Wiki Page for 2015 SPAN Annual Conference
American Medical Student Association (AMSA)
Americans Abroad for Single Payer
Business Coalition for Single-Payer Health Care
California Nurses Association
Campaign for Better Health Care
Congressman John Conyers' Single-Payer Health Care Web Site
Connecticut Coalition For Universal Health Care
Health Access California
Health Care for All - California
Health Care for All Colorado
Health Care for All Oregon
HealthCare 4 ALL PA
Health Care For All Philadelphia
Health Care for All Texas
Health Care for All - Washington
Healthcare Is a Human Right
Healthcare-NOW! A national grassroots advocacy organization in support of single-payer health care with a network of activists in 42 states.
Illinois Single-Payer Coalition
Kaiser Family Foundation: State Health Facts
Kentuckians for Single-Payer Health Care
Labor Campaign for Single Payer Healthcare
Maryland Chapter PNHP is a chapter of Physicians for a National Health Program, a nonprofit research and education organization of 16,000 physicians, medical students, and health professionals who support single-payer national health insurance.
Maryland Citizens Health Initiative
Massachusetts Campaign for Single Payer Health Care (MASS-CARE)
MEDICARE for ALL
Minnesota Citizens Organized Acting Together (COACT)
National Nurses United
Our Ailing Health Care
Physicians for a National Health Program (PNHP)
Physicians Working Group Proposal for Single-Payer National Health Insurance
Single-Minded for Single-Payer: An Interview with Kevin Grumbach
Single-Payer: Answers and Facts About Health Care for All
Single-Payer Action A nonprofit activist-fueled organization based in Washington, D.C.
Single Payer Central
Single Payer New York
Single Payer NOW
Tennessee Health Care Campaign (THCC)
Unions for Single Payer Health Care
United for National Health Care
Universal Health Care Action Network (UHCAN-National Office)
Universal Health Care Action Network Ohio (UHCAN-Ohio Office)
Vermont Health Care for All
Working America - Community Affiliate of the AFL-CIO
WHO WE ARE – The Single-Payer Action Network Ohio (SPAN Ohio) is a statewide coalition of organizations and individuals in Ohio seeking fundamental health care reform in our state and country so that every resident is guaranteed full and comprehensive coverage. This includes the full range of medical services, hospitalization, prescriptions, vision care, dental care, mental health care, home care, long-term care, and care for all injuries and illnesses.
We advocate the establishment of a public fund that would pay all health care bills without co-payments or deductibles. Funding would come from the savings realized by eliminating the administrative waste and profits of the 1,500 private insurance companies and HMOs, savings from greater utilization of preventive medicine, and from additional mechanisms deemed necessary to ensure that the public fund has the necessary financial resources, with adequate reserves. The plan we call for is known as a single-payer health care system.
SPAN Ohio is a non-profit, non-partisan 501(c)4 organization.
Contributions to SPAN are not tax deductible.
WHAT WE DO – We carry out a variety of programs designed to educate and inform on the need for single-payer. A focus of our activities is to win enactment of the Ohio Health Care Plan, either through direct legislative action or by an initiative petition sponsored by SPAN Ohio.
SPAN Ohio functions democratically and those who attend its meetings decide what the group's activities shall be. We distribute educational materials, organize public meetings featuring physicians and others with expertise on health care issues, circulate petitions, and introduce single-payer resolutions to organizations and legislative bodies. While campaigning to win single-payer health care in Ohio, we see this as a stepping stone toward achieving a national single-payer health care system, which is our ultimate goal.
WHEN WE MEET – SPAN Ohio meets quarterly. Check the SPAN Ohio website calendar for dates, times and locations. Join us!
Origins and Development of SPAN Ohio
When the Clinton health care plan collapsed in 1994, many people active in the movement to reform the system concluded that national health care was way off in the remote future and that the emphasis should be on attempting to win "small victories" and incremental reforms.
Actually, the Clinton plan never called for true universal health care. It specifically rejected eliminating the private health care insurance companies from the system. It was basically a plan for managed care or, more accurately, managed costs.
A broad coalition of forces actively fighting for a single-payer system in the early 1990s disappeared after the 1994 debacle. By the year 2000, increasing numbers of people had come to understand that an incremental approach could not solve the country's health care crisis and that only a fundamental reform of the system would. Indeed, when Clinton left office, there were eight million more people without health care insurance than on the day he was inaugurated. The single-payer movement began to experience a revival.
In February, 2001, six people met at a union office in Cleveland and constituted themselves the Single-Payer Universal Health Care Organizing Committee (SPUHCOC). Their goal was to educate the public about the advantages of a single-payer plan and to build a movement at the grass roots calling upon the Ohio General Assembly to establish such a system.
The founding group was diverse in composition and included unionists, a physician, community activists and retirees. SPUHCOC decided as its initial function to organize a public meeting to be addressed by Claudia Fegan, a Chicago physician who was a past president of Physicians for a National Health Program (PNHP) and co-author of Universal Health Care: What the United States Can Learn From the Canadian Experience. The meeting was held April 10 and drew an audience of 130 at Case Western Reserve University.
In subsequent months, SPUHCOC concentrated on drafting a model single-payer resolution and getting political bodies, other health care groups, health care providers, unions, community organizations and faith groups to endorse it. In relatively short order, the Cleveland City Council approved the model resolution with only minor modifications and other cities and town councils followed suit. Many physicians, nurses, local unions, and a variety of others endorsed a statement which simply said, "We endorse the campaign to get the Ohio General Assembly to act without delay to pass publicly funded health care guaranteeing coverage for all Ohioans." This statement was unanimously approved by the Cuyahoga County Commissioners, three members of Congress — Sherrod Brown, Dennis Kucinich and Stephanie Tubbs-Jones — and a number of state legislators.
In November, 2001, at the insistence of growing numbers of activists, SPUHCOC changed its name to Single-Payer Action Network Ohio (SPAN Ohio). Meanwhile, single-payer groups in Toledo and Cincinnati had begun to form and they affiliated with SPAN.
In early 2002, thousands of steelworker retirees from LTV in the Greater Cleveland area lost health care benefits they thought had been guaranteed for life. They were among 600,000 steel retirees confronted with the same drastic loss. The anguish of this situation and the constantly growing numbers of the uninsured from all walks of life created further disillusionment with the market-driven, for-profit system and much greater openness to the single-payer alternative.
By mid-2002, SPAN had become the established organizing center for the single-payer movement in Ohio. By then, SPAN had established a web site at www.spanohio.org, which in its first six months received over 10,000 hits.
It became clear that SPAN needed to branch out and become a genuine statewide coalition. In the summer of 2002, SPAN activists began discussing the possibility of organizing a statewide conference which could be the springboard for forming an Ohio coalition that could mount an effective campaign for single-payer. In September, 2002, the Ohio AFL-CIO, representing 850,000 workers and meeting in convention in Cleveland, voted unanimously to endorse SPAN's campaign for a single-payer health care system in Ohio. The UAW, on a statewide basis, had also endorsed. These developments helped propel momentum for the state conference, which was held in Columbus on January 18, 2003.
This conference was a great success with keynote speeches by Dr. Claudia Fegan and Dan Martin, representing Steelworkers District 1, a panel discussion and workshops for constituency groups. The upshot of the conference was a call for a March 1 meeting to formally launch a statewide single-payer coalition.
The March 1 meeting brought together organizations representing a million Ohioans and a number of dedicated individuals. It was agreed that "Single-Payer Action Network Ohio (SPAN Ohio)" would be the name of the coalition formed at the meeting. An Interim Steering Committee of 29 was elected, pending the adoption of bylaws.
While SPAN continued to gather endorsements for its campaign, the March 1 meeting exhibited increasing interest in the idea of an initiative petition ballot campaign to put the single-payer issue on the ballot. Bob Smiddie, of Pomeroy, had long been urging an initiative and, now that SPAN Ohio had the affiliation of major forces, the idea seemed eminently reasonable, despite Ohio's highly restrictive constitutional provisions on initiatives.
In the months following that meeting, SPAN fleshed out its structure, approved bylaws, changed the name of its governing body to State Council (retaining as members on that body those previously elected to the Interim Steering Committee while adding others), convened periodic meetings of the State Council and moved forward in the drafting of the initiative petition. After months of meetings, discussions and plain hard work, a petition upon which all could agree was finalized and approved by a statewide meeting of SPAN supporters. The petition summary and 201 signatures were filed with the Attorney General's office on July 14, 2004. (The state requires that 100 or more qualified electors sign to begin the process of proposing a law to the Legislature.) On August 5, 2004, the Attorney General certified the petition, and by August 20, five thousand copies, each accommodating 65 signatures, had been printed for distribution. Within five days, nearly 2500 had been picked up by chapters, unions, and individual supporters, all volunteering to help SPAN reach its goal of 140,000 valid signatures. (To be valid, a signature must be that of a registered voter, and must be personally witnessed by the petition circulator.)
Health Care is a HUMAN RIGHT
"Everyone has the right to a standard of living adequate to the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services....." Universal Declaration of Human Rights, Article 25, adopted by the United Nations General Assembly on December 10, 1948, signed and ratified by the United States of America.
The right to health is universally recognized as fundamental to human dignity, freedom and well-being. There are many factors that influence our state of health and well-being including housing, workplace safety, environmental conditions, access to a safe and sustainable food supply and our own genetics. However, access to comprehensive medical care is fundamental to our health and well-being. Without that, it is impossible for a person to realize their full potential and dignity as a human being
In order to meet human rights standards, a health care system must be:
- Accessible to all and available to all,
- High quality standards of care for all,
- Comprehensive and appropriate to all health needs,
- Financed and delivered in a non-discriminatory way that enables the participation of all individuals and communities,
- Provides access to information,
- Ensures transparency and
- Has effective mechanisms to hold both the public and private sector accountable to the citizens.
SPAN Ohio is dedicated to achieving a health care system that fulfills the human right to health care and that ensures every person will receive the care they need in a manner that affords them the dignity they deserve.
For further information on the human right to health care, read the following articles:
What’s behind Ireland’s economic miracle—and G.M.’s financial crisis?
by MALCOLM GLADWELL
Issue of 2006-08-28
The years just after the Second World War were a time of great industrial upheaval in the United States. Strikes were commonplace. Workers moved from one company to another. Runaway inflation was eroding the value of wages. In the uncertain nineteen-forties, in the wake of the Depression and the war, workers wanted security, and in 1949 the head of the Toledo, Ohio, local of the United Auto Workers, Richard Gosser, came up with a proposal. The workers of Toledo needed pensions. But, he said, the pension plan should be regional, spread across the many small auto-parts makers, electrical-appliance manufacturers, and plastics shops in the Toledo area. That way, if workers switched jobs they could take their pension credits with them, and if a company went bankrupt its workers’ retirement would be safe. Every company in the area, Gosser proposed, should pay ten cents an hour, per worker, into a centralized fund.
The business owners of Toledo reacted immediately. “They were terrified,” says Jennifer Klein, a labor historian at Yale University, who has written about the Toledo case. “They organized a trade association to stop the plan. In the business press, they actually said, ‘This idea might be efficient and rational. But it’s too dangerous.’ Some of the larger employers stepped forward and said, ‘We’ll offer you a company pension. Forget about that whole other idea.’ They took on the costs of setting up an individual company pension, at great expense, in order to head off what they saw as too much organized power for workers in the region.”
A year later, the same issue came up in Detroit. The president of General Motors at the time was Charles E. Wilson, known as Engine Charlie. Wilson was one of the highest-paid corporate executives in America, earning $586,100 (and paying, incidentally, $430,350 in taxes). He was in contract talks with Walter Reuther, the national president of the U.A.W. The two men had already agreed on a cost-of-living allowance. Now Wilson went one step further, and, for the first time, offered every G.M. employee health-care benefits and a pension.
Reuther had his doubts. He lived in a northwest Detroit bungalow, and drove a 1940 Chevrolet. His salary was ten thousand dollars a year. He was the son of a Debsian Socialist, worked for the Socialist Party during his college days, and went to the Soviet Union in the nineteen-thirties to teach peasants how to be auto machinists. His inclination was to fight for changes that benefitted every worker, not just those lucky enough to be employed by General Motors. In the nineteen-thirties, unions had launched a number of health-care plans, many of which cut across individual company and industry lines. In the nineteen-forties, they argued for expanding Social Security. In 1945, when President Truman first proposed national health insurance, they cheered. In 1947, when Ford offered its workers a pension, the union voted it down. The labor movement believed that the safest and most efficient way to provide insurance against ill health or old age was to spread the costs and risks of benefits over the biggest and most diverse group possible. Walter Reuther, as Nelson Lichtenstein argues in his definitive biography, believed that risk ought to be broadly collectivized. Charlie Wilson, on the other hand, felt the way the business leaders of Toledo did: that collectivization was a threat to the free market and to the autonomy of business owners. In his view, companies themselves ought to assume the risks of providing insurance.
America’s private pension system is now in crisis. Over the past few years, American taxpayers have been put at risk of assuming tens of billions of dollars of pension liabilities from once profitable companies. Hundreds of thousands of retired steelworkers and airline employees have seen health-care benefits that were promised to them by their employers vanish. General Motors, the country’s largest automaker, is between forty and fifty billion dollars behind in the money it needs to fulfill its health-care and pension promises. This crisis is sometimes portrayed as the result of corporate America’s excessive generosity in making promises to its workers. But when it comes to retirement, health, disability, and unemployment benefits there is nothing exceptional about the United States: it is average among industrialized countries—more generous than Australia, Canada, Ireland, and Italy, just behind Finland and the United Kingdom, and on a par with the Netherlands and Denmark. The difference is that in most countries the government, or large groups of companies, provides pensions and health insurance. The United States, by contrast, has over the past fifty years followed the lead of Charlie Wilson and the bosses of Toledo and made individual companies responsible for the care of their retirees. It is this fact, as much as any other, that explains the current crisis. In 1950, Charlie Wilson was wrong, and Walter Reuther was right.
The key to understanding the pension business is something called the “dependency ratio,” and dependency ratios are best understood in the context of countries. In the past two decades, for instance, Ireland has gone from being one of the most economically backward countries in Western Europe to being one of the strongest: its growth rate has been roughly double that of the rest of Europe. There is no shortage of conventional explanations. Ireland joined the European Union. It opened up its markets. It invested well in education and economic infrastructure. It’s a politically stable country with a sophisticated, mobile workforce.
But, as the Harvard economists David Bloom and David Canning suggest in their study of the “Celtic Tiger,” of greater importance may have been a singular demographic fact. In 1979, restrictions on contraception that had been in place since Ireland’s founding were lifted, and the birth rate began to fall. In 1970, the average Irishwoman had 3.9 children. By the mid-nineteen-nineties, that number was less than two. As a result, when the Irish children born in the nineteen-sixties hit the workforce, there weren’t a lot of children in the generation just behind them. Ireland was suddenly free of the enormous social cost of supporting and educating and caring for a large dependent population. It was like a family of four in which, all of a sudden, the elder child is old enough to take care of her little brother and the mother can rejoin the workforce. Overnight, that family doubles its number of breadwinners and becomes much better off.
This relation between the number of people who aren’t of working age and the number of people who are is captured in the dependency ratio. In Ireland during the sixties, when contraception was illegal, there were ten people who were too old or too young to work for every fourteen people in a position to earn a paycheck. That meant that the country was spending a large percentage of its resources on caring for the young and the old. Last year, Ireland’s dependency ratio hit an all-time low: for every ten dependents, it had twenty-two people of working age. That change coincides precisely with the country’s extraordinary economic surge.
Demographers estimate that declines in dependency ratios are responsible for about a third of the East Asian economic miracle of the postwar era; this is a part of the world that, in the course of twenty-five years, saw its dependency ratio decline thirty-five per cent. Dependency ratios may also help answer the much-debated question of whether India or China has a brighter economic future. Right now, China is in the midst of what Joseph Chamie, the former director of the United Nations’ population division, calls the “sweet spot.” In the nineteen-sixties, China brought down its birth rate dramatically; those children are now grown up and in the workforce, and there is no similarly sized class of dependents behind them. India, on the other hand, reduced its birth rate much more slowly and has yet to hit the sweet spot. Its best years are ahead.
The logic of dependency ratios, of course, works equally powerfully in reverse. If your economy benefits by having a big bulge of working-age people, then your economy will have a harder time of it when that bulge generation retires, and there are relatively few workers to take their place. For China, the next few decades will be more difficult. “China will peak with a 1-to-2.6 dependency ratio between 2010 and 2015,” Bloom says. “But then it’s back to a little over 1-to-1.5 by 2050. That’s a pretty dramatic change. Thirty per cent of the Chinese population will be over sixty by 2050. That’s four hundred and thirty-two million people.” Demographers sometimes say that China is in a race to get rich before it gets old.
Economists have long paid attention to population growth, making the argument that the number of people in a country is either a good thing (spurring innovation) or a bad thing (depleting scarce resources). But an analysis of dependency ratios tells us that what’s critical is not just the growth of a population but its structure. “The introduction of demographics has reduced the need for the argument that there was something exceptional about East Asia or idiosyncratic to Africa,” Bloom and Canning write, in their study of the Irish economic miracle. “Once age-structure dynamics are introduced into an economic growth model, these regions are much closer to obeying common principles of economic growth.”
This is an important point. People have talked endlessly of Africa’s political and social and economic shortcomings and simultaneously of some magical cultural ingredient possessed by South Korea and Japan and Taiwan that has brought them success. But the truth is that sub-Saharan Africa has been mired in a debilitating 1-to-1 ratio for decades, and that proportion of dependency would frustrate and complicate economic development anywhere. Asia, meanwhile, has seen its demographic load lighten overwhelmingly in the past thirty years. Getting to a 1-to-2.5 ratio doesn’t make economic success inevitable. But, given a reasonably functional economic and political infrastructure, it certainly makes it a lot easier.
This demographic logic also applies to companies, since any employer that offers pensions and benefits to its employees has to deal with the consequences of itsnonworker-to-worker ratio, just as a country does. An employer that promised, back in the nineteen-fifties, to pay for its employees’ health care when they were retired didn’t set aside the money for that while they were working. It just paid the bills as they came in: money generated by current workers was used to pay for the costs of taking care of past workers. Pensions worked roughly the same way. On the day a company set up a pension plan, it was immediately on the hook for all the years of service accumulated by employees up to that point: the worker who was sixty-four when the pension was started got a pension when he retired at sixty-five, even though he had been in the system only a year. That debt is called a “past service” obligation, and in some cases in the nineteen-forties and fifties the past-service obligations facing employers were huge. At Ford, the amount reportedly came to two hundred million dollars, or just under three thousand dollars per employee. At Bethlehem Steel, it came to four thousand dollars per worker.
Companies were required to put aside a little extra money every year to make up for that debt, with the hope of someday—twenty or thirty years down the line—becoming fully funded. In practice, though, that was difficult. Suppose that a company agrees to give its workers a pension of fifty dollars a month for every year of service. Several years later, after a round of contract negotiations, that multiple is raised to sixty dollars a month. That increase applies retroactively: now that company has a brand-new past-service obligation equal to another ten dollars for every month served by its wage employees. Or suppose the stock market goes into decline or interest rates fall, and the company discovers that its pension plan has less money than it had expected. Now it’s behind again: it has to go back to using the money generated by current workers in order to take care of the costs of past workers. “You start off in the hole,” Steven Sass, a pension expert at Boston College, says. “And the problem in these plans is that it’s very difficult to dig your way out.”
Charlie Wilson’s promise to his workers, then, contained an audacious assumption about G.M.’s dependency ratio: that the company would always have enough active workers to cover the costs of its retired workers—that it would always be like Ireland, and never like sub-Saharan Africa. Wilson’s promise, in other words, was actually a gamble. Is it any wonder that the prospect of private pensions made people like Walter Reuther so nervous?
The most influential management theorist of the twentieth century was Peter Drucker, who, in 1950, wrote an extraordinarily prescient article for Harper’s entitled “The Mirage of Pensions.” It ought to be reprinted for every steelworker, airline mechanic, and autoworker who is worried about his retirement. Drucker simply couldn’t see how the pension plans on the table at companies like G.M. could ever work. “For such a plan to give real security, the financial strength of the company and its economic success must be reasonably secure for the next forty years,” Drucker wrote. “But is there any one company or any one industry whose future can be predicted with certainty for even ten years ahead?” He concluded, “The recent pension plans thus offer no more security against the big bad wolf of old age than the little piggy’s house of straw.”
In the mid-nineteen-fifties, the largest steel mill in the world was at Sparrows Point, just east of Baltimore, on the Chesapeake Bay. It was owned by Bethlehem Steel, one of the nation’s grandest industrial enterprises. The steel for the Golden Gate Bridge came from Sparrows Point, as did the cables for the George Washington Bridge, and the materials for countless guns and planes and ships that helped win both world wars. Sparrows Point, a so-called integrated mill, used a method of making steel that dated back to the nineteenth century. Coke and iron, the raw materials, were combined in a blast furnace to make liquid pig iron. The pig iron was poured into a vast oven, known as an open-hearth furnace, to make molten steel. The steel was poured into pots to make ingots. The ingots were cooled, reheated, and fed into a half-mile-long rolling mill and turned into semi-finished shapes, which eventually became girders for the construction industry or wafer-thin sheets for beer cans or galvanized panels for the automobile industry. Open-hearth steelmaking was expensive and time-consuming. It required great amounts of energy, water, and space. Sparrows Point stretched four miles from one end to the other. Most important, it required lots and lots of people. Sparrows Point, at its height, employed tens of thousands of them. As Mark Reutter demonstrates in “Making Steel,” his comprehensive history of Sparrows Point, it was not just a steel mill. It was a city.
In 1956, Eugene Grace, the head of Bethlehem Steel, was the country’s best- paid executive. Eleven of the country’s eighteen top-earning executives that year, in fact, worked for Bethlehem Steel. In 1955, when the American Iron and Steel Institute had its annual meeting, at the Waldorf-Astoria, in New York, the No. 2 at Bethlehem Steel, Arthur Homer, made a bold forecast: domestic demand for steel, he said, would increase by fifty per cent over the next fifteen years. “As someone has said, the American people are wanters,” he told the audience of twelve hundred industry executives. “Their wants are going to require a great deal of steel.”
But Big Steel didn’t get bigger. It got smaller. Imports began to take a larger and larger share of the American steel market. The growing use of aluminum, concrete, and plastic cut deeply into the demand for steel. And the steelmaking process changed. Instead of laboriously making steel from scratch, with coke and iron ore, factories increasingly just melted down scrap metal. The open-hearth furnace was replaced with the basic oxygen furnace, which could make the same amount of steel in about a tenth of the time. Steelmakers switched to continuous casting, which meant that you skipped the ingot phase altogether and poured your steel products directly out of the furnace. As a result, steelmakers like Bethlehem were no longer hiring young workers to replace the people who retired. They were laying people off by the thousands. But every time they laid off another employee they turned a money-making steelworker into a money-losing retiree—and their dependency ratio got a little worse. According to Reutter, Bethlehem had a hundred and sixty-four thousand workers in 1957. By the mid-to-late-nineteen-eighties, it was down to thirty-five thousand workers, and employment at Sparrows Point had fallen to seventy-nine hundred. In 2001, Bethlehem, just shy of its hundredth birthday, declared bankruptcy. It had twelve thousand active employees and ninety thousand retirees and their spouses drawing benefits. It had reached what might be a record-setting dependency ratio of 7.5 pensioners for every worker.
What happened to Bethlehem, of course, is what happened throughout American industry in the postwar period. Technology led to great advances in productivity, so that when the bulge of workers hired in the middle of the century retired and began drawing pensions, there was no one replacing them in the workforce. General Motors today makes more cars and trucks than it did in the early nineteen-sixties, but it does so with about a third of the employees. In 1962, G.M. had four hundred and sixty-four thousand U.S. employees and was paying benefits to forty thousand retirees and their spouses, for a dependency ratio of one pensioner to 11.6 employees. Last year, it had a hundred and forty-one thousand workers and paid benefits to four hundred and fifty-three thousand retirees, for a dependency ratio of 3.2 to 1.
Looking at General Motors and the old-line steel companies in demographic terms substantially changes the way we understand their problems. It is a commonplace assumption, for instance, that they were undone by overly generous union contracts. But, when dependency ratios start getting up into the 3-to-1 to 7-to-1 range, the issue is not so much what you are paying each dependent as how many dependents you are paying. “There is this notion that there is a Cadillac being provided to all these retirees,” Ron Bloom, a senior official at the United Steelworkers, says. “It’s not true. The truth is seventy-five-year-old widows living on less than three hundred dollars to four hundred dollars a month. It’s just that there’s a lot of them.”
A second common assumption is that fading industrial giants like G.M. and Bethlehem are victims of their own managerial incompetence. In various ways, they undoubtedly are. But, with respect to the staggering burden of benefit obligations, what got them in trouble isn’t what they did wrong; it is what they did right. They got in trouble in the nineteen-nineties because they were around in the nineteen-fifties—and survived to pay for the retirement of the workers they hired forty years ago. They got in trouble because they innovated, and became more efficient in their use of labor.
“We are making as much steel as we made thirty years ago with twenty-five per cent of the workforce,” Michael Locker, a steel-industry consultant, says. “And it is a much higher quality of steel, too. There is simply no comparison. That change recasts the industry and it recasts the workforce. You get this enormous bulge. It’s abnormal. It’s not predicted, and it’s not funded. Is that the fault of the steelworkers? Is that the fault of the companies?”
Here, surely, is the absurdity of a system in which individual employers are responsible for providing their own employee benefits. It penalizes companies for doing what they ought to do. General Motors, by American standards, has an old workforce: its average worker is much older than, say, the average worker at Google. That has an immediate effect: health-care costs are a linear function of age. The average cost of health insurance for an employee between the ages of thirty-five and thirty-nine is $3,759 a year, and for someone between the ages of sixty and sixty-four it is $7,622. This goes a long way toward explaining why G.M. has an estimated sixty-two billion dollars in health-care liabilities. The current arrangement discourages employers from hiring or retaining older workers. But don’t we want companies to retain older workers—to hire on the basis of ability and not age? In fact, a system in which companies shoulder their own benefits is ultimately a system that penalizes companies for offering any benefits at all. Many employers have simply decided to let their workers fend for themselves. Given what has so publicly and disastrously happened to companies like General Motors, can you blame them?
Or consider the continuous round of discounts and rebates that General Motors—a company that lost $8.6 billion last year—has been offering to customers. If you bought a Chevy Tahoe this summer, G.M. would give you zero-per-cent financing, or six thousand dollars cash back. Surely, if you are losing money on every car you sell, as G.M. is, cutting car prices still further in order to boost sales doesn’t make any sense. It’s like the old Borsht-belt joke about the haberdasher who lost money on every hat he made but figured he’d make up the difference on volume. The economically rational thing for G.M. to do would be to restructure, and sell fewer cars at a higher profit margin—and that’s what G.M. tried to do this summer, announcing plans to shutter plants and buy out the contracts of thirty-five thousand workers. But buyouts, which turn active workers into pensioners, only worsen the company’s dependency ratio. Last year, G.M. covered the costs of its four hundred and fifty-three thousand retirees and their dependents with the revenue from 4.5 million cars and trucks. How is G.M. better off covering the costs of four hundred and eighty-eighty thousand dependents with the revenue from, say, 4.2 million cars and trucks? This is the impossible predicament facing the company’s C.E.O., Rick Wagoner. Demographic logic requires him to sell more cars and hire more workers; financial logic requires him to sell fewer cars and hire fewer workers.
Under the circumstances, one of the great mysteries of contemporary American politics is why Wagoner isn’t the nation’s leading proponent of universal health care and expanded social welfare. That’s the only way out of G.M.’s dilemma. But, from Wagoner’s reticence on the issue, you’d think that it was still 1950, or that Wagoner believes he’s the Prime Minister of Ireland. “One thing I’ve learned is that corporate America has got much more class solidarity than we do—meaning union people,” the U.S.W.’s Ron Bloom says. “They really are afraid of getting thrown out of their country clubs, even though their objective ought to be maximizing value for their shareholders.”
David Bloom, the Harvard economist, once did a calculation in which he combined the dependency ratios of Africa and Western Europe. He found that they fit together almost perfectly; that is, Africa has plenty of young people and not a lot of older people and Western Europe has plenty of old people and not a lot of young people, and if you combine the two you have an even distribution of old and young. “It makes you think that if there is more international migration, that could smooth things out,” Bloom said.
Of course, you can’t take the populations of different countries and different cultures and simply merge them, no matter how much demographic sense that might make. But you can do that with companies within an economy. If the retiree obligations of Bethlehem Steel had been pooled with those of the much younger industries that supplanted steel—aluminum, say, or plastic—Bethlehem Steel might have made it. If you combined the obligations of G.M., with its four hundred and fifty-three thousand retirees, and the American manufacturing operations of Toyota, with a mere two hundred and fifty-eight retirees, Toyota could help G.M. shoulder its burden, and thirty or forty years from now—when those G.M. retirees are dead and Toyota’s now youthful workforce has turned gray—G.M. could return the favor. For that matter, if you pooled the obligations of every employer in the country, no company would go bankrupt just because it happened to employ older people, or it happened to have been around for a while, or it happened to have made the transformation from open-hearth furnaces and ingot-making to basic oxygen furnaces and continuous casting. This is what Walter Reuther and the other union heads understood more than fifty years ago: that in the free-market system it makes little sense for the burdens of insurance to be borne by one company. If the risks of providing for health care and old-age pensions are shared by all of us, then companies can succeed or fail based on what they do and not on the number of their retirees.
When Bethlehem Steel filed for bankruptcy, it owed about four billion dollars to its pension plan, and had another three billion dollars in unmet health-care obligations. Two years later, in 2003, the pension fund was terminated and handed over to the federal government’s Pension Benefit Guaranty Corporation. The assets of the company—Sparrows Point and a handful of other steel mills in the Midwest—were sold to the New York-based investor Wilbur Ross.
Ross acted quickly. He set up a small trust fund to help defray Bethlehem’s unmet retiree health-care costs, cut a deal with the union to streamline work rules, put in place a new 401(k) savings plan—and then started over. The new Bethlehem Steel had a dependency ratio of 0 to 1. Within about six months, it was profitable. The main problem with the American steel business wasn’t the steel business, Ross showed. It was all the things that had nothing to do with the steel business.
Not long ago, Ross sat in his sparse midtown office and explained what he had learned from his rescue of Bethlehem. Ross is in his sixties, a Yale- and Harvard-educated patrician with small rectangular glasses and impeccable manners. Outside his office, by the elevator, was a large sculpture of a bull, papered over from head to hoof with stock tables.
“When we showed up to the Bethlehem board to approve the deal, they had an army of people there,” Ross said. “The whole board was there, the whole senior management was there, people from Credit Suisse and Greenhill were there. They must have had about fifty or sixty people there for a deal that was already done. So my partner and I—just the two of us—show up, and they say, ‘Well, we should wait for the rest of your team.’ And we said, ‘There is no rest of the team, there is just the two of us.’ It said the whole thing right there.”
Ross isn’t a fan of old-style pensions, because they make it impossible to run a company efficiently. “When a company gets in trouble and restructures,” he said, those underfunded pension funds “will eat it alive.” And how much sense does employer-provided health insurance make? Bethlehem made promises to its employees, years ago, to give them medical insurance in exchange for their labor, and when the company ran into trouble those promises simply evaporated. “Every country against which we compete has universal health care,” he said. “That means we probably face a fifteen-per-cent cost disadvantage versus foreigners for no other reason than historical accident. . . . The randomness of our system is just not going to work.”
This is what Walter Reuther believed. He went along with Wilson’s scheme in 1950 because he thought that agreeing with Wilson was the surest way of getting Wilson and the other captains of industry to agree with him. “Reuther and his brain trust had a theory of capitalism,” Nelson Lichtenstein, the Reuther biographer, says. “It was: If we force G.M. to pay extra, we can create an incentive for G.M. to join our side.” Reuther believed, in other words, that when American corporations reached the point where they couldn’t make their business more efficient without making it less profitable, when their dependency ratios soared to unimaginable heights, when they got tens of billions behind in their health-care obligations, when the cost of carrying thou-sands of retirees forced them to stare bankruptcy in the face, they would come around to the idea that the markets work best when the burdens of benefits are broadly shared. It has taken half a century, but the world may finally be catching up with Walter Reuther.
WELCOME HOME, DAVE!
In July of 2006, Dave Pavlick, a dedicated SPAN supporter based in Cleveland, decided to use his four weeks of vacation to hike across the state to call attention to the plight of the uninsured and underinsured and to publicize and win support for SPAN's campaign to put single-payer health care on the ballot in Ohio. Dave completed his grueling 23-day walk on July 27 at 7:00 p.m. on the steps of Cleveland City Hall, 601 Lakeside Avenue. The Walk was a complete success, raising awareness of the issue and support from people across the state. Click here to see some of the press coverage Dave got.
By Dean Baker
t r u t h o u t | Perspective
Monday 05 May 2008
Last month, a bipartisan group of prominent budget experts had a press event at the Brookings Institution where they argued that Congress had to make major cuts in Social Security, Medicare and Medicaid. They claimed large cuts in these programs were necessary in order to prevent the explosion in the budget deficit that is projected if these programs stay on their current course.
While these experts are right to point to the long-term fiscal problems facing the country, the real problem is not the budget and these key programs on which tens of millions of people depend. The real problem is the United States has a broken health care system, which is projected to get progressively more inefficient through time.
Since roughly half of the country's health care costs are paid by the government, primarily through Medicare and Medicaid, the projected explosion in health care costs is also projected to lead to an explosion in government spending. If the health care system is never fixed, the burden on the budget will eventually be unsustainable, with annual deficits running into the trillions of dollars, exactly as the Brookings contingent claimed.
However, it is crucial the public recognize that the problem is health care costs, not a growing population of elderly. The two issues are easily confused, especially since most public sector health care costs go to provide health care for the elderly. The projected increase in the ratio of retirees to workers will impose a strain on the budget, but it will not be qualitatively different than the strain that aging has imposed in prior decades.
The country has always been aging - we are living longer - we can easily cover the cost of a growing population of retirees as long as the economy is healthy. With normal productivity and wage growth, our children and grandchildren will be able to support a larger population of retirees and still enjoy a better standard of living than we do; just as most of us now enjoy a better standard of living than our grandparents, even though we support a much larger number of retirees than they did in their working years.
However, if health care costs follow the projected trajectory, then the cost of Medicare, Medicaid, and other government health care programs will be unsustainable. Of course, in this scenario the rising cost of health care will also place an enormous burden on the private sector.
Our per person health care costs are already more than twice as high as the average in other wealthy countries like Germany, England and Canada. In the projected scenario, per person health care costs will be four or five times as high in the United States as in other countries by 2050. In this context, US firms will face an enormous competitive disadvantage if they pay for their workers' health care costs.
If the companies don't pay for insurance, then most workers will face an enormous struggle paying for insurance costs that will be almost as high as the typical wage of a worker today. In either case, workers will have far less money to spend on food, housing, education, and other necessary expenses, if health care costs grow as projected.
No one in the Brookings contingent would dispute the basic facts; we are all looking at the same numbers. If health care costs in the United States were brought in line with costs in other wealthy countries, all of which enjoy longer life expectancies than we do, then we would not be looking at scary budget projections 20 or 30 years down the road.
This suggests the urgency of fixing the US health care system. Health care reform is not only necessary to extend health care coverage to the uninsured, it is also essential for preventing our health care system from strangling the economy. Reform will require overcoming the opposition of extremely powerful lobbies, such as the pharmaceutical and insurance industries, but there really is no alternative.
As the Brookings contingent said, the current path is unsustainable. And it is not acceptable to tell our parents and grandparents they will just have to die because our health care system has made their care unaffordable.
By Amy Goodman
King Features Syndicate
Posted on April 24, 2008
As the media coverage of the Democratic presidential race continues to focus on lapel pins and pastors, America is ailing. As I travel around the country, I find people are angry and motivated. Like Dr. Rocky White, a physician from a conservative, evangelical background who practices in rural Alamosa, Colo. A tall, gray-haired Westerner in black jeans, a crisp white shirt and a bolo tie, Dr. White is a leading advocate for single-payer health care. He wasn't always.
He told me in a recent interview: "Here I am, a Republican, thinking about nationalizing health care. It just went against the grain of everything that I stood for. But you have to remember: I didn't come to those conclusions with lofty ideals of social justice."
In the early 1990s, his medical group started falling apart. White, a keen student of economics and the business of medicine, determined that it wasn't just his practice but the system that was broken.
"You're seeing an ever-increasing number of people starting to support a national health program. In fact, 59 percent of practicing physicians today believe that we need to have a national health program. I mean, that's unheard of, even 10 years ago. It's amazing to see a new generation of physicians coming up who are disgusted with our current health-care system. You know, we're trained to be advocates of patients, we're trained to save lives, we're trained to practice medicine. And instead, what we're doing is we're practicing Wall Street economics."
Single-payer is not to be confused with universal coverage, which Hillary Clinton and Barack Obama both support. In fact, in a recent debate, when Clinton raised the issue of single-payer, the audience interrupted with applause. She immediately countered, "I know a lot of people favor [it], but for many reasons [it] is difficult to achieve."
Why? One of the most powerful industries in the country opposes it -- the insurance industry. Under universal coverage, insurance profits are preserved. Under single-payer, they are not.
Dr. Rocky White, who now sits on the board of the nonprofit Health Care for All Colorado, has switched his political affiliation. He also has updated and reissued Dr. Robert LeBow's book on single-payer called Health Care Meltdown: Confronting the Myths and Fixing Our Failing System.
He described possible solutions: "There are a lot of different types of single-payer systems -- you could have purely socialized medicine. That's kind of like what England has. The government owns the hospitals, the government owns the clinics, the government finances all the health care, and all the doctors work for the government. That is truly socialized medicine, as opposed to the Canadian system, where the financing comes through their Medicare program, but all the doctors are in private practice."
The economics are complex, but this plain-spoken country doctor explains it clearly:"You know, this industry is a $2-trillion industry, and the profits in the for-profit insurance industry are so huge and it's so deeply entrenched into Wall Street ... but until we move to a single-payer system and get rid of the profit motive in financing of health care, we will not be able to fix the problems that we have."
What would it take? Dr. White has spent his life dealing with the high winds on the high plains, from Nebraska to Colorado, and describes the challenge the country faces in familiar terms:"I think that our current presidential candidates understand that ideally single-payer would be the best, but they don't have the political will to move that forward. Their job is to feel which way the wind is blowing. Our job is to turn that wind."
Amy Goodman is the host of the nationally syndicated radio news program, Democracy Now! © 2008 King Features Syndicate All rights reserved.
View this story online at: http://www.alternet.org/story/83420/
New York Times
March 27, 2008
By MARCI ALBOHER
If there is one thing that separates the self-employed from those employed by others, it is their preoccupation with health insurance.
I was reminded of this on Feb. 14, when I wrote a post on the Shifting Careers blog asking small-business owners and would-be entrepreneurs what they were doing about health insurance. Within hours, scores of people posted comments about their own experiences and, if they had managed to find good resources, shared those. I have been reading e-mail messages and trying to make sense of the subject ever since. In short, it is not pretty out there.
A 43-year-old woman wrote about going without insurance in the first year of her business. “I lived in terror of needing a doctor visit or worse yet, lab tests or something more,” she said. She then moved to an H.M.O. for sole proprietors through a local chamber of commerce. The cost of that plan, which she said was $171 a month in 2001, has now risen to $500 a month. At the same time, she wrote, co-payments have increased and services have been cut.
That woman’s experience reflected the exasperated tone of several of the other writers. Many entrepreneurs seem to find health insurance after doing a lot of research, though they generally pay more than they think they should. Some who are in good health bet on remaining that way and forgo health insurance or get policies with low premiums and high deductibles, choosing to insure themselves for mostly catastrophic illness. Some are lucky enough to have a well-insured partner.
The unluckiest are those with chronic illnesses or the dreaded pre-existing condition that results in a denial of coverage. Many of these people abandon dreams of entrepreneurship altogether because they need jobs that come with a health plan and they cannot find a way to self-insure.The comments also revealed that the health care system is a state-by-state patchwork, with options varying based on where you live. A 60-year-old owner of a mail order business from Illinois wrote that she was unable to get insurance until about 10 years ago when Illinois started a high-risk pool with Blue Cross Blue Shield.
A woman in business with her 57-year-old husband wrote to say that her husband is presently uninsured because, as a diabetic with high blood pressure, she cannot find an insurance company in Florida that will cover him. The stories go on. There were reports from Americans happily insured while living in Europe and Canada. And, of course, there were numerous pleas to Washington.
Jennifer Jaff, a reader who happens to be an expert on health insurance issues, shared a valuable tool, healthinsuranceinfo.net. The site, maintained by the Georgetown Health Policy Institute, shows a map of the country and after clicking on a state, a document is downloaded that covers everything from what kinds of programs are available to small-business owners to whether there is a high-risk pool available for those who have been rejected by insurance providers. These primers are comprehensive and frequently updated, and they are a great place to start, especially if you have been wondering about the meaning of jargon that peppers insurance providers’ descriptions of their offerings.
Many readers shared recommendations based on where they buy their insurance. Popular sources were local chambers of commerce, the Small Business Service Bureau (sbsb.com), AARP (aarp.org) (for those over 50), industry-specific trade associations like a bar association or the Institute of Electrical and Electronics Engineers. In states that permit it, small-business owners can also start a group with as little as one member. In that case, a good insurance agent comes in handy.
For the reasonably healthy who know what they are looking for, ehealthinsurance.com got fairly good reviews. The site, which has the feel of an Expedia or Orbitz for purchasing health insurance, allows you to compare a variety of policies offered through about 70 insurance providers. One caveat, pointed out by several readers, is that ehealthinsurance.com does not serve consumers in all states. Rhode Island, Vermont, Massachusetts, Maine and North Dakota are excluded. The company also covers only individuals. So if your company has employees, you will need to explore other options, like starting a group if your state permits that.
Another possibility for consultants and independent workers is the Freelancers Union, which won consistently good reviews in the reader comments. But the union also has some limitations. It operates in only 30 states, and you have to work in one of the industries or occupations it serves. While healthy business owners have to incur high costs and navigate a maze of choices, the truly unhealthy face the biggest challenges.
To learn more about options for those whose health is getting in the way of their self-employment, I spoke with Ms. Jaff, the woman who directed me to healthinsuranceinfo.net. Ms. Jaff, a lawyer who has worked on legal issues surrounding health care in both the public and private sector, now runs Advocacy for Patients With Chronic Illness (advocacyforpatients.org), a nonprofit organization in Farmington, Conn., that advises and advocates on behalf of the chronically ill. She says she works with about 1,000 patients a year, handling everything from battles to get insurance companies to pay for treatments prescribed by patients’ doctors to helping people figure out the best coverage.
Ms. Jaff speaks from experience. She suffers from Crohn’s disease, a condition so severe that she does not leave her house during flare-ups except to get to a doctor’s appointment or to the hospital. She wanted to find something she could do out of her home and as she went through the challenge of finding her own health insurance, she discovered what she calls “a community of patients in desperate need of help.”
Ms. Jaff qualified for the Municipal Employees Health Insurance Program, offered by Connecticut to cover small-business owners as part of a plan for state employees. She knew about the plan, which she recommends to all small- business owners in Connecticut, from her days as a lawyer in the attorney general’s office. Even with her extensive experience, Ms. Jaff has not been able to find the holy grail — good coverage at a great price. When she started on this insurance, her premium was $400 a month. Last year, the monthly payment went up to $800.
“I don’t know if people who don’t have chronic illnesses can really understand this,” she said. “But I have worked full time my entire adult life — generally 15 to 18 hours a day. I have paid into the system for all those years. And there is only one thing that could bankrupt me, and it is my health. I could lose every penny I own from one serious hospitalization without insurance. So I chose the plan that would give me the most possible coverage because the year I don’t is going to be the year I get really sick.”
By Milton Fisk and Kay Mueller
April 24, 2008
Government subsidies and outsourcing may be good for business without always being good for the public. Medicare outsources the administration of its prescription drug program, Medicare D, to private insurers. Medicare Advantage — Medicare C — subsidizes managed care insurance plans for seniors choosing them. Several current presidential aspirants — Clinton and Obama — would subsidize the purchase of insurance for the low-income uninsured. Each of these plans offers private insurers protection against a less wasteful plan, one that does without private insurers.
Involving the insurers in the Medicare drug and Advantage plans is a needless drain of Medicare funds.
The drug companies charge much more for the drugs used under Medicare D than they do for the same drugs bought by Medicaid. The law forbids Medicare to negotiate prices of Medicare D drugs with the pharmaceuticals. Medicaid bargains a 30 percent discount on drugs while the insurers running Medicare D bargain only a 5 to 10 percent discount. Medicare C’s Advantage Plan turns over managed care to private insurers, paying them 10 to 12 percent more than Medicare pays for seniors in its regular program.
Suppose one of those presidential aspirants wins. What would the subsidies they want cost? They want subsidies to help at least the poorest two-thirds of the 47 million uninsured buy insurance.
The insurers would be in for a windfall injection — from the government and low-income individuals — of about $150 billion each year. Any industry would love this. But would it serve the public interest?
The answer comes from looking at how to get quality health care to the uninsured for much less. The private insurers operate with enormous overhead. Profit is an essential part of it, since without it, investors turn away.
Then there is marketing, lobbying, paperwork, computer systems, colossal salaries for upper level managers and the expense of constantly merging and reorganizing. In sum, overhead accounts for roughly 25 percent of premium income, while overhead for Medicare is five times less!
The presidential aspirants who promote this kind of insurer protection plan recognize the waste involved. So what is their response? They would make subsidies contingent on reducing overhead. Sen.Clinton’s plan says premiums are not to be dedicated to “excessive profits and marketing.” This might reduce overhead from 25 percent down to 15 or 20 percent of premium income — still three or four times more than Medicare’s overhead. How can anyone stand before the public and say they want to waste billions of taxpayers’ dollars just to protect the insurers?
It is not right to use the uninsured as an excuse for making the insurers richer. We don’t need the insurers to provide the uninsured with health care.Those proposing insurance protection plans spread the view that we shouldn’t help the uninsured unless the corporations make a buck out of it. Whatever happened to the public interest?
This guest column was written by Milton Fisk and Kay Mueller, who are members of the research committee of Hoosiers for a Commonsense Health Plan. Fisk is also an author of a book on health care reform
New York Times
May 4, 2008 By REED ABELSON and MILT FREUDENHEIM
The economic slowdown has swelled the ranks of people without health insurance. But now it is also threatening millions of people who have insurance but find that the coverage is too limited or that they cannot afford their own share of medical costs.
Many of the 158 million people covered by employer health insurance are struggling to meet medical expenses that are much higher than they used to be often because of some combination of higher premiums, less extensive coverage, and bigger out-of-pocket deductibles and co-payments.
With medical costs soaring, the coverage many people have may not adequately protect them from the financial shock of an emergency room visit or a major surgery. For some, even routine doctor visits might now take a back seat to basic expenses like food and gasoline.
“It just keeps eating into people’s income,” said James Corbin, a former union official who works for the local utility in Tucson.
Mr. Corbin said that under their employer’s health plan, he and his co-workers are now obliged to pay up to $4,000 of their families’ annual medical bills, on top of about $1,600 a year in premiums. Five years ago, they paid no premiums and were responsible for only about $2,000 of their families’ medical bills.
“That’s a big jump,” Mr. Corbin said. “You’ve just lost a month’s pay.”
Already, many doctors say, the soft economy is making some insured people hesitant to get care they need, reluctant to spend a $50 co-payment for an office visit. Parents “are waiting longer to bring in their children,” said Dr. Richard Lander, a pediatrician in Livingston, N.J. “They say, ‘The kid isn’t that sick; her temperature is only 102.’ ”
The problem of affording health care is most acute for people with no insurance, a group expected to soon exceed 48 million, but those with insurance say they too are feeling the pain.
Since the recession of 2001, the employee’s average cost of an annual health care premium for family coverage has nearly doubled to $3,300, up from $1,800 while incomes have come nowhere close to keeping up. Factor in other out-of-pocket medical costs, and the portion of the average American household’s income that goes toward health care has risen about 12 percent, according to the consulting and accounting firm Deloitte, and is now approaching one-fifth of the average household’s spending.
In a recent survey by Deloitte’s health research center, only 7 percent of people said they felt financially prepared for their future health care needs.
Shirley Giarde of Walla Walla, Wash., was not prepared when her husband, Raymond, suddenly developed congestive heart failure last year and needed a pacemaker and defibrillator. Because his job did not provide health benefits, she has covered them both through a policy for the self-employed, which she obtained as the proprietor of a bridal and formal-wear store, the Purple Parasol.
But when Raymond had his medical problems, Ms. Giarde discovered that her insurance would cover only $22,000, leaving them with about $100,000 in unpaid hospital bills.
Even though the hospital agreed to reduce that debt to about $50,000, Ms. Giarde is still struggling to pay it in part because the poor economy has meant slumping sales at the Purple Parasol. Her husband, now disabled and unable to work, will not qualify for Medicare for another year, and she cannot afford the $758 a month it would cost to enroll him in a state-run insurance plan for individuals who cannot find private insurance.
She recently refinanced her car, a 2002 Toyota Highlander, to help pay for her husband’s heart medicines, which cost some $400 a month.
Experts say that too often for the underinsured, coverage can seem like health insurance in name only adequate only as long as they have no medical problems.
“There’s a real shift in the burden of health care to people who happen to be sick,” said Paul B. Ginsburg, the president of the Center for Studying Health System Change, a research group in Washington.
Companies and policy makers have yet to focus on what the faltering economy means for employees’ medical care, said Helen Darling, president of the National Business Group on Health, a Washington association of about 200 large employers.
“It’s a bad-news situation when an individual or household has to pay out-of-pocket three, four or five times as much for their health plan as they would have at the time of the last recession,” she said. “Americans have been giving their pay raise to the health care system.”
Sage Holben, a 62-year-old library technician with diabetes who is active in her local union in St. Paul, says that in 2003 union members agreed to a two-year freeze on wages to protect their health care coverage. But for the union, which will begin talks on the next contract this fall, it may be difficult to continue that trade-off, Ms. Holben said. “It’s at the point where we’re losing, anyway,” she said.
“I live paycheck to paycheck,” said Ms. Holben, who makes close to $40,000 a year at Metropolitan State University.
When she took the job in 1999, she says, the health benefits required no co-payments for doctor visits. Now, her out-of-pocket cost per visit is $25, and she pays $38 a month for her diabetes medicine. She has not been to the eye doctor in two years, even though eye exams are crucial for people with diabetes and she knows she needs new glasses. Nor does she monitor her blood sugar as regularly as she should because of the cost of the supplies.
“It’s not an extravagant expense,” she said. “It just adds up.” And it comes atop the increasing cost of utilities, gasoline and food and the few hundred dollars of repairs her 1994 Chevrolet Cavalier needs.
Many employers do recognize that their workers are struggling financially even as they are asking them to pick up more of their health-care bills.
“It makes the work we have to do even more challenging,” said Anne Silverman, the vice president in charge of benefits in North America for the publishing company Reed Elsevier. “Employees are being stretched in terms of their disposable income.”
Even so, more companies may see themselves as having little choice but to require employees to pay even more of their health expenses, said Ted Nussbaum, a benefits consultant at the firm Watson Wyatt Worldwide. And when a weak economy undermines job security, he said, workers may simply have to accept reduced benefits.
While Mr. Nussbaum and other consultants say it is unlikely that significant numbers of employers will simply drop coverage for their workers, the weak economy could prompt more of them to push for so-called consumer-driven plans. Such plans tend to offset lower premiums with higher annual deductibles.
And while these plans often allow employees to put pre-tax savings into special health care accounts, they typically end up forcing the worker to assume a bigger share of overall medical costs. About six million people are now enrolled in these medical plans.
Among employers, the hardest pressed may be small businesses. Their insurance premiums tend to be proportionately higher than ones paid by large employers, because small companies have little bargaining clout with insurers.
Health costs are “burying small business,” said Mike Roach, who owns a small clothing store in Portland, Ore. He recently testified on health coverage at a Senate hearing led by Ron Wyden, Democrat of Oregon.
Last year, Mr. Roach paid about $27,000 in health premiums for his eight employees. “It’s a huge chunk of change,” he said, noting that he was forced to raise his employees’ yearly deductible by 50 percent, to $750.
Around the nation, some workers are simply priced out of their employee health plans.
After Brian Falacienski of Milton, Fla., was laid off last year from his job as a surveyor for a construction company, he found another position. But the cost of his new health plan $800 a month for coverage with a $1,000 annual deductible was beyond the means of Mr. Falacienski, 38, who is married and has a 2-year-old daughter.
His wife, Marianne, started researching individual insurance policies and was able to find policies for her husband and daughter offering basic, if minimal, coverage, costing $161 a month for father and daughter. But Ms. Falacienski, 32, who has arthritis and the severe digestive disorder Crohn’s disease, is now uninsured. Because of her conditions, she said, four major insurers rejected her.
“I even applied for Medicaid,” she said, “but I wasn’t low-income enough.”
Copyright 2008 The New York Times Company