The Patient’s Responsibility and Affordable Health Care Act—commonly known as Obamacare—had a remarkable milestone recently. After something like the 50th or 60th Republican House vote to repeal (one loses count after so many) the Affordable Care Act, one must ask—why? Hasn’t that plan worked out rather well? How has that plan, one whose signing into law was voted against by every single Republican but one, with no real alternative offered by the Republicans–how has that plan worked out for Americans? Here’s how–it has brought health insurance premium price increases to a standstill.
Before discussing it, let’s remind everyone that if you have a health plan that you like from 2014, you can simple renew it for 2015. Your company should already have sent you information on rates but if they have not, you should contact them. If you have no current health insurance, you have until February 15, 2015 to get insurance for this year. It is important for you personally and for everyone else that you investigate your options, (on healthcare.gov if necessary) right away.
So—here we are with something approaching a modified national health care system. Almost like the other 36 advanced countries, the “grown ups” who do not allow heavy lobbying and as a result have better health care delivery and far more affordable health care than we. After an analysis of health care premium increases from 2014 to 2015, the Commonwealth Fund and the National Conference of State Legislatures, among others have reported that there is good news. On average—there were no premium increases nationally. Yes, on average health care insurance premiums did not rise–for the first time anyone can remember.
In fact, it may be unprecedented. In other words, given the usual price increases in some areas and price decreases (until now, rare) in some other areas, the sum total of premium increases for the country between 2014 and 2015 is, on average, zero. This is simply unheard of in the individual insurance markets. Using the same calculations, in the years immediately prior to ACA, 2008-2010, in each year the Commonwealth Fund found prices increases of 10 percent or more not just in some states but in every state.
But that isn’t all. Over the ten year period 2003 to 2013, increases in individual family health care premiums increased 73%. In employer-sponsored programs, employee’s share of premiums increased 93%! So there was basically no way to escape ever-growing health care premium increases. But that still doesn’t touch the worst of it. Deductibles doubled over that same period. So that people were paying more for less health care. After the Affordable Care Act was introduced, health care premiums did begin to decrease. The years 2010 to 2013 saw some moderation in the rate of premium increases, but nonetheless they continued to go up. Now the full effect of the admittedly flawed bill is taking effect.
On the bill itself, one must say that the more than 140 amendments that Republicans inserted or tried to insert in order to slow down the bill made it less effective than it could have been. If, for example, the Republicans had allowed a public option in the health care exchanges, health premiums would be plunging right now. Of course, so would the stock value of health insurance companies. Not that the demise of health insurance companies or the substitution of a Medicare-like administration would be a bad thing. After all, health insurance companies don’t provide anything that Medicare doesn’t provide. And they basically only restrict services yet cost at least 25% more than a regional exchange administrator would cost. If the evidence of the last 30 years tells us anything, it is that the main job of health insurance companies is to deny health care services and maintain profits.
A public option in the regional state exchanges would have allowed citizens to buy into a public insurance program, administered by Medicare or VA or some similar administrator that would have brought costs down from approximately 30% overhead to something like 5% overhead. This would have reduced premiums by at least 20%. So a $500 monthly premium would have been $400. But the Republicans not only would not help the average American family but in fact tried again after taking control of Congress to keep health insurance prices rising. They have not succeeded, but they have prevented some several million working-poor families from getting Medicaid or subsidies to buy health care in roughly half of all states—those states that are run by Republican governors and Republican state legislatures. These states merely refused to participate in the Affordable Care Act in any way that they could.
It is amazing in the year 2014 that the American People in so many states, including those with very high rankings in education at all levels can elect Republican governors. They are all sponsored by Right Wing billionaires or global corporations or they would not be the Republican candidates. That is simply the way that Citizens’ United has structured the politics of the United States today. In other words, any candidate who is reviewed by the leaders of the state Republican Party who either will not go along with the ALEC prescriptions of what is expected of them, is summarily rejected and, if deciding to run anyway, is simply run out of the Party primary with huge expenditures from the billionaire and corporate sponsored campaign contributions of political PACs. Anyone who does not know what ALEC is or does not know the impact of the so called “Citizens’ United” Supreme Court decision may well one day read about if from a cell in one of the numerous new private prisons being built in these same states.
It is these same Republican governors and Republican legislators who have denied Medicaid services to millions of poor working families even when the costs would be covered 100% by the Federal Government for two years and then 90% after that. It can only be pure spite, hatred of opposing views by Republicans that would cause them to deny health care to those who are in most need. It is reprehensible, cruel and it says volumes about the insensitivity of Americans in many states around the country. We have become an uncaring, hateful, thuggish people in many ways and many areas, while claiming absurdly that we are “exceptional.” Looking at the denial of health care to poor working families who are priced out of the market and frozen out of any participation by the Republican governors elected by American voters makes that laughable. And if you voted Republican and that statement makes you angry, then you’re a big part of the problem.
Why have the health care premium costs come down under the ACA? There were undoubtedly many reasons for this, all having to do with slight or significant changes in the way health care delivery has improved as a result of the Affordable Care Act. Certainly one factor has been the increase in the number of participating insurance carriers, providing more and wider competition. Another has been the design of the marketplaces themselves and the risk stabilization factors as a result of the new programs. The pool is larger by at least ten million individuals (no one can be denied insurance) and the government assumes a higher share than before of the risk.
So what is the problem for the Republicans? There is no problem. The influence of the Health Insurance Industry on Republicans to force them into repeated attempts to “repeal” health care reform merely exhibits the connection between corrupt politics and the desire for monopolistic control of industries by those on the Right. Republicans are willing to take hundreds of millions of dollars ($400 million in 2009 alone) from the health care industry to continue to fight against the will of the People in a lost cause. Certainly the Affordable Care Act, not the most efficient way to deliver health services, which passed with just one vote in the House and one in the Senate was not the legislation the People would have been handed if the health insurance industry had not held such enormous political and lobbying influence in 2009. If we had been able to introduce a better plan, one in which the Republicans participated rather than tried to destroy, our health care insurance costs and our overall health care costs would have already dropped like a stone.
Premiums did moderate but did not remain constant in 2013. The rates had increased at an average of 10 percent, or more, per year throughout the Bush years. After the 2009 passing of the ACA, which would not take effect for several years, the trend of rapid rate increases slowed down. But 2013 still saw health insurance premium rates increase by an average of over 4%. Such was the entrenched nature of the Health Insurance industry and their political clout with the Republicans.
The Facts about Health Care Reform
It is important to look at health insurance rates in the context of average household income. Americans suffered (we are all too easily forget) stagnant wages for many years after the great Bush Crash and Depression of 2008. During 2013, wages rose only 1.8%. And in the ten years prior to 2013, wages went up 31% while health insurance premiums increased by 93%. And it wasn’t because of inflation (the insurance industry’s standard excuse for price hikes) because inflation went up a minimal 1% in 2013, and only 27% over the last ten years, less than a third of the 93% increase in health insurance premiums. No wonder there was such a battle. Modest changes—expanding coverage, demanding standards, making insurance companies pay at least 85% of what they charge in premiums as services or offering refunds—all these things and an honest portrayal of the situation have reduced premiums and the trend towards higher premiums. Health care costs have stabilized and seem to be coming down.
But the Republicans haven’t given up. In addition to their most recent failed repeal of health care, they now, perhaps because of their bravado at their total if temporary control of both houses of Congress, have come up with their first real health care proposal. Their previous proposals were simply health insurance plans tacked onto a plan to reduce the liability of physicians and hospitals. In other words, in addition to pandering to health insurance companies, they initiated a plan that they knew would never see the light of day in order to attract the support of doctors and hospitals. This plan seems to build slightly on what they cannot change…the provisions in the current Affordable Care Act.
The Story of Representative Fred Upton and the Latest Republican “Health Care Plan”
The plan is being hawked by the new House Energy and Commerce Committee Chairman, Fred Upton. Fred Upton is the story of a man so enormously repulsive that it is, once again, difficult to fathom the ignorance of voters, or their mendacity that they would send him repeatedly back to Congress. The facts about Upton are very clear and deserve comment over and above his attempt to con the American People out of their health care.
Fred Upton is an heir to the Whirlpool Corporation fortune and not the image that one might conjure up of an elite, educated patrician, like, for example, a Rockefeller or a Fish or a Heinz or a Danforth. Fred Upton is as sneaky and as slimy as any snake oil salesman since Daryl Issa slithered out of California to waste the nation’s resources on one politically motivated investigation after another. Public records show Upton to be worth about $17 million, inherited from his grandfather, the founder of the Whirlpool Corporation. Other than that, he has no particular traits that would commend him as a leader. He seems to lack courage, foresight, culture and intelligence. He works tirelessly to advance his own personal wealth and that of his wealthy Republican friends. He is basically a Republican toady, doing the bidding of more capable and stronger-willed millionaires and billionaires. He used his wealth to arrange his election to the House of Representatives from the area of the Whirlpool Headquarters, the St. Joseph’s-Benton Harbor area of Michigan. He is a close associate of the literally Neo-Fascist governor of Michigan, Rick Snyder.
Upton’s connection to Snyder involves one very particular and symptomatic debacle. After Snyder was elected governor of Michigan, a man by the name of Al Pscholka persuaded him, or he persuaded Pscholka, to promote and eventually pass a bill in the Michigan legislature that enables the governor to take over a local community, throw out the elected officials and install his own manager, if he decided it was necessary. In St. Joseph and Benton Harbor, particularly Benton Harbor, the economy was not great. Upton’s concern for the people of his district was evidenced by the moving the manufacturing of Whirlpool appliances, his family’s business, out of Michigan, first to Arkansas, then to Mexico. Al Pscholka, who now worked for Governor Snyder, had formerly been Upton’s legislative aide.
Upton and some of his local wealthy pals at Whirlpool headquarters, still in the area, and other businesses in St. Joseph’s decided that what they needed was a better golf course, and to pay for it, a development of luxury homes. Now, to be fair, this started around 2003 as a much smaller re-development project for the city. But then it became a different project, now involving the developers of the luxury homes and golf course. To do the golf course the way they wanted to do it, they needed some holes along Lake Michigan, in Benton Harbor. So they decided to simply take part of the Jean Klock Park, the only really good and illuminating area of troubled Benton Harbor. Jean Klock Park is a large park fronting Lake Michigan that had been purchased and donated to Benton Harbor by a former mayor in 1917. The development group was able to take the land. So Benton Harbor went to court…and lost. But the citizens of Benton Harbor were still not satisfied and continued to interrupt local proceedings with complaints about the process of taking a sizable hunk of pristine land along Lake Michigan for a private development.
The final result was that Fred Upton’s pal, Governor Snyder, signed Al Pscholka’s new law and, thus enabled, simply fired the elected mayor and city council of this disruptive (to the Harbor Shores developers) community. Then he inserted one Joe Harris, a Republican operative from Detroit, to run the city. After Harbor Shores was finally completed, the rich had their condos and homes and Fred Upton could shoot his likely 105 score on the Jack Nicklaus-designed Harbor Shores course. It costs a mere $150 per round if you’re not a member of the Harbor Shores community with your own pass. (costing $5,000) Not many in Benton Harbor have either. The median income in Benton Harbor is $10,500.
So the Snyder-Upton-Harris-Pscholka team got what they wanted. Particularly Upton and Pscholka, who were personally involved with the developers…clear violations of personal ethics. Now the people of Benton Harbor, at last report, for some reason can no longer get into Jean Klock Park. The gates are locked and the people are told to “drive around” the locked gates, which is not possible. One important footnote is that Benton Harbor is largely an African-American community. So, while this might not be racist-inspired, it certainly has all the hallmarks. At the very least, this is Fascist government at its worst. The Fascist policy has always been clear. Take government or personal property for the use of the state, which is composed of people from only one political party, the one in power. Today in these Fascist states, that is the Republican Party.
This same Fred Upton is the chairman of the committee in the House that wants to repeal the Affordable Care Act—not reform it or improve it—and substitute a brand new bill. This man who turned on the people of his own district to favor a tiny but affluent group of businessmen, a man who would overturn long standing public access, who encouraged and did not fight for the jobs in a company, for Christ’s sake, founded by his own family—a man who has voted 60 times to overturn health care reform, whose party is controlled by huge interests from the health care industry, this many wants you to believe that he has a new and better plan for you. These are the same people who, in 2009, voted 100 percent against health care reform. They did not join in the effort to improve it. The President, as you may recall, held a televised hearing on the bill and was himself the chairman of the meeting, to show the American People that Republicans did have the opportunity—which they refused—to make improvements in the bill—a process in which they had been constantly requested to participate.
Here is what Fred Upton would have you believe will improve your health care, the health care that now, in the Democratic bill has given you: guaranteed coverage—you cannot be turned down, lower premiums, lifetime coverage, government subsidies while prices are going down, standardized minimum plans, and more health services, like testing and screening for serious diseases included in every plan.
The Republican plan—
1. It would scrap the current law. Then it would eliminate the requirement for everyone to have health care and any requirement for employers to provide it. It would eliminate the health insurance free-market exchanges and the government subsidies. (This would effectively kill universal health care.) It would throw 10 million people off federal exchange acquired health insurance and those subsidies.
2. It would drop the option for states to receive support from the Federal government to cover the poor on Medicaid. It would return the responsibility to the states, in many cases the same states that refused to take Federal money and so dropped hundreds of thousands of poor from any health care at all. Medicaid would now consist of private plans with the poor getting “tax credits” as a assistance. This is basically saying to the poor—goodbye.
3. All the taxes and fees, mostly on the wealthy and on corporations, that go into helping pay for a universal health care program would be eliminated. This would effectively kill universal health care. Like most other things that the billionaire-pandering Republicans seem to ignore—every government program must have funding.
4. Health insurance companies could now impose rates five times higher on older customers than they charge younger customers.
5. People on Medicaid…poor people who cannot now afford health insurance…lose their government sponsored health care. They would be given “tax credits” and told to go out onto the open market and buy health insurance. This is misleading because poor people do not get enough “tax credits” to cover the kinds of costs they will incur.
6. The new GOP plan would revise what would be termed “essential health benefits” in a plan. Women would get short shrift, as maternity benefits would not be one of those essentials.
7. It would allow states to decide whether or not to keep the provision allowing young people to stay on a parents’ policy to age 26. In Republican states this would virtually guarantee loss of insurance.
8. Republican subsidies for health insurance premiums would continue but not really for everyone. First of all, the federal health exchanges would be gone. Instead of subsidies, individuals would be eligible for “tax credits” but only those with incomes up to three times the poverty rate. (Current subsidies are up to four times the poverty rate.) But remember that under the Republican plan you do not have to have insurance at all. So, that means two things. One, you will get treatment at the emergency room. And two, everyone will once again start to see double digit increases in health care insurance.
So what does the Fred Upton, Whirlpool heir, House member who quickly abandons his constituents, have in mind as a health plan for the American public? It’s pretty simple. The Republican plan calls for a return to private health insurance, with state regulation, abandoning those 10 million people who finally received health care, abandoning the poor, abandoning universal care, and giving states the option of whether to continue to allow those age 26 or under to remain on their parent’s plan. In other words, they say, we may return to the bad old days. We may return to double digit premium increases. We may knock 12 million people off the rolls of the insured. We may go back to the days of not knowing if your health care provider will actually pay for the treatments on your illness.
They have voted to repeal the Affordable Care Act 56 times and never once, not once, did they ever offer an amendment, not one amendment in 2009, 2010, 2011,2012,2013 or 2104—and none yet in 2015, where they have both Houses—to the Affordable Care Act that would make it better for you, the American Citizen. The most logical reason is cost. Just to get out in front of this aspect, let’s look at the costs of health care as the entitlement systems are written right now.
Here is what is not in dispute. The Republicans say that the current health care law, the Affordable Care Act, is going to cost an additional $1 trillion dollars (actually those are reliable CBO numbers) over ten years and we cannot afford it. That’s based on the way things are right now, when GE and EXXON pay no income taxes at all on tens of billions of dollars in profits. Those profits go to stockholders, many of whom are Wall Street firms, others are large non-profit organizations, pension funds of one kind or another. But the chief benefactors of low-taxed profits are a few major stockholders most of whom are multi-millionaires or billionaires. So…profits on companies paying no taxes go chiefly to the rich. The question becomes, who are those rich? They are people like the Koch Brothers, Mitt Romney, George W. Bush and Dick Cheney…all enormously wealthy men who pay somewhere around a dollar and a half out of every ten in taxes. You, on the other hand, pay between two-and-one-half and three dollars of every ten in taxes. And that’s fine. You are not over taxed—so long as you receive value for your taxes, some help in living your daily life, and so long as the rich do not steal your Social Security, Medicare or now this new opportunity with ACA to buy reasonably priced health insurance.
So let’s say that the CBO is right about the cost of a trillion dollars over ten years, while keeping in mind those very wealthy corporations and people who pay very small taxes right now. That means that the subsidies in the ACA for the poorer Americans, as the law is written right now, would amount to about $100 billion per year. Let’s examine this as a payroll deduction situation. In other words, let’s say we keep the rich out of it for now. At present, American citizens pay 12.4% for Social Security and Medicare. That generates, all together, about $1.4 trillion per year. Remember, that is 12.4%, half paid by employers and half paid by employees, and it includes disability insurance premiums.
Here’s the key calculation. Given those numbers and the number of people and the amount now being paid in, a 1% increase in payroll revenues would completely cover the costs of the ACA. In other words, a 1% increase (from 6.2% to 6.7%–each, by the employer and the employee) in the payroll deduction from 12.4% to 13.4% would add more than enough ($112 billion a year, and $1.12 trillion over ten years.) Is this the way to pay for it? If you are a Republican, wouldn’t you say yes? No taxes on hugely wealthy individuals. No more taxes on corporations. Even if there were, they would in all likelihood pass a 5% increase in prices on to consumers. So, this is merely one way to pay for it. There are surely other, perhaps even easier, ways to pay for it. There are a handful of billionaires who could pay for it and still have money left over.
But you’re not interested in hearing that if you are Fred Upton or his Republican colleagues. It does not help you in fighting the callous and contemptuous war against the People on behalf of the health insurance industry. Who will deliver those huge campaign contributions if the sadistic dance over the graves of Americans ever stops? No. There is no real Republican plan to help Americans with affordable health care. For the Republicans it is not about health or their constituents. It is about staying in power, and like Dick Cheney—using government lobbyists to make you rich.
If the Republicans are looking out for all of us, rather than the health care industry, why wouldn’t they make improvements in health care rather than trying to make it less accessible and more expensive again? Why couldn’t they send up a bill that says that all Americans can purchase their drugs through drug stores and have a cap of $500 on their drug costs? Why wouldn’t they simply improve on a bill that is already lowering costs for all Americans, despite their interference, repeal attempts and court challenges, each of which tries to restrict your ability to get health care?
It is not complicated. The Republicans work for the health insurance industry and the other reactionary segments of the health care industry—the pharmaceutical companies, some hospital chains and some members of the American Medical Association. They don’t work for you.