Sue
the Bastards: Why are only Republican AGs Threatening
Court Action against Health `Reform' Legislation?
3 January 2010By Dave Lindorff
Attorneys General from 13 states--all of them
Republicans--are saying that they are going to sue to
block the health insurance reform bill if, when it is
finally passed, it still includes a measure giving
Nebraska an extra $100 million in Medicaid funds. They
charge that this “bribe” was used to get Nebraska’s
conservative Democratic Senator Ben Nelson to join
fellow Democrats to get the Senate’s version of the
bill passed.
They’re right to sue. Nebraska shouldn’t get more
funds than the rest of the country to finance hospital
care for its poorest residents, and Nelson shouldn’t
be able to extort the Senate. But the question is why
aren’t Democratic attorneys general threatening to sue
over this execrable bill?
Residents of states with higher-than-average health
care costs--states like California, New York, Florida,
and Connecticut, for example--will be hit hard if the
bill passes, because it includes a heavy tax on health
plans that cost employees and employers more than a
combined $12,000 per year per person. In these and
many other states, because of the higher charges by
doctors and hospitals, many of which are teaching
institutions or public institutions that provide more
tertiary care and that treat much larger numbers of
low-income patients, and all of which have much higher
real-estate costs and wage rates for staff, insurance
plans are inevitably also costlier. Yet the residents
of those states and their employers will end up
getting socked with taxes as high as 40% on those
plans that are over the limit. The result, experts
say, is that many employers in these states will
simply reduce coverage to bring the plans in under the
limit.
Also slammed by this tax will be unionized
workers--most of them again concentrated heavily in
relatively union-friendly states like California, New
York and much of the northeastern US--who over long
years and many bitterly fought contract battles--have
negotiated better-than-average health insurance
coverage. The fruits of their struggles, which often
included tough strikes and lockouts, and deals that
involved forgoing bigger pay increases in return for
better health coverage, could be erased by this
legislation if the bill is passed as written.
And what about the so-called “near poor”? Under the
plan as it stands, everyone would be required to buy
health insurance, or face a stiff fine of as much as
$1200 from the IRS for a family. People earning less
than 133% of the federal poverty level (that would
currently be approximately $13,000 a year for
individuals or $30,000 a year for a family of four,
except in Hawaii and Alaska where the numbers are
slightly higher), and less than four times the federal
poverty level ($40,000 for an individual or $88,000
for a family of four), would be given a subsidy to
help them buy that insurance. But they would be
expected to pay as much as 12% of their income out of
pocket for coverage, up to a limit of $5000 for an
individual and $10,000 for a family. (I’m just trying
to imagine how that would hit a family earning $88,000
a year. First of all, it seems clear to me that many
hard-pressed families will look at the costs, just
decide can’t afford it, and pay the IRS penalty.)
But the number of people who could lose insurance
coverage under this legislation could be much greater.
The right has done a much better job of analyzing the
health reform bills in House and Senate, with most of
the left holding its collective nose and backing the
measures, apparently thinking that things can be
“fixed later.” (We saw how well that idea worked when
liberal Democrats went along with President Bill
Clinton’s and the GOP’s trashing of welfare programs
back in the early 1990s. “We’ll fix it later” was the
mantra, but it never got fixed, and millions families
are suffering today because of that Democratic
treachery.) But the reality is that because of the
mandates and penalties in both versions, and the
relatively limited penalties for not providing
coverage, many employers will probably end up
reducing, or worse, dropping health coverage for their
employees and taking the penalties, leaving workers
stuck with having to buy crummy coverage through the
new “insurance exchanges” envisioned in the bills. The
Congressional Budget Office estimates that some 10
million workers who currently have employer-provided
health care will lose it, but other experts predict
that the number could be much higher.
Democratic states whose residents stand to be hurt by
this legislation should be preparing to sue to protect
their residents. Unions (most of whom have been
backing this legislation when they should have been
marching on Washington in protest), should instead be
threatening to sue if it passes.
Eventually, of course, they will. The courts will be
tied up for years in challenges to the inequities and
constitutional violations contained in this
legislation. Meanwhile, though, Americans are going to
get socked with higher tax bills, higher insurance
premiums, higher medical bills, and poorer coverage.
What is maddening is that none of this had to happen.
We could have had health coverage for everyone, and at
much lower cost than today, by simply expanding
Medicare to cover everyone. The reason we don’t have
Medicare for all is because, with the exception of
Dennis Kucinich (D-OH), John Conyers (D-MI) and a few
other members of the House, and Bernie Sanders (I-VT)
in the Senate, neither the ruling Democrats in
Congress, nor President Obama, ever had the integrity
and guts to point out that Medicare for All would be a
net savings for almost everyone. Yes, expanding
Medicare would mean higher taxes for everyone, but the
net financial impact, after factoring in the
elimination of many hugely expensive current federal,
state, county and municipal health care programs such
as Medicaid, veterans care, charity care, etc., an end
to private insurance premiums paid by employers and
individuals, and the end to workers compensation and
embedded health costs such as medical coverage riders
in car and home insurance policies, would be positive,
not negative.
Nobody had the integrity and guts to point out that in
countries that have a version of Medicare for all,
like Canada, Taiwan or many of the European countries,
total health care costs both as a percentage of GDP,
and on a per-capita basis, are half as much or even a
third as much as they are in the US.
Medicare is routinely trashed by the right, and by
business lobbies, which claim it is going bust, and
certainly as presently funded, it is underfunded,
particularly with the Baby Boomer population about to
be enrolled. But bear in mind that the heavy lifting
of insuring everyone in the country has already been
done. The one-in-seven Americans currently covered by
Medicare are by far the costliest segment of the
population. Within Medicare, the reality is that 10
percent of the recipients account for 90% of the costs
of the program. More broadly, I suspect that the
elderly account for half or more of the total health
care costs of the entire population. That is, it would
probably cost only twice as much to cover everyone
with Medicare as it costs today to cover just those
over 65. Since total Medicare costs were just under
$500 billion in 2009 (representing about 80% of actual
medical costs for care of the elderly), then that
means the total cost of health care for the elderly
that year was approximately $600 billion. Expanding
the program to cover everyone, and to cover them in
full, instead of just 80%, would thus be about $1.2
trillion a year. Given that the actual cost of medical
care in the US in 2009 was about $2.5 trillion, this
figure is probably accurate, because countries that
have a version of Medicare for All have health care
costs of roughly half what they are in the US.
That is to say, expanding Medicare both to cover
everyone in the US, and to cover each person in full,
instead of only in part, would result in a net savings
to Americans of $1.2 trillion to $1.3 trillion a year!
How can this be, you might ask? Well first of all,
remember that programs like Medicaid ($400 billion a
year), veterans care ($100 billion a year), and
charity care delivered by hospitals to the indigent
($400 billion a year) would be eliminated as
redundant. So would premiums for mandated workers’
compensation insurance paid by employers, and the
hundreds of billions paid in premiums by workers and
employers for private insurance coverage. Also, costs
would be hammered as government set the rates for
doctors, hospitals, and drugs.
Polls have consistently shown that half or more of
Americans want Medicare extended to all. Despite all
the propaganda on the right and from the corporate
lobbies which trash Medicare as “socialism” and which
make ludicrous predictions about its impending
“bankruptcy,” and despite all the propaganda and scare
stories claiming that Canadians and Europeans hate
their systems (a claim manifestly false, as proven by
the fact that even conservative governments in those
countries have been afraid to attempt to undo their
public health systems for fear of voter wrath), most
Americans are smart enough to understand that Medicare
for All is what we need.
The problem is that the political system is broken.
The Democrats elected to majorities in House and
Senate, and the Democratic president elected a little
over a year ago, don’t see their role being to do what
the public elected them to do. Rather they see their
role as being to prevent the public from getting what
it wants, in order to protect the interests of the
very industries that are benefitting from the status
quo--in this case the insurance companies, drug
companies, physicians and hospital companies.
Until Americans rise up and start making politicians
accountable to them, what we’ll get instead of real
reform or, in this case, real health care reform, will
be rip-offs, screwjobs and flim-flam, which in the
end, after months of sturm and drang is all the
current health “reform” legislation really is.
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