November 16, 2003

Medicare and more: Health Care Crisis (year 75)

News has leaked that the committee working on the Medicare prescription drug issue has reached "agreement in principle" on the basics of the proposal. It remains to be seen if the bill can pass the House and Senate, where the vote margin is razor-thin. Key legislators are not jumping on the bandwagon--yet.

The real problem with drugs in America (the legal kind!) and health care is not that they aren't covered by Medicare, but that they cost too much to begin with. The current legislation is not being driven by the public outcry over availability or price. Medicare recipients have complained for years about the lack of coverage, and nothing happened until the drug companies started losing revenues to overseas sales of drugs re-imported back into the United States. American drug prices are sky-high because drug companies use American sales to recoup their development costs (and pad their profits) on drugs while selling those drugs at much lower prices in other markets. In short, we not only pay for the drugs, as U.S. consumers we subsidize the low overseas prices that make Canadian internet pharmacies such a pain to the drug companies' bottom line.

But note that nothing came before Congress until the drug companies started to take that financial hit, and the political solution that has emerged is, predictably, not to address the pricing disparities and the reasons for them, but to directly and indirectly subsidize the drug companies' revenues, with the health insurance companies getting a slice of the action as well. We've already seen what "competition" within the health care insurance industry means. It means that insurance companies will "skim" the healthier patients off, excluding the sickest from private policies. So the taxpayers end up subsidizing insurance companies and drug companies, while those stuck in the government programs face declining benefits.

And in the meantime, more and more non-elderly taxpayers not eligible for ANY government-subsidized health care benefits are finding out that they can afford neither medical care nor health insurance. Sky-rocketing premiums are making insurance for family members so outrageously expensive that even if a worker is covered by an employer's policy, they often can not afford to have their spouse and children covered as well. This is the driving engine of the increase in the uninsured. More and more middle-class families are facing the choice of gambling for continued good health, or paying premiums that exceed their total monthly household bills. They make enough money that they're not eligible for government programs, but not enough to pay the insurance bill, which can easily exceed $1000/month for a family.

Greatly suffering are the middle-class self-employed, who must pay the full 15.4% portion of their Social Security and Medicare taxes instead of the 7.7 percent taken out of corporate paychecks (employers pay the other half), yet often can't afford to buy health insurance for themselves or their families. So the younger and more healthy workers caught in the squeeze are increasingly doing without insurance altogether, using their earnings for housing and other living expenses. Given the choice of effective poverty and being insured, or better disposable income and no insurance, they increasingly are choosing to do without insurance.

Not that being insured is any gaurantee of good treatment. Insurance policies are increasingly coming loaded with exclusions, restrictions, and high deductibles. Some conditions are not covered at all, or are covered so partially that insurance claims are woefully insufficient to cover the costs.

The solutions coming from Congress, for either Medicare or for general health care, don't even begin to address the real problems of runaway profiteering and skyrocketing costs. Beset by wealthy lobbys such as physicians, for-profit hospitals, and drug companies, the "solutions" proposed all fall into one of two categories: either taxpayers subsidizing for-profit health care, or forcing the healthy uninsured to pay for mandatory insurance in order to subsidize the less healthy.

A decade ago the Clinton administration ran head-first into the medical lobby while trying to promote a "National Health Insurance" plan that was doomed to fail, constructed to sneak in the actuality while still leaving enough monopoly power on the table to please the medical and insurance lobbies. It didn't work. Those lobbies are now more firmly entrenched in Washington than ever before, and as a result more and more Americans are going without health care so that the recipients of the public largesse can keep getting richer. There are no easy solutions. If we expect our health care system to continue to achieve breakthroughs, the incentives must be there. But right now, those breakthroughs are increasingly being paid for by reduced health among those who can afford it least, by the people who do without basic healthcare so that the well-insured and wealthier patients can have access to the best and most recent treatments. The money MUST come from those not paying into the system now, but forcing those who can't afford the basics to pay more in taxes for others who are already insured isn't the answer--and let us remember that the Medicare tax will sooner or later rise to cover the extra costs.

We are the only major nation that does not have national health insurance, and our system is breaking down. Health insurance used to be a fairly low-cost benefit for employers, but that's changed to the highest-cost benefit, and the nature of the job market has changed, as has the nature of the entire economy. Insurance must become "portable," attached to the person and not the job, or the system will simply break down, which it already shows signs of doing. National basic health care is coming, sooner or later. The questions we need to explore are what form it will take, and how we will pay for it?

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