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Band-Aid Fixes

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The Westin Convention Center's ballroom was only half full on the night of Sept. 13, but the crowd was boisterous. Roughly 100 people, many in town for the AFL-CIO's national convention, were on hand for the taping of MSNBC's Ed Schultz Show. And they leapt to their feet and applauded when Schultz, a full-bore progressive, called for health-care reform. 

"I don't care how much it costs," Schultz declared. "Because nobody asked those questions bout Iraq. And nobody asked those questions about the Bush tax cuts either.

"There are some Democrats that are afraid to be Democrats," he added. "I'm just saying, 'Follow the president. Because the president knows what the interests of the people are.'" The applause swelled, nearly drowning Schultz out entirely. 

Meanwhile, Tom Ammons sat quietly with his wife, both wearing signs that read "HR 676 Single Payer" around their necks. Neither seemed overcome by Schultz's starpower. But then they weren't overwhelmed by President Obama's Sept. 10 speech on health-care reform either.

"Schultz is really a cheerleader for Obama," Ammons says. And "I heard some fibs in the President's speech. One fib is that the President said the people who run private insurance aren't bad people. But the insurance companies have said that unless they're restricted by law, they won't stop practices like dropping customers who get sick."

Single-payers don't want to reform the health-insurance business: They want to replace it with government-run insurance ... to offer a program like Medicare to everyone, not just senior citizens. And despite all the sunny reviews for Obama's speech, they see more and more reasons for despair. 

Ammons isn't the type to shout "You lie!" at a president, and Schultz repeatedly expressed sympathy for the single-payer plan. ("I think that's where we've got to go, but the president says ... it would be too much of a radical change.") But there was a microphone set out for audience members to use, and Ammons hoped to use it to take on the insurance companies once more. As his wife, Janet, put it, "I think they're a lot like the tobacco companies": Sooner or later people would turn on their business practices.

Not that night, however. Schultz's show ran out of time before Ammons got to speak. 

 

U.S. Rep. Mike Doyle
  • U.S. Rep. Mike Doyle

That's been the fate of single-payer all along, acknowledges U.S. Rep. Mike Doyle, a Pittsburgh Democrat. "I was a sponsor of single-payer legislation," says Doyle -- if nothing else, "It would be a lot easier to explain 'Medicare for everyone' than the current discussion. But the president thought we couldn't make this leap. Americans are used to a system that's unlike any other in the world." 

In fact, this is how screwed up the debate about health care is: When reform critics predict dire results of government intervention, their worst-case scenario is pretty much what we already have. 

Worried about faceless bureaucrats coming between you and your doctor? You already have those: They just work for the private sector now. Concerned that a "government takeover" would reduce choice and threaten the free market? That assumes you have choice today.

In fact, most working Americans have their insurance policy chosen by their employers -- and even the boss has limited options. "All across America we have insurance monopolies or duopolies," says Doyle.

In his own district, Doyle contends, Highmark has wrapped up nearly three-quarters of the health-insurance market. UPMC's own insurance plan has most of the remaining customers. 

Highmark doesn't break down its market share by Congressional district, says its spokesperson, Michael Weinstein. But in 29 Western Pennsylvania counties, he says, its market share is only "somewhere in the 50 to 55 percent range." Urban areas probably have more competition than in rural counties, he adds. 

Or do they? County Executive Dan Onorato has told audiences -- including the one at the Ed Schultz taping -- about his own effort to bid out the county's own insurance contract. During Onorato's six years in office, insurance premiums have gone from $35 million a year to $65 million. But when he put the insurance contract out for a bid, he only got three responses -- and "all three companies came in at $65 million, within $100,000 of each other."

"Do you think they had lunch together?" Schultz asked. 

The bigger question, of course, is if a $65 million contract can't attract rival bids, what chance do the rest of us have?

"The big thing is competition," Doyle agrees. "If we don't have it, we're in trouble." 

Thus, Doyle and others are espousing the "public option": a government-created insurer that would offer competing policies for those unhappy with, or unable to afford, private insurance. 

In theory, such an option wouldn't just help nearly 50 million uninsured Americans buy coverage: It would also keep the insurance companies honest by competing for those of us who do have policies. For progressives like Doyle, the public option has already become a viable alternative, now that single-payer is off the table. "I don't see myself voting for a plan if we don't have a public option or something comparable," Doyle says. 

Obama, though, already appears far less attached to the plan. During his Sept. 10 speech, Obama acknowledged "a strong majority of Americans still favor a public insurance option" -- and then signaled he'd be willing to ditch it anyway. "The public option is only a means to an end," he said. "We should remain open to other ideas."

Indeed, during a national conference call with supporters after the speech, Obama political adviser David Plouffe would promise only that a public option was "something that [Obama] is going to talk about in a favorable way." 

The compromise position, in other words, seems likely to be compromised in turn.

 

U.S. Rep. Tim Murphy
  • U.S. Rep. Tim Murphy

Not that achieving any reform will be easy. Just look at Pittsburgh's congressional delegation. Doyle says he likely won't vote for a plan without a public option; our two other congressman probably won't vote for a plan with it. 

Republican Tim Murphy, who represents the 18th district, issued a statement welcoming the president's speech: "Many of the principles that the President discussed tonight [are ideas] I have been advancing." But Murphy voted against the House health-care reform bill, HR 3200, in committee, and opposes a public option. To create competition, Murphy favors allowing insurers to compete across state lines instead. 

U.S. Rep. Jason Altmire
  • U.S. Rep. Jason Altmire

Democrat Jason Altmire, meanwhile, is a fiscally conservative "Blue Dog" Democrat. When the committee he sits on voted on HR 3200, he was one of three Democrats to vote against it -- out of 30 Democrats on the committee. Since then, Altmire has received a handful of fawning interview opportunities from Fox News, where he has insisted that taxes not be raised to fund reforms. Rather than trying to cover everyone without insurance, he said during one interview, "first and foremost we have to find a way to reduce the long-term cost of health care." His own cost-cutting proposals, which would change the way Medicare pays doctors and hospitals, have been endorsed by the American Hospital Association. 

There is big money at stake in all these positions. Murphy is a child psychologist, and the health industry is his largest source of campaign contributions: Since 2002, he has taken $800,000 from the health industry, according to the Center for Responsive Politics. Altmire, meanwhile, is a former UPMC lobbyist who has received nearly $450,000 in campaign contributions from the health industry since 2006. (He has, however, taken even larger sums from labor unions, who support reform.) 

And when it comes to cutting costs, as Altmire himself puts it, "Every dollar spent has a constituency." One man's excess overhead cost is another's profit margin. 

For example, Altmire, Doyle and Murphy all agree that insurers should be prohibited from dropping customers who get sick, or denying coverage for those with pre-existing medical conditions. For that matter, Highmark's Weinstein agrees that "there's a real need to fix the system. ... We're OK with eliminating the system where people can't get insurance for pre-existing conditions."

Sounds great. But then Weinstein adds a caveat: " -- as long as there is an individual mandate to buy insurance."

And that's the rub. Many of the nation's uninsured are young, healthy people who either can't afford insurance or would rather spend the money on something else. Capturing that market would be a boon for insurers, who can expect years of premiums from customers in the prime of life without having to pay much in return.

But as Ed Grystar notes, "There's nothing in the [current legislation] that says a person who has their insurance continued will be able to pay for it." To Grystar, who co-chairs the Western Pennsylvania Coalition for Single Payer Health-care, Obama's proposed reform "amounts to a continuation of a system that has failed millions of us already."

"If all we're going to do is add 30 or 40 million new customers through mandatory enrollment -- without any reforms or competition -- all we've done is make the current situation worse," agrees Doyle.

Some say it's already happening. 

 

Altmire, for one, maintains he doesn't necessarily oppose a public option. But he's taken positions that would likely weaken it. 

As currently proposed, the public option would reimburse doctors and hospitals at rates tied to the reimbursements set by the Medicare plan. But Altmire, like other Blue Dogs, says the public plan "has to meet the same requirement that private insurers do." That means instead of piggy-backing on Medicare's rates, rates "will have to be negotiated" with health-care providers. 

On one level, that doesn't make much sense. Medicare rates are generally lower than those charged elsewhere, so forcing the public option to negotiate rates separately will probably increase costs. That would seem like the last thing a Blue Dog -- who puts cost-control "first and foremost" -- should want to do. 

But insurers say that Medicare doesn't reimburse doctors and hospitals enough to pay for their services -- so providers make up the difference by overcharging people with private insurance. Highmark, for example, cites an industry-sponsored study showing that this "cost shifting" accounts for nearly $1,800 of a family's annual insurance premiums. Whether you call Altmire's demand "hamstringing reform" or "leveling the playing field," it will be a boon for hospitals and health-insurers alike. 

Altmire says that a public option will still have advantages over private insurers: "They're going to offer it cheaper, by not having a profit motive, a CEO that makes $10 million."  

But even if the public option is cheaper, will any of us be able to purchase it?

In his speech to Congress, Obama pledged that a public plan "would only be an option for those who don't have insurance. No one would be forced to choose it. ... [W]e believe that less than 5 percent of Americans would sign up." 

Obama clearly intended this pledge to reassure those afraid of "socialist medicine," but it's only made folks like Ed Grystar more concerned. 

Right now, critics note, most of us have only two choices: to accept our employer's insurance plan or drop it. But if Congress passes a mandate requiring us to buy insurance, we lose even that option. And unless the public option is open to all of us, buying our employer's crappy plan may be the only thing we're allowed to do. You'll have all the supposed downsides of a single-payer system -- a lack of choice -- combined with the worst excesses of the free market -- cheap employers who only want to save a few bucks.

As for the public option? Without the ability to compete head-to-head with private insurers, Grystar warns, it could become the insurer of last resort -- and thus confirm all the dark prophecies about "government health care." 

"The public plan will be the dumping ground for people who can't get insurance in the quote-unquote free market," Grystar predicts. "It's being set up to fail. And then it'll be the poster child of why we don't need the government." 

So never mind the tea-partiers, or the loutish Republicans who act up during presidential speeches. The real question is whether Democrats like Doyle and Altmire will be able to agree on a bill ... and whether any bill they agreed on would be worth having. 

In the near term, some reform seems almost inevitable. Even Republicans like Tim Murphy support requiring the insurers to sell health coverage to everyone. And Obama backs the idea of requiring (and helping) everyone to buy insurance. But those skeptical of the insurance industry worry that Washington is going to end the debate the way it began -- by jettisoning any policy that might scare insurers straight. The result, they worry, is that politicians will end up like a team of doctors who can't agree on a course of treatment, and so only remove half of the patient's malignant tumor.  

Which is why Tom Ammons thinks there was "another fib in the president's speech. He said he was going to be the last president to deal with health care. But a few years from now, it will blow up all over again." 

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