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Health Care in Obama’s 1st Year or More of the Same is not Health Care Reform. Leonard Rodberg, PhD Urban Studies Dept., Queens College/CUNY and NY Metro Chapter, Physicians for a National Health Program Teach-in New York City July 25, 2009

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health care in obama s 1st year or more of the same is not health care reform

Health Care in Obama’s 1st YearorMore of the Same is not Health Care Reform

Leonard Rodberg, PhD

Urban Studies Dept., Queens College/CUNY


NY Metro Chapter, Physicians for a National

Health Program

Teach-in New York City

July 25, 2009

why health care is on the agenda escalating cost
Why Health Care Is On the Agenda: Escalating Cost

Average Annual Premiums for Single and Family Coverage, 1999-2008

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2008.

international comparison universal coverage at less cost they must be doing something right
International Comparison: Universal Coverage at Less Cost -- They Must Be Doing Something Right!

Average spending on health per capita ($US PPP*)

* PPP = Purchasing Power Parity.

Data: OECD Health Data 2008, June 2008 version.

None rely on private for-profit insurance,

all have a strong role for government.

high cost of health insurance premiums even the middle class can no longer afford it
High Cost of Health Insurance Premiums: Even the Middle Class Can No Longer Afford It

National Average for Employer-provided Insurance:

Single Coverage $ 4,704 per year

Family Coverage $12,680 per year

Median household income = $50,233

Source: Kaiser Family Foundation/HRET Survey of Employee Benefits, 2008;

U.S. Census Bureau, 2008

the epidemic of underinsurance
The Epidemic of Underinsurance

Number of people spending more than 10% of income on health care (Millions)

Source:Too Great a Burden, Families USA, December 2007

medical costs create serious financial problems for millions of us
Medical costs create serious financial problems for millions of us

Source: Health Tracking Poll, Kaiser Family Foundation, April 2008

health care costs are concentrated among a few people in any one year
Health Care Costs Are Concentrated Among a Few People in Any One Year






This Year’s Underinsured

Source: Medical Expenditure Panel Survey, US Agency for Healthcare Research and Quality, 1999

While millions are underinsured,

millions more don’t think there’s a problem!

the president s principles for health care reform
The President’s Principles for Health Care Reform
  • Protect Families’ Financial Health…reduce growing premiums and other costs…protect from bankruptcy due to catastrophic illness.
  • Make Health Coverage Affordable... reduce high administrative costs, waste, inefficiencies.
  • Aim for Universality… put the United States on a clear path to cover all Americans.
  • Provide Portability of Coverage… not locked into their job just to secure health coverage.
  • Guarantee Choice… provide a choice of health plans and physicians… have the option of keeping their employer-based health plan.

-- “A New Era of Responsibility,” President’s Budget, Feb. 26, 2009

the progress of us health care reform
The Progress of US Health Care Reform

Employer mandate

Individual mandate*

* “each eligible individual must enroll in an applicable health plan for the individual and must pay any premium required with respect to such enrollment.” (S.1775)

Public option**

** “you can choose to enroll in the new public plan”

the mandate model
The Mandate Model
  • Everyone required to have insurance
  • Employers must offer insurance or contribute
  • Continued reliance on private insurance, with the option of a public plan
  • “Keep what you have”  Doesn’t address underinsurance.
  • No regulation of insurance company premiums, deductibles, co-pays, or payment and denial practices
  • Increases the system cost by hundreds of billions of dollars
  • No cost savings or realistic way to control costs, as long as there are many separate plans and payers.
the obama congressional plan
The Obama/Congressional Plan
  • Employment-based insurance unchanged, so

-- Employers can still change coverage

-- Insurers can still change networks

-- Employees still locked into jobs

  • Employees must accept employer plan if they can afford it (premium < 11% or 12.5% of income)
  • Starting in 2013, the uninsured can access an insurance “exchange” with subsidies up to 400% of the Federal poverty level
  • Public plan option available in the exchange
  • “Hardship waiver” for those who can’t afford it
the massachusetts plan insurance still costly and unaffordable
The Massachusetts Plan: Insurance Still Costly and Unaffordable

* Also physician & hospital co-pays

Source: (Boston Area, Jan 2009)

why a public option
Why a Public Option?
  • Provide stability, wide pooling of risks, transparency, affordability, broad provider access, source of data
  • Competitive benchmark to force private plans to reduce prices,improve coverage (“keep them honest”)
  • Lead in restraining costs and improving quality
  • Without it, there’s no reform, since there is no other change in the system

Source: Jacob Hacker, Healthy Competition, Berkeley Law and Institute for America’s Future, April 2009, Howard Dean, Barack Obama

why not a public option
Why Not a Public Option?

From supporters of private insurance –

  • “Unfair competition” from government
  • Would undermine private insurance, use inherent powers of government to limit competition, underpay doctors and hospitals
  • Will eventually lead to “government-run” system

From single payer supporters –

  • Private insurers will selectively market to the healthy (“adverse selection”)
  • Retains private insurance
  • Doesn’t get all the savings possible with single payer
what happened to the public plan the original robust plan
What Happened to the Public Plan?The Original “robust” Plan
  • Open enrollment
  • Medicare-like, backed by the Federal Government
  • 119 million members (Lewin)

The Congressional Plan

  • Restricted enrollment (only the uninsured)
  • Self-sustaining, follow same rules as private insurers
  • Perhaps 10 million members (CBO)

The 800-pound gorilla has turned into

a mouse!

what will control costs under the congressional plan
What Will Control Costs under the Congressional Plan?
  • Emphasis on prevention
  • Computerization
  • Chronic disease management
  • Payment reforms (e.g., medical home, “bundling”)
  • Comparative effectiveness research

The Congressional Budget Office says these will (1) not cut costs significantly and (2) not limit the continuing rise in cost.

covering the uninsured and the underinsured
Covering the Uninsuredand the Underinsured?

$1 Trillion/seven years = $130 billion/yr

Number of Uninsured Covered: 37 million

Number of Uninsured Remaining: 17 million

[ Source: Congressional Budget Office, Letter to Rep. Charles Rangel,

July 17, 2009]

Number of Underinsured: 50 million+

Even a Trillion dollars is not enough!

Total cost of making health care affordable:$200-300 billion/year

Single Payer can provide it!

senate finance committee considers how to pay for hcr
Senate Finance Committee Considers How to Pay for HCR

Senate Finance Committee Considers How to Pay for Health Care Reform

  • What’s on the table? New Taxes!
  • Surtax on the wealthy
  • Employer-based health insurance
  • Hospitals
  • Sodas
  • Alcohol
  • Tobacco

The Invisible

Pot of Gold!

  • What’s off the table?
  • $400 Billion in savings from Single Payer
  • Elimination of private for-profit insurance
  • Savings in hospital and MD billing costs


will the mandate plan pass
Will the Mandate Plan Pass?
  • Will business accept the mandate to provide coverage?
  • Will private insurance companies accept guaranteed issue and community rating?
  • Will conservatives accept the new taxes needed to fund the subsidies for the individual mandate?
  • Will the general public support a plan with a mandate to purchase insurance?
the bottom line on the congressional plan
The Bottom Line on the Congressional Plan

If it does pass in some form, it would:

Make the world’s most expensive system even costlier.

Not achieve universal coverage

Not improve coverage for the average person.

Not make affordable insurance available.

Not contain the continuing growth in cost.

Not achieve President Obama’s goals.

It doesn’t really reform the system.

It just won’t work!

conyers expanded and improved medicare for all single payer national health care hr 676
Conyers: Expanded and Improved Medicare for All“single payer national health care” HR 676
  • Automatic enrollment
  • Comprehensive benefits
  • Free choice of doctor and hospital
  • Doctors and hospitals remain independent
  • Public agency processes and pays bills
  • Financed through progressive taxes
  • Costs contained through capital planning, budgeting, primary care emphasis
new sanders mcdermott american health security act s 703 hr 1200
New – Sanders (& McDermott): American Health Security Act S 703 (HR 1200)
  • Automatic enrollment
  • Comprehensive benefits
  • Operated by States using Federal standards
  • Free choice of doctor and hospital
  • Doctors and hospitals remain independent
  • Public agency processes and pays bills
  • Financed through payroll taxes
how we pay for health care today
How We Pay for Health Care Today

Federal Government

(existing Medicare, Medicaid, other)


Private Insurance


Out of pocket


State and Local Government

(existing Medicaid, other)


Other private funds

(charity, etc.)


Source: Health Affairs, Feb. 2008; data for 2006

covering everyone with no additional spending
Covering Everyone with No Additional Spending

$ B




Additional costs

Covering the uninsured and poorly-insured +6.4%

Elimination of cost-sharing and co-pays +5.1%


Reduced hospital administrative costs -1.9%

Reduced physician office costs -3.6%

Reduced insurance administrative costs -5.3%

Bulk purchasing of drugs & equipment -2.8%

Primary care emphasis & reduce fraud -2.2%

Total Costs +11.5%






Total Savings -15.8%

Net Savings - 4.3% - 73

Source: Health Care for All Californians Plan, Lewin Group, January 2005

single payer offers real tools to contain costs
Single payer offers real tools to contain costs
  • Budgeting, especially for hospitals
  • Capital investment planning
  • Emphasis on primary care, coordination of care, and alternative ways of paying for services
  • Bulk purchasing
  • A system based on private insurance will never lead to universal coverage, nor can it control costs
  • Only single payer can provide comprehensive services while costing no more than we now spend.
  • Only single payer can control costs going into the future.
  • If a mandate plan is passed, the problems of the health care system will not go away. Real health care reform will continue to be essential.

We don’t need more money.

We need a new system.

-- Arnold Relman & Marcia Angell

We Can’t Wait Another 16 Years!Will We Get Real Health Care Reform Before the Premium Takes All our Income?


Source: American Family Physician, November 14, 2005