PNHP's Case for Single Payer

The case for single payer health insurance.

PNHP’S CASE FOR SINGLE PAYER :PNHP’S CASE FOR SINGLE PAYER Leonard Rodberg Urban Studies Dept., Queens College/CUNY and NY Metro Chapter Physicians for a National Health Program March 8, 2008

PNHP MESSAGES :PNHP MESSAGES 1. More and more Americans are feeling insecure about the high cost of health care and access to health care.  2. Our country's reliance on private insurance companies adds cost and no value to our health care system.  3. PNHP supports a national health care insurance program that is publicly funded like Medicare and will ensure comprehensive care for all. This program would cover all necessary medical services such as doctor visits, hospitalization, long-term care, prescription drugs, dental care, mental health, and preventive care.

Message 1 :Message 1 1. More and more Americans are feeling insecure about the high cost of health care and access to health care.

Why Health Care Is On the Agenda :Why Health Care Is On the Agenda

Rising Number of uninsured :Rising Number of uninsured

..And Costs Will Continue to Rise :..And Costs Will Continue to Rise

High Cost of Health Insurance Premiums: It’s Even Too Expensive for the Middle Class Today :High Cost of Health Insurance Premiums: It’s Even Too Expensive for the Middle Class Today National Average for Employer-provided Insurance Single Coverage $4,479 per year Family Coverage $12,016 per year Note: Annual income at minimum wage = $11,700 Annual income of average Wal-Mart worker = $17,114 Source: Kaiser Family Foundation/HRET Survey of Employee Benefits, 2007

Lowest-cost – but Very Costly – Unsubsidized Insurance under the Massachusetts Plan :Lowest-cost – but Very Costly – Unsubsidized Insurance under the Massachusetts Plan * Also MD co-pays & hospital co-insurance Source: www.mahealthconnector.org (Boston Area) February 2008

The Extent of Underinsurance :The Extent of Underinsurance 4 in 10 Americans are uninsured or underinsured 29% with insurance postponed needed medical care because of cost 37% with insurance had outstanding medical debt About 1 million people each year declare bankruptcy as a result of their medical bills Three-fourths of these had insurance when they got sick -- Consumer Reports, September 2007; D. Himmelstein et al, “Illness and Injury as Contributors to Bankruptcy”, Health Affairs, w5-63, 2005

Half of Middle- and Lower-Income Adults Have Problems Paying Medical Bills and Premiums :Half of Middle- and Lower-Income Adults Have Problems Paying Medical Bills and Premiums Percent Percent Medical bills Insurance premiums Source: Commonwealth Fund Survey of Public Views of the U.S. Health Care System, 2006.

Millions of the Insured of All Incomes Face Financial Burdens :Millions of the Insured of All Incomes Face Financial Burdens Source: “Too Great A Burden”, Families USA, December 2007

MESSAGE 2 :MESSAGE 2 2. Our country's reliance on private insurance companies adds cost and no value to our health care system.

Private Insurers’ High Overhead :Private Insurers’ High Overhead International Journal of Health Services 2005; 35(1): 64-90

U.S. Health Costs are 70% Greater than the Median of Other Countries :U.S. Health Costs are 70% Greater than the Median of Other Countries United States

US Life Expectancy is Less than Many Other Countries :US Life Expectancy is Less than Many Other Countries Source: OECD 2005 United States

Deaths before age 75 that are potentially preventable with timely and appropriate medical care. :Deaths before age 75 that are potentially preventable with timely and appropriate medical care. Mortality Amenable to Health Care Deaths per 100,000 population, 1998 Source: Commonwealth Fund

The Outlier Nation: Our Public System Covers Fewer… :The Outlier Nation: Our Public System Covers Fewer… Source: F. Colombo and N. Tapay, Private Health Insurance in OECD Countries, OECD 2004 United States

While Private Insurance Dominates :While Private Insurance Dominates Source: F. Colombo and N. Tapay, Private Health Insurance in OECD Countries, OECD 2004 United States

Where’s the Choice?The insurance industry is highly concentrated and profitable :Profits 5% of revenues Where’s the Choice?The insurance industry is highly concentrated and profitable

Some Choices Don’t Really Matter! :Some Choices Don’t Really Matter!

The Choice that People Really Want: :The Choice that People Really Want: Choice of doctor Choice of treatment Choice of hospital or location of treatment NOT Choice of health plan Today’s managed care plans limit the patient’s choice of doctor, treatment, and location. The only choice the insurance companies offer is: How much are you willing to pay to avoid our limits?

MESSAGE 3 :MESSAGE 3 3. PNHP supports a national health care insurance program, publicly funded like Medicare and ensuring comprehensive care for all. This program would cover all necessary medical services including doctor visits, hospitalization, long-term care, prescription drugs, dental care, mental health, and preventive care.

THERE IS ONE SOLUTION THAT CAN SOLVE THE PROBLEM OF HIGH AND RISING COST: :THERE IS ONE SOLUTION THAT CAN SOLVE THE PROBLEM OF HIGH AND RISING COST: Expand the existing Medicare program to cover everyone Improve the coverage it offers Eliminate private insurance

Conyers HR 676 Expanded and Improved Medicare for All “single payer national health insurance” :Conyers HR 676 Expanded and Improved Medicare for All “single payer national health insurance” Automatic enrollment - everyone receives a card assuring payment for all needed care Free choice of doctor and hospital Doctors and hospitals remain independent, negotiate fees and budgets with public agency Public agency processes and pays bills Financed through progressive taxes

Some Implications of Medicare for All :Some Implications of Medicare for All The same coverage for everyone: No means testing; coverage would not depend on income, employment or age Medicaid would no be longer needed Hundreds of billions of dollars in administrative costs would be saved Costs would be controlled through coordinated capital planning, budgeting, and quality reviews

How Would Single Payer Be Paid For? One Example of Revenue Sources from a Recent Study of a California Plan :How Would Single Payer Be Paid For? One Example of Revenue Sources from a Recent Study of a California Plan

Covering Everyone and Saving Money through Medicare for All :Covering Everyone and Saving Money through Medicare for All Additional costs Covering the uninsured and poorly-insured +6.4% Elimination of cost-sharing and co-pays +5.1% Savings Reduced hospital administrative costs -1.9% Reduced physician office costs -3.6% Reduced insurance administrative costs -5.3% Bulk purchasing of drugs & equipment -2.8% Primary care emphasis & reduce fraud -2.2% Source: Health Care for All Californians Plan, Lewin Group, January 2005 134 107 241 -21 -76 -111 -59 -46 -313 $ B Total Costs +11.5% Total Savings -15.8%

Most Families Would Save Money :Most Families Would Save Money Source: Health Care for All Californians Plan, Lewin Group, January 2005

Those Employer Currently Offering Coverage Would Save. There Would be Modest Costs for the Rest :Those Employer Currently Offering Coverage Would Save. There Would be Modest Costs for the Rest Source: Health Care for All Californians Plan, Lewin Group, January 2005

McCain/Republican Approach to Health Care Reform: Individual Responsibility :McCain/Republican Approach to Health Care Reform: Individual Responsibility End employer-based insurance by eliminating the employers’ tax deduction for health insurance Use tax credits to help individuals buy insurance To control costs, make patients (“consumers”) more cost-conscious thru copays and deductibles Lower costs through market competition “Faith-based health policy”

U.S. Out-of-Pocket Expenses are Already Greater than Those of Anyone Else :U.S. Out-of-Pocket Expenses are Already Greater than Those of Anyone Else Source: OECD 2006

“Universal health care” :“Universal health care” The Good News: This is accepted as the goal by the Democratic candidates.The Bad News: They define this simply as everyone having some kind of insurance, not everyone having affordable access to care.

The Mandate Model :The Mandate Model Employer mandate: Provide insurance or contribute to a public fund Individual mandate with guaranteed issue Offer of government/public program (“single payer”?) as well as private insurance plans Subsidies to make premiums “affordable” “Keep what you have”

Common Features of these Mandate Plans :Common Features of these Mandate Plans The problem is defined as: Too many uninsured The solution: Require everyone to have insurance, insurance companies to sell to all Employers contribute but don’t necessarily offer insurance Continued reliance on private insurance No regulation of insurance company premiums or their reimbursement practices

Will Mandates Lead to Universal Coverage? :Will Mandates Lead to Universal Coverage? Source: Sherry Glied et al, “Consider It Done? The Likely Efficacy of Mandates for Health Insurance,”, Health Affairs, 26(6), Nov/Dec 2007; Insurance Research Council, June 2006 below 65 yrs

Why The Mandate is Bad Public Policy :Why The Mandate is Bad Public Policy Those without insurance will avoid seeking care Financing through premium payments requires complex intrusive means testing Will not lead to universal coverage If premium is affordable, coverage will be limited Private health insurance will be a continuing consumer’s nightmare ( copays, deductibles, denials) Increases the cost of the system Will not control rising costs Will not help those who think they’re insured but find, when they’re sick, they can’t afford care. It does not reform the system.

What’s Wrong With Offering a Public Plan vs. a Private Plan? :What’s Wrong With Offering a Public Plan vs. a Private Plan? Private plans avoid sick people, leading to “adverse selection” for the public plan. Slick advertising will mislead consumers into purchasing private insurance (e.g., Medicare Advantage plans) Many payers remain, so the savings from single payer cannot be achieved. There is no way to control costs. A “level playing field” is impossible: Private insurers insist on subsidies to stay in the game

These Plans Are Not Politically Realistic! :These Plans Are Not Politically Realistic! They cost hundreds of billions of dollars They benefit only those with low incomes and those without insurance  weak public support They don’t solve any of the problems (especially rising costs) that concern everyone Insurance companies will resist government regulation Little public support, strong opposition to mandated purchase of insurance None envisions a real structural change.

Why a National Health Insurance Program is Possible Today :Why a National Health Insurance Program is Possible Today Everyone benefits: the uninsured, the underinsured, and everyone else who is insecurely insured. Employers will be relieved of the burden of rising costs and unfair competition from employers who don't offer insurance. Small businesses will contribute affordable payments and their employees will be covered. Limited reforms that keep private insurance in place have been tried and failed. Every other advanced country has done it.

“Would you prefer the current system or Universal Health Insurance…like Medicare…run by Government…financed by Taxpayers” :“Would you prefer the current system or Universal Health Insurance…like Medicare…run by Government…financed by Taxpayers” Source: Washington Post/ABC News Poll, 10/20/03 Current Don’t know Universal Health Insurance

Our Message: Get the Insurance Companies Out of Health Care! :Our Message: Get the Insurance Companies Out of Health Care! Bypass the insurance companies and create a Medicare for All system that is: - Simpler - Less costly - Better for our health - Equitable, and - Covers everyone That is: A single payer plan can solve the problems that afflict our health care system.

RESOURCES :RESOURCES Physicians for a National Health Program (PNHP) www.pnhp.org PNHP NY Metro Chapter www.pnhpnymetro.org.