A comment from Dick McDonald, a retired accountant
I get so frustrated watching Republican politicians, talking heads and pundits letting Democrats claim that private health care insurance companies are making enormous, unwarranted and unjustified profits without even one challenge. This morning on George’s Sunday show Senator Charles Schumer stated that profits of health insurers had gone from $1 billion to $12 billion in 10 years. The Republican Senator John Cornyn sat there like a petrified log ostensibly agreeing with Charlie.
Medical care is presently 17% of our GDP which translates to a $2,350 billion a-year business. $12 billion of annual profits represent less than one-half of 1%. Now the average return for corporation is 9% and 9% of $2,350 is $211 billion. As I said, uninformed Republicans are completely incompetent as an opposition party when they miss such an “elephant” in the room.
With all apologies to Jane Barnett, the new head of the Republican Party of Los Angeles County, who is doing a bang-up job of revitalizing the local party apparatus, there appears to be a serious flaw in the structure of not only local but state and national party systems. She says there is no ideological committee or other party apparatus that focuses strictly on what Republicans stand for. That is left up to think tanks.
Well think tanks are failing to inform politicians and advocates of simple facts that unchallenged become vicious and virulent weapons in the political wars. There should be changes such as stopping Democrats from fooling the public into believing that $12 billion is greater than $211 billion.
What About 40 Billion Dimes?
One of his many promises about which Obama has repeatedly gone out of his way to be “perfectly clear,” as he emphasized in his State of the Union Address, is that "if your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime."
If he intends to keep this promise he will have to veto any final health care that resembles the bill on the way out of the Senate Finance Committee, for as Senator Orrin Hatch has just pointed out, a massive tax increase on un-rich Americans was just added to that bill.
The proposal, added as part of a last-minute package of modifications to Chairman Max Baucus' bill, would increase the threshold for deducting medical expenses from today's level of 7.5 percent of income to 10 percent. This seemingly small change is projected by the nonpartisan Joint Committee on Taxation to cost taxpayers over $4 billion per year....
Of the almost 15 million families affected by this change, only 78,000 have incomes of more than $200,000. The other 99.5 percent of the victims of this tax hit would be below that figure, with many of them being far from wealthy. In fact, more than 62 percent of the taxpayers affected by this change make less than $75,000 per year.
That’s 40 billion dimes per year, 400 billion in a decade.
Americans Gather to Defend the Dream
“We were able to stop an inevitability.” That was the message on health care from Laura Ingraham at the Americans for Prosperity Summit on Friday night in Washington, D.C. Ingraham told the producers on her radio show staff at the beginning of the summer that the singular goal of her show from that point on was to stop health care legislation. Exactly how that goal was achieved was explained earlier by Rep. Patrick McHenry, (R-S.C.), a speaker at AFP’s Capitol Hill rally earlier in the day. “[The health care bill] was supposed to go for a vote in July. Then September. Then October,” he told a rowdy crowd. “Last night, Steny Hoyer said it would be two more weeks. What they’re trying to do now is twist arms.”
AFP’s 2000-person summit was more than receptive to both the Congressman’s and Ingraham’s remarks. Sarah Cadwell, 36, traveled to the Summit from Ann Arbor, Michigan, despite not really having the money to do so. “The 9-12 [March on Washington] was the beginning of it for me,” she said. “My understanding of the government is that it’s supposed to function from the bottom up, not the top-down.”
She complained that when she contacted her legislator, she was given the run-around as to why he was not holding a town hall meeting in her district. She was unable to voice her opinion to her Representative, so she hoped to make her voice heard at the AFP conference, which included a session where participants visited their Congressmens' offices.
That idea was echoed by Ingraham, who told the crowd on Friday night that participation in events like AFP’s was essential for reinforcing American values of liberty and freedom. “If you don’t do what you’re doing tonight… you will, one of these days, perhaps spend your final years telling your children and your children’s children about this place you once called America,” she said.
Dr. Jim Miller, former budget director for President Reagan, Congressman Mike Pence, and health care TV-advertisement star Shona Holmes were others who presented at the first day of the summit. The event is held annually to expose participants to “free-market leaders” and effect legislative change in their hometowns, but this year, it took on a distinctly anti-health care flavor.
That was why Jonathon Johnson, of Charlotte, N.C., was there: “Being a vet, I saw the problems with health care reform,” he said. “I believe in health care reform” – but not the kind that is currently working it’s way through Congress. “It’s not broken, but this isn’t the way to fix it.”
Somewhere Over the Border
In the past few days, the Los Angeles Times and The Wall Street Journal have both highlighted the plight of Canadians denied coverage by the very health system that purports to save them. I had the pleasure of meeting several of these patients on Monday, as part of a fact-finding trip organized by the Independence Institute of Colorado. Independence Institute President Jon Caldara said that he had dreamed of hosting such a meeting for years.
Christina Woodkey, featured in the LA Times story, was one of the patients who shared her story. Crippled with pain, she endured years of doctors visits before finally being diagnosed with a spinal condition that required surgery. She was told to “take more pills,” and received an estimated time frame for surgery: one and a half years. Another Canadian we met, Cheryl Baxter, faced a similar wait time for hip surgery.
Lin Gilbert, a 27-year-old mother of two, faced debilitating pain due to a congenital spine condition. She was told by specialists that she was too young and “hadn’t suffered long enough.” Forced to wait three years for her surgery, Gilbert lost her job because of constant, unbearable pain.
Unfortunately, the other thing she lost in the process was her dignity. Gilbert was reduced to a walker and diapers – needed because of a loss of bowel function. The government, in its infinite kindness, “allowed” her to stay on welfare past the allotted time frame due to her special circumstances, and picked up the tab for her incontinence products. They also paid for her morphine – to which she became addicted.
Lindsay McCreith suffered through multiple seizures each day. He needed an MRI, but was told he'd have to wait 4 ½ months for the scan. McCreith flew to the United States for the procedure, which revealed a golf-ball sized tumor on his brain. When shown to his doctor in Canada, an appointment was made with a neurologist – 6 months down the road. Returning to New York for a biopsy a week later, the surgeon removed the entire growth – which was already at grade 2. Had McCreith waited the full six months, the prognosis likely would have been grave.
McCreith never set out to be an activist. But his experience, and that of a friend, convinced him that someone needed to speak out. His coworker, feeling ill, went to the doctor, and was told he needed a triple bypass. He could not be seen immediately, and returned to work. The surgery, scheduled for several weeks later, was pushed back another 6 weeks. He died three days before the rescheduled date.
McCreith is currently suing the government of Ontario for denial of his charter rights – specifically, his security of person. It seems the Canadian founders, much like the framers of the U.S. Constitution, believed in a (now arcane) individual right to self-preservation. Ah, the good old days. McCreith argues that Canada's health system, by restricting treatment and outlawing private providers, prevents citizens from exercising this basic right.
All tragic stories, to be sure – but what message would a group of Canadian patients, from disparate locations and backgrounds, have for a group of visiting American policy wonks? "Don't do what we've done. Not just for yourself, but for us too. Without the U.S., we lose our escape valve."
Obviously, the Canadian government didn’t set out to hurt their citizens. And, in some case, for example for routine care, the system performs perfectly adequately. But for more complex procedures – ones requiring specialty care, or advanced technologies – the system breaks down.
According to Nadeem Esmail, the Fraser Institute’s director of health systems performance studies, the median waiting time in Canada in 2008 from general practitioner’s referral to treatment by a specialist was 17.3 weeks (times varied from province to province, from a high of 28.8 weeks in Saskatchewan to a mere 13 weeks in Ontario.) Wait times for access to diagnosis using technologies are of similar length. In 2008, patients had to wait 5 weeks for CT scans, 9.7 weeks for an MRI, and 4.4 weeks for an ultrasound – on average, 150% longer than in 1994. No small wonder, then, that Canadian patients fear what changes to the U.S. health care market will mean for them. For many illnesses, delayed access to care is the equivalent of a death sentence.
How long you wait isn't just a product of the overall shortage of doctors and machines. In Canada, bureaucrats also consider the “medical necessity” of a treatment and the general suitability of patients (obesity, hypertension, and age included) when deciding a treatment course. Don’t fit the perfect patient profile? To the back of the queue you go. The young and the healthy are accorded preferential treatment, while older and less healthy payment are discriminated against.
To be fair, no health reform proposal currently on the table in the U.S. would turn our system into Canada's (Canada is the only OECD country that outlaws privately funded purchases of core health services). But the extreme example of our neighbors to the north serves as a cautionary tale both against the expansion of current programs and the slippery slope that will unquestionably lead to more comprehensive government-run health care down the road.
Many in Congress envision a single-payer system resembling that of Canada in the future – a reality that must not come to pass. The lives of not just Americans, but many Canadians like some I met, depend on it.
Health insurance bills could be hardship for many
Many middle-class Americans would still struggle to pay for health insurance despite efforts by President Barack Obama and Democrats to make coverage more affordable. The legislation advancing in Congress would require all Americans to get insurance — through an employer, a government program or by buying it themselves. But new tax credits to help with premiums won't go far enough for everyone. Some middle-class families purchasing their own coverage through new insurance exchanges could find it out of reach.
Lawmakers recognize the problem. "For some people it's going to be a heavy lift," said Sen. Tom Carper, D-Del. "We're doing our best to make sure it's not an impossible lift." Added Sen. Olympia Snowe, R-Maine: "We have no certainty as to whether or not these plans are going to be affordable." Both are on the Senate Finance Committee, which finished writing a health care bill on Friday.
A new online tool from the Kaiser Family Foundation illustrates the predicament. The Health Reform Subsidy Calculator provides ballpark estimates of what households of varying incomes and ages would pay under the different Democratic health care bills. The legislation is still a work in progress and the calculator only a rough guide. Nonetheless, the results are revealing. A family of four headed by a 45-year-old making $63,000 a year is in the middle of the middle class. But that family would pay $7,110 to buy its own health insurance under the plan from the committee chairman, Sen. Max Baucus, D-Mont.
The family would get a tax credit of $3,970 to help pay for a policy worth $11,080. But the balance due — $7,110 — is real money. Maybe it's less than the rent, but it's probably more than a car loan payment.
Kaiser's calculator doesn't take into account co-payments and deductibles that could add hundreds of dollars, even several thousand, to a family's total medical expenses. A Congressional Budget Office analysis estimates total expenses could average 20 percent of income for some families by 2016.
The issue of affordability "has been lurking in the background and is nowhere near resolved yet," said Kaiser's president, Drew Altman. "It's tricky because it doesn't take a lot of people to make affordability a political problem. It just takes some very visible and understandable cases." At the root of the concerns is the push to cut the overall cost of health care overhaul legislation. Congress is trimming the budget for subsidies to meet Obama's target of $900 billion over 10 years — as the Baucus plan does. It means premiums will be higher than under earlier Democratic proposals. The trade-off directly affects people who buy their own coverage. For those with job-based insurance, employers would continue to cover most of the costs.
Most of the uninsured are in households headed by someone who's self-employed or works at a business that doesn't provide coverage. It's this group that Democrats are trying to help. Because health insurance is so expensive, lawmakers recognize that if they're going to pass a law requiring all Americans to get coverage, government has to defray the cost. The size of those subsidies makes an enormous difference.
Under the Baucus bill, a family of four making $63,000 would have to pay 11 percent of its income for health insurance, according to Kaiser. By comparison, an earlier bill from the Senate Health, Education, Labor and Pensions Committee with more generous subsidies required the same hypothetical family to pay about 7 percent of its income for premiums — a difference of about $2,500. "This is not the loaves and the fishes — you can't just throw some subsidies out there and expect that will take care of everybody's needs," said Karen Pollitz, a Georgetown University professor who studies the insurance market for people buying their own coverage.
The legislation provides the most generous subsidies to those at or near the poverty line, about $22,000 for a family of four. That's where the problem is concentrated because about three-fourths of the uninsured are in households making less than twice the poverty level. But as income rises, the subsidies taper off. For a family of four making $45,000, federal subsidies would pick up 71 percent of the premium under the Baucus plan, according to the Kaiser calculator. For a family with an income of $63,000, the subsidies would only cover 36 percent of the premium. A family making $90,000 would get no help.
Pollitz said the subsidies disappear rapidly for households with solid middle-class incomes. That could be tricky for a self-employed individual who has a particularly good year financially.
Another problem is that people won't be able to get the insurance tax credits immediately after the bill passes. To hold down costs, the assistance won't come until 2013, after the next presidential election.
White House officials say that while Obama wants the cost of the final bill to stay manageable, it has to provide affordable coverage. "The president is absolutely committed to making this affordable. That's the whole point," said Linda Douglass, spokeswoman for the White House health reform office. Douglass said it's premature to draw any conclusions while the bill is being shaped in Congress. But House leaders are also cutting back their legislation to meet Obama's target.
Acknowledging the affordability problem, Baucus' committee voted Friday to exempt millions of people from the requirement to buy insurance and reduce penalties for those who fail to do so. But that would mean leaving at least 2 million more uninsured — not very satisfying to Democrats who started out with the goal of coverage for all. "I think we've got to do something about it," said Sen. Chuck Schumer, D-N.Y. "We've got to make sure health insurance is affordable for the middle class."