The Affordable Care Act, Insurance Companies and “Single Payer”

Written by Peggi Chute

Dr. Jeoffry Gordon, self-described as a Family Doctor, was our honored guest speaker at the Lake San Marcos Democratic Club meeting held in August. An incredibly engaging speaker, his power-point presentation was informative, thoughtful, and a call to action to change the status quo of our healthcare system. (Click the link below to see his full presentation).

He began his talk referencing George Orwell, author of the novel, 1984, whom Gordon believes was right – just 33 years off. It is today that we now face the challenges that were described in this book where wrong is right, and up is actually down.

“The only thing necessary for evil to prevail is to do nothing,” is a slight variation on a quote generally attributed to Edmond Burke. It’s where we find ourselves today – at a crossroads. Will we sit back passively or will we join the fight to create a more equitable and fair healthcare system for all citizens?

The Democratic Party has declared healthcare as a right. Many in the Republican Party, however, continue to believe it is not the State’s responsibility to provide healthcare to its citizens. As a consequence of the Republicans controlling the White House, Congress, the Supreme Court, as well as the majority of the U.S. individual states, this Republican philosophy has had a negative affect on health. Life expectancy in the USA is going down with ½ million people dying earlier than in other industrialized countries. In rural American, the number is even higher. The maternal mortality rate – American women having babies – has risen from 10% to 22% in recent years.

Income inequality has affected the poor the most with a poor person dying earlier than those in the high income brackets, in large part due to the fact that the wealthy can spend a greater portion of their money on health. The top 1% of the income bracket spend 25% of their income on health. The top 50% of the U.S. middle class spend 3% of their earnings on their health.

In 2007, there were 800,000 bankruptcies. After the Affordable Care Act (ACA) also known as Obamacare was passed, that number declined by half, because 60% of all bankruptcies are due to illness. The ACA with its Medicaid expansion is the band-aid that is holding America together. No longer a program simply for the poor, the Medicaid expansion also covers those with pre-existing conditions, seniors in care facilities, children with disabilities, and veterans and their families. So the question is, stated Gordon, “If you’re pro-life, why are you against universal health care?”

The ACA transformed access to medical care for millions of people. In addition to covering pre-existing conditions, it allows young adults to remain on their parents’ plan until the age of 26. It created a competitive market enabling the poor to purchase insurance when previously they could not afford it. ACA eliminated differential insurance premiums for the sexes, and expanded benefits for substance abuse help, and eliminated the Medicare prescription gap, once known as the “donut hole.” And finally, it subsidized insurance premiums, copays, and deductibles for 80+% of those signing up on the exchanges that were determined to live below the poverty line. The Act also calls for investing $10 billion in community health centers. By taxing the wealthy more and subsidizing health insurance and medical care for the poor and struggling middle class, the ACA clearly reduces economic inequality ever since the inequality gap began rising four decades ago. So far, we can continue to describe the ACA in the present tense. It all depends on how vigilant citizens are to hold Congress accountable to maintain these health care advances.

With the attempts to pass a supposed “healthcare bill” in President Trump’s first 100 days, what the Republican Party was in fact trying to pass after hoping to repeal ACA altogether, was not a health care program but a tax abatement. Even though the Republicans voted for 7 years to repeal the ACA only to have Obama veto their efforts, they came up empty handed when they took power. They presented a poorly conceived health care plan under the leadership of Senator Mitch McConnell that was created behind closed doors with no discussion or input from the healthcare industry. All of the various bills they scratched together had virtually no support. Hospitals, insurance companies, doctors, nurses, patient advocates and disease groups judged every proposal negatively, along with the neutral Congressional Budget Office.

Each plan the Republicans tried to pass were limited, weak plans that would have hurt millions who again would not be able to afford insurance. Instead, their plans were thinly disguised bait and switch attempts to give a huge tax windfall to those making over $200,000 a year, or $250,000 for couples, with most of the burden falling on families in the upper 5 % of income earners.

Red states that accepted ACA, which included the Medicaid expansion, received 38 billion in assistance to make the Affordable Care Act prosper in their states. The states who fell behind in helping their citizens were the ones who refused to accept the Medicaid expansion. Such refusal caused insurance companies to exit the insurance exchanges in those states, knowing they wouldn’t get paid. That usually left but one company that could then raise its rates indiscriminately since they had no competition. Yet, the people who saw their premiums sky rocket, blamed the ACA instead of their state government.

If the Republicans had been successful in repealing the ACA, California would have suffered greatly. With such a large population, California has the most at stake to make sure heath care works. It’s important to inform people that a Single Payer System is not socialized medicine; it’s a financial system. Individuals and employees pay taxes to the government instead of paying monthly premiums to private insurance companies. The government provides the coverage. The government, therefore, becomes the “single payer” of health care bills but delivery of health care services remains the same.

California, therefore, has been working to create their own Single Payer system. A bill was introduced that took a stab at changing the California system. S.B 562 was a bill that would have cost the state $400 billion a year. With such a staggering price tag, Governor Brown was opposed to it as being fiscally too expensive.

S.B. 562 proposed that a 2.3% sales tax increase and a 2.3% gross sales business tax could cover the cost for the system. Since any tax increases always seem to be unpopular with voters, it is easy to see how opposition to such a plan could fail. The bill, therefore, was shelved for the time being to give proponents of a Single Payer system more time to solve the barriers to the idea and more time to mobilize the citizens.
Once people understand that it would save them money in the long run by eliminating the middle men – the insurance companies – it’s possible to sell the idea. Part of the challenge will be to retrain people who currently work for the insurance industry so they are not squeezed out of the job market.

Other countries have solved these problems and are now offering health care systems that serve their populations. Many actually are into preventative medicine, which also saves money. It makes sense that a sick citizenry should not be profitable. A healthy citizenry creates a more profitable economy. We need to keep encouraging our representatives in Sacramento to solve this health care issue so CA can add Health Care to its list of issues where California leads the way and is yet another reason why California is the sixth largest economy in the world.

DR Gordon AUG 2017 National Health Policy

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