Worker Notes: American Big Bucks Health Care System One Sick Puppy


By Tom Crofton
The Commoner Call (5/15/17)

A great irony of the employerbased health insurance system is that employers originally created it to save money on wages. Their complaints now would be funny if the consequences were not so dire. Their unwillingness to use simple Business 101 concepts like “ the best value wins”, “competition brings down costs”, “demand pushes supply”, and “government should not pick winners and losers” is part of the inherent contradictions of an undemocratic, capitalcontrolled economic system that uses the political system as its straw man. All recent options leading up to a true single-payer system, including a Public Option, have been sacrificed on the altar of business and profit.

The California Nurses Association were not allowed by their “progressive” congressional representatives to have a seat at the table in early discussions of what Obamacare would be. The CNA advocate single-payer, non-profit health care. Not only is profit making the issue, where maximizing profit means minimizing care, it’s the blizzard of paperwork that’s a major problem. We should not pay to get permission to be treated. We should just pay for the treatment. We need to use our collective strength to buy in bulk and self-insure the entire country. We have been “marketed” into thinking we need health insurance. We do not.

We need universal Health Care

Origins of universal health care

One of the earliest examples of public health care comes from late 19th century Germany. Germany has the world’s oldest national social health insurance system, with origins dating back to Otto von Bismarck‘s social legislation, which included the Health Insurance Bill of 1883, Accident Insurance Bill of 1884, and Old Age and Disability Insurance Bill of 1889. Bismarck stressed the importance of three key principles:

  • Solidarity – the government is responsible for ensuring access by those who need it,
  • Subsidiarity – policies are implemented with smallest (of) political and (government) administrative influence,
  • Corporatism – the health care professions set out procedures they deem feasible. (Meaning health care professionals, not politicians, decide policy.)

There is great irony that one of history’s most brutal despots created such a humane and socially responsible program for the working people, starting with those needing help the most. Historians often mention that the social turmoil of the new labor and leftist movements made this action necessary as a safety valve to prevent revolution. 

Hmm, could it be that the great lesson to be learned is that social change only happens when the economic powers are threatened deeply enough by collective action?

A vaccination against revolution?

Perhaps that lesson has been learned by the American business community who created a bait-and-switch structure for health care that can be withdrawn slowly as market forces allow (For example, Gov. Scott Walker’s Act 10 makes public workers contribute more wages to benefits after using benefits to attract workers from the private sector). Was this a vaccination against revolution? A core truth is that the American medical financing and servicing industry is a profit center that uses immoral methods to achieve the highest priced, lowest performing outcomes in the industrial world. The axiom that competition will create better outcomes rings hollow when no competition is allowed.

“Obamacare” exists as a propaganda term only. It is not as good as Nixon’s 1972 concept, nor Eisenhower’s ‘50s era plan. The Affordable Care Act (ACA) was developed by a conservative think tank that was hell-bent on keeping the insurance industry relevant, profitable and expanding. Romneycare was the same concept in Massachusetts. Obama handed off his lofty rhetoric to Sen. Max Baucus and the Senate Gang who killed off the public option. The Public Option was a moderate attempt to prevent a true single-payer plan from gaining traction. All of the problems with the compromise plans come down to the fact that allowing profit to drive the health care system costs more than just treating people. In service of corporate profits, the costs of administering and providing services become too great, and totally unproductive.

A self-insured workers plan that worked

In the 1990’s, my Carpenter Union health care was a self-insured plan that gave us better service with lower deductibles than conventional versions, and used only 3% of the premiums for administrative costs. Traditional plans used 30 -35% of their fees for administration and profit. The ACA set a maximum of 20% overhead and profit, and was criticized as impossible for the insurance companies: they needed to raise rates. They have greatly increased their number of customers and now are using the republican majorities to cover for them as they pull back from the best parts of the ACA and create temporary disruptions in service and the kind of price hikes typical of a monopoly.

In 2007 I heard a presentation by State Sen. Jon Erpenbach about a health plan that had passed the State Senate called Healthy Wisconsin. State Sen. Kathleen Vinehout and others in labor, management, politics, and higher learning had come up with a plan to regulate insurance companies in Wisconsin to a max of 6% profit and overhead. The plan actually was easier to understand that the ACA and would have covered everyone in the state. A working family making $50,000 per year and paying as much as $14,000 per year for very good coverage (like my Union plan) would see an average savings of $6,000 per year.

The economic impact of the plan across the state would have been in the billions, with the saved premium money spent locally, over and over many times at small businesses. No money would be spent on denying coverage. Cost saving preventive care and early intervention would be the norm. Productivity and reduced employer paperwork would ring the Business 101 bells.

Democratic Party of Wisconsin kills off Healthy Wisconsin

I was so inspired by the good business sense this made (Janesville’s GM cars at the time would cost $1,500 less, etc) that I decided to run for assembly with Healthy Wisconsin a major part of my platform. My opponent claimed I was advocating providing coverage for illegal aliens (they are already covered in expensive emergency rooms) and that I was proposing the largest tax hike in history. I countered that I was advocating the largest premium reduction in history and economic expansion beyond his wildest dreams.

An insurance industry lobbyist drove several hours to meet with me to see if I would take their money in exchange for backing off Healthy Wisconsin. He left after a few minutes.

The Democratic Party of Wisconsin (DPW) Assembly Democratic Campaign Committee (ADCC) quietly sent the word out that no one should run on Healthy Wisconsin, or even discuss it. Then Rep. Mark Pocan was the chair of the ADCC and he was influential in picking who could speak at the convention. No speakers mentioned Healthy Wisconsin. I lost my race in a red district but the DPW picked up majorities in the Assembly, the Senate, and had the governor’s office. They did not finish the work of the Senate on health care.

In early winter 2008 Mr. Pocan was interviewed by the Union Labor News, the newspaper of the South Central Federation of Labor in Madison. He was quoted as saying that new Assembly candidates such as me were too weak to run on Healthy Wisconsin so he did not want to push it. Or maybe lobbyists just got their way with the DPW that year?

If you doubt the influence of corporate money on things like your family’s health care, you should go to the candidate/lobbyist mixer the ADCC holds every election cycle. Believe me, you’ll want a shower and new set of clothes afterward.

Meanwhile millions of Americans go without health care.

(Artwork from FDR Presidential Library and Museum.)