The crabbed arguments against universal coverage – “socialized medicine, passed too fast, government control, waiting lines for care” – come right from the playbook of 1965, when the same retrograde opinion sought to stop President Lyndon Johnson’s plan for the older uninsured. Sen. Bob Dole, then in the House of Representatives, voted against Medicare. Overall, the Republicans split 50-50 while 83 percent of the Democrats said yes.
It took Johnson’s forceful persuasion to end the scandal of 19 million elderly lacking broad-based health insurance (private insurers neglected them as too high a risk). Congress not only passed the country’s first plan for national health, it included a tax to pay for it. Medicare’s basic price was divided 50-50 between employers and employees. Even the smallest businesses paid. And contrary to what you might think from today’s frenzied rhetoric, unemployment fell in the years after the tax was imposed. Small firms prospered and multiplied.
The scandal today is the 37 million people under 65 without health insurance (up to 51 million during some portion of last year). But in Washington’s PAC-driven politics, the uninsured go largely unheard. The bills now in Congress have all been sculpted by health-industry lobbyists. One reason the red ink might run so high is that industry beat the cost controls in the Clinton plan and held off most of the substitutes. Some version of the president’s much-maligned alliances – requiring small groups to join bargaining units – would in fact have been an effective way of negotiating a better price.
What’s more, right from the start, the president’s planning was hijacked by the elderly. Not content with the tax-supported health coverage they have already, they exacted even more as the price of their support. The bills add prescription drugs to the Medicare program and include extra money for long-term care, with only the smallest rise in most seniors’ costs. Back when Medicare passed, the rest of the nation demanded no favors for itself. A pity that seniors weren’t as generous in return. Today’s limited funds should be spent on the people who go without coverage, not on the best-insured age group we have.
The Senate, in particular, has also been driven by the narrowest-minded small business owners who feel no responsibility for the health coverage of their employees. Universal health cannot realistically be financed without contributions from employers, yet senators tremble at the thought. The House Democrats, by contrast, want business to cover 80 percent of their workers’ costs, with subsidies for smaller firms. Maybe 80 percent is too high, but zero is too low. Regions dominated by small business – like the South, the Southwest and some of the Western states – have more senators opposing levies on employers. They also have the largest percentage of uninsured.
Many small businesses do the right thing, despite the fact that their premium costs are much higher than bigger businesses pay. By one survey, health insurance now is provided by 44 percent of all firms with one to nine employees.
At 3 Guys, a pair of New York City diners, co-owner John Zannikos pays half the price of family coverage for six employees. New workers aren’t covered immediately, so a health-reform law might cost him more. But he still favors mandated company contributions. “Sometimes people have no coverage and it’s a shame,” he says. “The public pays the cost in the end.”
Eric Sklar, co-owner of three carryout stores called Burrito Brothers in Washington, D.C., also pays half the premium cost, but says that two thirds of his 29 workers can’t afford their share. “I’m willing to pay as much as 80 percent, but as long as my competitors don’t, I’m at a disadvantage,” Sklar says. “A mandate would level the playing field.” He buys his coverage through a local restaurant association. “In effect, it’s a health alliance,” he says. “They have strong negotiating power and got us a good price.”
Another narrow-minded analysis assumes that the drive for universal health can be derailed by ending the fears of the well-insured middle class. All they care about (the thinking goes) is being able to buy or keep a policy even if they fall seriously ill. To buy them off, the Congress would require insurers to sell small-group and individual policies without regard to health. Both bills also impose a limited form of “community rating,” which greatly narrows the price gap between the young and the middle aged.
But the insured will never be safe unless they protect the uninsured, too. If you can buy health coverage any time, you might as well wait until you’re sick. If the middle aged pay less, younger people will pay more. Together, those provisions encourage the young and the healthy to drop out, forcing up costs to the older and sicker who stay insured, as well as to their employee plans. Community rating works only under universal coverage, where everyone joins.
The Senate bill also requires smaller businesses to offer (but not pay for) a group health plan, with government subsidies for lower-wage workers. But as the Association of Private Pension and Welfare Plans points out, that merely encourages low-wage firms to drop their own plans and let subsidized employees join group plans, instead. So even fewer employers would help pay.
The bills contain other perverse incentives, some of which could drive prices up, not down. There are no believable cost controls. No taxes adequate to the task. No shame at adding new benefits to buy support. The plans are underfunded, depending – among other laughers – on mysterious Medicare savings.
Somewhere in this mess there’s a leaner bill struggling to get out – one that would move the country toward universal coverage with more employers sharing costs. But there may not be enough better selves in Congress to get this job done. Here’s the one-two punch: opponents kill off reform’s central premise, then praise themselves for dumping the corpse.
