Do you remember the Harry and Louise ads used by the health insurance industry to help defeat the Clinton health care initiative in the 1990’s? Chances are today a couple like Harry and Louise, who were so happy with their employer-provided health insurance plan then, are worrying now about whether they can afford the premiums, co-pays, and deductibles, or they may not have any health insurance at all. In the past few years, the number of employers offering any health coverage has slipped from 7 in 10 to 6 in 10.
In fact, when medical bills now prompt more than 60 percent of U.S. bankruptcies. This is a dramatic shift from when in the late 1960’s I did a study for the Bankruptcy Court of Western Missouri to determine why people were taking bankruptcy. Only one in fifty – just 2% – cited medical bills as the reason.
Who doesn’t know someone who has delayed or gone without treatment because they can’t afford it and don’t have health insurance to cover what they need? How ironic considering Americans spend more per capita on health care than any other advanced country.
While there is no single reason for our health care predicament, one factor that contributes mightily to what prompts so many personal health calamities are are big insurance companies motivated primarily by profit, are systems for denying care at any chance. Consider how they routinely deny coverage to people who consider themselves to be in good or excellent health. Here, for example, are some of the grounds insurance companies are using to prevent people from qualifying for health insurance:
allergies, breast implants, ear infections, herpes, high blood pressure, impotence, infertility, mild depression, migraines,miscarriage, pregnancy “expectant fatherhood”, planned adoption, psoriasis, recurrent tonsillitis, ringworm, swelling from a spider bite, three months of psychological counseling after a marriage breakup, and varicose veins.
The shame is that every American could have health insurance for about what is being spent on health care today if we did just one thing – wring out the administrative cost and profit out of health insurance that accounts for one dollar in four of what we pay for health insurance. Before 1990, insurance companies like Blue Cross charged only about 5% for their services. Even today non-profit systems like Kaiser Permanente and Medicare can offer care for less than 5% for such costs, not 25%; Canadian Health Insurance runs below 3.2%.
In other words, we know about one dollar in every five could be saved from what’s now going into processing paper, corporate marketing, executive bonuses, and shareholder profits.
How could this happen? Many people advocate Medicare for All. How might this be funded? Congressman Dennis Kucinich calculates a 7.7% payroll tax will enable universal coverage. The State of California calculates that a 4% payroll and a 2% income tax would provide health coverage for all Californians.
But there are other alternatives, too, such as:
Returning to an all cash system and allowing new community-based health insurance plans and pricing to emerge. Right now the cash price for health care in the U.S. is a fraction of those billed insurance companies, exceeding the co-pays. They could enable U.S. health care costs more in line with those in countries that are now attracting medical tourism when people who needing hip replacements, for example, spend $10,000 on travel in order to get a new hip for $5,400 instead of the $45,000 it would cost in the U.S.
One example of the kind of insurance companies that could emerge is the Freelancers Insurance Company in New York State. The for-profit company is wholly owned by the nonprofit Freelancers Union. It insures 25,000 independent workers and family members charging premiums more than a third below what they would otherwise pay for health insurance. Another example is Grand Junction, Colorado. Such a plan would be possible in an Elm Street Economy.
Regardless of the alternative we settle upon, no one should profit from insuring the illness of others. We need to wring the administrative costs out of the system, provide professionals with a decent income, and quality health care for all without raising the overall cost of health spending.
Let’s use our voices and voting power to make this happen. It can start by creating local Elm Street Economies.
Comments on the substance of the blogs are welcome. If you have other questions, please contact me directly for a consulting appointment.
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