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What They Don’t Want You to Know About Health Insurance

What They Don’t Want You to Know About Health Insurance

by Dr. David Gruder

Would you like to know what those who are opposed to a single-payer healthcare system, AND those who only want government-run health insurance, DON’T want you to know? If so, this post is for you.

Ten years ago 2% of an employers’ costs covered health care; now it’s 15-20%. Ten years ago the U.S. health system ranked 37 out of 191 countries in terms of performance, according to the World Health Organization’s World Health Report 2000. Today the U.S. has the highest health care cost and the poorest outcomes among the world’s most prosperous nations. Canadians and Europeans are being treated for the same illnesses we have, with a lower incidence of complications and death from treatment, and for approximately two-thirds the cost of our system.

Somewhere between 39 and 45 million Americans (NOT including illegal immigrants) have no health insurance at all. In addition, the majority of other Americans are underinsured, in that they do not have full-range coverage that includes costs such as long-term care, prescription drugs or more affordable complementary healthcare treatments.

The U.S. health system spends a higher portion of its gross domestic product than any other country. In fact, that cost is astronomical — as much as $2.4 trillion per year! The cost of healthcare in the United States is more than twice as much the average of other developed nations, all of which boast universal coverage.

72% of Americans favor a public health insurance option that competes with private plans. A recent USA Today poll found that only four percent of Americans trust insurance companies. There is a reason for this, as you’re about to see.

We spend as much as $2.4 trillion annually for health care in America. That’s what I would call big business. Depending on which source you believe, somewhere between 20 and 33 cents of every dollar in health insurance premiums goes to corporate profits, stock options, executive salaries, marketing & advertising, and the cost of underwriting and other paperwork. In other words, for-profit insurance companies make their profits by NOT providing health care. Think about this: of the estimated $2.4 trillion Americans spend on health care each year, as much as $800 billion of that is used by for-profit health insurance companies for overhead, executive compensation packages, and shareholder profits… NOT healthcare.

Now pay very close attention to this: Canadians and Europeans are being treated for the same illnesses we have, with a lower incidence of complications and death from treatment, and for approximately one-third less than our costs. For-profit insurance companies use up to one-third of every health insurance premium dollar for things other than covering health costs. Do you really believe these two facts are a random coincidence?

Once you understand how much potential profit at stake, it should come as no surprise that the health insurance industry is currently spending $1.4 million a day to lobby your elected senators and representatives to try to block single-payer national health insurance, or even the consumer’s right to choose between private and public health insurance. They are threatening your elected senators and representatives in Congress with negative advertising during their next re-election campaigns if they don’t support the for-profit health insurance industry’s profit motives.

This plays a much bigger part in why so many of your elected officials oppose what 72% of Americans favor, and why they keep finding ways to spin the issues so that it looks like their opposition is the right thing for Americans despite what the overwhelming majority of Americans believe.

And guess what? Their propaganda campaign is working! Polls showing that public support for health care reform is declining reveal that the main reason for this is the success of the for-profit health insurance company spin campaigns. Increasing numbers of people now falsely believe that revamping the health care system will reduce the quality of their care, increase their out-of-pocket health costs and tax bills, and limit their options in choosing doctors, treatments and tests. More people also now believe that spiraling health care costs are not the serious threat to the American economy that they are.

In addition to the great lies fueling healthcare reform gridlock (see www.thenewiq.com/integritywatch-blog/great-lies-fueling-us-health-care-reform-gridlock, here’s more information that for-profit health insurance companies are spending millions of dollars a day to try to make sure you don’t know.

Physicians for a National Health Program is a non-profit research and education organization of 16,000 physicians, medical students and health professionals who support single-payer national health insurance. They claim that streamlining payment through a single nonprofit payer would save Americans more than $400 billion per year. They also say this would be enough to provide comprehensive, high-quality coverage for ALL Americans. (You can read their basic primer on single-payer national health insurance at www.pnhp.org)

Saving $400 billion a year is just the beginning, however. We can save significantly greater amounts of money by implementing other simple reforms like one being proposed by the Life Extension Foundation. They have developed what I believe is an extremely sensible plan for drastically reducing the massively inflated medication prices that are also contributing to out-of-control healthcare costs. You can read about the plan they have proposed by going to www.LEF.org, scrolling down to "Consumer Alerts" and clicking on "The Generic Drug Rip Off."

It appears that we can make health insurance coverage available to everyone without bankrupting businesses, the government or taxpayers by reducing overhead, greed, and rip-offs. If this is true, why would you oppose it? Because you don’t believe in socialism? (If so, read further below.) Because you don’t want the government running health care? (I, for one, don’t.)

No matter what you believe, don’t be fooled by those opposing single-payer health insurance, and those adamantly advocating a government-only health plan. They would have you believe that the only alternative is either for-profit health insurance or government-run healthcare. And they would have you believe that the only alternative is the one they’re peddling.

Despite their claims there a simple alternative that, if handled properly, could combine the strengths of both strategies: a private-public partnership in the form of a nonprofit corporation. A simple health coverage structure already exists that this nonprofit corporation could use. It would promote the common good by providing basic coverage for all while preserving individual health freedom at the same time.

That structure is similar to what Medicare does in separating Part A from Part B. Part A is basic health care and is funded by taxes. (Remember that if a single-payer plan can save at least $400 billion, then it’s possible that health insurance premiums could be lowered while everyone could be covered, all without a tax increase.) Similarly to how it is with Medicare, Part B would include a wide variety of optional supplemental health plans, each of which could be provided by various private insurance carriers, whether for-profit or nonprofit.

Let’s face it: despite the fact that Medicare’s overhead is only 3% of its revenues, government has notoriously been awful when it comes to running businesses in efficient ways. A nonprofit corporate private-public partnership responsible for administering a single-payer program could function more efficiently than government seems to know how to do. And it would do so without the exorbitant overhead that for-profit insurance companies necessarily have because their sharholders rightly demand maximum profits. Wrapping Medicare, Medicaid and Veterans Administration healthcare into this partnership’s responsibilities would save even more money since having only one basic system would mean having only one set of administration costs. This would relieve the government from having to administer our healthcare system (other than the military’s own healthcare system for meeting the specialized needs of active military).

A nonprofit public-private partnership would make it possible for all Americans to receive basic health care while anyone wanting insurance for various kinds of extras (Part B) above and beyond the basic plan (Part A) could choose to pay based on their individual priorities. If this kind of system was implemented well it would be a huge step in the direction of the health freedom I believe we should have.

Three Analogies for a Two-Tier Healthcare System

1. Car Insurance: Even though basic auto insurance is mandatory (Part A), you still have the freedom to select higher coverage amounts if you the higher premium is worth it to you (Part B).

2. Car Purchasing: You can buy a car with or without various packages of extras. Everyone who buys that car still purchases a viable form of transportation (Part A) whereas the add-ons vary with each purchaser’s priorities (Part B).

3. Education: The United States mandates that American children receive a 12th grade education (Part A). Options exist for going beyond that, including trade school, college, specialty certifications and graduate school (Part B). By analogy, a 12th grade education would be the equivalent of basic universal health care. Post-high school education would be the equivalent of expanded coverage that could be provided by for-profit or nonprofit health insurance companies for extra add-ons such as coverage for nutritional supplements or experimental treatments, for instance.

Doesn’t this possibility have the potential to provide a win-win for almost all of us and for our society as a whole? I believe it does, but the "almost" is the problem. This kind of plan would deprive for-profit insurance companies of massive amounts of profit (just as the Life Extension Foundation‘s proposal would similarly deprive the pharmaceutical industry). And, as we have seen, for-profit health insurance companies and the pharmaceutical industry are more interested in preserving their own profits than in optimizing Americans’ health.

But, consider this: as long as capitalism-based for-profit insurance companies can only make their profits through the amount of health care they DON’T provide (click here for the Bill Moyers interview that exposes this truth), and as long as pharmaceutical companies are allowed to continue to collude with the federal government to prevent drugs from being manufactured at their true fair market cost (click here for those details), the healthcare system in the United States will remain severely broken and massively unaffordable.

(After I posted the original version of this article I became aware of another sensible proposal that is complementary to the one I have proposed above, from Will Marre. Read these two post of his for more: Will Marre is Outraged at the Politics of Healthcare and Will Marre’s Radical Solution to Healthcare in America).

In closing I will now return to the question I raised earlier in this post about socialism. But first let me be clear with you that I am a passionate supportor of healthy socially responsible capitalism (and not the pretense of capitalism that has usurped true capitalism during the past few decades — for more information about this click here).

There are a lot of cries out there about how single-payer health care reform is socialism. Well, you know what? They’re right! But — and this is a HUGE "but" — here’s the heart of what they don’t tell you: their intention is to activate your "socialism fear" in order to manipulate you into supporting their self-serving interests without knowing it.

The truth these self-serving narcissists want you to forget is that the United States Constitution’s framers created a country mandated to function at the intersection of preserving individual freedom AND promoting the common good. The Constitution’s framers knew that the best economic system to help private citizens preserve their individual freedom, and promote innovation, is capitalism, and that the best economic system the government could use to provide for the common good is socialism. They had the audacity — and the brilliance — to create a country that combines both systems!

In other words, what self-serving narcissists posing as capitalists don’t want you to know is that since its birth, socialism has been the economic system the United States government has used to fund necessary infrastructures, such as emergency services, public health, transportation and public education.

These folks also don’t want you to know that socialism in the United States doesn’t stop there. The essence of insurance is pooling the resources of many (in the form of business and individual and insurance premiums) in order to cover the few who have catastrophies that cost more than most people could reasonably pay for on their own (insurance policy payments, including life insurance, auto insurance, homeowner’s insurance and, yes, health insurance). Well, guess what? This is socialism! Pooling a group’s resources (those who pay insurance premiums) in ways that also create profit for investors (shareholders) is nothing more than capitalism’s way of attempting to profit from socialism.

Once you understand the truth about socialism and its intertwined relationship with capitalism, the real dilemma we face with health care reform becomes glaringly obvious. Investors have every right to make sure that companies they invest in maximize profits; that’s an important ingredient of healthy capitalism. With this in mind, ask yourself what we should do when something that is necessary to the wellbeing of a nation can only be provided if profits aren’t made from providing it. Why should you ask this question? Because this is always the question we have asked in this country whenever we have considered funding common good projects, such as the emergency services, public health, transportation and public education infrastructures I mentioned above. (For more about the forms of socialism that have existed in the United States since this country’s birth, click here.)

Well, guess what? A big part of why the cost of health insurance is unaffordable is that it’s simply not possible to truly cover the cost of health care while also providing maximal profits for investors! This in a nutshell is why corporate capitalism is the wrong system for health care and socialism is the right system for it. And this is what for-profit health insurance companies — and those in Congress and the media that they have propagandized or intimidated into supporting them — don’t want you to know.

So, when you hear people call health care reform socialism, know that on the one hand they are right and on the other hand, they are telling this to manipulate you into forgetting that: 1) Insurance is by definition a form of socialism; 2) Almost all programs in the United States that pool resources to serve the common good are based more on socialism than capitalism; and 3) Our constitution’s framers dared to design a country in which capitalism and socialism co-exist. Go too far in either direction and you are out of integrity with the Constitution.

Keeping health insurance in the hands of for-profit companies goes too far in one direction and placing health coverage in the hands of government goes too far in the other direction.

Now you know the well-hidden secret about what those who are opposed to a single-payer healthcare system, AND those who only want government-run health insurance, don’t want you to know.

Anyone who understands what’s really going on in healthcare knows that major reform is long overdue. Great care needs to be taken in constructing that reform. I don’t agree with the plans that are on the table. But what concerns me even more is that the public is buying the spin that drug companies and for-profit health insurance companies are spending millions each DAY. They are manipulating our elected representatives and media pundits into spouting lies that are designed to make sure that the reform we DO need doesn’t happen.

Your opinion as a citizen about all of this is your business. My job as a transpartisan integrity expert is to cut through the spin so you can form a well-considered opinion. You have every right to your own opinion as a citizen about how to best implement health care reform. But, please don’t form your opinion based on spin that’s been designed to manipulate you into opposing reform itself! Remember my saying: "what you think is fact is usually spin!" Be a savvy citizen. Be a spinbuster! I sincerely hope this post has helped you become a better health reform spinbuster.

PS. Want three more tips beyond those in this post for making a difference with healthcare reform? Go to http://www.thenewiq.com/integritywatch-blog/three-tips-making-difference-healthcare-reform

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Comments

  • art hays
    August 29, 2009

    Thanks so much for posting this. I’m passing it on to friends.

     

    -a

  • David
    August 30, 2009

    Thanks for passing along this article to your friends.

    All the best,
    David Gruder

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