Pretty much everybody agrees that something has to be done about the state of U.S. healthcare and healthcare coverage. President Bush’s idea of a fix is to offer a tax deduction for people who abandon employer-financed medical insurance and purchase their own private insurance.
From the viewpoint of workers and the poor, this is not a solution but a scam. If implemented, it will only worsen a situation in which they receive not the medical care that they need, but the care they can afford.
Looked at from a capitalist perspective, however, Bush’s plan makes perfect sense. It will draw blood from workers’ veins in order to transfuse it into an ailing corporate America. Bush is demanding that workers sacrifice their own physical and economic health for the health of their bosses’ profits.
Pay more, get less. Companies like General Motors have long complained that paying into workers’ health plans disadvantages them in relation to competitors from Germany and Japan, where businesses do not directly bear the same financial obligations under the national healthcare systems.
In reality, skyrocketing costs primarily reflect the greed of GM’s fellow capitalists in the medical and pharmaceutical industries. But the insistent corporate campaign to blame workers has allowed GM and other businesses to win wrenching concessions from the labor movement. In 2005, for example, GM struck a deal with leaders of the United Auto Workers to save $15 billion in long-term healthcare expenses by dramatically reducing benefits, especially for retirees.
Bush’s aim now is to erase expectations that big business has any obligation to support the health of its employees, current or former. In selling his new plan to workers, he is using both a tax bribe and a tax bludgeon.
The bludgeon is the proposal to count employer healthcare contributions as taxable income for workers. The bribe is to allow workers to deduct a certain amount from their taxable income if they purchase private insurance.
The highest deductions will go to the wealthiest people. For low-income families, Bush’s $15,000 deduction translates into a refund check of only $150! This will not make even a dent in either the cost of the private insurance or a family’s annual out-of-pocket expenses. And the cheaper the plan, of course, the more bare-bones the coverage will be, with high deductibles and copays.
Bush calls the type of private insurance he is promoting “basic.” For most people, “basic” coverage will often put needed tests and treatment out of reach — or will simply be out of reach itself.
The drive for profits poisons care. Insurance companies are in the business of denying medical services. The more they retain their premiums, the greater their profits.
Collecting premiums and paying claims is carried out by a bureaucracy that consumes 25 percent of the revenues of a typical private insurer. This compares to about 3 percent for government-administered national plans in other countries.
The bloated bureaucracy exists for just one purpose: to enrich a small number of individuals. In 2006, profits totaled about $9 billion for four of the top companies. CEO salaries run in the millions, with stock options in the billions — which they can count up while flying in their $25 million company jets.
But the leading force behind rising health costs is the pharmaceutical industry.
People with limited resources frequently lack medicines because they can’t afford to refill their prescriptions. Meanwhile, the drug industry invokes “intellectual property” rights to frustrate the manufacture of inexpensive generic equivalents. It insists that its hefty profits help develop new drugs.
But the industry is substantially subsidized by taxes on working people. Up to 25 percent of the cost of developing a new drug comes from research funded by the National Institutes of Health (NIH).
Once a candidate drug is identified, it is sold cheaply to drug companies. The NIH spent $4 million on research that led to the glaucoma drug Xalatan. Pharmacia bought the rights for $150,000, and proceeded to rake in half a billion dollars yearly in profit.
Big pharmaceuticals typically refuse to disclose how much they spend on actual drug development. But experts estimate that they spend twice as much on marketing and sales.
Immense inequality. Although even workers whose employers contribute to their medical insurance are hard-pressed to afford increasing out-of-pocket expenses and employee copays, Bush insists on calling their coverage “gold-plated” and “deluxe.”
If so, what to call the healthcare enjoyed by the superrich, who supplement their insurance plans by purchasing the services of their own private, on-call physicians? Perhaps the solid gold plan.
Meanwhile, many of the elderly and disabled are already on a version of Bush’s miserly “basic” plan through Medicare and Medicaid — which Bush wants to slash by $70 billion over the next five years, while also cutting veterans’ health benefits by $1 billion in two years.
U.S. healthcare plans are steeply stratified — from solid gold down to “gold-plated,” “basic,” and none at all. Forty-seven million people have the last plan.
This stratification means extreme suffering at the lowest end. According to the World Health Organization, the U.S. ranks 24th in healthy life expectancy. “Basically, you die earlier and spend more time disabled if you’re an American rather than a member of most other advanced countries,” says Dr. Christopher Murray, a WHO director. Native Americans, rural African Americans, and the inner-city poor are hit hardest, according to WHO.
With good reason, working and poor people believe they are entitled to more and better healthcare, not less. This is a recipe for serious class battles ahead.
The cure is nationalization! However, with the state on the side of the insurance and pharmaceutical industries, winning universal, high-quality healthcare will take a determined struggle. Unfortunately, the necessary leadership is currently lacking.
Working people can’t look to the Democratic Party. Beginning with lots of fancy talk about making healthcare universal, Bill Clinton ended up by doing nothing about the millions of people who are uninsured while consolidating the current miserable system of “managed care,” in which HMOs actually ration care. Whatever the Democratic candidates for president are saying now, it would be suicidal for workers to expect any better from them than from Clinton.
Many union leaders, meanwhile, accept the idea that healthcare costs are an insupportable corporate burden, and they peddle this line to their members.
But, in an encouraging development, the AFL-CIO labor federation recently joined progressive voices in demanding a single-payer plan, in which the government assumes the role now taken by insurance companies, but covers everyone.
A single-payer system would definitely be an improvement, but doesn’t go nearly far enough. Depending on the government to properly fund the system, especially in this harsh era of cutbacks in social spending, would be delusional. British workers know this, as do Medicare and Medicaid recipients.
And a single-payer setup doesn’t touch the problem of rising costs due to the obscene profits of any other part of the healthcare racket but the insurers.
The answer is to take the profits out of the whole operation, from the pharmaceuticals to the medical supply companies to the hospitals. A nationalized system should also be supported by sharply increased taxes on the corporations, whose profits so often come at the expense of workers’ health.
And this system needs to be controlled by healthcare workers, in collaboration with users/patients. It is the workers in the trenches who understand what needs to be done to provide truly universal and comprehensive care — for the employed and unemployed, immigrant and native-born, documented and undocumented, male and female, gay and straight.
The profit system is a disease that ruins everything it touches. It needs to be put in permanent remission — and the healthcare industry would be an excellent place to make a start!
Steven Strauss, a Baltimore neurologist at Franklin Square Hospital, is also an education activist and author.
• AIDS is the leading killer of Black women aged 25 to 34.
• Nearly 85 percent of rural counties where Blacks are the majority have a shortage of healthcare professionals.
• Infants who are Native die at a rate almost twice that of white infants.
• The death rate for Hispanics due to HIV is 295 percent higher than for non-Hispanic whites, and 58 percent higher for Hispanics due to diabetes.
• Compared to insured adults, adults who have gone without insurance for over a year are about 2.5 times more likely not to have had a routine checkup in the last two years.
The United States!