EVIDENCE of how bad the U.S. health care crisis has gotten continues to pile up. And with the federal government preparing to impose automatic cuts in the Medicare health program for the elderly and Medicaid health program for the poor, it will only grow worse–unless something is done to change the direction.
A new study by the Commonwealth Fund found that the U.S. ranks last among high-income nations in preventable deaths. Up to 84,000 people die every year because they lack access to health care.
The economic crisis has led to unprecedented numbers of people losing employment-based health coverage, alongside the meltdown of the Medicaid program because of ongoing cuts at the state level. Both are drivers behind another statistic: Over 51 million Americans are uninsured, an all-time high.
Meanwhile, there is an unrelenting, bipartisan attack on Medicaid and Medicare. Instead of putting Pentagon spending on the chopping block, ending the trillion-dollar war in Afghanistan or closing tax loopholes for corporations like General Electric, which paid no taxes on $5.1 billion in profits in 2010, political leaders are ready to accept major cuts in medical care for the poor and elderly as a way of cutting the deficit.
Congress’ “supercommittee” failed to reach an agreement on proposals to reduce the federal government’s budget shortfall by $1.2 trillion, as stipulated with the deal that ended the debt-ceiling debacle over the summer. As a result, automatic spending cuts will be triggered, starting in 2013.
During their meetings, the six Democrats on the supercommittee offered a mind-boggling package of deficit-reduction measures, worth between $2.5 trillion and $3 trillion, according to press reports. All told, the Democrats recommended $400 billion in Medicare “savings,” half of which would have come from reducing benefits.
The Democrats couldn’t get Republicans to go along with their proposals, which included some tax increases to reduce the deficit. But if the deal had gone through, the cuts proposed for Medicare would have devastated the program. Cost-sharing is already far too high a burden on retirees living on fixed incomes. The cuts being sold today as “savings” would force seniors to pay more out-of-pocket, and threaten to push more into poverty and bankruptcy.
For their part, the Republicans hoped to use supercommittee negotiations not only for deeper cuts, but to push ahead on privatizing Medicare.
Rep. Jeb Hensarling, the Republican co-chair of the supercommittee, offered to negotiate on the basis of a bipartisan proposal developed by former Sen. Pete Domenici, a Republican, and former Clinton administration budget official Alice Rivlin, a Democrat, that would give seniors a choice between traditional Medicare procedures and a voucher system to buy insurance on the private market.
That effort likewise failed when the supercommittee couldn’t reach a deal, but the direction of negotiations is clear: speed up the privatization of Medicare, transfer more taxpayer money to private insurers via “premium subsidies,” and get rid of the idea that health care for seniors is an entitlement guaranteed by the government.
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LIKEWISE, THE Medicaid health program for the poor and disabled is undergoing privatization measures on the state level all the time, with more and more recipients transferred into managed-care plans. In Illinois, for example, Democratic Gov. Pat Quinn forced 40,000 elderly and disabled Medicaid recipients into HMOs run by Aetna and Centene. HMOs are notorious for restricting and denying care in order to boost profits.
Every state is taking a knife to Medicaid, and hundreds of thousands of recipients have been cut off in the drive to balance state budgets–all with the approval of the federal government under the leadership of President Barack Obama.
In California, for example, the Obama administration recently gave approval for huge cuts to Medi-Cal, a state program covering 7.6 million people that already spends less per recipient than any other state. Payments to doctors, dentists, clinics and nursing homes will be reduced–thus accelerating the dangerous national trend of dwindling numbers of health care providers willing to accept Medicaid patients because of low reimbursement rates.
In Arizona, the Feds approved a series of changes that include more co-pays for services, a fee for missed appointments and elimination of screening and treatment benefits for 19- and 20-year-old childless adults.
Meanwhile, employers are shifting more of the cost of health care onto workers–when they aren’t eliminating coverage completely.
Wal-Mart’s famous slogan “Save money. Live better” certainly doesn’t apply to its employees. The company recently announced that future part-time workers who put in less than 24 hours a week will no longer be eligible for company insurance plans. Employees who work more hours can no longer add spouses to their health plans. As the New York Times reported:
Barbara Collins, a sales associate at the Wal-Mart in Placerville, Calif., said that the premiums for the HMO plan for herself and her 5-year-old son would rise to $18 every two weeks from $10. Her big concern, she said, was that her deductible would jump to $5,000 a year, from $1,000–a daunting amount considering she earns $19,000 a year. “I don’t know how I’ll be able to afford it if I go to a doctor or to physical therapy,” she said.
While Wal-Mart workers and their partners lose health coverage, or have to chose between paying a deductible or paying the rent, Alice Walton, heiress to the Wal-Mart fortune and certified member of the 1 percent, just opened Crystal Bridges Museum of American Art in Bentonville, Arkansas. The Walton Family Foundation contributed $800 million to build the museum–and Alice Walton reportedly paid $35 million for one painting.
As Wal-Mart shows, the employment-based system of health coverage is highly unstable and a disaster for workers because it links health care to having a full-time job. When the economy is booming, that’s less of a problem, but when the economy goes bust and unemployment rises, millions of workers lose coverage.
That’s when the health-care horror stories, of which there is never a shortage, begin to defy belief.
James Richard Verone’s horror story is both heartbreaking and infuriating. After 17 years at Coca-Cola, he was laid off from his job and lost his insurance. He developed a growth in his chest and had two ruptured discs in his back. The 59-year old was in chronic pain. Desperate for relief, Verone planned a bank robbery, knowing that once incarcerated, he’d be entitled to health care. He quietly handed the bank teller a note demanding $1 and medical care. Verone then sat down and waited for the police to arrive.
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THE MUCH-ballyhooed Patient Protection and Affordable Care Act (PPACA), passed by Congress and signed into law by Barack Obama in 2011, is under attack.
An army of health insurance company lobbyists is working stealthily behind the scenes in every state–and openly with Health and Human Services Secretary Kathleen Sebelius at the federal level–to define the law’s regulations and gut any that limit the industry’s ability to determine benefits and make profits.
Wendell Potter, the former public relations director for insurance giant Cigna-turned-whistleblower, described one of the latest “interpretations” of the law that will benefit the industry:
Consumer advocates who have been in meetings at the White House in recent weeks say they believe the administration is bending over backward to accommodate the insurers…They expressed concern that the final regulations would allow insurers to stack the decks against patients by allowing health plans to deem a second-level internal appeal of a denial as meeting the requirement for an independent external appeal.
One of the first provisions of the PPACA eliminated after the act became law was a long-term care benefits program called Community Living Assistance Services and Supports (CLASS).
Championed by the late Sen. Edward Kennedy, CLASS was meant to provide support so the elderly and disabled could stay at home, rather than move into nursing homes. The program was made a part of the PPACA as a tribute to Kennedy. But insurance industry lobbyists objected that the program was too costly, and Sebelius apparently agreed, announcing in October that the administration would not implement the CLASS program.
Meanwhile, the industry is on the verge of gutting the medical-loss ratio (MLR) rule. The MLR requires insurance companies to spend at least 80 percent of premiums on medical care–and if they don’t, the money must be rebated to policyholders.
Insurers hate the MLR rule for obvious reasons–they want to spend less on providing actual health care so they can increase returns for profits and salaries for executives. So lobbyists have been hard at work twisting arms at the state and federal level.
They may have gotten their way. The National Association of Insurance Commissioners (NAIC)–an organization representing the chief insurance regulators in all 50 states–voted to send a resolution to Congress in support of suspending or changing the calculation of the MLR.
If Congress agrees, $1 billion in expected rebates would be cancelled and the MLR rule voided. Lynn Quincy of the watchdog group Consumers Union said of the decision: “This is a serious setback in the struggle to protect consumers…It is also a step back for working families.”
The insurance industry’s toxic influence can be seen as well in the actions of the prestigious Institute of Medicine (IOM).
The IOM was tasked by Sebelius with formulating a package of essential health benefits to be offered by private health plans sold through the state insurance exchanges that will be set up under the PPACA.
Incredibly, the IOM recommended a set of benefits modeled on the skimpy, high co-pay, high-deductible coverage that small businesses currently offer–and that millions of workers can’t afford. Physicians for a National Health Program (PNHP) sent an open letter with over 2,000 signatures to the Obama administration opposing the recommendations. It stated:
We protest the Institute of Medicine’s (IOM) recommendation that cost rather than medical need be the basis for defining the “essential benefits” that insurance policies must cover when the federal health reform law takes effect in 2014…The inadequate coverage the IOM recommends would shift costs from corporate and government payers onto families already burdened by illness.
So why did the respected IOM make such an awful recommendation? Could it have anything to do with the $2 million donation to the IOM from Leonard D. Schaeffer, CEO of insurance giant Wellpoint?
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WITH THE PPACA, insurance companies won both a mandate forcing everyone to have health coverage and no working cost controls that would inhibit their profits. They will be happy to underinsure millions of people with the $447 billion in taxpayer subsidies that will be transferred to their coffers under the PPACA.
Underinsurance is guaranteed profits for the insurance companies–and guaranteed misery and financial hardship for patients.
Especially during next year’s election campaign, the Obama administration will claim that more Americans will be insured under the PPACA. That may be true–but the real question is whether it’s legitimate to describe as “health insurance” policies with $15,000 annual deductibles, with out-of-pocket expenses ranging into the thousands of dollars, without comprehensive coverage.
People “insured” under these policies will very easily find themselves pushed into bankruptcy if they get sick–no different than the current system.
Another highly touted gain in the PPACA is the expansion of eligibility for Medicaid–an estimated 20 million people will be added to the program. But how can that happen when Medicaid funding is being slashed to the bone, providers are leaving the program in droves, and state governments are coming up with new ways to push people off the Medicaid rolls?
Barack Obama’s health care legislation is fundamentally flawed. Any provisions that would do some good in extending coverage to more people and limiting insurance company abuses are being eviscerated–while the health care industry stands to make a windfall from other parts of the law.
That’s the reality of the health care crisis in the U.S. today. But the insurers aren’t having it all their way. The greed of the corporations that own and control health care has been pushed back into the spotlight by the Occupy Wall Street movement.
Like the banks, the insurance industry is being exposed as part of the profit-gouging 1 percent that is ripping off the 99 percent. Health care as a human right is among the Occupy movement’s demands, and nurses, doctors and other health care providers have joined the occupations, marched with protesters, organized teach-ins and provided on-site medical care.
The slogan “Health care for the 99 percent” can direct more people to the need for a single-payer, nonprofit, national health care system that includes everyone.