Placing a Price Tag on the Value of Life; An in-depth look at health reform

Placing a Price Tag on the Value of Life; An in-depth look at health reform

By Margaret Flowers of Popular Resistance.

The healthcare fight is front and center right now for many reasons. The ‘Affordable Care Act’ (ACA) is manifesting itself in rising premiums and out-of-pocket costs that make it difficult for people who have health insurance to afford health care. Twenty-nine million people currently lack health insurance, and that is not expected to change. The Republican health plan, the American Health Care Act, being pushed through Congress will leave tens of millions more people without insurance and shift even more of the costs of care onto those who are most vulnerable while making the already-wealthy richer. And most people in the United States support National Improved Medicare for All (NIMA) and want to see a serious commitment to that by members of Congress.

As a former practicing pediatrician and a long-time advocate for NIMA, this fight is hitting home in a more personal way. An elderly family member recently developed a serious medical condition, and while this loved one is able to get care acutely, thanks to Medicare, the stress and worry over affording long-term care is preventing him from improving. Instead of putting energy into recovering, he frets over very real concerns – how much care the family can afford, what the expenses will do to his spouse’s financial security and whether death might be a better alternative.

This is what happens when health care is treated as a commodity – a price tag is placed on the value of life and only those with the means have the right to live. Or as one medical student wrote at the Students for a National Health Program conference this past weekend: “When health is a thing that people can buy, the rich live and the poor die.”

It’s not just the poor who are stressed about healthcare costs.  A recent Kaiser Family Foundation poll found:

“Significant shares of the public say they are ‘very worried’ about not being able to afford health care services they think they need (25%), losing their health insurance (22%), or not being able to afford prescription drugs (21%). Overall, half say they are at least somewhat worried that they won’t be able to afford needed health care services.”

People in the US are reaching a point where this is no longer acceptable. Just before the November election, notices were sent out about the increases in health insurance premiums and deductibles for 2017. Some premiums rose by as much as 60%.  People voted, in part, in rejection of the ACA. And in town halls across the country, in progressive and conservative districts, in rural and urban areas, people are telling their members of Congress that they are fed up and want Medicare for All.

We have an opportunity right now to make NIMA the top political issue and force our members of Congress to either get on board or lose voter’s support. Health care is an issue of life and death, and those who reject NIMA, which is supported by the majority of people and would be a significant step towards solving the healthcare crisis, are on the wrong side.

How do we build political power to win NIMA? It begins with education. We must understand what health proposals will and won’t do, and we must understand how to impact members of Congress. As we educate, we must also organize by getting each other’s contact information and staying in touch. And then we must mobilize by speaking out in the media, meeting with members of Congress and holding protests in our districts. Health Over Profit provides tools for people to do each of these. Check out the “Tools” pages.

The Republican’s Healthcare Proposal

The Republican proposal is going to worsen the healthcare crisis significantly. Congressional leadership is pushing it through Congress quickly using the budget reconciliation process. The bill has already passed in two House committees and is headed to a third one before it is brought to the floor of the House for a full vote. The Hill is tracking Republican opposition to it here. Twenty-four Republicans and all Democrats will need to vote against it to stop it in the House. If it passes the House, then it will be sent to the Senate for possible amendments and a vote. Three Republicans and all Democrats will have to oppose it to stop it there.

We have an opportunity to use the concerns around the Republican bill to educate both Republican and Democratic members of Congress about the many reasons that NIMA is superior to both the ACA and the American Health Care Act (AHCA). There is NIMA legislation in the House, HR 676, that already has 65 co-sponsors and we are urging Senator Sanders to introduce a companion bill in the Senate.

Here is a chart comparing the three proposals and below that I will go into the AHCA in more detail.

[Click on the link to download a pdf of the above image: ComparisonChart]

The Congressional Budget Office (CBO) released its evaluation of the AHCA on Monday, March 13. In short, the AHCA will create 14 million newly-uninsured in 2018 by ending the individual mandate forcing people to either buy private health insurance or pay a penalty. In 2020, when cuts to both Medicaid and the subsidies to purchase private insurance kick in, the newly uninsured would rise by 21 million. In 2026, the total number of people estimated to be without insurance in the US would be 52 to 54 million (the latter figure comes from the White House’s analysis).

The CBO estimates that the above cuts would decrease the federal deficit by $337 billion between 2017 and 2026. That comes in the form of ‘savings’ from $1.2 trillion in cuts to Medicaid and subsidies for private insurance that will be offset by lost revenue in the form of $900 billion in tax cuts, which would primarily benefit the wealthy. There is no discussion of the impact of taking $1.2 trillion that would have been spent on health care and other basic necessities out of the economy, nor of the impact more tax cuts for the rich will have on the wealth divide.

The AHCA keeps the popular parts of the ACA such as the pre-existing condition requirement and allowing youth up to 26 years of age to stay on their parent’s plans. The main areas where the AHCA differs from the ACA is the financing of private health insurance, taxes and Medicaid.

Here are the impacts on financing private health insurance:

Instead of providing subsidies to purchase private health insurance on the exchanges that are based on income so that those with lower incomes receive larger subsidies, the AHCA will give tax credits based on age for those with an income of up to $75,000 for an individual or $150,000 for a married couple. The tax credits range from $2,000 for the youngest age group to $4,000 for the oldest age group, and they can be used to buy any individual health plan, not just ones on the exchanges, as long as it doesn’t cover abortions. The AHCA also allows private insurers to charge up to five times more for the oldest age group. This means that those with lower incomes will receive less support, those with middle incomes may get more support and those with higher incomes will get a tax break they didn’t have before. And older people, especially those 55 to 64, may face much more expensive premiums.

The AHCA will end subsidies to reduce out-of-pocket costs so that individuals will face higher co-pays and deductibles. This is likely to take effect in 2019.

The AHCA will end the individual mandate forcing people to either purchase private health insurance or pay a penalty, but it will add a 30% surcharge on top of the cost of a health insurance premium  for one year if someone goes without health insurance for more than 63 days and then purchases insurance. This will create a hurdle that will keep some from becoming insured.

And starting in 2020, private health insurers will be allowed to sell health plans that cover less than 60% of covered medical care. These plans will be cheap and appealing to people who are healthy or have low incomes, but people will face significant financial barriers and the risk of medical bankruptcy when they do need care.

Reuters reports that in addition to tens of millions of people, the private health insurers are also going to be losers because fewer people will be able to afford to buy their plans.

Here are the impacts on taxes:

The AHCA will repeal practically every tax associated with the ACA. Health Affairs lists the taxes that will be eliminated here. Overall this represents $900 billion over ten years of lost revenue.

This includes new taxes that were imposed on the wealthy to provide revenue for Medicare. The Center on Budget and Policy Priorities estimates that the cuts in Medicare taxes would equal about $350 billion in lost revenue to Medicare over ten years.

And the AHCA will raise the amount of money that people can deposit into tax-free Health Savings Accounts and allow them to use that tax-free money for more things such as over-the-counter health items. This is another give-away to the rich that will reduce the tax base in the country that we rely on to fund necessary programs.

And here are the impacts on Medicaid:

There are 74 million people in the United States who rely on Medicaid. That equals 20% of the population. Unlike Medicare, which is national, Medicaid is administered by individual states and varies from state-to-state. States rely on federal funds to support their state Medicaid systems. The ACA provided increased funds for states to expand Medicaid to cover adults and families with higher incomes than before. Thirty-one states and the District of Columbia expanded Medicaid.

At present, federal funds for state Medicaid are determined by need. The state agrees to cover people who meet their criteria and provide a specific set of benefits. The AHCA would end that guarantee and instead impose a per-capita amount of money. That means that if states experience higher health needs, they will be limited in what they can provide.

The AHCA will end support for adults who were added to Medicaid under the ACA, which would risk 11 million people who relied on that support losing their coverage. On top of that, according to Health Affairs, the change to per-capita support is estimated to shift $370 billion of the cost of Medicaid onto state budgets. The New York Times breaks down the AHCA’s impact on Medicaid on a state-by-state basis. Click here to read it.

Making health the bottom line

The United States is the only industrialized nation that treats health care as a commodity rather than a human right. As a result of our wasteful market-based system, the US spends twice as much per person each year as most other industrialized countries and those countries cover everyone and have better health outcomes.

The chart at right comes from the Organization for Economic Cooperation and Development. It shows the percentage of the population in each country that is covered. The darker orange represents the percentage of health spending that is in public dollars and the lighter orange represents private dollars. The United States stands out for covering a lower percentage of people and being highly privatized.

Systems break down when necessities are treated as commodities. Most of the time, health care is a necessity, not a choice. Unlike with consumer goods, people can’t delay necessary care until they can afford it, nor do people know what the cost of health care will be until after they receive it. Each person is different and responds differently to treatment. Two people may go into the hospital with the same diagnosis, but they will require different treatment based on their overall health and how they respond. For almost 40 years, health care has been treated as a commodity in the US when it just doesn’t fit into that box.

When health care is treated as a public necessity, like fire departments, libraries, roads and schools, and financed up front through progressive taxes, then public dollars can be used to pay for a system that is there for everyone when they need it. The costs of an individual person’s care no longer depend on the severity of their illness. This is a difficult concept for people in the US to understand because we have experienced the opposite for so long.

Think of a public road. Tax dollars are traditionally used to build and maintain the road. Some people need to drive on the road a lot and others drive very little, but we all pay in so that the road is there when we need it. If the road starts to be used a lot and it creates greater wear and tear or traffic back-ups, then people might push the government to build more lanes or to build other forms of public transportation to ease the burden. This is a systematic approach, and it works when we all have a stake in the system and are engaged in deciding how it works.

National Improved Medicare for All (NIMA) would create a publicly-financed healthcare system that covers everyone from birth to death. Our tax dollars would finance that system and it would be there when we need it. We would all have a stake in it, so we would all care about having the best system we could have. We are already spending enough on health care in the US to have a top-quality system. It’s time to tell our members of Congress that we won’t accept anything less.

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