The retreat from reform

THE SEVERITY of the health care crisis in the U.S. has millions of people expecting dramatic change.

The U.S. Census Bureau's official statistics say that 45.7 million people didn't have health insurance in 2007. But the problem is even worse, according to a Families USA study--which found that 86.7 million Americans, or about one in three people under the age of 65, was without insurance at some point in 2007 and 2008.

Add in the problem of "underinsurance" for millions of people who think they're covered, but then discover, when they get hurt or sick, that there are giant holes in their employer-provided health insurance policies.

It's no wonder opinion polls consistently show that health care is a top concern for people--and that a majority wants the government to play a role in the health care system, as it does in every other advanced industrial economy. According to a February 2009 Grove poll, for example, 59 percent of people said they would prefer a national health insurance program that covers everyone, over the current system of private insurance, offered mainly through employers.

But in Washington, D.C., despite the bold promises from Barack Obama and the Democrats during the 2008 election campaign, the prospects for genuine health care reform seem to be running in the other direction.

From the start, the Obama White House has declared that precisely such "a national health insurance program that covers everyone"--a single-payer health care system that would provide government coverage for everyone in the U.S. under an expanded Medicare-like system--is "off the table."

At a town hall meeting in New Mexico earlier in May, Obama repeated his position that "[i]f I were starting a system from scratch, then I think that the idea of moving towards a single-payer system could very well make sense"--but that it was unrealistic to make major changes to the system of providing insurance mainly through employers.

As a result, the case for single-payer has been excluded from discussions like the White House summit on health care in March and recent Senate Finance Committee hearings led by Sen. Max Baucus.

Instead of hearing from both patients and caregivers who support a national health care system that eliminates private insurance, these forums have been dominated by representatives of the health care industry, who are maneuvering to make as few concessions.

MANY LIBERALS are setting their hopes on Democratic proposals for a so-called "public option"--a new health insurance program provided by the federal government that people could opt to join if they didn't like their private insurance plans. Obama said during the campaign last year that he supported a "public option," though he left the details vague.

The "public option" might sound good. According to the union-backed Health Care for America Now (HCAN) coalition, a "public option" would "[g]ive America a choice. We support health care reform that allows individual Americans to choose either a universally available public health care option like Medicare or for-profit private insurance."

But once you look at the specifics, the problems with a "public option" are clear.

First of all, the "public option" would leave the private insurance industry intact, and put the federal government in the position of trying to out-compete these corporate giants at their own game.

That might not seem so bad if there were any prospect of a fair fight. After all, millions of people fed up with private insurance companies would gladly choose a government-run insurance program if one was offered. But any "public option" program would be required to play by the rules of private industry--and that means it will be doomed from the start.

This fact was underlined by the proposal floated by Sen. Charles Schumer, who was asked by Baucus to begin outlining the specifics of a "public option" program, according to the New York Times.

According to the Times, Schumer proposed the following principles:

-- The public plan must be self-sustaining. It should pay claims with money raised from premiums and co-payments. It should not receive tax revenue or appropriations from the government.

The public plan should pay doctors and hospitals more than what Medicare pays. Medicare rates, set by law and regulation, are often lower than what private insurers pay.

The government should not compel doctors and hospitals to participate in a public plan just because they participate in Medicare.

To prevent the government from serving as both "player and umpire," the officials who manage a public plan should be different from those who regulate the insurance market.

In other words, Schumer's proposal for a "public option" gives up on everything that would make government-run health coverage more efficient and effective, in order to run a clone of a private insurance plan.

For example, one of the central causes of the health care crisis is runaway costs, which regularly outpace the overall rate of inflation in the economy. A government-run system could leverage its bargaining power by insisting on lower payments to hospitals and drug companies. But Schumer expressly closes off this possibility.

Likewise, when advocates make the case for a single-payer system, they point out that a government system could be financed by eliminating the vast administrative waste in the private insurance industry. Schumer's version of the "public option" specifically preserves that waste.

THIS ISN'T "like Medicare," as HCAN suggests in its statements. Rather, the "public option," as it is shaping up under Democratic proposals, would be little different from the unaccountable, loophole-filled and outrageously expensive health insurance plans provided by the private industry.

As one single-payer activist wrote, commenting on the developments in Congress:

Look at the history of what has happened here. The progressives were told by the moderates that the votes for single-payer were not there. So negotiations began from a position that single-payer was off the table. The progressive community then decided to concede that the Republicans and the insurance industry could have their market of private plans, and that the compromise position that all could accept would be the addition of a public insurance option.

In the compromise process, the Republicans and the insurance industry finally made their move. That was: "drop dead"...So now we have the Schumer compromise of public option light, which now has been blessed as the current, official Democratic position, even though it moves even closer to the Republican position...

The Democrats have already conceded on an effective public plan option. They have conceded that universal coverage is not possible so we should merely "aim for universal." They have admitted that they have not figured out a way to pay for plans with adequate benefits for working families. They have abandoned support of policies that would improve value while controlling costs.

The Democrats have already given away all major policies for reform, and the Republicans haven't had to budge the least. Why should they when the Democrats are rushing in their direction?

No wonder Karen Ignagni, head of the insurance lobby, America's Health Insurance Plans, admitted, "We are very, very grateful that members of Congress are looking at our concerns."

Nevertheless, the Democrats' concessions haven't won AHIP to supporting a "public option"--and Republicans and conservative Democrats in Congress are vowing to fight even Schumer's half-measures.

Anyone who thinks the "public option" is at least an appealing alternative if we can't get single-payer needs to recognize the central problems of the health care crisis that it would leave unaddressed.

Health insurance would remain an employer-based system, which means linking health care to having a job for most people. Nothing would be done to deal with the stunning racial and gender disparities of the current system. And health care would remain a commodity to be bought and sold, not a human right that can never be taken away.

The "public option" isn't a more practical way of moving toward a national health care system. We need to continue mobilizing--as doctors, nurses and activists did in civil disobedience actions during Senate hearings on health care--for a single-payer system that abolishes the for-profit insurance industry and provides comprehensive health care benefits to everyone.