare is a single-payer system -- a very popular one, by the way -- and single-payer systems such as Medicare do not employ any doctors or own any hospitals or medical facilities, let alone create bureaucracies approximating the bloated, inefficient bureaucracy the private insurance model has created in America.

 

Rather than hundreds of payers (insurance companies) and thousands of different forms, regulations and procedures, there would be one payer and one set of forms and procedures. Single-payer also would offer more choice of medical providers; unlike the current system, where patients are limited to panels of providers, in a single-payer system, patients go to any doctor they want, submit a national health insurance card and the government pays -- just like Medicare.

 

Single-payer is the simplest, most efficient, system of all. While single-payer is a government-paid program, American taxpayers already pay more than 60 percent of healthcare costs in America (including tax subsidies). With that much money invested, can't we demand a system that covers everyone at reasonable cost and with improved performance? Why should we continue to allow 22 percent to 31 percent of healthcare costs to be swallowed by bureaucratic inefficiencies, marketing and profit?

 

John Garamendi, formerly California's insurance commissioner and now lieutenant governor, campaigned in favor of single-payer and said repeatedly on the stump: "Are you aware that for 40 years, the United States has had a universal single-payer healthcare system that allows every participant to choose their own doctor, its administrative cost is one-tenth the cost of private insurance and people do everything possible to get into the system (i.e., live to 65). It is Medicare, and no one calls it socialized medicine."

 

Of course, the real reason people back away from a single-payer system is fear of insurance industry wrath. We all remember the "Harry and Louise" ad campaign the health insurance industry unleashed on HillaryCare 12 years ago. So, is anyone not afraid of the insurance industry? Is anyone willing to challenge insurance industry profits?

 

The answer, surprisingly, not only is yes, but the person apparently willing to take on the big ugly bear is a pro-business Republican -- The Terminator.

 

On Jan. 8, California Gov. Arnold Schwarzenegger unveiled his plan to insure all Californians, and while the proposal itself continues to rely on the private insurance model, it provides that insurance companies would be required to spend 85 percent of their revenues on medical services; in other words, insurance company overhead, marketing, administrative costs and profits, would be capped at 15 percent -- roughly half of what they currently are.

 

Does anyone think the insurance industry is not going to fight this incursion on its profits with all its might? Of course it will, and it will fight a halving of its profits just as vigorously as it will fight a single-payer system.

 

So, if a Republican, pro-business governor of a major state is willing to take on the insurance industry, should progressives be any less courageous in pursuit of real healthcare reform? In short, a very gifted Republican politician has made a calculated decision that fighting the insurance industry not only is not going to hurt him politically, it is going to get him elected to the United States Senate in 2010. It is good politics.

 

The other political objection to single-payer I have heard is that it is simply too big an idea and too big a proposal.

 

While this objection is debatable, single-payer need not be adopted whole in one bite; it can be adopted and implemented piece-meal, just as Howard Dean suggested when he said in the next two years we should work to cover the uninsured under age 25 in an expanded Medicare.

 

There are other inclusions which could be adopted incrementally, such as expanding Medicare to include everyone with incomes under $20,000 per year, then increasing income thresholds until everyone is covered; or, it would be possible to work in age-based increments by expanding Medicare into ever-younger categories of Americans. Conservatives understand the power and effectiveness of "slippery slope" proposals (banning partial birth abortion is one such "slippery slope").

 

Let's put the healthcare agenda on the "slippery slope" to Medicare for all, not work toward more private insurance and inevitable healthcare system insolvency -- where most current healthcare proposals (including Democratic) are headed.

 

Before leaving the subject of political viability, let me briefly address the healthcare proposal put out by the Center for American Progress, which threatens to become the Democratic Party proposal. In general, CAP's proposal would provide coverage for the uninsured through the existing private insurance system, funded by a national ad valorem (i.e., sales) tax. I had a long conversation with CAP's CEO, John Podesta, shortly after it was published, and while John is intellectually honest enough to recognize the advantages of single-payer, his advocacy of the CAP plan was more based on political viability than operational efficiency or effectiveness.

 

In any case, trying to impose a regressive national sales tax to fund insurance for 47 million people through an expensive, inefficient system not only makes no economic sense, I fail to see how it would be politically attractive, or even politically possible. It would make Democrats look like your daddy's Democratic Party -- you already can hear the Republicans, "Here they go again, another big, costly Democratic welfare program."

 

By contrast, a single-payer system could cover everyone, including the 47 million uninsured, at a net cost-savings, as the savings obtained by cutting overhead from 22-31 percent down to 3 percent would more than pay for providing coverage for the 47 million currently uncovered. It makes far more sense to approach healthcare reform as an issue which affects everyone, than it does approaching it as an issue that affects only the poor, to be solved by another welfare program, funded by more taxes -- in this case, a regressive tax.

 

America's current healthcare system works well for no one, and it would be better to seek a genuine progressive fix on the basis that we're all in this together and need to find solutions that work for everyone, rather than special pleading for some at the expense of others. The uninsured have to be covered, to be sure, but let's do it in the context of solving the real problems of American healthcare, not exacerbating the structural problems of the current system.

 

Healthcare is a $2 trillion industry in America, and we are fast approaching a "perfect storm," where individual consumers, voters, business and the government are beginning to realize the current healthcare system not only is not healthy, it is unsustainable. Is the range of discussion of "serious" healthcare proposals limited to proposals that offer only variations on the failed private insurance model? Howard Dean apparently doesn't think so.

 

If progressives are going to project progressive solutions and be part of this debate, they will need to do so quickly because the system is fast-collapsing and decisions are going to be made with or without us.

 

Guy T. Saperstein is a Democracy Alliance partner and past president of the Sierra Club Foundation; previously, he was one of the National Law Journal’s "100 Most Influential Lawyers in America."

© 2007 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/46550/

TEED UP

Health-Insurance Gap Surges as Political Issue

Democrats, Governors, Business Push Change,
But Fixes Vary Widely

 

By DEBORAH SOLOMON and DAVID WESSEL
Wall Street Journal, January 19, 2007; Page A1

 

Suddenly, the long-festering issue of providing health coverage to the one in six Americans who lack it seems to have leapt to the top of the national to-do list.

 

On Tuesday, an unlikely coalition of the Business Roundtable, AARP and the Service Employees International Union called for "affordable quality health care for all."

 

On Wednesday, Pennsylvania's governor became the latest to offer a way to cover the uninsured in his state.

 

Yesterday, another strange-bedfellows coalition, ranging from a health insurers' trade group to a liberal advocacy group, unveiled a plan to subsidize health premiums with a mix of tax credits and federal spending. And Oregon Sen. Ron Wyden dusted off a plan to make people buy insurance, with employers chipping in. On Tuesday, President Bush is expected to talk about his ideas for shrinking the ranks of the uninsured.

 

Thrusting the long-running issue to the fore are political and economic forces that have been building for years but are given new force by political events. Not only have the Democrats taken over Congress, but state political leaders, including Republicans such as California Gov. Arnold Schwarzenegger, are moving on their own to change the system. And U.S. companies increasingly complain that the current employer-paid insurance system puts some of them at a disadvantage -- either globally or vis-a-vis firms that won't provide insurance. (See related story.2)

 

A SURGING ISSUE

 

The News: Many Americans' lack of health insurance has abruptly become a hotter political issue, with proposed fixes proliferating and states taking action on their own.

The Cause: Political winds shift and big companies say employer-paid insurance puts them at a global disadvantage.

Bottom Line: Disagreement over cures may prevent change, but issue will be hot in 2008 presidential race.


All this increases the chances that Washington will try to tackle at least a piece of a health-care problem that has only grown bigger since the Clintons' failure at comprehensive reform back in 1994. But it still doesn't necessarily mean anything big will happen, at least nationally, in the next couple of years. The primary reason: There's nothing approaching a consensus on what to do.

All this increases the chances that Washington will try to tackle at least a piece of a health-care problem that has only grown bigger since the Clintons' failure at comprehensive reform back in 1994. But it still doesn't necessarily mean anything big will happen, at least nationally, in the next couple of years. The primary reason: There's nothing approaching a consensus on what to do.

 

There is, for sure, a growing consensus that the rising number of Americans without health coverage is a problem, not just for them but also for employers and governments that pay the bills. U.S. auto companies "are paying for the emergency-room treatments of people who can't afford it," complains Tom Lasorda, chief executive of DaimlerChrysler AG's Chrysler unit. "I'm paying for it because the rates go up because I have to cover the cost."

 

But there is a splintering of approaches to the problem. Some favor bigger government. Others would bolster the decaying system of employer-sponsored insurance. Still others would make health insurance more like car insurance and have people buy their own, aided by various subsidies.

 

THIS WEEK IN HEALTH CARE

 

See a list of events and announcements related to health care coming up this week.

 

Those who are optimistic that the recent talk portends action see a harmonic convergence of interests that suggests the latest round of press conferences and plans offered by coalitions will produce something tangible. Andrew Stern, president of the Service Employees International Union, or SEIU, says that when the Clinton health initiative failed, "business believed that they could somehow manage health costs, and the economy was far less global." The world has changed. "Having had 13 more years of increasing costs...," he says, "people realize that you can't manage this as a company -- we have to manage this as a country."

 

The problem has long been apparent and is getting worse. The number of Americans without health insurance is growing, and rising premiums have lessened employers' willingness to provide it. Though a majority of Americans still get insurance through the workplace -- a practice tracing to the 1940s, when businesses offered fringe benefits in lieu of higher wages -- the fraction of employees offered coverage at work fell to 77.4% in 2005 from 81.2% in 2001.

 

At last tally, the Census Bureau said 15.9% of Americans, 46.6 million in all, lacked health insurance. Government programs -- Medicare, Medicaid and the 10-year-old State Children's Health Insurance Program -- pick up the elderly, the disabled and the very poor.

 

Nearly 70% of the uninsured are in families with at least one full-time worker. In some cases, the employer doesn't provide coverage. In others, the employee can't afford it or doesn't take the coverage that employers offer, according to the Kaiser Commission on Medicaid and the Uninsured, a private foundation-backed effort.

 

So by no means are the uninsured all poor; more than a fifth live in families with incomes above $40,000. And it would seem they or their employers can afford to pick up a part of the tab -- an important factor in making some of the proposals floating around feasible.

 

The heightened political focus on the issue reflects pressure from two sources. One is voters' anxieties, both about the cost of care and about the risk of losing insurance for reasons such as changing jobs. "A member of Congress goes home and two issues come up every time you get together with folks: One of them is Iraq, and one of them is health care," says Sen. Wyden, an Oregon Democrat. "A lot of people who have coverage think they're one rate hike away from losing their coverage."

 

The other is an ever-louder complaint from U.S. businesses that they can't compete in a global economy when companies from other countries don't have to pay for health care. Deere & Co. Chief Executive Robert Lane told Congress last year that failure to act could result in a "limiting of covered services, loss of employer-provided health care...and even a loss of American jobs, both in the manufacturing and service sectors."

 

The uninsured, of course, make up only one of the U.S. health-care system's issues, alongside quality and, especially, rapid rises in costs. But confronting the uninsured problem is politically appealing and it seems not quite as intractable. "Dealing with cost is really hard. It means leveling with the public. It means telling people you can't have everything you want or your doctor wants," says Paul Ginsburg, president of the Center for Studying Health System Change, a foundation-backed think tank in Washington.

 

Then there's raw partisan politics. Democrats believe they have the political wind at their backs and that one reason they do is public anxiety about health care. Republicans feel a need to respond, and often look for approaches that rely less on government and more on market forces.

 

At the same time, some proponents of free trade seek ways to ease workers' anxieties about globalization so they might be less hostile to it. Recent initiatives at the state level reflect the public pressure for some kind of governmental action -- and at the same time increase the pressure for some federal action.

 

"Legislators and governors are feeling pressure from small businesses," says Katherine Swartz, a professor at the Harvard School of Public Health. She has another idea for dealing with the problem: government-subsidized reinsurance pools that might make it more affordable for employers to offer insurance.

 

Ms. Swartz says that "nobody believes anything is going to come out of Washington. States are more willing to say let's try something." Flush state budgets help. A survey by the Kaiser Family Foundation found that one-third of states, 17 in all, increased access to health coverage in 2006, often to low-income children. For the first time in four years, no state restricted income eligibility in Medicaid or in the State Children's Health Insurance Program.

 

Last year, the then-governor of Massachusetts, Republican Mitt Romney, helped by Democratic Sen. Edward Kennedy, cut a deal with Democratic leaders of the state's legislature. It required state residents to obtain insurance, created a state-sponsored "connector" where they could go to buy it, and required all but the very smallest employers to provide insurance or pay a penalty.

 

Vermont and Maine also have enacted universal-coverage plans. Vermont aims to have 96% of state residents insured by 2010 through a mix of subsidies and employer contributions, plus a tobacco tax. Maine's program, aimed at insuring all by 2009, is grappling with inadequate funding, fewer people enrolling than anticipated and lawsuits from business over the financing mechanism.

 

Several other states are mulling ways to increase coverage for their residents. Some mix expanded government programs with mandates on individuals to purchase insurance -- along with subsidies for low-income people, new insurance pools to share risks, and mandatory employer contributions.

 

Last week, California Gov. Schwarzenegger outlined a plan that would make uninsured residents purchase insurance, and require businesses with 10 or more employees to either offer insurance or pay 4% of their payroll into a fund for the uninsured. The plan would levy new taxes on doctors and hospitals to help pay for the state's estimated 6.5 million uninsured, a number that includes illegal immigrants.

 

On Wednesday, Pennsylvania's Democratic governor, Edward Rendell, became the latest recruit, with a plan to cover his state's nearly one million uninsured. He stopped short of a Massachusetts-style mandate, instead proposing to phase in a requirement that those with incomes above 300% of the poverty level ($60,000 a year for a family of four) purchase health insurance, along with full-time college and graduate students. His proposal would also penalize employers that didn't offer insurance and would provide money to help individuals afford it.

 

On Wednesday, Pennsylvania's Democratic governor, Ed Rendell, became the latest recruit, with a plan to cover his state's nearly one million uninsured. He stopped short of a Massachusetts-style mandate but would penalize employers that didn't offer insurance and would provide money to help individuals afford it.

 

As things stand, Mr. Rendell said, "It is a tremendous deterrent for businesses that are considering locating in Pennsylvania to know that in addition to paying for their own employees' health coverage, they will be subsidizing the costs of the uninsured" as hospitals charge them more to cover the free care the hospitals must give.

 

From the perspective of big companies, the mandatory-employer-contribution programs at least level the playing field within the U.S., though they don't do much to ease the problem of competing globally.

 

In Washington, it's far easier to get agreement on the goal -- "affordable, quality health care for all" is the mantra -- than on the way to get there.

 

One camp, almost entirely Democrats, sees the current turmoil and dissatisfaction with job-linked insurance as hastening a single-payer national system. It's an idea many Democrats have pushed since the days of Franklin Roosevelt and Harry Truman.

 

Sen. Kennedy, head of the Committee on Health, Education, Labor and Pensions, is proposing to expand Medicare beyond the elderly and disabled to all Americans, beginning with children and those aged 55 to 64. To many, that still seems politically unrealistic, especially given problems that Canada and Britain have run into with their national systems, including long waits and rising costs. But expanding the State Children's Health Insurance Program, which was created in 1997 to help states provide coverage to more low-income children, strikes some Democrats as a feasible step in this direction.

 

Another camp, including some Bush administration officials, sees the turmoil and decay of job-linked health insurance as a reason to go in a very different direction. They would let individuals shop for health care much as they do for other things. They would use tax breaks and vouchers to help people afford insurance, preferably high-deductible policies that prod citizens to make wise choices.

 

The government already is taking steps to make Americans better consumers of health care. To encourage people to be more cautious in using health care, the Bush administration is seeking ways to wean Americans off generous schemes that pay for almost anything. In their place, it favors high-deductible policies that cover the big expenses, plus ways to let people pocket the savings if they avoid unnecessary treatment or shop for lower-priced care. Health Savings Accounts are a way to do this, offering tax breaks to people who take high-deductible policies and allowing them to escape taxes on wages set aside for health care, keeping the money if they don't spend it.

 

Mr. Bush is expected to continue pushing in this direction. Among possible proposals: ways to make the market for individually purchased insurance more efficient, and encouragement to small businesses to help employees buy bare-bones policies. Administration officials argue that current tax law imprudently encourages employers to provide unlimited amounts of health care to workers who aren't taxed on that as income. One possible change would be to limit that tax break and devote any revenue raised by the change to subsidizing coverage for lower-income Americans.

 

In a recent op-ed piece in The Wall Street Journal, Mr. Bush listed "affordable health care" among the biggest issues facing the American people.

 

A third camp, borrowing from what's going on at the state level, essentially would widen existing sources of health insurance -- government, employers and individual policies -- so that they cover everyone. Such plans sometimes require that everyone get insurance; penalize employers that don't offer it; and subsidize coverage for people who can't easily afford it yet don't qualify for programs for the poor.

 

Although state experimentation is in favor now, one obstacle to state-by-state reform is a federal law, the Employee Retirement Income Security Act, or Erisa, that limits states' maneuvering room. It has thwarted an attempt by Maryland to force Wal-Mart Stores Inc. to offer health insurance to employees. This week, the Fourth U.S. Circuit Court of Appeals upheld an earlier decision that Maryland had violated Erisa. Legal experts said the decision could pose problems for states considering health-care changes but suggested that it wouldn't cripple efforts in states like Massachusetts, where the overhaul is broad and not targeted at a single employer.

 

Some veterans of health-care battles past smile at the enthusiasm for tackling the problem. Recalling high-profile press conferences of years past -- and proposals shredded by partisan politics or budget realities -- they say the most likely federal action is none of the above. There's also likely to be a big debate over health care in the coming presidential campaign.

 

But Mr. Stern, the union leader, thinks that view underestimates the current ground swell and unusual political opening. "I'm not sure Congress is yet recognizing the tidal wave that is building," he says. "It's the perfect time. You have an evenly divided Congress in Democratic control and a presidency in Republican control. You have everyone lined up on the side of universal coverage."

 

Doing nothing is costly too, says Henry Simmons, president of the National Coalition on Health Care, a collection of companies and interest groups that has agitated for major health-care change since 1990. "We can afford health-care reform," he says. "What we cannot afford is a continued failure to address the crisis in health care."

 

This Week in Health Care:

 

Tuesday

 

Who: Business Roundtable, Service Employees International Union, AARP

What: These unlikely allies launched a group called "Divided We Fail" and proclaimed that health care costs have gotten out of control. They said they plan to force lawmakers to begin confronting the issue of health care reform as we head towards the 2008 election.

Tidbit: The group got off to a rough start with a full-page ad in the Washington Post announcing the group somehow failing to include the word "Divided," leaving the ad to read simply: "We Fail"

 

www.dividedwefail.org3

 

Wednesday

 

Who: A bipartisan group of Senators and members of the House

What: Unveiled the "Health Partnership Act" which is aimed at providing grants to states that are crafting their own health care reform plans. Under the plan, Congress would create a State Health Innovation Commission to review and approve grants

Quote: "There is no single prescription to solving our nation's serious uninsured problem. Extending health care to the millions of Americans who are uninsured will require the innovation of governors and other leaders in all 50 states. Our legislation simply helps each state implement the solution that is right for them," said Sen. Jeff Bingaman, (D-NM), a sponsor of the bill.

Tidbit: The bill doesn't call for a specific amount of money to fund the program.

 

Wednesday

 

Who: Pennsylvania Gov. Edward Rendell

What: Became the latest governor to propose a plan to cover the state's uninsured residents

Quote: "We can no longer stand by while health care costs spiral out of control … It is no longer a question of whether we can afford to act – the cost of inaction is far greater; both in terms of individual health consequences and from the increasing burden on taxpayers," Mr. Rendell said.

Tidbit: The plan will phase in a mandate requiring health insurane for those with incomes more than 300% of the federal poverty level ($60,000 for a family of four) and require that full-time four-year college and grad students have coverage.

 

http://www.gohcr.state.pa.us/4

 

Thursday

 

Who: Strange bedfellows including Families USA, the US. Chamber of Commerce and America's Health Insurance Plans

What: Announced a two-step approach to providing coverage to children and adults. The plan would use of mix of tax credits, subsidies and an expansion of existing federal programs aimed at low-income individuals.

Tidbit: Perhaps to signal how grandiose they view their plan, the group unveiled it in the cavernous foyer of Washington, D.C.'s Union Station.

 

www.coalitionfortheuninsured.org5

 

Thursday

 

Who: Sen. Ron Wyden (D-Oregon)

What: Introduced the Healthy Americans Act. The plan is to de-link health care from the employer-sponsored model and move towards a system where individuals purchase coverage and employers help foot the bill

Quote: "Americans really don't have health care at all. They have sick care," said Mr. Wyden. "We are going to change that. We are going to change that by giving seniors incentives to stay healthy, rewarding parents who enroll their youngsters in wellness programs and pushing private insurers to put a new emphasis on prevention and wellness in the plans they offer."

Tidbit: The plan has gained endorsements from Safeway CEO Steve Burd, as well as SEIU President Andy Stern.

 

www.wyden.senate.gov6

 

---- Kris Maher contributed to this article.Write to Deborah Solomon at This email address is being protected from spambots. You need JavaScript enabled to view it.7 and David Wessel at This email address is being protected from spambots. You need JavaScript enabled to view it.8

 

RL for this article:
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(3) http://www.dividedwefail.org
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America's Agenda: Health Care for All

GOOD NEWS! Labor, business and medical leaders have launchedAmerica's Agenda: Health Care for All. Their stated goal  is to "break the insurance lobby choke-hold on health care." See full text of announcement.

 

If you're not yet convinced that something needs to be done about access to health care in the USA, click here to read Barbara Ehrenreich's commentary: A Society That Throws the Sick Away.

 

A lengthy but enlightening article by Morton Mintz appeared recently in The Nation magazine. It is well worth your time to read: Single-Payer: Good for Business.

 

"We need to view health care in terms of a social movement, like we looked at slavery. We need to come to that realization about health care ... We have to fix it."— Michael Connelly, president and CEO of Catholic Healthcare Partners. Click to see full Article, "45 Million and Growing," published in the May 6, 2005 Catholic Universe Bulletin.

Gold-Plated Indifference

January 22, 2007

Op-Ed Columnist

New York Times

By PAUL KRUGMAN

 

President Bush’s Saturday radio address was devoted to health care, and officials have put out the word that the subject will be a major theme in tomorrow’s State of the Union address. Mr. Bush’s proposal won’t go anywhere. But it’s still worth looking at his remarks, because of what they say about him and his advisers.

 

On the radio, Mr. Bush suggested that we should “treat health insurance more like home ownership.” He went on to say that “the current tax code encourages home ownership by allowing you to deduct the interest on your mortgage from your taxes. We can reform the tax code, so that it provides a similar incentive for you to buy health insurance.”

 

Wow. Those are the words of someone with no sense of what it’s like to be uninsured. Going without health insurance isn’t like deciding to rent an apartment instead of buying a house. It’s a terrifying experience, which most people endure only if they have no alternative. The uninsured don’t need an “incentive” to buy insurance; they need something that makes getting insurance possible.

 

Most people without health insurance have low incomes, and just can’t afford the premiums. And making premiums tax-deductible is almost worthless to workers whose income puts them in a low tax bracket.

 

Of those uninsured who aren’t low-income, many can’t get coverage because of pre-existing conditions — everything from diabetes to a long-ago case of jock itch. Again, tax deductions won’t solve their problem.

 

The only people the Bush plan might move out of the ranks of the uninsured are the people we’re least concerned about — affluent, healthy Americans who choose voluntarily not to be insured. At most, the Bush plan might induce some of those people to buy insurance, while in the process — whaddya know — giving many other high-income individuals yet another tax break.

 

While proposing this high-end tax break, Mr. Bush is also proposing a tax increase — not on the wealthy, but on workers who, he thinks, have too much health insurance. The tax code, he said, “unwisely encourages workers to choose overly expensive, gold-plated plans. The result is that insurance premiums rise, and many Americans cannot afford the coverage they need.”

 

Again, wow. No economic analysis I’m aware of says that when Peter chooses a good health plan, he raises Paul’s premiums. And look at the condescension. Will all those who think they have “gold plated” health coverage please raise their hands?

 

According to press reports, the actual plan is to penalize workers with relatively generous insurance coverage. Just to be clear, we’re not talking about the wealthy; we’re talking about ordinary workers who have managed to negotiate better-than-average health plans.

 

What’s driving all this is the theory, popular in conservative circles but utterly at odds with the evidence, that the big problem with U.S. health care is that people have too much insurance — that there would be large cost savings if people were forced to pay more of their medical expenses out of pocket.

 

The administration also believes, for some reason, that people should be pushed out of employment-based health insurance — admittedly a deeply flawed system — into the individual insurance market, which is a disaster on all fronts. Insurance companies try to avoid selling policies to people who are likely to use them, so a large fraction of premiums in the individual market goes not to paying medical bills but to bureaucracies dedicated to weeding out “high risk” applicants — and keeping them uninsured.

 

I’m somewhat skeptical about health care plans, like that proposed by Gov. Arnold Schwarzenegger, that propose covering gaps in the health insurance market with a series of patches, such as requiring that insurers offer policies to everyone at the same rate. But at least the authors of these plans are trying to help those most in need, and recognize that the market needs fixing.

 

Mr. Bush, on the other hand, is still peddling the fantasy that the free market, with a little help from tax cuts, solves all problems.

 

What’s really striking about Mr. Bush’s remarks, however, is the tone. The stuff about providing “incentives” to buy insurance, the sneering description of good coverage as “gold plated,” is right-wing think-tank jargon. In the past Mr. Bush’s speechwriters might have found less offensive language; now, they’re not even trying to hide his fundamental indifference to the plight of less-fortunate Americans.

Physicians and Nurses Decry Bush Health Plan, Reject Reform Based on Private Insurance

Unite in Call for National Health Insurance - "Medicare for All"
New Congress to Introduce Plan and Hold Hearings

Washington, DC - The 75,000-member California Nurses Association and the 14,000-member Physicians for a National Health Program will announce their opposition to President Bush's feeble health reform proposal at the National Press Club on Wednesday, January 24 at 1:00 p.m. The groups will call on Congress to pass single-payer legislation that will provide real coverage to all Americans.

Unite in Call for National Health Insurance - "Medicare for All"
New Congress to Introduce Plan and Hold Hearings

Washington, DC - The 75,000-member California Nurses Association and the 14,000-member Physicians for a National Health Program will announce their opposition to President Bush's feeble health reform proposal at the National Press Club on Wednesday, January 24 at 1:00 p.m. The groups will call on Congress to pass single-payer legislation that will provide real coverage to all Americans.

"There are only two real choices in the present healthcare debate, plans that continue to push the defective products of the private insurance industry, and the one plan that would expand Medicare to all Americans (HR 676) . Caregivers know that this patient-based model is the most effective and humane approach," said Deborah Burger, RN, president of the California Nurses/National Nurses Organizing Committee.

Let's skip the gimmicks and enact real reforms

January 24, 2007

By MERTON C. BERNSTEIN
Special to The Star

We have reached a national consensus on health insurance — it costs too much and covers too few. Most “reform” proposals, like California Gov. Arnold Schwarzenegger’s and the health insurance industry’s, camouflage their real costs with tax breaks and other subsidies.

But coverage and cost are not two separate problems. Repeated double-digit cost increases caused coverage of millions to disappear. To cover the uncovered, we must — and we can — make better use of the $2 trillion public and private medical-care programs now expend. Banishing unnecessary nonbenefit costs could generate funds to cover everyone.

It is not reform to make individuals insure themselves. An individual mandate would require establishing and maintaining records just to keep track of compliance; enforcement proceedings against every noncomplying individual; processing requests for exemptions; keeping tabs on those not exempted; and repeatedly updating all these steps.

It is not reform to condition subsidies on poverty. Such tests, which also would require repeated updating, would cost tens of billions when applied to millions of people. That helps explain why means-tested Medicaid costs almost 5 percent more to administer than nonmeans-tested Medicare. Nor is it reform to vary millions of individuals’ subsidies based on the inevitable variations in individual income — at great administrative cost.

These nonreforms only increase costs — massively reducing funds for essentials like vaccination. They pepper the much-heralded Massachusetts and Schwarzenegger health-care plan and the health-care-provider proposal, backed by AARP, to extend coverage. Understandably, that proposal omits to say who will pay.

Permitting physician ownership interests in testing laboratories, imaging facilities, hospitals, nursing homes and pharmacies would provide inducements to prescribe what they sell. Rather than assuming that everyone would resist temptation, medical societies and legislation should shut those cookie jars. That would improve care and reduce costs.

Reform will elude us if the public and policy-makers mistake what needs changing. For example, in a 2006 Kaiser Foundation opinion poll, “too many malpractice suits” tied for second as the largest cause of ballooning health-care costs. Yet analyses show that malpractice premiums and litigating costs constitute just 1 percent of medical- care outlays.

If Medicare covered us all, more of the health-care dollar would go for treatment and prevention. Currently, insurers and providers spend huge amounts to match billions of billings with thousands of private plans and many public programs with differing eligibility and benefit criteria.

Medicare for All would save most of those nonbenefit charges. Some object that savings would be slight because providers must maintain records for treatment. Yes, but that recordkeeping does not require clericals to determine what programs, if any, cover claimants, and if so, what is billable and how much is reimbursable.

To tame costs and extend coverage, we must harvest savings where now we sow and reap inefficiently. The Schwarzenegger and Massachusetts gimmicks and the plan shaped by the same people who designed the perplexing and inefficient Part D — health insurers and AARP — plow other fields. Instead of savings, they increase nonbenefit costs. That’s not reform.

http://www.kansascity.com/mld/kansascity/news/opinion/16529363.htm

Merton C. Bernstein is a Coles Professor of Law Emeritus at Washington University. He was principal consultant to the National Commission on Social Security Reform and is a founding board member of the National Academy of Social Insurance.

© 2007 Kansas City Star and wire service sources. All Rights Reserved.
http://www.kansascity.com

More going without health care

Americans are paying more for medical insurance than they did a year ago, and many are avoiding important doctor visits simply because of the cost, an MSN-Zogby poll reports.

 

By MSN Money staff

1/30/2007 6:27 PM ET

 

More than a quarter of Americans have skipped or postponed an essential visit to a doctor because it was too expensive, a new MSN-Zogby poll says.

 

Nearly half (48%) say they pay more in health-insurance premiums than a year ago, and 37% say they pay more out of pocket for medical services or prescriptions.

The results of the poll of 9,765 adults suggest that medical expenses are becoming a heavier burden on household finances, even for middle-income Americans. They underscore the findings of other recent studies that the cost of health care is becoming a more widespread problem.

The ranks of the nation's uninsured have grown by 11.2% since 2000, according to a study by the Kaiser Commission on Medicaid and the Uninsured. Tens of millions of Americans lack insurance, and millions more are underinsured, with gaps in their coverage that leave them exposed to catastrophic medical bills.

Medical bills pile up

A recent Harvard University study said medical bills are a factor in about half of all consumer bankruptcies. Another study reported that more Americans are turning to credit cards to cover rising medical expenses, often leading to crippling debts.

"Too many working people are piling up debt on high-interest credit cards and risking financial security simply because they have the misfortune of getting sick," says Mark Rukavina, one of the authors of a study by nonpartisan public-policy group Demos, according to Bankrate.com.

More from MSN Money

Nearly three in 10 participants in the survey from low- and middle-income households with credit card debt say medical expenses contributed to their current credit card balances, according to the Demos report. The majority had a major medical expense within the past three years.

More families are struggling in the aftermath of a serious medical problem, and many try to repay debts by taking out second mortgages or cashing in their retirement accounts, says Elizabeth Warren, a Harvard law professor. "Many will still end up in bankruptcy, but only after they have run up even more debt and their last meager resources have been exhausted," she told Bankrate.com.

 

Squeeze for middle-income people

According to the MSN-Zogby poll, 91% say they have health insurance, and 73% say they're happy with their coverage. Yet household income has a major influence on coverage. About 30% of households with incomes below $25,000 go without coverage, compared with 3% of those with household income exceeding $100,000.

The interactive MSN-Zogby poll took place Jan. 17-22 and contains a margin of error of plus or minus 1 percentage point.

The poll suggests an increasing squeeze for middle-income Americans. People with household income of $25,000 to $75,000 report the highest level of dissatisfaction, with approximately one in four dissatisfied with their benefits.

Those in the $50,000-to-$75,000 range were most likely (51%) to say their premiums have climbed. Married adults say they've been hit especially hard: 51% are facing higher premiums over the past year, compared with 37% of single adults.

When it comes to out-of-pocket expenses, households with $25,000 to $35,000 in income say they are hardest hit, with 40% paying more.

 

Though 16% of Americans say they have a health savings account, the popularity of the high-deductible plans increases as a person's income rises. Nearly a quarter (24%) of people with more than $100,000 in household income say they have a health savings account, compared with just 5% of those making less than $25,000. Such plans allow consumers to save money tax-free to pay for health services.

WHAT’S WRONG WITH THE PRIVATE HEALTH INSURANCE SYSTEM

William W. McGuire’s Estimated Annual Retirement Benefit: $5,092,000*

*Calculated by The Corporate Library for the AFL-CIO Executive PayWatch

 

UnitedHealth Group CEO William W. McGuire will receive an annual supplemental retirement benefit for his lifetime. If he retires at age 65, his pension benefit will equal 65 percent of his average cash compensation over his past 36 months of employment. This special pension benefit is part of McGuire’s employment agreement. [1]

 

Ironically, this special pension guarantee probably will not be necessary for McGuire to have a secure retirement. On paper, McGuire is a stock option billionaire with $1,776,547,635 in unexercised stock options as of Dec. 31, 2005. [2]

 

Until 2005, UnitedHealth Group permitted McGuire to choose the day of his own option grants by giving “oral notification.”In 1997, 1999 and 2000 he received stock option grants on the day of the single lowest closing price of each year, and a grant in 2001 that came near the bottom of a sharp stock dip. According to The Wall Street Journal, “the odds of such a favorable pattern occurring by chance would be one in 200 million or greater.” [3]

 

On McGuire’s retirement, all his stock options will immediately vest. His employment agreement also provides for additional retirement perks. For the first 36 months of McGuire’s retirement, UnitedHealth Group will continue to pay his insurance premiums, provide him an office and a secretary and allow him personal use of the company jets. [4]

 

Should UnitedHealth Group need McGuire’s services after he retires, his employment contract provides for a consulting agreement for up to 36 months. During this period, he will be paid his full cash compensation that he earned as UnitedHealth Group’s CEO. [5] However, the provisions of his consulting agreement will ensure this consulting work does not impose on McGuire’s retirement.

 

Under McGuire’s contract, the UnitedHealth Group’s requests for consulting services “shall not unreasonably interfere with the personal, charitable or other business activities” of McGuire or interfere with him “pursuing other full time employment.” Moreover, UnitedHealth Group will continue to pay for McGuire’s consulting services to his beneficiaries in the event of his death during the consulting period. [6]

 

Lastly, McGuire’s contract requires that UnitedHealth Group provide him and his spouse with health care for the remainder of their lives at no cost to McGuire. Should UnitedHealth Group terminate its retiree health care plan, the company must reimburse McGuire for the full cost of alternative insurance coverage. [7] Unlike McGuire's coverage, the retiree health care of UnitedHealth Group’s 55,000 employees is not protected by law.

 

[1] 2006 UnitedHealth Group proxy statement, page 18.

[2] 2006 UnitedHealth Group proxy statement, page 16.

[3] “The Perfect Payday,” The Wall Street Journal, March 18-19, 2006.

[4] 2006 UnitedHealth Group proxy statement, page 18.

[5] Amendment to Employment Agreement Between UHG and William W. McGuire, M.D., Aug. 5, 2005.

[6] Amendment to Employment Agreement Between UHG and William W. McGuire, M.D., Aug. 5, 2005.

[7] William W. McGuire, M.D., Employment Agreement, Oct. 13, 1999.

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UPCOMING EVENTS

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