The Case For Eliminating Private Health Insurance
Why don’t we all just admit that the politicians aren’t capable of providing healthcare reform that will work. That includes President Obama, the Senate and the House of Representatives.
They are politicians and can’t separate party politics from the problem at hand. That is why they are going around in circles now, getting nowhere.
The fact of the matter is private insurance companies cannot provide us all with affordable healthcare. Like it or not that is a fact. People cannot afford the premiums the companies must or are charging in order to provide the health care people need.
Erase political thought from your mind and take a fresh look at the whole problem. Forget capitalism, socialism or any other kind of ism.
Now, let me introduce you to the Physicians for a National Health Program. Who are they?
The Physicians for a National Health Program is a non-profit research and education organization of 17,000 physicians, medical students and health professionals who support single-payer national health insurance.
It is a single issue organization advocating a universal, comprehensive single-payer national health program. PNHP has more than 17,000 members and chapters across the United States.
Since 1987, we’ve advocated for reform in the U.S. health care system. We educate physicians and other health professionals about the benefits of a single-payer system–including fewer administrative costs and affording health insurance for the 46 million Americans who have none.
Our members and physician activists work toward a single-payer national health program in their communities. PNHP performs ground breaking research on the health crisis and the need for fundamental reform, coordinates speakers and forums, participates in town hall meetings and debates, contributes scholarly articles to peer-reviewed medical journals, and appears regularly on national television and news programs advocating for a single-payer system.
PNHP is the only national physician organization in the United States dedicated exclusively to implementing a single-payer national health program.
PNHP says that “private health insurance was an idea that worked during party of the last century; it will not succeed through the 21st Century.”
Why? Because “jobs are increasingly service-based and short-term, the large employment-based risk pools that made this insurance system possible no longer exist.” Times have changed. Conditions existent then are no longer existent.
Medical care has become more effective and more essential to the ordinary person, but also more costly and capital-intensive. The multiple private insurance carriers that emerged during the last century can no longer provide a sound basis for financing our modern health care system.
The United States is all alone among the world’s nations. It has relied upon private insurance to cover the majority of its population. “In the mid-20th Century, when medical care accounted for barely 1% of our gross national product, medical technology was limited, and jobs lasted a lifetime, health care could be financed through such employment-based, premium financed health insurance. But the time for private insurance has passed.”
Health care has now become a major part of our national expenditures. The premium for an individual now averages more than $4,000 per year, while a good family policy averages more than $10,000 per year, comparable to the minimum wage and nearly one-fourth of the median family income. As a consequence, though the US spends far more on health care than any other nation, we leave millions of our people without any coverage at all. And those who do have coverage increasingly find that their plans are inadequate, exposing them to financial hardship and even bankruptcy when illness strikes.
So, “if we believe that everyone should have health care coverage, and that financial barriers should not prevent us from accessing health care when we need it, then it has become clear that the private health insurance system cannot meet our needs.” That is glaringly obvious right now. PNHP concludes “health care has simply become too expensive to be financed through private insurance premiums.”
But those who advocate and support insurance companies “claim that they create efficiency through competition.” That is a fallacy. What competition? The insurance industry has become increasingly concentrated. There are three national insurance firms: United Health, Wellpoint and Aetna. Those three run the industry. Any past competition has evaporated and no longer works to hold down costs.
Private insurance supporters also claim it expands consumer choice. But choice of plans the companies offer is not what consumers want. Consumers wan their choice of doctors and hospitals. That choice is increasingly denied us by private insurance plans through managed care.
The health insurance industry, “to protect their markets and try to make premiums affordable have reduced the protection afforded by insurance by shifting more of the cost to patients, especially through high-deductible plans. They have also targeted their marketing more narrowly to the healthy portion of the population, so as to avoid covering individuals with known needs for health care.” Nonetheless premiums keep rising each year, “increasing by nearly 70% above inflation in just the last six years.”
The so-called “universal health care” proposals being put forward by mainstream politicians would simply expand the current system without addressing any of its problems. They would simply mandate that either our employers provide us with coverage or we, as individuals, purchase our own coverage in the private insurance market. These plans cannot work in the face of the high cost of premium-based coverage for even the average person. (Some proposals would offer the option of buying a competing public plan, under the theory that the public program would be more efficient and effective. The flaw here is that the public plan would attract those who are unable to afford private coverage or who are paying high premiums or have no insurance because of pre-existing conditions. Placing these high-cost individuals in a separate government pool would make it unaffordable for most other people. This “death spiral” would cause the public plan to fail.) [Emphasis added]
The main impetus for renewed interest in health care reform has been the rapid rise in costs over the last few years. Yet, while most of these proposals give lip service to the need to control costs, none actually addresses the problem in a serious way. (The introduction of health information technology and “disease management”, which some of them urge, are mere placebos; they may make politicians feel better, but studies have shown they will do little to reduce costs and may actually increase them.) [Emphasis added]
If low-income people and the average-income person and family have to be subsidized “we might as well throw in the towel and recognize that a more efficient, more equitable financing system has to be adopted if it has any chance of providing coverage while being affordable. “An individual mandate to purchase private insurance cannot provide good coverage while remaining affordable, while employ-provided coverage also can no longer be sustained as the premium costs to the employer become increasingly unaffordable.”
The private insurance industry spends about 20 percent of its revenue on administration, marketing, and profits. Further, this industry imposes on physicians and hospitals an administrative burden in billing and insurance-related functions that consumes another 12 percent of insurance premiums. Thus, about one-third of private insurance premiums are absorbed in administrative services that could be drastically reduced if we were to finance health care through a single non-profit or public fund. Indeed, studies have shown that replacing the multiplicity of public and private payers with a single national health insurance program would eliminate $350 billion in wasteful expenditures, enough to pay for the care that the uninsured and the underinsured are not currently receiving. [Emphasis added]
So what would it mean if private insurance was left behind in favor of a single payer plan?
Such a single payer plan would make possible a set of mechanisms, including public budgeting and investment planning, that would allow us to address the real sources of cost increases and allow us to rationalize our health care investments. The drivers of high cost such as administrative waste, deterioration of our primary care infrastructure, excessive prices, and use of non-beneficial or detrimental high-tech services and products could all be addressed within such a rationalized system.
In sum, we will not be able to control health care costs until we reform our method of financing health care. We simply have to give up the fantasy that the private insurance industry can provide us with comprehensive coverage when this requires premiums that average-income individuals cannot afford. Instead, the U.S. already has a successful program that covers more than forty million people, gives free choice of doctors and hospitals, and has only three percent administrative expense. It is Medicare, and an expanded and improved Medicare for All (Medicare 2.0) program would cover everyone comprehensively within our current expenditures and eliminate the need for private insurance. This is the direction we must go. [Emphasis added]
Makes sense to me. I’ll rely on the opinion of medical professionals rather than politicians any day.
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Jack, I’ve read what you have written re: healthcare insurance and I really believe we should follow the all-Medicare route. Could it be, though, that those of us who are already on Medicare would have to continue paying our premiums while those who would be added would simply skate along? I think there should be a healthcare tax everyone should have to pay in proportion to that person’s income that could be used for nothing else except healthcare and those funds watched so closely that even a box paperclips could not be purchased without approval. Doesn’t the PX have something like that already? Anyway, keep up your good work. It makes for interesting reading.
The “Medicare for all” is the phrase used by Physicians for a National Health Care Program. My understanding of the “Medicare for all” route is that everyone would have to pay. The idea is that by broadening the number of people with Medicare for all would spread the cost over everyone so that individually people would pay an equal share of the cost.
The PX you mention is a military facility. Sort of like having a Wal-Mart on the military base. Has nothing to do with healthcare.