An attack on health care in the guise of reform

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By Kate Randall 22 March 2010 [print_link]

With a special bonus feature by Jane Hamsher, sorting out myth from truth throughout the bill.

After months of closed-door negotiations with insurance CEOs and pharmaceutical executives, Obama made the absurd claim that the measure came “from the bottom up.” In fact, the legislation was entirely dictated from the top. It represents the opening shot in a sweeping attack on health care for working people.

The vote Sunday night by the US House of Representatives to approve Obama’s health care overhaul was accompanied by declarations that the measure represents the greatest social reform in generations.

With predictable demagogy, Obama, in a statement following passage of the bill, hailed the measure as a historic reform a century in the making, a vindication of the “American dream” and proof that “government of the people and by the people still works for the people.”

After months of closed-door negotiations with insurance CEOs and pharmaceutical executives, Obama made the absurd claim that the measure came “from the bottom up.” In fact, the legislation was entirely dictated from the top. It represents the opening shot in a sweeping attack on health care for working people.

A staggering level of cynicism has been exhibited throughout the so-called health care “debate.” Evasions and outright lies have been utilized to conceal the real content of the bill. With its final passage, a media-led orgy of self-congratulation will no doubt follow.

In the end, what decided the bill’s passage was pressure brought to bear by the White House, acting on behalf of the most powerful sections of the financial elite.

There has always been a stark difference between the public appeal made by the Obama administration, accompanied by phony populist attacks on the insurance companies, and the fundamental strategic aims guiding the health care overhaul, which were worked out by Washington think tanks behind the backs of the American people.

Details on what is actually included in the legislation have deliberately been left vague. The public presentation by the administration and congressional Democrats is designed to conceal far more than what it reveals. Through no fault of their own, most people are largely in the dark as to what the implementation of the bill’s provisions will mean for them and their families. For all of Obama’s talk of the great debate over health care, there has been no serious or honest public discussion.

The main features of the bill include hundreds of billions of dollars in cuts to Medicare, and the requirement that individuals and families obtain insurance or pay a fine, thus providing a new influx of cash-paying customers for private insurance companies. Businesses are under no obligation to provide their workers with insurance, paying only minimal fines if they do not.

The government and the corporations are to a large extent absolved of any responsibility for funding health care, and the working population made to foot the bill.

Those elements of the overhaul which, within the framework of American liberal politics, were proclaimed to be absolutely essential—such as the public option—were abandoned long ago. They were initially included as a fig leaf, to make it easier for Obama’s liberal supporters to sell the scheme to the American people.

Concession after concession to the Republican Party was said to be necessary in order to obtain bipartisan support. But after it became clear that no Republican support would be forthcoming, rather than restoring the discarded provisions, new regressive measures were added.

A shameful agreement was reached with the most right-wing sections of the Democratic Party itself to further restrict abortion coverage. Final passage was secured through a deal with Democratic Representative Bart Stupak, an anti-abortion advocate from Michigan. Obama agreed to sign a last-minute executive order confirming that no federal funds would be used for abortions under the terms of the bill.

The executive order, as well as language in the bill itself, means that individuals receiving government subsidies—that is, the working class and the poorest layers of society—will be prevented from purchasing insurance that covers abortion.

This testifies to the political bankruptcy of the liberal and so-called “left” supporters of Obama. What they claimed for decades was the central issue necessitating support for the Democratic Party—the right to an abortion—was abandoned without a protest.

Comparisons to the passage of Social Security (in 1935) and Medicare (in 1965) proliferate in the media and in statements from the White House and congressional Democrats. When these landmark reforms became law, however, people were clear on their implications.

Enactment of Social Security meant that retirees would receive a monthly check in the mail. With Medicare, people knew that when they reached the age of 65 they would receive medical coverage under the government-run program. With this so-called “reform,” by contrast, nobody knows what to expect.

The earlier measures, like every social reform wrested from the American ruling class, were connected to broad social struggles. Enactment of Social Security came as a response to the mass movement of the working class for industrial unions. Medicare coincided with the civil rights movement, a wave of militant strikes, urban uprisings, and the initial stirrings of popular opposition to the war in Vietnam.

This measure has been drafted and imposed from above. It is entirely in line with the overall policy of the Obama administration.

The White House and Congress have responded with indifference and contempt as millions have been made jobless, lost their homes, and struggled to pay their rent and utility bills. While trillions of dollars have been allocated to bail out Wall Street, no meaningful measures have been taken to alleviate the catastrophe facing working class families.

All of Obama’s policies have been geared toward increasing social inequality. School closures and privatizations and mass teacher firings have been endorsed by his administration. General Motors and Chrysler were driven into bankruptcy in order to create conditions where the wages, working conditions and health benefits of auto workers could be savagely attacked.

The claim that the health care overhaul is an oasis of progress in this desert of social reaction is simply a lie. The experiences of millions of people—who have seen no sign that the government is in any way responding to their needs—have fueled well-deserved skepticism and outright opposition to the health care legislation within wide layers of the population.

The bill aims to deal with what is seen as a pressing problem for the ruling elite. While corporations, with the collaboration of the unions, have been able to drive down wages and increase productivity, they have not been able to put a brake on spiraling medical costs. These come in the form of increased costs for employee insurance coverage, as well as care for the poor and uninsured who seek medical treatment at emergency rooms and public clinics, thus driving up costs overall.

A solution to this problem for big business—one which is addressed by Obama’s health care restructuring—is to dump these more vulnerable sections of the population into bare-bones plans, where limitations are placed on more expensive and “unnecessary” tests, treatments and drugs. These will include stripped-down Medicaid plans, a gutted Medicare program where care is rationed according to “cost effectiveness,” and substandard plans available for purchase on insurance “exchanges.”

The health care legislation sets a dangerous precedent for a far broader assault on social programs, elements of which have already been put in motion by the administration. Last month, Obama established by executive order a bipartisan commission on deficits, which will propose measures to slash government spending on Medicare, Medicaid and Social Security.

In the coming period, when millions become clearer on the real implications of the health care bill, the brutal reality will inevitably provoke an enormous sense of betrayal and anger. This will set the stage for the emergence of new forms of struggle as people begin to consider the alternative to a corporate-controlled health care system—that is, one based on a socialist program that begins with basic human needs rather than corporate profit.

Kate Randall is a senior political writer with the World Socialist Web Site.

••••

Fact Sheet: The Truth About

the Health Care Bill

By: Jane Hamsher Friday March 19, 2010 8:58 am

The Firedoglake health care team has been covering the debate in congress since it began last year. The health care bill will come up for a vote in the House on Sunday, and as Nancy Pelosi works to wrangle votes, we’ve been running a detailed whip count on where every member of Congress stands, updated throughout the day.

We’ve also taken a detailed look at the bill, and have come up with 18 often stated myths about this health care reform bill.

Real health care reform is the thing we’ve fought for from the start. It is desperately needed. But this bill falls short on many levels, and hurts many people more than it helps.

A middle class family of four making $66,370 will be forced to pay $5,243 per year for insurance. After basic necessities, this leaves them with $8,307 in discretionary income — out of which they would have to cover clothing, credit card and other debt, child care and education costs, in addition to $5,882 in annual out-of-pocket medical expenses for which families will be responsible. Many families who are already struggling to get by would be better off saving the $5,243 in insurance costs and paying their medical expenses directly, rather than being forced to by coverage they can’t afford the co-pays on.

In addition, there is already a booming movement across the country to challenge the mandate. Thirty-three states already have bills moving through their houses, and the Idaho governor was the first to sign it into law yesterday. In Virginia it passed through both a Democratic House and Senate, and the governor will sign it soon. It will be on the ballot in Arizona in 2010, and is headed in that direction for many more. Republican senators like Dick Lugar are already asking their state attorney generals to challenge it. There are two GOP think tanks actively helping states in their efforts, and there is a booming messaging infrastructure that covers it beat-by-beat.

Whether Steny Hoyer believes the legality of the bill will prevail in court or not is moot, it could easily become the “gay marriage” of 2010, with one key difference: there will be no one on the other side passionately opposing it. The GOP is preparing to use it as a massive turn-out vehicle, and it not only threatens representatives in states like Florida, Colorado and Ohio where these challenges will likely be on the ballot — it threatens gubernatorial and down-ticket races as well. Artur Davis, running for governor of Alabama, is already being put on the spot about it.

While details are limited, there is apparently a “Plan B” alternative that the White House was considering, which would evidently expand existing programs — Medicaid and SCHIP. It would cover half the people at a quarter of the price, but it would not force an unbearable financial burden to those who are already struggling to get by. Because it creates no new infrastructure for the purpose of funneling money to private insurance companies, there is no need for Bart Stupak’s or Ben Nelson’s language dealing with abortion — which satisfies the concerns of pro-life members of Congress, as well as women who are looking at the biggest blow to women’s reproductive rights in 35 years with the passage of this bill. Both programs are already covered under existing law, the Hyde amendment.

But perhaps most profoundly, the bill does not mandate that people pay 8% of their annual income to private insurance companies or face a penalty of up to 2% — which the IRS would collect. As Marcy Wheeler noted in an important post entitled “Health Care on the Road to NeoFeudalism,” we stand on the precipice of doing something truly radical in our government, by demanding that Americans pay almost as much money to private insurance companies as they do in federal taxes:

When this passes, it will become clear that Congress is no longer the sovereign of this nation. Rather, the corporations dictating the laws will be.

I understand the temptation to offer 30 million people health care. What I don’t understand is the nonchalance with which we’re about to fundamentally shift the relationships of governance in doing so.

We started down a dangerous road with Wall Street banks in the early 90s, allowing them to flood our political system with money and write our laws so that taxpayers would subsidize their profits, assume their losses and remove themselves from the necessity of competition. By funneling so much money into the companies who created the very problems we are now attempting to address, we further empower them to hijack our legislative process and put more than just our health care system at risk. We risk our entire system of government.

Congress may be too far down the road with this bill to change course and save themselves — and us. But before Democrats cast this vote, which could endanger not only their Congressional majority but their ability to “fix” things later on, they should consider the first rule of patient safety: first, do no harm.

Myth

Truth

1. This is a universal health care bill.

The bill is neither universal health care nor universal health insurance.

Per the CBO:

  • Total uninsured in 2019 with no bill: 54 million
  • Total uninsured in 2019 with Senate bill: 24 million (44%)

2. Insurance companies hate this bill

This bill is almost identical to the plan written by AHIP, the insurance company trade association, in 2009.

The original Senate Finance Committee bill was authored by a former Wellpoint VP. Since Congress released the first of its health care bills on October 30, 2009, health care stocks have risen 28.35%.

3. The bill will significantly bring down insurance premiums for most Americans.

The bill will not bring down premiums significantly, and certainly not the $2,500/year that the President promised.

Annual premiums in 2016, status quo / with bill:

Small group market, single: $7,800 / $7,800

Small group market, family: $19,300 / $19,200

Large Group market, single: $7,400 / $7,300

Large group market, family: $21,100 / $21,300

Individual market, single: $5,500 / $5,800*

Individual market, family: $13,100 / $15,200*

4. The bill will make health care affordable for middle class Americans.

The bill will impose a financial hardship on middle class Americans who will be forced to buy a product that they can’t afford to use.

A family of four making $66,370 will be forced to pay $5,243 per year for insurance. After basic necessities, this leaves them with $8,307 in discretionary income — out of which they would have to cover clothing, credit card and other debt, child care and education costs, in addition to $5,882 in annual out-of-pocket medical expenses for which families will be responsible.

5. This plan is similar to the Massachusetts plan, which makes health care affordable.

Many Massachusetts residents forgo health care because they can’t afford it.

A 2009 study by the state of Massachusetts found that:

  • 21% of residents forgo medical treatment because they can’t afford it, including 12% of children
  • 18% have health insurance but can’t afford to use it

6. This bill provide health care to 31 million people who are currently uninsured.

This bill will mandate that millions of people who are currently uninsured must purchase insurance from private companies, or the IRS will collect up to 2% of their annual income in penalties. Some will be assisted with government subsidies.

7. You can keep the insurance you have if you like it.

The excise tax will result in employers switching to plans with higher co-pays and fewer covered services.

Older, less healthy employees with employer-based health care will be forced to pay much more in out-of-pocket expenses than they do now.

8. The “excise tax” will encourage employers to reduce the scope of health care benefits, and they will pass the savings on to employees in the form of higher wages.

There is insufficient evidence that employers pass savings from reduced benefits on to employees.

9. This bill employs nearly every cost control idea available to bring down costs.

This bill does not bring down costs and leaves out nearly every key cost control measure, including:

  • Public Option ($25-$110 billion)
  • Medicare buy-in
  • Drug reimportation ($19 billion)
  • Medicare drug price negotiation ($300 billion)
  • Shorter pathway to generic biologics ($71 billion)

10. The bill will require big companies like WalMart to provide insurance for their employees

The bill was written so that most WalMart employees will qualify for subsidies, and taxpayers will pick up a large portion of the cost of their coverage.

11. The bill “bends the cost curve” on health care.

The bill ignored proven ways to cut health care costs and still leaves 24 million people uninsured, all while slightly raising total annual costs by $234 million in 2019.

“Bends the cost curve” is a misleading and trivial claim, as the US would still spend far more for care than other advanced countries.

In 2009, health care costs were 17.3% of GDP.

Annual cost of health care in 2019, status quo: $4,670.6 billion (20.8% of GDP)

Annual cost of health care in 2019, Senate bill: $4,693.5 billion (20.9% of GDP)

12. The bill will provide immediate access to insurance for Americans who are uninsured because of a pre-existing condition.

Access to the “high risk pool” is limited and the pool is underfunded. It will cover few people, and will run out of money in 2011 or 2012

Only those who have been uninsured for more than six months will qualify for the high risk pool. Only 0.7% of those without insurance now will get coverage, and the CMS report estimates it will run out of funding by 2011 or 2012.

13. The bill prohibits dropping people in individual plans from coverage when they get sick.

The bill does not empower a regulatory body to keep people from being dropped when they’re sick.

There are already many states that have laws on the books prohibiting people from being dropped when they’re sick, but without an enforcement mechanism, there is little to hold the insurance companies in check.

14. The bill ensures consumers have access to an effective internal and external appeals process to challenge new insurance plan decisions.

The “internal appeals process” is in the hands of the insurance companies themselves, and the “external” one is up to each state.

Ensuring that consumers have access to “internal appeals” simply means the insurance companies have to review their own decisions. And it is the responsibility of each state to provide an “external appeals process,” as there is neither funding nor a regulatory mechanism for enforcement at the federal level.

15. This bill will stop insurance companies from hiking rates 30%-40% per year.

This bill does not limit insurance company rate hikes. Private insurers continue to be exempt from anti-trust laws, and are free to raise rates without fear of competition in many areas of the country.

16. When the bill passes, people will begin receiving benefits under this bill immediately

Most provisions in this bill, such as an end to the ban on pre-existing conditions for adults, do not take effect until 2014.

Six months from the date of passage, children could not be excluded from coverage due to pre-existing conditions, though insurance companies could charge more to cover them. Children would also be allowed to stay on their parents’ plans until age 26. There will be an elimination of lifetime coverage limits, a high risk pool for those who have been uninsured for more than 6 months, and community health centers will start receiving money.

17. The bill creates a pathway for single payer.

Bernie Sanders’ provision in the Senate bill does not start until 2017, and does not cover the Department of Labor, so no, it doesn’t create a pathway for single payer.

Obama told Dennis Kucinich that the Ohio Representative’s amendment is similar to Bernie Sanders’ provision in the Senate bill, and creates a pathway to single payer. Since the waiver does not start until 2017, and does not cover the Department of Labor, it is nearly impossible to see how it gets around the ERISA laws that stand in the way of any practical state single payer system.

18 The bill will end medical bankruptcy and provide all Americans with peace of mind.

Most people with medical bankruptcies already have insurance, and out-of-pocket expenses will continue to be a burden on the middle class.

  • In 2009, 1.5 million Americans declared bankruptcy
  • Of those, 62% were medically related
  • Three-quarters of those had health insurance
  • The Obama bill leaves 24 million without insurance
  • The maximum yearly out-of-pocket limit for a family will be $11,900 (PDF) on top of premiums
  • A family with serious medical problems that last for a few years could easily be financially crushed by medical costs

*Cost of premiums goes up somewhat due to subsidies and mandates of better coverage. CBO assumes that cost of individual policies goes down 7-10%, and that people will buy more generous policies.

Documentation:

  1. March 11, Letter from Doug Elmendorf to Harry Reid (PDF)
  2. The AHIP Plan in Context, Igor Volsky; The Max Baucus WellPoint/Liz Fowler Plan, Marcy Wheeler
  3. CBO Score, 11-30-2009
  4. “Affordable” Health Care, Marcy Wheeler
  5. Gruber Doesn’t Reveal That 21% of Massachusetts Residents Can’t Afford Health Care, Marcy Wheeler; Massachusetts Survey (PDF)
  6. Health Care on the Road to Neo-Feudalism, Marcy Wheeler
  7. CMS: Excise Tax on Insurance Will Make Your Insurane Coverage Worse and Cause Almost No Reduction in NHE, Jon Walker
  8. Employer Health Costs Do Not Drive Wage Trends, Lawrence Mishel
  9. CBO Estimates Show Public Plan With Higher Savings Rate, Congress Daily; Drug Importation Amendment Likely This Week, Politico; Medicare Part D IAF; A Monopoloy on Biologics Will Drain Health Care Resources, Lancet Student
  10. MaxTax Is a Plan to Use Our Taxes to Reward Wal-Mart for Keeping Its Workers in Poverty, Marcy Wheeler
  11. Estimated Financial Effects of the “Patient Protection and Affordable Care Act of 2009,” as Proposed by the Senate Majority Leader on November 18, 2009, CMS (PDF)
  12. ibid
  13. ibid
  14. ibid
  15. Health insurance companies hang onto their antitrust exemption, Protect Consumer Justice.org
  16. What passage of health care reform would mean for the average American, DC Examiner
  17. How to get a State Single Payer Opt-Out as Part of Reconciliation, Jon Walker
  18. Medical bills prompt more than 60 percent of U.S. bankruptcies, CNN.com; The Patient Protection and Affordable Care Act Section‐by‐Section Analysis (PDF)

Comments Spotlight

Selected responses to “Fact Sheet: The Truth About the Health Care Bill”

cassiodorus March 19th, 2010 at 9:04 am

1

Oh GO JANE!

Reply

DWBartoo March 19th, 2010 at 9:06 am

2

Absolutely great Fact Sheet.

Reply

fuckno March 19th, 2010 at 9:07 am

3

Troll repellent.

Reply

canadianbeaver March 19th, 2010 at 9:09 am

4

Wow. Great post Jane! Can we copy and paste it to other sites like KOS?

Reply

Teddy Partridge March 19th, 2010 at 9:09 am

5

Well, there it is folks.

Watch for incoming, now….

Reply

Sufilizard March 19th, 2010 at 9:11 am

6

Oh so you expect us to believe the “facts” rather than Obama’s rhetoric?

/snark

In regards to an earlier thread about being thrown under the buss…

I have an idea. If they want to keep throwing us under the bus, why don’t we bring some tools with us next time and convert the thing to bio-diesel while we’re down there.

Reply

Sufilizard March 19th, 2010 at 9:13 am

7

P.S. I would love to have just that chart as a stand-alone page I can link to from Facebook etc. Some people might be deterred by seeing all those words before they get to the easier-to-read table.

Reply

Frank33 March 19th, 2010 at 9:13 am

8

This is a health bill for the political health of President Obama. He tied himself to a corrupt PhRMA and they now own him.

Reply

hotdog March 19th, 2010 at 9:13 am

9

Jane rocks.

Reply

lucky March 19th, 2010 at 9:14 am

10

Correction???

“But perhaps most profoundly, the bill does not mandate that people pay 8% of their annual income to private insurance companies or face a penalty of up to 2%”

Should that be DOES mandate?

Reply

demi March 19th, 2010 at 9:14 am

11

In response to Sufilizard @ 7

Copy. Paste. Clip. Could that work?

Reply

klynn March 19th, 2010 at 9:14 am

12

Thank you. Wonderful work.

Reply

moderateextremist March 19th, 2010 at 9:14 am

13

Outstanding rebuttal, Jane…detailed and even footnoted. Firedoglake should e-mail this to every still-undecided House member.

Reply

demi March 19th, 2010 at 9:15 am

14

In response to Frank33 @ 8

Isn’t it just awful when you have to agree with Boehner? What a world.

Reply

seaglass March 19th, 2010 at 9:15 am

15

Love the FACT sheet getting ready to re-post at my own blog. Great work Jane. It’s amazing how little were getting after such a Titanic struggle. This bill could have been written by the BV$H regime from what I can see. It’s almost like a mirror image of the Medicare Part D bill the Dems. fought tooth and nail against a few yrs. ago. This sucks and proves what many have been saying for decades , that both major parties are owned and operated by the same Fortune 500 companies. I’m personally abandoning the Dem. ship after this crushing experience. I’ve been a community activist and Prog. Dem. for 45 yrs. but no more. I’m dropping the Dem. party membership and becoming an Indep. Progressive . I will not give $$, time or votes to Corporatist candidates. You want to take $$ from these SUPER SIZED PEOPLE go ahead but you don’t get anything from me.

Reply

Twain March 19th, 2010 at 9:16 am

16

If the Dems think this POS is going to help them in Nov and in 2012, I pity them. I would bet that most people who are screaming for this to pass think it kicks in immediately and it’s going to be a shock to them.

Reply

KarenM March 19th, 2010 at 9:16 am

17

In response to Sufilizard @ 7

I’d love that, too and I’d tweet it and facebook it until it was blue in the face!

Reply

egail March 19th, 2010 at 9:16 am

18

What a great FACT sheet – although I wish it did not represent the actual facts.

While I expected to be sold out by the Dems, there is still a part of me that cannot believe this is actually happening.

Reply

KarenM March 19th, 2010 at 9:17 am

19

In response to demi @ 14

Exactly! That’s how we know we’re living in a nightmare!

Reply

lucky March 19th, 2010 at 9:18 am

20

Addition:

Whenever someone mentions stocks going up or down, one should always compare to a broad index, say Dow: “health care stocks have risen 28.35%.” Dow is up about 10% over that time…

Reply

jimbowski March 19th, 2010 at 9:18 am

21

One has to wonder if Obama prefers a big defeat in November. Perhaps he would welcome a defeat just as Iran would welcome an Israeli invasion. Be careful what you wish for, Democrats!

Reply

aoyama March 19th, 2010 at 9:19 am

22

That definitely sums it up. What a list.

Reply

yellowsnapdragon March 19th, 2010 at 9:20 am

23

OMG. Thank you for the truth telling.

IMO the most important question–knowing everything we know about ENRON, World Com, Merryl Lynch, Etc., etc.,– is why should we prefer to give 8% of our yearly income to a private insurance company that has already proven that it does not have its customers’ interests at heart?

Why trust private business more than a government program over which voters have some control?

Crazy.

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