Health Reform Nears Universal Coverage – Of Insurers
Pierre Tristam | October 11, 2009
When Congress haggled five years ago over the prescription-drug benefit portion of Medicare, the government health-insurance program for the elderly, cost projections of the new benefit ranged from $400 billion to $720 billion over 10 years. Congress had not one penny in dedicated revenue to pay for it. Whatever the cost, it would all be charged to the nation’s credit card. Congress approved the plan anyway.
The latest projections have the benefit costing around $80 billion a year by 2011, when baby boomers start popping pills at government expense. The plan still has no revenue source.
The latest projections of the cost of health care reform (what Sen. Max Baucus’ plan calls reform, anyway) put the cost around $83 billion a year over 10 years, roughly the same as the prescription-drug benefit. The difference is that somewhere along the way, reform stopped being about providing access to decent health coverage for all and became a mechanism to lower the deficit.
Health care reform as of now projects lowering the deficit by $81 billion over 10 years. That’s the priority. In an absurd twist of purpose, health “reform” has been reduced to subsidizing the deficit, not subsidizing care for those who need it most.
The Baucus proposal, which Barack Obama likes too much, isn’t a compromise. It’s a sell-out. As late as two weeks ago, 65 percent of Americans favored a government-backed health insurance plan like Medicare as an option for all (according to a New York Times poll).
The Baucus plan does away with a public option. It replaces it with a state-by-state mess of health-insurance exchanges that will have no public component but allow private insurers to compete for clients. Individuals will be required to buy insurance or pay steep fines. Companies won’t be required to provide insurance to their employees. In rare cases, some companies may have to pay a few hundred dollars per employee – nothing close to the fines levied on individuals – should their coverage fall below a certain threshold.
None of it goes to improving coverage or care. Employers and insurers will be able to calibrate the lowest possible level of service with the highest level of allowable deductibles and premiums. The proposed premium cap beyond which insurers have to pay an excise tax is set ridiculously high ($21,000 for family policies beginning in 2013, when the average premium is projected to be $17,000 to $18,000). Insurers, besides being forced, finally, to cover all who ask (including the sick or those with pre-existing conditions) will still set the terms of actual coverage.
The legislation opens the way for insurers to sell products across state lines – and evade state insurance regulation. For all that, the plan projects that 25 million people will still not have insurance. That’s not universal care. It’s insurance law written by the insurance industry.
How familiar. That’s how the Medicare prescription-drug plan was written. It was nowhere near a universal- coverage plan. It forbade the government from negotiating lower costs with pharmaceuticals. It lined the pockets of private insurers while still saddling beneficiaries with a chunk of costs (the “donut” hole in coverage past a certain point).
Not that the elderly should be complaining, considering with what the rest of the population has to contend. And the prescription-drug plan is still an unaccountable plunder of the federal budget.
Providing some form of prescription- drug coverage for the elderly is important. But let’s face it: It’s not more important than universal health coverage, and in many ways, it’s less so. Dollar for dollar, person for person, the elderly, since the 1960s, and compared with, say, children, have made out like bandits in government benefits. Elderly poverty was a problem until the late 1950s. It no longer is. The problem now is elderly greed, a political force opponents of health care reform learned to use to great effect. An Economist/YouGov poll last month found 63 percent of the elderly opposed to Obama’s handling of health-care reform. The same people who benefit most from government-backed health insurance are the largest force opposing it for younger people. Don’t look far: It’s how Florida works.
The elderly make up a larger proportion of the population (17 percent) than in any other state (the national average is 12.6 percent and growing), and they vote in larger proportions than any other group – a double whammy at the polls. More concerned with golf and colonoscopy dates than school curriculums, retirees’ selfishness is the millstone around progressive policies, whether those policies aim for a better-educated population or a healthier one.
That, too, is a new twist on an old formula: The old get richer benefits, the rest get poorer. And that’s what they’re calling reform. Thanks, greediest generation.