On Tuesday night I participated in a Live Chat with Dr. Howard Dean, former Governor of Vermont and former head of the Democratic National Committee, to discuss health care—specifically the need for a public option. While there was no overly new material presented to me and I did not manage to get any of my specific questions answered, it did seem that Dean managed to answer at least a few similar questions presented by other participants. The format seemed to prevent Dean from providing answers with enough context to truly satisfy me, but the few interesting statistical facts that came through and some of the rhetoric made the chat worthwhile overall.

For example he noted that:

·    With for-profit health insurance between 20 %- 50% [of the premium dollar] goes for expenses other than health care, depending on the amount of advertising, CEO salaries and return on equity for the shareholders.
·    Medicare, a public health insurance plan for those over 65 has increased its costs by roughly 50% above the rate of inflation. Private health care has increased its costs by more than 200% above the rate of inflation.
·    Medicare spends 4 cents out of every premium dollar on non-health care expenditures, private insurance spends 20 cents of every premium dollar on non health care expenditures

Although, he was also honest enough to admit that some “doctors could refuse to take the insurance,” this was one statement where further follow-up would have been appreciated. He did explain that the “one thing we did when we created a system like this in Vermont was to increase reimbursement [for children under 18] to pediatricians so that they would stay in the system.” But that hardly speaks to how the situation would be resolved on a national level let alone across the age spectrum. Nor did it offer up a forecast for how many doctors would refuse to take the insurance, why they would refuse and what particular incentives would work best for which type of doctors to encourage them to stay in.

But the one line that spoke to me came when he stated, “while, bi-partisanship is nice, it should not be used as an excuse to pass a crummy bill. Any bill without a public health insurance option will be a failure.” I personally would prefer a full single-payer plan but at the very least a muscular public option is essential to truly reforming our system which is terribly, terribly broken.

Over 50 million American lack health coverage because employer based healthcare does not extend to all workers and neither they, nor those without jobs, can easily afford private health insurance.  And for those that manage to buy into cheap $100 a month plans the policy that buys tends to exclude coverage for a myriad of health problems, comes with a high deductible of at least $2,000 before your benefits kick in, and it usually comes with an upper limit in terms of how much the insurance company will cover. So if you get a truly catastrophic disease such as cancer, you can be sure you will be bankrupt before you die.

Then there is always the issue of a preexisting health condition, such as diabetes, cancer, or a heart problem (my retired father in-law, a former small business owner who supplied insurance to his whole staff, has a heart problem and cannot get insured by a private plan no matter how much he is willing to pay. His wife had to increase her hours at her job at the YWCA where she works as a therapist to get him insurance until he turns 65 and can get Medicare).

For those of you with employer-based healthcare you are used to plans providing coverage for regular doctor visits, emergency care, prescription drug plans, and maternity, as well as preexisting conditions but private insurance will do their best to deny you and if you have heart disease, asthma, or even AIDS, the odds that you will be denied coverage rise sharply.

Of course if you recently lost a job you can obtain COBRA until you find a new one (and then wait at least 90 days for the health insurance to kick in—if your employer has it, mine currently does not) as long as you can pay the entirely monthly premium that your employer used to cover. So it is when you are at your most vulnerable and least able to afford healthcare, that our system makes it the most expensive but if you do not have it and something happens before you find a job you face financial ruin.

Also, the more you use it the more it costs because the more claim you make the higher your premiums will go. This of course encourages you to avoid going to the doctor until something is really wrong. I know I have that fear. Heck, when my wife was pregnant I called Monday’s insurance days because that is when I tried to call our insurance and our doctors’ offices to clarify why such and such was not covered (after our daughter was born, our insurance not only tried to claim that the pregnancy was a pre-existing condition but they also put a hold on my drug benefit because I was suddenly using it and they wanted to make sure I was still eligible for benefits before they paid). But that is not the worst that can happen—if you are on private insurance and you have an injury that requires physical therapy or many doctor visits, when your coverage comes up for renewal you may be turned down or find those treatments are excluded.

At a glance this all sounds rather “evil” but it is merely capitalism whose very amorality makes it damaging to something as vital to the social good as healthcare. As Dean noted in the first chapter of his forthcoming book, “insurance companies earn enormous returns for its chairman and shareholders by insuring only the healthy and dropping coverage for the ill.” Insurance companies are for profit enterprises whose goal is to maximize their value on the stock exchange not to take care of your health. We are no more truly their patients than we are “guests” at Starbucks. We cannot trust corporate owned interests to be caring, compassionate or, looking at the recent banking crisis, act with long-term fiduciary interests in mind. For all of you out there who are angry about how the banks have screwed the public what makes you think insurance companies will take better care of you than the banks took care of your money? All the insurance companies think about is how can they get away with the least amount of care offered to you, so that their premium is going to give them the most profit.

Of course that doesn’t mean you’re ready for “socialized medicine” does it? I mean, it may be expensive to businesses and individuals, provide a lack of quality healthcare and create true rationing by either preventing large segments from getting healthcare at all or by allowing a “customer service” agent to decide when and if you can call something as basic as an ambulance without prior approval but at least it is a free market solution right? Wrong.

According to Physicians for a National Health Program(PNHP) over sixty percent (60.5 percent) of health spending in the U.S. is funded by government.

“Official figures for 2005 peg government’s share of total health expenditure at 45.4 percent, but this excludes two items:

1. Tax subsidies for private insurance, which cost the federal treasury $188.6 billion in 2004. These predominantly benefit wealthy taxpayers.

2. Government purchases of private health insurance for public employees such as police officers and teachers. Government paid private insurers $120.2 billion for such coverage in 2005: 24.7 percent of the total spending by U.S. employers for private insurance.

So, government’s true share amounted to 9.7 percent of gross domestic product in 2005, 60.5 percent of total health spending, or $4,048 per capita (out of total expenditure of $6,697).”

A public option would follow the same path by socializing the cost not the operations. Medical decisions are left to the patient and doctor, as they should be—right now my HMO makes the decisions. Doctors will not work for the government; they will merely accept the government backed insurance.
Additionally, the public plan will save money and that is crucial for our economy.

Part of the “huge salaries” provided to the United Auto Workers Unions is calculated by US economists by including health benefits when they calculate wages. That truly puts our manufacturing sector at a disadvantage when you realize that Japan has a full public system for their workers. And the costs on all business and individuals are only going to increase under our current system. In the last ten years we have seen employer based coverage increase by over 119 percent. And the Wall Street Journal noted that businesses expect their health benefit costs to spike an average of 7.4 percent this year. This is not just manufacturing that will face these costs, they will spread across the entire spectrum of US employers.

A lot of these costs come from huge operating overheads and the aforementioned drive for profits. Under a public option, it we will no longer have a huge bureaucracy of underwriters deciding who gets care and who doesn’t because everyone is covered and has the same comprehensive benefits. With a public system we would be able to cut our bureaucratic burden and save hundreds of billions annually.

For example according to PNHP, Medicare operates with just 3% overhead, compared to 15% to 25% overhead at a typical HMO. Provincial single-payer plans in Canada have an overhead of about 1% (I recommend reading this great op-ed on debunking Canadian Health Care Myths)

In Dean’s new book he states that the Congressional Budget Office found that “29 percent of the premium dollars in the individual insurance market go toward administrative costs; the average policy holder spends roughly $300 more on admin costs each year than if he or she purchased coverage through a group policy.” Why pay all this money to the overhead?

So why is everyone fighting this change? Because the insurance companies are afraid they can’t compete and many politicians agree:

On May 17 Mitch McConnell, Senate Minority Leader, admitted to Chris Wallace on the May 17 Fox News Sunday: “The private insurance people would not be able to compete with a government option.”

Senator Chuck Grassley (IA-R) recently wrote in Politico that “As many as 119 million Americans would shift from private coverage to the government plan.” and “Eventually, the government plan would overtake the entire market.”

But isn’t that truly the free market? If private health insurance actually provided those 119 million people with what they want wouldn’t they be happy to stay with the system.  That is partly why reform failed in the 1990s because too many people were satisfied and that is why Obama is not planning to sign legislation that forces people into the public plan. He is positive that on the field of free market ideas, given a choice, the public will choose to move away from private plans or employer-based healthcare. It is time to give these 119 million people more choices, more freedom not less coverage for most money.

Of course, Grassley is concerned about the industry disappearing he gets so much money from it; according to OpenSecrets.org Grassley’s top four donor groups were Health ($411,956); Insurance ($307,348); Pharmaceuticals ($233,850); and Hospitals ($197,137). Eighth on Grassley’s donor list were HMOs at $130,684.

Of course to be fair, the health industry is pretty much the Standard Oil of the 21s century and they spread their money around so that no member of Congress, Democrat of Republican, probably has a very clean record, which is why it is all the more important to support the ones that support a public option which you can find at: Where Congress Stands.

At this point in my life I have been without insurance more often than I would have preferred and without employer based insurance, despite regular employment (including now), for almost five years and I sit back and I wonder why we have public plans for the general poor i.e. Medicaid, poor children i.e. S-CHIP, and the elderly i.e. Medicare which despite flaws (Medicare frequently outsources its programs to private insurance companies such as Blue Cross which prevents them from paying hospitals in lumps sums. Instead they nickel and dime the costs by paying for each pill or bandage one at a time, a very inefficient method but one brought on by private involvement in a public program) receive massive public support and I cannot find a program that will truly provide healthcare as opposed to largely inadequate health insurance.

I pay well over 10% of my salary for my families health insurance as of right now and I get no preventive care, a high deductible, limited prescription benefits and an overall feeling of dread when I am sick. Not because of the illness but because I know that no matter how sick I am that day, when I get that special envelope from my insurance I will always feel sicker as I open it because I fear what I will find inside.