Progressives are defensively crouched in their usual corner, complaining about the minimal nature of the proposed healthcare reform.

 

However, they may be so frustrated that they are blinded to something much worse: much of the proposed legislation would actually deliver a stunning set-back for low to middle income Americans. In many ways, the proposal for a universal mandate will create a direct transfer of wealth from every American, now mandated, to the private insurance companies.

 

Lost in some of the flurry of debate over the Public Option is the vital importance of the universal mandate. During his campaign, Obama was resolutely opposed to the universal mandate because of its potential to place a burden on lower to middle-class families. Nothing regarding this problem has changed. As the water is murky regarding most of this proposed legislation, one can only judge the ongoing slogans. Nowhere is it clearly indicated how families facing foreclosure, rising utilities, and unemployment are going to pay for this mandate. There is talk about federal support and "affordable" policies, but no one is even giving rough numbers. Why provide subsidies when "affordable" care should be provided up-front in any reasonable plan? Subsidies will only offer a target for opponents to shoot at in the future.

"Affordability" can turn out to be a cruel hoax: For example, as Maggie Mahar points out, the Senate Finance plan "means a 56-year-old couple with income of $60,000 could wind up paying premiums of $7,800, plus out-of-pocket expenses for coverage that’s worth 25 percent less than the top-of-the-line "gold plan." (Couples earning more than $43,710 don’t qualify for subsidies.)"

 

If one were to predict the winners and losers in a universal mandate-based system–especially one lacking an expansive and open public option—the losers would be lower to middle income families and the indisputable winners would be the for-profit insurance companies. This evaluation is confirmed by the rise in the value of insurance companies on the stock markets based on expectations of increased profits derived from this universal mandate.

 

Given that the whole public selling point of health reform was to aid lower to middle-income families who are uninsured and to curb the widespread abuses of the insurance companies in denying healthcare to Americans with healthcare, much of the proposed legislation would achieve exactly the opposite effect.

 

A second area of misrepresentation or delusion is in the regulation of insurers being proposed. At first glance, the idea of prohibiting the insurance companies from refusing coverage for pre-existing conditions is a great idea. However, as always, the devil is in the details. The most obvious problem with this proposition is in the implementation and enforcement of this rule. It isn’t as if the insurance companies don’t have an army of lawyers prepared to dilute the impact of any rules.

 

The dubious record of regulations imposed on insurance companies leaves one with little confidence that they will adhere to their end of the bargain. In exchange for tens of millions of new customers, insurers will merely have to pay lip service to a set of new regulations. Their armies of lawyers and "experts" will make the insurers seem like Houdini escaping from a pair of dime-store handcuffs.

 

Specifically, the protection for people with pre-existing conditions is likely to be a mirage.

ns. It doesn’t help much to be allowed coverage if the cost is way beyond what’s possible to afford. Further, it has also been proposed that age can be a factor in assessing insurance costs. The Baucus bill would permit insurers to charge older people five times more than younger workers. Any humane and progressive assessment of costs should be based on income, not age or state of health.

 

At the foundation of the entire approach to "reform," Congress is ignoring the basic reality that, insurers’ profits depend precisely on refusing payment on a significant percent of claims. As Harvard Medical School’s Dr. Marcia Angell has observed, "Private insurers

maximize profits mainly by limiting benefits or by not covering people with health problems.  She also noted that the United States is the only advanced county in the world with a health system based on avoiding sick people."

 

Obama’s speech before Congress was heartening in its general thrust for historic reform, but every time he used the word "affordable," one wanted to ask, "Affordable to whom?" Likewise, when the pre-existing condition reform is bandied about, one wants to scream "Are you planning to monitor every decision by the insurers?" In his own speech, Obama referred to someone who had died while these issues were being debated. Exactly how is this going to be halted?

 

 If an abused woman takes back an abusive husband because he says he is reformed, everyone screams that she is being hopelessly naive. Yet given insurers’ basic motives and record, what makes these insurance companies any different from abusive husbands?

 

At their very core, the basic interests of health insurers and health "consumers" are directly at odds: health insurance corporations maximize their profits by minimizing the payments and treatments they authorize. That is precisely why even a life-saving expenditure is labeled a "medical loss" in the language of insurers. Defenders of the insurance industry will often argue that it is in insurers’ self-interest to keep their patients healthy in order to minimize expensive care for untreated ailments over the long haul.

 

The problem is the high degree of transience driven by for-profit insurance firms’ outrageous premium increases. Thus, most people stay with a particular insurer just under two years on average, as their employer’s frantically shop around for less expensive coverage.

 

Consequently, insurers develop no interest in sustaining the long-term health of their enrollees. If an insurer fails to authorize expensive treatment of a complex condition, chances are that patient will soon become another insurer’s problem given this high degree of transience.

 

The proposed Baucus legislation adds to the middle-class rip off by proposing taxes on existing benefits. This would be yet another indirect transfer from middle- class Americans to insurance companies. The whole point of insurance reform, from the average person’s point of view, is to provide the uninsured a way to gain healthcare and to gain protections from insurers’ most outrageous abuses.

 

Often, the provision of healthcare itself gets lost in the debate. Health insurance in the US is one mechanism to provide Americans with healthcare. Very few people–unlike Max Baucus and his allies– care about the long-term survival of insurance companies, but they are desperately anxious about assuring healthcare for their families and fellow Americans.

 

 

Roger Bybee and Carolyn Winter are long-time progressive writers and activists based in Milwaukee. His labor blog appears twice weekly at WorkingInTheseTimes.com. They can be reached at winterbybee@gmail.com.

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