Insurers’ Axis of Evil
Health care as gang rape
When I look at the major presidential candidates’ proposals on health care — Republican or Democratic, it makes no difference — what I see is fear and mendacity. The fear to take on the insurance industry’s lock on a preferential, inefficient, and often ruinous system even for the insured; and the mendacity to suggest that feeding into that system by forcing more Americans into it will improve matters.
On the Republican side, Rudy Giuliani, Mike Huckabee, John McCain and Mitt Romney all favor a mixture of tax credits and free-market dogmatism. So does Hillary Clinton, the leading Democrat, who’d make coverage mandatory. Barack Obama and John Edwards, the supposed liberal Democrats of the bunch, would make health insurance mandatory for most as well, but with a larger component of direct state subsidies. But Edwards is also into tax credits, and Obama has a blind spot for the uninsured.
The free-market approach assumes that health care is like shopping for sandals — that there’s enough health care products out there for competition to lower prices. Shoppers just have to find their deals. But health care is neither a luxury nor a consumer “product.” It’s an absolute necessity with limited choices. It’s not as if hospital X can throw in a free appendectomy if you go in for a gallbladder operation to keep you from going to hospital Y. It’s not as if, lying doubled over in an ambulance and being pummeled for your insurance information, you’re in a position to have your pick of destinations. Same goes for insurance. If you’re employed, you take what insurance package your employer offers and live with its limitations and, for many, its exorbitant costs. If your employer offers no insurance, you likely go without because self-insurance at any price is legalized robbery.
So shopping for the right health care package is a myth. So is choice in health care for anyone but the very rich, the elderly on Medicare, and to some extent the poor on Medicaid. Providers know it. Their only potential competition is a Medicare-like single-payer system that takes out the profit motive at the insurer’s end, which is why the private-insurance industry peddles all sorts of lies about single-payer systems eliminating choice or imposing inefficient socialized medicine. There is no medical system more inefficient than the American — certainly not in the West, and many Asian and Latin American countries care for their citizens better as well — or more socialized, although perversely so: The medical-industrial complex is primarily designed to keep the insurance industry healthy. People’s health is more of a collateral.
The proof is in the tax-credits. They would supposedly help individuals and families buy health insurance by making it more affordable. But no tax credit will help a family on a $35,000 income afford more than bare-bones family insurance, which runs about $10,000 to $12,000 a year, with about $2,500 to $5,000 paid by the employee and the rest paid by the employer. (That won’t last. Employers continue to shift burdens to employees either by increasing deductibles, limiting choice in providers, or replacing the benefit with legalized scams like health savings accounts, which put the burden almost entirely on the employee. Tax credits will act as a further incentive for employers to bail.)
Nor can tax credits keep up with the rapid rise in premiums (rising an average 10.3 percent a year since 2001; this year’s relatively small increase of 6.1 percent is still double the rate of inflation), or cover the not-so-hidden cost of runaway out-of-pocket expenses. The cheaper your health plan, the dearer your out-of-pockets, although even relatively good health plans can slam you. I recently had a few heart tests done — nothing serious, a bit of monitoring, an EKG, a couple of chats with a doctor. My share of the bill: $500, despite my annual premium of about $5,000 (that’s when the arteriosclerosis set in). Tax credits might shave a few dollars from that but not lessen the disproportionate impact of the bill on the family budget.
Tax credits sound better than they work, and are lousy tax policy when used for social services: Why back into a credit that marginally lowers an individual’s medical costs and deny the Treasury dollars that could more efficiently be used to pay for health care directly?
The answer runs into the ideological wall that’s been blocking the way to honest health-care reform. When tax dollars are used to pay insurers, with you as the pass-through, which is what tax credits would do, that’s called “choice” and “market-based solutions.” When tax dollars are used to pay your medical provider directly, skipping middle men altogether, that’s called “socialized medicine.” And that’s the racket every major presidential candidate is buying into, rhetorically and substantially.