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Bush’s Solution To The Health Care Crisis
W hen he made his State of the Union address in January, George W. Bush knew he would soon be announcing sizable cuts in Medicare and Medicaid two weeks later. He chose to say nothing about that. Apparently he understood that a $101.5 billion cut over 5 years in Medicare and Medicaid is not the sort of thing that provokes standing ovations from members of Congress on prime-time television.
What Bush did mention was “two new initiatives” that would shift federal subsidies from some Americans to other Americans. His first “initiative” called for raising taxes on Americans who have employer-sponsored health insurance in order to lower taxes on Americans who buy health insurance on their own. His second proposal called for shifting federal tax subsidies from hospitals that serve disproportionate numbers of uninsured patients to insurance companies (which are not in the business of serving uninsured patients). The White House estimated the first proposal would lower the nation’s number of uninsured, now at 47 million, by 3 to 5 million in 2009 when these proposals would take effect. The White House offered no estimate of what the second proposal would do.
Bush’s proposal to raise taxes on people with employer-sponsored health insurance rests on the assumption that health care inflation in the U.S. is driven by “overuse” of medical services and that overuse is in turn driven by health insurance with “low” deductibles and copayments. According to the right wing in this country, medical care is no different from any other commodity—if insurance pays for most of your medical costs, then you’ll consume far more medical services than you need.
To make this point, advocates of high-deductible policies like to ask audiences to imagine what would happen to food prices if all Americans had grocery insurance that paid for 95 percent of their grocery bills. The problem with the grocery/insurance analogy is that medical services, unlike food, are rarely pleasurable and are often painful and even life-threatening. Would you rush off to have your uterus or prostate removed if it was not cancerous just because you are insured and would pay only a minor portion of the bill? Would you endure radiation and chemotherapy if you did not have cancer? Or, to take a service that is not painful, but just plain boring, Would you take time off work to have blood drawn for a cholesterol test you didn’t need just because you didn’t have to pay full price?
Research demonstrates that Americans, including insured Americans, vastly underuse medical services. To take just two examples: (1) half of all insured Americans with high blood pressure are not being treated for it; and (2) one-fourth of insured Americans who have had an angiogram that demonstrates they need either bypass surgery or angioplasty have neither done.
A large study conducted by the Rand Corporation that was published in the New England Journal of Medicine late in 2003 demonstrated that underuse of medical care occurs four times as often as overuse. The high-deductible policies advocated by Bush and the Republican Party ($5,000 to $10,000 per year for families) might or might not reduce overuse (patients are not doctors, after all), but they will definitely aggravate the underuse problem. Of course, highdeductible policies will not address the enormous waste generated by the health care industry in the form of excessive administrative costs, excessive prices for specialist services and drugs, and fraud.
Bush nevertheless invoked the myth of the “overinsured” America, arguing that some unspecified portion of the populace had “gold-plated” health insurance. He implied that overuse by these people was a primary cause of health care inflation. To discourage the purchase of “gold-plated” health insurance, whatever that is, Bush proposed to raise taxes on those who purchase it.
Under Bush’s proposal, employer contributions toward employee health insurance would, for the first time, be treated as income, just like wages and salaries are now. Employer contributions would show up on W-2 forms, just like other forms of income. However, Bush would offset this new liability with a deduction worth $15,000 for families and $7,500 for individuals. Thus, as long as you keep your insurance premium below the deduction, you would not have to report your employer’s payments for your health insurance and, therefore, you would not owe more taxes. One way to do that, of course, is to buy health insurance with a very high deductible.
According to White House estimates, the average cost of family insurance in 2009 will be $13,500, which is just below the $15,000 deduction Bush is proposing. Bush announced during his State of the Union address that 80 percent of Americans with employer-sponsored insurance will pay no new taxes. What Bush did not mention was that this 80 percent figure, while accurate for 2009, will fall as time goes by because the $7,500 to $15,000 deduction is pegged to the general inflation rate, while health insurance inflation zooms along at 3 to 4 times the general inflation rate in most years. By 2011 or so the average price of health insurance will surpass the deduction. According to the Tax Policy Center, the percent of Americans with employer-sponsored coverage who will pay more taxes will rise to 40 percent within a decade.
But the justice done for individual buyers will be offset by new injustices done to the sick and the lower-income. Bush’s crude definition of “gold-plated” makes no allowance for the fact that the health insurance industry charges higher premiums for sicker groups and individuals. The sick are far more likely to wind up paying a disproportionate share of the new taxes. Also, as is the case with all tax deductions, the deductions Bush is proposing will mean a lot more to the rich than they will to the middle and lower income classes.
The White House estimates that making the new deduction available to individual buyers will cause 3 to 5 million of the 47 million Americans who currently don’t have health insurance to buy it on their own. Whether the proposal will have even this much effect is debatable. The reason is obvious. Many of the uninsured pay so little in income and payroll taxes (payroll taxes are also reduced under Bush’s proposal) that the Bush deductions are meaningless. Even among those households that will enjoy a substantial reduction in their taxes, say $5,000, many will still be unable to hand over $13,000 or more to the insurance industry.
Comedian Steven Colbert articulated this defect in Bush’s proposal quite succinctly: “It’s so simple. Most people who can’t afford health insurance are also too poor to owe taxes. But if you give them a deduction from the taxes they don’t owe, they can use the money they’re not getting back from what they haven’t given to buy the health care they can’t afford.”
Whereas Bush’s deduction proposal at least has the redeeming value of eliminating the disparate tax treatment of employerversus individually-sponsored insurance, Bush’s second “initiative” has no redeeming value at all. Under this proposal, federal dollars that currently go to public and teaching hospitals that treat an above-average portion of the uninsured would be funneled to insurance companies via the states. The money, which the White House calls “affordable choices grants,” would go only to states that promise to use the money to subsidize the purchase of high-deductible policies from insurance companies. High-deductible policies are “affordable,” get it?
Bush’s rationale for shifting money from hospitals to insurance companies is that if people have insurance, they won’t be showing up at hospitals seeking free care. But by shifting money from hospitals to insurance companies, the actual dollars available for patients shrinks. That’s because hospitals use nearly all of the money for patient care, whereas insurance companies will waste 20 percent of the money on non-medical expenses such as advertising, underwriting, “managing” care, profit, lobbying, and rich perks for executives. Hospitals can ill afford to see 20 percent of their revenues siphoned off to pay for insurance industry overhead.
Rising expenditures on Medicare and Medicaid are essential to our increasingly sick health care system for the same reason an ever-expanding tourniquet is essential to someone with an ever-expanding wound. The unrelenting increase in health care costs, a problem Bush has done nothing to address in his six years in office, is driving employers and individuals from the health insurance market. If it were not for government-financed health insurance programs, of which Medicare and Medicaid are by far the largest, the percentage of the U.S. population without health insurance would be much higher.
To give you some idea of the protective role Medicare and Medicaid play, consider the results of a study that examined how insurance status changed in this country between 2000 and 2004. Over that period, the percent of nonelderly Americans without health insurance rose from 16.1 to 17.8. The 2004 figure would have been 20.4 percent, not 17.8 percent, if Medicare, Medicaid, the State Children’s Health Insurance Program, and smaller public health insurance programs run by the states had not acted as the safety net for some of the four million Americans jettisoned by the private health insurance industry during the 2000-2004 period. At a time when our safety net is not big enough to catch all the people being tossed from the ranks of the insured, it is irrational to propose cutting the safety net.
Judging from the contemptuous reactions of the Democrats who chair the health committees in Congress, Bush’s little money-shifting “initiatives” are going nowhere. Pete Stark (D-CA), who chairs the health subcommittee of the House Ways and Means Committee, dismissed Bush’s plan to tax “goldplated” insurance as a “new tax proposal [that] would shift health care costs to working families.” Even some Republicans agreed.
But Democrats will find it more difficult to ward off all of Bush’s proposed cuts in Medicare and Medicaid. They would find it slightly easier to do if they were to stop the overpayments to HMOs that participate in Medicare and Medicaid and much easier to do if they brought the Iraq war to a quick end and let a substantial portion of Bush’s 2001 tax cuts expire in 2010 as scheduled. Americans would be well advised, however, not to hold their breath for these events to come to pass.
With polls indicating threefourths of Americans support universal health insurance and twothirds support achieving universal coverage with a single-payer (or Medicare-for-all) system, it is difficult to endure the sight of Democrats dickering with Republicans over whether to cut Medicare and Medicaid. In a democracy less influenced by money, we would be watching Congress debate HR 676, the single-payer bill sponsored by Rep. John Conyers (D-MI). Hopefully, that day is coming.
Kip Sullivan is a health systems analyst with the Minnesota Universal Health Care Coalition. He is the author of The Health Care Mess (AuthorHouse, 2006).
Z Magazine Archive
AnnouncementsLABOR - May 1 is May Day. Workers of the world will celebrate the 124th anniversary of International Worker’s Day. Born out of a call for an 8-hour workday in the United States, this day is an opportunity for all workers to show their solidarity with one another, as well as to renew the call for labor rights.
FARM CONFERENCE - The Farm Conference on Community and Sustainability will be held May 24-26 in Summertown, TN, in partnership with the Fellowship of Intentional Communities. Tour green homes, see sustainable food production, learn about solar installations, alternative education, midwifery, and more.
Contact: Douglas@thefarmcommunity.com; http://www.thefarmcommunity.com/.
PALESTINE - The Conference of the Palestinian Shatat in North American will be held June 3-5 in Vancouver. The conference will examine the future of the Palestinian liberation movement.
Contact: email@example.com; http://www.palestinianconference.org/.
LABOR - The Pacific Northwest Labor History Association’s 45th annual conference will be held May 3-5, in Portland, OR. This year’s theme is Labor Under Attack: Learning from the Past and Preparing for the Future. A call for presentations, workshops and papers is currently underway.
Contact: PNLHA, 27920 68th Ave. East, Graham, WA 98338; 206-406-2604; PNLHA1@aol.com; http://www3.telus.net.
MARIJUANA - On the first Saturday of May marijuana legalization activists will hold informational and educational events, rallies and marches in over 300 cities around the world.
ECONOMICS - The Union For Radical Political Economics will hold its 39th annual conference May 9-11 in New York City.
RECLAIM THE DREAM - The 2013 Poor People’s Campaign & March from Baltimore to Washington D.C. will be May 11. Communities, schools and unions interested in participating are encouraged to contact the Baltimore People’s Assembly.
Contact: 410-500-2168; 410-218-4835; BaltimorePeoplesAssembly@gmail.com; Southern Christian Leadership Conference of Baltimore and the Baltimore Peoples Power Assembly, 2011 N. Charles St., Baltimore, MD 21218.
MOTHER’S DAY - The 17th Annual Mother’s Day Walk For Peace will be May 12th, in Dorchester, MA. The walk began in 1996 for families who had lost children to violence. The day has become a way for thousands of people to financially support the work of the Louis Brown Peace Institute.
Contact: http://www.ldbpeaceinstitute.org/; http://mothersdaywalk4peace.org/.
NATO 5 - An International Week of Solidarity with the NATO 5 has been called for May 16-21. Supports call on supporters to raise awareness of the NATO 5 and support funds for the defendants on the one-year anniversary of their preemptive arrests.
Contact: firstname.lastname@example.org; https://nato5support.wordpress.com.
MOUNTAINTOP - The 2013 Mountain Justice Summer Activist Training Camp will be held May 19-27 in Damascus, VA. It will be a week of workshops, field trips to view Mountain Top Removal coal mines, direct actions, and service project.
FEMINIST SCI-FI - The feminist science fiction convention WisCon 37 is scheduled for May 24-27 in Madison, WI.
Contact: WisCon, ? SF3, PO Box 1624, Madison, WI 53701; email@example.com; http://www.wiscon.info/.
ANARCHY FEST - A month-long Festival of Anarchy is scheduled for May in Montreal. The festival includes The Montreal Anarchist Bookfair (May 19-20).
Contact: http://www.anarchistbookfair.ca/; http://www.radicalmontreal.com/.
LABOR - The International Labor Rights Forum will present: Down the Supply Chain, Driving Corporate Accountability, on May 22 in Washington, DC. The Labor Rights Awards Ceremony and Reception will honor pioneers in supply chain worker organizing, working solidarity and international labor rights policy.
MULTICULTURE - The 26th annual National Conference on Race & Ethnicity in American Higher Education (NCORE) will take place May 28-June 1, in New Orleans.
Contact: SWCHRS, 3200 Marshall Avenue, Suite 290, Norman, OK 73072; 405-325-3694; firstname.lastname@example.org; www.ncore.ou.edu.
MEDIA - The 2013 Alliance for Community Media Annual Conference will be held May 29-31, in San Francisco, CA. Participants will include educators, community leaders, media professionals, journalists, nonprofit leaders, policymakers and students.
RADIO - The 38th Annual Community Radio Conference is schedule for May 29-June 1, in San Francisco, CA, with discussions and workshops.
Contact: 1101 Pennsylvania Ave. NW, Suite 600, Washington, DC 20004; 202-756-2268; email@example.com; http://www.nfcb.org/.
BRADLEY MANNING - On June 1, a rally will be held at Fort Meade in support of Bradley Manning.
BIKES - Bikes Not Bombs is holding its 24th annual Bike-A-Thon and Green Roots Festival in Boston, MA on June 3, with several bike rides scheduled, music, exhibitors and more.
Contact: Bikes Not Bombs, 284 Amory St., Jamaica Plain, MA 02130; 617-522-0222; firstname.lastname@example.org; www.bikesnotbombs.org.
LEFT FORUM - The 2013 Left Forum will be held June 7-9, at Pace University in New York City.
Contact: 365 Fifth Avenue, CUNY Graduated Center, ? Sociology Dept., New York, NY 10016; http://www.leftforum.org/.
VEGAN FEST - Mad City Vegan Fest will be held in Madison, WI, June 8. The annual event features food, speakers, and exhibitors.
Contact: 122 State Street, Suite 405 B, Madison, WI 53701; email@example.com; http://veganfest.org/.
ADC CONFERENCE - The American-Arab Anti-Discrimination Committee (ADC) holds its annual conference June 13-16, in Washington, DC, with panel discussions and workshops on civil rights, media and other topics.
Contact: 1990 M Street, Suite 610, Washington, DC, 20036; 202-244-2990; firstname.lastname@example.org http://convention.adc.org/.
CUBA/SOCIALISM - A Cuban-North American Dialog on Socialist Renewal and Global Capitalist Crisis will be held in Havana, Cuba, June 16-30. There will be a 5 day Seminar at University of Havana, plus visits to a cooperative, urban garden, community development project, social research centers, and educational & medical institutions.
Contact: email@example.com; http://www.globaljusticecenter.org/.
NETROOTS - The 8th Annual Netroots Nation conference will take place June 20-23 in San Jose, CA. The event features panels, trainings, networking, screenings, and keynotes.
Contact: 164 Robles Way, #276, Vallejo, CA 94591; firstname.lastname@example.org; http://www.netrootsnation.org/.
MEDIA - The 15th annual Allied Media Conference will be held June 20-23, in Detroit.
Contact: 4126 Third Street, Detroit, MI 48201; http://alliedmedia.org/.
GRASSROOTS - The United We Stand Festival will be hosted by Free & Equal, June 22 in Little Rock, Arkansas. The festival aims to reform the electoral process throughout the U.S.
SOCIALISM - The Socialism 2013 Conference is scheduled for June 27-30 in Chicago, featuring talks and panel discussions.
Contact: email@example.com; http://www.socialismconference.org.
LITERACY - The National Association for Media Literacy Education (NAMLE) will hold its conference July 12-13 in Los Angeles under the heading, Intersections: Teaching and Learning Across Media.
Contact: 10 Laurel Hill Drive, Cherry Hill, NJ 08003; http://namle.net/conference/.
IWW - The North American Work People’s College will take place July 12-16 at Mesaba Co-op Park in northern Minnesota. The event will bring together Wobblies from branches across the continent to learn new skills and build One Big Union.
PEACESTOCK - On July 13th, the 11th Annual Peacestock: A Gathering for Peace, will take place at Windbeam Farm in Hager City, WI. The event is a mixture of music, speakers and community for peace. Sponsored by Veterans for Peace.
Contact: Bill Habedank, 1913 Grandview Ave., Red Wing, MN 55066; 651-388-7733; firstname.lastname@example.org; http://www.peacestockvfp.org.
CHILDREN’S DEFENSE - July 15-19, join clergy, seminarians, Christian educators, young adult leaders and other faith-based advocates for children at CDF Haley Farm in Clinton, Tennessee, for five days of spiritual renewal, networking, movement building workshops, and continuing education about the urgent needs of children at the 19th annual Proctor Institute for Child Advocacy Ministry.
Contact: email@example.com; http://www.childrensdefense.org.
ACTIVIST CAMP - Youth Empowered Action (YEA) Camp will have sessions in July and August in Ben Lomond, CA; Portland, OR; Charlton, MA. YEA Camp is designed for activists 12-17 years old who want to make a difference in the world.
Contact: firstname.lastname@example.org; http://yeacamp.org/.
LA RAZA - The annual National Council of La Raza (NCLR) Conference is scheduled for July 18-19 in New Orleans, with workshops, presentations and panel discussions.
Contact: NCLR Headquarters Office, Raul Yzaguirre Building, 1126 16th Street, NW, Washington, DC 20036; 202-785-1670; www.nclr.org.
LABOR - The Eastern Conference For Workplace Democracy: Growing Our Cooperatives, Growing Our Communities, will be held at Drexel University in Philadelphia, PA, July 26-28.
Contact: email@example.com; http://east.usworker.coop/.
WOMEN/LYNNE STEWART- Radical Women is asking for support letters and cards to be sent to Lynne Stewart. Stewart is a civil rights attorney and political prisoner who is currently in jail. She has breast cancer and authorities have denied her request for transfer from her Texas prison to the New York City hospital where she received medical attention during a prior bout of breast cancer. Send messages and cards to: Lynne Stewart 53504-054, Federal Medical Center Carswell, P.O. Box 27137, Fort Worth, TX 76127.
Contact: 747 Polk Street, San Francisco, CA 94109; 415-864-1278; RadicalWomenUS@gmail.com; http://lynnestewart.org/; http://www.radicalwomen.org/.
HAITI/WOMEN - Haiti’s government is considering a legal reform measure that would prohibit and punish all sexual assault, including marital rape. MADRE and the International Campaign to Stop Rape & Gender Violence in Conflict are launching a petition to raise international support for this push to address violence against women in Haiti.
Contact: 121 West 27th Street, #301, New York, NY 10001; 212-627-0444; firstname.lastname@example.org; http://www.madre.org.
SYRIA/MIDDLE EAST - The Middle East Children’s Alliance (MECA) is currently seeking funds to assist more than 200,000 refugees fleeing violence in Syria.
FOLK FESTIVAL - The Falcon Ridge Folk Festival will be held August 2-4, in the Berkshires, NY.
Contact: http://www.falconridgefolk.com/; email@example.com.
WAR RESISTERS - The War Resisters League will hold its 90th anniversary conference, Revolutionary Nonviolence: Building Bridges Across Generations and Communities, August 1-4, at Georgetown University. The event will focus on the U.S.’ long history of antimilitarism.
Contact: 339 Lafayette Street, New York, NY 10012; 212-228-0450; firstname.lastname@example.org; http://www.warresisters.org.
POPULAR ECONOMICS - The Center for Popular Economics is holding its 2013 Summer Institute August 4-9 at Hampshire College in Amherst, MA. No background in economics is needed for this intensive training. This year’s theme is, The Care Economy: Building a Just Economy with a Heart.
Contact: Center for Popular Economics, PO Box 785 Amherst, MA 01004; 413-545-0743; email@example.com; www.populareconomics.org.
VETERANS - Veterans for Peace is holding the 28th annual convention August 6-11 in Madison, WI. This year’s theme is, Power To The Peaceful.
DEMOCRACY - The Democracy Convention will take place August 7-11 in Madison, WI. The convention brings together nine conferences including topics such as media, education, defense, race, environment and others.
MEN - The 38th National Conference on Men & Masculinity: Forging Justice: Creating Safe, Equal and Accountable Communities, presented in partnership with HAVEN, will be held in Detroit, MI, August 8-10.
Contact: firstname.lastname@example.org; http://www.nomas.org/.
OCCUPY - An Occupy National Gathering will be held in Kalamazoo, MI, August 21-25.
Contact: email@example.com; http://occupynationalgathering.net/.
COMMUNITIES - The Communities Conference is a networking and learning opportunity for co-operative or communal lifestyles, with workshops, events and entertainment; scheduled for August 30-September 2 at the Twin Oaks Community in Louisa, Virginia.
LABOR DAY - The 29th annual Bread and Roses Festival, a celebration of the ethnic diversity and labor history of Lawrence, MA, will be held September 2, in honor of the 1912 Bread and Roses Strike. There will be music, dance, poetry, drama, ethnic food, historical demonstrations, walking & trolley tours.
Contact: PO Box 1137, Lawrence, MA 01842; 978-794-1655; http://www.breadandrosesheritage.org/.
OCCUPY WALL STREET - September 17 is the two-year anniversary of the Occupy Wall Street movement. Events are planned in New York City and worldwide.
TEACHERS - The 13th Annual Conference, “Teaching for Social Justice: The Politics of Pedagogy,” will be held October 12 in San Francisco, CA. The free event features workshops, resources, and free childcare.
Contact: 415-676-7844; firstname.lastname@example.org; http://www.t4sj.org/.
HAITI - International Action, which brings clean water and chlorinators to Haiti, seeks office space capable of housing up to six people and their office equipment.
Contact: Zach Bremer, Zbrehmer@haitiwater.org; 202-488-0735; http://www.haitiwater.org/.
MEDIA - The Union for Democratic Communications and Project Censored are sponsoring a joint conference on media democracy, media activism and social justice to be held November 1-3 at the University of San Francisco. Proposals for presentations, workshops and panels from activists and critical scholars are invited.