21 April 11
Earlier this week, The Times reported on Congressional backlash against the Independent Payment Advisory Board, a key part of efforts to rein in health care costs. This backlash was predictable; it is also profoundly irresponsible, as I'll explain in a minute.
But something else struck me as I looked at Republican arguments against the board, which hinge on the notion that what we really need to do, as the House budget proposal put it, is to "make government health care programs more responsive to consumer choice."
Here's my question: How did it become normal, or for that matter even acceptable, to refer to medical patients as "consumers"? The relationship between patient and doctor used to be considered something special, almost sacred. Now politicians and supposed reformers talk about the act of receiving care as if it were no different from a commercial transaction, like buying a car - and their only complaint is that it isn't commercial enough.
What has gone wrong with us?
About that advisory board: We have to do something about health care costs, which means that we have to find a way to start saying no. In particular, given continuing medical innovation, we can’t maintain a system in which Medicare essentially pays for anything a doctor recommends. And that’s especially true when that blank-check approach is combined with a system that gives doctors and hospitals — who aren’t saints — a strong financial incentive to engage in excessive care.
Hence the advisory board, whose creation was mandated by last year’s health reform. The board, composed of health-care experts, would be given a target rate of growth in Medicare spending. To keep spending at or below this target, the board would submit “fast-track” recommendations for cost control that would go into effect automatically unless overruled by Congress.
Before you start yelling about “rationing” and “death panels,” bear in mind that we’re not talking about limits on what health care you’re allowed to buy with your own (or your insurance company’s) money. We’re talking only about what will be paid for with taxpayers’ money. And the last time I looked at it, the Declaration of Independence didn’t declare that we had the right to life, liberty, and the all-expenses-paid pursuit of happiness.
And the point is that choices must be made; one way or another, government spending on health care must be limited.
Now, what House Republicans propose is that the government simply push the problem of rising health care costs on to seniors; that is, that we replace Medicare with vouchers that can be applied to private insurance, and that we count on seniors and insurance companies to work it out somehow. This, they claim, would be superior to expert review because it would open health care to the wonders of “consumer choice.”
What’s wrong with this idea (aside from the grossly inadequate value of the proposed vouchers)? One answer is that it wouldn’t work. “Consumer-based” medicine has been a bust everywhere it has been tried. To take the most directly relevant example, Medicare Advantage, which was originally called Medicare + Choice, was supposed to save money; it ended up costing substantially more than traditional Medicare. America has the most “consumer-driven” health care system in the advanced world. It also has by far the highest costs yet provides a quality of care no better than far cheaper systems in other countries.
But the fact that Republicans are demanding that we literally stake our health, even our lives, on an already failed approach is only part of what’s wrong here. As I said earlier, there’s something terribly wrong with the whole notion of patients as “consumers” and health care as simply a financial transaction.
Medical care, after all, is an area in which crucial decisions — life and death decisions — must be made. Yet making such decisions intelligently requires a vast amount of specialized knowledge. Furthermore, those decisions often must be made under conditions in which the patient is incapacitated, under severe stress, or needs action immediately, with no time for discussion, let alone comparison shopping.
That’s why we have medical ethics. That’s why doctors have traditionally both been viewed as something special and been expected to behave according to higher standards than the average professional. There’s a reason we have TV series about heroic doctors, while we don’t have TV series about heroic middle managers.
The idea that all this can be reduced to money — that doctors are just “providers” selling services to health care “consumers” — is, well, sickening. And the prevalence of this kind of language is a sign that something has gone very wrong not just with this discussion, but with our society’s values.
New York Times, May 21, 2011
By ABBY GOODNOUGH
MONTPELIER, Vt. — Many people move to Vermont in search of a slower pace; Dr. Deb Richter came in 1999 to work obsessively toward a far-fetched goal.
She wanted Vermont to become the first state to adopt a single-payer health care system, run and paid for by the government, with every resident eligible for a uniform benefit package. So Dr. Richter, a buoyant primary care doctor from Buffalo who had given up on New York’s embracing such a system, started lining up speaking engagements and meeting with lawmakers, whom she found more accessible than their New York counterparts.
“I wrote a letter to the editor, and the speaker of the House called me up to talk about it,” Dr. Richter, 56, recalled recently. “It was astounding. In New York, I couldn’t even get an appointment with my legislator.”
Twelve years later, Dr. Richter will watch Gov. Peter Shumlin, a Democrat, sign a bill on Thursday that sets Vermont on a path toward a single-payer system — the nation’s first such experiment — thanks in no small part to her persistence. Though scores of people pushed for the bill, she was the most actively involved doctor — “the backbone,” Mr. Shumlin has said, of a grass-roots effort that helped sway the Democratic Legislature to pass it this spring even as other states were suing to block the less ambitious federal health care law.
“We wouldn’t be where we are without Deb,” Mr. Shumlin said in an interview. “She’s made this her passion. And like anyone that’s making significant social change, she has qualities of persuasiveness and leadership and good judgment that are hard to find.”
As in all states, the cost of health care has increased sharply in Vermont in recent years. It has doubled here over the last decade to roughly $5 billion a year, taking a particular toll on small businesses and the middle class. All 620,000 of the state’s residents would be eligible for coverage under the new system, which proponents say would be cheaper over all than the current patchwork of insurers. A five-member board appointed by the governor is to determine payment rates for doctors, what benefits to cover and other details.
But much remains to be worked out — so much that even under the most optimistic projections the plan might not take effect until 2017. Most significantly, Mr. Shumlin still has to figure out how much it will cost and how to pay for it, possibly through a new payroll tax. Whether he will still be in charge by 2017 is among the complicating factors.
“If we had the exact same Legislature and the same governor we could get it done,” Dr. Richter said. “It’s a big if, because the opposition has a ton more money to convince people that the governor is evil and this is socialized medicine and all kinds of other scary stuff.”
The opposition will probably include insurance companies, drug makers and some employers who say there are too many unknowns. Many doctors, too, are wary of the change and what it might mean for their income. Dr. Richter said she believed a “slim majority” of the state’s 1,700 licensed physicians were supportive.
“One of the bigger worries I have is we’ve had all this hoopla and nothing’s going to happen,” she said at a coffee shop here recently on a rare quiet afternoon. “But it might also be helpful to us, because it’s going to be hard for any opposition to be steadily pushing for seven years.”
The federal health care law has complicated Vermont’s plans, requiring the state to first create a health insurance exchange to help residents shop for coverage by 2014. The state would then need a federal waiver to trade its exchange for a government-run system.
Dr. Richter said she embraced the idea of a single-payer system as a young doctor in Buffalo, where many of her patients put off crucial treatments because they were uninsured. As a medical student, she saw a patient with a life-threatening heart infection caused by an infected tooth that had gone untreated because he lacked dental insurance.
“He was in the hospital for six weeks, and I was like, ‘This makes no sense,’ ” she said.
She went to a meeting of Physicians for a National Health Program, a group that advocates for a national single-payer system, and started researching the concept. Before long she became a vocal advocate, even becoming president of the physicians’ group, and moved to Vermont.
John McClaughry, a former Republican state senator who is against the new law, said Dr. Richter meant well but did not understand the “long-term damage” it would wreak. In particular, he said the law would drive away businesses that did not want to help pay for it. “She’ll tell you that putting in single-payer will attract businesses from all over the place,” said Mr. McClaughry, vice president of the Ethan Allen Institute, a conservative research group. “I don’t think she has any appreciation of business decisions at all.”
Since moving with her husband and two sons to a rambling old house within view of the State House, Dr. Richter has given about 400 talks on the single-payer concept, tutored lawmakers in the State House cafeteria and testified before the Legislature more times than she can remember. Once, she presented a printout of all the insurance companies her small practice in Cambridge had billed over five years.
“It was like 190 pages long,” she said. “Here we were, this tiny rural clinic having to bill all these different addresses. And all of them have different rules and reimbursements; I mean, it’s ridiculous.”
Some supporters of single-payer health care say Vermont’s law does not go far enough, mostly because it would allow at least a handful of private insurers to stay in the market indefinitely. Self-insured businesses like IBM, the state’s largest employer, could continue providing health coverage to workers under the law, though they would have to help finance the new system, possibly through a payroll tax.
Physicians for a National Health Program is among the critics, saying the law “falls well short of the single-payer reform needed.” Allowing private insurers to remain in the state will prevent meaningful savings, the group says.
Dr. Richter acknowledges that the law will not allow for “strict single-payer,” but said it still promised “health care for everybody, for less cost.”
“This is not the top of the mountain, but it’s the first time anyone has headed up the mountain,” she said. “No other place in the country has gotten this far.”
Big leap points to urgency of enacting single-payer Medicare for all: national doctors' group
FOR IMMEDIATE RELEASE
Sept. 16, 2010
Quentin Young, M.D.
Olveen Carrasquillo, M.D.
Margaret Flowers, M.D.
Mark Almberg, PNHP, (312) 782-6006, firstname.lastname@example.org
Local physicians in almost all 50 states available for comment (See historical table of uninsured by state below).
Official estimates by the Census Bureau showing a dramatic spike of 4.3 million in the number of Americans without health insurance in 2009 - to a record 50.7 million - underscore the urgency of going beyond the Obama administration's new health law and swiftly implementing a single-payer, improved Medicare-for-all program, according to Physicians for a National Health Program, a 17,000-member physician group.
The Census Bureau reported that 16.7 percent of the population lacked health insurance coverage in 2009, up from 15.4 percent in 2008, when 46.3 million were uninsured.
Lack of health insurance is known to have deadly consequences. Last year researchers at Harvard Medical School showed that 45,000 deaths annually can be linked to lack of coverage.
"Tragically, we know that the new figures of uninsured mean a preventable annual death toll of about 51,000 people - that's about one death every 11 minutes," said Dr. Quentin Young, national coordinator of PNHP. Young is a Chicago-based retired physician whose private medical practice once counted President Obama among its patients.
Young said that even if the administration's new health law works as planned, the Congressional Budget Office has projected about 50 million people will be uninsured for the next three years and about 23 million people will remain uninsured in 2019.
"Today's report suggests those projections are likely too low," he said.
The jump of 4.3 million uninsured is the largest one-year increase on record and would have been much higher - over 10 million - had there not been a huge expansion of public coverage, primarily Medicaid, to an additional 5.8 million people.
The rise in the number of uninsured was almost entirely due to a sharp decline in the number of people with employer-based coverage by 6.6 million. In 2009, 55.8 percent of the population had such coverage, having declined for the ninth consecutive year from 64.2 percent in 2000.
The record-breaking number of uninsured - exceeding 50 million for the first time since the Census Bureau started keeping records - includes 10 million children.
The biggest jumps in the percentage of uninsured were in Alabama, Oklahoma, Ohio, Missouri, Georgia, Delaware, North Carolina and Florida. In terms of absolute numbers, the biggest increases were in California, Florida, Texas, Ohio, Georgia, North Carolina, Illinois, Alabama, Michigan and Pennsylvania. In Massachusetts, 295,000 people remain uninsured despite that state's 2006 reform. (See link below for historical tables of the uninsured by state.)
"The only way to solve this problem is to insure everyone," Young said. "And the only way to insure everyone at a reasonable cost is to enact single-payer national health insurance, an improved Medicare for all. Single payer would streamline bureaucracy, saving $400 billion a year on administrative overhead, enough to pay for all the uninsured and to upgrade everyone else's coverage."
Dr. Olveen Carrasquillo, a PNHP board member and chief of general internal medicine at the University of Miami's Miller School of Medicine, noted that the Census Bureau was once again silent on the pervasive problem of "underinsurance."
"Not having health insurance, or having poor quality insurance that doesn't protect you from financial hardship in the face of medical need, is a source of mounting stress and poor medical outcomes for people across our country," Carrasquillo said. New research has found that about 14.1 million children and 25 million non-elderly adults were underinsured in 2007, a figure that is likely much higher today.
"The government subsidies under the new health law will not be sufficient to provide quality and affordable coverage to the vast majority of Americans," he said. "Tens of millions will remain uninsured, underinsured and without access to care. We need more fundamental reform to a single-payer national health insurance program."
State-by-state data on the uninsured from 2006-2009 can be found here: www.pnhp.org/sites/default/files/docs/2010/Uninsured-by-state-2006-2009.pdf
Physicians for a National Health Program (www.pnhp.org) is an organization of more than 17,000 doctors who support single-payer national health insurance. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.
Call Congress and Ohio Legislators to restore funding:
Ohio ADAP (Aids Drug Assistance Program)
Joint federal/state funding just like Medicaid
People rely on this program due to economic strain from job loss and loss of insurance.
July 4 2010, budget reductions put a freeze on new enrollees, and changed income requirements which dropped 300+ people from the program.
Patients on these medications are less likely to infect others.
We care about others and this strengthens our community.
Stopping these treatments causes a viral rebound, and the virus that arises after treatment is stopped, is resistant to the medication.
Assistance for these medications can save lives and supports the freedom for patients to lead a productive and fulfilling life.
This month show some love and call on political leaders to empathize with patients who are struggling to stay healthy.
US Congress switchboard: (202) 224-3121 Ask for your Senator or Representative’s office.
Reach Ohio Senators at: www.ohiosenate.gov
Vermont moves closer to enacting Single Payer system
Less than one month after receiving the final system designs from Dr William Hsiao, Vermont Governor Peter Shumlin unveiled his proposal for moving Vermont to a single payer type universal access health care system in presentations to the Vermont legislature Feb 8th and 9th.
All the groups supporting single payer in Vermont are coalescing around Governor Shumlin’s proposal. It starts by developing an exchange under the PPACA then establishes funding and delivery criteria to morph into a single payer system by 2014. Federal waivers are required to accomplish this proposal so it’s important all state-based organizations support waiver amendments to the PPACA. Click the "News & Opinion" tab at SPANOhio.org for a screen shot picture of Vermont’s health reform timeline.
SPAN Ohio’s 8th Annual State Conference set for April 16th
Join fellow advocates from across Ohio at the 8th annual SPAN Conference. Speakers include Donna Smith of CNA/NNU (National Nurses United). Donna, a journalist by trade, came to national attention when her medical bankruptcy was exposed in the movie “SICKO”. She works today helping organize nurses and advocates a humane and sustainable single payer system for America. Also speaking is David Steil, newly elected President of healthcare4allPA. A former PA legislator David served sixteen years in the PA assembly as a Republican. Mr. Steil also is owner and president of a manufacturing concern in PA. His focus: the business perspective on healthcare reform. All attendees will have the choice of attending workshops after a provided luncheon and will receive gift bags including SPAN pen, notepad and a copy of “Hijacked” by Dr John Geyman. Brochures will be in the mail next week or register online at spanohio.org.
Kurt Bateman, Director
AP Photo/Toby Talbot
(Host) Governor-elect Peter Shumlin says he's optimistic that he can persuade the Obama administration to grant Vermont a special waiver to implement a single payer health care system.
Shumlin says he's already raised this issue with the president, and he'll do it again when he visits the White House early next month.
VPR's Bob Kinzel reports.
(Kinzel) The possibility of Vermont winning a federal waiver to put a single payer health care system in place was a top issue in the gubernatorial campaign.
Republican candidate Brian Dubie said that 2014 is the earliest a waiver could be issued under the new national health care reform law.
But Democrat Peter Shumlin argued that Vermont's congressional delegation could petition the Obama administration to make it happen sooner.
Speaking on VPR's Vermont Edition, Shumlin says he's already spoken to the president about this issue.
(Shumlin) "I had the privilege of talking to the President of the United States earlier today. He called me from Air Force One. A lot of bizarre things have happened to me in the last five days, but that's one of them. You know, you pick up the phone and there's the president at the end of the line. It was a real honor."
(Kinzel) And Shumlin says he doesn't think getting a federal waiver will be the toughest part of implementing a single payer system in Vermont.
(Shumlin) "The waivers is the easy part. The hard part is designing a single payer health care system that works and that delivers quality health care, gets insurers off our providers' backs, has a reimbursement system that makes sense. ... I believe if we design that system, we can sell it."
(Kinzel) The Legislature is expected to receive a special study this winter that will outline several different health care reform plans. One of them will be a single payer approach.
Once that report has been released, Shumlin says he wants to bring together a diverse group of businesspeople, health care providers and consumers to hammer out a workable plan. The governor-elect says it should have 4 specific goals.
(Shumlin) "Delivers quality health care to all Vermonters, where health care is right and not a privilege. Second, is affordable. The current system is going to drown us and will bankrupt us. We can't spend a million dollars more a day than we did the day before. Third, provide outcomes-based medicine so that providers are reimbursed for keeping us healthy, not the number of tests they put us through. And finally, fourth, and perhaps most important, using technology."
(Kinzel) Shumlin admits that making major changes to the state's health care system isn't going to happen overnight. But he's hopeful that significant progress can be made during his first term in office.
For VPR News, I'm Bob Kinzel in Montpelier
Massachusetts voters have, for the second straight election, overwhelmingly affirmed their support for single payer health reform by turning in majority ‘Yes’ votes in all fourteen districts where local single payer ballot questions appeared on November 2. The ballots spanned 80 different cities and towns in a state of 351 municipalities, winning in every city and town reporting results so far except two. Five of the districts backing single payer reform voted for Scott Brown in last year’s special senate election, which was largely seen as a referendum on national health reform, showing that the goal of improved and expanded Medicare for All is supported by a diverse range of communities across the state. It is also striking that in a year of political change, and in a year of drawn-out economic suffering, residents recognize that single payer health reform offers the promise of a more just and humanitarian health care system, which would actually cost us less as a society and lift the burden of sky-rocketing health costs from thousands of households, employers, and taxpayers.
As we celebrate the life and accomplishments of Dr Martin Luther King Jr., it is fitting that we recall his observation about what has become SPAN’s purpose:
“Of all the forms of inequality, injustice in healthcare is the most shocking and inhumane.” Rev Dr Martin Luther King Jr.
It is undeniable that health care is a fundamental human need. Indeed the concept of access to care as an unalienable human right exists in the philosophical tenets of every faith tradition. This fact was reiterated at a health conference hosted at the Vatican in November.
Caring for one another is at the heart of our modern democracy as well. These values are set forth in both the Declaration of Independence and the preamble of the US Constitution. However, without health none of the later enumerated rights are able to be realized. I say the people are losing their freedom due to lack of health care every day.
Dr King understood: “because the arc of the moral universe is long, but it bends toward justice" that no one bill passed or law enacted would achieve justice. We must be always advancing the cause. For as long as one person suffers from the lack of care we all suffer.
Today we recommit to fighting for universally accessible care, for all, without regard to individual economic means or the ability to pay.
Kurt Bateman, Director
Third Biennial Teach-In a Success
On the heels of the introduction of SB 112 by Senator Skindell Ohio SD 23 and co-sponsored by Senator Nina Turner Ohio SD 25 March 10 , 2011, members of the SPAN Ohio Lobby Committee met with members of both houses of the Ohio Legislature March 15th. Those attending for SPAN Ohio were Dr. Johnathon Ross Region 2, Arlene Sheak Region 3, Dr. Donald Rucknagel and Dr. Dick Bozian Region 4, Dr Alice Faryna Bob Krasen and Connie Hammond Region 5, and Debbie Silverstein and Mary Nichols-Rhodes Region 6. Special recognition to our committee co-chairs Debbie and Mary for doing the bulk of the preparation for this event in conjunction with the office of State Representative Robert Hagan and Mike Foley’s offices to arrange the meeting space atop the Riffe Office tower in Columbus.
Throughout the day, in-office meetings were attended by our committee with Ohio Senators and Representatives totaling more than 10% of the entire legislature. At the midday presentation even more legislative staff was in attendance to hear our own Dr. Ross explain the scope of the problem with healthcare access in Ohio and the solution that the Health Care For All Ohioans Act provides. After Dr. Ross completed, Debbie Silverstein presented the economic data that SPAN Ohio has assembled to illustrate the positive effect the HCFAOA would have on state budget conditions. This timely discussion of the cost advantages stood in sharp contrast to the budget machete that, ironically, was being wielded on the other end of the hall by Governor Kasich at the same moment. See the News and Opinion section of this site for an entertaining narrative written by Mary Nichols-Rhodes. In the end we did a great deal of education and outreach to the legislature and citizens there to oppose the Governor’s budget proposal.
PPACA….. Popular support for doing more
Polls conducted this year have consistently shown that though the public is closely split on positive or negative reaction to the Affordable Care Act, solid support is growing that more should be done. Associated Press polls conducted January 5 thru 10 show 43% support for “doing more” vs. 26% for repeal. These results show an 8% increase in support for “doing more” and an 11% decrease in support for repeal from October 2010. Likewise in Public Policy Polling conducted February 3 thru 6 the largest plurality of any category (38%) wanted the federal law changed to make it stronger. 56% of self described Moderates favored no change or making the ACA stronger and even 15% of self described Conservatives felt the same. Finally, a survey of the most important issues among voters, the top four according to Senator Sherrod Brown’s office were, in order of importance: Federal Deficit, Jobs, Protection of Medicare and Affordable Healthcare. As we know the best way to protect Medicare is to enhance and expand it to all! In addition that would enhance economic competitiveness, improve job prospects, and by extension help raise revenues to mitigate the deficit.
Vermont’s Legislature Passes Reform
Pasted below is a link to an article describing the passage of H202 in the Vermont legislature. Ohio can be on its way also through our perseverence!
SPAN Ohio Support Petition
Dave Pavlick, SPAN Ohio board member and intrepid walker for the Health Care For All Ohioans Act, has created an online petition at Change.org. Dave, as many of you know, has walked across Ohio twice to raise awareness about the need for a new approach to the provision of health care in Ohio and indeed America. The PPACA isn’t going to be enough. All of those receiving this message please sign the petition and circulate this link to others. As Vermont demonstrates, we will overcome, there is no doubt!
Debtor’s prison the next battle in healthcare?
The following comment was posted in response to an article regarding collection agencies who swear out warrants for arrest of people who can’t pay bills:
I went to a first time visit in a "Women's Specialty Center". I am covered by an HMO. I had to provide proof of insurance (which they verified ) and my driver's license. I was handed at least 10-12 pgs of paperwork to read and sign. One page was one of the financial responsibility pages. It said if my insurance didn't pay then I was financially responsible for the bill AND if the account went into collections that I agreed to pay collection fees and 53.84 % interest. Nice number huh?! I wrote down that I did not agree and signed the form. The BUSINESS Manager came to the waiting area and called me into the office. We had a discussion and at the end I was told that I would not be seen in their office because I would not re-sign another form removing my comment that I did not agree. And this provider's office is part of the HMO group that I'm insured with!
Letter from Vermont
I wanted to give you a quick rundown of the Vermont single payer rally yesterday. I joined 200 of my fellow medical, nursing, and MPH students as we rallied through Montpelier and the state house with signs, music, and true single payer love. We had two local news channels covering the medical and nursing student speeches as well as speeches from Sen Sanders and Gov Shumlin. Sen Sanders said that our presence there conveyed that: "I want to be the best doctor or healer that I can be, but I can't be that unless we change the system."
I thought the day went swimmingly thanks to amazing efforts from PNHP/AMSA organizers and the Vermont docs like Deb Richter who have been working tirelessly on the ground over the past months.
Video was taken and will be compiled by PNHP NY executive director Laurie Wen soon.
Thanks for all the OPS support! Much love,
Richard Bruno Oregon Health & Science University med student
SPAN Ohio support for Vermont grew out of the OPS (One Payer States) collaboration.
April 21st, 2011 9:51 PM
By Wendell Potter
Rep. Paul Ryan's plan to privatize Medicare would accelerate a trend started several years ago by corporate CEOs and their political allies to shift ever-increasing amounts of risk from Big Business and the government to workers and retirees.
If enacted, the Ryan plan would represent a windfall of unprecedented proportions for insurance corporations and other businesses.
For millions of average Americans, many of whom already are finding it impossible to save for retirement, it would represent financial calamity. The nation's middle class would pay dearly for Ryan's proposed shredding of the social safety net that Medicare currently provides.
Ryan, chairman of the House Budget Committee, wants to dismantle the Medicare program and replace it with a system of vouchers. Starting in 2022, the government would give the average 65-year-old Medicare beneficiary $8,000 a year to buy coverage from a private insurer. That's the amount health care analysts estimate will be what the Medicare program will spend on every 65-year-old in 2022 if the government doesn't turn it over to private insurance companies.
While that might sound fair on the surface, it would actually be a very bad deal for people who turn 65 that year, compared to those who turn 65 in 2021. That's because commercial insurance plans are much more expensive, and operate far less efficiently, than the current Medicare program.
The amount of money commercial plans actually spend to pay medical claims has been declining rapidly over the past several years while the amount they spend on administrative activities such as marketing and underwriting -- and to pay executives and reward shareholders -- has been increasing. That's why Congress included a provision in last year's health care reform law to require insurance firms to spend no more than 20 percent of their policyholders' premiums on overhead. By contrast, the current Medicare program spends just 3 percent of its budget on administration.
The nonpartisan Congressional Budget Office says the $8,000 voucher won't be nearly enough for seniors to buy comparable coverage from private insurers and pay the additional out-of-pocket costs that those insurers would require them to pay. The amount the average 65-year-old would have to shell out to buy private insurance in 2022, according to the CBO, will actually be $20,510. Seniors would have to pay the difference -- $12,510. If Medicare is not privatized, the difference would be $6,150.
Here's why this would be a dream-come-true for the insurance industry: The more health plan enrollees have to pay out of their own pockets, the less insurers have to pay for medical care. The money that insurers avoid paying out in claims goes straight to their bottom line -- and into shareholders' pockets.
Insurers have been shifting more and more of the cost of care to their policyholders over the past several years by enticing -- or pushing -- them into plans with ever increasing deductibles. This trend is part of what Yale professor Jacob S. Hacker called "the personal responsibility crusade" -- making people more responsible for the management and financing of the major economic risks they face -- in his 2006 book, The Great Risk Shift.
This crusade has been led by Republicans and insurance company executives who have been saying for years that the best way to control medical costs is for Americans to have more "skin in the game." That's an expression that former Aetna CEO Jack Rowe used often before he retired in 2005, the year he made $22.2 million. It was also a sound bite favored by the CEO I used to work for, CIGNA's Ed Hanway, before he retired in 2009. Hanway's total compensation that year was almost $111 million.
The problem is, most Americans have far less skin to put in the game than CEOs like Rowe and Hanway or even Rep. Ryan, who makes $174,000 as a member of Congress. The median household income in the United States was just $49,777 in 2009, which was down $335 from 2008.
That decline, by the way, was the continuation of another trend that began as the Clinton era was ending and the George W. Bush era was beginning. Median household income in the United States peaked in 1999 at $52,388 (adjusted for inflation). It fell more than $2,000 during the eight years of the Bush administration.
During that time, health costs rose dramatically. According to the Kaiser Family Foundation, the average annual health insurance premium for family coverage increased from $5,791 in 1999 to $13,770 in 2010. The average amount that workers contributed out of their own pockets for family coverage increased from $1,543 to $3,997.
With household incomes declining, Americans have had far less money to put into retirement. According to a recent survey conducted by Opinion Research Corp. for America Saves and the American Savings Education Council, less than half of current workers are saving enough to have a "desirable standard of living in retirement."
If workers are having this much difficulty saving for retirement, where in the world will they find the money to pay what Rep. Ryan would make them pay for Medicare coverage when they turn 65?
Ryan's "blueprint" is one that will take America back to the pre-1965 days when senior citizens were losing their homes and their farms to pay for medical care. They were becoming destitute -- and dying much earlier than they are today -- because insurers would not sell them coverage because they were too much of a risk to insure, and there was no safety net for them.
That's exactly the same place future senior citizens would find themselves if Ryan's plan to privatize Medicare ever becomes public policy. #