Health Care for America Proposal:
Comparison to Single-Payer
Basis for “Health Care for America Now” campaign and the Barack Obama health care plan
Introduction
Conclusion
Summary
Simplicity Wins
Impact of the Proposal, including the proposed public plan
Details
The Claims vs. The Facts
Big Challenges as documented by the Lewin Group
Proposed Public Plan
Further Reading
References
Introduction
The “Health Care for America” proposal is the basis of:
- the “Health Care for America Now” campaign
- the health care proposals of:
- Barack Obama
- Hillary Clinton
- John Edwards
My report on this web page is based on the proposal itself and the economic analysis of the highly respected Lewin Group. If you carefully read the 56-page proposal and the Lewin Group’s economic analysis and find that any of what I have written should be improved, please contact me.
Conclusion
As supported by the information and observations below, the “Health Care for America” proposal maintains the health insurance companies and their bureaucracy, as well as expanding government bureaucracy. It is a poor proposal that does not perform well compared to non-profit single-payer national health insurance, such as what is proposed via U.S. House Resolution 676.
Summary
| “Health Care for America” proposal: Health Insurance Companies’ Bureaucracy + Government Bureaucracy References: Proposal and Analysis (pdf) |
Non-Profit Single-Payer National Health Insurance: Simple and Efficient Payment of Medical Bills by the Single-Payer Reference: U.S. H.R. 676 |
| Number of Uninsured: 1.3 million estimated | Number of uninsured: zero |
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Complex with Many Costs: Financial and emotional stress for many – Citizens are forced to pay health premiums; if you don’t enroll, it will be done automatically “for” you – Increased business costs 1 |
Simple with Minimal Costs: Peace of mind for all |
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For more comparison topics that are deliberately not duplicated here, please see the comparison web page |
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Overall result: Increased health insurance companies’ bureaucracy plus Increased government bureaucracy |
Overall result: Elimination of health insurance companies’ bureaucracy plus Dramatic reduction in government bureaucracy |
Simplicity Wins
The “Health Care for America” proposal (pdf) was examined thoroughly by the Lewin Group, which developed an analysis (pdf) report.
The Health Care for America proposal does not cut administrative costs to the degree that single-payer will
- It does not provide maximum simplicity with the least administrative costs and, therefore, does not provide the highest productivity,
- The “Health Care for America” proposal accurately communicates about “the vast administrative efficiencies of a single insurer” and that “A single national insurance pool covering nearly half the population would create huge administrative efficiencies.” The proposal then suggests that less than half the population be covered by the single-payer with fewer benefits than single-payer provides!
- The “Health Care for America” proposal accurately communicates about “the vast administrative efficiencies of a single insurer” and that “A single national insurance pool covering nearly half the population would create huge administrative efficiencies.” The proposal then suggests that less than half the population be covered by the single-payer with fewer benefits than single-payer provides!
- It causes a loss for America’s family budgets instead of a win,
- It causes an additional cost burden (more than single-payer would) on companies that had not provided employee health insurance coverage in the past, and
- It burdens everyone with mandated (forced) participation and payment of health insurance premiums (in addition to health-insurance-related spending of taxes) within a system that is not as good and simple as single-payer.
Impact of the Proposal
Including the Proposed Public Plan
Summary: Average American Would Continue to Lose Twice
- Government The costs to implement and maintain the new public “Health Care for America Plan” will be in addition to the proposal’s keeping the current funding for some federal programs, such as TRICARE/CHAMPUS for military retirees and dependents. See government bureaucracy for a list of current government programs. Medicaid and SCHIP enrollees would be transferred to the new plan, but the states will still be responsible to provide the former funding of those programs to the federal government to help fund the new program.
- Health Insurance Companies More spending to health insurance companies would occur, since the use of health insurance companies would be maintained.
- The 56-page analysis (pdf) of the “Health Care for America” proposal includes the following information:
- the proposal “requires that individuals obtain coverage and automatically enrolls people who do not have insurance into the public Health Care for America plan. It also provides subsidies to help low-income people pay premiums. Overall, families would save $23.3 billion primarily from lower out-of-pocket payments. However, other financing mechanisms that would be needed to fully fund the proposal (i.e., $49.3 billion) would reduce these savings to families.”
- RESULT: Gain $23 billion (out-of-pocket); and lose $49 billion (more federal taxes)! This is not a good net result to spend more money, especially when single-payer will save an estimated $350 billion per year.
Details
Differences between the “Health Care for America” proposal and the U.S. current financing of health care are seen highlighted in red or are contained in the associated footnotes related to the red text.
| “Health Care for America”: Private Health Insurance Bureaucracy and Government Bureaucracy Proposal and Analysis (pdf) |
Single-Payer National Health Insurance: Simple and Efficient U.S. H.R. 676 |
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Health care for “most”, not all. |
Health care for all with dignity. |
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Number of Uninsured: 1.3 million estimated Result: 1,300,000 persons out |
Number of uninsured: zero Result: Everybody In; Nobody Out |
Complex with Many Costs: – Current Medicare is maintained with its tax on earned income and tax on business payroll – Health care premiums to private health insurance companies; these payments are now forced (“mandated”) on everyone who has earned income; if you don’t enroll, it will be done automatically “for” you – Report yearly with your federal taxes that you have proof of insurance – Increased business costs 2 due to all employers now forced to pay for health insurance, where some may not have provided insurance in the past – Lower wages, including government workers’ lower wages, due to the above increase in business costs – Out-of-pocket up to a limit of $3,500 ($5,000 for family) Costs via the government spending of our tax dollars: – Subsidies to low-income enrollees … to help pay their premiums on a sliding scale based on income; This is an addition to the long list of current government spending The above list and this entire table is primarily a list of additions to the more list at the comparison web page. SEE THE COMPARISON WEB PAGE TO MORE FULLY APPRECIATE THE COMPLEXITY of proposals that maintain are not non-profit financing of health care. Overall result: Financial and emotional stress for many |
Simple with Minimal Costs: – See Costs and Savings and the Comparison web pages Results of simplicity: – See the Comparison web page for this list Overall result: Peace of mind for all |
Limited Benefits “Besides Medicare benefits, the plan would cover mental health and maternal and child health.” and “would also provide drug coverage directly.” Result: significant limitations compared to the proposed single-payer benefits. Two examples: dental services and long-term care are generally not covered. |
All Medically-Necessary Coverage Result: The list is too long to include here! See “What Single-Payer Provides”, including the examples of dental services and long-term care. |
Poor efficiency. – About 69% estimated efficiency – About 31% spent on administrative functions – Some degree of administrative efficiency is claimed by the proposal and addressed in the analysis, but see the section of this web page, below, titled “BIG CHALLENGES” The reasons for poor efficiency are indicated below by “Managed and influenced by many”! Also see “Current Condition” and its U.S. Health Care Financing |
Excellent efficiency. – About 95% or higher estimated efficiency Result – The largest step the U.S. can take to achieve quality affordable health care |
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Managed and influenced by many: – (The following note is in addition to the list at the comparison web page – The names of some of the multiple programs will change, such as from “Medicaid” and “SCHIP” to new names that will provide the functions of “effective enrollment and outreach systems”3 |
Managed by one public agency: — Addressing regional differences by using the same ten regions already defined by Medicare Results of single-payer: Dramatic reductions in private and government bureaucracy |
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For more details of comparison that are deliberately not duplicated here, please see the comparison web page |
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Summary About Single-Payer Financing:
* Simpler, more efficient
* No health insurance company bureaucracy
* Dramatically less government bureaucracy
* Result: more benefits at a lower cost!
The Claims vs. The Facts
Cover Everyone … or Leave Over a Million Behind?
- CLAIM: statement that the “Lewin (Group) found that (Health Care for America) would cover everyone in America.”
- FACT: The Lewin Group reported that the Health Care for America proposal leaves over a million people uninsured.
- Lewin Group Economic Analysis Executive Summary - pdf page 3
- “The Health Care for America Proposal would … (leave) … about 1.3 million people uninsured.”
- But the main point is NOT that there is over a million uninsured. However, we must remember the underinsured whose lives WILL be in financial stress or ruin due to one upcoming major medical event that WILL happen. Single-payer WILL address ALL of the 42% of Americans who are either uninsured or underinsured; it’s unclear that Health Care for America proposal will do anything to impact the underinsured, who become underinsured by their choice of health insurance company plans or by the insurance offered by their employer.
Spending 50 Billion is a Good Deal … HOW Can That Be Better Than Saving 350 Billion?
- CLAIM: An implication that the benefits of the “Health Care for America” proposal will be worth the $50 billion in cost: “… the new system would cost the US government only $50 billion more than what we are paying now …”
- FACT: No proposal that maintains the health insurance companies’ bureaucracy and expands the government bureaucracy is worth any price when a non-profit solution would save $350 billion instead of costing $50 billion. —– That is a net difference of $400 billion!
- Note: the first major step for the U.S. health care crisis is to implement the best solution for health care financing that will allow the uninsured to be covered and will also eliminate the underinsured.
Keep that important need in mind. The “Health Care for America” proposal will do neither, yet it will cost $50 billion.
Creating U.S. Laws That Put Arbitrary Regulations on Private Corporations Will Solve the Problems of Dealing with Over 1300 Health Insurance Companies; I don’t think so!
- CLAIM: Implication on televised ads that the problem of health insurance companies focusing on profits over the health of their policy-holders is going to be solved by the Health Care for America proposal
- TV ad “Will health insurance companies ever put YOUR health before THEIR profits? We can’t trust insurance companies to fix the health care mess. If you are ready to demand quality, affordable health care now, join us.”
- FACT: The proposal maintains the 1300+ health insurance companies, gives them more business, and increases our federal taxes by $50 billion. In fact, when it comes to establishing the proposed government regulations of the workings of private insurance companies, there will be a brick wall of fierce opposition by the insurance companies that will stop any proposal in the U.S. Congress. Why? Because their job is to maximize their profits for their shareholders, and that job will never change. The result gives some more months or years of life to the health insurance companies at the expense of at least 75,000 lives per year, 205 lives per day.and 2 millions more average Americans per year in financial stress or ruin. Refer to what single-payer eliminates
Mention the need for a single-insurer for administrative efficiencies … and then not do much about them
- CLAIMS: From the Health Care for America Proposal: “Health Care for America would create a large publicly overseen insurance pool that would bargain for lower prices, capitalize on the vast administrative efficiencies of a single insurer, and use its reach and purchasing power to spearhead improvements in the quality and cost-effectiveness of medical care.” (bolding added) … and … “A single national insurance pool covering nearly half the population would create huge administrative efficiencies. Medicare’s administrative costs amount to roughly 2% of total program spending, compared with 14%, on average, in the private sector.” (bolding added)
- FACT: These claims (implications of vast efficiency gains) are a dramatic misrepresentation of the proposal. A more accurate statement in the proposal would be to write “partially capitalize on the vast administrative efficiencies …”
This better disclosure of the realities of the proposal is highlighted by my observations below under “Administrative Savings?”
COMMENT about this last set of claims and facts. Let’s take full advantage of the vast administrative efficiencies stated above and go to single-payer national health insurance and cover all of the population to create monstrous administrative efficiencies!
About the Campaign: “National Grassroots Campaign” … Huh?
- CLAIM: “Health Care for America Now is a national grassroots campaign organizing millions of Americans …” at the campaign web site
- FACT: Any campaign that has a million dollars behind it, much less 40 to 60 million dollars, is not grassroots
Big Challenges as documented by the Lewin Group
The analysis estimates administrative savings. However, there are at least two problems:
- Without the use of one federal agency to replace the use of hundreds of health insurance companies and multiple government programs, it is virtually impossible to achieve the best degree what the proposal states: “… capitalize on the vast administrative efficiencies of a single insurer.”
- Although the analysis report does describe some possible actions toward a solution for the following problem, the complexity seems a bit of a challenge:
- “(The requirements of the Health Care for America Plan) would require monthly transactions of lists of workers and dependents from all firms that do not offer coverage for roughly 3.5 million employers (mostly small). People would also have to apply to Health Care for America when they become unemployed, which again would require millions of enrollment and disenrollment transactions performed monthly that must be processed in real-time so all have coverage in each month. The cost of administering such a system could be prohibitive, if not simplified in some way. Also, the time involved to apply for premium assistance is bound to result in periods of uninsurance. To address this issue, administrative mechanisms could be designed to assure prompt transitions in coverage for people changing employment status, …”
- “(The requirements of the Health Care for America Plan) would require monthly transactions of lists of workers and dependents from all firms that do not offer coverage for roughly 3.5 million employers (mostly small). People would also have to apply to Health Care for America when they become unemployed, which again would require millions of enrollment and disenrollment transactions performed monthly that must be processed in real-time so all have coverage in each month. The cost of administering such a system could be prohibitive, if not simplified in some way. Also, the time involved to apply for premium assistance is bound to result in periods of uninsurance. To address this issue, administrative mechanisms could be designed to assure prompt transitions in coverage for people changing employment status, …”
Proposed Public Plan
- Addition of Mandated Insurance
- If you do not enroll in any other plan, it will be done automatically for you. Then you then would be responsible for paying whatever the premiums are for the public “Health Care for America Plan.” The financial or other consequences for not paying this forced commitment would need to be defined.
- Keeping Adverse Selection
- Adverse selection includes the denial of insurance due to pre-existing conditions. The proposal states that “some degree of adverse selection is unavoidable.” In other words, it is specifically stated that it will still exist, whereas it’s eliminated with single-payer. The related question is “does the proposal suggest that “guaranteed issue” be used for all plans? Answer: No.
- Maintaining the Funding of Existing Public Health Care Assistance Programs
- The proposal specifically refers to Medicaid and S-CHIP in addition to Medicare. In other words, the proposal does not suggest the elimination of current government-assistance programs. However, the cost analysis report gives the specific details: the programs would not be in existence, but the states would still be responsible for the same degree of funding, which will then be a contribution to fund the new program.
- Reminder to Avoid Repetition of Information
- This entire web page is critical to study in order to fully appreciate how poor the “Health Care for America” proposal is. For example, regarding the public plan, be sure to see the costly impact at Impact and the Claims vs. Facts topic on spending $50 billion instead of saving $350 billion.
Further Reading
Within the PNHP QOTD review by Don McCanne. Dr. McCanne acknowledges Jacob Hackers’s good intentions, but he also highlights problems about the proposal.
The “Health Care for America” proposal, sometimes called the “Hacker Plan” due to the name of its author Jacob S. Hacker.
Is the “Health Care for America” proposal the same proposal as advocated by the “Health Care for America Now” campaign? Yes, as per the one of the references also used above at this web page at “Claims and Facts.”
Single-payer succeeds. “Health Care for America” fails.It’s time to communicate to our U.S. Representatives, such as following the Schedule of a note, a toll-free phone call and/or an e-mail each month. |
Bolding was added to the original quotes provided at this web page.
I removed the full version of my report from this web page. It was an interesting exercise, but it is partly a duplication to the comparison web page of this website. Please take a close look at the comparison web page. If you have any questions, please contact me.
References
Cost Impact Analysis for the “Health Care for America” proposal
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The Cost Impact Analysis estimates 1) $65.6 billion savings by companies who currently offer coverage who discontinue that coverage and enroll their workers in Health Care for America by paying the six percent tax 2) $55.6 billion increase in spending by other companies who are now required to either provided coverage or enroll their workers in Health Care for America by paying the six percent tax. “On average, firms that currently offer coverage would save $809 per worker and those that do not currently offer coverage would spend $1,568 more per worker.” (Bolding was added.) See the Executive Summary in the analysis (pdf) Note: the tax for Health Care for America is in addition to the tax for Medicare, which will be maintained as a separate financing system.
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See footnote 1.
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This topic is mentioned in the proposal document, but not in the cost analysis document.
