Despite being a political football, the Affordable Care Act—“Obamacare”—has succeeded in providing 10 million Americans with new health insurance. 19 to 25 year-olds can now be covered under their parents’ policies. Pre-existing conditions can no longer be grounds for denying coverage, and Medicare Part D’s “Doughnut Hole” is gradually closing.
But are we really solving the problems of our nation’s health system? Spending over $8,000 per person annually, more than 18% of our gross national product, nearly $4 trillion total, the U.S. has the world’s most expensive medical system. This might be justified if we had the world’s best health care, but we don’t. We are far down in international rankings of longevity, maternal and child mortality, and other measures of public health.
Why this disconnect? First, instead of patient care, America spends about a third of its health system’s dollars on administration. Insurance companies keep 15-30% of all the money they collect. Because the reimbursement system is so complicated, the average doctor’s office spends $83,000 annually dealing with insurance companies and billing.
Our medical system reflects America’s great disparity between rich and poor. Well-off Americans can get pretty good care. The poor often can’t. They get sicker and die younger. Their children get sicker, and poor women die more often in childbirth.
Unfortunately, the Affordable Care Act solves few real problems. Tiered policy levels—bronze, silver, gold and platinum—provide coverage according to wealth. Even many middle class people can only afford policies with high deductibles and co-pays that leave them personally liable for most of their medical costs.
The ACA doesn’t resolve the chaos of insurance billing that wastes so much time and money. Insurance companies are now mandated to spend no more than 20% on administration, but many get around that requirement by accounting tricks.
There are no overall controls on our nation’s ballooning health system costs, which are projected to increase. Wall Street appreciates this. The S&P Health Industry Index is rising 25% faster than the regular S&P.
Is there a better solution? Actually, there is. Soon to be introduced in our State Legislature, the Family and Business Healthcare Security Act would establish “Medicare for All,” a Single Payer system covering every resident of Pennsylvania.
With this Single Payer plan, instead of insurance premiums, everyone pays a 3% surcharge on their income tax. Employers pay a 10% payroll tax. Additional funding comes from Medicare, Medicaid and other federal sources.
In return we get coverage for doctors, dentists, hospitals, prescription drugs, lab tests and x-rays, mental health and drug treatment, rehab, nursing homes, hearing aids, glasses—and nearly all of our other health needs. Coverage is at 100%: no deductibles, co-pays or “tiers.” Everyone gets the same coverage.
The plan is administered by a public corporation, permitted to spend no more than 5% on overhead. Representation afforded to health professions, hospitals, consumers and businesses assures a fair reimbursement system. As with Medicare, providers remain independent, and may even choose not to participate.
Administrative costs would plummet. Local governments and school districts (and thus taxpayers) would save an estimated $2.3 billion annually, statewide. Everyone’s auto and liability insurance would be cheaper, because medical expenses would be covered under the state program. With just a 10% payroll tax, employers would save about one third of what they now pay for medical insurance.
Of course, Single Payer is opposed by health insurance companies, whose executives make some of our state’s biggest salaries. It’s opposed by big pharma, profit-making hospital systems, and even parts of the medical profession, who fear their incomes might decrease under a more equitable plan.
Is this a sinister “big government” scheme? Ask senior citizens how they feel about their Single Payer plan, called Medicare. How many of them do you think would give it up? Incidentally, Medicare runs with an overhead of about 2%.
Single Payer is the most civilized, fair and economical way of paying for health care, and Pennsylvanians will soon have a chance to get it.
For more information, you can go to websites of Health Care for All Pennsylvania, www.healthcare4allPA.org, or Physicians for a National Health Program, www.pnhp.org.
Arno Vosk, M.D. is a retired emergency room physician, a board member of Health Care 4 All PA and a member of the Susquehanna Valley Progressives.